Water rates in Kamloops could increase between 18 and 25 per cent in 2024.

This as city staff will be presenting three options for proposed water rate hikes to council at the November 21 city council meeting.

The first option is the original 25 per cent increase which was walked back by council earlier this month.

In a report to council, Corporate Services Director David Hallian says that option would cover the $3.2 million in decommissioning payments going to users of the Noble Creek Irrigation System, which accounts for 15 per cent of the initially proposed increase.

Hallinan say it would also address council’s decision to increase the development cost charges’ water assist factor from 1 per cent to 10 per cent to support growth in Kamloops. He says those changes resulted in an increase to the City’s water utility capital budget by $5,000,000 over the bylaw’s 10-year period.

Hallinan says the first option would also provide funding “to address intake issues materializing with the Kamloops Centre for Water Quality.”

“This option would also provide an adequate level of funds to provide for ongoing and predictable changes to the water utility rates,” the report said.

“The reserve funds would also provide an effective buffer against marketplace volatility brought on by inflation and product supply issues without the need to borrow, defer capital infrastructure replacement (asset management) projects, or continually change and adjust user rates.”

This option is also the cheapest over the course of the five-year plan, with a total water rate increase of 55 per cent – or $254 – between 2024 and 2028.

The second option will mean an 18 per cent increase in 2024, or an extra $69 in water costs for the average Kamloops household. Staff say it would also require the city to borrow money to cover work related to the Kamloops Centre for Water Quality, a debt they expect to repay by 2028.

“Use of debt would result in an overall increase in costs associated with interest incurred on the overall cost to borrow,” the report said, noting the current Municipal Finance Authority short-term interest rate is 5.62 per cent.

“At this interest rate, the impact on borrowing to the Kamloops Centre for Water Quality intake work would be $550,000 annually and would be subject to change over the term of the loan.”

This second option is also the most expensive over the course of the five-year plan, with a total increase in water rates of 63 per cent – or $307 – between 2024 and 2028.

Hallinan says staff don’t recommend the third option which also proposes an 18 per cent increase next year as it includes the deferral of a water main project in Westsyde by two years.

“This project was selected as it is fully water-funded work, and the proposed deferral would take the timing of the project from 2024 to 2026,” the report said. “This project is considered an asset management project as the existing infrastructure is approximately 47 years old.”

“Administration does not recommend this option as it introduces an aspect of risk into the overall asset management and planning process that could result in infrastructure being functioning beyond its expected useful life and may not perform as needed and lead to failure.”

Option three also projects a total increase of 61 per cent to water rates – or $299 – over the course of the next five years.

Earlier this month, the city’s Utility Services Manager Greg Wightman told Radio NL that staff would do their best to keep the increase as low as possible while ensuring they have enough in a reserve fund to cover any unforeseen costs.

“[Council is] not disputing the fact the the revenue generated by that increase is required,” Wightman said on Nov. 8.

“What they’ve asked staff is come back with different options where we can potentially smoothen out that rate a bit so we don’t have 25 per cent in one year, or look at other funding options which could potentially include borrowing and things that we typically don’t necessarily defer to right away.”

While the 2024 water rate is up in the air, council has approved increases to the solid waste and sewer rates in 2024. Solids waste pick-up fees will jump around 7-per cent, or $22 a year, $12 of which is for the new curbside organics program, while sewer rates would rise 2.5-per cent, or $12 a year.

City Councillors will have to make a decision at Tuesday’s meeting as the utility rate bylaws for 2024 need to be approved before Dec. 31 of this year.

“Direction is needed from Council on the water utility rate no later than November 21 so that Administration can prepare the Bylaws to be brought forward to Council on December 5 for three readings,” the report said. “The bylaws would then be adopted on December 12.”