WATER
Approved
www.london.ca/budget
Contents
Water Budget Overview
Recommendations ..................................................................................................................................................................... 1
Executive Summary ................................................................................................................................................................... 2
Operating Budget
2015 Budget Highlights ........................................................................................................................................................... 21
2015 Object of Expenditure and Source of Revenue Summary .............................................................................. 22
2015 Operating Program Budget Summary .................................................................................................................... 23
Overview of Program Changes – Revenue ....................................................................................................................... 24
Overview of Program Changes – Expenditures ............................................................................................................. 25
Four Year Operating Forecast ............................................................................................................................................... 26
Performance Measures and Staffing ................................................................................................................................... 29
Capital Budget
Capital Expenditure Linkage to Safe Drinking Water Act .......................................................................................... 30
Capital Program .......................................................................................................................................................................... 31
Capital Expenditure Summary by Classification ........................................................................................................... 33
Capital Source of Financing Summary ............................................................................................................................... 34
Capital Expenditure Detail...................................................................................................................................................... 35
Reserve Funds and Reserves .................................................................................................. 53
Debt Summary................................................................................................................................. 57
Appendix A - 2015 Schedule of Rates and Charges .................................................... 59
Appendix B - 2015 Business Plan ......................................................................................... 64
Water
2015 Budget and Forecast
Recommendations
Council resolved on January 27, 2015:
“That, on the recommendation of the Managing Director, Environmental and Engineering
Services and City Engineer, with the concurrence of the Managing Director, Corporate
Services & City Treasurer, Chief Financial Officer, the following actions be taken with respect
to the 2015 Operating Budget, 2015 Capital Budget and associated forecasts for Water
Services:
(a)
the 2015 Operating Budget for Water Services BE APPROVED as submitted;
(b)
the 2016 - 2019 Operating Forecast for Water Services BE RECEIVED for information;
(c)
the 2015 Capital Budget for Water Services BE APPROVED as submitted;
(d)
the 2016 - 2024 Capital Forecast for Water Services BE RECEIVED for information;
it being noted that all rates and charges related to the provision of Water Services, with the
exception of the Customer Assistance charge, will increase by 7% effective January 1, 2015 as
approved by Council on November 25, 2014.”
1
Water
2015 Budget and Forecast
Supporting Council’s 2010-2014 Strategic Plan by Responding to its Strategies

A Strong
Economy
A Vibrant &
Diverse
Community
 
A Green &
Growing City
A Sustainable
Infrastructure
A Caring
Community
A Strong Economy:
•
•
•
•
Invest in infrastructure – robust capital programs for growth, lifecycle renewal and
system improvement
Maintain competitive utility rates – fair and equitable rate structure that supports both
water conservation and low rates for industry
Establish a focused strategy for the downtown – capital investment in downtown
infrastructure
Build on the industrial land development strategy (ILDS) – ILDS projects included in the
capital program
A Green and Growing City:
•
•
•
•
•
Promote a “green culture” and the fundamentals of sustainability – water conservation
programs
Reduce carbon footprint through wise actions that benefit our local, regional and global
environment – energy reduction projects with significant results
Facilitate, plan and manage growth for the greatest long-term benefit for all – updated
Master Plan in 2014
Demonstrate environmental leadership in all municipal operations – innovation and use
of new technologies to reduce construction impacts
Establish London as a leader in green technologies – participation in research, testing
and commercial validation
A Sustainable Infrastructure:
•
Invest in strong, safe, modern and efficient infrastructure networks – a balanced
watermain replacement program with cutting edge rehabilitation technologies
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Water
2015 Budget and Forecast


Ensure affordability for users – fair and equitable rate structure that supports both water
conservation and low rates for industry
Achieve effectiveness, economy and efficiency in operations – achieving financial
stability
One of the most significant undertakings of the new Council will be to update the City’s
strategic plan that will cover the next 4 years. The newly elected Council will be establishing
the vision and future direction for the City and the strategic objectives that support the
vision. It is anticipated that the development of the new strategic plan will be completed in
early 2015.
Overview
The approved 2015 Water operating and capital budgets represent the final step along the
path to a sustainable water supply system for Londoners. Continuing the theme of the 2014
budget, the 2015 Water operating and capital budgets support 4 core business objectives:




Compliance
Growth
Efficiency
Best Management Practices
Municipal Councillors and officials have oversight responsibilities under Section 19 of the Safe
Drinking Water Act, which became a statutory requirement on January 1, 2013. Severe
penalties are possible for municipal officials who fail to act in good faith and do not exercise
honesty, competence and integrity to ensure the protection and safety of the users of
municipal drinking water systems. A statutory standard of care is required on the part of our
elected officials to prevent waterborne disease outbreaks.
Considerable effort has been undertaken in the Water Service Area to assess risk and put in
place management strategies to reduce risk and minimize the impact on our customers by
addressing the 5 “barriers” to compliance outlined in the Safe Drinking Water Act:





