Hamilton residents paid more for water than the city needed in 2018

Hamilton Water has $18 million left over from last year's budget, and local water rates are still set to increase by 4.66 per cent.

But the city says it needs the money to upgrade the city's aging water system.

Pending city council approval, the average homeowner will pay $32.20 more for water in 2019. That means the average home will pay $722.90 a year, up from $690.70 in 2018.

Last year, water rates increased 4.5 per cent ($29.75), and Hamilton Water had an $18-million surplus. So did residents overpay?

"In theory, to look at it as base principle, yes," said Andrew Grice, head of Hamilton Water. "Last year could have been a lower rate increase if that money wasn't spent."

Grice said the surplus happened in part because the city budgeted for projects and didn't have enough staff to carry them out. The city wanted to jump on unprecedented matching grants from the provincial and federal governments.

Also, Hamilton Water budgeted for repeats of the frigid winters in 2014 and 2015, when pipes froze and cost the city millions. That hasn't happened since, Grice said, so it's removed those costs from the 2019 budget.

Still, Coun. Lloyd Ferguson of Ancaster had questions.

"If you don't have the team, then why keep asking for this?" he said.

"You are asking for a rate increase that's double or triple the rate of inflation. You're asking people to fund that."

Grice said afterward that Hamilton Water's rates "are lower than pretty much anyone else in the entire province. Everyone's trying to trend in an upward direction to fix that construction challenge."

The challenge is real. Large portions of the city's watermains are more than 50 years old, Grice said. The city is trying to replace kilometres of underground infrastructure before it gives way and causes havoc in neighbourhoods. 

Climate change is also increasing how much extreme weather Hamilton is getting, staff say. That makes the situation more pressing.

This year, four times pipes burst and flooded homes. The biggest instance was in the east end in October, when a resident said the water "came tearing through like a river."

Grice said last year's surplus is going into reserves, and being absorbed into the 2019 water budget. 

Meanwhile, Hamilton residents are doing a decent job at conserving water. From 2011 to 2017, usage decreased more than six per cent.

All this fell to a brand new general issues committee, including five new councillors who only took office on Monday.

Brad Clark is a new councillor for Ward 9 (Upper Stoney Creek). He served in that seat four years ago though, and was once a provincial cabinet minister.

He sat out on voting for the budget Thursday. This is a complex document, he said. He hasn't even been a councillor long enough to meet with staff and ask questions about it.

"I really believe that it's prudent for councillors to be fully informed, and I didn't see the rush to have this adopted now," he said. "They could have easily put it off for a couple more weeks and made sure everyone was comfortable with it."

City council still has to ratify the budget on Dec. 19. On Friday, councillors will vote on the capital budget, which proposes an increase of 0.52 per cent, or $18 on the average home.