Greater Victoria taxpayers may soon be getting their first bill for sewage treatment, even though shovels have yet to hit the ground on the megaproject.
Local homeowners will face tax hikes of between $39 and $65 this year for sewage, if local politicians approve a new multi-year cost formula at a Wednesday sewage committee meeting.
“An orderly annual predictable increase will reduce the shock of this increased expenditure,” says a Capital Regional District staff report that recommends the changes.
The treatment system, budgeted at $783 million, has yet to be built, but is set to go online in 2018. Instead of hitting taxpayers with a $35-million bill to operate the plant and pay interest on its loans in that first year, the CRD could spread out the cost starting now, the report said.
“It’s to smooth out the costs so you’re not faced with [the total] all at once,” said Denise Blackwell, chairwoman of the CRD sewage committee.
Staggering the costs will also save $3 million in debt servicing, according to the CRD report.
The decision doesn’t change the amount taxpayers will have to pay in 2018 and beyond, once the treatment system is fully active.
Those amounts, previously reported last October, will cost a typical Oak Bay household $391 a year — the highest in the region — and a Saanich household $232 a year, the lowest.
But prior to 2018, the annual sewage bill per household will steadily increase. For example, the extra cost to Oak Bay taxpayers could go from $65 in 2013 to $391 in 2017 while in Saanich the hike could go from $39 in 2013 to $232 in 2018.
“I think it’s prudent to start paying now,” said Victoria Mayor Dean Fortin, a sewage committee member.
“Clearly there’s savings in long-term interest costs. Knowing we have to do it, it makes sense to start paying it down now.”
Esquimalt Mayor Barb Desjardins said she hopes the tax increase will spur people to pay attention to the sewage project. Municipalities are facing tax increases of varying levels this year, and it is going to stress family finances, she said.
“I think these costs are going to be significant and going to create significant problems to many people,” Desjardins said.
“We need to mitigate them as much as possible, absolutely. But I still have a concern that a hit this year and in the next five years is going to be significant for everybody.”
Part of the problem for the CRD is that, while the federal and provincial governments have agreed to pay two-thirds of the project’s cost, the province will only pay its $248-million share after construction is complete, leaving the CRD on the hook for borrowing and interest costs.
“Once you start to build it, people aren’t going to wait for five years to get paid,” said Saanich Coun. Vic Derman, who also sits on the sewage committee. “The province isn’t paying its share till the end, which is a bit unusual. It obviously ups the local contribution.”
The estimated household costs could vary depending on how each municipality chooses to bill or tax its citizens for the cost.
© Copyright 2013