Brookfield Water Utility - PUB Order 108/23 (revised rates)
Rural Municipality of Lac du Bonnet, Manitoba
· adopted 2023-09-14
· summary & facts
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Room 400 - 330 Portage Avenue
Winnipeg, MB R3C 0C4
www.pubmanitoba.ca
330, avenue Portage, pièce 400
Winnipeg (Manitoba) Canada R3C 0C4
www.pubmanitoba.ca
Order No. 108/23
RURAL MUNICIPALITY OF LAC DU BONNET
BROOKFIELD WATER UTILITY
REVISED WATER RATES EFFECTIVE JANUARY 1, 2024
September 14, 2023
BEFORE: Marilyn Kapitany B.Sc. (Hon), M. Sc., Panel Chair
Susan Boulter, Panel Member
Order No. 108/23
September 14, 2023
Page 2 of 17
Table of Contents
1.0
Executive Summary..................................................................................................... 3
2.0
Background ................................................................................................................. 3
Water Supply/Distribution ........................................................................................... 4
Unaccounted for Water ............................................................................................... 4
3.0
Application ................................................................................................................... 4
Contingency Allowance and Utility Reserves .............................................................. 6
Working Capital Surplus/Deficit .................................................................................. 6
Cost Allocation Methodology ...................................................................................... 6
4.0
Board Findings ............................................................................................................ 8
5.0
IT IS HEREBY ORDERED THAT: ............................................................................... 9
SCHEDULE A ........................................................................................................... 11
Order No. 108/23
September 14, 2023
Page 3 of 17
1.0 Executive Summary
By this Order, the Public Utilities Board (Board) approves the revised water rates for the Rural
Municipality of Lac du Bonnet (RM), Brookfield Water Utility (Utility), effective January 1,
2024, January 1, 2025, January 1, 2026, and January 1, 2027.
The approved rates are as follows:
Current
Rates
January 1,
2024
January 1,
2025
January 1,
2026
January 1,
2027
Quarterly Service Charge
$27.41
$28.40
$29.39
$30.38
$31.36
Water (per cubic meter)
$7.30
$7.64
$7.98
$8.32
$8.66
Minimum Quarterly
Charge*
$129.61
$135.36
$141.11
$146.86
$152.60
*Based on 14 cubic meters
Details of other rates may be found in the attached Schedule A.
Rationale for the Board's decisions may be found under the heading Board Findings below.
2.0 Background
The RM owns and operates the Utility serving 38 metered, local customers and the Awanipark
Water Utility (Awanipark) in the Local Government District of Pinawa (or a total of 39
customers). Awanipark is recognized as one customer that services 40 residential
customers. The Utility purchases treated water from the Whitemouth Water Utility, owned by
the RM of Whitemouth, at the first step rate (i.e. no volume discounts). Rates were last
approved in 2019 in Board Order No. 193/19, with current rates coming into effect July 1,
2021.
Order No. 108/23
September 14, 2023
Page 4 of 17
Water Supply/Distribution
The water lines and pumping station were completed in 2019 and began providing treated
water in the same year. The utility purchases water from the Whitemouth Water Utility.
Unaccounted for Water
The acceptable percentage of unaccounted for water is 10%, based on industry standards.
If the percentage is above this amount, the applicant is to explain why and provide a plan to
remedy.
As at 2021, unaccounted for water for the Utility reported in the rate study was -5.0%.
3.0 Application
On January 26, 2023, the RM applied for revised water rates for the Utility. The application
was accompanied by a rate study prepared by the RM's consultant and By-Law No. 13-22
having had first reading on November 29, 2022.
A Public Notice of Application was issued on February 6, 2023 allowing for any questions or
comments with respect to the proposed rate increases to the Board and/or the RM on or
before March 23, 2023. There were no responses to the Notice.
When reviewing an application the Board can either: hold a public hearing at which the
applicant can present its case and customers can present their concerns; or where it is
deemed to be in the best interests of a utility and its customers, the Board can review the
application using a paper review process without holding a public hearing. The paper review
process considers all written materials submitted by the Utility and the public, as well as any
information requests and responses between the Board and the Utility. This process may
reduce regulatory costs to the Utility.
A public hearing process allows the Utility and the public the opportunity to review the
application and address any concerns with the Board present.
