Utilities Kingston Report to Council Report Number

Transcription

1 To: From: Resource Staff: Utilities Kingston Report to Council Report Number Mayor and Members of Council Date of Meeting: November 23, 2015 Subject: Executive Summary: Jim Keech, President and CEO, Utilities Kingston Randy Murphy, Chief Financial Officer, Utilities Kingston Approval of the 2016 Operating Budgets for the Municipal Utilities This report provides a summary and recommendation for the 2016 Wastewater, Water, Natural Gas and Appliance Rental Operating Budgets for which approval is recommended. The attached appendices provide details of the noted operating budgets as well as five year operating budget estimates. Recommendation: That Council approve the 2016 Municipal Utility Operating Budgets in the amounts noted below; and WASTEWATER Operating Budget $14,255,000 Debt Costs $4,480,000 Transfer to Facility Repair Fund Debt 85 Lappan s Lane $515,000 Transfer to Capital Reserve Fund $10,992,000 Total Revenue $30,242,000 Committee of the Whole - November 23, 24 and 25 1

2 WATER Operating Budget $13,252,000 Debt Costs $2,175,000 Transfer to Facility Repair Fund Debt 85 Lappan s Lane $515,000 Transfer to Capital Reserve Fund $10,260,000 Total Revenue $26,202,000 GAS Operating Budget $4,407,000 Commodity Purchase, Transportation & Storage $25,000,000 Debt Costs $7,000 Transfer to Facility Repair Fund Debt 85 Lappan s Lane $187,000 Transfer to Gas Capital Reserve Fund $3,441,000 Transfer to City Municipal Capital Reserve Fund $2,000,000 Total Revenue $35,042,000 APPLIANCE RENTAL BUSINESS Operating Budget $580,000 Transfer to Capital Reserve Fund $755,000 Transfer to City Environmental Reserve Fund $1,020,000 Total Revenue $2,355,000 That the City s budget By-Laws include the municipal utility operating budget as approved. Committee of the Whole - November 23, 24 and 25 2

3 Authorizing Signatures: Jim Keech, President and CEO Utilities Kingston Gerard Hunt, Chief Administrative Officer Consultation with the following Members of the Corporate Management Team: Cynthia Beach, Corporate & Strategic Initiatives Lanie Hurdle, Community Services Denis Leger, Transportation, Facilities & Emergency Services Desiree Kennedy, Chief Financial Officer & City Treasurer Not required Not required Not required Not required Committee of the Whole - November 23, 24 and 25 3

4 Options/Discussion: Attached are summary reports for the recommended 2016 Operating Budgets and five-year operating budget estimates for each of the municipal utilities: Wastewater, Water, Natural Gas, and Appliance Rental Business managed by Ontario Limited (operating as Utilities Kingston) on behalf of the Corporation of the City of Kingston OPERATING The requested 2016 operating budget approvals are as follows: Operating - Gross 2015 Budget 2016 Budget Wastewater $14,424,000 $14,255,000 Water $13,213,000 $13,252,000 Gas $4,293,000 $4,407,000 Appliance Rentals $534,000 $580,000 Total - City-owned Utilities $32,464,000 $32,494,000 Below is a table that displays the Natural Gas, Wastewater and Water utility budgets less costs related to master plans. This isolates the day-to-day operational costs, the overall increase which is in line with inflation: Natural Gas Wastewater Water Overall 2015 Budget 4,292,700 14,423,700 13,213,300 31,929,700 Less: 2015 Master Plan Costs - 425, , ,000 Total Budget Less Extraordinary Cost 4,292,700 13,998,700 12,788,300 31,079, Budget 4,407,100 14,255,500 13,251,800 31,914,400 Less: 2016 Master Plan Costs - 110, , ,000 Total Budget Less Extraordinary Cost 4,407,100 14,145,500 13,141,800 31,694,400 Percentage Increase Year Over Year 2.7% 1.0% 2.8% 1.98% Committee of the Whole - November 23, 24 and 25 4

5 The 2016 gross operating expenses for the municipally owned utilities, excluding the appliance rental business, are budgeted to increase 1.98% or $615,000. These increases are a result of a 2% increase in operating expenses which is reflective of general inflationary increases It should be noted that as a provider of multiple utilities, Utilities Kingston allocates shared corporate costs to the various utilities on the basis of customer numbers. As the water and wastewater utilities continue to grow, a larger proportion of these shared costs will move from the gas utility to the water and wastewater utilities. This change has been incorporated into the 2016 budgets. Staff at Utilities Kingston reviewed the Strategic Priorities of Council prior to this budget process. Over the course of 2016 and on to 2018 Utilities Kingston has proposed activities to support the following council priorities: 1. Create a smart economy Progressively sponsor city-wide broadband wi-fi infrastructure Promote fibre access to strengthen Kingston s competitive advantage 2. Invest in infrastructure Maintain and improve roadways and sidewalks Complete John Counter Boulevard Continue to support the current infrastructure plan and recommend continued support to future councils 3. Plan a livable city Foster intensification in the city core 5. Advance a vibrant waterfront 6. Foster open government Build on a culture of excellence in customer service This support will be from a mixture of operating and capital projects and day to day activities. Wastewater and Water Utilities The proposed 2016 operating budget for the wastewater and water utilities is an increase of approximately $256,800 or 1.8% and $463,500 or 3.6% respectively. Expenses contributing to these increases are the costs for master plans. The total of this cost is $110,000 per utility. It is important to note that the expansion of the Point Pleasant Water Treatment Plant is scheduled to be completed in mid Once completed, the plant will experience some changes to its operations which will likely result in increased costs for some expenditures such Committee of the Whole - November 23, 24 and 25 5

