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01 09 2017 SpCouncil Agenda The Township of Oro-Medonte Special Council Meeting Agenda Council Chambers Monday, January 9, 2017 11:00 a.m. - Open Session Page 1. Call to Order - Moment of Reflection: 2. Adoption of Agenda: a) Motion to Adopt the Agenda. 3. Disclosure of Pecuniary Interest: 4. Presentations: 3 - 45a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile Bed and Wastewater Rate Analysis; and Report No. ES2017-01, Michelle Jakobi, Manager, Environmental Services Compliance & Capital Projects re: Water, Stormwater, Communal Tile Bed and Wastewater Rate Analysis. 5. Open Forum: The Open Forum provides an opportunity for the public to provide verbal comments to Council, in Open Session, on matters scheduled on the current agenda, and shall be conducted as follows: Open Forum shall last no longer than 20 minutes; Each speaker shall be required to identify the agenda item they are speaking to and provide their name and address, which may become part of the public record; A speaker shall be limited to 2 minutes per agenda item; No response shall be provided to any question posed during Open Forum; No discussion, debate or decisions will occur during Open Forum; Each speaker is permitted to speak only once per agenda item; A speaker may provide comment on one agenda item and then shall step aside to enable another to provide comment on an agenda item; No speaker shall speak to a second agenda item until other individuals have had an opportunity to speak once; Speakers providing comment on the same agenda item, shall be requested to limit their comments so as to provide additional Page 1 of 71 Council Meeting Agenda - January 09, 2017 information and not repeat the same information provided by a previous speaker; Comments made during Open Forum will not form part of the minutes of the meeting; The following matters will not be permitted during Open Forum: o Comments/complaints against Members of Council or Township staff; o Matters beyond the jurisdiction of Council or the Township; o Closed Session agenda items, including current or pending litigation, or Insurance claims and/or pending claims by or against the Township; o Comments with respect to Minutes of Council and Committees; o Comments that are contrary to the Municipal Freedom of Information and Protection of Privacy Act; o Comments with respect to any applications which have proceeded through a Public Meeting in accordance with the Planning Act, with the exception of comment related to a recommendation contained within the Staff Report. The Chair may conclude Open Forum prior to the 20 minute maximum time limit, for non-compliance with the Open Forum parameters, Conduct of Members of the Public, or any other reason. 6. Reports of Municipal Officers: 46 - 70 a) 1:30 p.m. Donna Hewitt, Director, Corporate & Strategic Initiatives; Catherine Oosterbaan, Ec.D., CEcD, Agriculture and Rural Economic Development Advisor, Ministry of Agriculture, Food and Rural Affairs re: Economic Development Strategic Planning Session. 7. Confirmation By-Law: 71 a) By-Law No 2017-003: Being a by-law to confirm the proceedings of the Special Council meeting held on Monday, January 9, 2017. 8. Adjournment: a) Motion to Adjourn. Page 2 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... Page 3 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... Page 4 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... Page 5 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... Page 6 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... Page 7 of 71 1 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... ffi , Medonte - © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Stormwater Page 8 of 71 Corporation of the Township of Oro Water, Communal Tile Bed and Wastewater Rate Analysis Presentation to Township Council January 9, 2016 2 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... and systems Management stormwater ffi Stormwater its Comprehensive implements Rate Review is an expectation that all three activities will increase in scope and cost as © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte Financial information is hypothetical and for illustrative purposes onlyActual rates will differ and will be based on 2017 budget information - wastewater management servicesThere the Municipality Master Plan and continues to assume water and wastewater This presentation includes indications of how the recommended rate structures would work: Township of Oro Introduction Page 9 of 71 3 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... , metres shortfalls to ffi were invoiced to customers metres levels 2015, predominantly due to wet summers and lower than forecasted Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte Municipality has incurred approximately $350,000 in water rate - Water services Approximately 2,500 municipal water customers serviced through 13 different municipal systemsTotal annual water production in 2015 was approximately 500,000 cubic of which 370,000 cubic Annual operating costs are approximately $1.3 million, funded primarily through a variable rate structure that invoices customers at a rate of $2.44 per cubic metreAnnual capital funding is approximately $530,000, funded through a quarterly infrastructure renewal fee of $59.00 per customerThe December consumption Township of Oro Overview of the Current Situation 1. Page 10 of 71 4 