2010 Final water sewer and storm budgets
GENERAL COMMITTEE No. CFS10-013 SUBJECT: 2010 Water, Wastewater, Stormwater and Sewage Pumping Station
Budget and Rates FROM: Dan Elliott, Director of Corporate & Financial Services - Treasurer DATE: April 20, 2010 RECOMMENDATIONS
THAT Council approve the 2010 Water, Wastewater, Stormwater and Sewage
Pumping Station Budgets as presented with net expenditures totalling $13,256,000;
and
THAT Council approve the 2010 Retail Water rate of $1.3055 per cubic meter and the Retail Wastewater rate of $1.0217 per cubic meter of water consumed for all bills issued on and after May 1, 2010; and
THAT Council approve the 2010 Flat Rate Stormwater charge of $4.11 per unit per
month for Residential and Condominium properties and $57.69 per unit per month
for metered Non-residential Commercial/Industrial and Multi-Residential properties for all bills issued on and after May 1, 2010; and
THAT Council approve the 2010 Flat Rate Sewage Pumping Station charge for each
of the 165 users of the Ballymore Sewage Pumping Station of $9.91 per month on all
bills issued on and after May 1, 2010; and
THAT Council approve the 2010 Flat Rate Sewage Pumping Station charge for each of the 246 users of the Bayview Vandorf Sewage Pumping Station of $6.62 per month on all bills issued on and after May 1, 2010; and
THAT Council approve the 2010 Flat Rate Sewage Pumping Station charge for each
of the 104 users of the Brentwood Sewage Pumping Station of $14.44 per month on
all bills issued on and after May 1, 2010; and
THAT Council approve the 2010 Bulk Purchase Water Rate of $2.35 per cubic meter on all bills issued on and after May 1, 2010; and
THAT Council approve fees for installation of a service connection for either water or
wastewater services be $725 per connection effective for works completed on or
after May 1, 201; and
THAT the necessary by-law to implement the 2010 Water, Wastewater, Stormwater Sewer and Sewage Pumping Station Rates be enacted to be effective for all bills
issued on or after May 1, 2010.
TOWN OF AURORA
April 20, 2010 - 2 - Report No. CFS10-013 PURPOSE OF THE REPORT To present the 2010 operational budgets for Water, Wastewater, Stormwater and three local service sewage pumping stations, and the rates necessary to be set to fully recover the costs of delivering these services in Aurora. All rates are to be effective for billings issued on or after May 1, 2010.
BACKGROUND Water, Wastewater and Storm Systems budgets are not Tax Supported The full costs of operations of the water distribution system, the wastewater collection system, the stormwater collection and management systems, and the local services
sewage pumping stations are to be fully recovered from user charges. No tax levy subsidy is to occur. Further, in the near future, the Town will be required to demonstrate full cost recovery, including the recovery of the necessary capital costs to maintain the system in perpetuity.
The 2010 budgets have been reviewed in detail by staff from the Infrastructure & Environmental Services Department, and the Corporate & Financial Services Department. Costs for the operation of the systems are directly controlled and managed by I&ES, while overhead allocations from the general operating budget have been made to allocate costs of general corporate overhead to the water, wastewater and stormwater operations costs.
Some direct costs of administering the customer accounts are directly charged to the operations. Contributions to capital reserves for future repair and replacement needs of the system have been included in the current budgets. These are estimates only at this time. During
2010 it is expected that staff will be able to complete a reserves adequacy and funding study of all Town capital reserves, including those for user rate funded assets. The finding of this work will be presented during the 2011 budget cycle. Retail Flows Do Not Equal Wholesale Flows
For 2010, staff have reviewed the approaches used in determining estimated water retail consumption as all recoveries for water and wastewater are based on retail volumes. The estimate is premised on the Region of York’s volume estimate for the Town, which is then factored downward by Town staff for the water lost in transmission due to leaks and other reasons prior to reaching the retail water meters in individual properties.
