HALDIMAND COUNTY 2013 Rate Supported Water and Wastewater Capital Forecast and Operating Budget. Committee of the Whole April 22, 2013

Transcription

1 HALDIMAND COUNTY 2013 Rate Supported Water and Wastewater Capital Forecast and Operating Budget Committee of the Whole April 22, 2013

2 Council Review of s Budget Review Dates Tax Supported Capital Budget and Forecast Completed January 2013 Tax Supported Operating Budget Review Completed March 25, 2013 Water and Wastewater: Draft Capital Forecast and Operating Budget Review April 22, 2013

3 Rate Supported Budget Constraints Legislative Framework/External Budget Constraints Full cost recovery from users of system(s) Water users fund 100% of water capital and operating costs Wastewater users fund 100% of wastewater capital and operating costs Highly legislated/regulated Full cost recovery principles Water conservation principles Economies of scale (significant number of systems in Province (>800 systems) and number of small systems (approx. 600 systems have <10,000 users) Province is advocating use of technology to improve efficiencies of systems

4 Rate Study Budget guidelines based on the principles developed/approved during the water/wastewater rate study Activity Completion Date/Anticipated Timing Completion of water/wastewater models, review with County June 2012 staff, refinement of models and modeling of scenarios Notice of Public Information Session #1 Week of July 2, 2012 Hold Public Information Session #1 July 18, 2012 (two sessions held in Cayuga) Initial Customer feedback period July 2 July 31, 2012 Consideration of public comments, adjustments to models August to November, 2012 and preparation of report to Council Report and Presentation to Council on the draft models and January 21, 2013 customer feedback Notice of Public Information Session #2 February 1, 2013 Hold Public Information Session #2 February 20, 2013 Presentation of Report recommending approval of rate model April 22, 2013

5 HALDIMAND COUNTY 2013 Draft Rate Supported Capital Budget and Forecast

6 2013 Draft Rate Supported Capital Budget Focus on Corporate Strategic Objectives and Long Term Financial Plans Key Principles of Rate Supported Capital Budget Replacement/Rehabilitation Focus Studies/Reviews Provide Service Capacity for Anticipated Growth Focus on Financing of Projects over the forecast Water vs. Wastewater

7 Gross Capital Expenditure Summary Comparison of average gross expenditures over forecasted period Gross Expenditures 2012 Approved Budget Average Annual Gross Expenditures Average Annual Gross Expenditures 10 Year Forecast from Rate Study (average annual gross expenditures) Water System $3.0 Million $4.0 Million $4.7 Million Wastewater System $2.6 Million $3.4 Million $4.3 Million Total $5.6 Million $7.4 Million $9.0 Million

8 2013 Draft Rate Supported Capital Budget 6,000,000 Gross Capital Expenditures - Water 5,000,000 4,000,000 Administration 3,000,000 Plants/Transmission Systems Technical Reviews and Studies Replacement and Upgrade Projects 2,000,000 1,000,

9 2013 Draft Rate Supported Capital Financing 6,000,000 Funding Sources - Water 5,000,000 4,000,000 3,000,000 2,000,000 Debentures Reserve Funds Development Charges Reserve Fund Gas Tax Reserve Fund External Financing Grants/Subsidies 1,000,

10 2013 Draft Rate Supported Capital Budget 6,000,000 Gross Capital Expenditures - Wastewater 5,000,000 4,000,000 Administration 3,000,000 Plants/Transmission Systems Technical Reviews and Studies Replacement and Upgrade Projects 2,000,000 1,000,

11 2013 Draft Rate Supported Capital Financing 6,000,000 Funding Sources - Wastewater 5,000,000 4,000,000 3,000,000 2,000,000 Debentures Reserve Funds Development Charges Reserve Fund Gas Tax Reserve Fund External Financing Grants/Subsidies 1,000,

12 Impact on Capital Replacement Reserve Funds 8,000,000 Forecast -Capital Replacment Reserve Funds 6,000,000 4,000,000 2,000, Wastewater Water -2,000,000-4,000,000-6,000,000-8,000,000