6 as electricity etc. Utilities Kingston has not increased its operating budget estimates for 2016 to reflect these potential increases and will monitor the actual costs during the year. Consequently, the 2017 operating budget for the water utility will need to be adjusted to reflect the increased operating costs. The water rates that were approved in 2015 for the 4 year period did take into account the estimated increase when fully operational. Natural Gas Distribution Business The 2016 natural gas distribution business operating budget is projected to increase approximately $114,500 or 2.7%. Appliance Rental Business The proposed 2016 operating budget for the appliance rental business is an increase of approximately $46,000 or 8.5%. This is a result of an increase in labour and other services. Revenues are expected to increase 6.5% over the previous year. As a result, net earnings are projected to be $1,775,000 in 2016, an increase of $98,000 over the 2015 net earnings of $1,677,000. After an allocation for capital expenditures, the remainder of the net earnings from the appliance rental business flow directly into the Environmental Reserve Fund and the Municipal Capital Reserve Fund. For 2016, this business has increased the annual contributions to a total of $1,020,000. Note In the charts and graphs that follow, the data prior to 2015 is from audited financial statements. For 2015, the approved 2015 operating budgets and the approved 2015 capital budgets including carryover are reported. For , we show the recommended and forecast operating budget amounts. Also reflected are the capital budgets which have already been approved. Committee of the Whole - November 23, 24 and 25 6

7 WASTEWATER UTILITY Years Capital Expenditures Operating Revenue 2011 $7,884,000 $11,081,000 $23,755, $11,448,000 $12,697,000 $25,575, $17,238,000 $12,426,000 $26,656, $13,830,000 $13,198,000 $27,536, $54,930,000 $14,424,000 $28,615, $101,230,000 $14,255,000 $30,242, $13,250,000 $14,611,000 $31,274, $22,686,000 $14,976,000 $32,342,000 Wastewater Capital Expenditures Wastewater Operating Expenses $16,000,000 $120,000,000 $100,000,000 $80,000,000 $101,230,000 $14,000,000 $12,000,000 $10,000,000 $11,081,000 $12,697,000 $12,426,000 $13,198,000 $14,424,000 $14,255,000 $14,611,000 $14,976,000 $60,000,000 $8,000,000 $40,000,000 $54,930,000 $6,000,000 $20,000,000 $7,884,000 $11,448,000 $17,238,000 $13,830,000 $13,250,000 $22,686,000 $4,000,000 $2,000,000 $ $ Total Wastewater Revenues $35,000,000 $30,000,000 $25,000,000 $20,000,000 $23,755,000 $25,575,000 $26,656,000 $27,536,000 $28,615,000 $30,242,000 $31,274,000 $32,342,000 $15,000,000 $10,000,000 $5,000,000 $ Committee of the Whole - November 23, 24 and 25 7

8 WATER UTILITY Years Capital Expenditures Operating Revenue 2011 $13,162,000 $10,345,000 $18,483, $9,607,000 $11,014,000 $21,104, $15,113,000 $11,542,000 $22,832, $39,426,215 $11,538,000 $24,205, $82,775,921 $13,213,000 $25,253, $12,400,050 $13,252,000 $26,202, $8,951,250 $13,583,000 $26,976, $10,454,750 $13,923,000 $27,773,000 Water Capital Expenditures Water Operating Expenses $16,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $82,775,921 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $10,345,000 $11,014,000 $11,542,000 $11,538,000 $13,213,000 $13,252,000 $13,583,000 $13,923,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $13,162,000 $9,607,000 $15,113,000 $39,426,215 $12,400,050 $8,951,250 $10,454,750 $6,000,000 $4,000,000 $2,000,000 $ $ Total Water Revenues $30,000,000 $25,000,000 $20,000,000 $15,000,000 $18,483,000 $21,104,000 $22,832,000 $24,205,000 $25,253,000 $26,202,000 $26,976,000 $27,773,000 $10,000,000 $5,000,000 $ Committee of the Whole - November 23, 24 and 25 8

