THE CORPORATION OF THE MUNICIPALITY OF PORT HOPE Notice of Budget Meeting Town Hall, 56 Queen St

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1 THE CORPORATION OF THE MUNICIPALITY OF PORT HOPE Notice of Budget Meeting Town Hall, 56 Queen St DATE: May 24, CALL TO ORDER Disclosure of pecuniary interest and the nature thereof 2. Delegations n/a 3. Correspondence n/a 4. Business from Previous Meetings n/a 5. Items of Business TIME: 5:00 p.m. 5.1 Ontario Nature s 80th Anniversary Celebration Recommendation Receive for Information 5.2 L. Sypher, Financial Analyst Re: Financial Report to April 30, 2011 Recommendation Receive as information 5.3 L. Sypher, Financial Analyst Re: Amendment to Police Services Board Budget Recommendation That Budget Committee approve the transfer of $5,000 from the Screening Reserve to the Police Services Board budget for the Port Hope Police Service Business Plan 5.4 S. Baldock, Roads Supervisor Re: Sickle Bar Mower Recommendation That the Budget Committee approve allocating $4, including net tax from the Rural Patrol Truck Replacement project to purchase a replacement mower. 5.5 V. Barrie, Revenue Coordinator Re: Golf Course Assessment Appeals Recommendation Receive for Information 5.6 L. Araujo, Director of Finance Re: Water/Sewer Consumption Relief Policy Recommendation that Budget Committee direct staff to prepare the attached draft Water Consumption Appeal Process by-law for approval at the May 31, 2011 Council meeting, and further That Budget Committee support maintaining the existing water/sewer rate by-law for the five-year term outlined in the by-law and direct staff to undertake a review of various rate structures during the next rate study and by-law update Budget Committee Agenda Page 1 of 2 May 24, 2011

2 6. Other Business 6.1 In-Camera item regarding personal matters about an identifiable individual, including municipal or local board employees per Section 239(2)b of the Municipal Act 6.2 Next budget meeting June 21, :00 p.m. 7. Adjourn Budget Committee Agenda Page 2 of 2 May 24, 2011

3 Item 5.1 Municipality of Port Hope 56 Queen Street, Port Hope ON L1A 3Z9 REPORT TO: FROM: SUBJECT: Budget Committee Barbara Spry, Treasurer Ontario Nature s 80 th Anniversary Celebration DATE: May 19, 2011 RECOMMENDATION(S): It is recommended that Budget Committee receive as information. BACKGROUND: This organization is requesting a commitment of $500 for sponsorship which will provide recognition for Port Hope s commitment including a complimentary exhibit space, the Municipal logo in the event programme, event signage and materials, marketing pieces in guest event bags, and acknowledgement in the Ontario Nature s annual report. The Municipality would also receive one Saturday wine and cheese reception ticket. The information has been circulated to various departments within the Municipality, however none identify a synergy to their activities. Although it may be an opportunity to promote Port Hope, Economic Development and Tourism staff are committed to another event that weekend. CONCLUSION: If the Budget Committee deems it merited to support the sponsorship of this event, there are currently sufficient funds in the Council Donation Account. Original Signed by: Barbara Spry, Treasurer Re: Ontario Nature s 80 th Anniversary Celebration Page 1 of 1 Report to Budget Committee May 24, 2011

4 Item 5.1 Come and get a little bit Wild Ontario Nature s 80 th Anniversary Celebration with The Municipality of Port Hope 366 Adelaide Street West, suite 201 Toronto, ON, M5V 1R9 P: F:

