Please recycle! - ADDENDUM - - GUELPH CITY COUNCIL MEETING -

October 19, 2011 ********************************************************** Memorandum from Janet Laird and Mark Amorosi, Executive Directors re: Update to Enterprise Funded Budget Council Report.

DATE October 18, 2011

TO Mayor and Councillors

Executive Team

FROM Janet L. Laird, Executive Director

Mark Amorosi, Executive Director

SERVICE AREA Planning & Building, Engineering and Environment

Corporate & Human Resources

DEPARTMENT Water Services, Wastewater Services, and Court Services

Departments

SUBJECT Update to Enterprise Funded Budget Council Report (dated

October 19, 2011).

________________________________________________________________________________________________________

On Thursday October 13, 2011 staff provided Council with the staff report for the 2012

Enterprise Funded Budget.

Due to impacts from the finalization of the benefit calculations for the Tax-Supported

Operating budget, we have updated the staff report with the following changes:

Enterprise Funded Budget - Staff Report to Council:

a) Page 1 Water and Wastewater Services bullet 1: Water expansion net amount of

$149,600 (replaces $150,000);

b) Page 1 Water and Wastewater Services bullet 1: Wastewater expansion net amount of

$92,600 (replaces $89,980);

c) Page 1 Court Services bullet 1: Operating budget of $3,580,250 (replaces $3,580,960);

d) Page 2 final bullet ● capital financing increase of $1,179,800 (replaces $1,101,000);

e) Page 3 third bullet ● capital financing increase of $1,331,980 (replaces $1,264,000);

f) Page 3 fourth bullet ● internal charges increase of $236,549 (replaces $220,377);

g) Add as attachment “Schedule “A” 2011/2012 Water and Wastewater Basic Service

Charge Summary stated as a daily charge”;

In addition, Slide 27 of the Water Services power point presentation has related changes:

a) Capital cost increase of $1,179,800 (replaces $1,101,000);

b) Compensation increase of $187,900 (replaces $266,700); and

c) Revenue Technician cost of $109,600 (replaces $110,000).

Updated copies of both Schedule “A” to the staff report and slide #27 of the presentation

are attached to this memo and hard copies will be attached to the Addendum for the

October 19th, 2011 Enterprise Funded Budget meeting. Please note that there are no

changes affecting the contents of the Enterprise Funded budget binders.

Janet L. Laird, Ph. D. Mark Amorosi Executive Director Executive Director Planning & Building, Engineering and Environment Corporate & Human Resources T 519-822-1260 x2237 T 519-822-1260 x2281 E janet.laird@guelph.ca E mark.amorosi@guelph.ca Attachments: Schedule “A”, updated Slide 27

WATER

Meter

size

2011 Basic

Service Charge

2012 Basic

Service Charge $ Change

5/8 " $0.21 $0.22 $0.01

3/4 " $0.21 $0.22 $0.01

1 " $0.30 $0.31 $0.01

1 1/2 " $0.77 $0.79 $0.02

2 " $1.67 $1.72 $0.05

3 " $3.53 $3.64 $0.11

4 " $6.10 $6.28 $0.18

6 " $11.42 $11.76 $0.34

8 " $19.89 $20.49 $0.60

10 " $32.84 $33.83 $0.99

WASTEWATER

Meter

size

2011 Basic

Service Charge

2012 Basic

Service Charge $ Change

5/8 " $0.30 $0.30 $0.00

3/4 " $0.30 $0.30 $0.00

1 " $0.49 $0.49 $0.00

1 1/2 " $1.29 $1.29 $0.00

2 " $2.91 $2.91 $0.00

3 " $5.91 $5.91 $0.00

4 " $10.57 $10.57 $0.00

6 " $19.87 $19.87 $0.00

8 " $35.00 $35.00 $0.00

10 " $58.32 $58.32 $0.00

Note: 2012 Basic Service Charges to be implemented on March 1, 2012

Schedule "A"

2011/2012 Water and Wastewater

Basic Service Charge Summary

stated as a daily charge

1

2012 Proposed Enterprise Funded

(Non-Tax Supported)

Operating and Capital Budgets

2

• Includes Water Services, Wastewater Services,

the Ontario Building Code (OBA) Administration

and Court Services;

• Self-supporting with no transfer from

property tax;

• Includes operating budget, capital budget,

and 9 year capital forecast.

Introduction

2

3

• Ensure alignment of service with Strategic Plan;

• Better business planning;

• Supports service performance measurement;

• Optimize organizational structure and service

delivery.

Service-Based Budgeting

3

4

• Capital budgets and forecasts reflect increases

related to growth and aging infrastructure;

• Operating increases including internal support

costs, goods and services, compensation and

reserve contributions;

• Various expansions recommended to allow for

more efficient and effective service delivery.

Common Cost Drivers

4

5

Water Services and Wastewater Services Budgets

6

Water/Wastewater Rate Pressures

6

• Mandatory Long-Range Financial Plan requires financial

sustainability;

• Capital reserves not funding accumulated depreciation of

infrastructure;

• Limited use of debt;

• Increased costs for internal support (OMBI);

• Continue multi-year increase with average

annual residential bill increase 8.5%;

• Rates near average of comparator municipalities.

