Agenda - Council - 20040622TOWN OF AURORA
COUNCIL
AGENDA
N0.04-22
TUESDAY, TUNE 2Z 2004
7:00 PAN
COUNCIL CHAMBERS
AURORA TOWN HALL
PUBLIC RELEASE
18/06/04
TOWN OF AURORA
COUNCIL MEETING AGENDA
NO. 04-22
Tuesday, June 22, 2004
7:00 P.M. OPEN FORUM — COUNCIL MEETING TO FOLLOW
I DECLARATIONS OF PECUNIARY INTEREST
11 APPROVAL OFAGENDA
RECOMMENDED:
THAT the content of the Agenda as circulated by the Corporate Services
Department be approved as presented.
III ADOPTION OF MINUTES
Special Council — Public Planning Meeting No. 04-19, Wednesday May 26,
2004 and Council Meeting No. 04-20, Tuesday, June 8, 2004
RECOMMENDED:
THAT the Council Minutes of Meeting Numbers 04-19 and 04-20 be
adopted as printed and circulated.
IV PRESENTATIONS
None
V DETERMINATION OF ITEMS REQUIRING SEPARATE DISCUSSION
VI ADOPTION OF ITEMS NOT REQUIRING SEPARATE DISCUSSION
Council Meeting No. 04-22
Tuesday, June 22, 2004
VII DELEGATIONS
Page 2 of 13
(a) Mr. Jeffrey Miller and Mr. Kerr of Maple Leaf Foods (pg. 1)
Re: Tannery Creek Study
(b) Ms Florence Murray,.Director of Fundraising with the (pg. 3)
Aurora Seniors
Re: Fundraising for the New Seniors' Centre (Item 2(10))
(c) Mr. and Mrs. Schomans, Resident (pg. 4)
Re: Proposed Parking Prohibitions on Gurnett
Street (Item 5(3))
(d) Mr. Jodi Matthew, Resident (pg. 5)
Re: Report PL04-075 — Cobblestone Lodge
Retirement Home (Item 9)
(e) Mr. Gary Stanhope of MHPM Project Managers (pg. 6a)
Re: New Recreation Complex Earthworks Site (Item 13)
Services Contract and Options for Energy Conservation
and Sustainable Design Initiatives for the
New Recreation Complex (Item 14)
(f) Mr. Ron Veyt, Resident (pg. 16)
Re: Leisure Services Advisory Committee Meeting
June 10, 2004 — Thomson Park (Item 6(3))
(g) Ms Sandra Humfryes, Resident (pg. 17)
Re: Traffic Calming Request on Golf Links
Drive (Item 5(2))
Vlll CONSIDERATION OF ITEMS REQUIRING SEPARATE DISCUSSION
IX REGIONAL REPORT
X OTHER BUSINESS, COUNCILLORS
Council Meeting No. 04-22
Tuesday, June 22, 2004
XI READING OF BYLAWS
RECOMMENDED:
Page 3 of 13
THAT the following listed by-laws be given 1 st, 2nd and 3rd readings, and
enacted:
4556-04.0 BEING A BY-LAW to
amend By-law 4280-
01.C, a by-law to govern
the procedures of the
Council of the Town of
Aurora and its
Committees and Boards.
4492-041 BEING A BY-LAW to
declare surplus lands
described as Part of Lot
80, Concession 1, EYS,
in the Town of Aurora
(adjacent to Chapman
Court Extension).
4534-04.D BEING A BY-LAW to
Amend By-law 2213-78
(Cobblestone - Holding)
4548-04.D BEING A BY-LAW to
adopt Official Plan
Amendment No. 53
(Trusthouse)
4549-04.D BEING A BY-LAW to
adopt Official Plan
Amendment No. 54
(2029193 Ontario Ltd.)
4551-04.D BEING A BY-LAW to
exempt Part of Block 258
on Registered Plan 65M-
3573, in Aurora, from the
Part Lot Control
provisions as provided in
subsection 50 (5) of the
Planning Act, R.S.O.
1990, c.P.13 (as
amended).
(pg. 179)
(pg. 182)
(pg. 185)
(pg. 190)
(pg. 203)
(pg. 214)
Council Meeting No. 04-22
Tuesday, June 22, 2004
4552-04.D BEING A BY-LAW to
exempt Part of Blocks
96, 97, 100 AND 101 on
Registered Plan 65M-
3657, in Aurora, from the
Part Lot Control
provisions as provided in
subsection 50 (5) of the
Planning Act, R.S.O.
1990, c.P.13 (as
amended).
4554-04.0 BEING A BY-LAW to
Confirm Actions by
Council Resulting From
This Meeting - Tuesday,
June 22,2004.
Xll IN CAMERA
Property and Personnel Matter
RECOMMENDED:
Page 4 of 13
(pg. 215)
(pg. 217)
THAT Council proceed In Camera to address a legal/property/personnel
matter.
Xlll ADJOURNMENT
Council Meeting No. 04-22
Tuesday, June 22, 2004
AGENDA ITEMS
1. Aurora Hydro/Newmarket Hydro Amalgamation
Assessment Report
RECOMMENDED:
Page 5 of 13
(pg. 18)
THAT the Joint Utility Executive Team Amalgamation Assessment Report
be received: and
THAT the Town proceed to the next steps of the merger discussions with
the Town of Newmarket including:
■ Establishment of a Shareholder Agreement detailing:
➢ Shareholdings
➢ Board of Directors
➢ Appointment of Auditors and financial reporting
➢ Shareholder approval thresholds
➢ Director approval thresholds
➢ Objectives and Guiding Principles for the company
➢ Share transfer, issuance and pledging
■ Establishment of an Amalgamation Agreement setting out:
➢ Mechanics of amalgamation under the Ontario Business
Corporations Act
➢ Valuation of the companies and
value
➢ Conditions precedent, such as:
■ Representations and warranties
■ Due diligence
➢ Any required covenants
Shareholder consideration for
• Other special arrangements to be considered by Council, including:
➢ Shareholder guarantees respecting current dividend and
promissory note interest payments
➢ Allocation of initial savings and efficiencies
➢ Disposition of any excess working finds
➢ Potential one-time dividend payments in recognition of revenues
realized through OEB retroactive rate adjustments
Council Meeting No. 04-22
Tuesday, June 22, 2004
Page 6 of 13
THAT the Negotiation Committee consist of the CAO of the Town of
Aurora, President and CEO of Aurora Hydro Connections Limited,
one (1) Member of the Board of Directors and one (1) approved
Member of Council with such supplementary legal and financial
advice as may be required.
2. General Committee Meeting Report No. 04-17 (pg. 71)
Tuesday, June 15,2004
RECOMMENDED:
THAT the Report of the General Committee Meeting No. 04-17 be
received and the recommendations carried by the Committee be adopted.
3. Motion Resulting From General Committee — May 4, 2004
(In -Camera Session)
Re: Appointments to the Environmental Advisory Committee
RECOMMENDED:
THAT the following individuals be appointed to the Environmental
Advisory Committee:
Robert Cook David Tomlinson
Mary Hill Susan Walmer
Ellen Mole Klaus Wehrenberg
Darryl Moore
4. AHC04-002 — June 14, 2004 Aurora Heritage Committee Meeting
RECOMMENDED:
11 a )
(pg. 82)
1. THAT the Committee Record of the Aurora Heritage Committee
Meeting held on June 14, 2004 be received for information; and
2. 18 Centre St.
THAT J. McIntyre and/or M. Brevik be delegated the authority to
confirm the final building elevations on behalf of the committee for 18
Centre St.; and
Council Meeting No. 04-22 Page 7 of 13
Tuesday, June 22, 2004
3. Heritage Plaque 65 Spruce St.
THAT the request for a Heritage Plaque from Mr. & Mrs. Housser of
65 Spruce St. be approved and that the signage should state "The
Osborne House c. 1911".; and
4. Site Plan Development Hartman House 669 Wellington St. E.
THAT the Town's Planning Dept. and Council consider the heritage
significance of the Hartman House 669 Wellington St. E. (SW corner
Bayview Ave & Wellington St. E) in its deliberations on the proposed
development of the property (File D14-06-04 & D09-05-04 Aurora
Toyota) recognizing its statement in the Town's Official Plan page
115 and Schedule "C" where this building is identified, and that the
Town and property owner utilize its best efforts to preserve and
incorporate this building in the future development of the site.
5. TSAB04-05 — June 9, 2004 Traffic Safety Advisory Board Meeting (pg. 88)
RECOMMENDED:
1. THAT the Committee Record of the Traffic Safety Advisory Board
Meeting held on June 9, 2004 be received as information; and
2. Report No. TSAB04-004 Traffic Calming Request on Golf Links
Drive.
THAT Report No. TSAB04-004 "Traffic Calming Request on Golf
Links Drive" be received for information;
THAT Council;
approve in principle the traffic calming design for Golf Links Drive;
authorize staff to conduct a poll of households on Golf Links Drive to
ascertain their views on the traffic calming design as contained in
Report No. TSAB04-004;
request staff be requested to notify and consult with public and
review agencies on the proposed traffic calming design; and
authorize staff to post the necessary advertising for the road
alteration by-law.
Council Meeting No. 04-22 Page 8 of 13
Tuesday, June 22, 2004
3. Report No. TSAB04-002 — Parking Concerns on Gurnett Street.
THAT multi -way stop sign control be approved at the intersection of
Gurnett Street and Kennedy Street East;
THAT parking be prohibited at anytime on the east side of Gurnett
Street from Connaught Avenue to a point 40 meters north of
Connaught Avenue;
THAT the Clerks Department be requested to introduce the
necessary by-laws to implement the above recommendations; and
THAT a letter be sent to all affected residents with the TSAB's
recommendations.
4. Report No. TSAB04-003 — Sightline Concerns on McMaster
Avenue at the Hollidge Boulevard Intersection.
THAT the second raised concrete centre median on Hollidge
Boulevard west of McMaster Avenue be removed;
THAT Council approve funds in the amount of $7,000 for this work;
and
THAT a letter be sent to all affected residents with the TSAB's
recommendations.
5. June 2, 2004 memorandum from the Traffic/Transportation Analyst
regarding Catherine Avenue — 2 Year Parking Review Between
Yonge Street and Spruce Street.
THAT the existing winter parking prohibition on the south side of
Catherine Avenue from Yonge Street to Spruce Street from
November 15Th to April 15Th remain in place on a permanent basis.
6. June 9, 2004 memorandum from the By-law Services Co-ordinator
regarding Parking Concerns on Tyler Street and Mill Street.
THAT parking be restricted on the south side of Tyler Street from the
east edge of the west driveway of the site to the west edge of the
east driveway of the property from 8:00a.m, to 4:00p.m., Monday to
Friday.
7. May 18, 2004 e-mail from Ms. Gail Severini requesting for "Children
at Play" signs on Watts Meadow.
THAT the request for "Children at Play" sings on Watts Meadow be
denied; and
Council Meeting No. 04-22
Tuesday, June 22, 2004
Page 9 of 13
THAT a letter be sent to Ms. Gail Severine with the TSAB's
recommendations.
8. May 26, 2004 e-mail from Ms. Jacqueline Schafer-Kopackov
regarding safety concerns on Aurora Heights Drive.
THAT the June 9, 2004 e-mail from Ms. Jacqueline Schafer-
Kopackov regarding safety concerns on Aurora Heights Drive be
deferred to the July 14, 2004 TSAB meeting;
THAT staff be requested to conduct a speed count on Aurora
Heights Drive between Crawford Rose Drive and McLeod Drive; and
THAT a letter be sent to Ms. Jacqueline Schafer-Kopackov with the
TSAB's recommendations.
9. June 1, 2004 e-mail from Ms. Stacey Crocker regarding parking
concerns relating to a Super Mailbox in front of 23 Downey Circle.
THAT staff be requested to work with Canada Post to determine if
the existing Super Mailbox on Downey Circle in front of house #23
can be moved to the end of the cul-de-sac;
THAT staff be requested to report back to the TSAB with the cost;
and
THAT a letter be sent to Ms. Stacey Crocker with the TSAB's
recommendations.
10. May 29, 2004 e-mail from Mr. Bill Hogg regarding traffic flow through
Bavview Wellington.
THAT staff be requested to review the traffic flow through Bayview
Wellington once the construction of the subdivisions and the
commercial properties on Earl Steward Drive and Peterson Drive
have been completed; and
THAT a letter be sent to Mr. Bill Hogg with the TSAB's
recommendations.
11. Selection of a Vice Chair from Committee Members.
THAT Brett Cole be appointed the Vice Chair of the TSAB until
January 2005 on a rotating basis.
Council Meeting No. 04-22
Tuesday, June 22,2004
Page 10 of 13
6. LSAC04-02 — June 10, 2004, Leisure Services Advisory (pg. 99)
Committee Meeting
RECOMMENDED:
1. THAT the Committee Record of the Leisure Services Advisory
Committee Meeting, held on June 10, 2004, be received for
information.
2. Murray Parkette
THAT the relationship with Beta Sigma Phi should be maintained;
and
THAT staff provide a paper trail showing the sequence of events
regarding Regency Acres Committee Association's application to
adopt the Murray Parkette.
3. Report LS04-022 - Timber/Thompson Park Construction
THAT Timber/Thompson Parks be developed in accordance with
the proposed Concept Plans presented by staff.
4. Report LS04-026 - Confederation Park Background Information
THAT staff advise, in writing, whether they intend to honour the
wishes of the Regency Acres Committee Association by providing
garbage cans, benches and coniferous trees in Confederation Park;
and
THAT staff provide a written response as to whether the school's
alarms and bells are in violation of the Town's noise by-law.
5. In -Camera
THAT the 11 nominations submitted for the Youth Action
Committee be accepted.
Council Meeting No. 04-22
Tuesday, June 22, 2004
Page 11 of 13
PL04-072 — Application for Exemption from Part Lot Control (pg. 108)
Arista Homes (Bayview Greens) Inc.
Blocks 258, Registered Plan 65M-3573
Kirkvalley Crescent
File D12-PLC-06-04
RECOMMENDED:
THAT Council approve the request for exemption from Part Lot Control
made by Arista Homes (Bayview Greens) Inc. to divide Block 258 on
Kirkvalley Crescent, Registered Plan 65M-3573 into separate lots.
THAT Council enact By-law 4551-04.D
8. PL04-073 - Application for Exemption from Part Lot Control (pg. 112)
Bayview-Wellington North Inc.
Blocks 96, 97, 100 and 101, Registered Plan 65M-3657
Limeridge Street and Kirkvalley Crescent
File D12-PLC-07-04
RECOMMENDED:
THAT Council approve the request for exemption from Part Lot Control
made by Bayview-Wellington North Inc. to divide Blocks 96, 97, 100 and
101 on Limeridge Street and Kirkvalley Crescent, Registered Plan 65M-
3567 into separate lots.
THAT Council enact By-law 4552-04.D
9. PL04-075 — Cobblestone Lodge Retirement Home (pg. 118)
Lot 167, R.P. 246
15029 Yonge Street
Zoning Amendment Application
File D14-18-03
RECOMMENDED:
THAT report PL04-075 be received and that Council determine its position
with respect to proposed Zoning By-law Amendment No. 4534-04.D.
Council Meeting No. 04-22 Page 12 of 13
Tuesday, June 22, 2004
10. PW04-028 — Award of Tender No. PW2004-09 - Construction of (pg. 131)
Sanitary Sewer and Watermain along Leslie Street
RECOMMENDED:
THAT Tender PW2004-09 the "Construction of Sanitary Sewer and
Watermain Along Leslie Street' be awarded to Carillion Construction
Canada at its tendered price of $536,791.94; and
THAT Council authorize the Mayor and Municipal Clerk to execute the
attached Form of Agreement between the Town of Aurora and Carillion
Construction Canada for the Construction of Sanitary Sewer and
Watermain along Leslie Street.
11. Memo from the Director of Planning (pg. 138)
Re: Oak Ridges Moraine By-law Flexibility
RECOMMENDED:
THAT Council provide direction on this matter.
12. LS04-029 —Additional 2004 Community Grant Requests (pg. 141)
RECOMMENDED:
THAT Council approve an additional 2004 Grant request for Mara Jones in
the amount of $500.00 and the Aurora Tigers Junior A Hockey Club in the
amount of $500.00.
13. Progress Report from MHPM Project Managers (pg. 150)
Re: New Recreation Complex Earthworks Site Services Contract
RECOMMENDED:
THAT Council authorize the award of the Earthworks Site Services
contract to Newbuilt Developers Ltd.; and
THAT staff be authorized to immediately execute a contract to commence
the work on site, subsequent to permit approvals pending.
Council Meeting No. 04-22 Page 13 of 13
Tuesday, June 22, 2004
14. Report from MHPM Project Managers (pg. 153)
Re: Energy Conservation and Sustainable Design
Initiatives for the New Recreation Complex
RECOMMENDED:
1. THAT Council give direction to the Project Architect and Engineers
to proceed with the Ecochill system as part of the project program,
at an estimated additional cost of $123,200; and
2. THAT Council provide direction on whether LEED certification is to
be achieved; and if so
3. THAT the maximum certification level be targeted and certified; and
4. THAT a Special Council meeting be called on September 7, 2004,
to award the General Contract.
15. Correspondence from the Town of Newmarket (pg. 168)
Re: Joint Recreational Pool Facility
RECOMMENDED:
THAT Council provide direction on this matter.
16. LSO4-030 — Request for Quotations L.S. 2004-31 (pg. 170)
through 34 Aurora Community Centre (ACC1)
Rehabilitation Works
RECOMMENDED:
THAT Council award RFQ No. L.S. 2004-31 Main Entrance Ticket Booth
Replacement and Suspended Ceiling Lighting Replacement to Ruscro
General Contracting in the amount of $34,510.00 less G.S.T.; and
THAT Council award RFQ No. L.S. 2004-32 Interior Painting to Al's
Decorating and Carpet Service in the amount of $28,608.00 less G.S.T.;
and
THAT Council award RFQ No. L.S. 2004-33 Supply and Installation of
Floor Tiles to Keefe Bros. Carpet Ltd. in the amount of $13,930.00 less
G.S.T.; and
THAT Council award RFQ No. L.S. 2004-34 Shower Stall and Washroom
Partitian Works to Doug Thompson Contracting Ltd. in the amount of
$16,635.00 less G.S.T.
�PI�Cy���196r�t�><r>tu!
Pan izza, Bob
From:
Miller, Jeffrey S
Sent:
Thursday, June 17, 2004 1:53 PM
To:
Pani=, Bob
Subject:
Tannery Creek Study
Please be advised that, further to the opportunity extended by the Town of
Aurora Council, at its General Committee Meeting of June 15th, to make a
presentation at the Council meeting of June 22nd, both myself and Mr. Kerr
will be in attendance and at least one of us will wish to make a submission
at that time.
Additionally, we hope to provide reports to the Town on this issue.
Please provide as soon as possible all agenda, and other related items
pertaining to this matter which will be voted on or discussed by Council.
You can a mail me these items at millerjs®mapleleaf.ca or you can send me
the information by telefax at 416-963-6125.
I also wish to advise that our participation in these delegations and
submissions to Town Council should not necessarily be interpreted as an
implied approval of the course of action that the Town has elected to follow
in this matter.
Please feel free to contact me at 416-925-2011 if you wish to discuss this
matter further.
Regards, Jeffrey Miller
Outbound email scanned for viruses. (e230)
COUNCIL JUNE 22 2004
,von of,,
TOWN OF AURORA
„ eM,re r 1,11
EXTRACT FROM GENERAL COMMITTEE MEETING
NO. 04-17 HELD ON TUESDAY, JUNE 15, 2004
V DELEGATIONS
(b) Mr. Jeffrey Miller, Maple Leaf Foods
Re: Item 2 -Tannery Creek -Surface Water and Sediment Sampling
Results
Mr. Jeffrey Miller of Maple Leaf Foods, who are the owners of the Collis Leather
site, addressed the Committee to advise that the contamination in Tannery Creek
may have originated from many other sources, other than from Collis Leather. Mr.
Miller requested that all potential sources be investigated, since Maple Leaf Foods
has already engaged in clean-up but contamination from other sources continues to
show up. Mr. Miller agreed to provide more detailed information to the Clerk by
noon on Friday, June 18, 2004, in order to include this on the agenda for the June
22, 2004 Council meeting.
Moved by Councillor West
Seconded by Councillor Morris
THAT the comments of the delegate be received.
CARRIED
2
COUNCIL JUNE 22 2004
Panizza, Bob
From: Hinder, Kim
Sent: Thursday, June 17, 2004 1:05 PM
To: Perim, Bob
Cc: Ewart, Karen
Subject: Delegation status at council June 22104
Good Afternoon;
Florence Murray, Director of Fundraising with the Aurora Seniors, would like delegation status at the next council meeting
on June 22, 2004,
Thank you
Kim Hinder
Seniors' Coordinator
COUNCIL DUNE 22 2004
Page 1 oft
Panizza, Bob
From:
Jessle Schorman
Sent:
Tuesday, June 15, 2004 8:30 PM
To:
Panizza, Bob
Subject:
Proposed Parking Prohibition On Gurnett
Street
Dear Mr Panizza:
I am writing to you with regard to the letter received June 15th, 2004 ,Re: Proposed Parking Prohibition On
Gurnett Street.
I would like to request that both my husband Rick Schormans as well as myself Diane Schormans have the
opportunity to address
the matter at hand( Namely the parking on the East side of Gurnett Street to a point 40 meters North of
Connaught Ave.) at the next council meeting scheduled for June 22nd,2004.
In the letter received ,numerous times Is the mention of Mr. Jody Matthew . My I please ask "Who Is Jody
Matthew"?
Please advise as to the time of the Council meeting time as well .