Source water protection
Effective treatment
Secure distribution
Effective monitoring
Effective management
3
Water
2015 Budget and Forecast
The financial sustainability plan endorsed by Council during the development of the 2013
budget and confirmed during 2014 budget deliberations continues to remain the foundation on
which the 2015 operating and capital budgets were developed. Adherence to the plan will
result in a 7% rate increase in 2015. Financial sustainability 1 continues to be projected in 2016.
This is two years earlier than forecasted in the Financial Plan.
The approved 2015 Water budget presents a balanced cost/revenue plan in the amount of
$73.6 million. This represents an overall budget increase of 5.5% over 2014. Although rates
are increasing 7%, lower water consumption is anticipated to partially offset the incremental
revenue from the rate increase.
Total 2015 Approved Budget = $73.6 million
Capital & Debt
Servicing
$31.2 million
Operating
$42.4 million
The approved operating portion of the budget totalling $42.4 million represents a 2.4%
increase over 2014. There are a number of factors driving this 2.4% increase, including:
•
$837,000 increase in the wholesale cost of purchasing water from the Elgin Area and
Lake Huron Primary Water Supply Systems. Rates will increase by 9% and 5%
respectively. This increase is partially offset by a reduction in the volume of water
purchased;
1
Financial Sustainability is defined as the movement toward annual rate increases that can be maintained at or near the
annual rate of inflation based on a combination of the Consumer Price Index (CPI) and the Construction Price Index with
appropriate use of debt financing, adequate reserve funds and the appropriate investment in capital.
4
Water
2015 Budget and Forecast
•
•
•
$73,000 increase in purchased services, attributable to an inflationary increase in the
charges to Water for restoration services performed by Transportation Operations,
increasing utility locate costs, and a 12% forecasted increase in insurance premiums;
$81,000 increase in administrative costs, driven by an inflationary increase in the
charges to Water for corporate administrative services;
$18,000 net decrease in personnel costs, materials and supplies and equipment rental
costs.
The approved 2015 capital budget totals $29.9 million, up from $27.7 million in 2014. The total
5 year capital plan for 2015 to 2019 amounts to $186.1 million, up from the $163.5 million that
the 5 year capital plan outlined in the 2014 approved Water capital budget. Major factors
contributing to the increase in the capital forecast include:
•
•
$16 million of new projects added to the capital plan over the next 5 years to support the
City’s Industrial Land Development Strategy, two-thirds of which are assumed to be
funded by senior levels of government.
Changes to the timing of various capital projects in accordance with the 2014
Development Charges Background Study and Growth Management Implementation
Strategy (GMIS).
5
Water
2015 Budget and Forecast
No rate supported debt is anticipated within the next 5 years, although approximately $10
million of debt is anticipated to support the proposed capital plan at the end of the 10 year
window. Debt servicing costs are projected to decrease from $364 thousand to $350
thousand, while rate supported capital funding has increased by $0.2 million, from $16.9
million to $17.1 million.
Ensuring adequate reserve funds in accordance with the 20 Year Water System Plan
continues to be a priority. The new water rate structure, combined with the forecasted future
rate increases, will enable reserve funds to be maintained at a more optimal level, recognizing
that higher than average drawdowns are forecasted in the 2021 to 2023 timeframe to support
the proposed capital plan.
Impact on the Average Residential Ratepayer
The average cost to the homeowner for 2015 is forecasted to increase by $24 per year (based
on projected 2014 consumption of 171.9 m3). At the revised rates for 2015, the homeowner’s
cost for the year will be $367 or $1.01 per day.
Budgeted Residential Cost at
Forecasted Residential Cost
2014 Rates (1)
at 2014 Rates (2)
$363
$343
2015 Increase (7%)
Forecasted Residential Cost
at 2015 Rates (3)
$24
$367
3
(1) The budgeted residential cost in 2014 was based on an average residential consumption of 181.2 m .
(2) The forecasted residential cost in 2014 has been restated using a revised average residential consumption estimate of 171.9 m 3.
(3) The forecasted residential cost in 2015 is based on an average residential consumption of 171.9 m 3.
6
Water
2015 Budget and Forecast
Recent Accomplishments
The Water utility has successfully completed a number of initiatives in support of its 4 core
business objectives – Compliance, Growth, Efficiency and Best Management Practices.
Selected highlights of recent accomplishments include:
Compliance
•
•
•
Continued compliance with the City’s Water Operational Plan under the Drinking Water
Quality Management Standard, and increased vigilance with respect to compliance
under the Safe Drinking Water Act and the Fire Code. Received a 100% score on the
Ministry of the Environment Report Card (audit) for 2013.
Implemented a proactive preventative maintenance program for eliminating and/or
substantively reducing the risk of drinking water contamination in flooded air and
vacuum valve chambers within the distribution system.
Continued the program for replacement of lead services, consistent with the
recommendations of the Walkerton Inquiry.
Growth
•
•
•
