Presentation of the 2018 Water and Wastewater Budget

Transcription

1 Presentation of the 2018 Water and Wastewater Budget Monday December 11 th, 2017 Tracey Bailey, General Manager, Financial Services/Treasurer John St. Marseille, M.Sc., P.Geo., P.Eng., FEC General Manager, Infrastructure & Municipal Works

2 Presentation Overview Budget Framework Asset Management Sustainable Financial Planning Compliance Water Program Wastewater Program Operating & Capital Budgets Long-Term Debt and Reserves Municipal Comparators Summary 2

3 Budget Framework Council s Strategic Plan Compliance Asset Management Financial Plan Customer Service Informs financial plan (priorities, services, and service levels) Resource limitations Future financial state Budgets (Operating & Capital) Policy environment/ guidelines for annual/long-term budgeting Services, service levels and priorities for budgeting Results Evaluation Actual performance vs. Benchmark Inform strategic and long-term financial plan 3

4 Asset Management Sustainable Service Delivery The objective of asset management is to maximize benefits, manage risk, and provide satisfactory levels of service to the public in a sustainable manner. Current Water and Wastewater Infrastructure: 280km of watermains 2016 estimated replacement value, $135M Current backlog $41.2M 393km of wastewater pipes 2016 estimated replacement value, $321M Current backlog $6.8M Buildings and process equipment 2016 estimated replacement value, $223M Current backlog $1.2M 4 It is important to note that the 2018 proposed capital projects total $6,745,000, which is only 1% of the estimated replacement values of these assets.

5 Sustainable Financial Planning These items together fund replacement costs. A sustainable level of revenue accounts for the future investment needs of the utility in addition to current period expenses. Revenues in excess of current period expenses will be reflected as an accounting surplus in financial statements. If revenues are at this point, the utility is just meeting current period expenses. It is not adequately planning for the future. This is an accounting view of cost under municipal full accrual accounting practices. If revenues are at this point, the utility is just recovering cash costs. It is significantly underfunded. 5 (Source: Ontario Ministry of Environment, 2007, Toward Financially Sustainable Drinking Water and Wastewater Systems)

6 Compliance Safe Drinking Water Act / Standard of Care Municipal Drinking Water Licence O.Reg. 453/07 Water and Wastewater Financial Plan 6

7 Water Accomplishments New funding Clean Water and Wastewater Fund Watermains replaced or relined 3.7km, km, km, km, km, 2013 Water bottle filling stations 100% Inspection Rating (9 straight years) Watermain Relining - Riverdale 7

8 Water System Challenges 34 Watermain breaks in 2017 YTD (Sydney, Brookdale, Vincent Massey, Tollgate) Soft and Hard Costs (repair, nuisance, unplanned disruptions) Taste and odour Blue-green algae, emerging contaminants (climate change) Financial sustainability Aging infrastructure Blue-green algae 8

9 Water Distribution Network 280 km of watermains 69 km of watermain needs (repaired, restored, rehabilitated or replaced) ( ) 9

10 2018 Capital Projects - Water 1. Watermain Rehabilitation (page 10) $1,700,000 Improves water quality, system reliability by relining watermains and addresses tuberculation, chlorine residuals, and fire flows. 2. Critical Looping New Watermain (page 11) $550,000 Redundant network extension to support network growth, improve water quality, and fire flow capacity. 3. Water Purification Plant Upgrades (page 12) $880,000 Performance improvements, upgrades and assessments of this critical infrastructure (Asset Management Plan). 10 Cornwall Water Purification Plant

11 Wastewater Accomplishments Ongoing optimization of enhanced secondary treatment plant (WWTP) Funding to update Pollution Control Plan Combined Sewer Separation Low Impact Development 7 th St. Bioswale Enhanced WWTP Pollution Control Plan 7 th St. Bioswale 11

12 Wastewater System Challenges Stormwater Management Combined sewer overflows (CSOs) Fats, oils, grease and other unflushables Emerging contaminants Climate change, flood risk reduction Financial sustainability Aging infrastructure 12

13 13 Wastewater Collection Network

14 SEYMOUR AV CUMBERLAND ST BEDFORD YORK ST AUGUSTUS ST 2018 Capital Projects Wastewater 1. Flood Reduction / Management (page 23) $200,000 Investigation and cleaning of sewers Before Cleaning After Cleaning 2. Sewer Network Improvements (page 24) $800,000 Combined sewer on Water Street as well as various culvert replacements Work Area Work Area WATER ST W LAMOUREUX PARK 14

