An explanation of VPID Taxes and Tolls
One of the more common queries VPID trustees get from part-time residents on the island is why they don’t enjoy a lower rate than full-time residents. After all, they use a lot less water because they may only be on the island a few times over the course of the year. In this newsletter we will try to explain the reasoning behind the taxes and tolls paid by VPID water users.
First, taxes are used to finance the capital side of the water system. This includes the treatment plant, storage tanks, the water lines that run from the plant to connections to individual properties, and the wells that pump water up to the treatment plant. Everyone with a water connection pays water taxes, even if they are currently not using water. The infrastructure is there so that property owners have access to potable water should they need it, and everyone with this access needs to help finance the cost of this infrastructure.
Second, tolls are used to finance the operations side of the water system. Part time residents might think that, if they’re not using water (that is, when they’re not on the island), they’re not costing the operations side any money, so why should they be paying. However, this is not the case. Operations costs mostly comprise activities like testing water quality, monitoring inflows and outflows, replacing filters at the wells and in the treatment plant, purchasing chlorine and filter media to treat our water, the hydro to operate the well pumps and the treatment plant, and so on. Nearly all of these costs are incurred regardless of how much water we’re delivering to the system. Hydro costs and chlorine use do go up when we pump more water, but in general very little of our operational costs are related to the amount of water we collectively consume.
One significant exception arises when we have to truck in water to meet demand that exceeds our supply of water. Admittedly this happened a lot during 2024, due to the challenges we have discussed with you in the past. But 2024 was an extremely unusual year. With the exception of 2024 (and late December 2023), we have trucked in water a total of 11 times since 2018.
Our policy of charging the same tolls to all water users is consistent with fees charged for water use in other jurisdictions in the Southern Gulf Islands, except that in some cases there are increased tolls charged for especially high usage. But everyone pays the minimum rate, regardless of how little water they use. We think this makes sense, given the nature of operations costs for a water system.