Name of Municipality: Town of Asquith			Date: August 29, 2008
WATERWORKS RATE POLICY
On July 9, 2007, Council passed a resolution on a waterworks rate policy.
Under the waterworks rate policy resolution, the rate of $6.00 per 1000 gallons of water usage will continue, as adopted under the water bylaw dated January 14. 2008.  To work towards waterworks revenues that cover waterworks operating costs, Council is planning to raise the price per 1000 gallons of water usage by fifty cents per year for the next three years.  At the same time, Council will closely monitor waterworks expenditures.   At the end of the third year, Council will review the waterworks policy to work towards waterworks revenues that cover waterworks operating costs and consider the need for a waterworks infrastructure charge.   By planning the waterworks rate increases ahead of time, residents and businesses will be able to prepare for and adjust to the increases. Bylaws will be passed each year for the water rate changes.
The rate of $6.00 per 1000 gallons of water usage that was established on January 14, 2008 was chosen to be an acceptable rate for residents and businesses at that time. The per gallons of water usage water rate does not generate enough waterworks revenues to cover the waterworks operating costs. The rate covers 100% of the waterworks operating costs. Waterworks operating costs, or expenditures, include waterworks’ staff salaries, benefits and training; power; telephone; fuel; heat; insurance; chemicals; repairs; maintenance; supplies; etc. Also, the per gallons of water usage water rate does not include an infrastructure charge. Some municipalities use an infrastructure charge to collect revenue that is put into reserves so that they are able to address waterworks infrastructure problems that arise and replace aging waterworks infrastructure as required.   Below provides the planned per gallons of water usage water rate increases of approximately 10% per year over the next three years. To demonstrate the impact on residents and businesses, below are estimated monthly charges that reflect the rate increases, which are based on average household consuming 3000 gallons of water each month.
Date	Rate Per 1000 Gallons	Estimated Monthly Charge (based on 3000 gallons)
June 11, 2007	$5.50	$16.50
January 1, 2008	$6.00	$18.00
January 1, 2009	$6.50	$19.50
January 1, 2010	$7.00	$21.00
January 1, 2011	$7.50	$22.50
(Describe the objectives of the waterworks rate policy) The objective of the waterworks rate policy is to work towards waterworks that are self-financing, where the users pay for the cost of the service. To accomplish this, waterworks rates need to increase over time so that the revenues cover operating costs, to the extent possible. At the end of the fourth year of the planned rate increases, Council will review its waterworks policy to determine if revenues are covering costs. At that time, Council will also need to consider increasing rates to build the waterworks reserves in order to cover future infrastructure maintenance and replacement costs, such as replacing the water plant and digging a new well, which have been identified in the 2005 waterworks assessment required by The Water Regulations, 2002.   This waterworks rate policy will work towards financially independent waterworks that do not have to compete with other key municipal financial demands under the municipal general fund. This will ensure our waterworks can provide safe drinking water. Also, rates that cover costs will influence consumer demand and water conservation, and self-financing waterworks from the general revenue fund will be reflected in the future mill rates.

WATERWORKS CAPITAL INVESTMENT STRATEGY

On July 9, 2007, Council passed a resolution on a capital investment strategy.

The objective of the waterworks capital investment strategy is to address anticipated waterworks infrastructure maintenance, the immediate drinking water infrastructure Problems and future infrastructure replacements in a timely fashion so as to ensure the municipal waterworks provides safe drinking water to residents and businesses. The strategy uses the 2004 waterworks system assessment that was required by Saskatchewan Environment for infrastructure planning.   To cover the costs of future waterworks infrastructure maintenance and replacements, Council will likely need to undertake in the future a combination of increasing water rates to build the waterworks reserves, once the water rates cover waterworks operating costs, and long term borrowing.   This capital investment strategy will ensure that safe drinking water can be provided to the residents and businesses in the community in the present and future.

Capital plans have been established to address the water works infrastructure deficiencies and replacements as identified and prioritized in the 2004 waterworks assessment to ensure safe drinking water. The current waterworks capital plans and planned sources of funding are as follows:

`     Project      Planned Year of Completion   2006 Cost    Future Cost*      Source of Funding

Well Pump                  2008                                     1,900              2,000                      Operating

Water Meters              2008                                     1,700              1,800                      Operating Water Plant                 2009-11                            600,000           600,000                      Reserves & Borrowing            Borrowing

*Assuming a 3% rate of inflation per year. For future waterworks capital plans, projects will be prioritized based on what is needed to ensure safe drinking water.

ANNUAL FINANCIAL OVERVIEW (of the previous calendar year)

Total 2007 waterworks revenues (as reported in the Financial Statements) (R) - $73,602

Total 2007 waterworks expenditures (as reported in the Financial Statements)(includes interest paid on waterworks infrastructure loans) (E) - $65,527

Total debt payments on waterworks infrastructure loans (D) – zero (no waterworks debt)

Comparison of waterworks revenues to expenditures plus debt payments, expressed as a ratio –                                    (73,602)    = 1                                    (65,527) + ($8,074)

For 2007, waterworks revenues covered 100% of the waterworks expenditures.

Amount of 2007 waterworks revenues transferred out of the utility, specifying where the revenues were transferred - $8,074 – Revenues spent on wastewater works.