I swell your reply.
Diane Scharmans
6116104
COUNCIL JUNE 22 2004
.Wnofq
"e TOWN OF AURORA
d
R Flaw Nkrz MQd To Call „W,�e. EXTRACT FROM COUNCIL MEETING NO. 04-18
HELD ON TUESDAY, MAY 25, 2004
3. PL04-054 - COBBLESTONE LODGE RETIREMENT HOME
Lot 167, R.P. 246, 15029 Yonge Street
Zoning Amendment Application, File D14-18-03
Moved by Councillor West Seconded by Councillor Buck
THAT report PL04-054 be received; and
THAT Zoning By-law Amendment No. 4534-04.D be enacted.
DEFERRAL: Upon the question of the adoption of the resolution, it was:
Moved by Councillor Vrancic
Seconded by Councillor Morris
THAT report PL04-054 and Zoning By-law Amendment No. 4534-04.D be
deferred for 4 weeks, to allow Mr. Matthew to meet with staff in regard to this
issue.
CARRIED
CORRESPONDENCE SENT BY: Corporate Svs.
ACTION DEPT.: Planning
INFO: A. Roylance PENDING
5
''COUNCIL JUNE 22 2004
TOWN OF AURORA
EXTRACT FROM COUNCIL MEETING NO. 04-18
HELD ON TUESDAY, MAY 25, 2004
VII DELEGATIONS
Mr. Jody Matthew
Re: Cobblestone Lodge Retirement Home
Mr. Jody Matthew addressed Council regarding issued related to Cobblestone
Lodge Retirement Home, and requested that Council deferthe decision on enacting
the proposed By-law in order that the Town can check with the Region of York, to
ensure that proper safeguards are in place with respect to the special needs
residents of the facility.
a
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COUNCIL JUNE 22 2004
Page 1 of 1
Panizza, Bob
From: Conboy, Paula
[pau la.con boy@hyd rovaughan. com]
Sent: Thursday, June 17, 2004 3:08 PM
To: Panizza, Bob
Subject: Council Meeting June 22
Mr Panizza
I understand that I am to contact you to request that my husband Ron Veyt be permitted to address Council on
June 22nd about the Leisure Services Advisory Committee's recommendation on the plans for Thomson Park.
I can be contacted at 905-417-6992.
thank you,
Paula Conboy
6/17/04 16
COUNCIL JUNE 22 2004
Panizza, Bob
From:
shumfryes@bell.ca
Sent:
Friday, June 18, 2004 1:07 PM
To:
Panizza, Bob
Cc:
Jefferson, Brent
Subject:
Delegate Status - Report No. TSAB04-004
Dear Mr. Panizza,
I would like to request delegate status on behalf of the residents of Golf Links Drive
relative to Report No. TSA1304-004 - "Traffic calming Request on Golf Links Drive". I
believe that the June 22nd, 2004 council meeting, council members will be reviewing and
hopefully supporting the TSAB recommendations for traffic calming devices on Golf Links
Drive to reduce speeds.
If you require any additional information or if I require to fill forms, please do not
hesitate to contact me at my residence at 905-727-1433 or business at 416-353-6050.
Sincerely,
Sandra Humfryes
17
COUNCIL JUNE 22 2004
urora
H-vd o
215 Industrial Parkway South, Box 157, Aurora, Ontario L4G 3H3
Telephone (905) 727-4612 Fax (905) 727-7340
AGENDA ITEM # I
June 17, 2004
Town of Aurora Council
100 John West Way
Box 1000
Aurora, Ontario
L4G 6J1
Attention: Larry Allison
Re: Aurora Hydro / Newmarket Hydro
Amalgamation Assessment Report
Dear Sir:
At a special meeting of the Borealis Hydro Electric Holdings Inc. Board, held
June 14, 2004, at which Shareholder representatives were invited to attend, the
following Board motion was passed:
Moved by: Jane Murray
Seconded by: Tim Jones
THAT the Board endorse the Joint Utility Executive Team Amalgamation
Assessment Report and recommend to the Shareholder to proceed to the next
steps of the merger discussions with the Town of Newmarket.
Carried
Attached to this report are the following supporting documents:
1) Navigant Consulting discussion paper on risks associated with a
Merger with Newmarket Hydro, risks associated with Aurora Hydro
remaining a stand alone utility and alternatives to amalgamation and
stand alone options.
18
COUNCIL JUNE 22 2004
Larry Allison
June 17, 2004
Page 2
2) June 14, 2004 Board Report recommending that the Shareholder
proceed to the next step of merger discussions with the Town of
Newmarket.
3) Navigant Consulting discussion paper on performance based
regulation, rates and qualitative benefits to Amalgamation.
4) Aurora Hydro Connections Limited and Newmarket Hydro Ltd.
Amalgamation Assessment Report.
5) Navigant Consulting review of the Aurora Hydro/Newmarket Hydro
Merger Report.
Please contact me if you have any further questions or comments.
Yours truly,
AURORA HYDRO CONNECTIONS LIMITED
Jo • . Sanderson, P.Eng.
President and CEO
JS/cm
E
COUNCIL JUNE 22 2004
NAviGANT
CON SU ITING
INTRODUCTION
Following a meeting with Aurora Hydro board members and shareholder representatives, Navigant
Consulting was asked to identify:
• The risks associated with Aurora Hydro — Newmarket Hydro amalgamation;
• The risks associated with Aurora Hydro remaining stand-alone; and
• Alternatives to amalgamation and, stand-alone.
These issues are addressed in the following sections.
2 AMALGAMATION RISKS
As in any corporate merger, the proposed Aurora Hydro — Newmarket Hydro amalgamation faces
numerous risks in achieving the desired end state. The following table identifies the key risks
inherent in a merger and outlines how management has attempted to mitigate these risks:
Inherent Risk Risk Mitigating Factors
• Multiple owners increases the risk • Shareholders are of similar mindset which should enhance
of decision making paralysis decision making. In addition, the shareholder agreement can
be structured to resolve issues of crucial importance to
individual shareholders.
• Not realizing or delays in 0 Management has used conservative estimates when
realizing efficiency gains quantifying potential savings from the merger. In addition,
(Integration risk) there is high confidence in the dollar amounts associated with
many of the major drivers of savings (premises, billing,
contract staff reductions) due to the contractual nature of the
expenses involved. Finally, management will need to
establish an integration team that is responsible to ensure that
efficiency improvements are implemented in a timely fashion.
• Staff resistance • Unions may block moves to outsource services such as
billing, but overall level of acceptance should be high given
absence of full-time job reductions and potential for increased
wages through harmonization.
• Public resistance • Positive relationship between communities plus a concerted
public education campaign should alleviate any public
concerns
• Increased transaction costs
Navigant Consulting noted that transaction cost estimates may
need to be increased for legal and system integration.
Fortunately, the projected savings are more than sufficient to
absorb an increase in transaction costs.
• System incompatibility
• Management has reviewed internal operating and distribution
systems and is confident that both systems can be integrated
with minimal difficulty.
• Reduced control
• Control will be reduced compared to current ownership;
however ultimate shareholder control over most issues such as
rates and service levels is minimal now that the utility is
regulated by the OEB.
• Not receiving regulatory approval
• Shareholders are demanding a thorough due diligence which
will benefit the regulatory approval process.
20
COUNCIL JUNE 22 2004
NAvIGANT
CONSULTING
Status Quo Risks
A decision to forgo opportunities to merge or acquire would leave the utility in a "business as usual"
state. While this would minimize short-term risk and avoid the additional expenditures associated
with a merger scenario, it could significantly hinder operating flexibility going forward. The number
of "levers" available to utility management to respond to pressures imposed by the regulator on
operating costs, service and reliability are much more limited. In addition to self-imposed cost
cutting and other efficiency improvement mechanisms, the only alternative for utility management is
to consider outsourcing or joint ventures, which may hinder or prevent the shareholder from selling or
merging the utility in future. The bottom line is that a future stand-alone Aurora Hydro may look
fundamentally different than it does today. Furthermore, regulatory pressure may force the
shareholder into certain decisions — such as selling or merging — at an inopportune time, thus
diminishing the value of the asset.
It is also important to be aware that Aurora Hydro has the opportunity to become a "founding partner"
of an amalgamated Aurora — Newmarket Hydro. It is not unusual for the initial shareholders in such
an arrangement to grant themselves certain guarantees in the shareholder agreement that would not
apply to members that join later (e.g. minimum board representation). It is quite possible that the
Town of Newmarket will seek other partners if the Town of Aurora were to opt out of a merger at this
point. If the Town of Aurora decided at a later date to re -consider the amalgamation option, it is
highly likely that Aurora's negotiating position would be considerably reduced. Therefore, the
opportunity to secure these "founding partner" guarantees will have passed and Aurora will be
negotiating from the position of a junior partner.
3 ALTERNATIVES TO THE AMALGAMATION AND STAND-ALONE
OPTIONS
This section discusses the primary strategic alternatives to amalgamation or stand-alone operation:
growth through acquisition; outsourcing/joint ventures; outright sale and entering into an operating
lease.
Growth Through Acquisition
As outlined previously, it is expected that successive generations of performance -based ratemaking
will exert considerable pressure on utilities in the province to become increasingly efficient. One of
the ways to improve operating efficiency is to expand the customer base through acquisition and
capture potential efficiencies available through increasing economies of scale.
Depending on the attractiveness of the utility for sale and the number of bidders, an acquirer will need
to formulate a bid that offers value and commitments that exceed other bidders. One of the common
features of many purchase offers is an employment guarantee that effectively delays potential
integration savings. In addition, it will be necessary for the bidder to devise ways to implement cost
reductions that exceed other competing bids; yet a significant portion of these savings will need to be
passed on to the vendor in the form of increased value (or bid premium) in order to win the bid. The
extent to which value is passed back to the vendor will vary from transaction to transaction.
However, this is perhaps the greatest source of risk in an acquisition since it creates a substantial
minimum threshold point in terms of savings that must be achieved before the buyer sees a net benefit
from the transaction. If the purchaser fails to achieve at least the savings that were reflected in the
bid premium, from an economic perspective they will worse off than before the purchase.
Why Consider an Acquisition?
21
COUNCIL JUNE 22 2004
NAvIGANT
CO NS LILTING
Shareholder's investment should see better value preservation and possibly value
enhancement from improved efficiencies. These efficiencies are potentially greater than
under the amalgamation scenario.
• Long term decision making should be easier due to single owner;
Concerns
Significantly greater integration risk since a large portion of incremental value from
efficiency savings has been passed on to the vendor;
Limited promising acquisition candidates for Newmarket Hydro or Aurora Hydro given
their size and location.
Outright Sale
If the shareholder of Aurora Hydro or the shareholder of Newmarket Hydro decide that owning and
operating the local utility is not in their long-term interest, a sale of the assets or shares of the utility is
the quickest and most simple method of exiting the business. There is an additional incentive to
consider this option given the current transfer tax waiver' that extends through March 28, 2005. The
shareholders of the utilities would require OEB approval prior to this date; otherwise any sale
transaction would be subject to a 33% transfer tax less PIL taxes paid to date.
Current Market is Illiquid
When the Electricity Act 1998 was first announced and clarified that ownership of MEUs rested with
the municipality, many municipalities made the decision to sell. The transaction environment and
market outlook at the time was very favourable to vendors, often resulting in sale prices that were
well above the book value of assets. There were a number of well -financed bidders present who were
encouraged by the Ontario market potential and the relatively straightforward market rules outlined
by the Ontario government and the OEB. However, today's market is not nearly as buoyant. Many
of the previous buyers have left the Ontario market for good, or at a minimum, reduced their
expectation due to numerous changes to government policy.
It is true that the clarity provided in the legislation announced by the Ontario government should
cause some private utilities to once again seek opportunities in Ontario. Unfortunately, the number of
suitors will be fewer and the level of aggressiveness will be lower due to the:
• Absence of many US players who continue to re -focus on their core domesticbusinesses;
• Financial restrictions imposed on US and Canadian utilities by credit rating agencies in the
post Enron era;
• Continued feeling that Ontario is a questionable place to invest.
In this environment, it can be safely assumed that any present day transactions will be at prices lower
than three years ago; however, the size of the discount is difficult to determine. Navigant Consulting
believes that most transactions will be much closer to net book value rather than the 1.3 times and
sometimes higher that was previously experienced.
Why Consider Selling?
• Value inherent in business is monetized, albeit at lower values than previously experienced;
Transfer tax waiver applies only to municipal utilities that are sold to other govemment-owned utilities.
22
'COUNCIL DUNE 22 2004
NAVIGANT
1 CONSULTING
• Regulatory and operating risk has been entirely passed on to new owner;
Concerns
• Illiquid market makes it difficult to determine potential sale price;
• A transaction with a private bidder would trigger transfer tax, significantly reducing the net
proceeds to the seller;
• Municipality is no longer in control of the ultimate destiny of the utility.
Operating Lease
An operating lease provides an alternative to an outright sale that may have some attractive features
for a municipality. In an operating lease, the MEU leases its distribution assets to a third party
(lessee) who operates the utility for the term of the lease (usually 10 years). All new capital is funded
by the lessee who also takes on all regulatory and operating risk for the term of the lease. At lease
expiry, the lessee has an option to buy the balance of the assets.
Why Consider an Operating Lease?
• Provides a long term source of revenue for the municipality;
• Avoids transfer tax;
• The ownership and long term destiny of the asset remains with the municipality;
Concerns
• Illiquid market makes it difficult to determine lease value.
Outsourcing / Joint Venture
While outsourcing of functions among LDCs in Ontario has been common for many years, it has
typically been limited to tree trimming, meter reading or some line constriction work. More recently,
larger utilities have been moving to outsource back office functions of customer service, billing, IT,
HR and finance. Outsourcing allows the utility to offload some of the operational risk associated with
these functions through a contractual arrangement that provides more certain costs for these services.
Some of the more notable outsourcing agreements in Canada include Cap Gemini / Hydro One and
the recently formed Accenture Business Services (ABS), whose clients include Enbridge, BC Gas,
Centrica, BC Hydro, and Enmax. Collectively, these companies serve over 5 million customers.
Accenture Business Services currently offers services for IT, customer service (meter reading, billing,
call centre, credit & collections), human resources, and financial support. In theory, outsourcing
allows each party to focus on what they do best — delivering energy for a utility versus customer
service for the service provider. Any economies of scale or scope that the service provider captures
are shared with the client utility in the from of reduced costs. The magnitude of these savings depend
on a number of things, including the number of customers involved, the length of the contract, the
presence of employment guarantees and the relative efficiency of operation at contract
commencement.
Why Consider Outsourcing?
• Some operating risk is passed on to the service provider;
• Should reduce costs in the long run versus providing service in-house;
Concerns
23
COUNCIL JUNE 22 2004
NAVIGANT
CONSULTING
• May limit the shareholder's ability to merge or sell the utility with outsourcing agreements
in place;
4 CONCLUSIONS AND RECOMMENDATIONS
Given the current and anticipated future operating environment for electric distribution utilities in
Ontario, operating flexibility will be the key to success. Utilities will need to be able to respond to
continuing cost pressures from PBR while maintaining or improving service and reliability levels. In
this environment, the most attractive strategic option is amalgamation, given that it:
1. Provides operating flexibility but does not preclude a strategic change of direction toward
another opportunity (e.g future sale);
2. Has the potential to increase value for the shareholder;
3. Would likely lead to lower rates for ratepayers when compared to the stand alone option;
4. Would retain at least some control over the utility for the municipal shareholder;
5. Presents minimal risk to shareholders and ratepayers.
Amalgamation presents a low risk, low cost opportunity that is even more attractive under the current
transfer tax waiver period set to expire March 28, 2005. Therefore, in Navigant Consulting's opinion,
it would seem a prudent course of action for the management of Newmarket Hydro and Aurora Hydro
to continue discussions and due diligence toward a possible amalgamation of the two utilities.
24
COUNCIL JUNE 22 2004
Borealis Hydro Electric Holdings Inc. Page 1
REPORT #04-07-01
TO:
Board of Directors
FROM:
John Sanderson
President and CEO
DATE:
June 14, 2004
SUBJECT.
Aurora Hydro / Newmarket Hydro Merger
Recommendation
THAT the Board endorse the Joint Utility Executive Team Amalgamation
Assessment Report and recommend to the Shareholder to proceed with the next
steps of the merger discussions with the Town of Newmarket.
Background
At the March 2, 2004 Council meeting, Council endorsed the principle of
amalgamation between Aurora Hydro and Newmarket Hydro in accordance with
the Navigant report, and instructed staff to continue to investigate the benefits of
merging the operations of the two utilities.
A Joint Utility Executive Team was struck comprised of the Presidents, Chief
Financial Officers, the Director of Engineering and Operations for Aurora Hydro
and the Chief Operating Officer of Newmarket Hydro. The Team also included at
least one representative from Navigant Consulting in attendance at Team
meetings. The respective Town CAO's were provided information as available to
ensure their participation in the process.
The Team examined a "stand alone" scenario for each utility and a "merged"
scenario, and how these scenarios were forecasted to perform with respect to
future revenues, expenditures and investment in capital structures.
The report reveals the financial positions and the other significant benefits that
could be achieved by a merger.
Also included in the report is a review by Navigant Consulting, which supports
the principles and methodologies used, as well as supporting the forecasted
savings as "realistic and achievable".
25
COUNCIL JUNE 22 2004
Borealis Hydro Electric Holdings Inc. Page 2
REPORT #04-07-01
Comments
The earlier Navigant Report was the first step in the merger process. The
Amalgamation Assessment Report (the Report) represents stage two of the
process, being a financial review of the proposed merger in order to confirm that
financial advantages exist prior to undertaking any further deliberations between
the shareholders. Step three would be deliberations between the respective
shareholders to establish Shareholder and Amalgamation Agreements.
Newmarket Hydro has presented the Report to its Board. Their Board endorsed
the recommendation and subsequently presented the Report to their
Shareholder. The Town of Newmarket has endorsed proceeding to the next step
of the merger process.
The Report
The Report presents a conservative cost savings and cost avoidance that relate
to a merger of the two utility operations. While this analysis was able to identify
$800,000 in cost savings through incremental savings and future avoided
operating costs after a transition period, the report also identifies an additional
$600,000 of future avoided capital costs over the four year forecast. There were
no apparent financial risks.
In addition to the financial benefits, there are a number of additional issues that a
merged utility would be able to benefit from.
1. A merged utility would be able to integrate their distribution systems to
allow for a reduction in system losses. This translates to a lower cost of
power and should result in a decrease to the customer's energy bill.
2. A merged utility would have enhanced distribution system reliability as a
result of increasing the availability of tie points between the total number
of supply points for the two utilities. This would result in a decrease in the
time required to restore power in the event of an outage or equipment
failure, in turn reducing outage minutes to customers. It would also be of
benefit in the event of a loss of a transformer at Hydro One's transformer
station.
3. A merged utility would be better able to concentrate and specialize staff
resources on industry issues and in response to challenges of continued
industry restructuring. As well, being larger would allow better opportunity
to participate and influence the electrical distribution industry.
M-
COUNCIL JUNE 22 2004
Borealis Hydro Electric Holdings Inc. Page 3
REPORT #04-07-01
4. A merged utility would be in a better position to meet the performance
based rate (PBR) requirements as savings would be realized through
future staff attrition. The OEB will continue to force LDC's to reduce costs
to customers through performance based rates.
5. A merged utility done prior to any forced merger would likely have
advantages as it is generally perceived that it is more beneficial to the
Shareholders and customers to be in charge of a merger than have it
mandated through regulation. Prior to electrical industry restructuring
there were approximately 320 local distribution companies (LDC's) in
Ontario. Currently there are approximately 90 LDC's and it is generally
anticipated that the Government and OEB will mandate efficiencies in the
distribution sector through a further reduction of the number of local
utilities.
With respect to rates, it is difficult at best to forecast specific distribution rate
impacts as a result of a merger given the current state of the Ontario Energy
Board's (OEB) position on rates in general. Two major factors affecting rates are:
• A Cost Allocation Study, as directed by the OEB, will be used to
determine the cost to service specific classes of customers in order to
eliminate cross subsidies between classes. This information will be used
to determine future rates.
• Rebasing of the rates, as deemed by the OEB, will be conducted to take
into consideration additional capital infrastructure that has been put in
place since the start of the electrical industry restructuring and initial 1999
rate base. This will allow the utility to capture the deemed rate of return on
the new installed plant.
It is anticipated that the merged utility would not harmonize rates until such time
as the cost allocation study and rebasing exercise has been completed.
Therefore the impact of rates harmonization is difficult to predict given the
regulatory uncertainty, however, a larger utility would be better positioned to
address rates issues softening impacts to customers.
The Joint Utility Team recognizes that the Report does not specifically address
any risks associated with the merger. It is the Team's opinion that:
• some of these risks are essentially challenges that need to be met to
have the merger transpire, such as union issues, relocation etc.
• the risks of not merging are the converse of the other benefits stated
above, namely:
o higher losses
o lower overall reliability
27
COUNCIL JUNE 22 2004
Borealis Hydro Electric Holdings Inc. Page 4
REPORT #04-07-01
o less influence in the electrical industry
o greater difficulty in meeting PBR
o being forced to merge
Attached to this report is a memo from Navigant Consulting. Their memo
restates some of the information noted above, outlines concerns related to
shareholder control, as well as provides commentary on value impact.
There are a number of issues that will need the consideration of the
Shareholders' should a merger of the two utilities be endorsed. These issues
have not been covered in detail within Report other than noting them under the
heading of "The Way Forward".
Should the Shareholder endorse proceeding to the next step in the merger
process between Aurora Hydro and Newmarket Hydro, an Amalgamation
Agreement, Shareholder Agreement and any other special arrangements
included therein would need to be worked out between the Shareholders.
