Moose Jaw rural water customers face 50 per cent rate hike

by Chris Rasmussen for DiscoverMooseJaw.com

For the first time in 20 years, some people in rural areas around Moose Jaw may be facing a major hike to the water rates they pay to the city.

City councillors have voted in favour of increasing the rate that rural water customers around Moose Jaw pay for the service by as much as 50 per cent for the purpose of reducing the mill rate increase city taxpayers were facing.

The City of Moose Jaw has a number of contracts for providing water but a report to the budget committee this week showed those rates have not been reviewed in more than two decades.

Although the motion still has to pass final approval by city council, the budget committee has directed administration to inform rural customers around the city their rates will be going up.

City manager Jim Puffalt presented a report to budget committee explaining that residents inside the city are subsidizing rural customers. He said a large portion of property taxes go towards paying water utility costs.

“$2.8 million of the total $28.5 million in property taxes or about 9.95 per cent.” Puffalt explained on Monday

Meanwhile, Puffalt said the water rate for rural customers was established in 1996 and it’s time to take a look at it.

“We’ve made massive changes in how the water utility gets funded and in 2017/18, the city spent $20 million on a secondary line from the Buffalo Pound Water Treatment Plant to the city and that’s all on city taxpayers,” he said.

While that water line goes from the plant to the city, it could be argued that without it, the rural water users would not have access to the water they use and council agreed there was a need to reflect that in the rates.

“The intent of the motion is because the citizens of Moose Jaw are subsidizing that and so I think it has to be reflective that the other water users carry their fair share of the upgrades,” said Mayor Fraser Tolmie who made the motion.

By increasing the rates for rural users by 50 per cent, the payments would go from 1.5 times the urban rate to 2.25 times whatever a customer inside the city would pay.

“This is a service that the taxpayers are providing the external water users and it’s not free,” said Councillor Dawn Luhning. “It shouldn’t be subsidized by the taxpayers of Moose Jaw. We’re the providers of the service and there’s a cost to that.”

The motion received initial support from budget committee and is pending final budget approval. City administration will then meet with coop partners and user groups to discuss the changes with the goal of implementing the new rates in June of 2019.

Since that increase to rural water rates is meant to make up for the tax dollars that urban residents have been paying, it may offset part of the need for a tax increase in 2019. Councillors started the meeting looking at a 4.16 per cent mill rate increase but this change would drop that to 3.81 per cent.

The city budget committee will take a break for the holidays and re-convene January 7th.