Director fears utility shortfall

Richard Rolke - Vernon Morning Star Published: March 13, 2010 12:00 PM

One politician is concerned water utility revenue could evaporate under strict restrictions. The North Okanagan Regional District is already forecasting tight conservation rules this summer because of a dry winter, but director Gyula Kiss insists that could undermine money generated by user fees. “The consequences of this will significantly impact our budget,” he said. “We’re going to conserve water but there are fiscal consequences.” Kiss believes stage two restrictions — irrigating twice a week — could lead to a $2 million deficit. “How will we recover that?” he said.

Beyond stage three restrictions (once a week) and stage four (no watering) possibly worsening the situation, Kiss says higher utility fees could lead to less consumption, forcing revenue down even further. Staff aren’t convinced there will be a problem. “It’s not our expectation that we will see a significant revenue decline because of increased rates,” said David Sewell, finance general manager. If a deficit were to occur, Sewell says a plan would be created to cover that situation and one possible option would be reserves. Kiss believes user fees create competing objectives between income and conservation, so taxation should be used for capital improvements.“We would have a fixed part of the budget covered by taxation,” he said.