9 GAS UTILITY Years Capital Expenditures Operating Return to the City Revenue 2011 $2,191,000 $3,088,000 $3,000,000 $10,169, $3,148,000 $3,299,000 $3,000,000 $9,699, $4,575,000 $3,819,000 $3,000,000 $10,403, $3,214,000 $3,750,000 $4,899,000 $10,398, $6,296,200 $4,293,000 $2,000,000 $10,300, $4,256,180 $4,407,000 $2,000,000 $10,042, $4,259,430 $4,495,000 $2,000,000 $10,185, $4,387,750 $4,585,000 $2,000,000 $10,330,000 Gas Capital Expenditures Gas Operating Expenses $5,000,000 $7,000,000 $4,500,000 $6,000,000 $5,000,000 $4,000,000 $4,575,000 $6,296,200 $4,256,180 $4,259,430 $4,387,750 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $3,088,000 $3,299,000 $3,819,000 $3,750,000 $4,293,000 $4,407,000 $4,495,000 $4,585,000 $3,000,000 $2,000,000 $2,191,000 $3,148,000 $3,214,000 $2,000,000 $1,500,000 $1,000,000 $1,000,000 $500,000 $ $ Total Gas Revenues Gas Return to the City $12,000,000 $5,000,000 $10,000,000 $8,000,000 $10,169,000 $9,699,000 $10,403,000 $10,398,000 $10,300,000 $10,042,000 $10,185,000 $10,330,000 $4,500,000 $4,000,000 $3,500,000 $4,899,000 $6,000,000 $3,000,000 $2,500,000 $3,000,000 $3,000,000 $3,000,000 $4,000,000 $2,000,000 $1,500,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $1,000,000 $500,000 $ $ Committee of the Whole - November 23, 24 and 25 9

10 APPLIANCE RENTAL BUSINESS Years Capital Expenditures Operating Return to the City Revenue Operating Income 2011 $666,000 $378,000 $750,000 $1,703,000 $1,325, $603,000 $465,000 $750,000 $1,920,000 $1,455, $677,000 $466,000 $825,000 $2,102,000 $1,637, $745,000 $530,000 $1,009,000 $2,189,000 $1,659, $600,766 $534,000 $1,000,000 $2,211,000 $1,677, $670,000 $580,000 $1,020,000 $2,355,000 $1,775, $690,000 $592,000 $1,040,000 $2,402,000 $1,810, $710,000 $604,000 $1,061,000 $2,450,000 $1,846,000 Appliance Rental Business Capital Expenditures Appliance Rental Business Operating Expenditures $700,000 $800,000 $700,000 $600,000 $500,000 $666,000 $603,000 $677,000 $745,000 $600,766 $670,000 $690,000 $710,000 $600,000 $500,000 $400,000 $465,000 $466,000 $530,000 $534,000 $580,000 $592,000 $604,000 $400,000 $300,000 $378,000 $300,000 $200,000 $200,000 $100,000 $100,000 $ $ Appliance Rental Business Revenue Appliance Rental Business Return to the City $3,000,000 $1,200,000 $2,500,000 $2,000,000 $1,500,000 $1,703,000 $1,920,000 $2,102,000 $2,189,000 $2,211,000 $2,355,000 $2,402,000 $2,450,000 $1,000,000 $800,000 $600,000 $750,000 $750,000 $825,000 $1,009,000 $1,000,000 $1,020,000 $1,040,000 $1,061,000 $1,000,000 $400,000 $500,000 $200,000 $ $ Committee of the Whole - November 23, 24 and 25 10

11 LOOKING FORWARD The water and wastewater utilities continue to be closely monitored and regulated by both upper levels of government, changes in regulations at any time can result in additional operating and capital expenses not currently foreseen. We are continually capturing additional information from our system monitoring equipment, our supervisory and control and data gathering systems, CCTV camera work and from our operating crews on a daily basis that will assist us in planning for future capital improvements. Existing Policy/By Law: Not applicable. Notice Provisions: Not applicable. Accessibility Considerations: Not applicable. Financial Considerations: Since amalgamation Utilities Kingston has worked to refine the ten year planning process and asset management principles for these municipal utilities (along with other assets that Utilities Kingston manages) and has adopted sufficient operating and maintenance practices to ensure maximum life expectancy from the assets. The ten year planning process has been increased to 15 years to allow for an additional 5 year planning horizon. A very important portion of this has been in regards to managing the financing for this work and maintaining the proper balance between user rates, impost fees (for new development), debt, and working to obtain grant funding from upper levels of government. Contacts: Jim Keech, President and CEO, Utilities Kingston, X2217 Nancy Taylor, Vice President, Utilities Kingston, X2460 Randy Murphy, Chief Financial Officer, Utilities Kingston, X2317 Jim Miller, Director, Utilities Engineering, Utilities Kingston, X2475 Brad Joyce, Director, Electric and Business Services, Utilities Kingston, X2319 Kevin Riley, Director, Water & Wastewater Operations, Utilities Kingston, X2224 Committee of the Whole - November 23, 24 and 25 11

12 Kevin McCauley, Director, Measurement & Communication Services, Utilities Kingston, X2247 Other City Of Kingston Staff Consulted: Gerard Hunt, Chief Administrative Officer, City of Kingston Desiree Kennedy, Chief Financial Officer and City Treasurer, City of Kingston Lana Foulds, Manager, Financial Planning, City of Kingston Exhibits Attached: Exhibit A Wastewater Utility Budget Summary Exhibit B Water Utility Budget Summary Exhibit C Natural Gas Distribution Business Budget Summary Exhibit D Appliance Rental Business Budget Summary Committee of the Whole - November 23, 24 and 25 12