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... new Stormwater ffi management infrastructure is comprised of: management ponds and drains located in subdivisions and the adoption of the Comprehensive stormwater management funding is limited and does not fully address the services management costs are expected to increase as a result of management activities are currently funded entirely through taxation stormwater roadside ditches and culverts Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte Stormwateranticipated capital and operating requirements associated with the - Rural Urban Stormwater StormwaterProvincial legislation Management Master Plan, part of the Lake Simcoe Protection PlanStormwater Township of Oro Overview of the Current Situation 2. Page 11 of 71 5 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... ffi Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - 400 customers that also receive water from the Municipality240 equivalent customers that do not receive water from the MunicipalityOperating costsImmediately required repairs and maintenanceRecovery of operating shortfallsAdministrative costsCapital requirements Wastewater services The Municipality administers the billing process for Skyline (owner of the wastewater infrastructure), with most customers charged a flat rate of $1,524.34 plus HSTTotal forecasted wastewater costs, as presented by Skyline, were approximately $2.4 million, which funds: Township of Oro Overview of the Current Situation 3.Approximately 640 wastewater customers, comprised of: Page 12 of 71 6 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... ffi term plan in place for the replacement of the systems - Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte Flat fee for operating, repairs and maintenance ($225 per year)Flat fee for capital ($115 per year) - No longPotential exists for the Province to require an alternative solution Communal tile beds The Municipality currently maintains seven communal tile bed systems providing wastewater service to 93 properties in the Horseshoe Valley AreaThe Municipality budgeted $21,000 for the operation and maintenance of the communal tile beds, funded through:The remaining life of the tile beds and associated septic tanks is 10 to 20 years Township of Oro Overview of the Current Situation 4. Page 13 of 71 7 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... ffi Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Establishing rates should attempt to reflect two important considerations:FairnessSustainability Users should pay for what they receiveNeed to differentiate between usage and access:Approximately 80% of water costs are incurred regardless of consumption levels and our experience demonstrates a similar level of fixed costs for wastewater servicesUsers benefit from having discretionary access to all environmental servicesOther utilities (cable, local phone) bill based on access, not usageFunding should be sufficient to provide reliable service that is compliant with regulations, while ensuring sufficiency for future capital reinvestment 2. 1. Township of Oro First Principles Page 14 of 71 8 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... ffi Medonte - © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Page 15 of 71 Corporation of the Township of Oro Water Analysis and Rate Recommendations 9 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... ffi called consumption risk and resultant - Rate Review Creates an inconsistency between expenses and revenuesExposes the Municipality to sofinancial deficits © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - The Municipality currently funds water services almost exclusively through variable charges, even though 83% of costs are fixedUse of variable rate also creates a fairness concern as users do not pay for access to serviceThe Municipality currently funds approximately 45% of its identified capital requirements, resulting in an increasing infrastructure deficit as time progresses Fixed vs. variable costs Sufficiency 1.2. Township of Oro Current Issues with Water Services Page 16 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 10 ffi Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - In comparison to the remainder of Simcoe County municipalities, the Municipality has the second highest cost for residential water services (which includes the quarterly infrastructure charge) The cost of water services in the Municipality reflects the relatively large number of water systems in operation (13) and the corresponding difficulties in achieving economies of scale Relatively high water costs in comparison to other municipalities . 