In past years a water loss estimate of 8% has been used, while detailed tracking was undertaken. Based on detailed tracking for the last several years, it appears that actual water loss is between 11 and 12%. Water loss is the difference between wholesale flows and retail metered flows. Water loss occurs for a variety of reasons, each of which needs
to be managed with different strategies. Losses occur due to the following factors: - to actual system pipe leaks seeping water out of the pressurized system
April 20, 2010 - 3 - Report No. CFS10-013 - water main breaks which occur and are repaired - required system maintenance, such as main swabbing and flushing, and hydrant flushing and testing activities - fire department use, for training and fire fighting purposes
- own use of unmetered supplies for landscaping, parks and road maintenance
activities - theft of water from hydrants and other sources - retail water meter slippage which increases with meter age, allowing water to slip through the meter unmeasured, normally less than 0.5% but as the meter ages
can increase upwards to 10% in some meters. Meter change out programs
manage this loss. For 2010, staff have increased the provision for water loss from 8% to 11%
Budget Results Highly Dependant on Weather Patterns
Water flows are affected dramatically by the summer weather. In dry periods, there is much out door water use to maintain yards, gardens and pools, while in wet periods, there is much less outdoor water use. The costs of maintaining Aurora’s infrastructure generally are fixed and are not variable based on water flow activity. Only the actual wholesale costs
of Region of York services are variable on flows. Accordingly, when flows are less than
expected, the fixed costs are not fully recovered, and a deficit in our budgets result, while when flows are higher than expected, such as in a very dry season, the year will conclude with a financial surplus.
The Region of York volume estimate for Aurora is premised on a normal and consistent
weather pattern for the whole of the summer. This is seldom realized particularly as the weather patterns are changing and remain quite unpredictable. Budget deficits have occurred regularly in past years due to weather fluctuations, and fluctuations in actual flows verses budgeted flow volumes. Accordingly, staff have now factored a small adjustment to
the formula to add a measure of conservativeness to the estimates, expected to result in a
lower likelihood of ending the year in a deficit. The factor used for 2010 is only 25% of the estimated factor necessary. If a surplus does result, the surplus is transferred to the user rate capital reserves for use in managing the condition of the infrastructure for the water and sewer services. Staff recommend that this factor be increased in future years to until
the full estimate is reached. COMMENTS
Proposed Water and Wastewater Rates for 2010 The detailed schedules for the water, wastewater budgets are included as Attachments #1 and #2 respectively. In preparing these budgets, staff have utilized a wholesale water flow
estimate of 6,178,000 cubic meters, and a retail water flow estimate of 5,410,400 cubic meters. The breakdown of the proposed 2010 total retail rate, by component, is as follows:
April 20, 2010 - 4 - Report No. CFS10-013 Water Rate
Components 2009 2010 Change %
Wholesale Cost (Region of York) $0.5763 $0.6339 10.0% Aurora Operations Costs $0.4587 $0.4361 -4.9%
Loss Factor increased for 2010 $0.1444 $0.2052 42.1%
Weather Conservatism Factor n/a $0.0303
TOTAL Retail Water Rate $1.1794 $1.3055 10.7% Wastewater Rate
Components 2009 2010 Change %
Wholesale Cost (Region of York) $0.6529 $0.7182 10.0%
Aurora Operations Costs $0.0965 $0.1231 27.6%
Loss Factor increased for 2010 $0.1106 $0.1572 42.1%
Weather Conservatism Factor n/a $0.0232
TOTAL Retail Sanitary Sewer
Rate
$ 0.8600 $1.0217 18.8%
Combined Rate $2.0394 $2.3272 14.11%
COMBINED RATE
Impact of Proposed 2009 Rate Changes on Average Consumer Where a residential household is billed an average of 400 cubic meters per year the impact of the proposed combined retail water and wastewater rate increase is as follows:
Proposed Rate-May 1, 2010 $2.3272 x 400 cubic meters = $930.88 Current Rate-May 1, 2009 $2.0394 x 400 cubic meters = $815.76 The additional cost on the average Water/Wastewater Aurora residential consumer is
$115.12 or 14.11%. $49.16 of the average increase is attributable to the Region of York
where as $65.96 is attributable to the Town of Aurora, water loss, and the adjustment factor. As most customers receive both water and wastewater services from the Town of Aurora,
staff recommend that a combined charge be implemented on the customer billings, rather
than showing the two services separately. This approach will reduce inquiries regarding the separate service charges. Storm service and pumping station charges will remain
April 20, 2010 - 5 - Report No. CFS10-013 separated on the billings.