13 REPORT EXHIBIT A Wastewater Utility Budget Summary (Rounded to Nearest Thousand) 2016 Total Revenue $ 30,242,000 Operating Expenses $ 14,255,000 Net Operating to Capital Reserve Funds $ 15,987,000 Debt Repayment $ 4,480,000 January 1, 2016 Rate Increase (previously approved) 5.0% January 1, 2017 Rate Increase (previously approved) 3.5% January 1, 2018 Rate Increase (previously approved) 3.5% Committee of the Whole - November 23, 24 and 25 13

14 Corporation of the City of Kingston Wastewater Utility 2016 Budget Revenue and Expenditure Actuals as of Budget Budget 30-Sep Revenue Central Sewer rates 20,845,113 27,864,583 29,492,000 Other Revenue 440, , ,000 Total Revenue 21,285,827 28,614,583 30,242,000 Operating expense Administration 1,936,559 4,125,550 3,883,960 Billing 519, , ,566 Pumping & Treatment 5,594,719 7,274,321 7,322,786 Community Relations 221, , ,755 Collection 788,128 1,095,924 1,169,622 Customer Service 435, , ,794 Operating Expenses (Contracted Services) 9,496,299 14,423,685 14,255,483 Contribution to Reserve Funds 11,789,528 14,190,899 15,986,517 Debt Repayment 3,152,869 4,203,826 4,480,000 Contribution to Facilities Repair Fund 386, , ,000 Net increase to Wastewater Reserve Fund 7,103,971 9,471,962 10,991,517 Net Surplus 1,146, Committee of the Whole - November 23, 24 and 25 14

15 Corporation of the City of Kingston Wastewater Utility Operating Budget Forecast (Rounded to Nearest Thousand) Budget Forecast Forecast Forecast Forecast Revenue Rates 29,492,000 30,524,000 31,592,000 32,514,000 33,843,000 Other 750, , , , ,000 Rates and Other 30,242,000 31,274,000 32,342,000 33,264,000 34,593,000 Operating Expense Contracted Services 14,255,000 14,611,000 14,976,000 15,850,000 16,246,000 Net operating to Reserve Funds 15,987,000 16,663,000 17,366,000 17,414,000 18,347,000 Debt Repayment 4,480,000 4,751,000 5,388,000 6,255,000 6,457,000 Contribution to Facilities Repair Fund 515, , , , ,000 Net increase to Capital Reserve Fund 10,992,000 11,397,000 11,463,000 10,644,000 11,375,000 15,987,000 16,663,000 17,366,000 17,414,000 18,347,000 Committee of the Whole - November 23, 24 and 25 15

16 Municipal Utility Opening Balance - January 1 5,675,405 9,090,779 4,571,201 7,815,046 9,136,251 11,181,017 11,953,416 13,753,934 16,668,813 20,089,481 24,828,253 30,274,329 35,774,027 43,123,983 50,612,702 Contributions: General Fund 15,471,281 16,147,109 16,850,156 16,897,173 17,829,608 18,607,902 19,242,363 19,717,549 20,575,316 21,275,202 21,998,327 22,542,413 23,517,328 24,314,783 25,138,637 Previous Years Surplus from General 15,471,281 16,147,109 16,850,156 16,897,173 17,829,608 18,607,902 19,242,363 19,717,549 20,575,316 21,275,202 21,998,327 22,542,413 23,517,328 24,314,783 25,138,637 Interest 3% 218, , , , , , , , , , , ,084 1,165,980 1,385,271 1,568,134 Drawdowns: Capital Expenditures 20,845, ,600 9,975,750 8,961,000 9,270,500 11,835,500 10,775,000 10,355,000 11,040,000 10,645,000 10,975,000 12,100,000 11,535,000 12,786,000 17,000,000 Closed projects return of funds Cash Flow Adjustments (15,634,088) (24,920) (1,995,150) (1,792,200) (1,854,100) (2,367,100) (2,155,000) (2,071,000) (2,208,000) (2,129,000) (2,195,000) (2,420,000) (2,307,000) (2,557,200) (3,400,000) Prior Year Approvals 2,209,840 15,634,088 24,920 1,995,150 1,792,200 1,854,100 2,367,100 2,155,000 2,071,000 2,208,000 2,129,000 2,195,000 2,420,000 2,307,000 2,557,200 - Principal and Interest - Issued Debt 4,172,583 4,135,753 4,104,082 4,067,529 4,035,065 4,000,872 3,967,673 3,932,930 3,900,782 3,567,979 3,534,722 3,205,916 2,731,988 2,706,225 2,679,503 - Principal and Interest - Approved - Not Yet Issued 307, ,088 1,284,257 2,187,636 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 2,421,845 - Principal and Interest - Planned - Not Yet Issued Transfer to General Fund Transfer to Facility Repair RF Short term Interest Impost Post Period benefits funded by wastewater 346, , , , , , , , , , , , , , ,203 Impost Post Period benefits interest 26,593 37,777 49,296 61,161 73,382 85,970 98, , , , , , , , ,000 12,274,126 20,868,589 13,789,359 15,826,479 16,085,096 18,177,391 17,821,757 17,252,267 17,697,874 17,200,239 17,366,575 18,018,799 17,333,352 18,211,335 21,821,752 Closing Balance - December 31 9,090,779 4,571,201 7,815,046 9,136,251 11,181,017 11,953,416 13,753,934 16,668,813 20,089,481 24,828,253 30,274,329 35,774,027 43,123,983 50,612,702 55,497,722 PAYG 20,845, ,600 9,975,750 8,961,000 9,270,500 11,835,500 10,775,000 10,355,000 11,040,000 10,645,000 10,975,000 12,100,000 11,535,000 12,786,000 17,000,000 Impost Reserve fund 60,385,000 6,125,000 12,710, ,000 2,700, ,000 1,800,000 1,400, ,000 1,520,000 2,400,000 - New Debt - Planned, Not Yet Issued Total Capital Resources Available 101,230,450 13,249,600 22,685,750 9,741,000 11,970,500 11,835,500 11,495,000 10,355,000 11,040,000 12,445,000 12,375,000 12,320,000 13,055,000 15,186,000 17,000,000 Inflation 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Rate Increases 5.0% 3.5% 3.5% 3.5% 3.5% 3.5% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Rate Revenue 29,491,875 30,524,091 31,592,434 32,513,880 33,842,605 35,027,096 36,077,909 36,979,857 38,275,054 39,423,305 40,606,004 41,621,154 43,078,910 44,371,277 45,702,416 Other Revenue 750, , , , , , , , , , , , , , ,000 Operating Expenses 14,255,483 14,611,870 14,977,167 15,851,596 16,247,886 16,654,083 17,070,435 17,497,196 17,934,626 18,382,992 18,842,566 19,313,630 19,796,471 20,291,383 20,798,668 Contribution to Facilities Repair fund 515, , , , , , , , , , , , , , ,111 TOTAL 15,471,281 16,147,109 16,850,156 16,897,173 17,829,608 18,607,902 19,242,363 19,717,549 20,575,316 21,275,202 21,998,327 22,542,413 23,517,328 24,314,783 25,138,637 Committee of the Whole - November 23, 24 and 25 16