Given that an application for the merger must be submitted to the OEB prior to
March 28, 2005, it would be anticipated the Shareholder deliberations would
need to commence in the fall of 2004 and be completed early in 2005.
Effect on Finance
The attached report discloses the financial position of the stand alone scenarios,
provides commentary on the potential benefits of a merger, and identifies
avoided costs.
Conclusion
That the Shareholder receive, for information and discussion, the report titled
Amalgamation Assessment; and
That the Shareholder endorse the commitment to the next step of the process,
which is to continue the discussions with the Town of Newmarket, the items
stated in the Way Forward.
Link to Strategic Plan
This item relates to:
• Objective I: Managing our Core Business for profitability
28
COU N 7r. 2004
r. ON s u i r I ,,N c Board Meeting Follow-up on Amalgamation Assessment
Amalgamation Context
Performance Based Regulation
Aurora Hydro operates under performance based regulation (PBR) that uses financial incentives
with appropriate checks and balances to influence the behavior of regulated utilities. The
expectation is that PBR will foster an atmosphere where utilities try to lower cost and improve
service to customers while providing an acceptable return to their shareholders. PBR has and will
continue to exert considerable pressure on utilities in the province of Ontario to find innovative
ways to reduce operating costs.
Although little information is available on the second generation PBR plan (PBR 2), it is
reasonable to assume that it will continue to put pressure on utilities to reduce controllable
expenses further. In fact, the Ontario Energy Board (OEB) is currently reviewing ways to
promote further efficiencies in the distribution sector, and the ultimate design of PBR 2 may be
the lever to fulfill this objective. In fact, Navigant Consulting expects that it will be difficult for
utilities to achieve the anticipated mandated efficiency improvements over the long term, without
considerable restructuring (outsourcing), strategic alliances or mergers to seize upon economics
of scale.
Customer Rates
Although existing commercial customer rates for Aurora Hydro are lower than Newmarket
Hydro, there are a number of pending regulatory issues that may significantly reduce or eliminate
this difference. The following regulatory changes are anticipated to be implemented prior to any
potential rate harmonization between Aurora Hydro and Newmarket Hydro, if the two utilities
were to merge;
• In preparation for the implementation of PBR 2, the OEB is requiring that all distributors
conduct a cost allocation study that will identify which customers are driving utility costs.
Customer rates will then be adjusted to more accurately reflect the true cost to serve a
specific customer class.
• Under the first generation PBR scheme, customer rates were adjusted upward to reflect a
market based return on debt and equity assuming a minimum zero return starting point
for equity. Those utilities that were in a net loss position, such as Aurora Hydro, were
not allowed to recover this loss in their market based rate increase. Ratepayers benefited
through slightly lower rates at the expense of shareholders who effectively were under
earning on their equity investment. Prior to commencing PBR 2, the OEB will require all
distribution utilities to undergo rebasing, whereby utilities will be required to submit
operating cost and asset (rate base) information. Customer rates are then "rebased" to
reflect the new costs associated with providing service. Although not guaranteed, the
expectation is that utilities such as Aurora Hydro that were penalized under the first
market based rate adjustment will be allowed to adjust their rates to earn a full equity
return on their assets,
Impending regulatory developments may result in some customer class rates increasing while
other classes decrease. The end result should be that discrepancies in rates between utilities are
minimized, which should mitigate the impact of harmonizing rates during a merger. It will be
important to educate ratepayers on the regulatory changes that are driving rate changes, and that
in the long term, efficiency gains from merging should provide for rates that are lower than they
would otherwise be as separate utilities.
Review of Amalgamation Assessment Report
29
1
COUNC I L ,../lJ i1 '2,�_ 2004
\ l C 0 i s u LT \Ih r; Board Meeting Follow-up on Amalgamation Assessment
Many of these impending changes may indeed have a financial impact that exceeds the projected
$800,000 in savings from merging Aurora Hydro and Newmarket Hydro. However, it is
important to note that regardless of the impact of PBR 2, cost allocation or rebasing, the merged
utilities would still be $800,000 ahead of where they would otherwise be if the utilities did not
merge. Either shareholders have benefited from the increased return on their investment, or if the
OEB has reduced rates under PBR 2 to reflect lower operating costs, then the ratepayers have
benefited.
Qualitative Benefits to Amalgamation
Service and Reliability Issues
Under the second -generation PBR plan, the OEB is expected to tighten customer service and
reliability requirements and implement meaningful penalties. Any degradation in service or
reliability is likely to result in reduced payments to shareholders because of the financial penalties
incurred, thus providing a significant incentive to ensure that standards are met. In addition,
smaller utilities may require proportionately more capital investment to ensure that service and
reliability levels are maintained or improved to acceptable standards. Given their increased
access to capital and operating flexibility, it should be easier for larger utilities to implement cost
effective measures that improve service and reliability and still maintain expected returns for
shareholders.
Under the contemplated merger, management expects that existing service and reliability for
Aurora Hydro should improve. Specifically, management expects that distribution system
reliability would be enhanced as a result of increasing the availability of tie points between the
total number of supply points for the two utilities. This would result in a decrease in the time
required to restore power in the event of an outage or equipment failure, in turn reducing outage
minutes to customers, It would also be of benefit in the event of a loss of a transformer at Hydro
One's transformer station.
Increased Debt Financing for Larger Utilities
The larger merged utility will be allowed to use increased debt financing (and reduced equity)
under Ontario Energy Board (OEB) guidelines once it reaches $100 million in assets (also called
rate base). One of the factors that the OEB considers when adjusting customer rates is the
utility's cost of financing its rate base. It should be noted that since debt is a cheaper source of
financing than equity, customer rates for the merged utility should decline due to the lower
overall cost to finance its rate base. Increased debt financing will also allow the shareholders to
increase their promissory note by approximately $5 million (for the combined utility), and receive
increased interest payments of approximately $350,000 annually under current allowed debt rates.
Alternatively, external financing could be used and the $5 million could be dividended to
shareholders.
Comment on Shareholder Control
The amount of control that the Town of Aurora has over a merged utility would be determined
during negotiation over the shareholder agreement. Although Aurora Hydro would represent less
than half of the total assets or net income of the combined utility, it is not uncommon for
shareholder agreements to have special provisions on certain issues important to minority
shareholders. It is also important to realize that entering into a merger does not preclude other
future shareholder decisions, such as selling the asset. Shareholder agreements can allow for one
owner to dispose of its interest through a predetermined process agreed to by both parties at the
outset.
Revievv of,9malgamanon Assessment Report
30
COUN(f 1�\ �Wt,2,2T 2004
BoardMeetin
VV TT FA
[ OII N 5 u i t�l�i'I IN(, g Follow-up on Amalgamation Assessment
Notwithstanding these comments on control, it is also important to realize that shareholder
control is not what it used to be. Historically, municipalities were able to influence the frequency
and magnitude of customer rate changes, and the levels of service and reliability established by
the utility. However, under PBR, a utility's rates, service and reliability are driven by regulations
established and enforced by the Ontario Energy Board. The level of municipal or shareholder
influence over these factors has been significantly reduced.
Comment on Value Impact
The value of a utility such as Aurora Hydro is driven by cash flow. Management estimates that a
merger should produce operating savings of approximately $800,000. Using a discounted cash
flow approach, Navigant Consulting estimates that the amalgamated utility should be worth 6%
morel than the combined value of separate utilities. This is a conservative estimate that reflects
the phase -in of savings through 2008 (as tabled in managements' report) and does not consider
other potential cash flow savings such as reduced capital expenditures.
Conclusion
Navigant Consulting believes that a merger of Aurora Hydro and Newmarket Hydro will be
beneficial to the communities, ratepayers and municipal shareholders of both utilities, and
concurs with management's recommendation to proceed with the next steps in merger
discussions.
Since all of the increased value will flow to equity holders, the increase in value from an equity holder's
perspective is 12%. This increased value is monetized if and when the shareholder(s) decide to sell their
investment.
Review ofAmalgamation Assessment Report
31
COUNCIL )UNE 22 2004
A aerorcr :.
11Yd o AURORAS Wfa CONNECTIONS Lmny)
NEW MA T
a0.
Aurora Hydro Connections Ltd.
Newmarket Hydro Ltd.
Amalgamation Assessment
Prepared by:
The Joint Utility Executive Team:
Aurora Hydro Connections Ltd.
J. Sanderson, President & CEO
T. Barrett, Chief Financial Officer
I. Klajman, Director of Engineering & Operations
Newmarket Hydro Ltd.
P. Ferguson, President
I. Clinton, Chief Financial Officer
G. Young, Chief Operating Officer
32
COUNCIL DUNE 22 2004
Table of Contents
Executive Summary
Introduction
Scope of Review
Status Quo Option
Newmarket Hydro Ltd,
Aurora Hydro Connections Ltd.
Merged Aurora — Newmarket Utility
Incremental Savings from Current Operations
Future Avoided operating Costs
Incremental Additional Costs
Projected Merger Results.
One -Time Transition Costs
Other Significant Benefits
Target Organization
Impact of Savings
Executive Staff Recommendation
The Way Forward
Appendix A: Newmarket Hydro 5-Year Forecasts
Appendix B: Aurora Hydro 5-Year Forecasts
Appendix C: Assumption of Incremental Savings and Additional Costs
Appendix D: Local Distribution Rates
2
3
3
4
5
6
6
6
7
7
7
8
9,
9
10
10
12
19
26
31
33
CKd9►Mam0N1q►1=SaQ WA01622!
r
Pursuant to a request from The Corporation of the Town of Aurora and the Town of
Newmarket to investigate synergies and the financial benefits of merging Aurora Hydro
Connections Ltd. (AHCL) with Newmarket Hydro Limited (NHL), an examination of a
merged local distribution company was undertaken by the executive staff of both utilities.
Navigant Consulting then subjected the results to a peer review, Both NHL and AHCL
specialize in providing distribution of electricity to their respective local municipality.
With 43 full time and 4 contract employees, and 25,000 customers, NHL is the thirtieth
largest utility in the province and is 100% owned by the municipality.
AHCL has 26 full time and 7 contract employees, 15,000 customers, and is the forty-third
largest utility in the province. It is also 100% owned by its municipality.
The method used to determine financial synergies involved a two -stage process. The first
stage examined a "stand alone' or status quo scenario for each utility. The expected
future revenue and expenditure streams, as well as investment in capital structure were
evaluated. The second stage involved an analysis of workflows and expenditures to
determine redundant or overlapping costs. Future areas of overlap were identified through
a review of the five-year operating and capital budgets. They were then quantified and
classified as avoided costs. It should be noted that these savings and avoided costs were
calculated without any full time staff layoffs.
The net annual operating savings are primarily the result of moving to one service center
and are valued at approximately $606,500. Other benefits include avoiding duplication of
significant capital expenditures and future increases in operating costs of approximately
, $208,000 annually.
Although not quantified financially, a merged utility would be able to integrate their
distribution systems to provide higher reliability and lower costs through reduced system
losses. NHL's system losses are 3.65% compared to AHCL's 5.06%. While there are
valid reasons for this difference, a merged utility may be able to realize at least a 1%
decrease in losses, directly lowering the customer's total bill by the same amount. It would
also be able to realize savings through future staff attrition, particularly in the administrative
functions.
The executive staff of each utility recommends proceeding with a merger. A larger utility
would be better able to focus and specialize its resources on present and future
challenges. Its size and combined financial resources would give the larger organization a
better opportunity to influence and to participate in the electrical distribution industry.
34
..COUNCIL JUNE 22 2004
This report was commissioned at the request of the Corporations of the Town of Aurora
and the Town of Newmarket. Both expressed an interest to examine the benefits of
merging their local distribution companies to ensure that customer and shareholder
interests will continue to be well served. In determining the synergies, the executive staff
examined the future revenue and expense streams for the next five years of their own
individual utility based on past deregulated operating results, and developed a projection
of the future operating environment. From this process, an understanding of the areas of
duplication and synergies were identified and financial values were allocated to them.
This report discloses the financial position of the stand alone scenarios for each utility,
provides commentary on the potential benefits of a merger, and identifies avoided costs.
The current environment in which both Newmarket Hydro Ltd. (NHL) and Aurora Hydro
Connections Ltd. (AHCL) operate is in a continual state of regulatory and legislative flux.
This uncertainty can be better managed through a merger of the two utilities. An
amalgamation allows for a reduction of expenses, a focusing and specialization of
employees, and flexibility to meet an ever -changing business environment. Furthermore,
a combined utility will result in higher dividend payments or, in the alternative, a greater
ability to absorb consumer rate Increase impacts, or both.
A decision to merge must be made and filed with the Ontario Energy Board (the "OEB") by
March 2005 to avoid a 33% transfer tax being imposed on the transfer of assets. At the
time of writing this report, the Provincial Government had made no decision on the
extension of this transfer tax exemption.
In carrying out the review, management has relied upon the following information:
• The Electricity Act, 1998
• Bill 210
• Provincial Government Electricity Conservation plan
2002 Newmarket Hydro Ltd. Audited Financial statements
• 2003 Newmarket Hydro Ltd. Audited Financial Statements
• 2002 Aurora Hydro Connections Ltd. Audited Financial Statements.
• Five year Capital and Operating budgets 2004-2008 from Newmarket Hydro Ltd.
• Five year Capital and Operating budgets 2004-2008 from Aurora Hydro Connections
Ltd.
• Distribution Rates for Newmarket Hydro Ltd. and Aurora Hydro Connections Ltd. as
approved by the OEB.
• Newmarket Hydro Ltd.'s Interim Rate submission for recovery of Regulatory Assets
• Aurora's Hydro Connections Ltd.'s Interim Rate submission for recovery of Regulatory
Assets
• Canadian Income Tax Act
36
COUNCIL JUNE 22 2004
Newmarket Hydro Ltd.
NHL's five-year operating and capital forecasts are attached in Appendix A. The forecasts
call for NHL to meet its targets of 7.25% interest payment on a shareholder promissory
note and 5.6% return on equity. Currently, approved OEB rates allow for payment of
4.83% interest on the promissory note. The 6.6% return on equity is forecasted to rise to
9.88% in 2005. The incremental increase in 2005 will be dedicated to demand side
management (DSM) in accordance with the Provincial Government's direction. Thereafter
it will increase dividends to the Shareholder.
NHL's five-year projections included the following significant assumptions:
• Power consumption in Newmarket is expected to increase by 3% per annum.
• There will be a decrease in overall consumption as the province Initiates DSM programs
and continues to increase the price of electricity. Although this percentage is difficult to
approximate, a conservative approach would indicate that overall demand should
decrease. As a result, overall increase in revenues has been calculated at 50% of the
expected 3% or 1.5%.
• Bank interest revenue is projected to increase at a rate of 1% per annum compared to
3% in past years due to lower interest rates and the refunding of customer deposits in
accordance with OEB Customer Deposit Policy. This policy will result in lower bank
balances on which interest revenue Is earned.
• Expenditures have been increased by the increase in Ontario Municipal Employees
Retirement Plan ("OMERS") contributions, plus an inflationary amount of 3% in each of
2004 and 2005 and by 4% thereafter in accordance with Conference Board of Canada's
projection, with the following exceptions:
o Depreciation expense will receive an adjustment of $150,000 in 2005 due to an
expected capital investment in DSM.
o The following positions have been included in the forecast:
In 2005:
Health and Safety Officer
• Regulatory Compliance Officer
4 One retirement— no replacement
• Technician
Clerk
4 Conversion of 3 contract positions to permanent staff
0 Purchasing/Risk Manager
The total cost of these positions is $350,000. The technician and clerk positions
will be funded from the retirement. This will be a complete offset. Also included is
an additional amount required to fund a pay equity increase, expected when a
planned review is completed in 2005.
0
36
COUNCIL JUNE 22 2004
Interest expense is expected to increase by only $10,000 per year as interest
expense on deposits will increase by a nominal amount due to the new OEB
Customer Deposit Policy. Deposits will be reduced by over $750,000, reducing
the interest paid on them. The required interest paid to consumers on deposits
will increase because of the same DEB decision. Overall, the account will
increase by $10,000 per year.
• Dividend Policy will follow the original filing of the Market Based Rate of Return in the
original market opening rate submission to the OEB and increase to $2,400,000 in
2006.
The projection does not consider a possible rebasing of the utility's assets, costs and rates
by the OEB in the future.
Aurora Hydro Connections Ltd.
AHCL's five year operating and capital forecast are enclosed in Appendix B.
Significant assumptions made in preparing AHCL's five-year projection are as follows:
• Residential consumption is expected to increase by 2% per annum.
• Commercial consumption is expected to Increase by 1 % per annum.
• In 2006-2007 the final phase in of the market -based rate of return will be
implemented.
• Other revenues are expected to increase by 1.7% per annum:
• Expenditures are forecasted to increase by 3% per annum.
• The following positions are forecast:
o In 2005:
• Health and Safety Officer
Meter Technician
• Retail Settlement Clerk
Conversion of 4 contract positions to permanent staff
The total cost of these positions is approximately $190,000,
o In 2008:
• Customer service representative at a cost of approximately $48,000.
AHCL has consistently made its interest payment on its promissory note and the forecasts
reflect AHCL continuing to pay 7,25% interest on the promissory note. At currently
approved OEB rates, they are only required to pay 4.83% interest.
The incremental rate increase in 2005 will be dedicated to Demand Side Management
(DSM) for one year in accordance with the Provincial Government's direction. Thereafter
it will increase dividends to the Shareholder. It should be noted that currently AHCL is
paying more than is required in regards to the promissory note interest.
The projection does not consider a possible rebasing of the utility's assets, costs and rates
by the OEB in the future.
37
COUNCIL JUNE 22 2004
The status quo options were analyzed to determine areas of duplication in revenues and
expenditures. The results of this analysis are summarized under the categories of:
Incremental savings from current operations
Future avoided costs
Incremental additional costs
Projected merger results
One-time transition costs; and
Other significant benefits
A detailed discussion of the savings and expenses identified is contained in Appendix C.
Incremental Savings from Current Operations
(i)
Premise Location
$250,000
(ii)
Contract Staff savings
$257,000
(ill)
Meter Reading
$120,000
(iv)
Board costs
$100,000
(v)
Consultant fees
$70,000
(vi).
Legal Fees
$30,000
(vii)
Operational savings
$20,000
(viii)
Auditfee
$10,000
(ix)
Computersupport
$7,500
(x)
General Admin Contract Labour
$7,000
$871,500
Future Avoided Operating Costs
In addition to the savings in current operations, there are also avoided costs in the future.
Both utilities are forecasting health and safety positions and the combined utility would
only need one. Responding to the ever-increasing regulatory burden of the OEB and
legislative changes, NHL is planning to add a regulatory compliance position and AHCL is
forecasting an increase in regulatory consulting hours allowing for combined savings. The
AHCL budgeted Retail Settlement Clerk and Customer Service Clerk will also not be
needed, as a merged utility will have sufficient resources to provide customer support.
This merger will also make the contract staff conversions to permanent staff unnecessary.
These avoided operating costs will be $160,000 in 2005 and $48,000 in 2008 for a total of
$208,000 annually. It should be noted that these avoided costs are not yet real savings as
the positions are budgeted for, but costs are not currently being incurred.
38
i COUNCIL JUNE 22 2004
Incremental Additional Costs
In a merger, there will be additional costs that will partially offset any savings realized
These include:
(i) Payroll Harmonization
$103,000
(ii) Taxes
$70,000
(III) Management Salaries
$50,000
(iv) Increased Premise Costs
$30,000
(v) Records Management
$12,000
$265,000
Details.of these costs are given in Appendix C.
Projected Merger Results
The combination of current cost savings, future avoided costs and additional costs result in
a.net operating benefit under a merger.
YEAR 2005 2006 2007
Incremental current cast savings
Incremental additional costs
11
Net annual benefit
(before transitional costs)
One time transitional costs
2005 avoided costs
2008 avoided costs
Net annual benefit
$ 871,500 $871,500 $ 871,500
($265,000) ($265,000) ($265,000)
$606,500
($380,000)
$160,000
0
$386,500
$606,500
0
$160,000
0
$766,500
$606,500
0
$160,000
0
$766,500
One -Time Transition Costs
There are also one-time transition costs in a merger that need to be considered:
• Converging the financial billing systems of each utility into one at an estimated cost of
$100,000.
• Increased facilities at 590 Steven Court, estimated to be $250,000, to accommodate
AHCL staff and equipment.
7
2008
$ 871,500
($265,000)
$606,500
0
$160,000
$ 48,000
$814,500
39
<Ko1vPMEIMMEMPP1ME WAPAWAN 1
• Additional computer application licenses amounting to approximately $20,000.
• Archiving AHCL records. This would have a one-time fee of $20,000.
• Conversion period audits of approximately $70,000 as the merger may not occur at
yearend.
• Training costs for staff estimated at $20,000.
• Operation transitional costs estimated at $50,000.
To offset these costs there will be revenues realized by selling duplicate equipment that
would be surplus in a merger. The trade in value of the surplus equipment is
approximately $150,000.
Other Significant Benefits:
There are numerous benefits that cannot be easily quantified, but will be realized over
time. These include:
• A larger utility will be more competitive and hold shareholder value in the long run. As
discussions continue both at.the provincialgovernmentand the OEB on the most
efficient size of distributors, it is expected that mergers will be encouraged. through
more punitive performance based. ratemaking.
• A combined utility will. be better able to resist future rate increases, lessening their
impact on customers. A Comparison of Rates is shown in Appendix D.
