PUBLIC

Created, Draft First Tabling Review

January 21, 2015 March 12, 2015

K. Elgharbawy, Senior Coordinator, Maintenance and Energy Management

M. Farrell, Coordinator, Materials Management

P. de Cock, Comptroller, Business Services

M. Puccetti, Superintendent of Facilities Services

RECOMMENDATION REPORT

Vision:

At Toronto Catholic we transform the world

through witness, faith, innovation and action.

Mission:

The Toronto Catholic District School Board is an

inclusive learning community rooted in the love of

Christ. We educate students to grow in grace and

knowledge and to lead lives of faith, hope and

charity.

G. Poole

Associate Director of Academic Affairs

A. Sangiorgio

Associate Director of Planning and

Facilities

Angela Gauthier

Director of Education

CITY OF TORONTO WATER AND

WASTEWATER UTILITY RATES

“I can do all this through Him who gives me strength.”

Philippians 4:13 (NIV)

REPORT TO

CORPORATE AFFAIRS, STRATEGIC

PLANNING AND PROPERTY

COMMITTEE

Page 32 of 134

Page 2 of 4

A. EXECUTIVE SUMMARY

This report recommends that Board staff pursue Ministry of Education support to

seek exemption from the proposed City of Toronto water surcharge.

B. PURPOSE

1. This report explains future pressures to operating budgets based on a new

City of Toronto method of water rate billing starting in 2017, and the overall

impact of utility increases on the existing and future TCDSB Operations and

Maintenance budgets.

2. The report is further intended to update Trustees that a letter has been sent,

advising the Manager of the City of Toronto Water department that the

Board intends to seek an exemption from the proposed Storm Water

Surcharge, based on the Ministry of Education’s position the surcharge is a

form of taxation, and school boards exemption.

C. BACKGROUND

1. On September 11 and 18, 2013, the City of Toronto Water held consultation

meetings regarding “Toronto Water Future Water Rate Increases”. This

presentation was primarily directed at landowners of extensive, large

properties as well as high consumers of water in the City of Toronto.

2. Currently the water rates are based on consumption and have been

increasing at a rate of 8% per year.

3. The presentation included comments on financing of water infrastructure

and maintenance, an overview of the issue concerning the department,

options to address capital funding deficiencies, what other jurisdictions are

currently doing and the next steps.

4. Stakeholders were asked to provide input on a proposed storm water

management charge in lieu of simple water rate charges.

5. The TCDSB did provide input noting that although the storm water charge

has some merits, the Board does not know how this charge will be

implemented and how it would affect its operations budget.

6. Following City of Toronto consultations, Toronto Water approved to

continue the rate increase at 8% per year.

Page 33 of 134

Page 3 of 4

7. On November 6, 2014, Toronto Water had a follow-up stakeholder

consultation meeting “Toronto Water Future Water Rate Increases”, again

directed at directed at landowners of extensive, large properties as well as

high consumers of water in the City of Toronto. The presentation is

attached in Appendix A.

8. The City of Toronto Water recommends continuation of water rates

increases at 8% per year until 2017 at which point it will split the rates into

two components; a consumption charge and a storm water charge. The

storm water charge will be at $0.77 per square meter of impermeable area

(roof, asphalt and concrete areas, etc.). After 2017, each component will

increase annually at an unknown amount.

9. Each stakeholder was also asked to prepare a letter as to their opinion on the

Toronto Water recommendation. On November 20, 2014 a letter was sent to

the Manager of City of Toronto, explaining that the proposed rate increases

would effectively double the Board’s water and storm management costs.

The letter further explained that the Board has limited financial resources to

address the increase and has other cost pressures such as a deferred

maintenance backlog of $647 M and increases in hydro and gas utility rates.

The letter also requested that if there is an increase, it should be applied

uniformly for all schools, regardless of the size of the property no more than

8% increase per year. The letter also recommended the City apply to the

province, (Ministry of Education or Finance) to request additional funding to

address the increase.

10. Prior to issuing the letter, Board staff held a meeting with its counterparts at

the TDSB (Utilities Monitoring) agreeing to submit a joint letter. A letter

drafted by TCDSB was provided to the TDSB for signature, however, the

TDSB did not respond.