5 Item 5.1 May 9 th 2011 Connie Martinell Deputy Clerk Municipality of Port Hope, Town Hall 56 Queen Street Port Hope, ON L1A 3Z9 Dear Ms. Martinell, You are invited to join Ontario Nature at our 2011 Annual General Meeting (AGM)! This year Ontario Nature will bring together hundreds of naturalists, conservation professionals, member groups and community leaders to celebrate our 80 th anniversary at the Ganaraska Forest Centre on June 11 th -12 th. Ontario Nature is the strongest voice for nature in Ontario and as a sponsor of this event you can play a key role in building much needed awareness, involvement and protection of Ontario s natural heritage. You can be a part of bringing together the dedicated people from across the province who wish to raise their voices for nature. Participants will connect through a weekend of local field trips and workshops including: Exploring local wildlife and guided tours Engaging children and youth in nature activities One of a kind works of nature art A gala celebration A meeting to plan the future of conservation in Ontario We would love to include you as a Scarlet Tanager sponsor with a commitment of $500. This sponsorship will provide the well deserved recognition for Port Hope s commitment including a complimentary exhibit space, your logo in the event programme, on event signage and materials, your marketing pieces in guest event bags, and acknowledgement in Ontario Nature s annual report. In addition, you will receive one Saturday wine and cheese reception ticket. As a sponsor of this event you will get to introduce visitors from across the province to the beauty and charm of the Port Hope area and the rolling Northumberland hills. Please consider the enclosed sponsorship guide as a place for us to begin our conversation. In the meantime please do not hesitate to call me at ext. 236, or contact Nicole Chamula at ext. 242 or nicolec@ontarionature.org for more information. Thank you for your time and I look forward to the opportunity to work with you. Yours sincerely, Kimberley MacKenzie, CFRE Director of Development 366 Adelaide Street West, Suite 201, Toronto, ON M5V 1R9 T/ F/ info@ontarionature.org CHARITABLE REGISTRATION # RR0001

6 Municipality of Port Hope Item 5.1 Ontario Nature s 80 th Anniversary & AGM 80 th Anniversary Quick Facts Who: Ontario Nature is a charitable organization that protects wild species and wild spaces through conservation, education and public engagement uniting more than 30,000 members and supporters and over 140 member groups in action across Ontario. What: The 80 th Anniversary and AGM will be a unique opportunity for naturalists, conservation professionals, member groups, community leaders, and children and youth to come together and celebrate eight decades of conservation in Ontario, and look forward to the future challenges and goals of protecting Ontario s natural heritage. The weekend will include: Field trips - Experts guide exploration of some of Ontario s most unique wildlife and habitats Co-hosted by the Willow Beach Field Naturalists. Nature camp - For kids 6-12 year olds. Snakes, turtles and other creatures will be the featured guests. Nature workshops - Include sessions on butterflies and other insects, how to restore tall-grass prairie, nature photography, surveying for reptiles and amphibians and more. Art exhibit - Variety of nature art created by Ontario Nature members and youth. Wine and cheese - Guest networking over local wine, beer and cheese. Gala dinner - Locally-sourced food, live music and a great, big birthday cake. Conservation awards - Honouring those who have made outstanding contributions to nature conservation. Where: th The 80 anniversary celebration and AGM will be held at the Ganaraska Forest Centre th th in the heart of the Oak Ridges Moraine (north of Port Hope) on June Why: Celebrating achievements in conservation and creating awareness of environmental successes motivate and inspire continued action to protect our wild species and spaces. Honouring dedicated naturalists, engaging youth, offering the community opportunities to explore nature and opening dialogue among the community to discuss the future of the conservation movement in Ontario are essential to keeping momentum, and moving forward in the fight to preserve nature. Your Sponsorship Investment: Your commitment will help motivate individuals to come together as the strong voice for nature in Ontario and inspire a generation of youth to steward the wild spaces and wild species they come to love, while aligning you with the future of environmental leadership and conservation. Page 3 of 5

7 Municipality of Port Hope Item 5.1 Ontario Nature s 80 th Anniversary & AGM What s in it for the Municipality of Port Hope Align yourself with a leading environmental organization Established as the Federation of Ontario Naturalists in 1931, Ontario Nature has been a trusted and recognized name across the province. For 80 years we have been the voice for nature in Ontario and partnering with us can connect you with this legacy. Build awareness and create a positive presence Leverage your complimentary exhibit space to network with industry leaders, educate representatives from 140 naturalist groups, conservation professionals and invested community members on tourism opportunities and the important and interesting aspects of Port Hope. Engage with attendees in the protection of Ontario s wild species and wild spaces. Participants from communities across the province Nature enthusiasts and Ontario Nature Members on average 35 years and older Youth ages % female 45% male Approximately 300 attendees over the weekend Gain positive advertising and media coverage You will be presented in partnership with an organization with a strong provincial presence that speaks up for nature and empowers youth and adults to take action for the environment. ON Nature magazine 3 time gold and 1 time silver National Magazine Award winner. Quarterly magazine with an average readership of 13, ,000 unique visitors per month and an average of 243 visits per day. 663 Ontario Nature Facebook members and growing 1245 Twitter followers and growing Stand out in Ontario By taking advantage of this exclusive opportunity you expand your audience reach through this interactive weekend and connect yourself with the future of environmental conservation and leadership in Ontario. Page 4 of 5