• There is a positive cash flow effect realized from reducing duplicate items in inventory
and capital equipment. As duplication is eliminated, the cash flow of the combined
utility will increase. Correspondingly, future significant inventory and capital
purchases may be reduced or eliminated. Significant capital items and costs that a
combined utility could avoid are:
- New Double Bucket Truck $300,000
-Additional Transformer Inventory $200,000
- New Phone System $100,000
$600,000
These capital items affect the cash flow of the utility and have only a marginal impact
on the operating results through depreciation.
• Improved distribution system reliability and flexibility in operation.
• The combined utility would be approaching an asset base of $100,000,000. With an
asset base of $100,000,000, the regulated debt equity spilt moves from 50/50 to
55/45. This allows the company to increase the amounts of the Shareholder
promissory notes.
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COUNCIL JUNE 22 2004
• A larger utility would be better able to leverage significant debt financing for future
capital projects when necessary.
• Additional synergies delivered from bulk purchase of material and services.
• Coordination of line crews, equipment and long range planning for better efficiencies.
• Possibility of one on call unit after hours.
• Combining meter reading routes to achieve the most economic meter reading costs.
Target Organization and Staffing Levels
The executive staffs of AHCL and NHL have assumed that merger savings and benefits
would not be at the expense of regular full time staff. Both utilities are currently operating
with minimal staff. The merged customer per employee ratio is approximately 600:1.
Based on 2003 industry benchmarks, this would place the merged utility in the top five in
Ontario for this measure.
A target executive level organization for a merged utility, as agreed to by both executive
teams, is as follows:
President
Executive
Assistant
Chief Human Executive
Financial Resources Vice
, Officer I I Officer President
- Director of Finance I Director of Operations
- Director of Engineering
AHCL executive staff would assume the positions of Executive Vice President, Director of
Engineering and Director of Finance. NHL executive staff would fill the positions of
President, Chief Financial Officer, Human ResOL!rces Officer', and Director of Operations.
Impact of Savings
The projected annual savings are estimated to be $814,500 without a reduction in regular
staff. Greater savings will occur as time progresses and growth continues in both
communities.
' AHCL does not currently have this position in the organization.
0
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COUNCIL JUNE 22 2004
The savings can be used to increase dividend payments to the Shareholders, provide
greater equity and working funds to the new corporation, limit consumer exposure to future
rate increases, or a combination of all.
The average residential consumers' local distribution charge for using a 1000 kWh per
month is $25.01 or $300 per year in Newmarket and $25.75 per month or $309 per year in
Aurora. If, in 2008, the new corporation retains 50 % of the $814,500 savings for
infrastructure, then $407,250 would be available to either the Shareholder as an increase
in dividend or to the consumer as a reduction in rates. If it is decided to provide residential
rate relief, then the savings translate into an avoided rate increase of as much as $10 per
customer per year, or about 3% of the local distribution charge.
Our conclusion is to proceed. A larger utility would be better able to focus and specialize
its resources on the challenges at hand. Its size and combined financial resources would
give the larger organization a better opportunity to influence, and to participate in the
electrical distribution industry.
Executive staff forecasts a conservative potential benefit of $766,500 on an annual basis
after the first full year of amalgamation rising to $814,500 in 2008.
This merger and combined savings will help provide stability to customers, preservation of
assets to the Shareholder, and will add strategic value and leadership within the electrical
distribution industry.
The result is a combination of two great and dedicated utilities serving a common
geographical area and purpose. The combined savings could be partially internalized
through additional capital monies invested in infrastructure with the remainder flowed back
to the communities they serve. Truly, this is a win -win scenario.
Should a merger of the two utilities be endorsed, then final arrangements must be made
and filed with the Ontario Energy Board by March 28, 2005 to take advantage of the
current transfer tax holiday on municipally owned distribution assets. Should the Towns of
Aurora and Newmarket wish to proceed from this point, there are a number of actions
required, including:
• Establishment of a Shareholder Agreement detailing:
o Shareholdings
o Board of Directors
o Appointment of Auditors and financial reporting
o Shareholder approval thresholds
o Director approval thresholds
o Objectives and Guiding Principles for the company
o Share transfer, issuance and pledging
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COUNCIL JUNE 22 2004
• Establishment of an Amalgamation Agreement setting out:
o Mechanics of amalgamation under the Ontario Business Corporations Act
o Valuation of the companies and Shareholder consideration for value
o Conditions precedent, such as: _
• Representations and warranties
• Due diligence
o Any required covenants
• Special arrangements:
o Shareholder guarantees respecting current dividend and promissory note
interest payments
o Allocation of initial savings and efficiencies
o Disposition of any excess working funds
o Potential one-time dividend payments in recognition of revenues realized
through OEB retroactive rate adjustments
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COUNCIL JUNE 22 2004
Appendix A
Newmarket Hydro Ltd.
5-Year Operating and Capital Forecast
The following is a summary of a five-year capital and operating forecast for Newmarket Hydro Ltd.
(NHL) as a standalone utility.
The attached forecasts includes capital works projects such as underground rebuilds, transformer
station 441<V line integration, regional work relocations, customer connections, subdivisions as well as
• Staffing for Operations and Engineering
• Capital Fleet costs
• Capital SCADA costs
• Other Capital Project costs
• Other increases in Operating costs
STAFFING FOR OPERATIONS & ENGINEERING
Staffing for NHL would increase over the next five years in response to growing regulatory
requirements. It is anticipated that four new positions would be created: a safety. officer (management:
position), a meter technician (3-year contract), a technologist/technician, and a'technical clerk. The
addition of Regulatory Affairs, and Purchasing Manager positions would also relieve some of the.
responsibilities now covered under Operations .& Engineering..
Health & Safety Officer
Some of the duties that a Health & Safety Officer would perform are currently done within the lines
section. Not all areas are receiving adequate attention.
The Health & Safety Officer would:
• Ensure that appropriate practices, policies and procedures are developed and maintained in order
for the company to fully comply with all safety related regulations
• provide safety training
• develop safety programs In accordance with appropriate departments
• chair safety meetings
• investigate and document incidents and accidents and recommend course of action
• liaise with government agencies
• internal safety audits
This position should initially be included in the 2005 budget and included in all years thereafter. Allow
for $60,000 (plus approximately 30% burden to give a total of $78k per year plus annual escalation) for
the Safety Officer's position. Consideration could also be given for combining this with a Regulatory
position Affairs depending on the individual's background qualifications.
Regulatory Affairs
The electricity industry is in a constant state of change. It takes considerable effort to stay current with
all the initiatives of the OEB, the IMO, ESA, MOL, various Ministries, and legislation/regulations such as
EA, OEB Act, TSSA, etc. This work is spread around the NHL but is primarily covered by four
management individuals.
12
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COUNCIL JUNE 22 2004
Currently, the responsibility for regulatory affairs is scattered throughout the utility. It would be beneficial
to have a regulatory affairs individual responsible for:
• keeping current with various legislation and regulations affecting NHL
• summarizing and presenting the information to the relevant departments
• coordinating and /or preparing the necessary regulatory filings
• leading the strategy discussions to develop the utility's policies and strategies for the
organization and coordinating implementation across departments when necessary
• Represent NHL and ensure that NHL's position on issues to regulators, industry stakeholders
are heard and understood
• Internal compliance audits
A position dedicated to regulatory affairs would allow an individual to focus on regulatory issues and
free up other resources to do their core work, as well as assist others in channeling overlapping areas
of concern.
It may be difficult to justify a full-time position for NHL at this time but the regulatory environment for the
electricity distribution sector is expected to increase especially anticipating PBR implementation in .
2006, hence plans to hire for this position within 5 years, (likely to be in 2006). Budget for a salary
range of $60,000 — 80,000 plus burdens depending on background.
Another consideration could be to cover safety as well as regulatory affairs if an individual with the right
combination background is available,
Control Room
The new Work Protection Code requires an additional layer of rigor that currently translates into
additional work procedures and documentation. Currently two technicians share these: duties in
addition to engineering & planning work.
NHL's technicians cover work that typically is done in a control room including:
• generate switching orders; coordinate switching and orders to operate
• coordinate all operating functions (hold -offs, protection, device operation)
provide constant contact to a central source for all crews and provides for a contact who is qualified
in the new work protection code.
• provide for a dedicated person for operation of the distribution system as its complexity and size
increases
• assist in ensuring the safety of crews by knowing the whereabouts and work environments due to
a larger number of working crews in the field.
• coordinate with supply authority (Hydro One system control) as single point of contact
• generate outage and trouble reports and provide Information for reliability statistics, system
planning, and possibly in the future, wholesale settlement
Implementation of new ESA regulations require more rigorous documentation and approvals for work
issued and inspected, as well as certification that standards are met. Formal work processes must be
developed for increased transparency and accountability in timelier manner, as various audits by
several different regulators increase. This increases pressure on our already burdened technicians
who currently cover a variety of responsibilities. It is recommended that another technician be added
in 2005.
Metering
Given the new provincial government initiatives in the electricity distribution sector, particularly DSM
and smart meters, it is conceivable that we may need to additional help in metering to charge out
13
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COUNCIL JUNE 22 2004
meters by 2007, Currently Measurement Canada requires existing meters to be reverified every 12
years but the new "smart' meters must be reverified twice as often, likely every 6 years. Hence an
additional meter technician position may be required from 2005 to 2008; however, since this likely is a
transitional position it may be best to hire on a 3-year contract. The current Five Year Capital Budget
Plan has already considered the addition of a metering technician in the Engineering and Operations
area in 2005.
Lines Staffing
The Purchasing Agent is expected to retire by 2005, No other retirements within the 5 year horizon are
anticipated.
Due to increasing purchasing and tendering requirements, and the importance placed on material
management, it is anticipated that a Purchasing and Risk Manager position be created and the
Purchasing Agent position declared obsolete.
5 YEAR CAPITAL BUDGET PROJECTION
The following table summarizes the capital budget for five years.
Table 1: 5-year Capital budget
Category
Year
2 004
2005
2006
2007
2008
Land
25,000
$0
$D
$0
$0
Leasehold Improvements
58,000
F;4
$43,000
$40,000
$40,000
$40,000
Stations
80,200
$505,200
$350,200
$350,200
$380,200
0/H Lines
1,352,200
$1,038,626
$1,316,126
$949,784
$2,718,784
U/G Lines
1,782,900
$1,725,016
$1,733,015
$1,306,003
$1,303,003
Distribution Transformers
665,500
$630,350
$598,850
$565,521
$515,521
Distrib0Equipment
877,000
$3,890,975
$3,887,975
$3,869,500
$297,500
Street
0
$0
$0
$0
$0
Office
22,000
$22,000
$22,000
$22,000
$22,000
Com
50,800
$40,800
$50,800
$50,800
$50,800
Com
59,000
$59,000
$59,000
$59,000
$59,000
Stores Equipment
0
$0
$0
$0
$0
Vehicles
9,D00
$350,000
$100,000
$377,000
$310,000
Tools
138,500
$113,500
$113,500
$113,500
$113,500
Sentinel Lights
0
$0
$0
$0
$0
S stem Su ervisa E ui mentL134
00,000
$105,000
$105,000
$35,000
$35,000
Total Capital Additions
6,060,100
$8,523,466
$8,376,466
$7,728,308
$5,845,308
Construction in Progress
0
$0
$0
$0
$0
ital Contributions
ENet
1,624,470
1,202,480
989,356
735,904
664,314
Ex enditures
4,435,630
$7,320,986
$7,387,110
$6,992,404
$5,180,994
FIT
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..COUNCIL JUNE 22 2004
Details on large expenditures such as vehicles are outlined below. It was assumed that DSM
programs to install "smart meters" at every residential customer at $500/installation, would need
to be completed by 2007.
Expansion of system to meet future needs including growth
New TS and 44kV feeders have been identified and funds were allocated accordingly in the budget.
These requirements were based on growth projections, which are shown in Table 2.
TABLE 2: GROWTH FORECAST
Year
Newmarket Forecasted
load MW
Newmarket Town
Population Forecast
Newmarket Hydro
Customer Growth
Forecast
2002
135.5
71,122
23,840
2003
137.4
73,015
24,555
2004
142.3
73,015
25,292
2005
147.2
73,015
26,051
2006
152.4
79,000
26,832
2007
157.8
80,539
27,637
2008
163.3
82,108
2009
169.0
83,707
2010
175.0
85,338
2011
181.1
87,000
29,000
2012
187.5
2013
194.0
2014
200.9
2015
207.9
2016
210.4
91,000
30,333
2017
212.5
2018
214.6
2019
216.8
2020
218.9
2021
221.1
31,667
2022
223.3
2023
225.6
2024
227.8
2025
230.1
2026
232.4
98,000
32,667
2027
234.7
2028 1
237.0
Capital Fleet Costs
The NHL lines department has forecasted the following vehicle replacement/refurbishment program
over the next 5. years.
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COUNCIL JUNE 22 2004
Additional to the costs listed, on average, annual maintenance cost is estimated to be $1,500 per
vehicle with the boom trucks having the most costly maintenance/year.
Table 3: NHL 5-year Vehicle Proiection
UNIT#
DETAIL
2004
2005
2006
2007
2008
20
2004 1/2 T
$32, 000
$40,000
80
2000 GMC 44
$190,000
100
2004 1 T
$50,000
110
2000 GMC mid size 4x4
$25,000
04
2004 GMC 4WD 3/4T
150
2000 GMC mid size 44
$25,000
280
1998 GMC 3/4 Ton
$50,000
40
2004 AWD
$32,000
130
2002 GMC Safari
$25,000
160
2001 Safari
$25,000
270
1997 Ford Cube Van
$65,000
30
1995 model 4900 boom/lift
50
1992 model 4900 55'
$300,000
70
1996 model 4900 45,
$250,000
140
2003 Sin le Bucket
260
2004 Double 65' refurbish
$140,000
310
1995 Sin le B
$170,000
120
2002 Ford F450 2T
$70,000
90
2003 Freightliner
220
1non Road Safet Trailer
230
1998 Pole Trailer Large
240
1990 Equipment Trailer
290
1994 Reel Trailer
Pole Trailer Small
300
1994 u/9 puller
electric forklift
ro ane forklift
water tank w/ um
TOTALS
I
$304,000
$350,000j
$75,000
$330,000
$290,000
CAPITAL SCADA COSTS
The SCADA Is used in NHL Distribution Stations and is about (10) ten years old but functional and
robust. It is anticipated that with time, it will become more difficult to support in terms of replacement
parts and ready communications. Replacement should be considered within 6 years or if the reliability
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COUNCIL DUNE 22 2004
of the system deteriorates due to lack of replacement parts, whichever comes first. Upgrades to allow
communication with new Hydro One protocol is budgeted for 2004.
MAINTENANCE & REPLACEMENT OF EXISTING ASSETS
An underground cable replacement program has been commenced in 2004 to replace cable that is
beyond 25 years old and that has experienced numerous faults in a particular area and vintage of
cable. Each year, $300,000 has been budgeted for this program.
On the overhead, there is a program to replace porcelain insulators on the 44kV distribution system
with polymer insulators. This program commenced in 2003 when reliability was compromised with 3
incidents in the first quarter, Each year, $100,000 is set aside to complete this project.
OTHER CAPITAL PROJECT COSTS
GIS & Databases
With technological advances, there are increasing expectations and requirements to have more timely
and accurate information available to management, staff, regulators, and customers for more
accountability as well as to make more informed and better decisions. Development of systems to
capture information as well as reporting information requires regular funding as part of doing business
in this millennium. Moreover, regulatory requirements necessitates more sophisticated systems be in
place for reporting, and auditing purposes e.g. OEB SQI reporting, ESA Audits, OES inspection
records. Maintenance of base maps requires $15,000 per annum. Development and maintenance of
databases, mapping, operating and work -order systems is estimated to cost another $20,000/year in
software licenses and hardware.
Major system P&C studies are in the order of $20,000 which should be done every 5 years.
Manage System Performance from Customer Perspective
NHL recently implemented an IVRS along with a new telephone system to Improve customer service.
The first stage concentrated an improving customer service in the Billing area. NHL Operations intends
to develop outbound calling for improved customer outage (planned and emergency) notification, as
well as to assist in the management of cable locate requests and street -lighting outage reports.
Power Transformer
Currently there are 13 distribution transformers in service at 10 Distribution Transformer Stations, with
another planned for Bogart Town area in 2004/5 at a cost of $625,000. NHL has a spare 44/13.8 kV
10MVA power transformer worth approximately $200,000 for emergency and reliability purposes.
Computers
In addition to the upgrades already covered in the forecasted 5 year capital plan, there will be an
additional requirement to provide the newly hired staff with computers, at a budget price of $3,000
each.
OPERATING COSTS
After Hours Control Room (�D RHHI
Currently, NHL pays for phone lines for after hours lines to Richmond Hill's Control Room.
Additionally, NHL pays RHHI $1,000/month for after hour's call -answering and dispatch (control room)
service,
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COUNCIL JUNE 22 2004
RHHI has indicated that next year's fee would be substantially increased. Assume that the fee will
double to $2,000 per annum and increasing annually thereafter.
Locates
As TSSA increase inspectors, and new ESA rules expand requirements for LDCs, cable locate related
work will increase. Because this work tends to be seasonal, it is expected that overflow work will be
done by contract.
Settlement Wholesale and Retail
With DSM initiatives such as residential smart meter installations, settlement data management is
expected to increase ten -fold or more. Some of the additional work to develop implement and
document systems could be covered by a new meter technician.
Trainino
The new Health & Safety officer will requires JHSC certification, or other current related training. The
metering tech may also need some training. Allow for some additional funding ($3,000) for the first two
years.
Table 4:OPERATING
2005
2006
2007
2008720909
Fr
$150,000
$154,500
$159,135
$163,909
oryer
$100,000
$103,000
$106090
$109,273
mne
,
OP — After Hours
Control Room
$1,000
$1,500
$2,000
$2,500
$3,000
Purchasing
manager
$30,000
$30,900
$31,827
$32,782
$33,765
additional costs
Locates (overflow)
$5,000
$5,000
$5,000
$5,000
$5,000
TOTAL
OPERATIONS
$286,000
$294,900
$304,052
$313,464
$323,142
is
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COUNCIL DUNE 22 2004
Appendix B
Aurora Hydro Connections Ltd.
5-Year Operating and Capital Forecast
The following is a summary of a five-year capital and operating forecast for Aurora Hydro as a stand
alone LDC if the proposed merger was not to materialize.
The attached forecasts do not include capital works projects (underground rebuilds, transformer station
44kV line integration, regional work relocations, customer connections, subdivisions etc.), but does
include:
• Staffing for Operations and Engineering
• Capital Fleet costs
• Capital SCADA costs
• Other Capital Project costs
• Other increases in Operating costs
A) STAFFING. FOR OPERATIONS & ENGINEERING
Currently, Aurora Hydro is a small utility that performs many tasks either with multiple existing staff or
on a limited (absolute minimum) basis with one individual.
Until a point in time when the utility, has reached a size that warrants a full position, this approach works
well.
If the merger does not move forward, the areas listed below should be seriously considered.
Health & Safety Officer
Some of the duties that a Health & Safety Officer would perform are currently done within the lines
section, with support from Engineering. Not all areas are receiving adequate attention.
The Health & Safety Officer would:
• Ensure full compliance with all safety related regulations
• develop and maintain appropriate practices, policies and procedures
• provide safety training
• develop safety programs
• chair safety meetings
• investigate and document incidents and accidents
• liaise with government agencies
This position should initially be included in the 2005 budget and included in all years thereafter. Allow
for $60,000 (plus approximately 30% burden - $78k per year plus annual escalation) to acquire a new
person from outside the organization, or to replace someone who is already here, and who will move
into the Safety Officers position.
Regulatory Affairs
The electricity industry is in a constant state of change. It takes considerable effort to stay current with
all the initiatives of the OEB, the IMO and ESA.
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51
LOOM M■ENER901�e;REEK XOZZI
Currently, the responsibility for these items are associated with the departments largely responsible for
the requirement. It would be beneficial to have a regulatory affairs individual responsible for:
• maintaining current information
• summarizing and presenting the information to the relevant departments
• preparing the necessary regulatory filings
• . leading the strategy discussions to develop the utility's policies and strategies for the
organization
• Presenting the utility's positions to the EDA, other utilities and to the regulators.
This individual would free up other resources to do their core work and would assist in channeling
overlapping areas of concern.
It is unlikely that Aurora Hydro warrants a full time position based on size. What is recommended is an
increase in the regulatory budget to $20,000 per year (an increase of $10,000 from the 2004 budget) to
assist with the functions listed above.
Control Room
The new Work Protection Code appears to require an additional layer of rigor that currently translates
into additional work for the supervisors who are involved in work planning.
Typically, once a utility reaches a size where there are a reasonable number of feeders (at as many
voltages that exist) it is recommended that a control room be established. This has transpired for other
utilities when their peak load has exceeded 100MW.
The control room would:
• coordinate all operating functions (hold -offs, protection, device operation)
• provide consistency for interpretations of practices, policies and procedures
• provide constant contact to a central source for all crews and provides for a contact who is
qualified in the new work protection code.
• Provide for one person to be in charge of the distribution system as its complexity and size
increases
• assist in ensuring the safety of crews by knowing the whereabouts and work environments due
to a larger number of working crews in the field.
• Coordinate switching and orders to operate
• Coordinate with Hydro One system control s a single point of contact
The current load forecast indicates that Aurora Hydro should not approach 10OMW until roughly 2012,
and based on this criteria, no action in this area is anticipated within the next 5 years.
It would, however, be advisable that the requirement for a control room be reviewed annually based on
the implementation of the work protection code or other regulatory influences.
Metering
The current Five Year Plan has already considered the addition of a metering technician in the
Engineering and Operations area in 2005.
Lines Staffing
Based on OMER's information, there would not be anyone that reaches the 90 factor required to retire
within the next five years. However, there would be 2 retirements at the five-year point based on
personnel reaching 65 years of age.