7

220

212

205 204202

200

210

220

230

240

250

2006 2007 2008 2009 2010

Guelph Average Household Water Consumption (cubic metres per year)

250 cubic metres per year standard used for rate comparison

8

• Based on Industry Standard Rate of 250

cubic metres per year per home:

9.6% or $75/year

• Based on Guelph’s Consumption Rate of 200

cubic metres per year per home:

8.5% or $56/year

Increase to Average Annual Residential Bill

8

9 9

10

• Commissioning new Arkell wells; • 100% compliance inspection score; • Source protection and infrastructure grants; • Conservation program rollout and awards; • Lead Reduction Strategy approval & submission; • Environmental assessment completion for

Paisley/Clythe feedermain; • Completion of ISF projects; • Transition to service based budgets.

2011 Water Services Accomplishments

10

11

• Capital cost increases - growth and ageing infrastructure +$1,179,800

• Operating budget cost increases: • Internal support costs +$538,270 • Compensation +$187,900 • Goods and services +$176,570

• Efficiency expansions: • Revenue technician +$109,600 • Infrastructure planning engineer +$40,000

2012 Water Services Key Budget Drivers

11

12

Water Services Capital Budget and Forecast

12

13

Water Services Reserve and Reserve Funds

13

14

• Grand River Water-Shed Wastewater Optimization Project;

• Capacity demonstration and plant expansion deferral;

• Septage receiving station, EPO and Dechlorination buildings;

• Digester cleaning and gas proofing programme;

• Replacement and upgrades to wastewater conveyance system;

• Sewer condition assessment program;

• Environmental Assessment for York Trunk Sanitary;

• Biosolids storage facility and operations centre.

2011 Wastewater Services Accomplishments

14

15

• Capital cost increases - growth and ageing infrastructure + $1,331,980

• Operating budget cost increases: • Goods and services + $896,582 • Internal support costs + $236,549 • Compensation + $171,267

• Efficiency expansions: • Infrastructure planning engineer + $40,000

2012 Wastewater Services Key Budget Drivers

15

16

Wastewater Services Capital Budget and Forecast

16

17

Wastewater Services Reserve and Reserve Funds

17 Note: the DC reserve is being increased to fund phase 2 of the plant expansion. Following the expansion, the reserve will be built up from DC collections.

18

Ontario Building Code (OBC) Administration Budget

19

• Two primary service areas which are separate from one another due to their involvement with the Ontario Building Code: OBC & Reserve – Funded solely from revenues generated by building permit fees. Non–OBC – Various by-laws, programs & services are funded through the tax-supported operating budget.

Building Services Areas

19

20

• Forecasting future building activity and

corresponding revenues;

• Forecasting future workload requirements and

associated staff levels;

• Compensation costs;

• Reduced interdepartmental cross charges (OMBI).

2012 Key Budget Drivers

20

21

2011 OBC Accomplishments

• Operational Review (2010) of permit issuance and building inspections processes. Implementation will be 90% complete at end of 2011;

• Initiated Operational Review of Development Application processes with Economic Development, Planning and Engineering Services;

• In partnership with the Finance Department, successfully transitioned to an Enterprise budget and a service-base budget.

21

22

2012 OBC Objectives

• With our Industry partners, achieve full implementation of Ontario Building Code energy efficiency requirements (effective January 1, 2012);

• Operational Review of permit issuance and building inspection processes - Implementation Strategy Plan;

• Continue to support Operational Review of Development Application process with Economic Development, Planning and Engineering.

22

23

2012 Performance Measures

Due to the reduction of technical staff in 2010, turnaround times continue to increase. Staff believe that the present 6.6 days should be maintained to accommodate the demanding and tight schedules associated with construction projects.

24

The proposed 2012 OBC Administration budget has $2,400,000 in both permit revenues and expenditures –including transfers to the reserve.

* Internal charges are comprised of compensation costs & Interdepartmental support costs.

25 25

Building Stabilization Reserve

• Only used for Ontario Building Code matters:

– to offset lean years;

– to implement service enhancements;

– for unexpected expenses.

• Project that the reserve will be at the

maximum limit within 7 to 10 years.

26

Building Stabilization Reserve

27

Court Services Operating and Capital Budgets

28

Court Services

28

• Mandatory service provided by the City under agreement with the Province of Ontario;

• Service is provided in accordance with the principles of justice and legislative and provincial policy;

• Service ensures public access to justice required by the Canadian Charter of Rights and Freedoms;

• Court Services is a self-supporting enterprise due to fine revenue;

• Fine amounts are set by provincial legislation, not by municipalities operating courts;

• Municipalities cannot alter fine amounts to increase revenue.

29

Court Services is comprised of the following services

29

Prosecutions – prosecutorial resources for resolutions, trials and appeals. Court Support – administer in-court proceedings, transcript preparation, judicial support. Court Administration – public service component of court operations, stakeholder relations, and financial operations. Court Facilities – the provision of physical facilities including courtrooms, public areas, judicial amenities, prosecution and administration offices, and in-custody functions.

30

• Prosecutions – 6800 trial matters. 50 Appeals. • Court Support – 1,200 hours of court support.

Preparation of 50 transcripts. • Court Administration – Over $1M in defaulted

fines recovered. • Court Facilities – First full year of operation in

new facility. Facility tours for staff, Council, media and Doors Open Guelph.

2011 Court Services Accomplishments

30

31

• Operating budget cost increases related to

• Compensation +$65,420

• Purchased services +$72,777

• Creation of POA Contingency Reserve;

• Establishment of Capital asset funding

entirely within Court Services Budget.

2012 Court Services Key Budget Drivers

31

2012 Court Services Operating Budget

32

Insert table from p. 43

33

Court Services Reserve and Reserve Funds

33

34

The End