8 Municipality of Port Hope Your Recognition-Scarlet Tanager What your $500+ sponsorship achieves: Complimentary exhibit space Your logo in event programme Your logo on event signage and materials Your marketing pieces in guest event bags Acknowledgement in annual report One Saturday wine & cheese reception ticket Item 5.1 Ontario Nature s 80 th Anniversary & AGM Page 5 of 5

9 Item 5.2 Municipality of Port Hope 56 Queen Street Port Hope, ON L1A 3V9 REPORT TO: FROM: Budget Committee L. Sypher, Financial Analyst SUBJECT: Financial Report as of April 30, 2011 DATE: May 13, 2011 RECOMMENDATIONS: That Budget Committee receives the report as information. BACKGROUND: The 2011 Operating Budget Financial Report Summary as of April 30, 2011 is attached as Appendix 1. As this report indicates, after four months of operation, most departmental budgets show between 56.1% and 82.7% of the budget remaining, relatively consistent with where they should be year to date (i.e. 67.0% remaining). The following provides an explanation of the more significant variances within each department. Non-Departmental This department is primarily comprised of the taxation revenue budget lines offset by expenditures that are not attributable to any specific department (retiree benefits, insurance deductibles, reserve contributions). The year-to-date totals reflect the 2011 interim property tax billing as well as the full-year approved contributions from tax levy to 2011 capital projects. The budget remaining reflects the balance of the 2011 final tax billing, smaller value items whose timing is spread throughout the year such as write-offs, supplementary taxes, insurance claims and reserve transfers. Re: Financial Report as of April 30, 2011 Page 1 of 6 Budget Committee May 24, 2011

10 Item 5.2 Council This department reflects 69.2% of the budget remaining. However, only 42.6% of budget remains for special events. The majority of spending to date has been on the volunteer appreciation dinner held March 25. As well, the meals budget has only 36.7% of budget remaining for the balance of the year. This is not unusual due to the high volume of Council meeting during budget review season. Staff will monitor this item going forward. Administration This department includes the CAO s Office, Corporate Services including the Building Maintenance Program and Human Resources. Overall the Department shows 72.6% of the budget remaining. The Administration Program (CAO and Corporate Services Administration) shows 71.7% of the budget remaining. Telephone expenditures include $10,800 to Introtel for annual maintenance of the Mitel 3300 system. This represents a timing issue only and the 21% remaining for the year should be sufficient based on average monthly service and long-distance charges. Human Resources has 82.0% of their budget remaining. This variance is largely the result of budgeted training/education amounts which have not been expended as yet due to timing. The Building Maintenance Program has 72.9% remaining primarily due to the insurance premium not yet being allocated and seasonality of utility charges. These timing differences should be resolved by year-end. Communications This newly created function is being funded by the Federal government through the Port Hope Area Initiative and the balance from a related industry. The full amount expended is billed to others and recovered; therefore this program has no net impact on the Municipality. Finance This department reflects 78.2% of the budget remaining and the variance from where the department should be at this time of year is mainly due to timing of transfers between departments and timing of payment of IT maintenance support contracts. Re: Financial Report as of April 30, 2011 Page 2 of 6 Budget Committee May 24, 2011

