AMHERST - Amherst did not break the spirit of its fire protection agreement with the Municipality of Cumberland when it applied to the Nova Scotia Utility and Review Board to increase fire protection rates for fire hydrants in the county.
"The (water) utility was not part of the agreement between the town and the county regarding fire protection," consultant Bill Gates told the utility and review board on Tuesday during a hearing into the town's proposed water rate increase. "The agreement is between the town and the county. There is no reference whatsoever to the utility being a party to this agreement."
The agreement signed in 2008 between the town and the county was for fire service provided by the Amherst Fire Department, said Gates, who prepared the town's submission.
"It's not about the water provided by the utility, which is quite different," said Gates.
Following the hearing, town CAO Greg Herrett echoed Gates' comments saying it's the town's position that the agreement for fire services covers the operating and capital aspects of the fire department.
"The supply of water is not part of that agreement, that is for the water utility," said Herrett. "That was not contemplated at the time we negotiated the agreement."
The town is asking the county to pay for 32 of 40 hydrants located in the municipality.
In November, the town accepted a study from Gates' company that proposed raising water rates for most residential customers by 5.9 per cent in 2010-11, 5.5 per cent in 2011-12 and 4.3 per cent in 2012-13. It amounts to about $3 per quarter, or $1 a month.
During its presentation to utility and review board commissioner Kulvinder Dhillon, county consultant Bob Radchuck and municipal CAO Rennie Bugley said the county was surprised and disappointed with the town's submission.
"We were very surprised and disappointed with the town utility's request to recover fire protection costs through this application process," Bugley said. "We understand a very comprehensive fire services negotiation and signed a service agreement on March 20, 2008."
During that process, Bugley said, the town's representatives made no reference to the fact the utilty would be filing an application to recover fire protection costs. He said the service level has not increased over the years and no mention was made of the hydrants in the town's last application to the utility and review board in 2005.
Earlier in the hearing, the board refused to make ownership of the water lines outside the town as one of issues to be decided through this process.
Dhillon said ownership of the transmission lines was not part of the town's original application to the utility and review board. Since adding ownership would impact all ratepayers, without giving them proper notification, Dhillon rules against including it.
However, he suggested the issue needs to be resolved soon and feels the board would be willing to hear arguments from both sides.
The county welcomed Dhillon's commitment to hear the ownership issue and Herrett admitted later it's a situation that can't go unresolved for much longer.
"If you look at the submission and our rebuttal to the county's position, we offered to take over the line to the experimental farm. What we requested the board order in return is a cash payment that would allow for depreciation and replacement of that line," said Herrett. "By taking over that line we need to be able to account for its replacement in 50 years or so."
The town, he said, is not interested in taking over the three-inch line in Nappan that includes the Smith Road system. Replacing that line up to bring it up to the standard would cost the utility in the area of $1.2 million.
Dhillon set mid-March as the deadline for both the town and the county to make their final written submissions on the water rates. He did not say when he would make his decision, but it generally takes 60-90 days.