Charge for Stormwater Services
In 2002, Aurora implemented a flat rate charge on water and wastewater accounts for maintenance and rehabilitation needs of the stormwater collection and management
system infrastructure.
For 2010, the stormwater system budget is includes as Attachment #3, summarized as follows:
2009 Budget 2010 Budget Change %
System Operational Costs 389,056 466,500 77,444 19.9%
Contribution to Capital Reserves 590,194 625,000 34,806 5.9%
Total Amount for Rate
Recovery
979,250 1,091,500 112,250 11.5%
A consistent formula is used to allocate the recoverable amount as between residential accounts and non-residential accounts. Each portion is then divided by the number of accounts in the respective category, resulting in an annual charge, which is then calculated
and expressed as a monthly fixed charge per account.
Due to the increase in the number of accounts in each category growing at different rates, the rates increase at different percentages. Budget increases for storm systems reflect increasing maintenance needs and costs, together with an increase in contributions for
rehabilitation, particularly with respect to Stormwater Management Ponds. The 2010 rates
proposed to be effective for May 1, 2010 are as follows: Stormwater Flat Rate 2009 Rate 2010 Rate Rate Change Change %
Residential/Year $43.92 $49.32 $5.40/year 12.3%
Residential/ Month $3.66 $4.11 $0.45/month 12.3%
Non-Res per Year $596.28 $692.28 $96.00 16.1%
Non-Res per Month $49.69 $57.69 $8.00 16.1%
April 20, 2010 - 6 - Report No. CFS10-013
Sewage Pumping Station Flat Rate Charges As part of the overall water distribution and wastewater collection system, the Town is
responsible for the operation and maintenance of various sewage pumping stations (SPS).
The costs to operate and maintain three of these (Ballymore SPS, Bayview Vandorf SPS and Brentwood SPS) are recovered from the benefiting property owners in accordance with arrangements included in past Subdivision and Site Plan Agreements for the various developments that are served by these stations. Currently there are 164 properties
serviced by the Ballymore Sewage Pumping Station, 246 properties serviced by the
Bayview Vandorf Sewage Pumping Station and 102 properties serviced by the new Brentwood Sewage Pumping Station. The detailed budgets for each pumping station are included as Attachment #4 to this report.
Each budget includes costs for electricity supply, maintenance, monitoring and repairs,
and a capital contribution for ultimate replacement of the facility. Variations in rate occur due to the budget changes, as well as the number units being served growing. The following is a summary of the detailed attachments:
Wastewater Pump 2010 Budget Costs 2010 Monthly Fee effective May 1 Fee Change %
Ballymore $18,930 $9.91 +11.9%
Bayview/Vandorf $21,980 $6.62 -27.3%
Brentwood $18,200 $14.44 -2.9%
Flat Rate Service Charges for Turning Water Off/On The current flat rate services charges for the turning of Water either on or off is $40.00 per event during working hours and $80.00 per event other than normal working hours. This rate has been in effective since May 1, 2008. Staff are not recommending any rate change
at this time. This service is seldom used except by contractors and renovators.
Purchased Water from Bulk Station or Hydrant Meters The current rate for the purchase of Bulk Water is $2.0394 per cubic meter. This is the
same rate charged to retail customers for both water and wastewater services combined.
The Town of Aurora incurs wholesale costs for both water and wastewater based on the flow and measure of water only. Therefore; the 2010 rate for the purchase of water from the Bulk Station and/or Hydrant Meters must increase to $2.35 per cubic meter effective May 1, 2010 to correspond with the new metered services combined rate.
April 20, 2010 - 7 - Report No. CFS10-013
Connection Charges
When a new infill structures are being constructed, they often require new or larger connections made to the main water lines or sewer lines. Fees for installation of
connections for either water service or wastewater services are recommended to
increase $25 to $725 per connection. These fees reflect increased costs of arranging, conducting and inspecting the connections made. These fees do not include any lateral lines located on the private property of the owner, rather only the fee to install a tee connection on the main, and connect it to the client’s lateral lines or to cap the new tee.
