St. Paul residents could see an additional per month added to their water bills in 2027 as Town Council looks to build savings for aging infrastructure and reduce the need for future borrowing.

During the November 9 regular council meeting, council reviewed proposed water and sewer rates with Golnaz Azimi of Azimi Consulting, discussing everything from operating costs to how much money the Town should be setting aside to replace underground pipes, pumps and treatment infrastructure.

While no new utility rates were formally approved during the meeting, council reached a preliminary consensus to increase the monthly water capital replacement charge from $10 to $15 in 2027.

The proposed increase would add $60 annually to a residential water bill, before accounting for any other changes to water or sewer charges.

Saving now to avoid borrowing later

The capital replacement charge is money collected from utility customers and placed into reserves to help pay for infrastructure when it reaches the end of its useful life.

The Town introduced the charge at $7 per month before increasing it to $10 in 2026.

Azimi explained that the current charge covers approximately 15 percent of the estimated amount required to fully fund future water infrastructure replacement.

Increasing it to $15 would bring that contribution to approximately 22 percent.

Council discussed gradually increasing the charge by $5 annually, with the longer-term goal of reaching approximately 50 percent of the estimated replacement funding requirement within five years.

The idea is to build reserves steadily rather than face large borrowing requirements when major infrastructure fails.

Administration reported that the Town currently has approximately $535,000 in its water capital replacement reserve and $343,000 in its sewer capital replacement reserve.

Those numbers may sound substantial, but council heard how quickly that money could disappear.

During the discussion, administration noted that replacing a single block of larger water main, including hydrants and valves, could cost approximately $500,000.

The challenge is particularly significant because much of St. Paul’s infrastructure is aging, and grant funding for local water distribution systems has become increasingly difficult to obtain.

Council also discussed how borrowing to replace infrastructure ultimately places the cost back on utility customers, with interest added.

What about sewer rates?

Council also spent considerable time reviewing sewer charges, including the relationship between operating costs, debt servicing and infrastructure replacement reserves.

One of the key considerations was how to handle money previously allocated to debt payments.

Rather than simply removing those amounts from utility bills as debt is paid off, the consultant recommended considering whether some of that money should instead be redirected into reserves for future infrastructure replacement.

Council explored several possible approaches, including adjustments to fixed charges, consumption rates and sewer capital replacement contributions.

However, the consultant indicated that some calculations would need to be updated to reflect actual 2026 salary costs before final figures could be presented.

The Town also discussed developing a more comprehensive equipment and fleet replacement strategy so future vehicle and equipment costs can be properly accounted for across municipal services.

Regional water customers also discussed

The review extended beyond residential utility bills.

Council discussed a proposed rate of $1.45 per cubic metre for the regional water commission, including a working capital component.

The consultant and administration are expected to present the proposed rate structure to the commission.

The Town also raised questions about whether the bulk water filling station should contribute more toward infrastructure replacement costs. That issue is expected to receive further review.

No final rate changes approved yet

Although council provided direction on several aspects of the proposed rate structure, the discussion did not result in a new water or sewer rate bylaw.

Administration confirmed that the recommendations and updated calculations would return to council through a formal request for decision before any changes could be implemented.

For residents, the clearest proposal emerging from the meeting is the additional $5 per month for water infrastructure replacement in 2027.

The final impact on utility bills will depend on the complete water and sewer rate package council ultimately approves.