11. In 2014, the Board paid $1.73M (actual) for water consumption. 2015

estimates are at $1.87M, 2016 estimates at $2.02M. Board Staff have

estimated that the combined consumption and storm water charge for 2017

could be as high as $3.56M based on the City’s proposed rate changes, as

noted in the chart below:

Page 34 of 134

Page 4 of 4

12. On January 6, 2015, in discussion with the Ministry of Education, Staff

received a letter provided by the Minister of Education (unreleased to

public), sent to the City of Waterloo, stating that this storm water surcharge

was a form of taxation, and as such, school boards are exempt from paying

the surcharge rate. The ministry official also noted that City of Mississauga

has implemented a similar exemption for the Peel Boards.

13. It is the intention of staff to contact the other boards in the City to request a

letter from the Ministry of Education and jointly inform the City of Toronto

Water of the Ministry’s position.

14. The City request input from stakeholders by February 28, 2014. Staff

submitted a letter to the Manager of the City of Toronto Water, of the

Board’s intention to jointly seek, with the other boards in the City,

exemption from the storm water surcharge.

D. STAFF RECOMMENDATION

That the Toronto Catholic District School Board objects to the proposed increases

and that staff be directed to approach the other school boards in the City, to jointly

pursue Ministry of Education support in seeking an exemption from the proposed

City of Toronto water surcharge.

1.73 1.87 2.02 1.75 1.87 1.81

1.33 1.73 1.87 2.02

3.56 3.20

2014 (Actual) 2015 2016 2017 2018

Comparison of Estimated Water Cost between 2014 to 2018

with impact from proposed storm water charge in 2017 ($M)

Page 35 of 134

Funding Toronto Water’s Capital Program

November 6, 2014 Stakeholder Meeting

Presented by Lou Di Gironimo,

General Manager, Toronto Water

Page 36 of 134

Toronto Water – a snapshot of what you pay for

• Drinking water

– For 3.2 million residents and businesses – Treat and supply 493 billion litres of safe

drinking water annually

• Wastewater

– Collect and treat 438 billion litres of wastewater annually (e.g., water from toilets, dishwashers, washing machines, etc.)

• Stormwater Management

– Protect private property and the environment from stormwater runoff

• Maintenance & Repair

– Repair 1,500 broken watermains each year – Maintain and service 4 water treatment plants

and 4 wastewater treatment plants – Maintain and repair 5,000 km of watermains;

5,700 km of sanitary sewers; 4,300 km of storm sewers

R.C. Harris Water Treatment Plant

Ashbridges Bay Wastewater Treatment Plant

Earl Bales Stormwater Management Pond

2 Page 37 of 134

How are all of these services paid for?

• Pay-as-you-go: Toronto Water’s funding is a “pay-as-you-go” system (i.e., water bills)

• Revenue: 93% of the revenues collected through water bills pays for the services each year – The water rate is completely separate from City

of Toronto taxes • Paying for aging infrastructure: the City has

aging infrastructure, and to help pay for upgrades, 9% water rate increases have occurred for the past 9 years, up to and including 2014

3 Page 38 of 134

Negative effects of stormwater • Stormwater is rain and melted snow • Paved surfaces: In a large city with paved

surfaces, a lot of stormwater can’t be absorbed into the ground, and it makes its way into storm sewers, picking up pollutants, before flowing through pipes into rivers, streams and Lake Ontario

• Older infrastructure: Underground sewers in the oldest part of the city carry both stormwater and sewage. During heavy rainfall the pipes become full and overflow into rivers, streams and Lake Ontario

• Basement flooding: Stormwater runoff (during heavy rains) can also overwhelm and back-up sewer pipes, causing basement flooding

4

Humber River/Lake Ontario

Page 39 of 134

What is the City doing to deal with stormwater?

• The Wet Weather Flow Master Plan (WWFMP) is a 25-year plan to reduce stormwater and protect the environment for healthy rivers, streams, and Lake Ontario – $3 billion over more than 25 years

• Significant large scale projects in the WWFMP: o Building underground infrastructure and a treatment

facility to capture and treat polluted stormwater and sewer overflows before they enter Toronto's waterways like the Don River and Central Waterfront – $1.4 billion over 20 years

o Projects to help reduce basement flooding in areas hardest hit by storms – $962 million over 10 years

• Other projects include: installing tanks and tunnels to intercept stormwater flows, new storm sewers, stormwater ponds etc.