11 Item 5.2 Fire and Emergency Services The Fire and Emergency Services Department shows 82.6% of its budget remaining. The most significant item creating this variance is the timing of the screening transfer to offset communications costs as per the approved budget and timing of debenture payments related to the fire truck purchases. Police The Police Department budget shows budget remaining of 72.7%. This is primarily attributable to timing of receipt of provincial grants, recoveries from other departments for Police Communication services being recorded early in the year and insurance premium not yet allocated. These timing differences should be resolved by year-end. Areas of interest that are being monitored with the Department include the timing of expenditures on training which includes the training of a new Ident Officer (22.3% of budget remaining), retiree benefits paid (38.2% of this budget remaining) and overtime paid to date to cover 3 members unavailable for duty (54% of budget remaining). Works and Engineering The Works and Engineering Department shows 68.9% of its annual budget remaining. Timing of insurance premium allocation and transfer station reimbursement should be resolved by year end. Areas of interest that are being monitored with the Department include timing of expenditures on radios (36.2% budget remaining) and engineering admin equipment lease (16.9% of budget remaining). Transit revenue is more than the approved budget (59.4% remaining) as well as transit rental revenue (49.1% budget remaining). Sanitary This function is made up of the Sewage Treatment and Sanitary Sewer programs. Sewer program surpluses at year end are allocated to assist in funding associated approved capital projects and any balance remaining is then transferred to the Sanitary Sewer Reserve Fund to be utilized for future years approved capital projects. Any annual operating deficit would be funded from the balance in the Sanitary Sewer Reserve Fund. To date, revenues in these programs have exceeded expenditures by $38,533. There are seasonal and one-time annual expenditure items have not yet been processed (e.g. health and safety and clothing Re: Financial Report as of April 30, 2011 Page 3 of 6 Budget Committee May 24, 2011

12 Item 5.2 allowance expenditures, sludge removal, chemicals, sewage treatment plant principle and interest, insurance and sampling costs) and as such the net position of the department at year-end may vary from the current status. These programs will be monitored and any surplus transferred as per policy. Water The Water Treatment Plant and Distribution Programs show that revenues currently exceed expenditures to date by $216,938. There are also seasonal and one-time annual expenditure items have not yet been processed (e.g. health and safety and clothing allowance expenditures, chemicals, insurance and sampling costs) and as such the net position of the department at year-end may vary from this status. These programs will be monitored and any surplus transferred as per policy. Similar to the sewer program, surpluses at year end are allocated to assist in funding associated approved capital projects and any balance remaining is then transferred to the Water Reserve Fund to be utilized for future years approved capital projects. Any annual operating deficit would be funded from the balance in the Water Reserve Fund. The Water function has operated at a deficit the last few years prior to 2010 primarily as a result of debt charges associated with the new plant and reduced revenues as consumption declined. It is hoped that the approved new water/sewer rate schedule will continue the trend toward recovery that was experienced in Parks, Recreation and Culture This department has 75.1% of their budget remaining. The most significant variances are due to the cost of seasonal employees primarily in the summer months and the majority of the utility expenditures later in the year. Library The Library Board shows 67.5% of the budget remaining. There are no significant variances to report. Planning and Development Planning and Development Department also includes Building Inspection Services and Parking Authority. These programs show 82.7% of the budget remaining. This is primarily due to the generation of revenues Re: Financial Report as of April 30, 2011 Page 4 of 6 Budget Committee May 24, 2011

13 Item 5.2 through application, subdivision, and building permit fees in excess of budgeted amounts during the first part of the year. Economic Development and Tourism Economic Development and Tourism shows 74.4% remaining in the budget for this time period. This is mainly due to the timing of expenditures such as promotions and advertising. Boards, Committees and Special Events The expenditures in this area reflect the payments to the outside organizations as well as the Municipal Boards and Committees for their approved 2011 budget allotments. The budget report shows 56.1% of the budget remaining in this category. The variance is primarily a timing issue based on when the payments are made to organizations as well as timing of transfer from reserves. Capital Projects Staff are managing more than 110 capital projects. Most projects are on target and progressing within the approved budget. The following projects have exceeded their budget and are identified for Committee information and for approval of additional funding. Budget Remaining Description $ % Action/Explanation Development Charge Study (18,307) (25.8%) Cost overruns are related to the ongoing appeal; 90% of costs can be covered by DCs; balance through Finance operating budget; report re additional funding will be presented when final costs are known. Finance staff are tracking various other projects that are within the approved budget. Other Items of Note The ability to produce monthly financial reports in both summary and detail formats and post these reports for access by all departments is continuing to improve departmental awareness of their budget status. As training continues staff will be able to produce more customized reports to meet the reporting needs of various departments. Re: Financial Report as of April 30, 2011 Page 5 of 6 Budget Committee May 24, 2011

