User Fees and Urban Service 3.3% Area Charges increase for 2016 - - PowerPoint PPT Presentation

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(CES-13 13-2015) 2015)

November 18, 2015

User Fees and Urban Service Area Charges increase for 2016 Capital Budget for 2016 10-Year Capital Forecast Contributions to Reserves in 2016 10-Year Contribution to Reserves 10-Year Infrastructure Deficit

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3.3% $18 M $138 M $6.9 M $75 M ($43.3 M)

Increase in Forecast Reserves after 10 years External Debt Repayment in 2016 External Debt Reduction Forecasted

• ver 10 years (principal)

Internal Debt Repayment in 2016 Internal Debt Forecasted over 10 years (principal)

($41 M) +$37 M $6.2 M

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$0.6 M +$28 M

Account Category 2016 Net Levy Increase/ (Decrease) Category Yr-over-Yr Change % Net Levy Impact Total Expenditures $637,544 2.4% 5.9% Total Revenue Sources (461,179) 3.0% (4.3%) Net Levy Impact 176,365 1.6% Assessment Growth (55,336) (0.5%) Net Levy Impact After Growth $121,029 1.1%

1% levy = $108.5 k

Net Levy below guideline of 3.0%

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 16

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Fixed User Fee 18.5% (2015: 15.3%) Volumetric User Fee 51.5% (2015: 54.1%) Urban Service Area Levy (for $200,000 property) 30.0% (2015: 30.6%)

Allocation of Water and Wastewater Revenue for the Typical User

Fixed User Fee: 5.90 $ Volumetric User Fee: (1.23) Urban Service Area Levy: 0.51 Total Monthly Increase: 5.18 $

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Historical Review

• f Rates & Taxes

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Year-over-Year % User Fee Increases

Water % Increase Wastewater % Increase Total % Increase $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Water $53.18 $63.41 $64.83 $64.84 $64.37 $65.99 $66.65 $66.81 $68.36 $71.13 Wastewater $68.01 $76.71 $77.38 $83.94 $81.70 $86.15 $86.10 $87.17 $87.96 $90.37

Total Water & Sewer Monthly Charges

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BMA Municipal Study 2015, pages 369-371

2013

• Est. Avg.

Household Income Ranking 2013

• Est. Avg.

Household Income 2014 Residential Water/ Wastewater Costs 200 m3 2014 Water/ Wastewater as a % of Household Income 2014 Water/ Wastewater Burden Ranking

Gravenhurst Low $71,130 $1,110 1.6% High Huntsville Mid $85,984 $1,110 1.3% High Bracebridge Mid $85,045 $1,110 1.3% High Average $93,038 $858 1.0% Median $86,773 $821 1.0% Minimum $55,056 $354 0.3% Maximum $174,855 $1,520 1.8%

Consumption Levels

• Decline in consumption levels since

2005.

• Conservation efforts is one factor.
• Weather also has an impact.
• 2016 consumption target is 2.665

million cubic metres (down 3.1%).

• Consistent with 2015 levels, but

assumes additional consumption from replacement of over 1,200 aging meters.

• 50% of the combined rate increase

due to consumption drop.

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 2

 Operating expenses, net of support services, are

2.9% above 2015

 Materials & Supplies increases = 2.8% or $116k  Purchased Services increases = 13.1% or $227k  Finance Charges/Reserves increases = 2% or

$267k

 Net Support Services increases = 1.4% or $26k

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 10

 Personnel increase = $22,067

• Projected wage and benefits costs
• Shifting labour to water services from wastewater
• Reallocation of Engineering administration, design and

facilities services = ($33k)

 Materials & Supplies = $68,585

• Meter replacements and equipment repairs - $43k
• Electricity costs rising 2% = $16k
• Chemical costs rising = $17k

 Purchased Services increase = $132,890

• Subcontractor costs fluctuate year to year based on

preventative maintenance scheduled

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 9

Budget Drivers – Water

 Finance Charges / Reserves increase = $158,765

• Debt repayments decreasing by $497k
• Reserve contribution increased by $646k to offset drop in

debt repayments plus 5.5% increase

 Net Service Charges increase = $22,240

• Fleet and insurance costs are main drivers

 Revenue increase = $319,617

• User fees increasing $377k
• Local improvements decreasing ($59k)

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 9

Budget Drivers – Water

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 14

 Personnel decrease = $20,715

• Projected wage and benefits costs
• Shifting labour from wastewater services to water

services

• Reallocation of Engineering administration, design and

facilities services = ($24k)

