CITY OF TORONTO WATER AND WASTEWATER UTILITY RATES

Transcription

1 PUBLIC REPORT TO CORPORATE AFFAIRS, STRATEGIC PLANNING AND PROPERTY COMMITTEE CITY OF TORONTO WATER AND WASTEWATER UTILITY RATES I can do all this through Him who gives me strength. Philippians 4:13 (NIV) Created, Draft First Tabling Review January 21, 2015 March 12, 2015 K. Elgharbawy, Senior Coordinator, Maintenance and Energy Management M. Farrell, Coordinator, Materials Management P. de Cock, Comptroller, Business Services M. Puccetti, Superintendent of Facilities Services RECOMMENDATION REPORT Vision: At Toronto Catholic we transform the world through witness, faith, innovation and action. Mission: The Toronto Catholic District School Board is an inclusive learning community rooted in the love of Christ. We educate students to grow in grace and knowledge and to lead lives of faith, hope and charity. G. Poole Associate Director of Academic Affairs A. Sangiorgio Associate Director of Planning and Facilities Angela Gauthier Director of Education Page 32 of 134

2 A. EXECUTIVE SUMMARY This report recommends that Board staff pursue Ministry of Education support to seek exemption from the proposed City of Toronto water surcharge. B. PURPOSE 1. This report explains future pressures to operating budgets based on a new City of Toronto method of water rate billing starting in 2017, and the overall impact of utility increases on the existing and future TCDSB Operations and Maintenance budgets. 2. The report is further intended to update Trustees that a letter has been sent, advising the Manager of the City of Toronto Water department that the Board intends to seek an exemption from the proposed Storm Water Surcharge, based on the Ministry of Education s position the surcharge is a form of taxation, and school boards exemption. C. BACKGROUND 1. On September 11 and 18, 2013, the City of Toronto Water held consultation meetings regarding Toronto Water Future Water Rate Increases. This presentation was primarily directed at landowners of extensive, large properties as well as high consumers of water in the City of Toronto. 2. Currently the water rates are based on consumption and have been increasing at a rate of 8% per year. 3. The presentation included comments on financing of water infrastructure and maintenance, an overview of the issue concerning the department, options to address capital funding deficiencies, what other jurisdictions are currently doing and the next steps. 4. Stakeholders were asked to provide input on a proposed storm water management charge in lieu of simple water rate charges. 5. The TCDSB did provide input noting that although the storm water charge has some merits, the Board does not know how this charge will be implemented and how it would affect its operations budget. 6. Following City of Toronto consultations, Toronto Water approved to continue the rate increase at 8% per year. Page 33 of 134 Page 2 of 4

3 7. On November 6, 2014, Toronto Water had a follow-up stakeholder consultation meeting Toronto Water Future Water Rate Increases, again directed at directed at landowners of extensive, large properties as well as high consumers of water in the City of Toronto. The presentation is attached in Appendix A. 8. The City of Toronto Water recommends continuation of water rates increases at 8% per year until 2017 at which point it will split the rates into two components; a consumption charge and a storm water charge. The storm water charge will be at $0.77 per square meter of impermeable area (roof, asphalt and concrete areas, etc.). After 2017, each component will increase annually at an unknown amount. 9. Each stakeholder was also asked to prepare a letter as to their opinion on the Toronto Water recommendation. On November 20, 2014 a letter was sent to the Manager of City of Toronto, explaining that the proposed rate increases would effectively double the Board s water and storm management costs. The letter further explained that the Board has limited financial resources to address the increase and has other cost pressures such as a deferred maintenance backlog of $647 M and increases in hydro and gas utility rates. The letter also requested that if there is an increase, it should be applied uniformly for all schools, regardless of the size of the property no more than 8% increase per year. The letter also recommended the City apply to the province, (Ministry of Education or Finance) to request additional funding to address the increase. 10. Prior to issuing the letter, Board staff held a meeting with its counterparts at the TDSB (Utilities Monitoring) agreeing to submit a joint letter. A letter drafted by TCDSB was provided to the TDSB for signature, however, the TDSB did not respond. 11. In 2014, the Board paid $1.73M (actual) for water consumption estimates are at $1.87M, 2016 estimates at $2.02M. Board Staff have estimated that the combined consumption and storm water charge for 2017 could be as high as $3.56M based on the City s proposed rate changes, as noted in the chart below: Page 34 of 134 Page 3 of 4