14 Item 5.2 CONCLUSION: It is too early to project the year-end financial position however, to date, revenues and expenditures are for the most part in line with what is expected at this time of year. Staff continue to monitor the budget on a regular basis and in accordance with the budget policy, will report any anomalies as soon as they are known. Original Signed by: Lynda Sypher, BA, CGA Financial Analyst Re: Financial Report as of April 30, 2011 Page 6 of 6 Budget Committee May 24, 2011

15 Item 5.2 APPENDIX 1 Municipality of Port Hope Council Report - Budget vs. Actual For the Four Months Ending April 30, 2011 Year to Date Annual Annual Budget Remaining Actual Budget $ % Non-Departmental (6,354,969) (14,742,000) (8,387,031) 56.9% Council 71, , , % Administration 331,747 1,209, , % Communications Finance 130, , , % Fire & Emergency Services 218,337 1,257,000 1,038, % Police 1,221,802 4,475,900 3,254, % Works & Engineering 1,091,100 3,507,100 2,416, % Sanitary (38,533) (0) 38,533 Water (216,938) 0 216,938 Parks, Recreation & Culture 421,816 1,695,200 1,273, % Library 195, , , % Planning & Development 63, , , % Econ Dev & Tourism 130, , , % Boards, Committees & Special Events 124, , , % Total (2,608,212) 0 2,608,212

16 Item 5.3 Municipality of Port Hope 56 Queen Street Port Hope, ON L1A 3V9 REPORT TO: FROM: SUBJECT: Budget Committee Lynda Sypher, Financial Analyst Amendment to PHPSB Budget and PSB Budget DATE: May 18, 2011 RECOMMENDATIONS: It is recommended that the Budget Committee approve the allocation of $5,000 from the Screening Reserve for the Port Hope Police Service Board Business Plan. BACKGROUND: The 2011 Budget was approved on April 5 th, 2011 however, on April 20 th information regarding amendments to the Port Hope Police Services Board (PHPSB) budget was received. These amendments, approved by the Board on February 17, 2011, do not change the bottom line of the Police budget, but require Council approval for the use of Screening funds. The resolution forwarded to the Finance Department is as follows: Resolution #16/11 now reads: MOVED by L. Thompson, SECONDED by L. Hutchings that whereas the previous 2011 PHPS Operating Budget approved represented a 6.32% increase, the Board recognizes that through diligent efforts of PSB Finance Chair L. Stewart and PHPS Chief K. McAlpine, the revised 2011 PHPS Operating Budget be approved in the amounts as follows: 2011 PHPSB $51,100, an increase of 1.2%. (Screening amount transfer increased from $15,000 to $20,000 to cover Business Plan expenses) 2011 CPVC $1,500, a 100% increase 2011 OPP $701,093, a 2.2% increase Re: Amendment to PHPSB Budget and PSB Budget Page 1 of 2 Budget Committee May 24, 2011

17 Item PHPS $4,525,900, a 5.51% increase which is a 1% decrease from what was approved in Resolution #188/10. The request to increase the screening transfer from $15,000 to $20,000 to fund the new Business Plan will have a corresponding increase in the Board expenses for the Business Plan. This will result in no net impact to the overall PHPSB budget. In addition, on May 3, 2011, Council passed resolution 65/2011 in support of transferring $25,000 from the 2011 Fleet Capital Account to a new capital project to facilitate the transition from Sig Sauer 9mm to Glock.40 caliber pistols and apprise Council of the transfer. The capital project as originally approved was in the amount of $30,000. In further conversation with the Police Service Board (PSB) it has been requested that the additional $5,000 be retained as a contingency measure in this new capital account. This will also have no net effect on the PSB budget. CONCLUSION: Overall there are no changes to the operating and capital budgets as approved on April 5 th, The only action required is transfers between accounts for the budget line changes. Original Signed by: Lynda Sypher, BA, CGA Financial Analyst Re: Amendment to PHPSB Budget and PSB Budget Page 2 of 2 Budget Committee May 24, 2011

