City of Pitt Meadows 2015 Utilities Financial Plan December 11, 2014

City of Pitt Meadows 2015 Utilities Financial Plan December 11, 2014

Agenda Purpose of Today s Presentation Drainage 2015 Capital & Operating Budget Sewer 2015 Capital & Operating Budget Water 2015 Capital & Operating Budget Solid Waste 2015 Operating Budget Utilities Summary Taxes & Utilities Combined Next Steps Opportunity for Questions, Comments & Public Input

Purpose of Today s Presentation To provide: Context for Council Budget Deliberations Information for decision making purposes during the budget deliberations early next year No decisions are required

Drainage Capital & Operating Budget

Drainage Capital Budget Reserve Description Amount Interest Allocation Yes (estimate) $5,500 Funding Fee (2015 increase is $80K) 580,000 Balance Minimum 5-Year Plan (2015) 205,300 Balance Maximum 5-Year Plan (2019) 852,400 2015 Capital Program 799,500 Significant Project Pump Station #4 (Grant Dependent - Carried Forward from 2014) -5.1 Million Significant Project McKechnie Pump Repl. (2014/15; $401K DCC; Maple Ridge $181K) -1,002,500 Significant Project Kennedy Pump Repl. (2016/17; $741K Debt) -1,105,000 Purpose To provide annual funds for the rehabilitation and replacement of drainage infrastructure.

108,200 205,300 289,800 534,600 683,000 852,400 1,047,800 1,533,200 2,058,600 2,788,000 2015 Utilities Financial Plan Drainage Capital Budget Reserve Balance Planned 2015 Increase is $80,000; Single Family = $9.59 & Multi Family = $4.98 Replacement Value (estimate) = $53,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Drainage Reserve Balance

Drainage Capital Budget Annual Reserve Transfer 1,000,000 900,000 800,000 764,000 700,000 600,000 500,000 580,000 400,000 300,000 200,000 100,000 Actual Reserve Transfer Replacement Reserve Transfer 0

Drainage Capital Budget Debt Funding Year Description Debt Term Interest Rate % Impact $ Single Family Impact $ Total Interest over Term Total Payments over Term Short Term 2015 Long Term 2016 2015 2016 2015/16 Pitt Polder Pump Station $1,835,000 McKechnie Drainage Area 346,000 Baynes Pump Replacement 216,000 TOTAL $2,397,000 10 3.03 45,300 272,300 5.45 32.70 326,000 2,723,000 20 3.60 45,300 166,800 5.45 20.00 939,000 3.336,000 30 3.70 45,300 131,400 5.45 15.80 1,546,000 3,943,000

Drainage Operating Budget Executive Summary Description Budget $ Total Budget $ SF Fee $ SF Budget $ MF Fee $ MF 2014(plus/minus budget drivers below) $1,502,000 $382,600 $98.90 $137,600 $51.50 Capital reserve 80,000 30,700 9.59 13,900 4.98 Maple Ridge drainage levy Area 3 (10,200) (3,900) (1.22) (1,800) (0.63) Administration support allocation 10,300 4,000 1.25 1,800 0.64 Maintenance (ditches, culverts, storm sewers) (6,400) (2,500) (0.78) (1,100) (0.39) Debt servicing (4,700) (1,800) (0.56) (800) (0.29) Other 1,000 400 0.13 200 0.07 Drivers - Total $70,000 $26,900 $8.41 $12,200 $4.38 2015 1,572,000 $409,500 $107.31 $149,800 $55.88 Based on 3,199 Single Family (SF) units - $3,199 is generated for every $1 flat fee increase Based on 2,793 Multi Family (MF) units - $2,793 is generated for every $1 flat fee increase

Drainage Operating Budget Parcel Impact Property Size Assessed Value 2014 Fee 2015 Fee Increase 1 ACRE $536,000 $115.53 $123.48 $7.95 5.6 ACRES 1,406,000 425.53 451.28 25.75 9.8 ACRES 312,296 469.50 490.49 20.99 70.7 ACRES 283,795 3,091.02 3,218.23 127.21

Drainage Summary Where does the money go? Hydro, Telephone, Insurance 13% Administration 14% Ditch Cleaning 20% Drainage Reserve 33% Culvert Maintenance 3% Storm Sewer Maintenance 3% Pump Maintenance 11% Debt Servicing 3%

Sewer Capital & Operating Budget

Sewer Capital Budget Reserve Description Amount Interest Allocation Yes (estimate) $35,000 Funding Fee (2015 increase = $11,000) 368,000 Balance Minimum 5-Year Plan (2015) 1,337,700 Balance Maximum 5-Year Plan (2019) 2,549,700 2015 Capital Program 25,000 Significant Project Sewer Pipe Rehab. (2016 & alternate years thereafter) -300,000 Significant Project Sewer Misc Repairs (annual) -15,000 Significant Project SCADA Upgrades (annual) -10,000 Purpose To provide annual funds to replace or refurbish sanitary sewer system infrastructure including: piping, stations, pumps and related equipment.