3 Township of Oro Current Issues with Water Services Page 17 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 11 1,200.00 1,000.00 800.00 ffi 600.00 400.00 200.00 - Tay Tiny Essa Orillia Barrie Innisfil Severn Ramara Midland Clearview Springwater Collingwood Oro-Medonte Wasaga Beach Adjala-Tosorntio Rate Review New Tecumseth Penetanguishene © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Bradford - West Gwillimbury Annual Residential Water Costs (20 cubic meters per month) Township of Oro Water Cost Comparison Page 18 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 12 regardless of ffi Description pay based solely on how much they consumepay a fixed amount for operating costs plus a All users pay the same amount,consumptionUsersUsersvariable consumption charge Rate Review rate structure Rate Structure © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. rate Medonte - Fixed rate VariableCombined Township of Oro Water Rate Alternatives Page 19 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 13 and information on the next slide ffi in approach that starts with a low fixed recovery - rate implementation of a fixed quarterly service charge for that the Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - hypothetical example of this impact is provided Implement a fixed quarterly service charge for operating costs Better matches fixed costs with fixed revenue sourcesAllows fairer recovery of operating costs for maintenance of system Minimizes the risk of deficits in periods of low consumptionRecovers a portion of costs associated with treated water that is not invoiced to customers (water used in fire fighting, flushing, routine operational maintenance activities, leaks etc.) A illustrates variable consumption Actual rates would need to be determined based on 2017 budget We recommend a phasedpercentage (20%), increasing to 50% over a four year period 1. Township of Oro Water Rate Recommendations Page 20 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 14 50% 2,500$1.10 $75.00 D D 500,000 $750,000$550,000 ($750,000)($200,000) $1,500,000 $1,500,000 40% 2,500$1.40 $60.00 C C 500,000 $600,000$700,000 ($600,000)($200,000) $1,500,000$1,500,000 30% $1.70 2,500 $45.00 B B 500,000 ffi $850,000 $450,000 ($450,000)($200,000) $1,500,000 $1,500,000 20% $2.00 2,500 $30.00 A A 500,000 $300,000 ($300,000)($200,000) $1,500,000$1,000,000 $1,500,000 4 quarters ) 3 3 ÷ (B) of customers (B) per m ÷ through service charge umber Rate Review operating costsother revenues operating costsn consumption (m © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. charge (A) Medonte operating charge - Implement a fixed and variable quarterly service charge for operating costs VariableHypotheticalPortion recovered(above)HypotheticalAdjusted consumption charge revenueEstimatedConsumption charge Fixed operating chargeHypotheticalPercentage recovered through service chargeTotal service charge revenue (A)HypotheticalQuarterly 1. Township of Oro Water Rate Recommendations Page 21 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 15 x 4 2,500 100% 2023 $1,303 $1,303 $130.30 $521.20 x 4 89% 2,500 $1,164 $1,303 2022 $116.36 $465.44 x 4 80% 2,500 2021 $1,039 $1,303 $103.90 $415.60 x 4 71% $928 2,500 2020 $92.78 $1,303 $371.12 x 4 ffi 64% $829 2,500 2019 $82.85 $1,303 $331.40 which reflects existing assets x 4 57% $740 2,500 2018 $73.99 $1,303 $295.96 x 4 51% $661 2,500 $66.07 $1,303 2017 $264.28 4 x 45% $590 2,500 $59.00$1,303 2016 $236.00 plan (adopted November 2016) renewal charge Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. of funding requirement met Medonte annual capital funding - of customers infrastructure renewal charge Increase the quarterly infrastructure renewal charge compared to the current level of funding of $530,000Closing this funding gap over a seven year period would require an average increase of $11.00 per quarter (less than $1.00 per week)The management Quarterly infrastructureAnnualNumberProjected annual revenue (in thousands)Estimatedrequirement (in thousands)Percentage 2. Township of Oro Water Rate Recommendations Page 22 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 16 law - ffi Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The Municipality has accumulated operating deficits totaling $350,000 with respect to water services in recent yearsIn the interest of fairness, these costs should be recovered from water customers (i.e. user pay) and not through the tax levyThe Municipality currently invoices for only 69% of treated water through user fees, with some portion of the unbilled water used for fire protectionGiven that all residents benefit from fire protection, consideration could be given to charging a small amount to fire services (2% of total water costs) Medonte - Recover past deficits through future rate increases Recover a portion of unbilled water costs through the tax levyUpdate the water rate setting policy, associated fees and charges byand public communication protocol 3.4.5. Township of Oro Water Rate Recommendations Page 23 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 17 of Recovery year recovery Component Fund accumulatedoperating deficitsIncorporated into calculationvariable and fixed operating chargeFiveperiod Deficit Fixed Charge ffi Infrastructure Fund capital investmentrequirementsPer customerIncrease over seven years untilcapital funding requirement is fully financed over metre Variable Fund annual operating costsPer cubic of water consumedDecreasingfour years concurrent with increases in fixed operating charge Operating Charge recover Fixed Fund annual operating costsPer customerInitially20% of operating costs, increasing to 50% of operating costs over four years Operating Charge Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - PurposeBasis of billingPhasing Township of Oro Water Rate Recommendations Page 24 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 18 ffi Analysis Medonte - © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Page 25 of 71 Corporation of the Township of Oro Stormwaterand Rate Recommendations 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 19 ffi of activity is expected to increase Management Stormwater Stormwater Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - No allocation of costs based on runoff generatedInsufficient funding for expanded operating costs and anticipated capital reinvestment requirements as the level significantly in the future as a result of the recently completed Comprehensive provincial legislation No incentive to adopt source controls to reduce runoff Fairness SufficiencyEnvironmental impacts 1.2.3. Township of Oro Current Issues with Page 26 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 20 ffi Description of users pay different flat rates All users pay the same amountDifferent typesCustomers are charged based on the amount ofimpervious area (parking lots, roofs, sidewalks) Management Rate Alternatives Rate Review rate Rate Structure © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - rate FlatTiered flatVariable rate Township of Oro Stormwater Page 27 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 21 ffi management flat rates management rate policy stormwater stormwater Management Rate Recommendations Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Establish urban and rural Adopt of formal 1.2. Township of Oro Stormwater Page 28 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 22 ffi Medonte - © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Page 29 of 71 Corporation of the Township of Oro Wastewater Analysis and Rate Recommendations 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 23 wastewater collection network ffi usage and access billings have historically funded only the wastewater treatment Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Lack of differentiation between Currently, all customers are billed the same amount regardless of the amount of wastewater generatedNot all customers receive water from the Municipality (some receive water from Skyline), limiting the ability to allocate costs based on wastewater generated Although, forecasted financial information is provided by Skyline, audited financial statements as requested by the Township have not been consistently provided Wastewater facility with additional funding required for the Fairness Information gapsCollection system funding 1.2.3. Township of Oro Current Issues with Wastewater Billings Page 30 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 24 to Skyline for the purposes ffi costs terms of the Municipal Responsibility Agreement and Municipal system and as such, ultimate responsibility rests with Skyline Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - The Municipality does not own or operate the wastewater collection and treatment Under the Capital Facility Agreement, the Municipality has agreed to collect wastewater charges from customers based on information provided by SkylineFunds collected by the Municipality are provided of covering operating and capital The Municipality cannot control the quantum of costs charged for wastewater services or the use of funding Private ownership of treatment facility 4. Township of Oro Current Issues with Wastewater Billings (Continued) Page 31 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 25 regardless of ffi Description billings are calculated as a percentage of All users pay the same amount,wastewater generatedWastewaterwater billingsWastewater billings are charged based on metered wastewater flows surcharge Rate Review Rate Structure © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. rate Medonte - Fixed rate WastewaterVariable Township of Oro Wastewater Rate Alternatives Page 32 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 26 Step 3 of water billings Customers receiving water Invoice based on a percentage ffi services from the Municipality Step 1 Allocate costs between water customers and other customers receiving water basis Step 2 not Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Invoice based on a per customer A hypothetical example is included on the following page services from the Municipality Customers Township of Oro Wastewater Rate Recommendations Page 33 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 27 That Receive 240 37.5% From the $375,000 $1,000,000 Municipality Water Services Customers Do Not 400 62.5% $625,000 Receive Water $1,000,000 Municipality ffi Customers That Service From the Do (A)(B)(C) (D) Reference Recommendation customers Rate Structure Rate Review of total wastewater customers share of wastewater costs (A) x (B) © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Allocate costs between customers that also receive water services from the Medonte - Total wastewaterPercentageTotal wastewater costs (hypothetical)Allocated Step 1 Municipality and customers that do not receive water services from the Municipality Township of Oro Wastewater Page 34 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 28 That Receive 240 From the $375,000 $1,562.50 Municipality Water Services Customers Do Not Receive Water Municipality ffi Customers That Service From the Do (A) (D) Reference Recommendation (A) ÷ Rate Structure Rate Review wastewater customers Billing (only for customers that © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Determine per customer charge for those customers that do not receive water Medonte - per customer (D) Flat Ratedo not receive water services from the Municipality)Allocated share of wastewater costsNumber of Cost Step 2 services from the Municipality Township of Oro Wastewater Page 35 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 29 That quarter Receive $3.20/m3 $48.00 per Rate From the Wastewater Municipality Water Services Customers Do Not 160%160% Percentage 160% Wastewater $625,000$400,000 Receive Water Municipality ffi Customers That Service From the Do /m3 quarter $2.00 $30.00 per (E) (D) Water Rate Reference Recommendation consumed (E) Rate Structure ÷ Rate Review water billings (from all 400 charges as a percentage of Determine charges for customers that also receive water services share of wastewater costs © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - AllocatedHypotheticalcustomers)Wastewaterwater billings (D) Variable charge per m3 of waterQuarterly fixed operating charge Step 3 from the Municipality, based on a percentage of their water charges Township of Oro Wastewater Page 36 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 30 ffi Recommendation can retain excess revenues in the event that water Rate Structure under the recommended wastewater rate structure Rate Review Municipality will not be required to compensate Skyline for any shortfalls to ensure that: © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - the in revenues in the event that water consumption levels are lower than budgeted; and The Municipality consumption levels are higher than budgeted, with the funds held in reserve to finance future revenue shortfalls. connection with the implementation of the revised wastewater rate structure, In we recommend that the Municipality consider obtaining an agreement from Skyline In the absence of this agreement, the Municipality should retain its current wastewater rate structure as it would be exposed to potential financial losses Township of Oro Wastewater Page 37 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 31 of in - Recovery Component Fund accumulatedoperating deficitsIncorporated into calculationvariable and fixed operating chargesNo phase Deficit in - Fixed Charge ffi Infrastructure Fund immediatelyrequired repairs and future capital investment requirementsPer customerNo phase of over Variable Fund annual operating costsand administrative costsPercentage water variable operating chargeDecreasingfour years concurrent with increases in fixed operating charge Operating Charge of recover Fixed Fund annual operating costsand administrative costsPercentagewater fixed operating chargeInitially20% of operating costs, increasing to 50% of operating costs over four years Operating Charge Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - PurposeBasis of billingPhasing Township of Oro Wastewater Rate Recommendations Page 38 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 32 ffi Medonte - © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Page 39 of 71 Corporation of the Township of Oro Communal Tile Bed Rate Recommendations 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 33 ffi Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Current system addresses capital and operating requirementsRelatively small number of homogeneous usersEasiest method of implementation Continued use of operating and capital fixed charges Consideration of future replacement strategy and required adjustment to rate structure (if necessary) Township of Oro Communal Tile Bed Rate Recommendations 1.2. Page 40 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 34 ffi Medonte - © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Page 41 of 71 Corporation of the Township of Oro Next Steps 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 35 ffi law - , Communal Tile Beds . 3rd quarter 2017) ie Rate Review Stormwater © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Water, Council to consider phased in approachImplementation to tentatively coincide with 2017 budget ratification and existing billing cycles (Develop a public information session and communication strategy to notify users of updates fees and implementation datesUpdate Fees and Charges By Wastewater Facilitate negotiations with Skyline for revised Agreements with Municipality Township of Oro Next Steps 1.2. Page 42 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 36 ffi term view to future capital scenarios will assist in - Information pamphlets with tax and water billingsOnline informationPublic information sessions Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Communication of the rationale for and nature of the changes is considered to be a critical element of implementationPotential communication strategies can include:Confirmation of specific matters relating to wastewater billings with Skyline is in our view a key requirement for changes to the wastewater billing systemAdoption of a longdetermining infrastructure funding Medonte - Communication strategy:Other considerations: General Considerations: Township of Oro Next Steps Page 43 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... 37 ffi Rate Review © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms aentity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Medonte - Township of Oro Questions Page 44 of 71 4.a) Oscar Poloni, KPMG re: Water, Stormwater, Communal Tile... kpmg.ca © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Page 45 of 71 DetailHeadingDetail HeadingDetailHeadingDetailHeading 6.a) 1:30 p.m. Donna Hewitt, Director, Corporate & Strategic... 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Page 70 of 71 7.a) By-Law No 2017-003: Being a by-law to confirm the proce... Nvojdjqbm!Bdu-!3112-!T/P/!3112-!D/!36-!bt!bnfoefe! Page 71 of 71