 Materials & Supplies increase = $47,567

• Electricity costs rising 2% = $37k

 Purchased Services increase = $94,150

• Subcontractor costs fluctuate year to year based on

preventative maintenance scheduled = $95k

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 13

Budget Drivers – Wastewater

 Finance Charges / Reserves increase = $108,205

• Debt repayments decreasing by $1M
• A/R write-offs decreasing to reflect actuals $20k
• Reserve contribution increased by $1.155M to offset drop

in debt repayments plus 5.5%

 Net Service Charges increase = $3,790

• Fleet reduction (offset in water) = ($9k)
• Insurance increase = $27.5k
• Other allocations = ($30k)

 Revenue increase = $141,562

• User fees increasing $257k
• Local improvements decreasing ($116k)

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, pages 13

Budget Drivers – Wastewater

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• Total 10-year Draft Capital Budget &

Forecast is projecting $30.7 million in gross expenditures (2015 - $31.1)

• The largest source of funding continues

to be from the internal reserve funds at $17.6 million (2015 - $17.3)

• Sustainable Infrastructure at $8.4

million

• Development Charges Revenue:
• $2.2 million in 2016 (2015 - $2.1)
• There are no shortfalls in development

charges revenue assumed in the 10- year forecast that require financing through internal debt over the next 10 years.

2016 Capital Financing - Water

Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 17

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Land & Site Improvements $5.9 Distribution $112.9 Treatment $63.9 Machinery & Equipment $32.2 Total Cost $214.9 Water: 2014 TCA Historical Costs

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Major Water Projects 2016 – 2025

Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 20

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2016 Capital Financing - Wastewater

• Total 10-year Draft Capital Budget & Forecast

is projecting $106.9 million in gross expenditures (2015 - $ 105.7)

• The projects for the Mountview and Golden

Pheasant plants in Huntsville represent $65 million of total

• Infrastructure Funding Deficit is $43 million.

This represents the grant funding necessary to proceed with Huntsville project

• Internal reserve funds are financing $29.2

million (2015 - $26.3) from Wastewater capital and Environmental reserves

• Borrowing from Debt Reduction is $19.3

million to finance Huntsville project

• Sustainable infrastructure is $7.6 million
• Development Charges Revenue reduced to

$5.3 million ($5.6 million in 2015)

Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 21

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Land & Site Improvements $8.9 Collection $125.5 Treatment $81.7 Machinery & Equipment $53.2 Total Cost $269.2 Wastewater: 2014 TCA Historical Costs

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Major Wastewater Projects 2016 - 2025

Reference: CES-13-2015-1 – Water & Wastewater Treasurer’s Report, page 24

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 27

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 29

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Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 30 Reference: CES-13-2015-1 - Water & Wastewater Treasurer’s Report, page 31

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Wastewater - Forecasted Payments

Existing Debt - External Existing Loans - Internal Forecasted Loans - Internal

 Review of condition and estimated remaining life

• f assets

 Review levels of service  Review replacement cost valuations  Integrate with capital forecast in the budget cycle  AMP indicates revenue sources need to increase:

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Water: 2.10% - 8.78% per year Wastewater: 2.47% - 9.85% per year

 The 2016 Draft Water and Wastewater Budget has been

prepared excluding:

• Amortization: Estimated at $5.6 million and $8.2 million for Water

and Wastewater, respectively; and

• Post-employment benefits: nominal

 Net deficit with Full Accrual Budgeting:

• Water is $1.1 million; and
• Wastewater is $0.6 million

 Conclusion: contributions to reserves are not sufficient to

replace assets at historical values

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 THAT the 2016 Draft Water and Wastewater

Operating Budget and Capital Budget and Forecast as presented in Report No. CES-13- 2015-1 BE AMENDED as outlined in the following table:

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Project 2015 LTD as Amended 2016 Draft as Presented Proposed Amendment 2016 Draft as Amended 411153 BB Golf Course/McCrank & Westvale LI Funding Sources Wastewater Capital 25,000 1,175,600 (275,854) 924,746 Municipal Contribution 370,800 393,200 764,000 Prepaid Specal Charges 901,100 (117,346) 783,754 Total Financing 25,000 2,447,500 2,472,500

 THAT the 2016 Report on Excluded Expenses

– Ontario Regulation 284/09 regarding expenses excluded from the 2016 Draft Water and Wastewater Operating Budget and Capital Budget and Forecast, as included in Report

• No. CES-13-2015-1, as amended, BE

APPROVED.

