joint meeting of the - muskoka › document › 25553 › presentation c… · joint meeting of the...

Joint meeting of the Engineering & Public Works Committee (PW-3-2015)

and Corporate & Emergency Services Committee (CES-3-2015)

February 18, 2015

User Fees and Urban Service Area Charges increase for 2015

Capital Budget for 2015

10-Year Capital Forecast

Contributions to Reserves in 2015

10-Year Contribution to Reserves

10-Year Infrastructure Deficit

2

1.4%

$10 M

$137 M

$4.8 M

$57.6M

($43.3M)

Increase in Forecast Reserves after 10 years

External Debt Repayment in 2015

External Debt Reduction Forecasted over 10 years (principal)

Internal Debt Repayment in 2015

Internal Debt Forecasted over 10 years (principal)

-$43 M

+$23 M

$7.8 M

3

$0.5 M

+$28 M

Account Category

2015 Net Levy

Increase/ (Decrease)

Category Yr-over-YrChange %

Net Levy Impact

Total Expenditures $249,001 1.0% 2.3%Total Revenue Sources (88,186) 0.6% (0.8%)Net Levy Impact 160,815 1.5%Assessment Growth (84,012) (0.8%)Net Levy Impact After Growth $76,803 0.7%

1% levy = $105.0 k Net Levy below guideline of 3.5%

5

6Reference: CES-3-2015-1 - Water & Wastewater Treasurer’s Report, page 17

Water Services 2014 2015

User Fee 52.89$ 54.10$ 2.3% 1.21$ Urban Service Area Charge 13.92$ 14.13$ 1.5% 0.21$

Total 66.81$ 68.23$ 2.1% 1.42$

Wastewater Services 2014 2015


Total 87.17$ 87.87$ 0.8% 0.70$

Combined Water & Wastewater Services 2014 2015


Total 153.98$ 156.10$ 1.4% 2.12$

Year-over-Year Increase

(Decrease)


(Decrease)

Monthly Impact on Typical Residential Household (20 cubic metres per month & house assessed at $200,000)


(Decrease)

7

In 2014 and proposed for 2015, the increase in monthly charges is less than the construction index which has averaged 2.1% in 2013 and 1.9% in 2014.

Historical Review of Rates & Taxes

8

BMA Municipal Study 2014, pages 369-371

2013 Est. Avg.

Household Income Ranking

2013Est. 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.

◦ 2015 consumption target is 2.75 million cubic metres (down 3.2%).

◦ Consistent with 2013 levels.

◦ Just less than the four-year average.

◦ 84% of the combined rate increase due to consumption drop.

9

Reference: CES-3-2015-1 - Water & Wastewater Treasurer’s Report, page 2

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

Cubi

c M

etre

sYear

Water Billed Consumption by Year

Operating expenses, net of support services, are 0.6% above 2014

Personnel increases = 1% or $49k Purchased Services increases = 4.8% or $80k Finance Charges/Reserves increases = 1.3% or

$168k Net Support Services decreases = 4.7% or $84k

10

12


Personnel increase = $160,011◦ Wage settlement = 2%◦ Shifting labour to water services from wastewater◦ Reclassification and new student = $16k◦ Reallocation of Engineering administration, design and

facilities services = ($44k)

Purchased Services decrease = $58,735◦ Subcontractor costs fluctuate year to year based on

preventative maintenance scheduled

13


Budget Drivers – Water

Finance Charges and Reserves increase = $74,428◦ Debt repayments decreasing by $77k◦ Reserve contribution increased by $123k to offset drop in

debt repayments plus construction index

Net Service Charges decrease = $24,120◦ Realignment of Engineering administration costs is main

factor

Revenue increase = $69,477◦ User fees increasing $70.7k

14


Budget Drivers – Water

16


Personnel decrease = $111,306◦ Wage settlement = 2%; overtime increase for Port Carling

