Kelowna City Council used the last meeting of 2007 to do their annual review of DCC rates. The full staff report and recommendation can be found at the above link. One of the items that caught my eye is produced below.
You can click on the image to enlarge but basically it says that under certain conditions interest charges on major capital projects can be included as a cost in the DCC formula. This would mean that the Wastewater Plant could be included in the DCC inventory at cost plus projected interest costs.I have been asking for at least 2-3 years for an annual DCC review, a consultant to update our project costs and to recommend DCC rate adjustments. I realize that the City will be investigating sector DCC's and reduced DCC's for secondary suites etc. but the first step and one that can be implemented is a readjustment of DCC's to more realistic levels based on up to date cost accounting.
Sept 11 Posting:
At Council Cow meeting in July Council passed a resolution to have a workshop on DCC's . Hopefully this will occur immediately and a consultant hired to recommend new DCC levels in conjunction with the ongoing OCP review. After all if GVSC could have a study done and recommend Parks DCC increases of up to 32% then the City is more than capable of ascertaining that our DCC's must be out of date and probably underfunded.As an illustration the cost assigned in 2005 for the Treatment Plant (which is a 50% DCC project) was $27,500,000. Now the last I heard the sewer plant came in thanks to a GST break at around $29,000,000. This $1 1/2 million difference should be reflected in the DCC calculation.
Now if we consider the outstanding debt on the sewer system is $21,875,979 as at Dec. 31/2006 most of it due 2012 and beyond according to the financial statements of the City then we can easily see that the DCC project cost basis should be much higher than what is reflected in the out of date 2005 figure..
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