I would like to clarify the 7.1 per cent increase in the sewer parcel tax and how the fund operates.
Legally only those people living in the sewer specified area are responsible for the costs of the sewer system. Revenue comes from their yearly parcel tax fees, sewer generation charges, rehabilitation revenue fund fees and permit fees. Expenses consist of the sewer operating contract (EPCOR), debt interest, debt principle and other miscellaneous expenses. Since the inception of the sewer due to expenses exceeding revenue, funds have been borrowed from the General Fund to pay the sewer bills. Legally they have to be repaid.
Audited financial statements consolidate Sewer Fund operations with General Fund operations making it difficult to track numbers directly related to the Sewer Fund. For example the audited statements mix some revenue like Development Cost Charge (DCC) with the Sewer Fund when they actually go to a Reserve Fund skewing the figures.
District’s costs to determine specific sewer fund costs come directly from the General Ledger which is the key document for any business accounting system. It shows each dollar in and each dollar out in addition to each dollar as it is allocated to a specific fund such the Sewer Fund, Sewer DCC fund, Parks Fund, etc. This can create a difference between the District’s actual numbers and the numbers in the audited consolidated financial statements.
Actual Costs
Revenue
2008 $1,265,991
2009 $1,325,174
2010 $1,459,698
2011 $1,581,979
Expenses
2008 $1,379,980
2009 $1,435,040
2010 $1,461,596
2011 $1,762,117
There were net losses from 2006 and 2007 as well, bringing the accumulated losses at the end of 2011 to $588,459. The significant increase in costs is the EPCOR operating cost which increased from $530,175 in 2008 to $814,924 in 2011. Total EPCOR expenses for 2012 will exceed $1,000,000. We are projecting that with growth and cost containment the sewer will be at a breakeven point by the time this deficit is paid off.
Some have stated this increase would not be necessary had the 21-year sewer deal gone through. I want to make it clear that the five- year deal the District signed was almost identical in terms to the 21- year deal with the exception of the length.
So to suggest the 21-year deal would have reduced these costs is simply not correct. Anyone who suggests differently should examine the two deals in detail before commenting.The five-year deal gives councils an opportunity to examine the operation of the sewer system to determine if there are ways to reduce the costs and still maintain the high standard we have today.
Mayor Wendal Milne
District of Sooke