4 Comparison of Estimated Water Cost between 2014 to 2018 with impact from proposed storm water charge in 2017 ($M) (Actual) On January 6, 2015, in discussion with the Ministry of Education, Staff received a letter provided by the Minister of Education (unreleased to public), sent to the City of Waterloo, stating that this storm water surcharge was a form of taxation, and as such, school boards are exempt from paying the surcharge rate. The ministry official also noted that City of Mississauga has implemented a similar exemption for the Peel Boards. 13. It is the intention of staff to contact the other boards in the City to request a letter from the Ministry of Education and jointly inform the City of Toronto Water of the Ministry s position. 14. The City request input from stakeholders by February 28, Staff submitted a letter to the Manager of the City of Toronto Water, of the Board s intention to jointly seek, with the other boards in the City, exemption from the storm water surcharge. D. STAFF RECOMMENDATION That the Toronto Catholic District School Board objects to the proposed increases and that staff be directed to approach the other school boards in the City, to jointly pursue Ministry of Education support in seeking an exemption from the proposed City of Toronto water surcharge. Page 35 of 134 Page 4 of 4

5 Funding Toronto Water s Capital Program November 6, 2014 Stakeholder Meeting Presented by Lou Di Gironimo, General Manager, Toronto Water Page 36 of 134

6 Toronto Water a snapshot of R.C. Harris Water Treatment Plant Ashbridges Bay Wastewater Treatment Plant Earl Bales Stormwater Management Pond what you pay for Drinking water For 3.2 million residents and businesses Treat and supply 493 billion litres of safe drinking water annually Wastewater Collect and treat 438 billion litres of wastewater annually (e.g., water from toilets, dishwashers, washing machines, etc.) Stormwater Management Protect private property and the environment from stormwater runoff Maintenance & Repair Repair 1,500 broken watermains each year Maintain and service 4 water treatment plants and 4 wastewater treatment plants Maintain and repair 5,000 km of watermains; 5,700 km of sanitary sewers; 4,300 km of storm sewers Page 37 of 134 2

7 How are all of these services paid for? Pay-as-you-go: Toronto Water s funding is a pay-as-you-go system (i.e., water bills) Revenue: 93% of the revenues collected through water bills pays for the services each year The water rate is completely separate from City of Toronto taxes Paying for aging infrastructure: the City has aging infrastructure, and to help pay for upgrades, 9% water rate increases have occurred for the past 9 years, up to and including 2014 Page 38 of 134 3

8 Negative effects of stormwater Stormwater is rain and melted snow Paved surfaces: In a large city with paved surfaces, a lot of stormwater can t be absorbed into the ground, and it makes its way into storm sewers, picking up pollutants, before flowing through pipes into rivers, streams and Lake Ontario Older infrastructure: Underground sewers in the oldest part of the city carry both stormwater and sewage. During heavy rainfall the pipes become full and overflow into rivers, streams and Lake Ontario Basement flooding: Stormwater runoff (during heavy rains) can also overwhelm and back-up sewer pipes, causing basement flooding Humber River/Lake Ontario Page 39 of 134 4

9 What is the City doing to deal with stormwater? The Wet Weather Flow Master Plan (WWFMP) is a 25-year plan to reduce stormwater and protect the environment for healthy rivers, streams, and Lake Ontario $3 billion over more than 25 years Significant large scale projects in the WWFMP: o Building underground infrastructure and a treatment facility to capture and treat polluted stormwater and sewer overflows before they enter Toronto's waterways like the Don River and Central Waterfront $1.4 billion over 20 years o Projects to help reduce basement flooding in areas hardest hit by storms $962 million over 10 years Other projects include: installing tanks and tunnels to intercept stormwater flows, new storm sewers, stormwater ponds etc. Page 40 of 134 5