These would be one lineman and one storekeeper in 2009,
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COUNCIL JUNE 22 2004
Given the aging work force, it is currently recommended that:
• the lineman be replaced with a second year line apprentice
• the storekeeper be replaced with a person with appropriate qualifications
There are no additional costs associated with these events
Consideration should be given to replacing one contract lineman with a permanent staff member in
order to bring the complement up to two full crews. This could transpire as early as 2005. There is no
net change in operating costs when the wages paid, benefit costs and unpaid times are factored in.
B) ADMIN STAFF ADDITIONS
Accounting Manager
The position of Accounting Manager does not currently exist, but this position will replace the Cost
Accountant that exists. The role of the Accounting Manager is to:
• manage the day-to-day workings of the department
• overall responsibilities of reconciliation of the general ledger
• ensure compliance with corporate financial policies
• interface with the Auditors
This should transpire in 2005.
Clerk
The current Five Year Plan has already considered the addition of a Clerk in the Billing Department.
This function is currently being performed by a temporary person. This position should become
permanent in 2005.
Executive Assistant
This position is currently filled under contract. This position should become permanent in 2005.
New Position: Retail Settlement Clerk
The current,Five Year Plan has already considered the addition of a CSR in the Billing Department.
This position is a result of customer growth, and should be hired in 2005.
New Position: Customer Service Representative
The current Five Year Plan has already considered the addition of a CSR in the Billing Department.
This position is a result of customer growth, and should be hired in 2008.
C) CAPITAL FLEET COSTS
The lines department has identified various vehicles that need replacement.
It is assumed that the new Health & Safety Officer and the new metering technician would each require
a new vehicle.
For forecasting purposes, costs could be accounted for as per Table 1. These costs could be made
lower if rehabilitation were to be used instead of replacement. This would need to be reviewed in the
year prior to the expenditure being required.
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COUNCIL JUNE 22 2004
Table 1: Fleet
VEHICLE
2005
2006
2007
2008
2009
109 —1994 GMC
$26,000
110 —1996 Ford
$27,000
111 —1998 Chev
$28,000
112-1999 Ford
$30,000
303 —1992 Van
$70,000
402 —1993 Altec
$230,000
503-1991 RBD
$230.000
New vehicles (2) —
$60,000
H&S Off, Met Tech
TOTALS
$315,000
$97,000
$230,000
$28,000
$30,000
D) CAPITAL SCADA COSTS
Since the budget was created in the Fall of 2003, a more comprehensive status of the SCADA system
has been determined. In summary, the field points have not been commissioned to ensure that Feld
data is accurately reported on screen at the master station.
Without a reasonable investigation of the costs with our supplier, this Is a difficult project to estimate, but
for the purposes of this report, it is estimated that: the commissioning costs might be in the range of
$20,000. This work could be done in 2005.
Further expansion to the system functionality (trending, reporting, additional points) should be
implemented yearly, at an estimated cost of $5,000 per year and escalating slightly year after year.
E) OTHER CAPITAL PROJECT COSTS
cost to implement being investigated This work should be done in 2005
Allow for 100 hours at $30/hr = $3,000 to make the electronic drawing changes, and allow for an
additional $5,000 for to place the maps on swing panels.
Nomenclature
It is recommended that In conjunction with the operating maps, the service territory be assigned new
grid numbers (by concession blocks), and devices be assigned new names that correspond to the new
grid system. This will likely extend to poles also. This work should also be done in 2005.
The names will need to be changed on the operating maps and in the field.
Allow for 500 hours at $30/hr = $15.000 for field checks and to install new nomenclature.
Power Transformer
Currently there are 9 transformers in service, with a tenth slated for 2006. Aurora Hydro should
consider the purchase of a spare 44/13.8 kV 10MVA power transformer if the merger were not to
proceed. Approximate value of $200,000, to be purchased in 2006.
Computers
In addition to the upgrades already covered in the forecasted 5 year capital plan, there will be an
additional requirement to provide the newly hired staff with computers, at a budget price of $3,000
each.
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54
COUNCIL JUNE 22 2004
We should replace the plotter that is in the Engineering department with a newer model, at a budget
price of $10,000. All expenditures should be in 2005.
Stores
The stores area requires additional shelving and organizing. This was noticeable during the annual
inventory count, and by the need to relocate material from the storage room.
Allow for $5,000 to complete the work in 2005.
Phones
A new phone system that allows:
• the reporting requirements of the OEB be net; and
• improved customer information
will need to be installed in 2005, at an estimated cost of $100,000.
Metering
The government has mediated that "smart' meters be installed on all customers prior to 2008. These
funds are allocated to metering in the capital plan.
F) OTHER INCREASES ON OPERATING COSTS
After Hours Control Room (a) RHHI
Currently, AHCL pays for phone lines -to Bell for after hours lines at Richmond Hill's Control:Room.
Additionally, we each pay fees for after hours control room service to RHHI.
RHHI has indicated that next year's fee would be substantially increased. Assume that the fee will
double to $2,000 per, resulting in an increase of $1,000, and Increasing annually after that.
Traininc
The new Health & Safety officer will requires JHSC certification, or other current related training. The
metering tech may also need some training. Allow for some additional funding ($3,000) for the first two
years.
Table 2 summaries the revised 5-year capital (CAP) and operating (OP) forecasts.
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'COUNCIL JUNE 22 2004
TABLE 2: REVISED FORECASTED COSTS
2A: CAPITAL
Item
2005
2006
2007
2008
2009
CAP - Fleet
$316,000
$97,000
$230,000
$28,000
$30,000
CAP - SCADA
$20,000
$5,000
$6,000
$7,000
$8,000
CAP -.OPMaps
$8,000
CAP-
Nomenclature
$15,000
$3,000
$3,000
$3,000
$3,000
CAP - Power
Transformer
$200,000
CAP -Computers
$13,000
CAP - Phones
$100,000
CAP - Stores
$5,000
TOTAL CAP
$477,000
$305,000
$239,000
$38,000
$41,000
26: OPERATING
2005
2006
2007
2008
2009
F
$78,000
$80,000
$82,000
$85,000
$88,000
$10,000
$10,000
$10,000
$10,000
$10,000
Control Room
$1,000
$1,500
$2,000
$2,500
$3,000
OP - Training
$3,000
$3,000
$1,000
$1,000
$1,000
TOTAL
OPERATIONS
$92,000
$94,500
$97,000
$98,500
$102,000
F,u
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COUNCIL JUNE 22 2004
2C: ADMIN
2005
2006
2007
2008
2009
rt:
nting
er
$62,000
$63,000
$54,000
$55,000
$56,000
ive Assistant
EE(new)
Settlement
$60,000
$61,000
$63,000
$64,000
$66,000
newer
Serviceentative
$48,000
$49,000
ADMIN
$112,000
$114,000
$117,000
$167,000
$171,000
0
57
K�D1RN�t�1�J\I�tl'�i�P=!
Appendix C
Assumption of Incremental Savings and Additional Costs
(i) Premise Location
Initially, the new utility will operate out of NHL's current location at 590 Steven Court in
the Town of Newmarket. This is based upon discussions with the Chief Administrative
Officers of each Town.
For 2003, AHCL incurred a total of approximately $320,000, including $96,000 in rent for
Premise cost in its trial balance. For 2004, AHCL's budget indicates that the cost will be
$300,000.
Major components of this are
Rent
$98,000
Building & Grounds Maintenance
83,000
Municipal Taxes
50,000
Electricity
29,000
Janitorial Contract
15,000
Gas
13,000
Insurance
12,000
TOTAL $300,000
The savings assumed to be available in the merger are $250,000 annually.
Contract Staff Savings
The staff savings are based on the following assumptions:
• There will not be any permanent staff members from either utility laid off due to the
merger. Based on the age demographic of staff, only one NHL employee is eligible for
retirement in the immediate future.
• When current staff leaves the new combined utility, a business case must be made in
order to fill that position.
Currently AHCL has seven temporary or contract workers, and NHL has four. These
contract employees are located throughout accounting, customer service and outside
operations. Under a merger, these positions will not be required, resulting in a savings
in salary and burdens of $257,000.
26
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COUNCIL JUNE 22 2004
Meter Reading
This amount is based upon applying NHL approved meter reading and billing rates to
AHCL current rates, then extrapolating the differential over AHCL customer base.
Because of the confidential nature of NHL approved charges with its contract meter
reading company (which is the same company contracted by AHCL), an exact
breakdown cannot be given. However, the potential savings are $120,000 annually.
If AHCL also performed the billing and collecting of water accounts similar to NHL, this
amount would be increased to $150,000 annually.
(iv) Board Costs
The need for two Boards of Directors would be eliminated under a merger. Currently,
both utilities have a 7 member board with average annual costs of $100,000.
Assuming a 7 member board for governance of the merged utility, an annual savings of
$100,000 would be realized.
Should a larger board be established, the annual savings would decrease incrementally
by $17,000 per additional director.
(v) Consultant Fees.
For 2004 AHCL has budgeted $70,000, NHL has similar amounts budgeted.
Therefore; there is an incrementalsavings of $70,000 based on the 2004 budget.
(vi) Legal Fees
The budgeted expenditures. of $30,000 on legal opinions are similar for both utilities.
Therefore, it is conservative to assume that there is full redundancy in these expenses.
(vii) Operational Savings
Within a combined organization, the fleet would be reduced by nine vehicles. Staff have
calculated the operational savings to be approximately $2,500 a year per vehicle.
Therefore, the savings are conservatively estimated at $20,000 annually.
(viii) Audit Fees (Including Parent and Related Companies)
Newmarket Hydra Ltd. $35,000
Aurora Hydro Connections Ltd. $35,000
Total $70,000
As per a discussion with Deloitte and Touche, a 45,000 customer utility audit would cost
about $50,000, provided the client prepared the tax returns.
27
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COUNCIL DUNE 22 2004
For 2005, the first year of savings, a discount factor of $10,000 is included to cover any
extra audit work for the combination of opening balance sheets.
Additional savings may be achieved if another audit firm is chosen through a competitive
RFP process.
Audit fees $50,000
Savings $20,000
For incremental savings, $10,000 on a regular basis has been projected due to
expected increases in reporting and audit compliance measures.
(ix) Computer Support, Software and Hardware
AHCL incurred an expense of $15,000 in 2003 and has budgeted for $20,000 in 2004.
The majority of costs were for support for e-mail, general service, repair and cost for the
local area network.
NHL has its own IT Technician and by integrating AHCL Into the NHL network, these
external expenses would reduce by 50% from the 2003 actual expense.
It is conservative to assume an incremental savings of $7,500,
(x) General Administration Contract Labour
Actual AHCL costs were approximately $20,000. For 2004, the budgeted amount is
$7,000.
Actual NHL costs were $1o,000.
Duplication in customer newsletter production and staff recruitment costs of $7,000
annually has been identified.
(i) Payroll Harmonization
It is assumed that wage rates will harmonize to the highest rate paid by either utility
within the flrst year of amalgamation. The impacts of this are:
Inside Workers:
The differential in wages is approximately two dollars an hour for a Customer Service
Clerk/Billing Clerk (CSC/BC) position. Nine AHCL CSC/BCs will be transferred to the
merged utility.
P-E
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COUNCIL JUNE 222004
Incremental cast calculated as:
Nine employees transferred X $2 per employee X 1,820 hours $32,760
Burden attached to the incremental costs which include
Workers Compensation (WSIB), Pension (OMERS), and
Employer Health Tax (EHT) and benefits:
Assume 20% burden allocation calculated as:
20% of $32,760 $ 6,552
Outside workers:
Linepersons:
The differential in wages for a Lineperson is approximately 75
cents an hour. Nine AHCL outside employees will be
transferred to the merged utility.
Incremental cost calculated as:
Nine employees transferred X $0.75 per employee X 2,080 hours $14,040
Burden attached to the incremental costs which include WSIB,
OMERS, EHT and benefits:
Assume 20% burden allocation calculated as
20% of $14,040 $ 2,808
Technician:
The differential in wages for a technician is $6.53 an hour.
One AHCL employee will be transferred -to the merged utility.
Incremental cost calculated as:
One employee transferred X $6.53 per employee X 2,080 hours $13,583
Burden attached to the incremental costs which include
WSIB OMERS, EHT and benefits:
Assume 20% burden allocation calculated as
20% of$13,583 $ 2,716
As the customer service supervisors are now required to
manage and evaluate more personnel, they will receive a
raise in their compensation. A comparison to rates of pay of
other utilities' customer service departments would indicate
that the three supervisor positions affected should increase by
no more than $30,541. $ 30,541
Total $103,060
(ii) Taxes
In calculating the Payments in Lieu of taxes the same formula is used for calculating
federal and provincial corporate income taxes. In regards to Federal Large Corporation
29
61
tax and Provincial Paid -up Capital tax, there are certain thresholds that are exempt
before the application of tax applies. Both NHL and AHCL are currently within these
thresholds. Once combined, these tax free thresholds will disappear and large corporate
tax as well as provincial capital tax will be charged. The incremental cost will be
$70,000.
(111) Management Salaries
In a combined utility of over 40,000 customers, the senior and middle management
compensation packages will eventually rise to compare to utilities of this size. Based
upon a comparison of similar sized utilities, senior management's compensation for
executive personnel may be expected to rise by at least' $50,000. Due to the
confidential nature of salary grids, a direct allocation and salary will not be indicated in
this report_
(iv) Increased Premise Costs
The relocation of AHCL staff to 590 Steven Court will result in greater operational cost.
There will be increases in heating and air conditioning, janitorial, maintenance,
insurance and property tax with the addition. Estimated cost increases are based on
current budgets are $30,000.
(v) Records Management
NHL has found document imaging processes as an efficient tool for Customer Service,
Representatives, Billing- and Collecting Staff to retrieve and review information. This
Process also removes a significant amount of space that is occupied with storage.. As
both utilities will be operating out of one location, space usage will need to be managed
as efficiently as possible. The incremental cost for AHCL document storage will be
approximately $12,000 per annum.
30
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COUNCIL JUNE 22 2004
Appendix D
Local Distribution Bates
Newmarket
Aurora
Residential Rates
Monthly Charge
$14.51
$13.25
Distributlon Volumetric Rate
$ 0.0105
$ 0.0125
Total distribution charges based on 1,000 KWH per month.
$25.01
$25.75
General Service less than 50 KW Rates
Monthly Charge .
$21.98
$32.21
Distribution Volumetric Rate
$ 0.0158
$ 0.0095
Total distribution charges based. on 8,000 KWH per month.
$148.38
$108.21
General Service greater than 50 KW rates
Monthly Charge
$400.63
$204.28
Distribution Volumetric Rate
$ 3.1392
$. 2.2816
Total distribution charges based on 25,000 KW per month.
$8,248.63
$5,908.28
31
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COUNC I LI vJ \I EMI �2\ "L L
%5 U I.T I.Nc
Review of Aurora Hydro - Newmarket Hydro Merger Report
Executive Summary
Navigant Consulting was retained by Aurora Hydro and Newmarket Hydro
to provide a third party review of the Amalgamation Assessment Report ("the
Report") prepared by a team comprised of management from the two utilities.
We did not independently verify the figures presented, but did review them
for reasonableness based on similar transactions, our understanding of utility
operations and the Ontario electricity regulatory regime.
In Navigant Consulting's opinion, the executive management teams have
conducted a comprehensive review of the benefits of merging Aurora Hydro
and Newmarket Hydro. The Report outlines a conservative approach to
estimating these savings and this fact should substantially reduce the risk of
realizing the expected benefits of merging the two utilities. However, during
our review there were a few observations worth noting, the most relevant of
which are noted below:
• Navigant Consulting expects that the projected merger savings may
not be fully realized during the first 12 months after merging
operations. This is not to say that the savings have been overstated,
rather that the period required to exit contracts and restructure
operations may extend beyond the first year after transaction close.
• Navigant Consulting believes that the estimate for total one-time
transition costs should be increased by approximately $50,000 to
$100,000 to reflect the potential for increased costs for system
integration and legal fees. While an extremely smooth negotiation and
integration process may obviate the need for this increased budget, it
may be prudent to budget for a more protracted process. The budget
may also include an amount for public education of the transaction.
• As noted in the Report, the larger merged utility will be allowed to use
increased debt financing (and reduced equity) under Ontario Energy
Board (OEB) guidelines once it reaches $100 million in assets (also
called rate base). One of the factors that the OEB considers when
adjusting customer rates is the utility's cost of financing its rate base.
It should be noted that since debt is a cheaper source of financing than
equity, customer rates for the merged utility should decline due to the
lower overall cost to finance its rate base.
Notwithstanding these observations, Navigant Consulting believes that a
merger of Aurora Hydro and Newmarket Hydro will be beneficial to the
communities, ratepayers and municipal shareholders of both utilities. In our
opinion, the estimates of net annual operating savings of approximately
$766,500 increasing to $814,500 by 2008 are realistic and achievable, and are
sufficient to warrant proceeding to the next steps in merger discussions.
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COUNCILJUN il� ir'�004
Introduction
Navigant Consulting has been retained by Aurora Hydro and Newmarket
Hydro to provide a third party review of the Amalgamation Assessment
Report ("the Report") prepared by a team comprised of management from the
two utilities. The review is based on the information and data contained in
the report and accompanying appendices, and our experience in working with
other utilities contemplating mergers or acquisitions. Navigant Consulting
has not independently verified the figures presented, however we have
reviewed them for reasonableness based on similar transactions, our
understanding of utility operations and the Ontario electricity regulatory
regime.
Status Quo Option
Navigant Consulting has reviewed the assumptions for both Newmarket
Hydro and Aurora Hydro as stand-alone utilities. For the most part, these
assumptions seem reasonable given current staffing levels, customer growth
rates, and the current regulatory environment in which the utilities are
operating.
Common to both utilities is the assumption that a Health and Safety Officer
would be a required addition to staff. In addition to complying with the
Ontario Occupational Health and Safety Act and the Electrical Safety
Authority, electricity distributors in the province are required to abide by the
health and safety provisions in the Distribution System Code. The Code
requires that in addition to having health and safety policies and procedures
in place, a distributor is required to implement an industry recognized health
and safety program that includes training and regularly conducted audits.
Included within this program will be public education and safety initiatives.
Given the visibility and importance of this function, it is not unreasonable to
assume that the stand-alone utilities would each require a full-time Health
and Safety Officer.
Conceivably, the only question that might be raised regarding staff additions
is one of timing. Aurora Hydro's hiring of three new staff and conversion of
the three contract positions to full-time may occur over a longer period rather
than in 2005 only. Navigant Consulting does not dispute that these positions
are necessary, rather that any future avoided cost benefit may occur over a
slightly longer period than forecast. However, it is important to note that in
the estimate of Future Avoided Costs, the report takes a conservative
approach and assumes an annual benefit of only $208,000 (by 2008) versus
the forecast staff cost increases of $350,000 for Newmarket Hydro and
$238,000 for Aurora Hydro.
65
COUNC I L N IJN/ I2�'_i YJbh
C O, S I: I r I V (I
Mer,qed Aurora — Newmarket Utility
Management teams from both utilities have proposed that any merger
between Aurora Hydro and Newmarket Hydro be premised on the
assumption that no job losses will occur for full-time employees. While staff
reductions are common in mergers and are often the source for near term
efficiency gains, there are a number of valid reasons to avoid this in the case
of Aurora Hydro and Newmarket Hydro. Firstly, management teams from
both utilities have had the foresight to use contract staff in certain functions,
consequently providing management with the flexibility to adjust overall
staffing levels at minimal cost. Secondly, management's claim that the
merged utility would already have a relatively high customer to employee
ratio when compared to its peers is correct. Navigant Consulting has
compared the Customer to Employee ratio, for similar sized utilities in
Ontario that have publicly disclosed their staffing levels on their website.
While our estimated ratio for a merged Aurora Hydro and Newmarket Hydro
is slightly lower than in the management report, the combined utility still
would have lower staffing levels than the six other utilities listed, assuming
all full time employees are retained.
Table 1 - Customer to Employee Ratios
Aurora — Newmarket (estimated)
Customers
40,000
Employees (1)
Ratio
Barrie Hydro
62,000
69 (2)
112
580 : 1
554 1
Burlington Hydro
52,000
95
547 : 1
Cambridge & North Dumfries
45,000
84
535 : 1
Greater Sudbury Utilities
43,000
90
478 : 1
Whitby Hydro
30,000
65
462 : 1
Bluewater (Samia) Power
34,000
75
455 : 1
(1) Based on information disclosed on utility's
website
(2) Assumes no contract staff retained
Finally, any foregone expense reduction from retaining all full-time
employees is counterbalanced by a number of advantages to this approach,
including:
• Typically, staff acceptance of the merger is much greater than it would
otherwise be in a scenario where staff reductions are anticipated.
Obtaining "buy -in" from all levels of staff should make it easier to
implement and achieve operating efficiencies.
• Less time should be required to negotiate a transition with the unions
involved.
Customer to employee ratios can change based on the amount of outsourcing used by individual utilities.
Since outsourcing information was not available, direct comparisons between utilities should be avoided in
favor of relative comparison to the sample.
0
�b�
ICOUNCIL UN 2�I'�
() N G I1 i (I N L
! One of the major negotiating points between shareholders in any
merger is often centered on whose employees are made redundant.
This issue is avoided under the proposed merger.
• Attrition through retirement occurs more naturally. Utilities with
targeted staff reductions will often experience employees that qualify
for retirement but remain on the job in anticipation of a buyout or
some other incentive to enter retirement.
• Senior staff may be able to dedicate more time to integration, a key
component of any merger which is discussed in more detail later in this
document.