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 THAT the 2016 Draft Water and Wastewater

Operating Budget and Capital Budget and Forecast as presented in Report No. CES-13- 2015-1, as amended, BE ADOPTED;

 AND THAT the 2016 rate structure for water and

wastewater services and miscellaneous charges, as included in Report No. CES-13-2015-1, as amended, BE ADOPTED AND BECOME EFFECTIVE January 1, 2016.

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Net Levy increase for 2016 Capital Budget for 2016 10-Year Capital Forecast Contributions to Reserves in 2016 10-Year Contribution to Reserves

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2.2% $2.3 M $21 M $2.9 M $31 M

Account Category 2016 Net Levy Increase Department Yr-over-Yr Change % Net Levy Impact Total Expenditures $319,378 2.1% 2.9% Total Revenue Sources (73,301) 1.8% 0.7% Net Levy Impact 246,077 2.2% Assessment Growth (56,740) (0.5%) Net Levy Impact After Growth $189,337 1.7%

1% levy = $111.3k

Net Levy below guideline of 2.3%

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 Personnel increase = $107,015

• Projected wage and benefits costs
• Service level change for 2 students = $24k
• Additional allocation of Engineering administration, to

assess environmental compliance = $58k

 Materials & Supplies = ($69,737)

• Decrease operating supplies to remove one-time

expenses at landfills and transfer stations from 2015

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 Purchased Services increase = $144,350

• Increase for contract inflation at 1.3% = $129k
• Increase advertising related to Service Level Change
• f $20k
• Increase subcontractor costs for repairs and

maintenance at transfer stations, offset by reductions in remote bins, depots and landfills from 2015 = $37k

• Decrease in consultant costs to remove one-time costs

from 2015 = ($41k)

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 Transfer to Other decrease = ($1,332,300)  Finance Charges / Reserves increase =

$1,365,100

• Reserve contribution increased by $1.336M to offset

completion of transfers to Areas plus 1.9%

 Net Service Charges increase = $108,760

• Fleet increase to reflect usage and increasing repairs
• f heavy equipment = $71k
• Support services increase for computer services due

to increased unit rate and one additional computer at transfer station = $36k

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 Revenue increase = $73,301

• Waste Diversion Ontario Grant increase $45k
• User fees increase $28k

 User Fee Changes

• Proposed user fees are generally increasing at 2.3%
• Minimum load fee of $5.00
• Commercial tip fee of $140 per tonne
• Residential tip fee of $130 per tonne

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 Waste diversion strategy is underway and

expected in early 2016

 Strategy may propose a 1 bag per week reduction

in bag limits to improve diversion rates and extend the life of the new landfill

 Net cost of service level change = $14,000

• Reduction in collection costs ($11,000)
• Increase in advertising to communicate the program

change and educate/promote waste diversion $20,000

• Increase in rebate for backyard composters $5,000

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 The 2016 Draft Capital Budget reflects $2.25 million

in expenditures:

• new disposal facility at Rosewarne ($1,500,000),
• land for a new transfer station upon the closure of Stisted

($250,000),

• Stisted final closure plans and surface water remediation

($225,000),

• assessment at the closed landfill sites ($100,000), and
• land purchase costs ($100,000)

 The 2016 – 2025 capital forecast is $20.7 million and

includes:

• Site expansions, site closures, investment in compactors and

scrap metal management upgrades

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Reference: CES-13-2015-2 Solid Waste Management Treasurer’s Report, page 8

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Grouping Non- curbside Total Cost 2,097,561 Allocation method Direct cost plus

• verhead

Municipality Units Curbside Non- curbside All Units Disposal/ diversion Total Cost per Unit # $ $ # $ $ $ Bracebridge 8,250 992,593 247,098 13,135 847,072 2,086,763 158.87 Gravenhurst 7,704 926,902 260,366 12,390 799,027 1,986,294 160.31 Huntsville 10,265 1,235,026 131,814 15,688 1,011,714 2,378,554 151.62 Georgian Bay 2,353 283,100 851,846 8,897 573,764 1,708,710 192.05 Lake of Bays

• 330,763

8,013 516,756 847,518 105.77 Muskoka Lakes 9,154 1,101,357 275,674 15,300 986,692 2,363,723 154.49 2016 Total 37,726 4,538,978 2,097,561 73,423 4,735,024 11,371,563 154.88 2015 Budget 37,726 4,464,086 1,895,102 73,423 4,766,298 11,125,486 151.53 Levy Incr/ (Decr) 74,892 202,459 (31,274) 246,077 Curbside Disposal/diversion 4,538,978 4,735,024 Serviced units Total units