10 Funding challenges Dedicated funding is needed to maintain current levels of service and to implement priority projects, especially WWFMP and Basement Flooding Protection Program (BFPP) projects to improve the quality and the quantity of stormwater runoff Page 41 of 134 6

11 Example Stormwater Management Projects Earl Bales Park Stormwater Pond Storm sewer upgrades for areas with basement flooding Page 42 of 134 7

12 How does Toronto compare? Page 43 of 134 8

13 Funding Options Option and on Water rate increases greater than inflation 8% increases for Blocks 1 and 2 8% increases for Blocks 1 and 2 8% increases for Blocks 1 and 2 Nominal increases for Blocks 1 and 2 Stormwater charge 8% increases for Blocks 1 and 2 8% increases for Blocks 1 and 2 Stormwater charge + Decreases for Blocks 1 and 2 Rates Stormwater charge + Nominal increases Blocks 1 and 2 Debenture financing 8% increases for Blocks 1 and 2 8% increases for Blocks 1 and 2 X% increases for Blocks 1 and 2 Costs associated with debentures (1-2% rate increase in future years) + Nominal increases for Blocks 1 and 2 Page 44 of 134 9

14 What is a stormwater charge? A stormwater charge (SWC) is determined based on the demands a customer imposes on the stormwater system Roughly, the more hard surfaces a property has, the more stormwater runoff it contributes and therefore the more it will be charged Page 45 of

15 Why recommend a stormwater charge? More equitable than other options Based on runoff rather than water consumption Greater transparency for cost of services provided and charges paid Previous consultation on funding options for Toronto Water showed support for a stormwater charge compared with other options Stormwater charges are increasingly common in other jurisdictions Page 46 of

16 Approximate Stormwater Charges for Various User Groups Property Class Number of Properties Total Area Average impervious area Runoff contribution to stormwater system 2017 SW cost by prop class based on Imp Area 2017 Estimated Annual Cost per Property Residential 435, ,431,931 52% 41% $78,440,599 $ 180 Condos/MFR 7,668 15,383,333 70% 4% $8,269,399 $ 969 Industrial 4,586 19,454,732 77% 6% $11,503,803 $ 969 Commercial + Institutional Large Properties >1 ha Total Area 20,093 20,078,169 75% 6% $11,564,073 $ 969 4, ,714,604 65% 42% $80,222,126 $0.77 per m2 of impervious area Total 473, ,062,769 $190,000,000 All figures are based on initial geographic estimates and are subject to change! Page 47 of 134 SWC averaged for most ICI users 13

17 Approximately how much will it cost? Multi-Family Residential Properties, including condos Water Consumption Low Average consumption (m 2 ) no SWC 2017 with SWC Consumption Rate Change 8% 8% -9% SW charge $969 Consumption Charge 2,200 $7,590 $8,197 $6,920 Total $7,888 Impact vs % 4% SW charge $969 Consumption Charge 6,000 $20,701 $22,357 $18,872 Total $19,841 Impact vs % -4% High SW charge $969 Consumption Charge 14,000 $48,301 $52,165 $44,034 Total $45,003 All figures are based on initial geographic estimates and are subject to change. Page 48 of 134 Impact vs % -7% 14

18 Approximately how much will it cost? Commercial and Institutional Properties Water Consumption Low Average consumption (m 2 ) no SWC 2017 with SWC Consumption Rate Change 8% 8% -9% Stormwater Charge $969 Consumption Charge 900 $3,105 $3,353 $2,831 Total $3,800 Impact vs % 22% Stormwater Charge $969 Consumption Charge 3,000 $10,350 $11,178 $9,436 Total $10,405 Impact vs % 1% Stormwater Charge $969 Consumption Charge 6,000 $20,701 $22,357 $18,872 Total $19,841 Impact vs % -4% Stormwater Charge $969 Consumption Charge 20,000 $69,002 $74,522 $62,906 Total $63,875 Impact vs % -7% High Stormwater Charge $969 Consumption Charge 32,000 $110,403 $119,235 $100,650 Total $101,618 Impact vs % -8% All figures are based on initial geographic estimates and are subject to change. Page 49 of