WWTP◦ Shifting labour from wastewater services to water = ($116k)◦ Reclassification and new student = $16k◦ Reallocation of Engineering administration, design and

facilities services = ($61k)

Purchased Services increase = $138,470◦ Subcontractor costs fluctuate year to year based on

preventative maintenance scheduled = $53k◦ Biosolids removal costs (haulage) increasing to reflect

actuals = $43k

17


Budget Drivers – Wastewater

Finance Charges and Reserves increase = $93,088◦ Debt repayments increasing by $193k◦ Tax write-offs increasing to reflect actuals $56k◦ Reserve contribution decreased by $157k to offset drop in

debt repayments less construction index

Net Service Charges decrease = $60,000◦ Recovery for supernatant treatment from Hauled Sewage ◦ Realignment of Engineering administration costs is main

factor

18


Budget Drivers – Wastewater

20

• Total 10-year Draft Capital Budget & Forecast is projecting $31.1 million in gross expenditures (2014 - $34.6)

• The largest source of funding continues to be from the internal reserve funds at $17.3 million (2014 - $23.6)

• Sustainable Infrastructure at $9 million

• Development Charges Revenue:• $2.1 million in 2015• $8.2 million in 2014

• 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.

2015 Capital Financing - Water


21

Land & Site Improvements $5.9Distribution $112.9Treatment $63.9Machinery & Equipment $32.2Total Cost $214.9

Water: 2013 TCA Historical Costs

22

Major Water Projects 2016 – 2019

Project Program BudgetBracebridge

431020 BB James from MacDonald to Ann Replacement - Upgrade 540,000Huntsville

432012 HV WTP Phase III Plant 3,000,000MacTier

432015 MT WTP Modifications Plant 1,900,000Bala

434009 BALA Repair/Paint Tower 2015 Reservoir 800,000Port Carling

434010 PC Repair/Paint Tower Reservoir 800,000Port Severn

432022 PS WTP Rehabilitation Plant 1,000,000Subtotal Expenditures $8,040,000

Remaining Expenditures 6,020,000Total Capital Project Expenditures $14,060,000


23



431024 BB Spencer from Andrea to Santa's Village Rd Replacement - Upgrade 600,000432039 BB WTP Rehabilitation Plant 2,000,000434016 BB Ecclestone Dr Reservoir & Pumping Station Reservoir 500,000

Gravenhurst432031 GH Filter Underdrains & Scour System Plant 1,500,000434005 GH Repair/Paint Fairview Tower Reservoir 800,000434006 GH Repair/Paint Beach Road Tower Reservoir 800,000

Subtotal Expenditures $6,200,000Remaining Expenditures 8,344,000

Total Capital Project Expenditures $14,544,000

Major Water Projects 2020 – 2024

24

2015 Capital Financing - Wastewater• Total 10-year Draft Capital Budget & Forecast

is projecting $105.7 million in gross expenditures (2014 - $78.9)

• The significant increase is due to the Mountview and Golden Pheasant plants in Huntsville

• Infrastructure Funding Deficit is $43 million which is grant funding necessary to proceed with Huntsville project

• Internal reserve funds are financing $26.3 million from Wastewater capital and Environmental reserves

• Borrowing from Debt Reduction is $19.3 million to finance Huntsville project

• Sustainable infrastructure is $10.1 million

• Development Charges Revenue reduced to $5.6 million ($29.8 million in 2014)


25

Land & Site Improvements $8.9Collection $124.8Treatment $81.7Machinery & Equipment $52.5Total Cost $267.9

Wastewater: 2013 TCA Historical Costs

26

Major Wastewater Projects 2015



413018 BB Beaumont Dr SPS Pumping Station $1,400,000413101 BB Dill St SPS Upgrades Pumping Station 1,200,000411086 BB Taylor from Toronto to Front Replacements/Upgrade 500,000412020 BB Lagoon Lane STP Headworks Plant 500,000

