Agenda - Finance Advisory Committee - 20240514Town of Aurora
Finance Advisory Committee
Meeting Agenda
Date:Tuesday, May 14, 2024
Time:5:45 p.m.
Location:Holland Room, Aurora Town Hall
Meetings are available to the public in person and via live stream on the Town’s YouTube channel.
To participate, please visit aurora.ca/participation.
Pages
1.Call to Order
2.Land Acknowledgement
3.Approval of the Agenda
4.Declarations of Pecuniary Interest and General Nature Thereof
5.Receipt of the Minutes
5.1 Finance Advisory Committee Meeting Minutes of April 9, 2024 1
That the Finance Advisory Committee Meeting Minutes of April
9, 2024, be received for information.
1.
6.Delegations
7.Matters for Consideration
7.1 Memorandum from Financial Management Advisor; Re: Water and
Wastewater Rate Study Update
5
That the memorandum regarding Water and Wastewater Rate
study be received; and
1.
That the Finance Advisory Committee comments regarding
water and wastewater rate study be received and referred to
staff for consideration and further action as appropriate.
2.
7.2 Memorandum from Financial Management Manager; Re: Budget Review
of the Finance Department and Corporate Accounts
19
That the memorandum regarding the Budget Review of the
Finance Department and Corporate Accounts be received; and
1.
That the Finance Advisory Committee comments regarding the
Budget Review of the Finance Department and Corporate
Accounts be received and referred to staff for consideration and
further action as appropriate.
2.
8.New Business
9.Adjournment
Town of Aurora
Finance Advisory Committee
Meeting Minutes
Date:
Time:
Location:
Tuesday, April 9, 2024
5:45 p.m.
Holland Room, Aurora Town Hall
Committee Members: Mayor Tom Mrakas (Chair)
Councillor Michael Thompson
Councillor Ron Weese
Other Attendees: Doug Nadorozny, Chief Administrative Officer
Rachel Wainwright-van Kessel
Jason Gaertner, Manager, Financial Management
Martin Stefanczyk, Manager, Project Management Office
Rahul Varadharajulu, Consultant, Project Management Office
Emily Freitas, Council/Committee Coordinator
_____________________________________________________________________
1. Call to Order
The Chair called the meeting to order at 5:46 p.m.
2. Land Acknowledgement
The Committee acknowledged that the meeting took place on Anishinaabe lands,
the traditional and treaty territory of the Chippewas of Georgina Island,
recognizing the many other Nations whose presence here continues to this day,
the special relationship the Chippewas have with the lands and waters of this
territory, and that Aurora has shared responsibility for the stewardship of these
lands and waters. It was noted that Aurora is part of the treaty lands of the
Mississaugas and Chippewas, recognized through Treaty #13 and the Williams
Treaties of 1923.
Page 1 of 40
Financial Advisory Committee Meeting Minutes
Tuesday, April 9, 2024 2
3. Approval of the Agenda
Moved by Ron Weese
Seconded by Councillor Thompson
That the agenda as circulated by Legislative Services be approved.
Carried
4. Declarations of Pecuniary Interest and General Nature Thereof
There were no declarations of pecuniary interest under the Municipal Conflict of
Interest Act, R.S.O. 1990, c. M.50.
5. Receipt of the Minutes
5.1 Finance Advisory Committee Meeting Minutes of February 13, 2024
Moved by Councillor Thompson
Seconded by Ron Weese
1. That the Finance Advisory Committee Meeting Minutes of February 13,
2024, be received for information.
Carried
6. Delegations
None.
7. Matters for Consideration
7.1 Memorandum from Financial Management Advisor; Re: Budget Review the
Aurora Historical Society
Geoffrey Dawe, President, Dan McGeown, Director, John Green, Director,
Kathleen Vahey, Curator, from the Aurora Historical Society presented an
overview of the Aurora Historical Society's Budget Review, highlighting
financial statements and balance sheets ending in 2022, including a
detailed discussion of the building's operating expense, fundraising and
Page 2 of 40
Financial Advisory Committee Meeting Minutes
Tuesday, April 9, 2024 3
volunteering challenges. The Hillary House’s approximate $1 million in
outstanding capital works was highlighted.
The Committee discussed the Aurora Historical Society’s declining
membership, explored alternative revenue and funding options, and
possible options for long-term sustainability of the Hillary House.
Moved by Councillor Thompson
Seconded by Ron Weese
1. That the memorandum regarding the Budget Review of the Aurora
Historical Society be received; and
2. That the Finance Advisory Committee comments regarding the Budget
Review of the Aurora Historical Society be received and referred to
staff for consideration and further action as appropriate.
Carried
7.2 Memorandum from Project Management Office; Re: Capital Project
Portfolio Update
Staff presented an alternative project management methodology called
earned value management along with its associated corporate portfolio
schedule and cost performance index.