17 REPORT EXHIBIT B Water Utility Budget Summary (Rounded to Nearest Thousand) 2016 Total Revenue $ 26,202,000 Operating Expenses $ 13,252,000 Net Operating to Capital Reserve Funds $ 12,950,000 Debt Repayment $ 2,175,000 January 1, 2016 Rate Increase (previously approved) 3.0% January 1, 2017 Rate Increase (previously approved) 3.0% January 1, 2018 Rate Increase (previously approved) 3.0% Committee of the Whole - November 23, 24 and 25 17

18 Corporation of the City of Kingston Water Utility 2016 Budget Revenue and Expenditure Revenue Actuals as of Budget Budget 30-Sep Water rates 18,510,235 24,863,134 25,802,000 Other Revenue 304, , ,000 Total Revenue 18,814,503 25,253,134 26,202,000 Operating expense Administration 1,927,062 3,513,155 3,276,703 Billing 519, , ,566 Pumping & Treatment 2,829,233 3,956,249 4,080,186 Community Relations 49, , ,014 Distribution 3,226,498 4,090,426 4,290,512 Customer Service 447, , ,794 Operating Expenses (Contracted Services) 8,999,088 13,213,277 13,251,774 Contribution to Capital Reserve Funds 9,815,415 12,039,857 12,950,226 Debt Repayment 619, ,684 2,175,000 Contribution to Facilities Repair Fund 386, , ,000 Net increase to Water Reserve Fund 8,643,559 10,708,062 10,260,226 Net Surplus 165, Committee of the Whole - November 23, 24 and 25 18

19 Corporation of the City of Kingston Water Utility Operating Budget Forecast (Rounded to Nearest Thousand) Budget Forecast Forecast Forecast Forecast Revenue #REF! Rates 25,802,000 26,576,000 27,373,000 28,057,000 29,040,000 Other 400, , , , ,000 Rates and Other 26,202,000 26,976,000 27,773,000 28,457,000 29,440,000 Operating Expense Contracted Services 13,251,774 13,583,000 13,923,000 14,271,000 14,628,000 Net operating to Capital Reserve Fund 12,950,226 13,393,000 13,850,000 14,186,000 14,812,000 Debt Repayment 2,175,000 2,828,000 2,809,000 2,795,000 2,787,000 Contribution to Facilities Repair Fund 515, , , , ,000 Net increase to Water Reserve Fund 10,260,226 10,050,000 10,526,000 10,876,000 11,510,000 12,950,226 13,393,000 13,850,000 14,186,000 14,812,000 Committee of the Whole - November 23, 24 and 25 19