13 2013 Draft Rate Supported Capital Budget Infrastructure Deficit The total value of physical infrastructure investment that should have occurred to maintain optimal performance but did not. This would include any delayed rehabilitation and replacement of assets that are worn out. Haldimand County s estimated water and wastewater infrastructure deficit (based on assets reported for audited financial statement purposes)

14 Haldimand s Infrastructure Deficit Estimated Infrastructure Deficit Rate Supported Assets $ Current Position Capital Replacement Reserve Fund ( CRRF ) Balances $6,151,767 Less: Estimated replacement value of fully amortized Assets (i.e. at/beyond estimated useful life) $11,815,281 Estimated Deficit $5,663,514 Current Historical Cost of All Rate Supported Assets (2011 audited financial statements) $169,751,630 Annual Contributions Current Annual CRRF contributions $3,024,820 Less: Estimated annual required contributions to meet future replacement costs at estimated useful life $23,081,772 Estimated Deficit $20,056,952 Current Annual Amortization Cost for all Rate Supported Assets (2011 audited financial statements) $2,813,600

15 Impact on Long Term Debt Payments $14,000,000 Debt Payments to Benchmark ARL $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 Benchmark ARL (10% of Net Revenues) Rate Supported Debt Charges Tax Supported Debt Charges $2,000,000 $

16 HALDIMAND COUNTY 2013 Draft Rate Supported Operating Budget

17 Rate Supported Operating Budget Constraints Full cost recovery from users of the system(s) (no support from tax levy) Relative small number of users (approx. 8,700) and large number of systems to operate (4 wastewater treatment plants, 4 wastewater lagoons, 2 water treatment facilities, 7 water distribution systems and 8 wastewater distribution systems) Large portion of costs fixed (50%); funded from variable rates (70%) Rate study addressed cost allocation/recovery principles (Appendix L): Move to 50%/50% fixed to variable recovery mode; Revised Fire Protection allocation methodology; Monthly Administration fees for bulk water and hauled waste customers; Blended holding and septic tank rates.

18 Operating Budget Rate Drivers The required rates revenues is a function of the following: Impacts of increased cost of system(s) Cost allocation methodology to specific customers Offsetting Revenue from other sources Impact on the Rate is a function of: Net required rates revenue (from above) Anticipated consumption/use of the system(s) rate model assumptions consumption impacts

19 Revenue Required from Rates Water Only WATER OPERATIONS incr/(decr) Budget Budget $ % Expenditures Salaries, Wages & Benefits 1,468,440 1,452,080 (16,360) -1.1% Supplies & Materials 112, ,310 (7,670) -6.8% Hamilton Water Supply 2,349,540 2,451, , % Services 2,725,470 2,903, , % Veolia Operating Services Charges 1,744,440 1,778,430 33, % Interdepartmental Charges 318, ,130 11, % Long Term Debt Charges 261, ,740 49, % Transfers to Reserves/Reserve Funds 1,650,430 1,817, , % Total Expenditures 10,631,300 11,148, , % Revenues Municipal Recoveries (192,100) (86,700) 105, % Fees & Recoveries (3,779,200) (5,403,350) (1,624,150) 43.0% Total Revenues (3,971,300) (5,490,050) (1,518,750) 38.2% Net Revenues Required from User Rates 6,660,000 5,658,820 (1,001,180) -15.0% Driver Net Rate Revenue Impact % Impact A. Infrastructure capital financing requirements $83, % B. Base Budget (net) $175, % C. New initiatives ($1,260,180) (18.9%) Total ($1,001,180) (15.0%)