ALTERNATIVE(S) TO THE RECOMENDATIONS
Council should be aware that traditionally, the rates proposed are to become effective on May 1, 2010, and any delay in approving the budgets will delay the implementation of the new rates and require that they be recalculated based on a revised implementation date.
1. Option 1 – Approve the 2010 Water, Wastewater, Stormwater and Sewage Pumping Station Budgets with the revised appropriate rates to be effective for all bills issue on or after May 1, 2009. 2. Option 2 – Refer the 2010 Water, Wastewater, Stormwater and Sewage
Pumping Station Budgets back to staff for more information and direction and thus delay the adoption of the new user rates for 2010. FINANCIAL IMPLICATIONS Total Expenditure Budgets (net of miscellaneous revenues) to be approved for user rate
recovery are as follows:
2009 2010 Change Change %
Water 6,122,845 6,869,200 746,355 12.2% Wastewater 4,769,701 5,236,200 466,499 9.8%
Storm 979,250 1,091,500 112,250 11.5%
Pump Stations (3) 61,103 59,100 (2,003) (3.3%)
Total for Rate Recoveries $11,932,899 13,256,000 1,323,101 11.1%
April 20, 2010 - 8 - Report No. CFS10-013 Approval of this budget will result in a rate increase to an average annual residential consumer as follows: Current Bill Increase Amt New Billing Increase %
Water Charge 471.76 50.44 522.20 10.7%
Wastewater 344.00 64.68 408.68 18.8% Storm Flat 43.92 5.40 49.32 12.3%
859.68 120.52 980.20 14.0%
One of the main influences on this increase is the 10% rate increases for wholesale water
and wastewater services purchased by Aurora from the Region of York. There are no full-time staff positions being added to the staff complement through the approval of the water, wastewater or storm budgets.
As noted throughout the report, the water, wastewater, stormwater and sewage pumping
station rate structures are consistent with that of previous years whereby establishing and maintaining a sustainable funding model for underground municipal infrastructure has been a key priority. During 2010, the restructured Financial Planning Branch will be undertaking a review of the sufficiency of the capital replacement reserves for all assets.
CONCLUSIONS
The Town’s proposed water, wastewater, stormwater and sewage pumping station rate structure for 2010 have been detailed in this report, along with summarized budgets of operations and administration. All rate increases are to be effective for billings issued on or after May 1, 2010, as is the normal practice.
Staff undertake to review the adequacy of user rate supported capital reserves for
infrastructure repairs and replacements during the 2010 year, and report to Council during the 2011 budget process.
ATTACHMENTS
Attachment #1 – 2010 Proposed Budget for Water Services
Attachment #2 – 2010 Proposed Budget for Wastewater Services
Attachment #3 – 2010 Proposed Budget for Stormwater Systems Services
Attachment #4 – 2010 Proposed Budgets for Sewage Pumping Stations
Attachment #5 – Draft By-law No. 5236-10 being a By-law to amend Municipal Waterworks
Distribution By-law No. 3305-91, as amended
Attachment #6 – Historical Review of Town’s Retail Water, Wastewater, Stormwater and
Sewage Pumping Station rates – 1993 to 2010.
