ST. PAUL – The City of St. Paul passed the first reading of an ordinance that could potentially reduce the recently implemented capital replacement levy for water and sewer during a council meeting on August 12.

On July 7, the City Council passed a water and wastewater ordinance that would establish a new capital replacement levy of $17 for water and $9 for wastewater to replace the City’s water and wastewater infrastructure in the future.

During the August 12 council meeting, changes were made to the bylaw to remove service fees that the city no longer charges or service fees that have become redundant because they are already covered by the zoning code – which will be presented to the council at a later date.

Since the council is already considering changes to the water and sewer bylaws, Mayor Maureen Miller has asked the council to discuss other parts of the bylaws with a consultant in a closed session. In particular, changes to the capital replacement levy for water and sewer are being considered.

The closed session lasted over half an hour.

After the council reconvened following the closed session, Councillor Brad Eamon made a motion to direct the administration to review the monthly capital replacement contributions for water and sewer.

The motion was accepted. A second reading of the statute will take place at the next council meeting.

Miller said, “To clarify, we wanted to save 25 percent of the replacement value for (future replacement) of water and wastewater facilities,” which was reflected in the capital replacement levy of $17 for water and $9 for wastewater.

“But given the feedback (from the community), we felt maybe it was a little aggressive, and we’re going to review it now and send it back. That’s what the long conversation with our consultant was about,” Miller said.

What does 25 percent replacement value mean?

In a subsequent interview with Lakeland this weekMiller said the replacement value is based on the current estimated cost of replacing the city’s water and sewer infrastructure, which she said the city cannot currently afford.

She said funding from the provincial and federal governments would likely cover only 75 per cent of the cost of replacing the infrastructure.

Miller said in the past, the provincial government’s Water for Life program would have covered 100 percent of the cost of building a water treatment plant, but that is no longer the case.

“That is the challenge… that is why we have to save now.”

She added: “Our original goal was to continue to save 25 percent. We expect to reach that goal in another 17 years and that we can reach that goal immediately when we can rebuild.”

The Council is now proposing to save 10 percent of the replacement value from the beginning of September.

This means that if the regulation is passed, the capital replacement fee for water and sewage will fall from a total of $26 to $10.50, said Chief Financial Officer Mitchel Bachelet in a follow-up with Lakeland this week. So $7 to replace water costs and $3.50 for sewer.

And because the cost of replacement could rise in the future, Miller said the council will review what the levy should be every five years. Savings today will also save the municipality from debt later, she said.

“The number will gradually increase because we have to get to 25 percent somehow unless the government starts handing out money, but I don’t think anything will change,” Miller said.