The Committee and Staff discussed sample schedules and cost
variances, and how the Project Management Office is taking an active
approach on how they manage the Town’s capital project portfolio
through their collection of data that will enable Council, senior
management and project managers to monitor how current projects are
performing. It was acknowledged that the education of Council and other
users on this proposed framework would be important in ensuring its
successful implementation.
Moved by Ron Weese
Seconded by Councillor Thompson
1. That the memorandum regarding the Town’s Capital Project Portfolio
Update be received for information.
Carried
Page 3 of 40
Financial Advisory Committee Meeting Minutes
Tuesday, April 9, 2024 4
7.3 Memorandum from Project Management Office; Re: Municipal Service
Delivery Review Update
Staff presented an update on the progress of implementing the
recommendations from the Municipal Service Delivery Review (SDR),
providing clarity on various topics including: hybrid work, the performance
and goals of the Project Management Office including corporate
performance management, corporate communications strategy, and
further plans to provide updates to the Committee.
The Committee and Staff discussed the modelling and methodology used
in the Municipal Service Delivery Review, including the tangible outcomes
to determine the progress of the service delivery.
Moved by Councillor Thompson
Seconded by Ron Weese
1. That the memorandum regarding the Town’s Municipal Service
Delivery Review be received for information.
Carried
8. New Business
None.
9. Adjournment
Moved by Councillor Thompson
Seconded by Ron Weese
That the meeting be adjourned at 6:45 p.m.
Carried
Page 4 of 40
100 John West Way
Aurora, Ontario
L4G 6J1
(905) 727-3123
aurora.ca
Town of Aurora
Memorandum
Finance
Re: Memo-Water and Wastewater Rate Study Update
To: Finance Advisory Committee
From: Sandeep Dhillon, Senior Advisor, Financial Management
Date: May 14, 2024
Recommendation
1. That the memorandum regarding Water and Wastewater Rate study be received; and
2. That the Finance Advisory Committee comments regarding water and wastewater
rate study be received and referred to staff for consideration and further action as
appropriate.
Background
Presently the Town’s water and wastewater rate structure consists of a single variable
rate for both water and wastewater. As Town’s fixed costs for the delivery of water and
wastewater services continue to rise as infrastructure ages, so too does the need to
ensure an equitable distribution of this burden across all user rate payers. The Town
has engaged DFA Infrastructure International Inc. to undertake a review of the existing
water and wastewater rates and recommend a future rate structure. The proposed fixed
and two-tier variable rate strategy was presented by DFA Infrastructure on March 26,
2024, in a public consultation meeting.
Analysis
Proposed rate strategy considers the affordability concern raised by residents at the
public consultation meeting
Town residents had raised concerns regarding the overall increase in the water bill cost
at the special public meeting on March 26, 2024, with the introduction of a proposed
two-tier rate structure. The primary objective of the water and wastewater rate study is
to promote fairness among different rate payers and fully recover the fixed cost. The
Page 5 of 40
Water & Wastewater Rate Study
May 14, 2024 Page 2 of 5
overall Town revenue from water bills for each option will remain same. The new rate
structure will help to ensure that the Town’s water rate payers equitably share the
overall fixed cost burden. For example, currently the water and wastewater services
infrastructure cost if fully paid by the active water consuming residents and most of the
vacant homes does not pay any water infrastructure cost. With the new rate structure,
all the Town’s water rate payers will share the fixed cost burden equitably.
A fixed and two-tier variable water and wastewater rate structure is recommended
The recommended structure consists of a base charge which recovers all, or most of
the fixed costs, and volumetric charge which recovers all of the variable costs based on
volume consumption.
A base charge allows for the more equitable sharing of the fixed cost burden across all
potential users. Meaning all residents and businesses will contribute toward the fixed
cost recovery whether they consume water or not for a given billing period. Only those
who consume water or wastewater services would contribute toward the cost recovery
of a service’s variable costs through the volumetric charge.
Further, a base charge also allows for greater assurance of fixed cost recovery
regardless of the volume of water consumed each year. The amount of water sold each
year is variable, the demand is impacted by weather and other factors. Under a single
volumetric rate, the Town risks not being unable to fully recover all the fixed costs.
A new water and wastewater rate structure option, including a fixed base charge, is
presented for consideration
Based on feedback from the public meeting, a new third option is presented for
consideration. This option includes the same fixed charge, which will recover the fixed
costs for the Town, and a two-tier volumetric charge which will increase for
consumption above 56 cubic metres.
This new option considers the basic water needs of a household and provides water at
a lower rate for the first 56 cubic metres. Above this, a higher rate is charged which will
encourage water conservation and provide some relief for basic water needs. This
method will be on a full cost recovery basis. The revenue collected in all three options
remains the same as shown in Table 1.