5 Page 40 of 134

Funding challenges

• Dedicated funding is needed to maintain current levels of service and to implement priority projects, especially WWFMP and Basement Flooding Protection Program (BFPP) projects to improve the quality and the quantity of stormwater runoff

6 Page 41 of 134

Example Stormwater Management Projects

7

Earl Bales Park Stormwater Pond Storm sewer upgrades for areas with basement flooding

Page 42 of 134

How does Toronto compare?

8 Page 43 of 134

Funding Options

9

Option 2015 2016 2017 2018 and on

Water rate increases greater than inflation

8% increases for Blocks 1 and 2

8% increases for Blocks 1 and 2

8% increases for Blocks 1 and 2

Nominal increases for Blocks 1 and 2

Stormwater charge

8% increases for Blocks 1 and 2

8% increases for Blocks 1 and 2

Stormwater charge + Decreases for Blocks 1 and 2 Rates

Stormwater charge + Nominal increases Blocks 1 and 2

Debenture financing

8% increases for Blocks 1 and 2

8% increases for Blocks 1 and 2

X% increases for Blocks 1 and 2

Costs associated with debentures (1-2% rate increase in future years) + Nominal increases for Blocks 1 and 2

Page 44 of 134

What is a stormwater charge?

• A stormwater charge (SWC) is determined based on the demands a customer imposes on the stormwater system

• Roughly, the more hard surfaces a property has, the more stormwater runoff it contributes and therefore the more it will be charged

10 Page 45 of 134

Why recommend a stormwater charge?

• More equitable than other options – Based on runoff rather than water

consumption • Greater transparency for cost of services

provided and charges paid • Previous consultation on funding options

for Toronto Water showed support for a stormwater charge compared with other options

• Stormwater charges are increasingly common in other jurisdictions

11 Page 46 of 134

Approximate Stormwater Charges for Various User Groups

13

Property

Class

Number of

Properties Total Area

Average

impervious

area

Runoff

contribution to

stormwater

system

2017 SW cost

by prop class

based on Imp

Area

2017 Estimated

Annual Cost per

Property

Residential 435,972 196,431,931 52% 41% $78,440,599 $ 180

Condos/MFR 7,668 15,383,333 70% 4% $8,269,399 $ 969

Industrial 4,586 19,454,732 77% 6% $11,503,803 $ 969

Commercial +

Institutional 20,093 20,078,169 75% 6% $11,564,073 $ 969

Large

Properties >1

ha Total Area

4,892 160,714,604 65% 42% $80,222,126 $0.77 per m2 of

impervious area

Total 473,211 412,062,769 $190,000,000

SWC averaged for most ICI users All figures are based on initial geographic estimates and are subject to change! Page 47 of 134

Average

consumption (m2) 2016

2017 no

SWC

2017 with

SWC

Consumption Rate Change 8% 8% -9%

SW charge $969

Consumption Charge 2,200 $7,590 $8,197 $6,920

Total $7,888

Impact vs 2016 8% 4%

SW charge $969

Consumption Charge 6,000 $20,701 $22,357 $18,872

Total $19,841

Impact vs 2016 8% -4%

SW charge $969

Consumption Charge 14,000 $48,301 $52,165 $44,034

Total $45,003

Impact vs 2016 8% -7%

Approximately how much will it cost?

14

Multi-Family Residential Properties, including condos

Low

Water Consumption

High

All figures are based on initial geographic estimates and are subject to change. Page 48 of 134

Average

consumption (m2) 2016 2017 no SWC

2017 with

SWC

Consumption Rate Change 8% 8% -9%

Stormwater Charge $969

Consumption Charge 900 $3,105 $3,353 $2,831

Total $3,800

Impact vs 2016 8% 22%

Stormwater Charge $969

Consumption Charge 3,000 $10,350 $11,178 $9,436

Total $10,405

Impact vs 2016 8% 1%

Stormwater Charge $969

Consumption Charge 6,000 $20,701 $22,357 $18,872

Total $19,841

Impact vs 2016 8% -4%

Stormwater Charge $969

Consumption Charge 20,000 $69,002 $74,522 $62,906

Total $63,875

Impact vs 2016 8% -7%

Stormwater Charge $969

Consumption Charge 32,000 $110,403 $119,235 $100,650

Total $101,618

Impact vs 2016 8% -8%

Approximately how much will it cost?