20 Municipal Utility Opening Balance - January 1 10,487,942 10,571,096 12,247,410 14,073,542 15,921,357 19,084,243 20,391,324 21,705,367 23,149,814 25,347,523 26,173,112 29,020,409 33,456,330 38,970,289 42,801,146 Contributions: General Fund 12,434,625 12,877,376 13,335,066 13,671,320 14,297,237 14,802,744 15,325,246 15,711,255 16,423,470 17,000,357 17,596,570 18,039,362 18,849,510 19,507,559 20,187,578 Previous Years Surplus from General 12,434,625 12,877,376 13,335,066 13,671,320 14,297,237 14,802,744 15,325,246 15,711,255 16,423,470 17,000,357 17,596,570 18,039,362 18,849,510 19,507,559 20,187,578 Interest 3% 311, , , , , , , , , , , ,302 1,070,344 1,208,445 1,324,312 Drawdowns: Capital Expenditures 10,355,050 8,181,250 9,194,750 9,416,400 8,598,000 11,843,000 11,730,000 12,135,000 12,055,000 14,580,000 12,240,000 11,605,000 11,610,000 14,705,000 14,705,000 Closed Projects Return of Funds Cash Flow Adjustments - 2,071,010-1,636,250-1,838,950-1,883,280-1,719,600-2,368,600-2,346,000-2,427,000-2,411,000-2,916,000-2,448,000-2,321,000-2,322,000-2,941,000-2,941,000 Prior Year Approvals 2,156,840 2,071,010 1,636,250 1,838,950 1,883,280 1,719,600 2,368,600 2,346,000 2,427,000 2,411,000 2,916,000 2,448,000 2,321,000 2,322,000 2,941,000 - Principal and Interest - Issued Debt 1,513,775 1,504,815 1,485,585 1,471,523 1,463,815 1,455,781 1,448,280 1,439,978 1,432,385 1,418,601 1,410,809 1,344,927 1,343,286 1,341,632 1,339,915 - Principal and Interest - Approved - Not Yet Issued 661,683 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 1,323,366 - Principal and interest - planned - not yet issued Short term Interest Unfinanced prior year projects Trf to Facilities Repair RF Impost Post Period interest funded by water 46,350 94,090 96,913 99, , , , , , , , , , , ,150 Impost Post Period benefits funded by water 12,662,688 11,538,281 11,897,913 12,266,779 11,651,675 14,079,046 14,633,322 14,929,692 14,942,470 16,936,157 15,564,941 14,526,742 14,405,895 16,885,147 17,502,431 Closing Balance - December 31 10,571,096 12,247,410 14,073,542 15,921,357 19,084,243 20,391,324 21,705,367 23,149,814 25,347,523 26,173,112 29,020,409 33,456,330 38,970,289 42,801,146 46,810,604 Interest Earnings Rate 3.0% Inflation on Annual Contribution 2.0% Capital Budget Approval Year Funded By Water Capital Reserve Fund 10,355,050 8,181,250 9,194,750 9,416,400 8,598,000 11,843,000 11,730,000 12,135,000 12,055,000 14,580,000 12,240,000 11,605,000 11,610,000 14,705,000 14,705,000 Funded by Impost Reserve Fund 2,045, ,000 1,260, ,000 1,740,000 2,450, ,000 4,650,000 Approved, Not Yet Issued New Debt - Planned, Not Yet Issued 5.5% Total Capital Resources Available - Timing of Expenditure 12,400,050 8,951,250 10,454,750 9,416,400 9,198,000 13,583,000 14,180,000 12,135,000 12,426,000 19,230,000 12,240,000 11,605,000 11,610,000 14,705,000 14,705,000 Inflation 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Rate Increases 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Rate Revenue 25,801,510 26,575,555 27,372,822 28,057,142 29,039,827 29,911,022 30,808,352 31,578,561 32,684,581 33,665,118 34,675,072 35,541,949 36,786,784 37,890,387 39,027,099 Other Revenue 400, , , , , , , , , , , , , , ,000 Operating Expenses 13,251,774 13,583,068 13,922,645 14,270,711 14,627,479 14,993,166 15,367,995 15,752,195 16,146,000 16,549,650 16,963,391 17,387,476 17,822,163 18,267,717 18,724,410 Contribution to Facilities Repair fund 515, , , , , , , , , , , , , , ,111 TOTAL 12,434,625 12,877,376 13,335,066 13,671,320 14,297,237 14,802,744 15,325,246 15,711,255 16,423,470 17,000,357 17,596,570 18,039,362 18,849,510 19,507,559 20,187,578 Committee of the Whole - November 23, 24 and 25 20

21 REPORT EXHIBIT C Natural Gas Distribution Business Budget Summary (Rounded to Nearest Thousand) 2016 Total Revenue $ 30,042,000 Less Operating Expenses $ 24,407,000 Net Earnings $ 5,635,000 Less: Debt Repayment $ 7,000 Less: Contribution to Facilities Repair Reserve Fund $ 187,000 Less: Contribution to Municipal Capital Reserve Fund $ 2,000,000 Net Contribution to Gas Capital Reserve Fund $ 3,441,000 Committee of the Whole - November 23, 24 and 25 21

