Operating Funding Surplus/(Deficit) Review - Quarter 2 Financial Update (2017)

Water and Wastewater

Water and Wastewater Services projected deficit of $3,576 (-4.46% of budget) is due to lower than budgeted water sales of $1,300 due to the cooler and wetter than normal weather, repairs on the digesters at NF WWTP of $1,112 and the Decew WTP reservoir of $769. Staff is reviewing expenditure to assess the possible capitalization based on accounting standards. Other shortfall relate to biosolids land applications, sludge haulage due to digester failures and chemical and utility costs due to usage and price escalations.

It is recommended that the projected funding deficit of $1,982 and $1,594 for water and wastewater be transferred from the water and wastewater stabilization reserves respectively.

Operating Funding Surplus (in the thousands)	$3,576
% of total budget	-4.46%
% of rate revenue	-3.28%

Water and Wastewater Consolidated Statement of Operations

Waste Management

Waste Management Services projected surplus of $5,153 (10.72% of net budget) is due primarily to higher than anticipated recycling market gross revenue for the sale of fibre at $5,116, which also accounts for the higher cost of recyclable material purchased from Haldimand and Waterloo contracts ($1,322). Fibre has increased significantly by $123/tonne for cardboard (OCC), $102/tonne for boxboard (OBB) and $53/tonne for newsprint, over the budgeted gross revenue per tonne ($140/tonne, $105/tonne and $89/tonne respectively), based on favourable market pricing conditions, the highest in at least 15 years for OBB/OCC. Other surplus contributors are the higher Blue Box program industry stewardship funding $385 and reduced compensation and administration costs due to vacancies.

It is recommended that the projected funding surplus of $5,153 for waste management be transferred at year end to the Waste Management Stabilization Reserve $2,300 and the balance to the Landfill Liability Reserve.

Operating Funding Surplus (in the thousands)	$5,153
% of total budget	10.72%
% of rate revenue	14.77%

Waste Management Consolidated Statement of Operations

Levy

Regional Departments and General Government (RD&GG) has a forecast surplus of $760 (0.16% of budget) due to higher investment income of $1,700, reversal of allowance for Merriton Mills receivables to offset tax increment grant of $1,026, Council Strategic Funding of $565, compensation due to corporate wide vacancies and Green Shield benefit costs and other cost restraint measures. These are offset by the estimated cost of legal and insured claims of $3.6 million made against the Region (inclusive of $1 million NRPS equipment claim included in the NRPS indirect allocations), higher tax write-offs of $675, cost of employee terminations and Smarter Niagara Incentive Program grants of $319.

This surplus is offset by deficit in Agencies & Boards of $1,995 primarily due to compensation costs in NRPS of $6,400 which is forecasted to be partially funded with $4,367 from reserves. NRH's surplus of $597 is due to favourable variances in investment income and personnel costs which is recommended to be transferred to the NRH reserves. Court Services net revenue to Region and local area municipalities is forecast to be $430 less than budget for each due to lower fine revenues, to be funded by the Taxpayer Relief Reserve.

RD&GG	$760
Niagara Regional Police	(3,111)
Court Services	(430)
Niagara Regional Housing	597
NPCA	-
Operating Funding Surplus (in the thousands)	$(2,186)
% of total budget	-0.30%
% of levy revenue	-0.63%

Levy Consolidated Statement of Operations