Subtotal Expenditures $3,600,000

Remaining Expenditures 4,015,000


27

Major Wastewater Projects 2016 – 2019 Project Program Budget

Bracebridge413018 BB Beaumont Dr SPS Pumping Station $1,200,000413050 BB Sewer & Forcemain Robert Dollar Dr Pumping Station 500,000412020 BB Lagoon Lane STP Headworks Plant 6,500,000412037 BB Lagoon Lane STP Control Building Plant 1,400,000412058 BB Lagoon Lane Sludge Cleaning Repairs and Maintenance - Plant 600,000

Huntsville413105 HV Hodges Lane SPS Upgrade Pumping Station 850,000412061 HV GP STP Alkalinity Control Plant 600,000412066 HV GP Expand/Upgrade to Receive MV Plant 25,000,000412067 HV Forcemain from MV to GP Plant 5,000,000412068 HV MV STP Convert to SPS & Decommission Plant 20,000,000412069 HV GP Upgrade Future Plant 15,000,000

Gravenhurst412063 GH STP Replace Blowers Phase II Plant 500,000412065 GH STP Headworks/Flow Monitoring Plant 500,000

Port Carling411099 PC Forcemain West St SPS to Medora Replacements/Upgrade 800,000

Port Severn412026 PS STP Upgrade Plant 1,000,000

Subtotal Expenditures $79,450,000Remaining Expenditures 7,960,000



28

Major Wastewater Projects 2020 – 2024


Project Program Budget

Huntsville

413077 HV Twin Hodges PS Forcemain Pumping Station 1,500,000

Subtotal Expenditures $1,500,000

Remaining Expenditures 9,240,000


29

2014 Budget 2015 BudgetWater OperationsWater Capital $2,600,000 $2,723,000Wastewater OperationsWastewater Capital 2,300,000 2,143,000

Total $4,900,000 $4,866,000

Budget ContributionFund

2015 2015 2015 2015 2015Opening Balance Commitments Transfers In Interest Closing Balance

Fund (over-committed)Water Capital $4,299,501 ($2,214,000) $2,723,000 $101,038 $4,909,539Wastewater Capital 4,220,722 (3,475,894) 2,143,000 99,187 2,987,015Environmental 2,234,083 (2,178,068) 2,500,000 52,501 2,608,516Sustainable Infrastructure 1,731,984 (2,400,000) 1,714,739 40,702 1,087,425

Total $12,486,290 ($10,267,962) $9,080,739 $293,428 $11,592,495


30


Muskoka is below comparator group

2012 Water

Reserves

2012 Total Water Own Source Revenues

2012 Closing

Amortization Water

Water Reserves as

% Total Water Own Source Revenues

Water Reserves as % Closing

Amortization Water

Muskoka $4,778,549 $12,259,059 $71,288,720 39.0% 6.7%Average * 70.8% 18.9%Median* 68.7% 16.7%Minimum* 26.8% 6.2%Maximum* 168.2% 44.5%

*Comparison of upper-tier municipalities

31

2019 – 2020 Reserve Fund reaches average of survey

32


2012 Wastewater Reserves

2012 Total

Wastewater Own Source Revenues

2012Closing

Amortization Wastewater

Wastewater Reserves as %

Total Water Own Source Revenues

Wastewater Reserves as %

Closing Amortization Wastewater

Muskoka $7,958,234 $13,985,750 $92,646,916 56.9% 8.6%Average * 73.8% 15.0%Median* 67.4% 19.7%Minimum* -40.8% -19.7%Maximum* 208.1% 28.5%

Muskoka is below comparator group

*Comparison of upper-tier municipalities

33

Reserve Fund does not reach survey average over the forecast period

34

(4,000,000)

(2,000,000)

0

2,000,000

4,000,000

6,000,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Development Charge Reserve Fund Forecasted Year-end Balances

Water Development Wastewater Development

35

($20)