Based on the above reasons, Navigant Consulting believes that the decision
to retain all full-time staff is prudent.
Incremental Savings and Avoided Costs
Navigant Consulting believes that the identified savings are realistic and
conservative in nature. However, it is important to recognize that the
projected savings from merging the two utilities may not be fully realized in
the first full year after merging operations. In most mergers, the first year
transition costs fully offset any financial benefit from combining operations.
In addition, the forecast incremental savings and avoided costs identified in
the report may not occur within the first year after merging. For example,
contract or lease terms may extend into subsequent periods after any
proposed transaction date, thus requiring that the merged utility continue to
honour the terms of the contract or provide a buyout to terminate the
contract. It will be important to consider this fact if any contracts come up
for renewal in the period prior to finalizing any transaction.
Based on these considerations, the table below illustrates the possible timing
of savings, avoided costs, incremental costs and transitional costs. The
intent of this table is to make the reader aware that the full benefit from
merging is unlikely to be realized in the first year after transaction close.
Table 2 - Illustrative timing of savings (displayed in real S)
2004 2005
2006
2007
2008
Savings
- 400,000
800,000
871,500
871,500
Avoided Cost
80,000
160,000
160,000
208,000
Incremental Costs
(200.0OO)
(265.000)
(265,000)
(265.000)
Transition Cost
(50,000) (-l50,000)
(30,000)
-
Surplus Assets
100,000
50,000
Net Pre-tax Benefit (50,000) (70,000) 715,000 766 500 814,500
Despite this normal delay in realizing the full benefit from merging, using on
the numbers provided in the Report, the total net pre-tax benefit through
2008 should exceed $2 million.
87
i COV NCIL UN 2
U \i li 1. l'IN11
Transition Costs
The one time transition costs identified in the report cover most of the major
expenses incurred for a merger transaction. However, based strictly on
experience in other transactions, Navigant Consulting believes that costs to
integrate and/or convert billing and other systems may be slightly higher
than the amount indicated in the report. It is recognized that Newmarket
Hydro has a somewhat unique situation with its outsourced billing system
that may reduce these costs, but when other operations are considered
(customer information, control room, etc) the software licensing, conversion
and data entry costs may be higher than currently budgeted.
In addition, the transition cost estimate should include an amount for legal
and other advisory fees that each party will spend in order to conclude the
transaction. The amount spent on these services can vary greatly and will be
driven primarily by the time spent on finalizing the shareholder's agreement
for the merged utility. At a minimum, each municipal shareholder will
require independent legal advice on the proposed deal structure and possibly
an independent valuation of each utility. In total, Navigant Consulting
believes that the estimate for total transition costs should be increased by
approximately $50,000 to $100,000. Finally, at management's discretion, it
may be worthwhile to include an amount for public relations to keep the
public apprised of developments.
Other Benefits
The Report correctly identifies many of the qualitative benefits to merging
the two utilities. These benefits include the opportunity to improve service
response time and system reliability through increased flexibility in
operations. While the expected beneficial impact on cash flow through
reduced capital outlay is mentioned, it is correct to state that this will have
only a marginal impact on overall profitability. However, it is important to
realize that this improved cash flow should allow for a more reliable dividend
stream to shareholders.
The report is somewhat silent on the impact on customer rates in the two
communities. Previous utility amalgamations were subject to rate
harmonization, a process whereby rates for each customer class in one utility
were brought in -line with rates from the other utility. This would result in
the higher rate utility lowering its rates slightly and the lower rate utility
increasing rates slightly until they matched. However, as a prelude to the
next generation of performance based regulation, the Ontario Energy Board
is expected to require that all distributors conduct a cost allocation study.
These studies will ensure that customer rates more accurately reflect the true
cost to serve a specific customer class. Therefore, it is difficult to predict
68
COUNCIL J"UNFY,� 111L1004
what the impact on customer rates will be for each customer class, other than
to say that:
1. any cost allocation discrepancies between customer classes (e.g.
residential versus commercial) will be minimized, which should
provide some level of harmonization between all utilities; and
2. efficiency gains from merging should provide for rates that are lower
than they would otherwise be as separate utilities.
As an example of the potential for lower rates, the Report mentions that as a
larger utility, the Ontario Energy Board will allow increased debt financing.
While this does allow the shareholder promissory note to increase, it is also
important to note that the increased leverage allows overall financing costs to
decline, since debt is a cheaper source of financing than equity. One of the
factors that the OEB considers when adjusting customer rates is the utility's
cost of financing its rate base. This increased leverage should allow overall
customer rates to decline slightly to reflect this cheaper source of financing.
Navigant Consulting estimates that this benefit would be approximately
$370,000 annually'z or roughly $10 per customer. This would take effect once
the utility reaches $100 million in assets (or rate base) and the OEB adjusts
the merged utility's deemed capital structure and customer rates accordingly.
The Way Forward
Navigant Consulting believes that this section should also include, as an
action item, the need to assign members to an integration team that will be
responsible for developing and executing a transition plan. This group would
be comprised of management and supervisory level staff who are responsible
for managing the integration of the two utilities. It is likely that at least one
person will be required to dedicate close to 100% of their available time over a
period of months to manage this process. There is considerable risk that the
forecast benefits to merging the two utilities will not be realized expeditiously
if integration is not closely managed.
Conclusion
Navigant Consulting has been asked to address whether proceeding with the
merger is warranted. There are a number factors that are forcing
management and shareholders of Ontario electricity distributors to seriously
consider the future direction of their utility. Most prominent among these
factors are the ever changing regulatory environment, the constant pressure
from performance based regulation to reduce costs, and the financial pressure
to earn a return and provide dividends to shareholders. The solution that
many utilities are considering is to amalgamate with other municipally
The actual dollar value of the benefit to customers wilt change as the Ontario Energy Board changes the
deemed cost of equity and debt.
M
COUNCILIJIUNY 1, /2�0'O
owned utilities. The question then becomes — At what point does it make
sense to proceed with a merger?
A simple economic threshold to proceeding with a merger could be stated as
the point at which the present value of future benefits from merging exceeds
the total cost to complete the merger. In the case of Newmarket Hydro and
Aurora Hydro, the report estimates a net annual operating savings of
approximately $766,500 increasing to $814,500 by 2008. Since this amount
is sufficient to cover the estimated transaction costs in the first year, and this
economic benefit will continue through the future, the proposed transaction
easily passes this simple economic threshold. However, Navigant Consulting
believes that this analysis is less meaningful unless placed in its proper
context. There are many proposed and existing mergers that use higher
savings estimates than displayed in the report. Yet, the probability of
achieving all of these savings is typically much lower than that of the
Newmarket Hydro and Aurora Hydro analysis. In reviewing this report,
Navigant Consulting's focus was on whether the identified savings are
achievable, and in our opinion the conservative approach used in the report
to estimate these savings gives us confidence that they will be achieved.
Beyond the economic impact, the qualitative benefits from merging
operations outlined in the report of improved system reliability and flexibility
in operation cannot be understated. These are the benefits that will allow
management to overcome the regulatory and cost pressures faced by all
distribution utilities in Ontario.
While Navigant Consulting does believe that one-time transition costs may
be slightly understated, it is our opinion that the Amalgamation Assessment
Report is an accurate reflection of the benefits and costs of merging Aurora
Hydro and Newmarket Hydro. While further due diligence may be required
to firm up some savings estimates or determine exactly when certain savings
are expected to be realized, we do not expect that these numbers will change
materially. Management has taken a conservative approach to estimating
these savings and this fact should substantially reduce the risk of realizing
the expected benefits of merging the two utilities. Therefore, Navigant
Consulting believes that a merger of Aurora Hydro and Newmarket Hydro
will be beneficial to the communities, ratepayers and municipal shareholders
of both utilities, and concurs with management's recommendation to proceed
with the next steps in merger discussions.
70
COUNCIL JUNE 22 2004
'AGENDA
i
TOWN OFAURORA
GENERAL COMMITTEE MEETING
REPORT
NO. 04-17
Council Chambers
Aurora Town Hall
Tuesday, June 15, 2004
ATTENDANCE
COMMITTEE MEMBERS Councillor Vrancic in the Chair; Mayor Jones,
Councillors Buck, Gaertner, Hogg, Morris, Wallace
and West.
MEMBERS ABSENT Councillor Kean was absent.
OTHER ATTENDEES Chief Administrative Officer, Director of Corporate
Services/Town Clerk, Director of Building, Director of
Leisure Services, Director of Planning, Acting
Manager of Planning/Environment, Director of Public
Works, Treasurer, Acting Town Solicitor, and
Council/Committee Secretary.
Councillor Vrancic called the meeting to order at 7:00 p.m.
DECLARATIONS OF PECUNIARY INTEREST
There were no declarations of pecuniary interest under the Municipal Conflict of
Interest Act.
APPROVAL OF AGENDA
Moved by Councillor West
Seconded by Mayor Jones
THAT the content of the agenda as circulated by the Corporate Services
Department be approved as presented with the following additional items:
➢ Delegation Request and Letter from Mr. Jeffrey Miller of Maple Leaf
Foods
Re: Item 2 - PW04-021 - Tannery Creek— Surface Water and
Sediment Sampling Results
➢ Correspondence from the Town of Markham
Re: Hydro One Transmission Line (Parkway TS to Armitage TS) —
Class Environment Assessment Process (13.8)
CARRIED
I// DETERMINATION OF ITEMS REQUIRING SEPARATE DISCUSSION
Items 1, 2, 3, 5, 9, 10 and 11 were identified for discussion.
71
COUNCIL JUNE 22 2004
General Committee Report No. 04-17 Page 2 of 11)
Tuesday, June 15, 2004
IV ADOPTION OF ITEMS NOT REQUIRING SEPARATE DISCUSSION
Moved by Mayor Jones Seconded by Councillor Morris
THAT the following recommendations respecting the matters listed as
"Items not Requiring Separate Discussion" be adopted as submitted to the
Committee and staff be authorized to take all necessary action required to
give effect to same:
4. CSO4.013 - Group Benefits Program, Benefits Consultant Broker Selection
RFP
THAT the Town engage the services of PPI Financial Group as the
Town's employee benefits consultant for the provision of advice and
guidance on the Town's employee benefits portfolio effective August 1,
2004 for a period of three (3) years with the option of three additional one
(1) year extensions subject to satisfactory performance; and
THAT PPI Financial Group be authorized to commence negotiations with
the Town's existing group benefits carrier with the objective of transferring
the Town's existing group benefits coverage on the same terms and
conditions as cost effectively as possible utilizing the larger bulk
purchasing efforts; and
THAT staff notify Buffett Taylor & Associates that the Town of Aurora is
appointing PPI Financial Group as the Town's employee group benefits
consultant thereby effectively withdrawing as a participating member of
the York Region Umbrella Group effective August 1, 2004.
6. PL04.071 - Official Plan and Zoning By-law Amendment Applications,
2029193 Ontario Inc., Lot 10, Registered Plan 65M-2873,
248 Earl Stewart Drive, Files D09-02-04 and D14-02.04
THAT Council approve By-law No. 4547-04.D, being a By-law to approve
Official Plan Amendment No. 54.
PL04-067 - Trusthouse 88 Inc., - Part of Lot 76 & Part of Road Allowance
between Lots 75 & 76, Con 1 EYS, 520 Industrial Parkway
South, Official Plan Amendment and Zoning By-law
Amendment Applications, Files D09-03-04 & D14-03-04
THAT report PL04-067 be received and that Official Plan Amendment No.
53 be approved by Council; and
THAT By-law 4548-04.D be enacted.
8. ADM04-014 - Acquisition of Land from Ontario Realty Corporation
(Hydro One Networks Inc.) for Amberhill Way Turning Circle
THAT the Mayor and Clerk be authorized to execute an Agreement of
Purchase and Sale between the Town of Aurora and Ontario Realty
Corporation respecting the acquisition of hydro corridor lands required to
complete a turning circle at the east end of Amberhill Way; and
THAT By-law 4546-041, being a by-law to acquire the subject lands be
enacted; and
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COUNCIL JUNE 22 2004
General Committee Report No. 04-17
Tuesday, June 15,2004
Page 3 of 10
THAT upon finalization of the acquisition, Council authorize the Mayor and
Clerk to execute a Permission to Enter in favour of Home Depot Holdings
Inc. over the subject lands in order that they can proceed with the
reconstruction of the Amberhill Way turning circle pursuant to the Site Plan
Agreement dated March 4, 2003 (D11-10-02).
12. PL04.070 - Proposed Regional Official Plan Amendment # 43Centres and
Corridors
THAT the Region of York be requested to make modifications to proposed
Regional Official Plan Amendment # 43:
Section 5.5.7. be altered by adding the following:
Individual Municipal Secondary Plans will not be required to meet
this target depending upon the findings of the Secondary Plan
Study and public consultation. This Section is not intended to
suggest that the entire Regional Corridor will form part of the
density target, only the Key Development Areas as determined by
the area municipality.
Section 5.5.4 be altered by adding the following as subsection e)
areas within historic downtown cores and the residential
neighbourhoods abutting them may achieve modest intensification
through infill and compatible redevelopment but will not be subject
to the 2.5 long-term FSI target; and
THAT map 5 be clear in not delineating Yonge Street South as part of the
Regional Corridor.
CARRIED
V DELEGATIONS
(a) Aurora Residents Pet Care Association
Re: Item 9 - Animal Control Services
Ms Carol Mernick, representing the Aurora Residents Pet Care Association,
addressed the Committee to express concerns regarding the extension of the
Town's animal control contract with Kennel Inn and the standards that are
maintained by the facility. Ms Merrick suggested that the Town consider building
its own pound or, alternatively, switch services to the Georgina pound.
Moved by Councillor West Seconded by Councillor Buck
THAT the comments of the delegate be received.
CARRIED
Councillor Hogg requested that the Town's standard application form for
community associations be forwarded to the Aurora Residents Pet Care
Association, in order to be properly recognized by the Town as an association.
Moved by Councillor West Seconded by Mayor Jones
THAT Item 9 -Animal Control Services be brought forward for discussion,
CARRIED
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COUNCIL JUNE 22 2004
General Committee Report No. 04-17
Tuesday, June 15, 2004
2.
CSO4-024 - Animal Control Services
Moved by Mayor Jones
Page 4 of 10
Seconded by Councillor Buck
THAT Council approve a one year contract extension with the Kennel Inn
for animal control services for the Town of Aurora at a cost of $105,000;
and
THAT the Town continue to pursue the option of joint venturing with
neighbouring municipalities for a municipally operated animal control
service and pound.
AMENDMENT: Upon the question of the adoption of the
recommendation, it was:
Moved by Councillor Morris
Seconded by Councillor Hogg
THAT staff report back by December 31, 2004, addressing the options of
joint venturing for a municipally operated animal control service and
pound.
CARRIED
The recommendation was CARRIED AS AMENDED
(b) Mr. Jeffrey Miller, Maple Leaf Foods
Re: Item 2 - Tannery Creek - Surface Water and Sediment Sampling
Results
Mr. Jeffrey Miller of Maple Leaf Foods, who are the owners of the Collis Leather
site, addressed the Committee to advise that the contamination in Tannery Creek
may have originated from many other sources, other than from Collis Leather.
Mr. Miller requested that all potential sources be investigated, since Maple Leaf
Foods has already engaged in clean-up but contamination from other sources
continues to show up. Mr. Miller agreed to provide more detailed information to
the Clerk by noon on Friday, June 18, 2004, in order to include this on the
agenda for the June 22, 2004 Council meeting.
Moved by Councillor West
Seconded by Councillor Morris
THAT the comments of the delegate be received.
CARRIED
Moved by Mayor Jones Seconded by Councillor Hogg
THAT Item 2 - PW04-021 - Tannery Creek - Surface Water and Sediment
Sampling Results be brought forward for discussion.
CARRIED
PW04-021 -Tannery Creek — Surface Water and Sediment Sampling Results
Moved by Councillor West
Seconded by Councillor Morris
THAT Report No. PW04-021 "Tannery Creek — Surface Water and
Sediment Sampling Results" and a copy of the June 7, 2004 report from
Earth Tech Canada Inc, ent�gpd "Tannery Creek — Surface Water and
COUNCIL JUNE 22 2004
Page 5 of 10
General Committee Report No. 04.17
Tuesday, June 15,2004
Sediment Sampling Report" be forwarded to the Ministry of the
Environment with a request that they exercise their jurisdiction so as to
require Maple Leaf Foods Inc. or the current owner or occupant to:
• conduct the necessary investigations to fully identify the full scope and
extent of the contamination of the soil or groundwater and to prepare,
for the approval of the Ministry, a remedial plan, satisfactory to the
Ministry, designed to prevent any further off -site migration and to
remediate the subject property; and
• determine if the sedimentation in the Tannery Creek along those
sections identified in Report No. PW04-021 poses a threat to aquatic
life through benthic surveys and bioassays; and
THAT Report No.PW04-021 "Tannery Creek — Surface Water and
Sediment Sampling Results" and a copy of the June 7, 2004 report from
Earth Tech Canada Inc. entitled "Tannery Creek — Surface Water and
Sediment Sampling Report" be forwarded to Maple Leaf Foods Inc.; and
3. THAT Report No. PW04-021 "Tannery Creek — Surface Water and
Sediment Sampling Results" and a copy of the June 7, 2004 report from
Earth Tech Canada Inc. entitled "Tannery Creek — Surface Water and
Sediment Sampling Report" be forwarded to the following agencies for
whatever action they feel appropriate and that these agencies be
requested to provide guidance to the Town on this matter:
The Region of York Health Department;
The Region of York Transportation and Works Department;
• The Lake Simcoe Region Conservation Authority;
• Environment Canada; and
• Department of Fisheries and Oceans.
4. THAT staff be requested to undertake public information initiatives
(including a public information session) to inform property owners abutting
Tannery Creek in the general area from Wellington Street West to Aurora
Heights Boulevard of the results of the investigation as described in
Report No. PW04-021; and
5. THAT staff be requested to continue with stormwater management
initiatives that minimize phosphorous discharges and incorporate creek
restoration/naturalization in order to improve surface water quality; and
THAT staff be requested to continue efforts to isolate other potential
sources of contamination in the Town's watercourses as generally
described in Report PW04-021.
CARRIED
Moved by Councillor Morris Seconded by Councillor Gaertner
THAT Megan Janes, Professional Engineer, provide a brief presentation
to Council next week regarding the Tannery Creek Surface Water and
Sediment Sampling Results.
DEFEATED .
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COUNCIL JUNE 22 2004
General Committee Report No. 04.17 Page 6 of 10
Tuesday, June 15, 2004
Vi CONSIDERATION OF ITEMS REQUIRING SEPARATE DISCUSSION
PL04.066 - Update Servicing Constraints and Allocation Issues
York Durham Servicing System (YDSS)
(Item Deferred from June 8, 2004 Council)
Moved by Councillor West Seconded by Mayor Jones
THAT Council receive Report No. PL04-066 respecting servicing
constraints and allocation issues in the York Durham Sewage System;
and
THAT Aurora Council indicate its support of the Region of York in their
pursuit of the approval permits required to allow the construction of the
necessary sewage capacity to allow planned Regional growth; and
THAT Mayor Jones be requested to continue to press Regional Council to
provide an equitable share of the available servicing capacity to the Town
of Aurora; and
THAT the Ministers of Environment and Municipal Affairs be advised of
the Town's concerns respecting the infrastructure delays; and
THAT Staff be requested to continue to monitor this matter including
attending meetings and providing information as required; and
THAT staff update Council on this matter as appropriate
CARRIED
3. CSO4-025 - Amendments to the Procedural By-law and Correspondence from
Mr. George Rust-D'Eye regarding amendments to the Procedural
By-law - (item Deferred from June 8, 2004 Council)
Moved by Councillor Morris Seconded by Councillor Hogg
Confirmatory By-law
THAT By-law 4280-01.0 is hereby amended by adding the following
section:
3.17 "It shall be the practice of Council to enact a Confirmatory By-law at
the end of every Council Meeting."
CARRIED
Moved by Councillor Gaertner Seconded by Councillor Hogg
Appointment of a Chair & Vice Chair
THAT By-law 4280-01.0 is hereby amended by repealing the wording in
Section 27.1 and substituting the following thereto:
27.1 "The Chair and Vice Chair shall be appointed from among
members of the committee and shall have such responsibilities and
powers as are provided for the Chair in Part 1 of this By-law."
CARRIED
76
COUNCIL JUNE 22 2004
Page 7 of 10
General Committee Report No. 04-17
Tuesday, June 15,2004
Moved by Councillor West Seconded by Councillor Hogg
Committee Membership
3. THAT By-law 4280-01.0 is hereby amended by repealing the wording in
Section 17.3 and substituting the following thereto:
17.3 "Council Members who are not Committee Members shall be
entitled to attend all Ad Hoc Committee meetings, including any in -
camera portion of the meeting, and shall be entitled to speak, but
shall not be entitled to vote."
CARRIED
Moved by Councillor Hogg Seconded by Mayor Jones
4. THAT By-law 4280-01.0 is hereby amended by repealing the wording in
Section 26.2 and substituting the following thereto:
26.2 "Council Members who are not Committee Members shall be
entitled to attend all Advisory Committee meetings, including any
in -camera portion of the meeting, and shall be entitled to speak, but
shall not be entitled to vote. This privilege shall not be extended to
Statutory Committees or Boards such as the Committee of
Adjustment or the Library Board."
CARRIED
Moved by Councillor Wallace Seconded by Mayor Jones
5. THAT By-law 4280-01.0 is hereby amended by adding the following
section:
32A - ASSEMBLIES
32A.1 In this By-law, "Assembly" means an informal gathering of
members of Council or of a Committee, held in accordance with this
Section.