22 Corporation of the City of Kingston Natural Gas Distribution Business 2016 Budget Revenue and Expenditures Actuals as of Budget Budget 30-Sep Energy & transportation Sales 13,659,179 30,000,000 25,000,000 Cost of sales 13,659,179 30,000,000 25,000, Local distribution revenue 7,542,146 9,800,000 9,542,000 Other operating revenues Account set up charge 26,199 41,650 34,000 Late payment charges 21,844 28,050 28,050 Miscellaneous 373, , ,950 Other Revenue 421, , ,000 Total Revenue 7,963,561 10,300,000 10,042,000 Operating expenditures (Contracted Services) Administration 1,046,185 1,892,953 1,943,148 Billing 265, , ,041 Distribution 1,109,930 1,575,764 1,688,142 Customer service 215, , ,776 Operating Expenditures (Contracted Services) 2,637,255 4,292,668 4,407,107 Net Earnings 5,326,306 6,007,332 5,634,893 Debt Repayment 443, ,707 7,000 Contribution to Facilities Repair Reserve Fund 140, , ,000 Contribution to Municipal Capital Reserve Fund 2,096,229 2,000,000 2,000,000 Net Contribution to Capital Reserve Fund 1,500,000 3,228,265 3,440,893 Net Surplus 1,145, Committee of the Whole - November 23, 24 and 25 22

23 Corporation of the City of Kingston Natural Gas Distribution Business Operating Budget Forecast (Rounded to Nearest Thousand) Budget Forecast Forecast Forecast Forecast Revenue Rates 9,542,000 9,685,000 9,830,000 9,977,000 10,127,000 Other 500, , , , ,000 Rates and Other 10,042,000 10,185,000 10,330,000 10,477,000 10,627,000 Operating Expense Contracted Services 4,407,000 4,495,000 4,585,000 4,677,000 4,771,000 Net operating revenue 5,635,000 5,690,000 5,745,000 5,800,000 5,856,000 Contribution to City of Kingston 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Contribution to Gas Capital Reserve Fund 3,635,000 3,690,000 3,745,000 3,800,000 3,856,000 Debt Repayment 7, Contribution to Facilities Repair Reserve Fund 187, , , , ,000 Net Contribution to Gas Capital Reserve Fund 3,441,000 3,503,000 3,558,000 3,613,000 3,669,000 Committee of the Whole - November 23, 24 and 25 23

24 City of Kingston Gas Reserve Fund Year End Projections Municipal Utility Opening Balance - January 1 5,442,993 4,753,719 4,128,681 3,436,238 3,718,161 3,888,046 3,989,801 3,978,921 4,011,042 4,195,460 4,467,880 4,464,320 4,342,868 4,404,855 4,624,982 Contributions: General Fund 3,447,488 3,502,475 3,557,846 3,566,142 3,669,728 3,726,232 3,834,504 3,835,241 4,057,588 4,172,487 4,289,683 4,282,238 4,531,156 4,655,526 4,782,384 Previous Years Surplus from General 3,447,488 3,502,475 3,557,846 3,566,142 3,669,728 3,726,232 3,834,504 3,835,241 4,057,588 4,172,487 4,289,683 4,282,238 4,531,156 4,655,526 4,782,384 Interest 150, , , , , , , , , , , , , , ,133 Drawdowns: Capital Expenditures 4,256,180 4,259,430 4,387,750 3,140,500 3,713,000 3,637,500 3,841,000 3,644,500 3,692,000 3,629,000 4,048,000 4,003,000 4,095,000 4,035,000 4,035,000 Cash Flow Adjustments (851,236) (851,886) (877,550) (628,100) (742,600) (727,500) (768,200) (728,900) (738,400) (725,800) (809,600) (800,600) (819,000) (807,000) (807,000) Prior Year Approvals 875, , , , , , , , , , , , , , ,000 Transfers to Reserves - Principal and Interest - Issued Debt 6, Principal and interest - approved - not yet issued Principal and interest - planned - not yet issued , , , , , , , , , ,845 Short term Interest ,750 13,750 13,750 13,750 13,750 13,750 13, ,287,453 4,258,780 4,362,086 3,389,950 3,612,250 3,740,899 3,963,149 3,921,198 3,994,447 4,028,097 4,425,246 4,533,845 4,598,445 4,568,845 4,556,845 Closing Balance - December 31 4,753,719 4,128,681 3,436,238 3,718,161 3,888,046 3,989,801 3,978,921 4,011,042 4,195,460 4,467,880 4,464,320 4,342,868 4,404,855 4,624,982 4,992,653 Interest Earnings Rate 3.0% PAYG 4,256,180 4,259,430 4,387,750 3,140,500 3,713,000 3,637,500 3,841,000 3,644,500 3,692,000 3,629,000 4,048,000 4,003,000 4,095,000 4,035,000 4,035,000 New Debt - Planned, Not Yet Issued 5.5% ,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000, Total Capital Resources Available 4,256,180 4,259,430 4,387,750 4,140,500 4,713,000 4,637,500 4,841,000 4,644,500 4,692,000 4,629,000 4,048,000 4,003,000 4,095,000 4,035,000 4,035,000 Inflation 2.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Rate Increases 0.00% 1.50% 1.50% 1.50% 1.50% 1.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Rate Revenue 9,542,000 9,685,130 9,830,407 9,930,407 10,127,531 10,279,444 10,485,033 10,585,033 10,908,628 11,126,801 11,349,337 11,449,337 11,807,850 12,044,007 12,284,887 Other Revenue 500, , , , , , , , , , , , , , ,000 Operating Expenses 4,407,152 4,495,295 4,585,201 4,676,905 4,770,443 4,865,852 4,963,169 5,062,432 5,163,681 5,266,955 5,372,294 5,479,740 5,589,334 5,701,121 5,815,143 Contribution to City General Fund - Dividend 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Contribution to Facilities Repair fund 187, , , , , , , , , , , , , , ,360 TOTAL 3,447,488 3,502,475 3,557,846 3,566,142 3,669,728 3,726,232 3,834,504 3,835,241 4,057,588 4,172,487 4,289,683 4,282,238 4,531,156 4,655,526 4,782,384 Committee of the Whole - November 23, 24 and 25 24

