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Drinking Water System Financial Plan Update Donna Smith, CA-IFA, CBV November 4, 2013

Drinking Water System Financial Plan Update Donna Smith, CA-IFA, CBV November 4, 2013. Agenda. Safe Drinking Water Act 2009 Financial Plan Review 2013 Water System Financial Plan Affordability Impacts of the Plan. Safe Drinking Water Act. Financial Plan Regulation 453/07

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Drinking Water System Financial Plan Update Donna Smith, CA-IFA, CBV November 4, 2013

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  1. Drinking Water System Financial Plan Update Donna Smith, CA-IFA, CBV November 4, 2013

  2. Agenda • Safe Drinking Water Act • 2009 Financial Plan Review • 2013 Water System Financial Plan • Affordability • Impacts of the Plan

  3. Safe Drinking Water Act • Financial Plan Regulation 453/07 • Drinking Water System Owners need to develop and endorse a financially viable Financial Plan for their system • Council endorsed the first Financial plan in February 2010 PURPOSE OF TODAY’S PRESENTATION Council to endorse second Financial Plan in order for the Water System to apply for License Renewal Deadline for submission - December 16, 2013

  4. Financial Plan Objectives O. REG 453/07 • Achieve financial viability • Limit overall water costs over time • Provide safe drinking water in the short term and long term • Long term planning for capital renewal and replacement • Maintain current service levels • Achieve full-cost recovery in the long term

  5. Roles and Responsibilities • City Council - Drinking Water System Owner • Section 19 of the SDWA sets out the legal responsibilities and duties • Owners shall: • Exercise a level of care, diligence, in respect of a municipal drinking-water system • Act honestly, competently and with integrity to ensure safety of the users of the municipal drinking water-system • Standard of Care allows for owners to rely in good faith on expertise of professionals

  6. 2009 Financial Plan Review • Highlights of Significant Changes or Differences: • Expenditures • Consumption • Revenues

  7. 2009 Financial Plan - Expenditures • Facilities and vehicle charges, including utilities, increased by 8% annually • Interdepartmental administrative charges increased by 15% annually • Overall, other Water System operating costs were controlled to offset increases

  8. Key Changes Going Forward - Expenditures

  9. 2009 Financial Plan - Consumption • Actual consumption decreased from 2009 to 2012 similar to those projected • 2013 consumption is expected to be 4% lower than anticipated • 2009 Financial Plan: would stabilize in 2013 • 2013 Financial Plan:

  10. Key Changes Going Forward - Consumption

  11. 2009 Financial Plan - Revenue • Rate increases were generally consistent

  12. Key Changes Going Forward - Revenue Operating Revenues Increased by 34% to Fund Full Cost of Operating the Water System.

  13. 2013 Water System Financial Plan • City’s Financial Plan includes Operating Plan, Funding Plan, Financial Projections and Affordability • Operating plan – operating expenditures, capital costs, debt management • Funding plan – revenues, new debt • Total cash receipts => Total cash expenditures

  14. Financial Plan: Total Cash Expenditures Capital Asset Management Financial Targets are Being Met

  15. Financial Plan: Total Cash Receipts

  16. Service levels maintained Capital asset management targets are being met New debt required of $67 million over twenty two years, financing approximately 50% of total capital investments Projected that Water System will achieve sufficient cash receipts to cover its annual cash expenditures of $33 million Financial viability Full cost recovery achieved over time Impact of Financial Plan

  17. Water Rates and Affordability • Affordability • Affordable water and sewer rates are considered to be 4% of household income • References: US Congressional Budget Office and US Environmental Protection Agency • The residential waste and water costs for 200m3 were $827, which is equal to 1.2% of household income. • Introduction of water credit program in 2011

  18. 2012 Water & Waste Water Cost Comparison - Residential Single Detached Residential 200m3 Annual consumption

  19. 2012 Water & Waste Water Cost Comparison - Commercial Commercial 10,000 m3 Annual Consumption

  20. Water and Sewer Rates Remain Affordable Median Household Income for all Private Households = $71,360 BMA Municipal Study 2012 Single Family Residential S&W Annual Rates

  21. Water System Financial Plan • Provide continual safe drinking water • Achieve financial viability • Continue to charge affordable water rates over the long term Sustainable Affordable

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