15 2018 Capital Projects Wastewater 3. Combined Sewer Separation (page 25) $675,000 Coordinated with roadway improvements 4. Wastewater Treatment Plant Upgrades (page 26) $890,000 Performance improvements, upgrades and assessments of this critical infrastructure (Asset Management Plan) 15

16 2018 Capital Projects Joint Infrastructure 1. Asset Management (page 13/27) $100, Arc Flash Risk Analysis (page 14/28) $100,000 To address worker safety at Water and Wastewater facilities as required by the Canadian Standards Association (Standard Z462) 3. York Street (Phase 1) $850,000 from Fifth to Seventh (page 15/29) Sewer, watermain, roadway, and sidewalks are in poor condition. Funded from water billings in 2018 and sewer billings in Construction in

17 2018 Operating Budgets $ % Budget Submission Change Change Revenue Fees, & Misc. Revenue $ 258,128 $ 265,300 $ 7, % Total Revenue $ 258,128 $ 265,300 $ 7, % Expenditures Salaries & Benefits $ 4,124,240 $ 4,201,401 $ 77, % Purchase of Goods 2,707,585 2,773,118 65, % Services & Rents 1,946,595 1,957,011 10, % Financial 1,454,187 1,439,700 (14,487) -1.00% Transfer to Reserves 250, , % Total Expenditures $ 10,482,607 $ 10,621,230 $ 138, % Debt Charges $ 1,501,913 $ 1,842,801 $ 340, % Total Net Expenditures $ 11,726,392 $ 12,198,731 $ 472, % Increase in operating costs is related to debt costs 17

18 2018 Capital Budgets The following charts illustrate capital funding allocations (in the thousands of dollars) from the 2014, 2015, 2016 and 2017 Budgets compared to the 2018 Submission Water Distribution $1,400 $2,790 $2,530 $1,560 $2,250 Water Purification Plant $2,050 $3,740 $3,180 $2,210 $3,130 $9.8M $10.8M $9.6M $6.7M $6.7M Sewer Collection Program $675 $810 $850 $800 $800 Combined Sewer Separation Wastewater Treatment Plant Flood Reduction Initiatives 4,600 4,030 1, Brookdale N. Channel Bridge ,000 1,350 0 $6,460 $5,725 $4,865 $3,235 $2,565 Joint Infrastructure Projects $1,330 $1,382 $1,515 $1,300 $1,050 Total Project Costs $9,840 $10,847 $9,560 $6,745 $6,745 Water Project Costs $2,715 $4,431 $3,938 $2,860 $4,070 Wastewater Project Costs $7,125 $6,416 $5,622 $3,885 $2,675 18

19 Long-Term Debt and Reserves This chart shows the ten year ( ) forecasted balance of Long-Term Debt. The City has borrowed for the Flood Reduction Initiative and for the Secondary WWTP. There is no new debt in Water Services is debt free. This chart shows the ten year ( ) forecasted balance for the Waterworks and the Wastewater Works Reserves based on the City s Long-Term Financial Plan. 19 *Dollars rounded to millions

20 Municipal Comparators 20 * Source: 2017 BMA Study (see Appendix A)

21 Municipal Comparators 21 * Source: 2017 BMA Study (see Appendix B)

22 Budget Overview The 2018 budget has been prepared with an overall increase of 7.65% to the utility bill. Water billings represent an 8.87% increase ($658,632) Wastewater billings represent a 6.67% increase ($613,707) Net Operating increased by $472,339 or 4.03%. $138,623 or 1.32% operating increase $340,888 or 22.7% increase in debt charges Net Capital increased by $800,000 or 16.34%. $0 increase gross capital ($6.7M, same as in 2017) $800,000 reduction in capital funding 22

23 Appendix A

24 Appendix B

25 Appendix C Cornwall Blueprint Comprehensive Cornwall urban water brand to address key pillars of the Strategic Plan: Quality of Life, Economic and Financial, as well as Environment Urban Water Brand Basement Flooding Mitigation Sewer Extraneous (I/I) Flow Control Education, Outreach and Engagement Homeowner Rebate (Policy Development) 25

26 Appendix C Cornwall Blueprint Comprehensive Cornwall urban water brand to address key pillars of the Strategic Plan: Quality of Life, Economic and Financial, as well as Environment Environmental, Water and Infrastructure Awareness Demonstration Projects and Innovation Fund Leveraging and Partnerships Climate Change Planning / Adaptation Water Demand Management 26