18 Item 5.4 Municipality of Port Hope 56 Queen Street Port Hope, ON L1A 3Z9 REPORT TO: FROM: SUBJECT: Budget Committee Steve Baldock, CRS Roads Supervisor Sickle Bar Mower DATE: May 2, 2011 RECOMMENDATION: That the Budget Committee approve allocating $4, including net tax from the Rural Patrol Truck Replacement project to purchase a replacement mower. BACKGROUND: In 2006 the Municipality purchased a Bomford Mower from Evergreen Tractors for $13,600 for grass cutting maintenance in the rural area. This equipment when operating efficiently works suitably for its intended use albeit very costly to maintain. In 2010 it is estimated $10,695 was spent in parts plus $1,200 in labor for repairs. In preceding years it is estimated a total of $5,000 has been spent annually on parts plus labor for this equipment. We are unable to find a parts supplier in Canada and have to obtain parts from England and as a result expend high shipping costs and a six week waiting period. Although specific monies have not been allocated towards the purchase of a replacement mower staff have obtained the following quotes for a Sickle Bar Mower to replace the high maintenance Bomford Mower. Bob Mark New Holland - $4,400 plus HST Evergreen Farm Equip. - $4,599 plus HST John Deere - $4,100 plus HST Todd Equipment - $4,595 plus HST Based on these prices it has been determined that the purchase of a replacement mower costs no more than the typical annual repairs on the existing mower. Staff have reviewed the above quotes and feels the John Deere, with the the low Sickle Bar Mower Page 1 of 3 Report to Budget Committee May 24, 2011

19 bid total cost including net tax from at $4,172.16, will meet the mowing needs of the rural area and recommends the acquisition. The 2011 Approved Capital Budget includes replacement of a Rural Patrol Truck budgeted at $45,000 with funding from the Ward 2 Transportation Equipment Reserve. The purchase price for the truck based on tender submissions is approximately $29,500. It is recommended that funds be allocated from this project to purchase a new mower. CONCLUSION: Item 5.4 Staff support the allocation of surplus funds from the Rural Patrol Truck project to accommodate the purchase of new mower equipment. This initiative is in accordance with the Infrastructure and Facilities goal area of the Corporate Strategic Plan. Original signed by: Steve Baldock, CRS Roads Supervisor Sickle Bar Mower Page 2 of 3 Report to Budget Committee May 24, 2011

20 Item 5.5 Municipality of Port Hope 56 Queen Street, Port Hope ON L1A 3Z9 REPORT TO: FROM: SUBJECT: Budget Committee Vicki Barrie, Revenue Co-coordinator Golf Course Appeals DATE: May 18, 2011 RECOMMENDATION: Receive for Information. BACKGROUND: The National Golf Course Owners Association of Canada and the Municipal Property Assessment Corporation (MPAC) have agreed on the terms of settlement for golf course valuations for assessment purposes. Basically, the parties agree that the income approach will be used to establish the value. In this approach, the revenues and expenses of a specific property and other similar courses in the geographical area are analyzed. Stabilized revenues and expenses are developed directly from market evidence. These revenues and expenses are used in estimating the net operating income for the golf course. The net operating income is then capitalized to arrive at a Current Value Assessment for the golf operation. Ancillary buildings and lands are added to this value to arrive at the overall Current Value Assessment for the property. MPAC is mandated to value all properties at current value - highest and best use and MPAC has stated that the Municipality will have an opportunity to review the proposed new assessed value and to exercise its right to have an appeal heard by the Assessment Review Board. If the income pro forma approach does not produce a correct current value for any lands currently used as a golf course, MPAC will notify the parties of the current value and the valuation particulars. Re: Golf Course Appeals Page 1 of 2 Budget Committee May 24, 2011

21 Item 5.5 The years under appeal for the property at 433 Lakeshore Rd. Port Hope are 2003 through Because the Municipality has not been notified of the income approach assessment, the impact of this change can not yet be quantified, however MPAC has calculated a worst case scenario as they see it which would result in reduced taxation revenue from the golf course of approximately $41,000 - $42,000 annually of which approximately 50% would be the Municipalities and the balance for the County and Boards of Education. The accumulated impact of the six years of appeals in a worst case scenario could be as high as $125,000. The 2011 Budget provides for $85,500 in write-offs. Any write-off in excess of this amount will be monitored against the entire 2011 Operating Budget to determine any offsetting increases in revenue (i.e. supplementary taxes beyond those budgeted). A report will be prepared to identify a source of funding if required closer to year-end. CONCLUSION: MPAC has indicated Minutes of Settlement (MOS) have been forwarded to AON for review and after being signed, the MOS will be sent back to MPAC s offices. At that point they will be forwarded to the Municipality for review. Staff will evaluate the Minutes of Settlement that are provided and, as required, obtain technical assistance in reviewing the proforma schedules to evaluate the potential financial impact on the Municipality. Original Signed by: Vicki Barrie, AMCT Revenue Coordinator Re: Golf Course Appeals Page 2 of 2 Budget Committee May 24, 2011