25 REPORT EXHIBIT D Appliance Rental Business Budget Summary (Rounded to Nearest Thousand) 2016 Total Revenue $ 2,355,000 Less Operating Expenses $ 580,000 Net Earnings $ 1,775,000 Transfer to Environmental Reserve Fund $ 1,020,000 Net Transfer to Appliance Rental Reserve Fund $ 755,000 Committee of the Whole - November 23, 24 and 25 25

26 Corporation of the City of Kingston Appliance Rental Business 2015 Budget Revenue and Expenditures Actuals as of Budget Budget 30-Sep Revenue Rental Revenue 1,765,929 2,211,000 2,355,000 Gross Revenue Total Revenue 1,765,929 2,211,000 2,355,000 Operating expenditures 387, , ,000 Operating Expenditures (Contracted Services) 387, , ,000 Net Operating Surplus 1,378,084 1,676,653 1,775,000 Contributions to Environment Reserve Fund 750,000 1,000,000 1,020,000 Contribution to Municipal Capital Reserve Fund Contributions to Appliance Rental Reserve Fund 507, , ,000 Net Surplus 120, Committee of the Whole - November 23, 24 and 25 26

27 Corporation of the City of Kingston Appliance Rental Business Operating Budget Forecast (Rounded to Nearest Thousand) Budget Forecast Forecast Forecast Forecast Revenue Rates 2,355,000 2,402,000 2,450,000 2,499,000 2,549,000 Operating Expense Contracted Services 580, , , , ,000 Net Operating Revenue 1,775,000 1,810,000 1,846,000 1,883,000 1,921,000 Contribution to Environmental Reserve Fund 1,020,000 1,040,400 1,061, , ,000 Contribution to Municipal Capital Reserve Fund , ,000 Contribution to Appliance Rental Reserve Fund 755, , , , ,000 1,775,000 1,810,000 1,846,000 1,883,000 1,921,000 Committee of the Whole - November 23, 24 and 25 27

28 City of Kingston Appliance Rentals Reserve Fund Year End Projections Municipal Utility Opening Balance - January 1 1,460,324 1,590,020 1,718,626 1,846,414 1,867,709 1,883,478 1,893,841 1,898,923 1,898,860 1,893,797 1,883,891 1,869,308 1,850,227 1,826,837 1,799,340 Contributions: General Fund 1,774,617 1,810,109 1,846,312 1,883,238 1,920,903 1,959,321 1,998,507 2,038,477 2,079,247 2,120,832 2,163,248 2,206,513 2,250,643 2,295,656 2,341,569 Other Previous Years Surplus from General 1,774,617 1,810,109 1,846,312 1,883,238 1,920,903 1,959,321 1,998,507 2,038,477 2,079,247 2,120,832 2,163,248 2,206,513 2,250,643 2,295,656 2,341,569 Interest 45,079 48,896 52,685 54,889 55,436 55,822 56,051 56,125 56,049 55,828 55,466 54,968 54,341 53,589 52,719 Drawdowns: Capital Expenditures 670, , , , , , , , , , , , , , ,000 Prior Year Approvals Transfers to Environment Reserve 1,020,000 1,040,400 1,061, , , , , , , , , , , ,619 1,009,411 Transfers to MCRF , , , , , , , , , , , ,265 1,690,000 1,730,400 1,771,208 1,916,832 1,960,569 2,004,780 2,049,476 2,094,665 2,140,359 2,186,566 2,233,297 2,280,563 2,328,374 2,376,742 2,425,677 Closing Balance - December 31 1,590,020 1,718,626 1,846,414 1,867,709 1,883,478 1,893,841 1,898,923 1,898,860 1,893,797 1,883,891 1,869,308 1,850,227 1,826,837 1,799,340 1,767,951 Interest Earnings Rate 3.0% PAYG 670, , , , , , , , , , , , , , ,000 New Debt - Planned, Not Yet Issued 5.5% Total Capital Resources Available 670, , , , , , , , , , , , , , ,000 Inflation 2.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Rate Increases 2.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Rate Revenue 2,354,572 2,401,663 2,449,697 2,498,691 2,548,664 2,599,638 2,651,630 2,704,663 2,758,756 2,813,931 2,870,210 2,927,614 2,986,167 3,045,890 3,106,808 Other Revenue Operating Expenses 579, , , , , , , , , , , , , , ,238 Contribution to City General Fund TOTAL 1,774,617 1,810,109 1,846,312 1,883,238 1,920,903 1,959,321 1,998,507 2,038,477 2,079,247 2,120,832 2,163,248 2,206,513 2,250,643 2,295,656 2,341,569 Committee of the Whole - November 23, 24 and 25 28