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$0.00 $50.00 $100.00 $150.00 $200.00 $250.00 Bracebridge Gravenhurst Huntsville Georgian Bay Lake of Bays Muskoka Lakes Average

Waste Management Cost per Unit

Curbside Non-Curbside Disposal & Diversion

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2015 versus 2016 Levy distribution Municipality 2015 Levy 2016 Levy Increase/(Decrease) from 2016 Levy $ % $ % $ % Bracebridge 2,045,977 18.4% 2,086,763 18.4% 40,786 2.0% Gravenhurst 1,969,910 17.7% 1,986,294 17.5% 16,384 0.8% Huntsville 2,341,609 21.0% 2,378,554 20.9% 36,945 1.6% Georgian Bay 1,663,179 14.9% 1,708,710 15.0% 45,532 2.7% Lake of Bays 784,637 7.1% 847,518 7.5% 62,882 8.0% Muskoka Lakes 2,320,174 20.9% 2,363,723 20.8% 43,548 1.9% Total 11,125,486 100.0% 11,371,563 100.0% 246,077 2.2% Impact to Property Assessed at $200,000 Municipality 2015 $ 2016 Draft $ Annual $ Increase/ (Decrease) Bracebridge 138.18 140.58 2.40 Gravenhurst 123.98 124.72 0.74 Huntsville 130.34 131.80 1.46 Georgian Bay 126.36 129.48 3.12 Lake of Bays 56.54 60.88 4.34 Muskoka Lakes 52.74 53.26 0.52

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 Bracebridge increase = $40.8k

• Curbside inflation $16k
• Remote bin/depot increased $16k
• Transfer station residential cost increase $14k
• Disposal/diversion decrease ($5.6k) as proportion of

serviced units remained unchanged at 17.9%

 Gravenhurst increase = $16.4k

• Curbside inflation $15k
• Remote bin/depot increased $3k
• Transfer station residential cost increase $3k
• Disposal/diversion decreased ($5.2k) as proportion of

serviced units remained unchanged at 16.9%

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 Huntsville increase = $36.9k

• Curbside inflation $20k
• Remote bin/depot increased $7k
• Transfer station residential cost increase $16k
• Disposal/diversion decrease ($6.7k) as proportion of

serviced units remained unchanged at 21.4%

 Georgian Bay increase = $45.5k

• Curbside inflation $4.7k
• Remote bin/depot increased $35k
• Transfer station residential cost increase $10k
• Disposal/diversion decrease ($3.4k) as proportion of

serviced units remained unchanged at 12.1%

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 Lake of Bays increase = $62.8k

• Transfer station residential cost increase $66k
• Disposal/diversion decrease ($3.4k) as proportion of

serviced units remained unchanged at 10.9%

 Muskoka Lakes increase = $43.5k

• Curbside inflation $18k
• Remote bin/depot increased $16k
• Transfer station residential cost increased $16k
• Disposal/diversion decrease ($6.5k) as proportion of

serviced units remained unchanged at 20.8%

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0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Bracebridge Gravenhurst Huntsville Georgian Bay Lake of Bays Muskoka Lakes

Share of Waste Management Levy

2015 Levy % 2016 Levy %

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$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 Bracebridge Gravenhurst Huntsville Georgian Bay Lake of Bays Muskoka Lakes

Waste Management Levy on $200,000 Property

Curbside Non-Curbside Disposal & Diversion

 The 2016 Draft Solid Waste Management Budget

has been prepared excluding:

• Amortization: estimated at $850,200; and
• Future landfill closure & post closure costs not

recognized: estimated at $1.65 million

 Net surplus with Full Accrual Budgeting is

$220,000

 Contributions are sufficient  Remediation costs for the close landfills is not yet

known

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 THAT the 2016 Report on Excluded Expenses –

Ontario Regulation 284/09 regarding expenses excluded from the 2016 Draft Solid Waste Management Operating Budget and Capital Budget, as included in Report No. CES-13-2015-2, BE APPROVED;

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 THAT the 2016 Draft Solid Waste Management

Operating Budget and Capital Budget and Forecast as presented in Report No. CES-13- 2015-2 BE ADOPTED;

 AND THAT the 2016 rate structure for solid waste

management services and miscellaneous charges as outlined in Report No. CES-13-2015-2 BE ADOPTED AND BECOME EFFECTIVE JANUARY 1, 2016.

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