Potty politics: can we afford to flush in 2025?
Remember, during the first year of the COVID-19 pandemic, we were all worried about the toilet paper supply? Hoo-boy. Lineups were wild, and stores limited the number of packs of the precious paper we could buy. What could be worse than no toilet paper? Ha. Just imagine the panic if we couldn’t afford to flush anymore. Worried about the cost overrun (almost $3B) for the new North Shore wastewater treatment plant, I figured out how the overrun would impact our cost per flush and utility bills.
Turns out flushing is pretty cheap. In 2024, here’s how much a flush costs in each North Shore municipality. Click here to check out how I derived these numbers (it’s guaranteed riveting stuff).
Wait a second
Hang on. What about the rising costs of the new wastewater treatment plant? We’ve heard repeatedly that each North Shore household will need to pay an average of $590 annually for 30 years to cover the bill. Well, the $590 is a number you get if you divide the cost of the plant by the number of households paying for the plant over 30 years. While perhaps not wrong, the $590 is just illustrative. The yellow row in the table below shows the actual annual year-over-year percentage Metro cost increases for the City of North Vancouver. That 67.9% percent increase is wicked in 2025. That same percentage applies to all three municipalities.
But that’s not the increase that will show on our utility bills.
If the City of North Vancouver charged the increases from Metro above, not even considering the municipality's increases, here’s what my bill would look like over five years. I live in a single-family home in the City of North Vancouver.
Ouch! Are we going to have to shell out? For sure. But not by as much as the above table shows. Why?
Cost sharing
First, while we Northshoreans will bear the brunt of the treatment plant cost overruns, all Metro Vancouver households will contribute. Our costs will phase in over five years, but all other Metro Vancouver households will be charged their full amount in 2025. This means the first year won’t be such a massive hit, and the treatment plant can continue construction.
Rate smoothing
Second, our municipalities use the equivalent of rainy day funds to “smooth rates.” Instead of implementing sudden, significant rate hikes, municipalities stockpile a rainy-day fund by setting aside a portion of utility fees or charging an extra levy for a specific purpose. We collectively save money today to pay for unpredictable future circumstances. We can all agree that the unexpected $2.8 billion price increase for the wastewater treatment plant is extraordinary. This strategy is also about fairness because it means that people flushing today don’t have to pay the entire price for tomorrow’s flushes.
Using each municipality’s actual cost increases, I did the same math for 2025 to compare the cost-per-flush stats. The same calculation for 2025 shows that although the cost will increase, we will still enjoy pretty cheap flushes. Phew—there's no need to panic. Yet.
The catch?
While for 2025, a flush is still cheap, by 2030 and beyond, maybe not. The different municipalities have varying buffer levels in reserve and can only smooth rates to that extent. One way or another, we’ll have to pay through our reserve funds or via increased rainy day fund fees. We certainly won’t get off the pot lightly. But, the rate smoothing strategy helps—so long as reserves are available.
The dollar value increase in 2025 is not close to the often-quoted $590 per year per household in any municipality. However, the actual percentage increases are much steeper than the usual single-digits thanks to Metro’s ballooning bill. Have a look.
Will we get help?
While all three municipalities increased the amount of money we put away for the treatment plant based on a $1B price tag, there’s no way those funds will cover the $3B overrun without significant year-over-year fee increases as well. Some believe that another level of government will come to the “rescue.” Cold comfort. The money all comes from us, so a “rescue” from the provincial or federal government, while a relief for locals, would be shifted to more tax contributors. But which politician is going to be able to sell that? And really, why should people in Kelowna or Nova Scotia contribute to a North Shore poo plant?
2025 muni-by-muni strategy and numbers
Here’s what each North Shore municipality is doing to prevent us from feeling the flush of our tax dollars going down the drain through a massive utility bill “shock” in 2025.
The City of North Vancouver reserves a portion of each year's utility fees in a reserve fund to help smooth future rate increases. The city will draw down $2.8M from these reserves to reduce utility rate impacts caused by the high cost of the new wastewater treatment plant.
Sewer increases for 2025
The city charges a flat rate for sewerage which combines Metro charges and city charges. The rate will increase in 2024 by ~21% for both multi- and single-family households. In dollar terms, the increase for 2025 is $88 for households in multi-family buildings and $141 for single-family homes.
The District of North Vancouver also prudently saves money from fees paid into a reserve for rate stabilization. To reduce the rate shock caused by increased Metro fees, the district plans to withdraw money from its sewer and drainage stabilization reserve. For 2025, the district will withdraw $2.9M from reserves to stabilize rates. Given its sizable $35M reserve, the district says it will be able to smooth rates for the next ten years.
Sewer increases for 2025
Sewer utility fees will increase by 19% for both multi- and single-family households. In dollar terms, this represents a year-over-year increase of $181 for single-family households and $151 for households in multi-family buildings.
West Vancouver is taking a hybrid approach. The plan for 2025 includes raising sewer rates to cover the treatment plant’s original re-estimated $1.058 billion price tag. In addition to raising sewer rates, a new property-value-based wastewater treatment plant levy targets the extra $2.8 billion plant price tag. By splitting the charges, property owners can defer paying the extra portion (the levy) using the same program for property tax deferral. The district will also contribute $650,000 from their $5M rate smoothing reserve for 2025. The reserve balance will continue to offset increases between 2025 and 2029.
Sewer increases for 2025
Sewer and drainage utility fees + the new Waste Water Treatment plant Levy represent an average single-family home by 35% or $315/household. Sewer and drainage utility fees + the new Waste Water Treatment plant Levy represent a 38% increase for an average household in a multi-unit building or $148/household.
Summing up the wastewater treatment plant bummer
Despite efforts from local governments to soften the blow, we are still on the hook for $3B more than was planned. Those same billions could go to many other community assets: the Spirit Trail, parks, sidewalks, turf fields, community centers, more firefighters, etc. Instead, that money will go to the least exciting of all amenities. Prior taxpayers (most of us) deserve thanks for contributing to our reserve funds, as do the municipal staff and previous councils that led in that direction. May the reserves last!
Now, we can hope for an official public inquiry into how the cost overruns occurred to avoid the same problem in the future. In the meantime, I’ll check out the sale on composting toilets at Home Depot.
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