19 Approximately how much will it cost? Industrial Properties Block 1 Water Consumption Low Average consumption (m 2 ) no SWC 2017 with SWC Consumption Rate Change 8% 8% -9% Stormwater Charge $969 Consumption Charge 3,000 $10,350 $11,178 $9,436 Total $10,405 Impact vs % 1% Stormwater Charge $969 Consumption Charge 4,500 $15,525 $16,767 $14,154 Total $15,123 Impact vs % -3% High Stormwater Charge $969 Consumption Charge 16,000 $55,202 $59,618 $50,325 Total $51,294 Impact vs % -7% All figures are based on initial geographic estimates and are subject to change. Page 50 of

20 Approximately how much will it cost? Industrial Properties Block 2 Water Consumption Low Average consumption (m 2 ) no SWC 2017 with SWC Consumption Rate Change 8% 8% -9% Stormwater Charge $969 Consumption Charge 9,000 $27,946 $30,181 $25,477 Total $26,446 Impact vs % -5% Stormwater Charge $969 Consumption Charge 100,000 $247,714 $267,531 $225,833 Total $226,801 Impact vs % -8% High Stormwater Charge $969 Consumption Charge 1,000,000 $2,421,242 $2,614,941 $2,207,372 Total $2,208,340 Impact vs % -9% All figures are based on initial geographic estimates and are subject to change. Page 51 of

21 Approximately how much will it cost? Commercial Property (30 ha) Consumption 2016 as is 2017 no SWC 2017 with SWC SW charge $ 227,194 Consumption Charge 203,000 $ 700,369 $ 756,399 $ 638,496 Total $ 865,690 Impact vs % 24% Impervious area = 295,864 m 2 at a cost of $0.77/ m 2 All figures are based on initial geographic estimates and are subject to change. Page 52 of

22 Approximately how much will it cost? Industrial Property (7 ha) Consumption 2016 as is 2017 no SWC 2017 with SWC SW charge $ 56,473 Consumption Charge 1,402,503 $ 3,391,125 $ 3,662,415 $ 3,091,585 Total $ 3,148,057 Impact vs % -7% Impervious area = 73,542 m 2 at a cost of $0.77/ m 2 All figures are based on initial geographic estimates and are subject to change. Page 53 of

23 To be added to existing water bills WATER METER READING METER NO Current Reading Date Reading 12/Sep/ Previous Reading Date 12/Jun/ Consumption (91 days) m3 WATER Current Billing Total Consumption Total Water & Sewer Charge 9% Rate Decrease JAN 01, 2017 Block 1: 750 = $ Stormwater Charge Industrial: 91 days = $ Total = $ Page 54 of

24 Incentives Incentives will be offered to large properties (i.e., those larger than one hectare) most affected by the stormwater charge for managing stormwater onsite Applicants will have to demonstrate management of water quantity and quality Details of the program are being determined Page 55 of

25 What other cities have stormwater charges? Municipality Start date Portland, OR 1977 St. Thomas, ON 2001 Edmonton, AB 2003 Calgary, AB 2004 Regina, SK 2008 Philadelphia, PA 2010 Washington, D.C Kitchener & Waterloo, ON 2011 Saskatoon, SK 2012 London, ON 2013 Richmond Hill, ON 2013 Mississauga, ON 2016 Page 56 of 134 Plus hundreds of others across North America 22

26 Timeline Early 2015: Council may choose to implement the SWC 2015: continue detailed geographic analysis : prepare water bills for the addition of a stormwater charge : public communication 2017: implementation of the SWC Page 57 of

27 Your Turn What questions do you have? Concerns? Issues? Comments? Page 58 of

28 Next Steps Staff are preparing a report for the January 2015 Executive Committee Please provide written feedback to be included in this report Send to: Adir Gupta City Hall, 5th Floor East Tower, 100 Queen Street West, Toronto, ON M5H 2N2 or agupta@toronto.ca Due date for written submissions: November 21, 2014 Page 59 of