The City of Campbell River, Strathcona Regional District (SRD) and some residents south of town are going to court this week over recent water rate hikes.
This case is being heard in a Nanaimo court room as this story is going to press, with two days set aside.
A major question is whether the city has exceeded its powers in how it charges for the provision of bulk water to the regional district and its residents in the north part of Area D.
For its part, the SRD board passed a resolution on June 6 to raise the rates to cover the fact the system has been costing much more than it has been taking in for several years. The issue is not new, and in fact, rate hikes were the subject of debate at the SRD table four years ago.
RELATED STORY: Area D water rate hikes put off for now
This spring, the SRD board did impose rate hikes, which were dramatic both for customers paying flat rates and the relatively small number of residential customers on meters.
RELATED STORY: Strathcona Regional District hikes water rates for rural area
In response, Area D resident Robert Benoit launched the action on behalf of himself and other residents following the hike in water rates. He and neighbour Jamie Wood started looking for support among other residents to raise money to cover the court costs.
The Mirror contacted Benoit last week for further comment but had not heard back as of press time. In his affidavit, he states, “My water bill has been increasing steadily since 2013 without any explanation…. For 2018 I am now having to pay $1,205.31 in total for water use…. This is dramatically higher than what residents in the City of Campbell River are charged for water use, which is $396 in total.”
He suggests the city’s action has resulted from Area D residents’ rejection of amalgamation in 2014.
“We view Campbell River’s sale prices as unfair and a bullying tactic in retaliation to us voting against amalgamating,” he continues.
Area D Director Brenda Leigh reiterates many of the same points in her affidavit, explaining the increased rates have been difficult for residents in the north part of her electoral area. She states, “The water use charges in Area D have become a financial burden for myself and all of my constituents in northern Area D, which includes a high percentage of pensioners and others on limited income.”
The case revolves around whether the city has exceeded its powers in hiking the rates, with the petitioner and his lawyers pointing to the fact there is no current agreement to cover the cost of bulk water sales. Leigh also refers to this point in her affidavit. Another issue raised by the petitioner is the legality of the city in charging residents in the north part of Area D more than residents living within the city. The reason for this, according to the court documents, is to make up for other charges such as development cost charges and parcel taxes the city cannot pass on to the Area D residents, as they live outside its jurisdiction.
Because the case is currently before the court, the City of Campbell River told the Mirror it is not in a position to comment on any aspect of the case at this time. On the regional district side, the issue was on the agenda at the July 18 board meeting, which fell apart when the Campbell River city council representatives all recused themselves, many citing they would be in conflict of interest. This, along with the fact that Leigh had stepped out of the room several minutes earlier, ultimately left too few regional district representatives around the table for a quorum. At this point, the meeting legally had to end. That the issue was on the agenda was unusual, as governments refrain from open discussion about ongoing legal issues. (A link to the agenda item has since been removed from the regional district’s website.)
RELATED STORY: Council reps all leave regional district meeting over pending water rate lawsuit
One question that lingers is who will ultimately pay for court costs? Benoit and residents have been raising an estimated $15,000 to cover their expenses. Benoit is asking that, if successful, he be entitled to special costs, or if unsuccessful, that no costs be imposed on him.
Another group, the Area D Residents and Ratepayers Association (ADRRA), responded by sending out an email newsletter on July 25 questioning the logic of suing the city and regional governments. For one thing, an SRD report – since removed from the regional district website – estimates the court action could cost the SRD $40,000, or more if Benoit is successful in his request that he bear no costs if his claim is unsuccessful.
“In accordance with the Local Government Act, those costs that cannot be recovered from the petitioner would need to be borne by the Area D water service budget,” the SRD staff report says.
Added to this are the potential costs to the city. With the city not commenting, there is no word on how much this will cost municipal taxpayers or whether it will bill these legal costs back to users in Area D.
“Suing yourself is obviously counterproductive and simply distracts from the fundamental problems with the Northern Area D Water System,” the ADRRA newsletter says. “Spending a total of $55,000 or more of Area D water customers’ money on lawsuits doesn’t buy one single gallon of water.”