Order No. 108/23
September 14, 2023
Page 5 of 17
Whenever reasonable, the Board will review the application using a paper review process,
which saves the cost of a public hearing process. The Board has chosen a paper review
process for the RM's application.
The rates were calculated based on the following projections using an annual inflation rate of
3% in all calculations:
Schedule of Utility Rate Requirements
Rural Municipality of Lac du Bonnet - Brookfield Water Utility
2024 to 2027 Budget Forecasts ($)
2024
2025
2026
2027
Forecast
General
Expenses
Administration
3,389
3,491
3,595
3,703
Training
1,545
1,591
1,639
1,688
Total General Expenses
4,934
5,082
5,234
5,391
Revenue
Penalties
500
500
500
500
Total General Revenues
500
500
500
500
Net Costs General
4,434
4,582
4,734
4,891
Water
Expenses
Purification and Treatment
15,570
16,037
16,518
17,013
Water Purchases
36,199
36,199
36,199
36,199
Other Water Supply Costs
468
482
496
511
Amortization
25,200
25,200
25,200
25,200
Interest on Long-Term Debt
9,005
8,311
7,594
6,854
Contingency
5,117
5,117
5,117
5,117
Reserves
7,500
7,500
7,500
7,500
Total Water Expenses
99,059
98,846
98,624
98,394
Revenue
Property Taxes - Water Debt
30,363
30,363
30,363
30,363
Total Water Revenues
30,363
30,363
30,363
30,363
Net Costs Water
68,696
68,483
68,261
68,031
Net Operating Costs
73,130
73,065
72,995
72,922
The proposed Utility rate increases are primarily required for inflation and to add a transfer to
the Utility Reserve Fund.
Order No. 108/23
September 14, 2023
Page 6 of 17
Contingency Allowance and Utility Reserves
As per the Board's Water and Wastewater Rate Application Guidelines, a yearly allowance
equal to 10% of the variable operating costs is recommended for a contingency allowance.
The RM has included an annual contingency allowance of $5,117.
The RM has a reserve allowance of $7,500 per year in its rate study.
Working Capital Surplus/Deficit
Board Order No. 93/09 established that utilities should maintain a minimum working capital
surplus, in an amount equal to 20% of annual expenses. The working capital surplus/deficit
is defined as the Utility fund balance, excluding any capital related items plus Utility reserves.
As per the 2021 Audited Financial Statements, the most recent information available, the
working capital surplus for the Utility at December 31, 2021 was:
2021
Utility Fund Surplus/Deficit
$880,342
Deduct: Tangible Capital Assets
(1,168,848)
Add: Long-Term Debt
317,804
Add: Utility Reserve
-
Equals Working Capital Surplus (Deficit)
$29,298
Operating Expenses
87,734
20% of Operating Expenses (Target)
$17,547
The Utility meets the Board minimum working capital surplus of 20%.
Cost Allocation Methodology
The Board requires all municipal governments to review the costs shared between its general
operations and the Utility, and to allocate appropriate and reasonable costs to the Utility,
based on a policy known as a Cost Allocation Methodology. This allocation must be
submitted to the Board for approval and cannot be changed without receiving approval from
Order No. 108/23
September 14, 2023
Page 7 of 17
the Board. The Board's requirements regarding cost allocation methodologies can be found
in Board Order No. 93/09.
The RM's allocation plan for shared costs is as follows:
Rural Municipality of Lac du Bonnet
Brookfield Water Utility
Allocation Plan for Non-Direct Shared Services (see Note 1)
as at November 2022
Category
Sub-category
Options
1.0 Administrative Staff
Activity Based (Note 1)
0.2% of general
legislative expenses,
excluding assessment
and grant expenses
1.1 Billing services - meter
reading to receipting and
collection.
Meter reading - drive
by readings with
minimal time required;
receipting and
collection part of admin.
staff allocation.
1.2 Accounting/ auditing/
including bylaw making and
enforcement.
0.2% of audit costs
1.3 Common office space
0.2% of office cots,
utilities
1.4 Office overheads
(telephone, photocopier,
computer, etc.)
0.2% of printing,
postage, and stationary
2.0 Operating, construction and
maintenance costs
2.1 Vehicle - fuel,
maintenance, lease costs,
capital costs
-
2.2 Labor - full time, part
time, on call, sick time,
vacation (see Note 2)
Staff time will be
minimal. RM staff
taking required utility
certification courses.
2.3 Public works building
and property.