22 Item 5.6 Municipality of Port Hope 56 Queen Street, Port Hope ON L1A 3Z9 REPORT TO: FROM: SUBJECT: Budget Committee L. Araujo, Director of Finance Water/Sewer Consumption Relief Policy DATE: May 19, 2011 RECOMMENDATION(S): It is recommended that Budget Committee direct staff to prepare the attached draft Water Consumption Appeal Process by-law for approval at the May 31, 2011 Council meeting and further That Budget Committee support maintaining the existing water/sewer rate by-law for the five-year term outlined in the by-law and direct staff to undertake a review of various rate structures during the next rate study and by-law update. BACKGROUND: In 2009 the Municipality undertook a detailed review of the water and sewer rates because it was evident that the rates as they previously existed were not sufficient to support the water/sewer systems. The review disclosed three key items that were affecting revenues: 1) the blocks for the increasing block rate had been applied incorrectly, 2) consumption had decreased and 3) capital costs had increased. The impact of these items was incorporated into a new rate structure and presented at a public meeting. Council requested staff and the consultant revisit the rates and investigate varying mixes of recovery through the base rate and consumption rate as well as use of reserves to support the rates and phase the impact of increases. After three different proposals were presented, Council approved a rate structure that, although it included rate increases, provided the best mix of based and consumption rates combined with phased increases while meeting the Municipality s financial needs. Re: Utility Relief Policy Page 1 of 6 Report to Budget Committee May 24, 2011

23 Item 5.6 Residential Impact The item that has had the most significant impact is the adjustment in the application of block rates. The typical home consumes, on average, 60 cubic metres of water per quarter. The following table depicts the impact of the change using the current rates on an average home Block Structure per 2010 Block Structure per Net change quarter quarter pe r quarter 0-80 cubic metres $ cubic metres $ cubic metres $ cubic metres $ and more $ - 61 and more $ - Base rate $ Base rate $ $ $ $ The block correction results in a 14% increase in the cost for an average home. If a home had a leaking toilet or tap, the consumption could be much higher than the average and the impact of the block correction would be larger. The Municipality has been approached by a few residents who, as a result of the change in rate structure, determined that they had a leak. Because the consumption levels caused by the leak are not representative of their normal consumption and because in some cases they have a significant impact on their utility bill, they have asked for some relief. Staff contacted neighbouring and comparator municipalities to determine if any provided relief in such situations. The Town of the Blue Mountains was the only one that did. If a home owner can prove that a leak was detected and that measures were implemented to correct the leak, the Municipality will provide one-time relief for the difference between the homes normal consumption and the consumption during the leak period. Based on that model, staff have prepared the attached draft by-law for Council s consideration. It provides relief on the consumptions charges based on the difference between the utility customer s estimated normal water consumption for the period under review and their actual water consumption. No adjustment will be made to the base charge. Non-Residential Impact Re: Utility Relief Policy Page 2 of 6 Report to Budget Committee May 24, 2011

