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Water user rates face potential increase

Masha Scheele
Local Journalism Initiative


Changes in the Water and Waste Water Utility operating costs may be covered in 2021 by a four per cent increase in user rates, according to the Town of Hinton status update on the water treatment plant.

Since early 2020, CAO Emily Olsen and West Fraser Mill manager, Paul DiJulio, have worked to understand the status of the Water Treatment Plant project, and to build working relationships between the two organizations.

The discussion on operating and other costs incurred by the Town that were not included in the Interim Water Services Agreement between the Town and West Fraser have taken place over the last 10 months.

Additional costs by the town were identified and verified, Olsen said during the standing committee meeting on Nov. 17. Language in the agreement provided opportunity for review of the actual operating costs and impacts of the water services agreement. No review has taken place to date, Olsen stated.

“The costs discussed amount to approximately $310,000 and include payment for power, rent and contributions to lagoon maintenance. These have been funded through the 2021 budget and will be included in the package council receives to discuss this weekend,” Olsen said.

Olsen said these costs are best discussed within the context of the budget document along with the information on capital cost and operating expenditures during budget deliberations this weekend.

According to the report, administration supports taking appropriate responsibility for coverage of costs incurred by water treatment plant operations by the Town, and for new contributions to support wastewater management.

The conclusion reached is that payment for the coverage of operating costs will be included and brought to Council for decision in the Town of Hinton 2021 budget. 

Of that $310,000, $110,000 is for power, $25,000 is for rent of the water treatment plant, $150,000 is a contribution to lagoon maintenance, and $25,000 is for a reduction of West Fraser potable water bill through accounting for re-circulation charges.

The changes in the Water and Waste Water Utility operating costs can be covered in 2021 by a four per cent increase in user rates, and a one-time transfer from reserves of $134,787. 

The amount required to cover these costs for 2022 will be fully covered by an additional four per cent increase in utilities, stated administration’s report.

Securing a sustainable potable water supply and maintaining safe and reliable infrastructure to meet the Town’s needs is part of Hinton’s council strategic plan that was set in 2017.

Very few public discussions have taken place on this item due to the confidential nature of agreements and sequencing of phase one and two of the umbrella agreement. 

“A lot of work has gone into reaching the agreements that are in place currently, including the Umbrella agreement signed by both parties in 2018,” stated Olsen.

Phase one was concluded when the Town assumed operations at the water treatment facility to manage the production of potable water using process water provided by West Fraser. 

“However the goal of transition was to eliminate any liability to West Fraser and their involvement in potable water supply to the town. In order to reach that goal, a water treatment plant bypass solution was created in collaboration with both parties,” Olsen explained.

Phase two focuses on the steps necessary to support and construct the bypass solution.

The original date included in the agreement was to commission this service through the bypass solution by January 2022, but Olsen explained that this process takes at least three years to achieve. 

Phase two faced several delays due to turnover in both organizations, as well as decision-making needed to advance phase two.

“In 2020, with new management on both sides, a discussion in collaboration on next steps was initiated and has taken place,” Olsen said.

The work to commence in 2021 is on the engineering and design side of the bypass, and a grant application was prepared to submit to the Alberta Municipal Water and Wastewater Partnership Program in early 2021. That grant application will come back to council for decision.

In the Capital Budget for 2021, $200,000 has been included to initiate the design and engineering of the by-pass solution. Additional funding for this work is included in 2022, along with funding allocated for construction.

In the 2021 Capital Plan, amounts for the project include $865,253 for water treatment plant upgrades and replacement design, and $25,625,000 for water treatment plant upgrades and replacement construction.

Initial site testing and development of a preliminary design will take place in 2021, and an updated budget and schedule could be presented to Council in September 2021.