There is no charge to
the Utility for the Public
Works Building use.
2.4 Road repairs and alike
(see Note 3)
-
3.0 Major projects
Interest/ financing
N/A
Labor
-
External costs
-
Order No. 108/23
September 14, 2023
Page 8 of 17
Note 1 - Allocation must be updated periodically to reflect impacts of inflation.
Note 2 - Including salaries and benefits.
Note 3 - If a project involves work benefitting both the Utility and general operations the costs may
be shared (i.e. If reconstructing a road and replacing services at the same time, a portion of the
roadwork costs may be allocated to the Utility.)
4.0 Board Findings
Rates
The Board has reviewed the application and the projections for utility rates presented by the
RM's consultant in its rate application and notes the calculations used to formulate the Utility's
rates are not consistent with Public Utilities Board Guidelines, but instead have been
designed to phase-in rates to mitigate rate-shock and high year-over-year rate increases.
The Board approves the rates as applied for, effective dates January 1, 2024, January 1,
2025, January 1, 2026, and January 1, 2027.
The Board requires the RM to review its water and wastewater rates for the Utility for
adequacy and file a report with the Public Utilities Board, as well as an application for revised
rates (if required) on or before July 1, 2027.
The Board directs the RM to monitor the Utility's performance and if the RM becomes aware
the rates approved in this Order are inadequate to cover the operating costs of the Utility, the
Board encourages the RM to submit a revised Rate Application as soon as possible.
The Board notes the RM has not submitted its 2022 Audited Financial Statements and
reminds the RM audited financial statements are to be reported to the Board no later than
June 30 of the following year. The Board directs the RM to submit its 2022 Audited Financial
Statements as soon as they are available.
The Board also notes, the 2020 and 2021 Audited Financial Statements report $30,363 in
debenture debt repayments related to the Utility as a transfer to the Utility from the RM's
General Operating Fund. It is the Board's understanding the aforementioned debenture debt
is being recovered using property taxes and therefore should be reported in the Audited
Order No. 108/23
September 14, 2023
Page 9 of 17
Financial Statements as Property Tax Revenue. The Board directs the RM to work with its
auditor(s) to correct the error in its future year's audits.
Unaccounted for Water
The Board notes, the RM reported unaccounted for water of -5.0%. This is not a
typical representation of unaccounted for water levels. The Board directs the RM to file an
updated report on unaccounted for water using the most recent data available by November
1, 2023, and to provide explanations and/or a plan to address unaccounted for levels that are
negative or do not fall within the maximum 10% industry standard.
5.0 IT IS HEREBY ORDERED THAT:
1. The revised water rates for the Rural Municipality of Lac du Bonnet, Brookfield Water
Utility, BE AND ARE HEREBY approved in accordance with the attached Schedule A,
effective January 1, 2024, January 1, 2025, January 1, 2026 and January 1, 2027.
2. The Shared Cost Allocation Methodology for the Rural Municipality of Lac du Bonnet BE
AND IS HEREBY APPROVED.
3. The Rural Municipality of Lac du Bonnet is to provide a notice of the decisions found in
this Order to its customers as soon as possible, with a copy provided to the Public Utilities
Board.
4. The Rural Municipality of Lac du Bonnet amend its water and wastewater rate By-Law to
reflect the decisions in this Order and submit a copy to the Board once it has received
third and final reading.
5. The Rural Municipality of Lac du Bonnet review its water rates for the Brookfield Water
Utility for adequacy and file a report with the Public Utilities Board, as well as an
application for revised rates if required, by no later than July 1, 2027.
6. The Rural Municipality of Lac du Bonnet submit its 2022 Audited Financial Statements as
soon as they are available.
Order No. 108/23
September 14, 2023
Page 10 of 17
7. The Rural Municipality of Lac du Bonnet file an updated report on unaccounted for water
levels, including explanations and/or a plan to address if unaccounted for levels are a
negative figure or do not fall within the maximum 10% industry standard, by November
1, 2023.
Board decisions may be appealed in accordance with the provisions of Section 58 of The
Public Utilities Board Act, or reviewed in accordance with Section 36 of the Board's Rules of
Practice and Procedure (Rules). The Board's Rules may be viewed on the Board's website
at www.pubmanitoba.ca.