($10)

$0

$10

$20

$30

$40

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Debt Reduction Reserve Fund

Balance Internal Loans Issued Transfer In Loan Repayments


36

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Wastewater - Forecasted Payments

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



Financial Statements do not consider:o future commitmentso service requirements (current & future)o infrastructure age, obsolescence or conditiono inflation on replacement of infrastructure

Asset Management Plans (AMP) are comprehensive long-term plans for capital assetso AMP’s mandatory in 2014 for Provincial Grantso District’s AMP covers Roads, Bridges, Water and Wastewater assets

37

Asset Type Historical Cost

(millions)

Replacement Cost

(millions)Water $214.9 $484.7

Wastewater $267.9 $613.6

Total Assets in AMP $482.8 $1,098.3

Review of condition and estimated remaining life of assets

Review levels of service

Review replacement cost valuations

Integrate with capital forecast in the budget cycle

AMP indicates revenue sources need to increase:

38

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

The 2015 Draft Water and Wastewater Budget has been prepared excluding:◦ Amortization: Estimated at $4.8 million and $7.7 million for Water

and Wastewater, respectively; and

◦ Post-employment benefits: nominal

Net deficit with Full Accrual Budgeting:◦ Water is $318,000; and

◦ Wastewater is $2.9 million

Conclusion: contributions to reserves are not sufficient to replace assets at historical values

39

THAT the 2015 Report on Excluded Expenses – Ontario Regulation 284/09 regarding expenses excluded from the 2015 Draft Water and Wastewater Operating Budget and 2015 Draft Water and Wastewater Capital Budget and Forecast, as included in Report No. CES-3-2015-1, BE APPROVED.

40

THAT the 2015 Draft Water and Wastewater Operating Budget and 2015 Draft Water and Wastewater Capital Budget and Forecast as presented in Report No. CES-3-2015-1 BE ADOPTED;

AND THAT the 2015 rate structure for water and wastewater services and miscellaneous charges, as included in Report No. CES-3-2015-1, BE ADOPTED AND BECOME EFFECTIVE APRIL 1, 2015.

41

Net Levy increase for 2015

Capital Budget for 2015

10-Year Capital Forecast

Contributions to Reserves in 2015

10-Year Contribution to Reserves

44

2.9%

$5.4M

$20M

$1.5M

$27M

Guideline was an increase to levy of 2.95% Proposed net levy increase for 2015 is

2.9% Main factors leading to increase:◦ Waste management contract costs increasing

with inflation at 1.7%◦ Decreased tipping fee revenue and grants

45

Account Category2015 Net

Levy Increase

Department Yr-over-Yr Change %

Net Levy Impact

Total Expenditures $199,306 1.3% 1.8%Total Revenue Sources 118,692 2.9% 1.1%Net Levy Impact 317,998 2.9%Assessment Growth (86,460) (0.8%)Net Levy Impact After Growth $231,538 2.1%

1% levy = $108.0 k Net Levy below guideline of 2.95%

46

47

Category Item $ Total $

Personnel 2% negotiated wage settlement, projected benefit costs and a change in allocation of costs of Engineering Administration and Hauled Sewage. 18,884

Employee Related Expenses Increase in cost of Courses 1,200Materials & Supplies Increase in Operating Supplies, Utilities and Taxes 13,780Purchased Services

Increase in Curbside Pickup for contract inflation and for increase in stop counts. 124,300Increase in Consultant costs for monitoring costs associated with closed landfill sites. 43,700Increase in Subcontractor costs primarily for wood chipping of stockpile at new Rosewarne landfill site. 28,300Decrease in recycling processing fees due to reduced tonnes of recycling material. (40,000)Increase in Net Lift and Dump budget to reflect contract inflation. 30,097

Net reduction in haulage resulting from compactors (29,577)Other miscellaneous adjustments. (43) 156,777