20 Revenue Required from Rates Wastewater only WASTEWATER OPERATIONS incr/(decr) Budget Budget $ % Expenditures Salaries, Wages & Benefits 612, ,700 47, % Supplies & Materials 40,240 27,490 (12,750) -31.7% Services 1,247,100 1,322,490 75, % Veolia Operating Services Charges 1,926,300 1,967,590 41, % Interdepartmental Charges 234, ,590 7, % Long Term Debt Charges 1,568,360 1,592,340 23, % Transfers to Reserves/Reserve Funds 1,992,220 2,253, , % Total Expenditures 7,621,740 8,066, , % Revenues Municipal Recoveries (66,200) (67,500) (1,300) 2.0% Fees & Recoveries (2,034,420) (2,424,730) (390,310) 19.2% Transfers from Reserves/Reserve Funds (419,600) (419,600) 0 0.0% Total Revenues (2,520,220) (2,911,830) (391,610) 15.5% Net Revenues Required from User Rates 5,101,520 5,154,680 53, % Driver Net Rate Revenues Impact % Impact A. Infrastructure capital financing requirements $627, % B. Base Budget (net) ($584,680) (11.5%) C. New initiatives $9, % Total $53, %

21 Impact on Other Revenues/Rates Water Other Revenues Bulk Water Charges represent $1.3 million and Fire Protection Recoveries represent $1.9 million of the total $3.5 million in other charges Wastewater Other Revenues Leachate treatment revenues represent $1.9 million and holding/septic tank revenues represent $325,100 of the total $2.9 million in other charges

22 Customers and Consumption Water System Budgeted Consumption Customer Number of Customers % (cubic metres) % Residential 8, % 1,422, % Commercial % 379, % Large Commercial % 207, % Large Industrial 3 0.0% 685, % Total (excluding bulk water) 8, % 2,694, % Bulk Water* 350 n/a 404, % Total Annual Consumption 3,098, % * - average monthly numb er of b illed b ulk water customers

23 BULK WATER COST ALLOCATION Treatment Plant Distribution System $2.92 /m3 BULK WATER STATION Direct Operating = $0.21/m3 Direct Capital = $0.06/m Rate = $ $ $0.16 (admin) = $3.03/m3

24 Proposed Bulk Water Rate Impact Bulk Water rate Change (per cubic metre) ($) (%) Proposed Rate $2.742 $ $ % New Monthly Administration fees n/a $14.96 Monthly Impact on Typical End User (3,000 gallon load) Water commodity $37.40 $41.32 $ % Estimated hauler delivery charge $72.60 $72.60 $ % Total End User cost $ $ $ %

25 Customers and Consumption Wastewater System Budgeted Consumption Customer Number of Customers % (cubic metres) % Residential 8, % 1,441, % Commercial % 355, % Large Commercial 9 0.1% 152, % Large Industrial 2 0.0% 307, % Total (excluding bulk water) 8, % 2,257, % Holding Tank n/a 17, % 7* Septic n/a 1, % Leachate (from County's landfills) 2 n/a 53, % 73, % Total Annual Consumption 2,330, % * - only includes commercial haulers that use the County's facilities

26 SEPTIC/ HOLDING TANK / LEACHATE Treatment Plant Loading ST = 0.8% HT = 6.6% Leachate = 45% Collection System Shared ST/HT/ Leachate Facilities Leachate and Holding/Septic Wastewater Leachate Receiving Station 100% Leachate

27 Proposed Holding/Septic Charges Impact Holding/Septic/Portable Toilet Tank Treatment Charge Change (per cubic metre) ($) (%) Proposed Rate $7.322 $8.58 $ % New Monthly Administration Fee (haulers only) New Annual Capital Charge for Properties with Holding/Septic Tank n/a $14.96 n/a $12.83 Monthly Impact on Typical End User (2,000 gallon load) Treatment cost $66.56 $77.99 $ % Estimated hauler delivery charge $87.70 $87.70 $0 0.0% Total End User costs $ $ $ %

28 Average Monthly Increase on Customers

29 Future Issues and Challenges Impacts of Master Servicing Plans Ongoing Performance Evaluations of Facilities Tangible Capital Asset Reporting and Asset Management Leachate Treatment Volumes