Page 6 of 40
Water & Wastewater Rate Study
May 14, 2024 Page 3 of 5
Table 1
Rate Structure Options
Water Wastewater
Weighted
Average
Rate for
2024
2024
Projected
Volume
Revenue
Weighted
Average
rate for
2024
2024
Projected
Volume
Revenue
Option 1
(Current) Variable $ 2.49
5,479,711 $ 13,644,480 $ 2.96
5,479,711 $ 16,238,210
Option 2
Fixed $ 283 $ 4,888,585 $ 240 $ 4,141,516
Variable $ 1.60
5,479,711 $ 8,755,895 $ 2.21 5,479,711 $ 12,096,694
Total Revenue $13,644,480 $ 16,238,210
Option 3
(New)
Fixed $ 283 $ 4,888,585 $ 240 $ 4,141,516
Variable - Teir 1
(0-56 m3) $ 0.74
968,259 $ 716,512 $ 1.01
968,259 $ 977,942
Variable - Teir 2
(57+m3) $ 1.78
4,511,452 $ 8,039,383 $ 2.46
4,511,452 $ 11,118,752
Total
5,479,711 $13,644,480
5,479,711 $ 16,238,210
The three options have varying impacts on the average water bill
The change to including a fixed rate on the water bill will impact customers differently
based on their water usage. The burden of infrastructure cost will be shared equitably
among all rate payers with the implementation of the fixed and a single or two-tier
variable rate.
In Option 3, the fixed with two-tier variable rate, a Town resident with the annual
consumption of higher than 298m3 will see a reduction in their overall billing as shown
in Table 2. Currently, burden of fixed infrastructure cost lies more on the higher
consumption residential and commercial customers. By introducing the fixed rate
charge, this burden will be shared equitably among all customers including the vacant
homes which currently do not pay for water and wastewater as they have zero
consumption.
Page 7 of 40
Water & Wastewater Rate Study
May 14, 2024 Page 4 of 5
Table 1
Impact on Customer Base
Option 1 Option 2 Option 3 (New)
Customer Base 100% Variable Fixed 30%
Variable 70%
Fixed
Variable Teir 1 (0-56m3)
Variable Teir 2 (56m3 +)
Residential family (4)
(1" Meter Size)
Annual consumption 311m3 $ 1,719 $ 1,705 $ 1,703
Retired Residential
(1" Meter Size)
Annual consumption 352m3
$ 1,947 $ 1,862 $ 1,877
Resident with Pool
(1" Meter Size)
Annual consumption 964m3
$ 5,334 $ 4,193 $ 4,479
Resident with Pool & Irrigation
(1" Meter Size)
Annual consumption 3691m3
$ 20,411 $ 15,544 $ 17,032
Resident with Sprinkler System
(1" Meter Size)
Annual consumption 1552m3
$ 8,581 $ 6,427 $ 6,972
Commercial Water Meter
(6" Meter Size)
Annual consumption
121,730m3
$ 673,169 $ 472,595 $ 526,155
Vacant Home
(1" Meter Size)
Annual consumption 0m3 $ - $ 522 $ 522
Residential Water Meter
(1" Meter Size)
Annual consumption 257m3
$ 1,421 $ 1,500 $ 1,474
If approved, the new water and wastewater rate structure would become effective in 2025
The Town’s May 1, 2024, water, and wastewater rates have already been approved and
it will take time to roll out a change in the rate structure, therefore the first opportunity
to introduce any new rate structure would be in time for the Town’s May 1, 2025 rate
update. The Town’s May 1, 2024, water, and wastewater rates have already been
approved and it will take time to roll out a change in the rate structure, therefore the first
opportunity to introduce any new rate structure would be in time for the Town’s May 1,
Page 8 of 40
Water & Wastewater Rate Study
May 14, 2024 Page 5 of 5
2025 rate update. Table 3 presents a summary of the remaining key milestones in this
review.