Reference: CES-3-2015-2 Solid Waste Management Treasurer’s Report, pages 4-5

48

Reference: CES-3-2015-2 Solid Waste Management Treasurer’s Report, pages 4-5


Transfer to Others Eliminate second Blue Box rebate. (30,225)Minor Capital Items

Removal of one-time budget items from 2014 at $50,000with only addition for Remote Bins of $5,000 (45,000)

Finance Charges Increase in Tax Write-offs and other adjustments 20,250Fleet Increased costs of mileage on high-use trucks as well as

increasing heavy equipment repair costs. 28,070Insurance Increase in premiums. 1,800Support Services Change to direct allocation of Engineering Admin and

finance services. 33,770

Subtotal 199,306

49

Reference: CES-3-2015-2 Solid Waste Management Treasurer’s Report, page 5


Grants Decrease in Municipal Hazardous and Special Waste (MHSW) funding, partially offset by increased E-Waste funding (23,900)

User Fees Decrease in Landfill Tipping Fees to reflect the decline in general waste tonnage. (78,000)Decrease in Clean Shingle Tipping Fees to reflect a single site accepting clean shingles. (17,000)Decrease in Wood Chipping Tipping Fees to reflect 2014 level of activity. (9,000)Increase in Scrap Metal sales revenue to reflect current market prices. 40,000Decrease in Recycling Rebate to reflect reduced volume of material collected. (30,000)Other User Fee revenue. (792) (94,792)

Subtotal (118,692)

The 2015 Draft Capital Budget reflects $5,400,000 in expenditures:◦ second year of development of a new disposal facility at

Rosewarne ($4,500,000), ◦ assessment and first year of remedial work at the closed

Chaffey Landfill Site ($550,000), and◦ compliance and final cover at the Stisted Landfill Site south

portions ($150,000), and land purchase costs ($200,000)

The 2016 – 2024 capital forecast is $14,770,000 and includes:◦ Site expansions, site closures, investment in compactors and

study costs

50

51Reference: CES-3-2015-2 Solid Waste Management Treasurer’s Report, page 7

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

2015 - 2024 Forecasted Capital Expenditures by Category

Collection - Diversion Collection - Waste Processing / Diversion Disposal - Waste

52

Grouping Curbside Non-curbside Disposal/Diversion

Total Cost 4,464,086 1,895,102 4,766,298

Allocation method Serviced units

Direct cost plus

overheadTotal units

Municipality Units Curbside Non-curbside All Units Disposal/

Diversion Total Cost per Unit

# $ $ # $ $ $

Bracebridge 8,250 976,216 217,095 13,135 852,666 2,045,977 155.77

Gravenhurst 7,704 911,608 253,998 12,390 804,304 1,969,910 158.99

Huntsville 10,265 1,214,649 108,564 15,688 1,018,396 2,341,609 149.26

Georgian Bay 2,353 278,429 807,196 8,897 577,554 1,663,179 186.94

Lake of Bays 0 0 264,468 8,013 520,169 784,637 97.92

Muskoka Lakes 9,154 1,083,185 243,780 15,300 993,209 2,320,174 151.65

37,726 4,464,086 1,895,102 73,423 4,766,298 11,125,486 151.53

53

$0.00$20.00$40.00$60.00$80.00

$100.00$120.00$140.00$160.00$180.00$200.00

Waste Management Cost per Unit

Curbside Non-Curbside Disposal & Diversion

54

2014 versus 2015 Levy distribution

Municipality 2014 Levy 2015 Levy Increase/(Decrease) from 2014 Levy

$ % $ % $ %Bracebridge 2,019,225 18.7% 2,045,977 18.4% 26,752 1.3%Gravenhurst 1,905,149 17.6% 1,969,910 17.7% 64,761 3.4%Huntsville 2,274,896 21.0% 2,341,609 21.0% 66,713 2.9%Georgian Bay 1,557,569 14.4% 1,663,179 14.9% 105,610 6.8%Lake of Bays 760,978 7.0% 784,637 7.1% 23,659 3.1%Muskoka Lakes 2,289,671 21.2% 2,320,174 20.9% 30,503 1.3%Total 10,807,488 100.0% 11,125,486 100.0% 317,998 2.9%