April 20, 2010 - 9 - Report No. CFS10-013 PRE-SUBMISSION REVIEW
Director of Infrastructure & Environmental Services, Director of Corporate & Financial Services – Treasurer, CAO, Finance Department staff
Prepared by: Dan Elliott, Director of Corporate & Financial Services - Treasurer
_________________________________
Ilmar Simanovskis
Director of Infrastructure & Environmental Services
_________________________________ _________________________________ Dan Elliott Neil Garbe
Director of Corporate & Chief Administrative Officer
Financial Services - Treasurer
Town of Aurora
Water Services Budget
2010
Actuals Budget Budget Budget
2009 2009 2010 % Change
Net Revenues
Retail Metered Revenue (5,515,679) (6,122,845) (6,869,200) 12.2%
Wholesale Cost (Region of York) 3,157,900 3,453,383 3,827,300 10.8%
Late Payment Charges (70,641) (77,000) (77,000) 0.0%
Contribution to Fixed Costs (2,428,420) (2,746,462) (3,118,900) 13.6%
Cost of Operations
Maintenance and Operations 1,439,732 1,442,950 1,844,300 27.8%
Corporate Overhead & Administration Allocation 589,975 589,975 582,100 -1.3%
Contribution to Rehabilitation Reserve 1,059,537 1,059,537 1,059,500 0.0%
Misc.Revenues/recoveries(connnections) (255,651) (346,000) (367,000) 6.1%
Prior year Deficit(Surplus) requiring funding 553,136 405,173
Draw from (Contrib. to) reserves re prior year (553,136) (405,173)
Total Fixed Costs 2,833,593 2,746,462 3,118,900 13.6%
Net Budget (Surplus)/ Deficit 405,173 - -
Existing Approved Rate to April 30, 2010 1.0047 1.1794
Proposed New Rate effective May 1, 2010 1.1794 1.3055
Rate Change Percent 17.39% 10.69%
Town of Aurora
Wastewater Services Budget
2010
Actuals Budget Budget Budget
2009 2009 2010 % Change
Net Revenues
Retail Revenue -3,998,762 -4,769,701 (5,236,200) 9.8%
Wholesale Cost 3,635,027 3,865,591 4,344,000 12.4%
Contribution to Fixed Costs (363,735) (904,110) (892,200) -1.3%
Cost of Operations
Maintenance and Operations 398,419 552,402 507,200 -8.2%
Contribution to Rehabilitation Reserve 391,708 391,708 425,000 8.5%
Misc.Revenues/recoveries(connnections) -130,449 -40,000 (40,000) 0.0%
Prior year Deficit(Surplus) requiring funding -22,142 295,943
Draw from (Contrib. to) reserves re prior year 22,142 (295,943)
Total Fixed Costs 659,678 904,110 892,200 -1.3%
Net Budget (Surplus)/ Deficit 295,943 - -
Existing Approved Rate to April 30, 2010 0.8479 0.8600
Proposed New Rate effective May 1, 2010 0.8600 1.0217
Rate Change Percent 1.43% 18.80%
Town of Aurora
Stormwater Systems Services Budget
2010
Actuals Budget Budget Budget
2009 2009 2010 % Change
Net Revenues
Retail Revenues (945,130) (979,250) (1,091,500) 11.5%
Contribution to Fixed Costs (945,130) (979,250) (1,091,500) 11.5%
Cost of Operations
Maintenance and Operations 253,534 389,056 466,500 19.9%
Contribution to Rehabilitation Reserve 725,716 590,194 625,000 5.9%
Prior year Deficit(Surplus) requiring funding 23,412 34,120
Draw from (Contrib. to) reserves re prior year (23,412) (34,120)
Total Fixed Costs 979,250 979,250 1,091,500 11.5%
Net Budget (Surplus)/ Deficit 34,120 - -
Residential Fixed Flat Rate per month
Existing Approved Rate to April 30, 2010 3.7600 3.6600
