Your 2023 Notice of Tax Levy showed a levy called Asset Renewal. It is included in your Tax Notice every year, and is subject to change.
Asset Renewal is being collected to increase SSID’s reserves. At present, the amount in reserves is not enough to maintain the waterworks infrastructure as the parts get old and need replacement.
SSID’s infrastructure is more than 50 years old. It is comprised of 16,000 feet (4,900 metres) of pipes, 2 wells, 2 pumps, 2 generators, 2 reservoirs totalling 50,000 imperial gallons of water, 5 outbuildings and a steel tower, 2 pump meters and 167 household meters, 13 hydrants, 13 hose cabinets, 4 pipe-end blowoffs, 17 gate valves and 3 air release valves. In 2019 and 2020, we replaced 10 old water meters, with funding from the reserves. In 2020, we replaced 1 of our 2 diesel generators. In 2022, we replaced 2 hydrants, and will replace more in 2024, as well as the 3 air release valves.
Late 2022, it came to the attention of the SSID Trustees that the lifespan of the two water tanks was probably much less than the original projection of 99 years (to the year 2069). On April 14, 2023, SSID did a thorough tank inspection and steel thickness test to get a better idea of the condition and longevity of the tanks. In anticipation of a tank replacement by 2043, taxes were raised accordingly for the years 2023 and beyond.
The Asset Renewal levy is calculated by determining how much longer each part of the water infrastructure might last, and how much it could cost to replace each part at that future date, so that we know how much must be collected through taxes until then. The current value of the entire infrastructure is estimated at $2.5 million, and over time is estimated to cost $6.9 million to replace. Most of that is in pipes, at $5.8 million, which fortunately are expected to last for another 60 years.
The reserves may also be used for unforeseen events, as in 2009, when $100,000 was used to fix the broken 40,000-gallon water tank, and for protective measures, as in 2012 when SSID bought a backup generator, well, and pump.
Waterworth is the online asset management software SSID uses, with guidance from an Asset Management Consultant. The financial model below, was presented at the 2023 AGM. This model is fluid; it will look somewhat different in 2024, depending on the updated financial situation.
The green peaks are the capital projects. The biggest peak here is the water tank, as mentioned above. The estimate is about $700,000 in 2043 costs. Some other big ticket items are the rebuild of the valve chamber scheduled for 2033, the storage shed rebuild in 2037, and a new generator-2 in 2040.
The orange bars represent tax income for the District. The blue bars represent operating expenses. And the black line shows the cash position each year, which must grow each year until funds are accumulated to replace the tank.