15

Commercial and Institutional Properties

Low

Water Consumption

High

All figures are based on initial geographic estimates and are subject to change. Page 49 of 134

16

Industrial Properties – Block 1

Average

consumption (m2) 2016

2017 no

SWC

2017 with

SWC

Consumption Rate Change 8% 8% -9%

Stormwater Charge $969

Consumption Charge 3,000 $10,350 $11,178 $9,436

Total $10,405

Impact vs 2016 8% 1%

Stormwater Charge $969

Consumption Charge 4,500 $15,525 $16,767 $14,154

Total $15,123

Impact vs 2016 8% -3%

Stormwater Charge $969

Consumption Charge 16,000 $55,202 $59,618 $50,325

Total $51,294

Impact vs 2016 8% -7%

Low

Water Consumption

High

Approximately how much will it cost?

All figures are based on initial geographic estimates and are subject to change. Page 50 of 134

17

Industrial Properties – Block 2

Average

consumption (m2) 2016

2017 no

SWC

2017 with

SWC

Consumption Rate Change 8% 8% -9%

Stormwater Charge $969

Consumption Charge 9,000 $27,946 $30,181 $25,477

Total $26,446

Impact vs 2016 8% -5%

Stormwater Charge $969

Consumption Charge 100,000 $247,714 $267,531 $225,833

Total $226,801

Impact vs 2016 8% -8%

Stormwater Charge $969

Consumption Charge 1,000,000 $2,421,242 $2,614,941 $2,207,372

Total $2,208,340

Impact vs 2016 8% -9%

Low

Water Consumption

High

Approximately how much will it cost?

All figures are based on initial geographic estimates and are subject to change. Page 51 of 134

18

Commercial Property (30 ha)

Consumption

2016

as is

2017

no SWC

2017

with SWC

SW charge $ 227,194

Consumption Charge

203,000 $ 700,369 $ 756,399 $ 638,496

Total $ 865,690

Impact vs 2016 8% 24%

Impervious area = 295,864 m2 at a cost of $0.77/ m2

Approximately how much will it cost?

All figures are based on initial geographic estimates and are subject to change.

Page 52 of 134

19

Industrial Property (7 ha)

Consumption

2016

as is

2017

no SWC

2017

with SWC

SW charge $ 56,473

Consumption Charge

1,402,503 $ 3,391,125 $ 3,662,415 $ 3,091,585

Total $ 3,148,057

Impact vs 2016 8% -7%

Impervious area = 73,542 m2 at a cost of $0.77/ m2

Approximately how much will it cost?

All figures are based on initial geographic estimates and are subject to change. Page 53 of 134

To be added to existing water bills

20

Total Consumption Total Water & Sewer Charge

9% Rate Decrease JAN 01, 2017

Block 1: 750 m3 @3.1453 = $ 2358.96

Stormwater Charge

Industrial: 91 days @969/365 days = $ 241.59

Total = $ 2600.55

WATER – METER READING METER NO. 00000001

Current Reading Date Reading

12/Sep/2017 1990.00

Previous Reading Date

12/Jun/2017 1240.00

--------------------

Consumption (91 days) 750.00 m3

WATER – Current Billing

Page 54 of 134

Incentives • Incentives will be offered to large

properties (i.e., those larger than one hectare) most affected by the stormwater charge for managing stormwater onsite

• Applicants will have to demonstrate management of water quantity and quality

• Details of the program are being determined

21 Page 55 of 134

What other cities have stormwater charges?

22

Municipality Start date

Portland, OR 1977

St. Thomas, ON 2001

Edmonton, AB 2003

Calgary, AB 2004

Regina, SK 2008

Philadelphia, PA 2010

Washington, D.C. 2011

Kitchener & Waterloo, ON 2011

Saskatoon, SK 2012

London, ON 2013

Richmond Hill, ON 2013

Mississauga, ON 2016

Plus hundreds of others across North America…

Page 56 of 134

Timeline

• Early 2015: Council may choose to implement the SWC

• 2015: continue detailed geographic analysis

• 2015-2016: prepare water bills for the addition of a stormwater charge

• 2015-2016: public communication • 2017: implementation of the SWC

23 Page 57 of 134

Your Turn

• What questions do you have? • Concerns? • Issues? • Comments?

24 Page 58 of 134

Next Steps • Staff are preparing a report for the January 2015

Executive Committee • Please provide written feedback to be included in

this report • Send to: Adir Gupta

City Hall, 5th Floor East Tower, 100 Queen Street West, Toronto, ON M5H 2N2

or agupta@toronto.ca • Due date for written submissions: November 21,

2014

25 Page 59 of 134