959,700 1,337,700 1,515,700 1,993,700 2,171,700 2,549,700 2,627,700 3,005,700 3,083,700 3,461,700 2015 Utilities Financial Plan Sewer Capital Budget Reserve Balance Planned 2015 Increase is $11,000; Single Family / Multi Family = $1.59 Replacement Value (estimate) = $19,700,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Sewer Reserve Balance

Sewer Capital Budget Annual Reserve Transfer 400,000 368,000 368,000 300,000 Actual Reserve Transfer 200,000 Replacement Reserve Transfer

Sewer Operating Budget Executive Summary Description Budget $ Total Budget $ SF/MF Fee $ SF/MF 2014 Flat Fee (incl. 2014 growth) $1,979,300 $1,855,700 $283.00 2014 additional growth (17,600) (16,600) (2.53) 2015 anticipated growth (ex: Cedar Downs) (39,300) (37,000) (5.64) Capital reserve 11,000 10,400 1.59 Utilities (insurance, telephone, hydro) 4,400 4,100 0.63 Maintenance (lift Stations, lines) (17,700) (16,700) (2.55) Other 3,500 3,300 0.50 Drivers - Total ($55,700) ($52,500) ($8.00) 2015 Flat Fee $1,923,600 $1,803,200 $275.00 Based on 6,557 Single Family (SF) & Multi Family (MF) units, $6,557 is generated for every $1 flat fee increase

Sewer Summary Where does the money go? Sewer Reserves 19% Administration 11% Lift Station Maintenance 5% Metro Vancouver GVS & DD Waste Treatment $1,180,000 60% Sewer Line Maintenance 5%

Water Capital & Operating Budget

Water Capital Budget Reserve Description Amount Interest Allocation Yes (estimate) $26,000 Funding Fee (2015 increase = $120K) 925,000 Balance Minimum (2017) 562,500 Balance Maximum (2019) 1,239,500 2015 Capital Program 1,095,000 Significant Project Blakely Road main replacement (2015) -175,000 Significant Project Ford Road main replacement (2014/2015) -500,000 Significant Project Wildwood Crescent main replacement (2015/2016) -550,000 Significant Project McKechnie Road main replacement (2015/2017) -720,000 Purpose To provide annual funds to replace or refurbish waterworks system infrastructure including: piping, hydrants, stations, pumps and related equipment.

701,500 562,500 1,274,500 1,130,500 868,500 1,239,500 1,435,500 1,856,500 1,997,500 2,468,500 2015 Utilities Financial Plan Water Capital Budget Reserve Balance Planned 2015 Increase is $120,000; Single Family = $13.85 & Multi Family = $10.56 Replacement Value (estimate) = $57,400,000 3,000,000 2,000,000 1,000,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Water Reserve Balance

Water Capital Budget Annual Reserve Transfer 1,000,000 900,000 889,000 925,000 800,000 700,000 600,000 500,000 400,000 Actual Reserve Transfer Replacement Reserve Transfer

Water Operating Budget Executive Summary Description Budget $ Total Budget $ SF Fee $ SF Budget $ MF 2014 Flat Fee (incl. 2014 growth) $2,710,910 $1,561,500 $438 $932,900 $334 2014/15 growth from new development (29,700) (12,200) (3.42) (7,300) (2.61) Conservative 2014 metered water revenue (89,600) (36,900) (10.35) (22,000) (7.88) Capital reserve 120,000 49,400 13.85 29,500 10.56 Administration support allocation 14,000 5,800 1.63 3,400 1.22 Maintenance (PRV station, lines, meters) (10,100) (4,200) (1.18) (2,500) (0.90) Other (4,600) (1,900) (0.53) (1,100) (0.39) Drivers - Total 0 0 0 0 0 2015 Flat Fee $2,710,910 $1,561,500 $438 $932,900 $334 Based on 3,565 Single Family (SF) units - $3,565 is generated for every $1 flat fee increase Based on 2,793 Multi Family (MF) units - $2,793 is generated for every $1 flat fee increase Fee $ MF

Water Operating Budget Executive Summary Description 2014 2015 Increase Metered Rate $ Budget $ Rate $ Budget $ Budget $ Consumption Metro Vancouver 1,392,031 Cubic meters Base Charge 701 meters 0.6296 802,100 0.6400 890,900 88,800 276.00 192,700 276.00 193,500 800 Total - Metered $994,800 $1,084,400 $89,600 Base Charge Increase = 0.0% Consumption Metro Vancouver = 1.65%