32A.2 An Assembly shall not be deemed to be a meeting of the Council or
Committee and shall not be subject to the rules and regulations
applicable to meetings, contained in this By-law.
32A.3 The Council may decide, at a meeting open to the public, to
convene an informal gathering of its members, or of the members
of a Committee, to receive and discuss information or advice of a
general nature involving subject matters of interest to the members,
at a time and place designated at that time by the Council.
32A.4 The Council, in deciding to convene an Assembly, shall designate
the general purpose or purposes for which the Assembly is to be
held, and no other matters may be considered by the Assembly.
32A.5 An Assembly may be held at any place designated by the Council
at the time at which it makes its decision to convene the Assembly,
whether or not within the boundaries of the Town or of any adjacent
municipality.
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COUNCIL JUNE 22 2004
General Committee Report No. 04-17
Tuesday, June 15,2004
5.
10.
Page 8 of 10
32A.6 All members of the Council or Committee respectively are entitled
to attend at the Assembly, together with designated staff or
consultants retained by the Town, but the Council, in deciding to
convene the Assembly, may decide to exclude the public therefrom.
32A.7 No motion, resolution, by-law, debate, agreement in principle,
consensus, straw -vote, report, recommendation or other action or
decision may be proposed, discu§sed, decided upon„ adopted,
taken or made at an Assembly.
32A.8 The Council or Committee shall, at the commencement of an
Assembly, designate a person to make notes describing in general
terms each subject matter dealt with at the Assembly.
e
32A.9 The notes taken pursuant to subsection 32A.8 shall, after the
conclusion of the Assembly, be maintained as a public record under
the control of the Clerk.
CARRIED
Moved by Councillor Gaertner Seconded by Councillor Hogg
THAT Section 6 of the proposed draft by-law amending by-law 4280-01.C,
pertaining to voting, be deferred to the June 22, 2004 Council meeting.
CARRIED
Memo from Councillor Gaertner Regarding Proposed Terms of Reference for
the Environmental Advisory Committee
Moved by Councillor Gaertner Seconded by Councillor Morris
THAT the proposed Terms of Reference for the Environmental Advisory
Committee be adopted.
AMENDMENT: Upon the question of the adoption of the
recommendation, it was:
Moved by Councillor West Seconded by Mayor Jones
THAT the proposed Terms of Reference for the Environmental Advisory
Committee be amended to reduce citizen members from 7 to 5.
DEFEATED
The original recommendation was CARRIED.
LSO4-027 - Fundraising for Future Facilities
Moved by Councillor West Seconded by Councillor Gaertner
THAT Item 10 - LSO4-027 - Fundraising for Future Facilities be referred
back to staff to review the establishment of 3 sub -committees to co-
ordinate fundraising efforts for the seniors, aquatics and ice user groups.
CARRIED
78
COUNCIL JUNE 22. 2004
General Committee Report No. 04-17
Tuesday, June 15,2004
Page 9 of 10
11. PL04.069 - Ministry of Municipal Affairs and Housing Comments on
Modifications to By-law 4469-03.1) (Town of Aurora
Oak Ridges Moraine Conformity Zoning Amendment)
Moved by Councillor West
Seconded by Mayor Jones
THAT the Ministry of Municipal Affairs be advised that the Council of the
Town of Aurora supports the modifications to By-law 4469-03.D as
proposed by the Province and shown in underlining within the attached
Appendix "2" with the following exceptions:
1. Do not support suggested site plan process to demonstrate
conformity with Oak Ridges Moraine Conservation Plan.
2. Do not support additional flexibility within Key Natural Heritage
Features.
3. Do not support suggested changes to zoning schedules and
creation of new zoning categories for Key Natural Heritage
Features, Minimum Vegetation Protection Zones, Linkage Areas
and Countryside Areas. However Council does support the addition
of the following text to Schedule "A", 'B", "C", "D" and "E" for
clarification purposes:
"By-law 4469.03.D consists of Schedules "A" to "E" inclusive
and accordingly each schedule shall be considered in the
determination of zoning provisions pertaining to individual
properties"
THAT Council supports the additional flexibility provisions as shown in
CAPITALS within the attached Appendix 2; and
THAT staff continue to work with Ministry staff to finalize the details of the
modifications and have by-law 4469-03.D approved expeditiously as
possible.
AMENDMENT: Upon the question of the adoption of the
recommendation, it was:
Moved by Councillor West
Seconded by Councillor Buck
THAT staff provide options pertaining to permissions for pools, decks,
sheds and minor additions within woodlands, for the June 22, 2004
Council meeting.
CARRIED
The recommendation was CARRIED AS AMENDED
Correspondence from the Town of Markham
Re: Hydro One Transmission Line (Parkway TS to Armitage TS) —
Class Environment Assessment Process (13.6)
Moved by Mayor Jones
Seconded by Councillor Morris
THAT the correspondence from the Town of Markham regarding Hydro
One Transmission Line be referred to staff together with the input from the
Hydro Information Meeting on June 10, 2004 and the Hydro Public
Meeting on June 29, 2004, for a report on July 13, 2004.
CARRIED
79
COUNCIL JUNE 22 2004
General Committee Report No. 04.17 Page 10 of 10
Tuesday, June 15, 2004
V11 OTHER BUSINESS, COUNCILLORS
Councillor Hogg requested that the Director of Corporate Services report back to
Council regarding a process for community groups to provide information about
the group before the groups' representative comes forward as a delegate.
Councillor Hogg requested that the Director of Leisure Services report back to
Council regarding setting up a policy to address special needs, including legal
and insurance information.
Mayor Jones advised that Mr. Lee Burton, representing the Aurora Tigers, is
attempting to raise money towards championship rings for the players and has
requested that Council consider a $500 community grant. Councillor Vrancic
requested staff to report back to Council on June 22, 2004.
Mayor Jones advised that the first round of larviciding for West Nile Virus will
begin on June 17, 2004 at Batson Drive and Moorcrest Drive.
Councillor Morris advised that she will be circulating the comments from the
Hydro Information Meeting of June 10, 2004 to members of Council.
Councillor Vrancic requested that a telephone number be provided to Council
members for use in cases where large, dead animals are found on the road after
hours. The Director of Public Works will report back with the information.
Councillor Vrancic expressed his concerns regarding the sound system in the
Council Chambers, advising that it Is very difficult to hear comments of delegates
as well as other Council members. Councillor Vrancic requested that staff
consider making arrangements to ensure that the Town Hall facilities are not
rented out on Tuesday evenings between 7:00 p.m. - 9:00 p.m.
Vlli IN CAMERA
Property, Personnel and Legal Matters
Moved by Mayor Jones Seconded by Councillor Wallace
THAT this Committee proceed In Camera to address property, personnel
and legal matters.
IX ADJOURNMENT
Moved by Councillor Hogg
THAT the meeting be adjourned at 10:15 p.m.
CARRIED
THE REPORT OF THE GENERAL COMMITTEE MEETING 04-17 IS SUBJECT TO
FINAL APPROVAL AT COUNCIL ON TUESDAY, JUNE 22, 2004.
wwo
Direction from In Camera Meeting
That the following individuals be appointed to the
Environmental Advisory Committee
Robert Cook
Mary Hill
Ellen Mole
Darryl Moore
David Tomlinson
Susan Walmer
Klaus Wehrenberg
[AGENDA ITEM #
z
COUNCIL JUNE 22 2004 -�--��.��-.-....„
ACENDA.!TEMTOWN OF AURORA �
COUNCIL REPORT No. AHC 04-02
SUBJECT: June 15, 2004, Aurora Heritage Committee Meeting
FROM: Diane Fergueson (Chair), Margaret Brevik, Councillor Nigel Kean,
Bob McRoberts, Walter Mestrinaro, John McIntyre, Stan Rycombel,
Jane Staunton, Councillor Ron Wallace
DATE: June 22, 2004
RECOMMENDATIONS
THAT the Committee Record of the Aurora Heritage Committee Meeting
held on June 15, 2004 be received for information; and
2. 18 Centre St.
THAT J. McIntyre and/or M. Brevik be delegated the authority to confirm the
final building elevations on be half of the committee for 18 Centre St.; and
3. Heritage Plaque 65 Spruce St.
THAT the request for a Heritage Plaque from Mr. & Mrs. Housser of 65
Spruce St. be approved and that the signage should state "The Osborne
House c. 1911 ".; and
4. Site Plan Development Hartman House 669 Wellington St. E.
THAT the Town's Planning Dept. and Council consider the heritage
significance of the Hartman House 669 Wellington St. E. (SW corner
Bayview Ave & Wellington St. E) in its deliberations on the proposed
development of the property (File D14-06-04 & D09-05-04 Aurora Toyota)
recognizing its statement in the Town's Official Plan page 115 and
Schedule "C" where this building is identified, and that the Town and
property owner utilize its best efforts to preserve and incorporate this
building in the future development of the site.
82
COUNCIL JUNE 22 2004
June 22, 2004 - 2 - Report No. 04-02
ATTACHMENTS
Committee Record 04-02
Prepared by: Bob Panizza
Diane Fergueson, Chair
Aurora Heritage Committee
83
COUNCIL JUNE 22 2004
Committee:
Date:
Time and Location:
AURORA HERITAGE
COMMITTEE RECORD
NO, 04-02
Aurora Heritage Committee
June 15, 2004
7:00 p.m. Holland Room, Town Hall
Committee Members: Diane Fergueson (Chair), Margaret Brevik,
Bob McRoberts, Walter Mestrinaro, John McIntyre,
Stan Rycombel, Councillor Ron Wallace
Staff:
Absent: Councillor Nigel Kean, Jane Staunton
Bob Panizza, Barry Bridgeford
DECLARATIONS OF INTEREST
None
APPROVAL OF AGENDA
Moved by Councillor Wallace
That the agenda as circulated be approved.
Seconded by M. Brevik
CARRIED
APPROVAL OF THE MINUTES
Moved by M. Brevik
Seconded by Councillor Wallace
That the minutes of the Aurora Heritage Committee No. 04-01 dated May 10,
2004 be approved.
DELEGATIONS
CARRIED
None
M
COUNCIL DUNE 22. 2004
MATTERS FOR CONSIDERATION
1. Draft Aurora Heritage Web Site
Moved by Councillor Wallace Seconded by B. McRoberts
That the presentation by Barry Bridgeford on the draft Aurora Heritage Web Site
be received with thanks.
CARRIED
2. Consolidated Heritage Designated Properties Report
Moved by W. Mestrinaro Seconded by J. McIntyre
That the consolidated heritage designated properties report be received for
information.
CARRIED
3. Site Plan Proposal 18 Centre St.
Members discussed the proposed development for 18 Centre St. and concurred
that J. McIntyre and/or M. Brevik should be involved in the review of the building
elevations prior to final approval by the Town.
Moved by S. Rycombel Seconded by W. Mestrinaro
That J. McIntyre and/or M. Brevik be delegated the authority to confirm the final
building elevations on be half of the committee for 18 Centre St.
4. Heritage Plaque — 65 Spruce St.
Moved by J. McIntyre
Seconded by Councillor Wallace
That the request for a Heritage Plaque from Mr. & Mrs. Housser of 65 Spruce St.
be approved and that the signage should state "The Osborne House c. 1911".
I Td3m
as
COUNCIL JUNE 22 2004
5. Hartman House — 669 Wellington St. E.
Moved by J. McIntyre Seconded by Councillor Wallace
That the Town's Planning Dept. and Council consider the heritage significance of
the Hartman House 669 Wellington St. E. (SW corner Bayview Ave & Wellington
St. E) in its deliberations on the proposed development of the property (File D14-
06-04 & D09-05-04 Aurora Toyota) recognizing its statement in the Town's
Official Plan page 115 and Schedule "C" where this building is identified, and that
the Town and property owner utilize its best efforts to preserve and incorporate
this building in the future development of the site.
-TI R-I 71
6. Heritage District Study Area
Committee members reviewed the material that had been distributed with the
agenda and discussed the preliminary work that had been done in 2003.
Members concurred that a meeting should be convened in early autumn with the
residents of Centre St., Catherine St., Maple St., Spruce St., and Fleury St.
possibly at the nearby school or church hall, in order to further explore with the
residents a proposal to establish a deisgnated heritage area in their community.
Moved by B. McRoberts Seconded by M. Brevik
That staff proceed to assemble the necessary information including any
additional documentation available from other municipalities regarding heritage
district designation and present it to the next Heritage Committee meeting.
CARRIED
7. Correspondence
Moved by Councillor Wallace
That the correspondence be received.
Seconded by W. Mestrinaro
CARRIED
N
COUNCIL JUNE 22 2004
OTHER BUSINESS
Mr. J. McIntyre indicated that the heritage sign that is currently on the wall
outside the Old Post Office is falling off and should be repaired. Staff advised that
the sign will be fixed and reattached.
ADJOURNMENT
Moved by B. McRoberts
That the meeting be adjourned at 8:40 p.m.
a7
COUNCIL JUNE 22 2004
+C
'TOWN OF AURORA
xt
NCIL REPORT No. TSAB04-005
SUBJECT: June 9, 2004 Traffic Safety Advisory Board Meeting
FROM: Chair
Committee Members
MEMBERS ABSENT:
DATE: June 22, 2004
RECOMMENDATIONS
- John West
Brett Cole, Carmen Zambri, Juergen Daurer,
Mike Walters, Robert Cook
None
THAT the Committee Record of the Traffic Safety Advisory Board Meeting held
on June 9, 2004 be received as information; and
2. Report No. TSAB04-004 Traffic Calming Request on Golf Links Drive.
THAT Report No, TSAB04-004 "Traffic Calming Request on Golf Links Drive" be
received for information;
THAT Council;
approve in principle the traffic calming design for Golf Links Drive;
authorize staff to conduct a poll of households on Golf Links Drive to ascertain
their views on the traffic calming design as contained in Report No. TSAB04-
004;
request staff be requested to notify and consult with public and review
agencies on the proposed traffic calming design; and
authorize staff to post the necessary advertising for the road alteration by-law.
3. Report No. TSAB04-002 — Parking Concerns on Gurnett Street.
THAT multi -way stop sign control be approved at the intersection of Gurnett
Street and Kennedy Street East;
THAT parking be prohibited at anytime on the east side of Gurnett Street from
Connaught Avenue to a point 40 meters north of Connaught Avenue;
THAT the Clerks Department be requested to introduce the necessary by-laws to
0
COUNCIL JUNE 22 2004
June 22. 2004 -2- Council Report No. TSAB04-005
THAT the Clerks Department be requested to introduce the necessary by-laws to
implement the above recommendations; and
THAT a letter be sent to all affected residents with the TSAB's
recommendations.
4. Report No. TSAB04-003 - Sightline Concerns on McMaster Avenue at the
Hollidge Boulevard Intersection.
THAT the second raised concrete centre median on HoNidge Boulevard west of
McMaster Avenue be removed;
THAT Council approve funds in the amount of $7,000 for this work; and
THAT a letter be sent to all affected residents with the TSAB's recommendations.
5. June 2, 2004 memorandum from the Traffic/Transportation Analyst regarding
Catherine Avenue - 2 Year Parking Review Between Yonge Street and Spruce
Street.
THAT the existing winter parking prohibition on the south side of Catherine
Avenue from Yonge Street to Spruce Street from November 15T" to April 15T"
remain in place on a permanent basis.
6. June 9, 2004 memorandum from the By-law. Services Co-ordinator regarding
Parking Concerns on TVIer Street and Mill Street.
THAT parking be restricted on the south'side of Tyler Street from the east edge
of the west driveway of the site to the west edge of the east driveway of the
property from 8:00a.m. to 4:00p.m.,Monday to Friday.
7. May 18, 2004 e-mail from Ms. Gail Severini requesting for "Children at Play"
signs on Watts Meadow.
THAT the request for "Children at Play" sings on Watts Meadow be denied; and
.THAT a letter be sent to Ms. Gail Severine with the TSAB's recommendations.
8. May 26, 2004 e-mail from Ms. Jacqueline Schafer-Kopackov regarding safety
concerns on Aurora Heights Drive.
THAT the June 9, 2004 e-mail from Ms. Jacqueline Schafer-Kopackov regarding
safety concerns on Aurora Heights Drive be deferred to the July 14, 2004 TSAB
meeting;
W
COUNCIL JUNE 22 2004
June 22, 2004 - 3 - Council Report No. TSAB04-005
THAT staff be requested to conduct a speed count on Aurora Heights Drive
between Crawford Rose Drive and McLeod Drive; and
THAT a letter be sent to Ms. Jacqueline Schafer-Kopackov with the TSAB's
recommendations.
9. June 1, 2004 e-mail from Ms. Stacey Crocker regarding parking concerns
relating to a Super Mailbox in front of 23 Downey Circle,
THAT staff be requested to work with Canada Post to determine if the existing
Super Mailbox on Downey Circle in front of house #23 can be moved to the end
of the cul-de-sac;
THAT staff be requested to report back to the TSAB with the cost; and
THAT a letterbe sent to Ms. Stacey Crocker with the TSAB's recommendations.
10. May 29, 2004 e-mail from Mr. Bill Hogg regarding traffic flow through Bayview
Wellington.
THAT staff be requested to review the traffic flow through Bayview Wellington
once the construction of the subdivisions and the commercial properties on Earl
Steward Drive and Peterson Drive have been completed; and
THAT a letter be sent to Mr. Bill Hogg with the TSAB's recommendations.
11, Selection of a Vice Chair from Committee Members.
THAT Brett Cole be appointed the Vice Chair of the TSAB until January 2005 on
a rotating basis.
BACKGROUND
All matters on the agenda were discussed fully.
COMMENTS
None.
CONCLUSIONS
The Board believes the recommendations contained herein to be appropriate and that
Council should adopt them.
E
COUNCIL .JUNE 22 2004
June 22, 2004 - 4 - Council Report No. TSAB04-005
FINANCIAL IMPLICATIONS
There will be individual costs for the following:
• Installation of parking signs on Tyler Street and Gurnett Street;
• Installation of multi -way stop sign control at the intersections of Gurnett Street and
Kennedy Street East.
The total cost for the above is estimated at be $800.00, which includes labor, equipment
and materials. Funds for which are available in the Public Works Operating Budget.
The estimated cost to remove the second raised concrete centre median on Hollidge
Boulevard, west of McMaster Avenue is $7000.00. Funds to remove the centre median
have not been provided in the 2004 Public Works Operating Budget.
ATTACHMENTS
June 9, 2004 Committee Record 04-02
Prepared by. Brent Jefferson, Traffic/Transportation Analyst ext. 4374
`mot/ v
John G. W st, Chair
Traffic Safety Advisory Board
COUNCIL JUNE 22 2004
Committee:
Date:
Time and Location:
COMMITTEE RECORD
NO. 04-02
Traffic Safety Advisory Board
Wednesday June 9, 2004
Leksand Room, Aurora Town Hall, 7:00p.m.
From: Chair: John West
Committee Members Brett Cole, Carmen Zambri, Juergen Daurer,
Mike Walters, Robert Cook
Members Absent:
None
Other Attendees: Brent Jefferson (Recording Secretary)
Chris Alexander (By -Law Services Co-ordinator)
Constable Matthew Pike (York Regional Police)
DECLARATIONS OF INTEREST
There were no declarations of interest.
APPROVAL OF AGENDA
Moved by Brett Cole
Seconded by Robert Cook
THAT the agenda be approved as circulated with the addition that a Vice Chair be
selected from committee members.
CARRIED
MINUTES OF PREVIOUS MEETINGS
Moved by Brett Cole
Seconded by Robert Cook
THAT the minutes of the May 12, 2004 TSAB meeting be adopted by Council.
CARRIED
92
COUNCIL JUNE 22 2004
TSAB Record No. 04-02 Page 2
DELIGATIONS
Sandra Humfryes — 45 Golf Links Drive
Sandra addressed the Board and indicated the residents on Golf Links Drive are looking
for the TSAB's support to adopt the recommendations as outlined in Report No.
TSAB04-004.
Sandra indicated that residents on Golf Links Drive have been working with staff for over
2 years for the implementation of traffic calming measures. Over 25 residents have
actively been involved to review and determine what measures residents feel should be
installed to address their concerns.
Sandra indicated that the necessary warrants for the installation of traffic calming
measures have been satisfied. The residents want traffic calming measures to reduce
vehicular speeds and to reduce the number of collisions, as there have been 23
reported collisions on Golf Links Drive in the past 13 years. Sandra pointed out that the
residents on Golf Links Drive are not looking to reduce the traffic volume as they only
want to calm the traffic.
Sandra indicated the proposed traffic calming design for Golf Links Drive includes the
installation of 5 speed humps. Sandra indicated that a petition was forwarded to staff
signed by 92% of the households on Golf Links Drive between house #34 and Murray
Drive who are in support of the proposed locations for speed humps as outlined in
Report No. TSAB04-004.
Finally, it was indicated that residents have worked with staff and reviewed different
types of traffic calming measures that could be installed on Golf Links Drive and speed
humps were the preferred measure.
Moved by Juergen Daurer
Seconded by Carmen Zambri
THAT the delegation be received as information
CARRIED
Moved by Brett Cole
Seconded by Robert Cook
THAT item #4 be moved forward at this time.
CARRIED
M
COUNCIL JUNE 22 2004
TSAB Record No. 04-02 Page 3
Moved by Brett Cole
Seconded by Juergen Daurer
THAT Report No. TSAB04-004 "Traffic Calming Request on Golf Links Drive" be received
for information;
THAT Council;
approve in principal the traffic calming design for Golf Links Drive;
authorize staff to conduct a poll of households on Golf Links Drive to ascertain their
views on the traffic calming design as contained in Report No. TSAB04-004;
request staff be requested to notify and consult with public and review agencies on the
proposed traffic calming design; and
authorize staff to post the necessary advertising for the road alteration by-law.