Table 3
Key Remaining Review Milestones
Date Milestone / Activity
March 26, 2024 Public Open House (Complete)
May 19, 2024 Finance Advisory Committee Update
September 4, 2024 Committee of the Whole
September 24, 2024 Council possible approval of alternative water &
wastewater rate structure
December 12, 2024 Council adoption of 2025 water & wastewater rates
March 25, 2025 May 1, 2025, water & wastewater rate by-law approval
Attachments
Attachment 1: Water and Wastewater Rate Structure Presentation
Page 9 of 40
TOWN OF AURORAWater & Wastewater Rate Study FACMay 14th, 2024%XXEGLQIRXPage 10 of 40
•Overview of current rate structure•Existing customer base & Cost•Residential consumption pattern•Commercial consumption pattern•Challenges of existing rate structure •Proposed rate structure•Benefits of proposed rate structure•Proposed rate structure impact to existing customer base2AgendaWater & Wastewater Rate StudyMay 14th, 2024Page 11 of 40
May 14th, 2024 Water & Wastewater Rate Study3Existing Customer BaseNo. of Customers 18101Inactive Customers 811Annual Water Consumption 5.5 Million m32024 Cost to be recovered from Water customers $14 Million 2024 Cost to be recovered from Wastewater customers $16 Million Current rate structure 100% Variable 2024 Average Water rate 2.49$ 2024 Average Wastewater rate 2.96$ Water and Wastewater Page 12 of 40
May 14th, 2024 Water & Wastewater Rate Study4Residential Consumption Pattern Page 13 of 40
May 14th, 2024 Water & Wastewater Rate Study5Commercial Consumption Pattern Page 14 of 40
May 14th, 2024 Water & Wastewater Rate Study6Challenges of existing rate structure •Inactive customers & vacant home do not pay for the infrastructure cost•Does not encourage water conservation•Revenues 100% dependent on level of consumption. Could result in budget deficits due to low consumption and less revenues (e.g. in wet years)•Active users bears the burden of full infrastructure costPage 15 of 40
7Proposed Rate Structure Water & Wastewater Rate StudyMay 14th, 2024Weighted Average Rate for 20242024 Projected VolumeRevenueWeighted Average rate for 20242024 Projected VolumeRevenueVariable 2.49$ 5,479,711 13,644,480$ 2.96$ 5,479,711 16,238,210$ Fixed (30%) 283$ 4,888,585$ 240$ 4,141,516$ Variable (70%) 1.60$ 5,479,711 8,755,895$ 2.21$ 5,479,711 12,096,694$ Total Revenue 13,644,480$ 16,238,210$ Fixed 283$ 4,888,585$ 240$ 4,141,516$ Variable - Teir 1 (0-56 m3)0.74$ 968,259 716,512$ 1.01$ 968,259 977,942$ Variable - Teir 2 (57+m3)1.78$ 4,511,452 8,039,383$ 2.46$ 4,511,452 11,118,752$ Total 5,479,711 13,644,480$ 5,479,711 16,238,210$ Option 2 Option 3(New)Option 1(Current)Water Wastewater Page 16 of 40
8Benefits of proposed rate structureWater & Wastewater Rate Study•Promotes fairness to all residents•Vacant homes pay for the fair share of infrastructure cost•Encourages water conservation•Improves the affordability by shifting burden from certain users to all usersMay 14th, 2024Page 17 of 40
9Proposed rate structure impact on customer baseWater & Wastewater Rate StudyMay 14th, 2024Customer Base 100% VariableFixed 30%Variable 70%Fixed Variable Teir 1 (0-56m3)Variable Teir 2 (56m3 +)Residential Water Meter(1" Meter Size) Annual consumption 257m31,421$ 1,500$ 1,474$ Residential family (4)(1" Meter Size) Annual consumption 311m31,719$ 1,705$ 1,703$ Retired Residential(1" Meter Size) Annual consumption 352m31,947$ 1,862$ 1,877$ Resident with Pool(1" Meter Size) Annual consumption 964m35,334$ 4,193$ 4,479$ Resident with Pool & Irrigation(1" Meter Size) Annual consumption 3691m320,411$ 15,544$ 17,032$ Vacant Home(1" Meter Size) Annual consumption 0m3-$ 522$ 522$ Resident with Sprinkler System(1" Meter Size) Annual consumption 1552m38,581$ 6,427$ 6,972$ Commercial Water Meter(6" Meter Size) Annual consumption 121,730m3673,169$ 472,595$ 526,155$ Page 18 of 40
100 John West Way
Aurora, Ontario
L4G 6J1
(905) 727-3123
aurora.ca
Town of Aurora
Memorandum
Finance
Re: Memo-Budget Review of the Finance Department and Corporate Accounts
To: Finance Advisory Committee
From: Jason Gaertner, Manager, Financial Management Services
Date: May 14, 2024
Recommendation
1. That the memorandum regarding the Budget Review of the Finance Department and
Corporate Accounts be received; and
2. That the Finance Advisory Committee comments regarding the Budget Review of the
Finance Department and Corporate Accounts be received and referred to staff for
consideration and further action as appropriate.
Background
As per its budget process document, the Finance Advisory Committee is required to
undertake a detailed review of each department and community service partner’s core
operating budgets prior to the conclusion of the Council term. These detailed reviews
allow for a more strategic review of the Town’s draft operating budgets by the Budget
Committee. During the course of these detailed reviews any arising budget concern
areas can be explored and addressed as part of a future Town budget process.
Attachments
Attachment #1 – Finance Department detailed budget materials
Attachment #2 – Corporate Accounts detailed budget materials
Page 19 of 40
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