/ Restaurants Wf Canada os . 902-425-0081, etre ac 1-877-756-1938 ces eta # 902-422-1161 Casi Aoteren ‘esses alee February 11, 2015 Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1601 Lower Water Street Halifax, Nova Scotia B3J 3P6 Members of the Utility and Review Board: ‘On behaif of the Restaurant Canada and our member establishments in Halifax, | am writing to express our industry's opposition to the request from the Halifax Regional Water Commission (HRWC) to dramatically increase water and wastewater rates. The foodservice industry is a vital part of the economic and cultural fabric of Halifax playing an important role in the vibrancy of the city. There are hundreds of foodservice establishments ‘employing thousands of residents in Halifax. In fact, with over 32,000 employees, foodservice is the third largest private sector employer in Nova Scotia. Foodservice operators are already struggling in a tough economic environment and are faced with significant increasing costs for food, labour and energy. At the municipal level, operators have seen their municipal tax bill soar, new fire inspection fees and to add injury to insult have in the past two years bore an increase in wastewater and water charges of in excess of 30%. On top of this many operations are also now saddled with an additional HRWC fee for paved parking lots. With razor thin pre-tax margins for full-service restaurants and quick-service establishments of just 3.0% and 7.0% respectively, itis little wonder that a starting 79% of establishments in a Restaurants Canada survey of Halifax restaurateurs believe they do not get ‘good value for municipal taxes and services. I'm sure members of the Utility and Review Board will agree that an increase in excess of 30% over the past two years is a difficult burden for any small business to bear. But to now turn around and request an increase in the range of 15% for the next two years is completely unreasonable. Water and wastewater services are an essential part of any foodservice business and operators ‘are prepared to pay their share for the water and wastewater services they use. That being said, it must be recognized that decades of neglect and mismanagement on the part of ‘successive governments and HRWC, not industry - have resulted in the poor state of the water and wastewater infrastructure today. Forcing existing restaurant operators to pay for the neglect of past governments penalizes today's operators and undermines Halifax's economy by positioning it as a high tax, high cost place to do business. HRWC clearly needs to fx its past mistakes; but demanding small businesses to carry the load is not the way to do it. The voice of foodservice La voix des services alimentairesUnreasonably High Rate Increase Restaurants Canada is concerned that permitting water rates to be raised a rate that is far beyond the level of other economic indicators over the next two years will place undue burden ‘on small business operators. Currently, operators are paying in the range of $15,000 - $25,000 ‘every year for water and wastewater services. With the average foodservice establishment in Nova Scotia generating an average pre-tax margin of just $40,000, the rate of increase proposed will have a significant economic impact, placing some businesses in jeopardy and curtailing investment in others. No Investment in Conservation or Reduction in Overhead and Administrative Costs Restaurants Canada appreciates that HRWC may need to expand or upgrade its infrastructure. However, a primary focus should also be on reducing operational costs and providing opportunities to reduce overall water use and wastewater generation, In recent years, administrative costs have soared with large sums being dedicated to salary increases and pension benefits that are completely out of line with the private sector who are footing the bill. Focus must be directed in this area with an eye to reducing administrative costs. Restaurants Canada provides members the opportunity to utilize the ConServe Sustainability Education Program, which provides restaurant operators with over 90 best practices to assist them with reducing their consumption of energy, water and wastewater, as well as reduce the volume of waste produced. Restaurant Canada recommends that before the Nova Scotia Utility and Review Board considers granting a rate increase to HRWC that they be required to demonstrate that conservation initiatives alone will not be able to reduce the need for this rate increase. Restaurants Canada is committed to reducing the environmental footprint of the restaurant and foodservices industry and would appreciate the opportunity to first work with HRWC to reduce the need for water and wastewater services. | trust you will give the concems of this important industry sector due consideration as you deliberate the increase proposal. While it is essential to have Properly maintained and well-run water and wastewater services, itis also essential to maintain fairness to current rate payers and ensure the viablity of businesses. | urge you to reduce and moderate the proposed increase to a level that is fair to both HRWC and ratepayers, A rate more in line with other economic indicators. Thank you for providing the opportunity for Restaurants Canada to comment on this issue. If you have any questions or concems, please do not hesitate to contact me. Sincerely, uc Erjavec, P. Eng. Vice-President, Atlantic.