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Q3 Financial Update (2016) Water and Wastewater Services - Statement of Operations (in thousands of dollars)

  Year to Date Annual
Budget Actual Variance Budget Forecast Variance
Expenses
Compensation $16,308 $15,747 $561 3.4% $21,397 $ 20,628 $ 769 3.6%
Administrative 3,264 1,971 293 39.6% 4,091 3,070 1,022 25.0%
Operational & Supply 7,763 7,770 (6) (0.1%) 10,441 10,977 (536) (5.1%)
Occupancy & Infrastructure 11,849 11,652 197 1.7% 15,799 16,103 304) (1.9%)
Equipment, Vehicles, Technology 3,762 3,920 (158) (4.2%) 5,016 5,742 (726) (14.5%)
Partnership, Rebate, Exemption 6,412 341 6,072 94.7% 11,235 10,748 487 4.3%
Financial Expenditures - (5) 5 0.0% - (4) 4 0.0%
Total Expenses 49,358 41,395 7,964 16.1% 67,979 67,264 715 1.1%
Revenues
Taxation (81,067) (82,341) 1,274 (1.6%) (108,179) (108,869) 690 (0.6%)
By-Law Charges & Sales (800) (699) (100) 12.5% (1,066) (947) (119) 11.2%
Other Revenue 225 (234) 459 204.2% (1,556) (1,371) (185) 11.9%
Total Revenues (81,642) (83,275) 1,633 (2.0%) (110,802) (111,187) 386 (0.3%)
Intercompany Charges
Intercompany Charges 1,418 1,374 44 3.1% 1,890 1,846 44 2.3%
Total Intercompany Charges 1,418 1,374 44 3.1% 1,890 1,846 44 2.3%
Net Expenditure (Revenue) Before Transfers & Indirect Allocations (30,866) (40,506) 9,640 (31.2%) (40,933) (42,078) 1,145 (2.8%)
Transfers
Transfers From Funds (5,732) (1,038) (4,694) 452.4% (10,811) (10,449) (363) 3.4%
Transfers To Funds 30,188 30,188 - 0.0% 40,251 40,251 - 0.0%
Total Transfers 24,456 29,151 (4,694) (19.2%) 29,440 29,802 (363) (1.2%)
Indirect Allocations & Debt
Indirect Allocation 2,914 2,967 (53) (1.8%) 3,876 4,121 (245) (6.3%)
Capital Financing Allocation 6,596 6,597 (1) (0.0%) 7,617 7,614 3 0.0%
Total Indirect Allocations & Debt 9,510 9,564 (54) (0.6%) 11,493 11,736 (243) (2.1%)
Net Expenditure (Revenue) After Transfers & Indirect Allocations $3,101 $(1,791) $4,892 157.7% $- $(540) $540 0.0%

Variance Analysis (in thousands of dollars)

Compensation

The favourable year-to-date and forecasted variances of $561 and $697 are a result of vacancies of water maintenance staff and administrative roles.

Administrative

The favourable year-to-date and forecasted variances of $1,293 and $1,022 are primarily due to lower than expected spending in consulting due to lack of staff capacity to manage consulting engagements.

Operational & Supply

The unfavourable forecasted variance of $536 is primarily due to increased demand for chemicals due to drier than normal weather ($142) and increased haulage costs related to the Biosolids program ($119).

Occupancy & Infrastructure

The favourable year-to-date variance of $197 and unfavourable forecasted variance of $304 are due to lower than budgeted spending for repairs and maintenance to water mains, sewers and buildings ($771 year-to-date, $867 forecasted) and is offset by higher than budgeted utility costs due to increased rates ($458 year-to-date, $732 forecasted), higher than budgeted property tax ($229 forecasted) and higher than budgeted waste disposal costs ($142 year-to-date, $186 forecasted).

Equipment, Vehicles, Technology

The unfavourable forecasted variance of $726 is primarily due to higher than budgeted spending on machinery and equipment repair and maintenance for the lagoon cleaning at the Garner Road Biosolids facility and digester repairs at Niagara Falls WWTP ($537) and increased computer software costs related to the ongoing roll out of a mobile maintenance platform ($110).

Partnership, Rebate, Exemption

The favourable year-to-date variance of $6,072 relates primarily to the timing of expenses related to the 2015 Combined Sewer Overflow (CSO) encumbrance ($6,412). The favourable forecasted variance of $487 represents the unsubscribed 2016 CSO funds that will be returned to reserves at year end. All other subscribed but unpaid funds will be encumbered at year end.

Taxation

The favourable year-to-date and forecasted variances of $1,274 and $690 are due to hotter and drier than normal weather in 2016 that has led to increased water usage and sales. It is expected that flows will be approximately 1,800 megalitres higher than projected for the year

By-Law Charges & Sales

The unfavourable year-to-date and forecasted variances of $100 and $119 are due to lower than budgeted sewer surcharge revenue.

Other Revenue

The favourable year-to-date variance of $459 is due to the timing and recognition of development charge revenue related to the CSO program as well as the timing of revenues for telecommunication rental fees at water and wastewater facilities. Telecommunication rental fees are anticipated to be lower than budgeted at year-end ($84) and the unrecognized development charge revenue due to unsubscribed CSO ($91) result in an unfavourable forecasted variance of $185.

Community Impacts & Achievements

  • The Water and Wastewater Operations Divisions treated 57.6 billion litres of water in 2015 through six water treatment plants and 316 km of water mains, as well as 67.8 billion litres of wastewater through eleven plants and one bio solids storage facility, with collection through 123 pump stations and 283 km of forcemains and gravity sewers.
  • The divisions provide input into water and wastewater approvals and master plans, design and construction, laboratory services, utility locates, source water protection, bio solids management, and environmental monitoring and enforcement.
  • A division wide re-organization which consisted of decentralizing core maintenance and the creation of a new Integrated Systems division was undertaken to streamline processes, improve efficiencies and increase customer service.
  • Significant programs in 2016 include the ongoing "How We Flow" Master Servicing Plan, Security Master Plan, Maintenance Mobile Solution, wet weather flow monitoring project with the Town of Fort Erie, continued refinements to the Port Colborne water loss program, enhanced community involvement and outreach such as the Children's Water Festival, water wagon deployment and Public Works Week which included facility tours and events for the public.
  • Construction is nearing completion at the Niagara-on-the-Lake and Welland wastewater treatment plants. Construction of the new Port Colborne water tower is now underway.
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