Water Summary Where does the money go? Metro Vancouver Water Purchase, 60% Water Reserves, 24% Hydrant Maintenance, 1% Administration, 8% PRV Station Maintenance, 2% Water Line Maintenance, 5% Meter Maintenance, 1%

Solid Waste Capital & Operating Budget

Solid Waste Operating Budget Multi-Materials BC (MMBC) Recycling Operating Budget Impact: MMBC Single family incentive too low to cover municipal costs No inflationary component in the MMBC contract $3,750 penalty for contaminated loads - excess of 3%; max. $120,000 annually 2015 Budget: $50,000 for penalties annually & established reserve Revenues phased-in over two years 2014 & 2015

Solid Waste Operating Budget Multi-Materials BC Recycling Operating Budget Impact: Financial Incentive PROPERTY MMBC INCENTIVE CITY COSTS DIFF. Single Family Multi Family Collection Admin Education Total City Costs Waste Mgmt Total $37.00 $2.50 $0.75 $40.25 $4.61 $75.72 $80.33 ($40.08) $20.00 $2.50 $1.00 $23.50 $0.78 $12.81 $13.59 $9.91

Solid Waste Operating Budget Unit Cost Breakdown Property Type Units Waste Mgmt City MMBC Total Cost 2014 Bylaw Incr. / (Decr.) 2015 Bylaw Single Family 3,600 216.00 77.00 (40.00) 253.00 253.00 0.00 253.00 Multi Family Curbside 886 216.00 77.00 (40.00) 253.00 253.00 0.00 253.00 Single Family Mobile Home 162 137.00 30.00 (40.00) 127.00 133.80 (6.80) 127.00 Multi Family Curbside No Garbage 312 137.00 30.00 (40.00) 127.00 96.57 30.43 127.00 Multi-Family Central Collection 2,057 20.00 13.00 (23.00) 10.00 10.00 0.00 10.00 TOTAL 7,017

Solid Waste Operating Budget Charge by Property Type Property Type Units Bylaw Rate Change Budget $ 2014 Solid Waste Revenue Budget $1,208,900 Changes Single Family 3,600 0.00 0.00 Single Family Mobile Home Park 162 (6.80) (1,100) Multi Family Curbside 886 0.00 0.00 Multi Family Curbside No Garbage 312 30.43 9,500 Multi Family Central Collection 2,057 0.00 0.00 Other -1,600 Changes - Total 7,017 $6,800 2015 Solid Waste Revenue Budget - Proposed $1,215,700

Solid Waste Operating Budget Executive Summary Description Budget $ 2014 Solid Waste Revenue Budget: Plus / (Minus Budget Drivers) $1,208,900 2014 growth adjustment 4,300 Garbage ticket revenue (3,000) MMBC recycling incentive (full year) (54,400) Solid Waste Stabilization reserve contribution 64,800 Administration support allocation 18,000 Adjust Waste Mgmt budget to match single/multi family unit counts (23,200) Metro Vancouver tipping fees (reduced garbage tonnage) (10,800) Metro Vancouver tipping fees (increased green waste tonnage) 11,000 Other 100 Drivers - Total $6,800 2015 Solid Waste Revenue Budget - Proposed $1,215,700 Based on 3,702 Single Family (SF) units $3,702 = $1 Fee Increase

Solid Waste Summary Where does the money go? 1,400,000 1,425,000 1,200,000 1,000,000 1,077,000 800,000 600,000 400,000 348,000 Green Waste Recycling Garbage 200,000 0 City Waste Management Total

Utilities Summary

Utilities Summary Fees by Service Type Single Family Home Service Type 2014 Budget 2015 Budget $ Variance Sanitary Sewer Services $ 283 $ 275 $ -8 Water Services 438 438 0 Storm Drainage Services 36 39 3 Dyking 2 2 0 Solid Waste Services 253 253 0 Subtotal (User Fee Charges) $1,012 $1,007 $ -5 Storm Drainage Services (mill rate) 63 68 5 Total Utility Charges $1,075 $1,075 $ 0

Utilities Summary Fees by Service Type Single Family Home $1,075 $1,075 $1,075 $0 $0 $0 $1,070 $5 ($8) $3 $1,065 2014 Sanitary Sewer Services Storm Drainage Services (User Fees) Storm Drainage Services (Mill Rate) Water Services Solid Waste Services Dyking 2015

Utilities Summary Fees by Service Type Multi Family Home Centralized Garbage Collection Service Type 2014 Budget 2015 Budget $ Variance Sanitary Sewer Services $ 283 $ 275 $ -8 Water Services 334 334 0 Storm Drainage Services 15 17 2 Diking 2 2 0 Solid Waste Services 10 10 0 Subtotal (User Fee Charges) $644 $638 $ -6 Storm Drainage Services (mill rate) 36 39 3 Total Utility Charges $680 $677 $ -3