Impact to Property Assessed at $200,000

Municipality 2014 2015 Draft

Annual Increase/ (Decrease)

Bracebridge 139.68 140.72 1.04 Gravenhurst 123.60 126.62 3.02 Huntsville 130.12 132.62 2.50 Georgian Bay 123.92 131.20 7.28 Lake of Bays 55.96 57.36 1.40 Muskoka Lakes 53.12 53.38 0.26

55

Bracebridge increase = $26.7k◦ Curb stop decrease offset partially by inflation ($6k)◦ Remote bin/depot increased $3k◦ Transfer station residential cost increase $11k◦ Disposal/diversion increase $19k as proportion of

serviced units remained unchanged at 17.9%

Gravenhurst increase = $64.8k◦ Curb stop increase plus inflation $44k◦ Remote bin/depot increased $12k◦ Transfer station residential cost unchanged◦ Disposal/diversion increased $8k as proportion of

serviced units decreased by 0.2% to 16.9%

56

Huntsville increase = $66.7k◦ Curb stop unchanged plus inflation $34k◦ Remote bin/depot increased $4k◦ Transfer station residential cost unchanged◦ Disposal/diversion increase $28k as proportion of

serviced units increased by 0.2% to 21.4%

Georgian Bay increase = $105.6k◦ Curb stop increase plus inflation $58k◦ Remote bin/depot increased $33k◦ Transfer station residential cost down slightly ($2k)◦ Disposal/diversion increased $17k as proportion of

serviced units increased by 0.1% to 12.1%

57

Lake of Bays increase = $23.7k◦ Transfer station residential cost increase $13.4k◦ Disposal/diversion increase $10.3k as proportion of

serviced units remained unchanged at 10.9%

Muskoka Lakes increase = $30.5k◦ Curb stop decrease partially offset by inflation $13k◦ Remote bin/depot increased $1.6k◦ Transfer station residential cost decreased ($1.4k)◦ Disposal/diversion increased $17.3k as proportion of

serviced units decreased 0.1% to 20.2%

58

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Bracebridge Gravenhurst Huntsville Georgian Bay Lake of Bays MuskokaLakes

Share of Waste Management Levy

2014 Levy % 2015 Levy %

59

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

Bracebridge Gravenhurst Huntsville GeorgianBay

Lake ofBays

MuskokaLakes

Waste Management Levy on $200,000 Property

Curbside Non-Curbside Disposal & Diversion

The 2015 Draft Solid Waste Management Budget has been prepared excluding:◦ Amortization: estimated at $3.3 million; and

◦ Future landfill closure & post closure costs not recognized: estimated at $1.4 million

Net deficit with Full Accrual Budgeting is $2.9 million

Contributions to areas for landfills assumed in 1996 is $1.3 million and will be added to contributions in 2016

60

THAT the 2015 Report on Excluded Expenses –Ontario Regulation 284/09 regarding expenses excluded from the 2015 Draft Solid Waste Management Operating Budget and Capital Budget, as included in Report No. CES-3-2015-2,BE APPROVED.

61

THAT the 2015 Draft Solid Waste Management Operating Budget and 2015 Draft Solid Waste Management Capital Budget and Forecast as presented in Report No. CES-3-2015-2 BE ADOPTED;

AND THAT the 2015 rate structure for solid waste management services and miscellaneous charges as outlined in Report No. CES-3-2015-2 BE ADOPTED AND BECOME EFFECTIVE APRIL 1, 2015.

62

joint meeting of the - muskoka › document › 25553 › presentation c… · joint meeting of the...

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