Halifax Water to ask for rate hike to deal with $18M deficit

Halifax Water is projecting an $18-million deficit for the coming year that the utility plans to offset through rate changes.

The utility presented its 2024-25 business plan to regional council on Tuesday.

Salaries and wages, gas costs, debt payments and delivering ongoing projects are the key components of the operating budget.

"We'll be targeting to go to the Utility and Review Board this year with a rate application," Kenda MacKenzie, acting CEO of Halifax Water, told councillors.

The deficit increased about $16 million from last year, when Halifax Water projected a $2-million deficit. Instead, the utility ended the year with about a $3.6-million surplus that was factored into this year's plan. Rates were last increased in April 2023.

The utility is also planning to spend $152 million on capital projects this year with the vast majority of the funds going toward upgrading existing infrastructure.

Work this year includes upgrades to water supply plants, progress on the Cogswell redevelopment's district energy system using heat from the nearby wastewater plant, and Fairview Cove sewer twinning to address capacity issues. Improvements will also be started for Bedford's Mill Cove wastewater facility, including moving treatment indoors.

"What I'm hearing is good news," said Bedford Coun. Tim Outhit.

MacKenzie also talked about the utility's integrated resource plan, approved in 2019, that lays out 30 years of investments needed to restore aging infrastructure and handle the boom of growth around the municipality.

"That's where we try and gauge and forecast and plan, when that pipe might need to be replaced — and then looking if it's triggered solely by that development, they would replace it — but we're monitoring what's going on," MacKenzie said.

Some councillors brought up stormwater concerns. They said communities that have always dealt with some flooding saw major issues after last year's dramatic rainstorms, including roads becoming submerged around the city.

MacKenzie said the city's infrastructure wasn't built to handle that type of extreme water increase, and Halifax Water is working closely with municipal staff to look at what can be done in vulnerable areas.

Coun. Becky Kent said it will take time to adjust to these storms driven by climate change.

"We need to have the opportunity to catch up," Kent said. "We're not gonna have an instant response."

Halifax Water also defended its plans for an $89-million operations centre in Burnside that would combine four aging buildings. A report to the UARB from real estate services firm CBRE said the price tag was not justified.

Reid Campbell, director of engineering and technology services for Halifax Water, said the four old depots are far too small for the utility's needs and some don't have room to add an extra employee or "park another truck."

"We did a lot of analysis and determined the most cost effective way to do that is to build one centralized depot," Campbell said during the meeting.

He said the UARB is set to hold a hearing in April about Halifax Water's funding request for the new Burnside centre.