Utilities Summary Fees by Service Type Multi Family Home Centralized Garbage Collection $680 $680 $677 ($3) $0 $0 $0 $675 $3 ($8) $2 $670 2014 Sanitary Sewer Services Storm Drainage Services (User Fees) Storm Drainage Services (Mill Rate) Water Services Solid Waste Services Dyking 2015

Utilities Summary Main Drivers for Zero Increase: Maintenance budget for all utilities reflected three-year average costs Sewer & Water Fund growth Conservative 2014 water meter revenue projection MMBC recycling financial incentive passed along to residences 2 nd year Adjust Waste Mgmt budget to match single and multi family unit counts

Utilities Summary Combined Expenses 4,500,000 4,000,000 3,500,000 $4.2 M $3.7 M 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 $1.1 M 500,000 0 Drainage Sewer Water Solid Waste Total City Metro Vancouver Waste Management

Utilities Summary Financial Challenges 1. Drainage Reserve Inadequate: need to build more quickly to mitigate debt borrowing costs 2. Historic Reserve Funding GAP Financial analysis is required to assess past funding shortfalls and relate to long-term asset replacements and annual funding needs 3. Multi Material BC Market incentive not covering single family cost Penalties are significant - $3,750 per contaminated truck in excess of 3% - maximum $120,000 Contract could be cancelled at any time with 180 days notice 4. Solid Waste Costs need to catch-up to Bylaw Rates Multi-family with curbside recycling / green waste not covering costs 2 nd year phase-in of program 5. Need to Replenish Solid Waste Rate Stabilization Reserve Started in 2015

Utilities Summary Financial Challenges 6. Limited Discretionary Spending Metro Vancouver Water Purchase 26% Metro Vancouver Solid Waste 3% Metro Vancouver Sewer Treatment 13% Waste Management Contract 12% City 46%

Utilities Summary Financial Opportunities 1. Debt Capacity City s debt capacity is favourable Debt allows the allocation of the capital cost to be spread over several generations 2. Leverage Technology Will provide opportunity for implementation of efficient processes Will provide improved public access to better information and will provide self-service options

Taxes & Utilities Combined

Taxes & Utilities Combined: Single Family Home Business Unit 2014 Budget 2015 Budget $ Variance User Fee/Tax Impact Corporate Finance $ -82 $ -112 $ -30-1.64% Operating Reserves -30-13 17 0.96% Capital Reserves 359 369 10 0.56% 1% Strategic Asset Levy 60 78 18 1.00% City Departments 596 604 8 0.45% Library 124 133 9 0.51% Parks & Leisure 243 247 4 0.23% Police - RCMP 502 516 14 0.79% Subtotal - Before Utilities $ 1,772 $ 1,822 $ 50 2.85% Storm Drainage (mill rate) 63 68 5 7.94% User Fee Utilities (Drainage, Water, Sewer, Dyking, Solid Waste) 1,012 1,007-5 -0.49% Total Property Charges $ 2,847 $ 2,897 $ 50 1.76% * Based on April, 2014 BC Assessment Roll Average Assessed Single Family = $457,000 2015 Average assessed value will not be known until tax rolls published in 2015 ** Approximately $17.50 for every 1% increase (e.g. 2.85% x $17.50 ~ $50)

Taxes & Utilities Combined: Single Family Home $2,925 $2,900 $2,897 ($5) $5 $2,875 $9 $4 $14 $50 $2,850 $2,847 $8 $2,825 $10 $18 $2,800 ($30) $17

Taxes & Utilities Combined: Multi Family Home Centralized Garbage Collection Business Unit 2014 Budget 2015 Budget $ Variance User Fee/Tax Impact Corporate Finance $ -63 $ -78 $ -15-1.49% Operating Reserves -18-8 10 0.98% Capital Reserves 208 214 6 0.59% 1% Strategic Asset Levy 35 45 10 1.00% City Departments 349 353 4 0.39% Library 72 77 5 0.49% Parks & Leisure 141 143 2 0.20% Police - RCMP 292 299 7 0.69% Subtotal - Before Utilities $1,016 $1,045 $ 29 2.85% Storm Drainage (mill rate) 36 39 3 8.33% User Fee Utilities (Drainage, Water, Sewer, Dyking, Solid Waste) 644 638-6 -0.93% Total Property Charges $1,696 $1,722 $ 26 1.53% * Based on April, 2014 BC Assessment Roll Average Assessed Multi Family = $263,000 2015 Average assessed value will not be known until tax rolls published in 2015 ** Approximately $10.18 for every 1% increase (e.g. 2.85% x $10.18 ~ $29)

Taxes & Utilities Combined: Multi Family Home Centralized Garbage Collection $1,730 $1,720 $1,710 $1,700 $1,690 $1,696 $6 $10 $4 $5 $2 $7 ($6) $3 $1,722 $26 $1,680 $1,670 ($15) $10

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