Fees payable upon this Order - $500.00
THE PUBLIC UTILITIES BOARD
"Marilyn Kapitany"
Panel Chair
"Frederick Mykytyshyn"
Assistant Associate Secretary
Certified a true copy of Order No. 108/23
Issued by The Public Utilities Board
Assistant Associate Secretary
Order No. 108/23
September 14, 2023
Page 11 of 17
SCHEDULE A
RURAL MUNICIPALITY OF LAC DU BONNET
BROOKFIELD WATER UTILITY
WATER UTILITY RATES BY-LAW NO. 13-22
SCHEDULE OF QUARTERLY RATES
Effective January 1, 2024
1. Schedule of Commodity Rates
& Quarterly Service Charge
January 1, 2024
Cubic Meters per quarter
All Water consumption
$7.64
Quarterly Service Charge
$28.40
2. Minimum Charges per Quarter
Notwithstanding the rates set forth in paragraph 1, all customers will pay the
applicable minimum charges per quarter set out below, which includes the water
allowance as listed.
a) Water Customers
Group
Water
Customer
Water
Water
Capacity Included
Service
Commodity Total Quarterly
Meter Size Ratio
Cubic Meters Charge
Charge
Minimum
5/8 inch
1
14
$28.40
$106.96
$135.36
3/4 inch
2
28
$28.40
$213.92
$242.32
1 inch
4
56
$28.40
$427.84
$456.24
2 inch
25
350
$28.40
$2,674.00
$2,702.40
3 inch
45
630
$28.40
$4,813.20
$4,841.60
Order No. 108/23
September 14, 2023
Page 12 of 17
1. Schedule of Commodity Rates
& Quarterly Service Charge
January 1, 2025
Cubic Meters per quarter
All Water consumption
$7.98
Quarterly Service Charge
$29.39
2. Minimum Charges per Quarter
Notwithstanding the rates set forth in paragraph 1, all customers will pay the
applicable minimum charges per quarter set out below, which includes the water
allowance as listed.
a) Water Customers
Group
Water
Customer
Water
Water
Capacity Included
Service
Commodity Total Quarterly
Meter Size Ratio
Cubic Meters Charge
Charge
Minimum
5/8 inch
1
14
$29.39
$111.72
$141.11
3/4 inch
2
28
$29.39
$223.44
$252.83
1 inch
4
56
$29.39
$446.88
$476.27
2 inch
25
350
$29.39
$2,793.00
$2,822.39
3 inch
45
630
$29.39
$5,027.40
$5,056.79
Order No. 108/23
September 14, 2023
Page 13 of 17
1. Schedule of Commodity Rates
& Quarterly Service Charge
January 1, 2026
Cubic Meters per quarter
All Water consumption
$8.32
Quarterly Service Charge
$30.38
2. Minimum Charges per Quarter
Notwithstanding the rates set forth in paragraph 1, all customers will pay the
applicable minimum charges per quarter set out below, which includes the water
allowance as listed.
a) Water Customers
Group
Water
Customer
Water
Water
Capacity Included
Service
Commodity Total Quarterly
Meter Size Ratio
Cubic Meters Charge
Charge
Minimum
5/8 inch
1
14
$30.38
$116.48
$146.86
3/4 inch
2
28
$30.38
$232.96
$263.34
1 inch
4
56
$30.38
$465.92
$496.30
2 inch
25
350
$30.38
$2,912.00
$2,942.38
3 inch
45
630
$30.38
$5,241.60
$5,271.98
Order No. 108/23
September 14, 2023
Page 14 of 17
1. Schedule of Commodity Rates
& Quarterly Service Charge
January 1, 2027
Cubic Meters per quarter
All Water consumption
$8.66
Quarterly Service Charge
$31.36
2. Minimum Charges per Quarter
Notwithstanding the rates set forth in paragraph 1, all customers will pay the
applicable minimum charges per quarter set out below, which includes the water
allowance as listed.
