After receiving a legal opinion that clarified the potential conflict of interest regarding a sitting council member whose business might be affected by changes to municipal utility rates, Village of Burns Lake council reopened the question of what to do with small business owners whose water and sewer usage are similar to residential levels.
Several businesses had questioned the fairness of current water and sewer rate schedules, which impose a heavier cost on local business owners. Village council agreed that an issue of fairness was at play and that a change would need to be made.
“Local governments have a duty to ensure that users are treated fairly and equitably based on usage,” wrote Village of Burns Lake chief administrator officer Sheryl Worthing in her report to council. “Other local governments have implemented a similar tiered system. Given the number of requests for reduction it is important for council to evaluate the options.”
The options were for a variety of scenarios where select businesses would receive a lower utility rate because of qualifying under low-volume user category. The category is based on the criteria of having five or fewer employees; a bathroom or shower primarily for employee use; and business water usage not tied to any services (as in a car wash or laundromat).
According to Worthing’s council report, of 86 annual business utility accounts in Burns Lake, twenty-two qualify under those criteria for a rate reduction.
The question for council was to decide how to implement the reduction. Council opted to extend ‘same as residential’ rates to those businesses that qualify. The rate reduction will come into effect in January, 2014.
If there is a downside to the rate reduction, it’s that residential water and sewer rates will have to increase for all Village of Burns Lake residents in order to make up the deficit created by the rate reduction.
Residential water rates will increase by 3.25 per cent in 2014, and sewer rates will increase by three per cent. Combined, the rate increases will make up the combined $17,104.53 shortfall created by changing the rate category for the qualifying businesses.
This is on the heels of a 22 per cent increase in 2013 to better reflect the actual cost of providing the service, and to increase long-term reserves for water and sewer infrastructure upgrades.
One option that council considered was to introduce the rate increase this year and make up the shortfall from a surplus account. This idea was rejected in favour of waiting for a 2014 rollout.
The decision to postpone a rate adjustment until 2014 did not sit well with a local small business owner who attended the council meeting.
During the closing public question and comment period, Kelly Holliday, owner of Aksenz Studios and Alakazam Boutique in Burns Lake, expressed her concern that the resolution may have been passed too quickly and without enough discussion with, or input from, the small businesses and property owners involved.
Her business is facing a possible rent increase - retroactively - because her landlord received three separate water and sewer rate bills - one for each of the businesses operating out of her holdings - instead of the one she was accustomed to receiving.
Holliday was hoping that if a rate reduction were to include 2013 rates, this would alleviate the unexpected situation she and her landlord find themselves in.
Mayor Luke Strimbold spoke on behalf of council and said that they would take Holliday’s comments under consideration. Worthing later clarified that council was free to revisit the issue at the next council meeting, as it is a separate concern from rate adjustments.
The resolution to adjust rates in 2014 should stand without need for reconsideration as Holliday’s concerns relate to 2013 rate schedules.