Proposed New Rate effective May 1, 2010 3.6600 4.1100
Rate Change Percent -2.66% 12.30%
Non-Residential Fixed Flat Rate per month
Existing Approved Rate to April 30, 2010 33.3067 49.6900
Proposed New Rate effective May 1, 2010 49.6900 57.6900
Rate Change Percent 49.19% 16.10%
Town of Aurora
Sewage Pumping Station Budgets for Rate Recovery
2010
Budget Budget Budget
2009 2010 % Change
Ballymore Sewage Pumping Station
Net Revenues
(18,200) (18,930) 4.0%
Contribution to Fixed Costs (18,200) (18,930) 4.0%
Cost of Operations
Utilities 2,000 2,200 10.0%
Materials & Supplies 1,000 1,030 3.0%
Telephone Service 700 700 0.0%
Contracts 12,000 12,500 4.2%
Contribution to Reserves 2,500 2,500 0.0%
Total Fixed Costs 18,200 18,930 4.0%
Net Budget (Surplus)/ Deficit - -
Bayview/Vandorf Sewage Pumping Station
Net Revenues
(24,703) (21,980) -11.0%
Contribution to Fixed Costs (24,703) (21,980) -11.0%
Cost of Operations
Utilities 2,500 2,750 10.0%
Materials & Supplies 1,000 1,030 3.0%
Telephone Service 700 700 0.0%
Contracts 15,000 15,000 0.0%
Contribution to Reserves 5,503 2,500 -54.6%
Total Fixed Costs 24,703 21,980 -11.0%
Net Budget (Surplus)/ Deficit - -
Brentwood Sewage Pumping Station (2010 is first full year)
Net Revenues
(18,200) (18,200) 0.0%
Contribution to Fixed Costs (18,200) (18,200) 0.0%
Cost of Operations
Utilities 2,000 2,000 0.0%
Materials & Supplies 1,000 1,000 0.0%
Telephone Service 700 700 0.0%
Contracts 12,000 12,000 0.0%
Contribution to Reserves 2,500 2,500 0.0%
Total Fixed Costs 18,200 18,200 0.0%
Net Budget (Surplus)/ Deficit - -
Flat Rate Charge Recoveries from benefitting
properties
Flat Rate Charge Recoveries from benefitting
properties
Flat Rate Charge Recoveries from benefitting
properties
EFFECTIVEDATE WATER RATESWASTEWATERCOMBINED RESIDENTIALCOMMERCIAL BALLYMORE BAYVIEWBRENTWOODRATES WATER/WASTEWATERFLAT RATEFLAT RATEFLAT RATEFLAT RATEFLAT RATEper cubic meterper cubic meterRATE per annum per annum per annum per annum per annum1993 0.3500$ 0.5700$ 0.9200$ -$ -$ 1994 0.3500$ 0.5700$ 0.9200$ -$ -$ 1995 0.4000$ 0.5700$ 0.9700$ -$ -$ 1996 0.4930$ 0.5700$ 1.0630$ -$ -$ 90.00$ 1997 0.5400$ 0.5700$ 1.1100$ -$ -$ 90.00$ 1998 0.5940$ 0.4630$ 1.0570$ 17.44$ 102.36$ 90.00$ 90.00$ 1999 0.6440$ 0.4630$ 1.1070$ 26.16$ 153.48$ 90.00$ 90.00$ 2000 0.6440$ 0.4630$ 1.1070$ 26.16$ 153.48$ 90.00$ 90.00$ 2001 0.6440$ 0.4630$ 1.1070$ 34.20$ 204.72$ 90.00$ 90.00$ 01-Jan-02 43.00$ 276.00$ 90.00$ 90.00$ 01-Apr-02 0.6960$ 0.4740$ 1.1700$ 01-Jan-03 43.00$ 276.00$ 90.00$ 90.00$ 01-Apr-03 0.7510$ 0.5010$ 1.2520$ 01-Jan-04 43.00$ 276.00$ 90.00$ 90.00$ 01-Apr-04 0.7880$ 0.5430$ 1.3310$ 01-Apr-05 0.7940$ 0.5910$ 1.3850$ 54.00$ 657.00$ 103.00$ 66.00$ 01-Apr-06 0.8708$ 0.6596$ 1.5304$ 55.40$ 673.80$ 103.00$ 66.00$ 01-May-07 0.9447$ 0.7679$ 1.7126$ 46.48$ 607.44$ 104.58$ 69.12$ 01-May-08 1.0388$ 0.8523$ 1.8911$ 45.12$ 599.52$ 120.44$ 82.72$ -$ 01-May-09 1.1794$ 0.8600$ 2.0394$ 43.92$ 596.28$ 106.32$ 109.32$ 178.4401-May-10 1.3055$ 1.0217$ 2.3272$ 43.92$ 609.72$ 118.92$ 79.44$ 173.28 STORM SEWER RATESRESIDENTIAL AND COMMERCIALS.P.S. RATESTOWN OF AURORA1993 TO 2010ATTACHMENT #6 - GENERAL COMMITTEE REPORT NO. CFS10-013 DATED APRIL 20, 2010HISTORY OF WATER AND SEWER RATES