It was noted that currently there is no York Region transit service on Golf Links Drive
and the implementation of speed humps would reduce the possibility of any future transit
service.
MATTERS FOR CONSIDERATION
1. May 25, 2004 TSAB Council Report No. TSAB04-001.
THAT the May 25, 2004 TSAB Council Report No. TSAB04-001 be received as
information.
2. Report No. TSAB04-002 — Parking Concerns on Gurnett Street.
Moved by Mike Walters
Seconded by Juergen Daurer
THAT multi -way stop sign control be approved at the intersection of Gurnett Street
and Kennedy Street East;
THAT parking.be prohibited at anytime on the east side of Gurnett Street from
Connaught Avenue to a point 40 meters north of Connaught Avenue;
THAT the Clerks Department be requested to introduce the necessary by-laws to
implement the above recommendations; and
THAT a letter be sent to all affected residents with the TSAB's recommendations.
CARRIED
M
COUNCIL JUNE 22 2004
TSAB Record No. 04-02 Page 4
3. Report No. TSAB04-003 — Sightline Concerns on McMaster Avenue at the Hollidge
Boulevard Intersection.
Moved by Mike Walters Seconded by Juergen Daurer
THAT Report No. TSAB04-003 — Sightline Concerns on McMaster Avenue at the
Hollidge Boulevard Intersection be received as information.
CARRIED
THAT southbound left turns from McMaster Avenue onto Hollidge Boulevard be
prohibited at anytime;
THAT the Clerks Department be requested to introduce the necessary by-law to
implement the above recommendation; and
THAT a letter be sent to all affected residents with the TSAB's recommendations.
DEFFEATED
Moved by Mike Walters
Seconded by Brett Cole
THAT the second raised concrete centre median on Hollidge Boulevard west of
McMaster Avenue be removed;
THAT Council approve funds in the amount of $7,000 for this work; and
THAT a letter be sent to all affected residents with the TSAB's recommendations.
CARRIED
Committee members discussed the different options provided in Report No. TSAB04-
003 and recommended not to approve the southbound left turn prohibition as members
felt this option does not address the real issue, which is sightlines.
Committee members supported the removal of the second raised concrete centre
median as this option would increase the sightlines while still keeping an entry feature
into the subdivision.
5. June 2, 2004 memorandum from the Traffic/Transportation Analyst regarding
Catherine Avenue — 2 Year Parking Review Between Yonge Street and Spruce
Street.
Moved by Mike Walters
Seconded by Robert Cook
z
MOM al M00 1U012E_Y_aWAOXO !
TSAB Record No. 04-02 Page 5
THAT the existing winter parking prohibition on the south side of Catherine
Avenue from Yonge Street to Spruce Street from November 15Th to April 15Th
remain in place on a permanent basis.
CARRIED
6. June 9, 2004 memorandum from the By-law Services Co-ordinator regarding
Parking Concerns on Tyler Street and Mill Street.
Moved by Mike Walters Seconded by Brett Cole
THAT parking be restricted on the south side of Tyler Street from the east edge of
the west driveway of the site to the west edge of the east driveway of the property
from 8:00a.m. to 4:00p.m.,Monday to Friday.
CARRIED
7 May 18, 2004 e-mail from Ms. Gail Severini requesting for "Children at Play" signs
on Watts Meadow.
Moved by Mike Walters Seconded by Juergen Daurer
THAT the request for "Children at Play" sings on Watts Meadow be denied; and
THAT a letter be sent to Ms. Gail Severine with the TSAB's recommendations.
CARRIED
8 May 26, 2004 e-mail from Ms. Jacqueline Schafer-Kopackov regarding safety
concerns on Aurora Heights Drive.
Moved by Mike Walters Seconded by Juergen Daurer
THAT the June 9, 2004 e-mail from Ms. Jacqueline Schafer-Kopackov regarding
safety concerns on Aurora Heights Drive be deferred to the July 14, 2004 TSAB
meeting;
THAT staff be requested to conduct a speed count on Aurora Heights Drive
between Crawford Rose Drive and McLeod Drive; and
THAT a letter be sent to Ms. Jacqueline Schafer-Kopackov with the TSAB's
recommendations.
96
COUNCIL JUNE 22 2004
TSAB Record No. 04-02 Page 6
9 June 1, 2004 e-mail from Ms. Stacey Crocker regarding parking concerns relating
to a Super Mailbox in front of 23 Downey Circle.
Moved by Brett Cole Seconded by Juergen Daurer
THAT staff be requested to work with Canada Post to determine if the existing
Super Mailbox on Downey Circle in front of house #23 can be moved to the end
of the cul-de-sac;
THAT staff be requested to report back to the TSAB with the cost; and
THAT a letter be sent to Ms. Stacey Crocker with the TSAB's recommendations.
CARRIED
10. May 29, 2004 e-mail from Mr. Bill Hogg regarding traffic flow through Bayview
Wellington.
Moved by Brett Cole Seconded by Robert Cook
THAT the May 29, 2004 e-mail from Mr. Bill Hogg regarding traffic flow through
Bayview Wellington be received as information;
THAT staff be requested to review the traffic flow through Bayview Wellington
once the construction of the subdivisions and the commercial properties on Earl
Steward Drive and Peterson Drive have been completed; and
THAT a letter be sent to Mr. Bill Hogg with the TSAB's recommendations
W—TIOluffel
11. Information regarding the September 19, 2004 Roadwatch Conference.
Moved by Brett Cole Seconded by Juergen Daurer
THAT the information regarding the September 19, 2004 Roadwatch Conference
be received as information; and
THAT the information regarding the September 19, 2004 Roadwatch Conference
be submitted to the July 2004 TSAB meeting.
CARRIED
It was suggested by members that information and a report on the Regional Roadwatch
Program be submitted to the July TSAB meeting for consideration.
97
COUNCIL JUNE 22 2004
TSAB Record No. 04-02 Page 7
12. Pending List
13. Traffic Calming Activity List
Moved by Mike Walters
Seconded by Juergen Daurer
THAT the pending list and the traffic calming activity list be received as
information.
CARRIED
OTHER BUSINESS BY MEMBERS
It was requested that'a Vice Chair be appointed from committee members to chair a TSAB
meeting in the absence of the appointed chair.
Moved by Carmen Zambri
Seconded by Robert Cook
THAT Brett Cole be appointed the Vice Chair of the TSAB until January 2005 on a rotating
basis.
CARRIED
It was requested that information on the installation of a laptop computer in the Town's
radar board be submitted to the July TSAB meeting.
YRP member Constable Matthew Pike informed the Board that he is currently
conducting police enforcement on Kennedy Street West and is dealing with youth
complaints on Aurora Heights Drive at the McLeod Drive plaza.
ADJOURNMENT
The meeting was adjourned at 8:30p.m.
0
COUNCIL JUNE 22 2004
TOWN OF AURORA
COUNCIL REPORT
AGENDA ITEM # (0
No. LSAC04-02
SUBJECT: June 10, 2004, Leisure Services Advisory Committee Meeting
FROM: Chair - Councillor Vrancic
Council Members - Councillor Gaertner
Committee Members - Diane Buchanan, Alan Dean, Stephen Dupuis,
John Gallo, Dawn Irwin, Al Wilson
Absent - Councillor Kean was absent.
DATE: June 22, 2004
RECOMMENDATIONS
1. THAT the Committee Record of the Leisure Services Advisory Committee
Meeting, held on June 10, 2004, be received for information.
2. Murray Parkette
THAT the relationship with Beta Sigma Phi should be maintained; and
THAT staff provide a paper trail showing the sequence of events regarding
Regency Acres Committee Association's application to adopt the Murray
Parkette.
3, Report LSO4-022 - Timber/Thompson Parks Construction
THAT Timber/Thompson Parks be developed in accordance with the proposed
Concept Plans presented by staff.
4. Report LSO4-026 - Confederation Park Backqround Information
THAT staff advise, in writing, whether they intend to honour the wishes of the
Regency Acres Committee Association by providing garbage cans, benches
and coniferous trees in Confederation Park; and
THAT staff provide a written response as to whether the schools°alarms and
bells are in violation of the Town's noise by-law.
5. In -Camera
THAT the 11 nominations submitted for the Youth Action Committee be
accepted,
0
COUNCIL JUNE 22 2004
June 22, 2004 - 2 - Report No. LSAC04.02
BACKGROUND
Attached for the information of Council is the Committee Record of the Leisure Services
Advisory Committee Meeting LSAC04-02, held on June 10, 2004.
COMMENTS
Nil.
OPTIONS
Nil.
CONCLUSIONS
Nil.
FINANCIAL IMPLICATIONS
None.
100
COUNCIL JUNE 22 2004
June 22, 2004 - 3 - Report No. LSAC04-02
ATTACHMENTS
1. Copy of Committee Record No. LSAC04-02.
Prepared by. Carol Clark, Council/Committee Secretary, ext. 4227
Reviewed by. Allan D. Downey, Director of Leisure Services, ext. 4752
Councillor amir V ancic, Chair
Leisure Services Advisory Committee
101
COUNCIL JUNE 22 2004
LEISURE SERVICES ADVISORY COMMITTEE RECORD
MEETING NO. 04-02
Date: Thursday, June 10, 2004
Time and Location: 7:00 p.m., Leksand Meeting Room, Aurora Town Hall,
100 John West. Way
Committee Members: Councillor Vrancic, Chair, Councillor Gaertner, Diane
Buchanan, Alan Dean, Stephen Dupuis, John Gallo, Dawn
Irwin, AI Wilson
Staff Attendees: Allan Downey, Director of Leisure Services, Jim Tree,
Manager of Parks, Chris Catania, Youth & Community
Development Co-ordinator, Carol Clark, Council/Committee
Secretary
Regrets: Councillor Kean
Other Attendees: Councillor Buck
Councillor Vrancic called the meeting to order at 7:00 p.m.
ADDITIONS/DELETIONS TO AGENDA
None
DECLARATIONS OF INTEREST
There were no declarations of interest under the Municipal Conflict of Interest Act.
APPROVAL OF AGENDA
Moved by Al Wilson
Seconded by John Gallo
THAT the content of the agenda as circulated by the Leisure Services Department
be approved as outlined herein.
CARRIED
102
COUNCIL JJNE 22 2004
Leisure Services Advisory Committee Record No. 04-02
Thursday, June 10, 2004
REVIEW OF PREVIOUS MEETING REPORT
Leisure Services Advisory Committee Meeting
Report No. 04-01, dated Thursday, May 13, 2004
Moved by Stephen Dupuis
Page 2 of 6
Seconded by Alan Dean
THAT the Leisure Services Advisory Committee Meeting Report No. 04-01 of
Thursday, May 13, 2004, be received for information.
W-1-tT-15
Mr. Downey suggested that Councillor Vrancic chair the meeting in Councillor Kean's
absence, to which the Committee members agreed. Mr. Downey suggested that, from
this point forward, if the Chair is absent, the next Chair in sequence would chair that
meeting, to which the Committee members agreed.
Councillor Vrancic advised that Council adopted a resolution that citizen members can
act as Chairs of advisory committees and that a discussion of this matter could take
place at a later date.
DELEGATIONS
1. Mr. Chris Catania, Youth & Community Development Co-ordinator
Re: Presentation on Youth Week Festivities
Mr. Chris Catania provided a visual presentation of the Youth Week Festivities,
which took place from May 1 - 8, 2004. The presentation showed many events
including Flipside Skateboard Park, Dinner & A Movie, Ball Hockey Drop -In, Baby
Sitter Training, Skateboarding Competition, Basketball Drop -In, Band Nite and a
LAN Tournament.
2. Ms Lottie Anderson, Beta Sigma Phi
Re: Murray Parkette
Ms Lottie Anderson addressed the Committee to indicate her surprise and concern
regarding the request by Regency Acres Committee Association to have Beta Sigma
Phi relinquish its adoption of the Murray Parkette. Ms Anderson advised that Beta
Sigma Phi entered into a 3 year agreement, with first right of refusal for future years.
Moved by Stephen Dupuis
Seconded by Diane Buchanan
THAT the relationship with Beta Sigma Phi should be maintained.
CARRIED
103
COUNCIL JUNE 22 2004
Leisure Services Advisory Committee Record No. 04-02 Page 3 of 6
Thursday, June 10, 2004
Moved by Councillor Gaertner
Seconded by Al Wilson
THAT staff provide a paper trail showing the sequence of events regarding
Regency Acres Committee Association's application to adopt the Murray Parkette.
CARRIED
3. Mr. Ron Veyt, Resident of 58 Gateway Drive
Re: Thompson Park
Mr. Ron Veyt addressed the Committee to voice his concerns regarding the
proposed inclusion of skateboard rails and a basketball court in Thompson Park.
Mr. Veyt indicated that his preference would be Option 3 in the Leisure Services
report LSO4-022, but that Option 2 would be acceptable.
Mr. Veyt asked to be notified when the Leisure Services Advisory Committee
minutes of this meeting are being put onto the Council agenda.
MATTERS FOR CONSIDERATION
Item 2 was moved forward for discussion.
2. Report LSO4-022 - Timber/Thompson Park Construction
Moved by Stephen Dupuis Seconded by John Gallo
THAT Timber/Thompson Parks be developed in accordance with the proposed
Concept Plans presented by staff.
CARRIED
1, Report LSO4-026 - Confederation Park Background Information
Mr. Wilson advised that his previous request for information on the noise by-law in
relationship to the schools' alarms and bells, as well as recommendations, was
not provided in the report. Mr. Downey advised that Leisure Services intends to
proceed as per Council's direction and recommendations therefore not required.
Mr. Downey indicated that Leisure Services has no discretion on surplus funds, as
they are returned to the general fund account and can be used towards park
furniture once the capital works projects are completed.
Committee members asked about the status of the tri-party agreement with the
school boards. Mr. Downey advised that an agreement is drafted but not yet
signed by the school boards, which permits the schools to have access to the
parking facilities as shared use.
104
COUNCIL JUNE 22 2004
Leisure Services Advisory Committee Record No. 04-02
Thursday, June 10, 2004
Moved by Al Wilson
Page 4 of 6
Seconded by Alan Dean
THAT staff advise, in writing, whether they intend to honour the wishes of the
Regency Acres Committee Association by providing garbage cans, benches and
coniferous trees in Confederation Park; and
THAT staff provide a written response as to whether the schools' alarms and bells
are in violation of the Town's noise by-law.
CARRIED
3. Selection of Liaison Members
Committee members were assigned as Liaison Members to the various
community groups, as follows:
Communitv Group Liaison Member
Aurora Seniors' Centre
Alan Dean
Oak Ridges Trail Association
Wendy Gaertner
Young Aurora Mixed Slo-Pitch League
Diane Buchanan
Aurora Minor Ball Association
Diane Buchanan
Aurora Diggers Girls Softball Association
Diane Buchanan
Valhalla Mixed Slo-Pitch League
Diane Buchanan
Aurora Community Tennis Club
John Gallo
Aurora Mens' Slo-Pitch League
Diane Buchanan
Aurora Youth Soccer Club
Alan Dean
Aurora Skating Club
Dawn Irwin
Aurora Soccer Club
Damir Vrancic
Aurora Minor Hockey Association
Stephen Dupuis
Aurora Hockey Parents' Auxilliary
Wendy Gaertner
Aurora Central Girls' Hockey
Diane Buchanan
Optimist Recreational Hockey League
Stephen Dupuis
Monday Night Hockey League
John Gallo
Aurora Old Chiefs Hockey Club
Stephen Dupuis
York Simcoe Express
Alan Dean
York Oldtimers Hockey League
Diane Buchanan
Aurora Community Arboretum Program
Dawn Irwin
Aurora Lawn Bowling Club
Alan Dean
Aurora Rovers Soccer Club
John Gallo
Aurora Swim Club
Al Wilson
Spectrum Baton Club
Wendy Gaertner
Aurora Agricultural Society
Dawn Irwin
Aurora & District Historical Society
Al Wilson
Aurora Garden & Horticultural Society
Dawn Irwin
Aurora's Creative Connection
Wendy Gaertner
Pine Tree Potters Guild
Stephen Dupuis
Society of York Region Artists
Dawn Irwin
Theatre Aurora
John Gallo
105
COUNCIL JUNE 22 2004
Leisure Services Advisory Committee Record No. 04-02 Page 5 of 6
Thursday, June 10, 2004
4. Capital Works Schedule
Mr. Downey advised that he will distribute the Capital Works Schedule via mail to
all Committee members.
5. Pricing Policy Review and Strategy Discussion
Mr. Downey provided a presentation to the Committee outlining the Pricing Policy
Strategy and steps required to arrive at the subsidy figures. Mr. Downey indicated
that the same procedure could be used again, or one of several alternatives could
be instituted.
Councillor Vrancic advised that this task is the most crucial service that this
Committee will undertake, as it impacts upon budget deliberations and fees. Due
to the complexity of the process, Councillor Vrancic proposed, and Committee
members agreed, that the matter be brought back to the next Leisure Services
Advisory Committee meeting in order to give the members an opportunity to
review the process and arrive at some suggestions.
Councillor Vrancic indicated that it would be helpful to receive information as to
how other municipalities of similar size and in the vicinity of Aurora arrive at their
pricing policy, to which Mr. Downey responded that he would investigate this.
6. Viable Youth Centre Proposal, Councillor Wendy Gaertner
Councillor Gaertner advised that the composition of the proposal for a viable
Youth Centre is still in progress and will be addressed at a future meeting.
AD HOC COMMITTEE/UPDATES
None
INFORMATIONAL ITEMS
Minutes of Youth Action Committee for May 19, 2004 received.
OTHER BUSINESS BY MEMBERS
Mr. Wilson recommended that Committee members receive a copy of the parkland
standards that the Town of Aurora has for community and neighbourhood parks.
Mr. Wilson advised that he will be the liaison member for the Youth Action Committee.
ME
COUNCIL .JUNE 22 2004
Leisure Services Advisory Committee Record No. 04-02 Paige 6 of 6
Thursday, June 10, 2004
Mr. Gallo advised that the centre pole and net is missing at the Highland Park soccer
field, to which Mr. Downey responded that he would remedy the situation.
IN CAMERA
The Committee proceeded In -Camera to discuss Youth Action Committee Recruitment
for 2004/2005.
Moved by Alan Dean
Seconded by Stephen Dupuis
THAT the 11 nominations submitted for the Youth Action Committee be accepted.
CARRIED
ADJOURNMENT
Moved by Alan Dean
THAT the meeting be adjourned at 10:15 p.m.
dCG _1
NEXT MEETING
It was noted that the next meeting of the Leisure Services Advisory Committee will take
place on Thursday, July 8, 2004 at 7.00 pm in the Lebovic Room.at the
Aurora Public Library.
107
COUNCIL DUNE 22 2004
AGENDA ITMA # 7]
'TOWN OF AURORA
COUNCIL REPORT No. PL04 072-
SUBJECT: Application for Exemption from Part Lot Control
Arista Homes (Bayview Greens) Inc.
Blocks 258, Registered Plan 65114-3573
Kirkvalley Crescent
D12-PLC-06-04
FROM: Sue Seibert, Director of Planning
DATE: June 22, 2004
RECOMMENDATIONS
THAT Council approve the request for exemption from Part Lot Control made by
Arista Homes (Bayview Greens) Inc. to divide Block 258 on Kirkvalley Crescent,
Registered Plan 65114-3573 into separate lots.
THAT Council enact By-law 4551-04.D
BACKGROUND
The subject lands are located on Kirkvally Crescent, being west of Bayview Avenue and
south of St. John's Sideroad. The lands form part of Phase 2 of the Bayview-Wellington
North Inc. development. The applicant is seeking to develop the subject lands for
townhouse dwelling lots.
The applicant proposes to develop the lots in the following manner:
Block 258, 65M-3573
Reference Plan 65R-27061
Unit Type
Lot Area
W)
Frontage
(m)
Part 1 & 2
Townhouse
289.61
8.54
Part 3, 4, 5 & 6
Townhouse
237.18
7.01
Part 7 & 8
Townhouse
237.80
7.01
Part 9, 10 & 11
Townhouse
237.51
7.01
Part 12
Townhouse
237.85
7.01
Part 13 & 14
Townhouse
237.74
7.01
Part 15, 16, 17 & 18
Townhouse
237.15
7.01
Part 19
Townhouse
361.91
10.12
COUNCIL DUNE 22 2CO4
June 22. 2004 -2- Report No PL04-072-
COMMENTS
The subject lots form part of Registered Plan of Subdivision 65M-3573 for Phase 2 of the
Bayview-Wellington North Inc development. The applicant is requesting an exemption
from Part Lot Control (as provided for under Section 50(7) of the Planning Act) as a means
of achieving the proposed lot divisions rather than through applications for consent to the
Committee of Adjustment or a separate plan of subdivision. All of the proposed lots
conform with the provisions of the zoning by-law. The exemption from part lot control
would implement the original intent of both the official plan and subdivision agreement.
,Q:a 11ls]►1a
Not Applicable.
CONCLUSIONS
The proposed lots conform with the provisions of the implementing official plan, zoning by-
law ,subdivision agreement and site plan agreement. Staff recommend that Council
approve the request for exemption from Part Lot Control made by Arista Homes (Bayview
Greens) Inc. to divide the subject lands as noted above into separate lots.
FINANCIAL IMPLICATIONS
Not Applicable
LINK TO STRATEGIC PLAN
Not Applicable
ATTACHMENTS
Figure 1 - Location Plan
Figure 2 - Survey Plan
PRE -SUBMISSION REVIEW
Management Team Meeting — June 16, 2004
Prepared by. Cristina Celebre, ext. 4343
d
i
Director of Planning