The City of Castlegar is considering across the board installation of water meters for all properties within the city’s water supply district. This is a discussion that I find a little amusing, coming from Australia, in the grip of a 10 year drought, with year round water restrictions so intense that famous beaches no longer have the showers operable, and washing cars can only be done by hand with a bucket, (no hoses) or at a facility that recycles it’s wash water.
The Need and the Cost
Castlegar doesn’t seem to have critical water quantity issues that would warrant demand management, and from the newspaper report, it hardly seems to be a solid set of arguments that the City is claiming. Charging residents over $200 a year for water service is not a big deal, as long as the city’s infrastructure costs are being covered. Water is generally not expensive to provide, pumping, treating and maintaining the infrastructure runs at around a couple of cents a day per house, particularly where water is plentiful, but the long term replacement costs are the hidden danger.
But assuming that we need to cover the replacement cost of pumps, pipes, valves, treatment facilities and allow for upgrades as the city increases in size, the question remains, is the amount of water consumed really the problem? Or is the age of the system more of an issue? Does an extra couple of hundred litres a day wear out equipment so much faster that we need to spend hundreds of thousands of dollars setting up a metering system that will continue to cost tax payers into the future?
The average residential unit should have to pay their fair portion of the cost of running the water system, where or not they use the water. In my mind, the fixed fee portion should be the greater of the two costs, as the greatest cost faced by the service provider is not in the water, but in the infrastructure. Water metering is seen in Australia as a measure for conserving precious water reserves and has little to do with conserving the cost of maintaining existing infrastructure, sure it may reduce the need for building a bigger reservoir or treatment plant, but typically the size of these structures has been calculated on an existing population, projected growth and water usage, so the only thing that is likely to change drastically is population if everything else remains the same.
Reading between the lines, it seems that the city is getting funding from the province for this initiative which will, in the short term offset the costs of implementing this program, (about $135,000 a year in funding). However all long term costs of maintaining, reading and auditing meters will be borne entirely by the city. Just because the provincial or federal governments are giving out money, doesn’t mean that you have to accept it. I can bet that this program wouldn’t have any support if it were entirely self funded by the City.
Read more after the jump….
The Volunteer Trial
In the volunteer trial, the average usage was 455 litres per person per day, so at an average of 2.5 people per house, that’s 1,138 litres per household per day or 415 kilolitres per annum. At an average home charge of $115.64 per year, this works out at 0.028 cents per litre or 28 cents per kilolitre. And I assume that this includes a service charge somewhere in the equation which would be a flat fee.
If a resident were happy paying the current flat rate fee under the metered system, (using the city’s own figures) an average household would be able to use 1,030 litres per person per day on average over the year, which is 55% more than the average for municipalities of similar size.
Update: In another article, the City has said that there is a service charge of $5 a month, so until I attend a public meeting on this issue, or write to council, the above figures I’ve given are crude estimates. Also given in the second article, (in the new Castlegar Current weekend paper), 1 out of 45 meters used in the trial failed during the test period, a failure rate of over 2%, which would mean that in a city of 3000 homes, some 150 meters would be likely to fail. At a couple of hundred dollars a pop, you’d hope for a better success rate. Hopefully the meters themselves are accurate too…
Show Me the Money
At the end of the day, I’m not opposed to metering, or pricing by volume, I’d just like to see the net present value calcs that show that by reducing consumption, the city is going to benefit. The prices that I’ve seen, seem really low, and smell like the bait in a classic bait and switch program, where in ten years time, when all houses in the city are metered, the real cost of the water supply is passed on at a volumetric rate.
I’d rather that cost , if it is going to be higher, be acknowledged up front, if it’s not higher, I’ll happily show my support for the proposal by writing another article when I get the full details.
As an aside, the way water prices are calculated in Australia are regulated by an independent state commission to ensure accountability and transparency.
There are many other ways that council can spend money to reduce consumption that have equally quantifiable reduction statistics, as well as many other questions that need to be asked in light of universal water metering but I’ll save those for another post, soon I promise.
What do you think of across the board water metering and how towns or water authorities structure their pricing?