a) Water Customers
Group
Water
Customer
Water
Water
Capacity Included
Service
Commodity Total Quarterly
Meter Size Ratio
Cubic Meters Charge
Charge
Minimum
5/8 inch
1
14
$31.36
$121.24
$152.60
3/4 inch
2
28
$31.36
$242.48
$273.84
1 inch
4
56
$31.36
$484.96
$516.32
2 inch
25
350
$31.36
$3,031.00
$3,062.36
3 inch
45
630
$31.36
$5,455.80
$5,487.16
Order No. 108/23
September 14, 2023
Page 15 of 17
The Following Clauses Take Effect January 1, 2024
3. Service To Customers Outside Utility's Limits
The Council of the Rural Municipality of Lac du Bonnet may sign Agreements with
customers for the provision of water services to properties located outside the
boundaries of Brookfield Water Utility. Such Agreements shall provide for payment of the
appropriate rates set out in this Schedule, as well as a surcharge, set by Resolution of
Council, which shall be equivalent to the frontage levy, general taxes, and special taxes
for the Utility purposes in effect at the time or may be in effect from time to time, and
which would be levied on the property concerned if it were within Brookfield Water Utility
boundaries. In addition, all costs of connecting to the Utility's mains, and installing and
maintaining service connections, will be paid by the customer.
4. Billings and Penalties
Accounts shall be billed quarterly based on water used. A late payment penalty
charge of 1.25% compounded monthly shall be charged on the dollar amount owing
after the billing due date. The due date will be at least fourteen (14) days after the
mailing of the bills.
5. Disconnection and Reconnection
The Rural Municipality shall charge a fee as shown below for a re-connection or a
disconnection of a service, if requested by a customer.
Service may be interrupted or disconnected as follows:
Curb Stop Turn-off
$50.00
Curb Stop Turn-on
$50.00
Customers will continue to receive their water billing, even if the curb stop has been
turned off.
Meter Removal (includes cost for curb stop turn off)
$300.00
Re-installation of Meter (includes cost for curb stop turn on)
$150.00
Customers will not receive quarterly water billings until the meter has been re-installed
and the curb stop has been turned on
The Public Utilities Board has approved the Conditions Precedent to be followed by the r
Rural Municipality with respect to disconnection of service for non-payment including
such matters as notice and the right to appeal such action to The Public Utilities Board.
A copy of the conditions precedent is available for inspection at the Rural Municipality's
office.
Order No. 108/23
September 14, 2023
Page 16 of 17
Any service disconnected due to non-payment of account shall not be reconnected until
all arrears, penalties and a reconnection fee of $300.00 have been paid.
6. Liability for Charges
Pursuant to Section 252 (2) of The Municipal Act, the amount of all outstanding
charges for water services, including fines and penalties, are a lien and charge upon
the land serviced, and may be collected in the same manner in which ordinary taxes
upon the land are collectible, and with like remedies
7. Water Meters
Water meters are owned by the Rural Municipality but are the responsibility of the utility
customer to maintain. If the water meter is broken, frozen, etc., the utility customer will
be billed for a new meter at the current cost of replacement.
8. Meter Testing
That in any case where a utility customer requests that a meter be tested for accuracy,
the customer will provide the Rural Municipality with a deposit of $100.00. The Rural
Municipality will then remove the subject meter and send it to an independent lab for
testing. If the meter is found to be faulty, all costs associated with the testing process will
be borne by the Rural Municipality and the deposit will be refunded to the customer and
the customer's account will be adjusted for the preceding four (4) months. If the meter is
found to be in proper working order, all costs associated with the testing process will be
borne by the customer and the customer will be billed or refunded any balance owing.
9. Cross Connections
No customer or person shall connect, cause to be connected or allow to remain
connected any piping, fixture, fitting, container or appliance in a manner which under any
circumstances may allow water, wastewater or any harmful liquid or substance to enter
the Rural Municipality's water system.
If a condition is found to exist which, in the opinion of the Rural Municipality, is contrary
to the aforesaid, the Rural Municipality may either:
Shut off the service or services; or
Give notice to the customer to correct the fault at his or her own expense within a
specified time period.
10. Conditions of Disrepair
In the event that there are conditions of disrepair in the water works on a property that
detrimentally affects the system as a whole and, upon the failure of the owner of the
property to correct the condition within a reasonable time, the Rural Municipality, or its
Order No. 108/23
September 14, 2023
Page 17 of 17
agents, may enter the property, effect repairs and charge the cost thereof against the
subject property as ordinary taxes.
11. Authorization For Officer To Enter Upon Premises
The Public Works Supervisor, or other employee authorized by the Rural Municipality in
the absence of the Public Works Supervisor, shall be authorized to enter upon any
premise for the purpose of:
Affixing to any pipe, wire or apparatus connected with any such utility, a meter or any
other measuring or testing device; or taking readings from, repairing, inspecting or
removing any meter or apparatus belonging to the Rural Municipality.