24 Item 5.6 In addition to concerns expressed by homeowners who have discovered water leaks, the Municipality has been approached by small business owners (primarily high water users) who are looking for potential relief from the water rates. These customers have stated that it would be cheaper to operate their business elsewhere. Unfortunately, with regard to water/sewer costs this is true with respect to Cobourg. A commercial operation using 1000 cubic metres of water would pay more in Port Hope than in Cobourg. Each Municipality varies in its approach to developing rates and the rates are impacted by the capital expenditures and the timing thereof. For example, Port Hope has implemented significant upgrades to the system with the construction of new water and sewer plants and the water tower. While contacting other municipalities regarding a residential relief policy, staff also asked if any utility operators made provisions for small businesses that were large consumers of water. The collective response was that, no, they do not provide relief for non-residential customers. Staff from the Economic Development Department has provided assistance in sourcing monies to assist the small business owners in upgrading their capital equipment to more efficient equipment for commercial operations as a means reduce their overall costs. There are various models for implementing utility billing. Of the surveyed municipalities that responded, two use a single cubic meter rate for all customers no matter what their volume of consumption, one municipality has a single rate in the winter season and an increasing block rate in the summer. The other four municipalities surveyed have an increasing block rate, the same as Port Hope. Additional research showed another model with an increasing block rate for residential and a decreasing block rate for non-residential. Because of the legislation requiring that the water/sewer systems be self sustaining, all costs for the systems must be recovered from the users. No water/sewer costs can be paid for by property owners who do not receive water/sewer services. Since all costs need to be recovered from the users, if one user is given a reduction, another user has to make up that difference. The Municipality conducted an extension review of the options for developing a water/sewer rate structure in 2005 when the increasing block structure was first implemented and again in 2009/10 when the current study was completed. Based on the analysis by staff and the consultant, the increasing block rate approach was recommended for all utility customers. If Council wishes, another review of rate structure options undertaken, substantive staff time and resources would be required to develop the templates and schedules necessary to evaluate Re: Utility Relief Policy Page 3 of 6 Report to Budget Committee May 24, 2011

25 Item 5.6 the various options to create a balanced rate structure. That is, a consultant would be needed to primarily undertake the process. The current by-law has been in place for one year and requires that the rates be reviewed every five years. Staff recommend that Council keep the existing rate structure until 2015 and direct staff investigate rate structure options in 2014/15 when the rate study and by-law update are completed. CONCLUSION: The Municipality has twice conducted a detailed review of the options for developing a water/sewer rates. The option to go with an increasing block rate is consistent with the Municipality s Strategic Plan goal areas of Responsible Environmental Stewardship and Growth and Sustainability. Original Signed by: Liz Araujo, CGA Director of Finance Re: Utility Relief Policy Page 4 of 6 Report to Budget Committee May 24, 2011

26 Item 5.6 THE CORPORATION OF THE MUNICIPALITY OF PORT HOPE By-law No. XX-2011 (will be formatted into appropriate by-law structure) Water/Sewer Consumption Relief Process It is the responsibility of the property owner or the tenant of the property to maintain the property in good repair. Any faulty plumbing should be repaired in a timely manner. From time to time, however, there may be plumbing problems that are not easily detected, which may result in higher than usual water consumption. The intent of the appeal process is to assist those residential water users that, under the pre-june 2010 increasing block structure, were either unaware of the fact that they had leaking plumbing, or were unaware of the impact the leaking plumbing would have on their utility bill based on the revised block structure. This appeal process is established to authorize a one-time only reduction to metered water consumption due to a faulty plumbing problem (for example a leaky water faucet or a leaking toilet). The adjustment will assist the utility customer to understand the relationship between the volume of water used and the resulting cost. A request for an adjustment to water consumption must be made in writing to the Municipality; the requester will explain the nature of the problem, the length of time that the problem was in effect, and will confirm that the problem has since been corrected; paid invoices indicating that repairs were made to correct the problem may be required upon the Municipality s request. An adjustment may be applied to situations that occur subsequent to the approval of the billing blocks and rate structure approved June 1, 2010 and prior to December 31, Water charges and sewer charges are each comprised of a fixed charge and a charge based on metered water consumption. Consideration will be given to reducing the charges based on water consumption only. Any reduction will apply to the water consumption charge and, where applicable, to the sewer charge based on water consumption; the fixed charges will not be adjusted. The billing adjustment will be the difference between the utility customer s estimated normal water consumption for the period under review and their actual water consumption for that period in cubic metres, multiplied by the total of the water consumption charge plus the sewer charge based on water consumption (where applicable) in effect for that period. The estimated normal water

27 Item 5.6 consumption for the period under review will be determined by the Municipality in consultation with the utility customer, but the Municipality s determination will be final. Adjustments will not be made where the difference is less than $5. Any adjustment will be posted to the utility customer s account and will not be paid directly to the customer. An adjustment may be made to metered water consumption or sewer charges with the approval of the Revenue Coordinator.