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Affordability Policy

The Town of The Blue Mountains passed an Affordability Policy for Water and Wastewater Service Extensions in 2017.

This Policy established affordability criteria for Water and Wastewater Service extensions in order to determine whether to proceed with a water and/or wastewater service extension.

The cost of municipal servicing can be extensive. The Affordability Policy will ensure that these service extensions are affordable for both the Town and the benefitting property owners.

Each water and wastewater service extension project will continue to be assessed on a case by case basis and the viability and value of a project is determined by considering the necessary works, available funding sources, and the end cost to the benefitting property owners.

The cost of municipal servicing can be extensive. The Town recovers the majority of the costs from benefitting property owners, and therefore each project needs to be assessed on a case by case basis that considers the necessary works, available funding sources, and the end cost to the benefitting property owners.

What makes a water or wastewater service extension project "affordable"?

The most current census data will be used to determine the median after tax single household income. This number will be used to determine the affordability, as each benefitting property owner will be required to pay for the cost of a service extension with available after tax income.

Using the most recent Census Data, the following measures of affordability will be used:

  • If the annual household cost of extending a service is equal to, or less than 5% of the median after tax single household income, the project would be considered affordable.
  • If the annual household cost of extending a service is greater than 5% but less than 10% of the median after tax single household income, the project would require additional analysis to determine affordability, including additional financial support, in order for the project to meet the affordability threshold of 5%.
  • If the annual household cost of extending services is equal to or greater than 10% of the median after tax single household income, the project would be deemed unaffordable for both the Town and the benefitting property owners.

For example, using the most recent Census Data, (2016 on the 2015 median after tax single household income) the principles outlined above would result in the following measures:

Description Household Income Share of Income (%/year) Share of Income ($/year) Maximum Charge
Affordable per service $ 33,760 <5% $ 1,690 $ 21,060
Unaffordable per service $ 33,760 >10% $ 3,380 $ 42,130

The above chart illustrates the Maximum Service Extension Charge per service extension. The figures are calculated assuming a 20-year financing with a 5% annual interest rate. If a property is receiving both a water and wastewater service extension, the Maximum Service Extension Charge would be doubled.

Why does the Town want to extend water and/or wastewater services?

The distribution of potable water and the collection of wastewater (sewage) benefits both the property owner and the community.
Servicing enables the owner to: i) achieve the highest value use of their property by removing building restrictions imposed by on-site servicing; ii) avoid the costs and inconvenience associated with the ongoing operation, maintenance and replacement of water wells and septic systems; iii) lower the cost of water and wastewater servicing through centralized municipal utility; and, iv) access to reliable and permanent servicing solutions with high quality.

Community benefits are achieved by enabling the:

  • protection of vulnerable natural lands, groundwater or water courses especially when lot sizes are small;
  • servicing of employment lands (i.e. restaurants); and
  • incremental overall improvement of the natural environment by centralizing wastewater treatment to a facility regulated to discharge compliant effluent.

What are the main issues the Town encounters when extending municipal services?

Cost
Much of The Blue Mountains’ development has occurred along the Georgian Bay shoreline, resulting in long, thin and stretched out water distribution and wastewater collection systems that require more pumping stations, reservoirs and appurtenances than a typical system of its size. As well, the shallow depth of bedrock increases construction costs significantly.

Method
The Town’s unique geography means that there are elevation changes throughout the Town’s water and wastewater systems that hampers traditional servicing methods. The topography impedes water distribution and requires the evaluation of alternative means to collect wastewater beyond gravity sewers, including modified gravity systems, low pressure sanitary systems. In addition, the need for pumping stations or grinder pumps increases.

New wells and septic systems
Residents with older well or septic systems who connect to municipal services can avoid future repairs and maintenance costs for private wells and septic systems. However, this benefit does not outweigh the cost of connecting to municipal services for residents who have recently installed a new well or septic system.

The Affordability Policy states that residents who have installed or significantly upgraded a new well or septic system within 5 years can defer the payment of capital costs for a maximum of ten years.

The Town passed a Wastewater Servicing Methodology Policy to outline the means by which the selection of wastewater servicing will be made when extending municipal wastewater services. This policy also clarifies the ownership and operation of grinder pumps servicing properties that are connected to low pressure sanitary systems.

The Policy confirms that when a municipal wastewater servicing extension to an un-serviced area of Town is being considered, a comparison of life cycle costs over a 20-year period will be completed to select the preferred municipal servicing alternative.

In most instances, the alternative with the lowest life-cycle cost will be preferred. There may however be circumstances where the costs are relatively close or that there are other factors such as property owner preference, future extension capacity or other factors that warrant another alternative being selected as the preferred option. Other overriding considerations may be the protection of the natural environment or another priority reason by the Town.


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