Prepared the City’s Water Growth Master Plan and the Water component of the new
2014 Development Charges Background Study.
Provided input to the Industrial Land Development Strategy.
These plans will form the roadmap for growth-related expenditures in the coming years.
7
Water
2015 Budget and Forecast
Efficiency
•
Initiated the District Meter Areas (EW1630) capital project aimed at reducing London’s
non-revenue water by identifying and remedying leakage within the system in targeted
areas of the City. This project will be expanded over the next 5 years to continue to
reduce leakage in the system, while also potentially being implemented in new
subdivisions to provide a mechanism to charge for construction water usage. This
program addresses findings noted in PwC’s 2011 Value for Money audit 2.
Best Management Practices
•
•
Implemented the new water and wastewater rate structure effective March 1, 2013. The
new rate structure shifts a greater proportion of water revenues to fixed charges,
making the utility less susceptible to changes in consumption. The rate structure also
introduced the new Fire Protection Charge to recover for the costs associated with the
provision of water for fire protection purposes. These changes were consistent with the
recommendations of the PwC Value for Money audit conducted in 2011.
Progressed towards implementation of a Computerized Maintenance Management
System, to bring the utility’s maintenance and work flow management up to industry
standards. This will result in staff resource efficiencies, enhanced documentation, and
cost tracking of maintenance activities, while also ensuring compliance with regulatory
requirements.
Economic Challenges
Notwithstanding the recent successes of the Water service area, a number of economic
challenges currently affect the 2015 budget as well as the forecast for the near future:
•
•
•
•
•
•
Consumption
Non-revenue water
Wholesale purchase of water costs
Inflation
Energy prices
Senior government funding programs
Although these challenges are being managed, they could adversely affect future budgets.
2
A Value for Money audit is conducted to assess the effectiveness and efficiency of an organization’s utilization of its funds.
8
Water
2015 Budget and Forecast
Consumption
•
•
•
•
•
Despite the implementation of the new water and wastewater rate structure in March
2013 that shifted a greater proportion of total revenues to fixed charges, revenues
continue to be heavily influenced by water consumption.
Water conservation efforts, coupled with recent weather conditions that have not been
conducive to water consumption, continue to drive water usage lower than
Administration previously forecasted.
The chart below illustrates the declining water consumption trend, as well as the
savings that have been achieved by an average residential user as a result of
conservation efforts. As the chart indicates, average residential consumption has
decreased 30% in the past 12 years, from a peak of approximately 253 m3/year in 2001
to approximately 176.3 m3/year in 2013.
A significant reduction in forecasted consumption was made for the 2014 budget,
reducing consumption forecasts from 43.2M m3 in 2013 to 41.0M m3 (5%) for 2014. A
further anticipated reduction to 40.1M m3 (2%) per year is the basis for the 2015 budget.
If recent consumption trends are indicative of future water use patterns, the Water utility
may be challenged to generate sufficient revenues to support current and future
infrastructure needs under the current rate plan.
9
Water
2015 Budget and Forecast
Non-Revenue Water
•
•
•
Notwithstanding abnormally high non-revenue water 3 experienced in 2014 from leakage
resulting from watermain and water service breaks due to the harsh winter conditions,
non-revenue water has averaged approximately 10-11% over the last 5 years, which is
below the provincial average of approximately 15%.
Enhanced leak reduction efforts (such as the 5 year District Meter Areas capital
program initiated in 2014) and meter replacement strategy are being undertaken in
order to reduce non-revenue water even further.
The Water financial model assumes future non-revenue water of 10% based on these
initiatives. Not achieving and maintaining this level of non-revenue water may require
greater rate increases in the future.
Non-Revenue Water
16%
14%
12%
10%
8%
6%
4%
2%
0%
Provincial Average
London's 5-year Average
3
Non-revenue water represents water purchased by the City of London but not billed to water users. Reasons for nonrevenue water include, but are not limited to, water lost in the system due to leakage, water consumed in firefighting
activities, water meter inaccuracies, etc.
10
Water
2015 Budget and Forecast
Wholesale Purchase of Water Costs
•
•
The cost of purchasing water from the Lake Huron and Elgin Area Primary Water
Supply Systems is a significant component of the Water budget, comprising
approximately 29% of the total Water operating budget.
The Water financial model includes the most up-to-date rate plans from the water
boards. Any changes to these rate plans may in turn affect the City’s forecasted rates.
Inflation
•
•
The outcome of achieving “financial sustainability” in the context of the Water and
Wastewater utilities is realizing future rate increases at or near the level of inflation.
Administration is currently forecasting this future inflationary rate at approximately 3%
based on a combination of consumer prices and construction price indices. 4
Should economic circumstances (nationally, provincially or locally) change, future rate
forecasts could be positively or adversely affected.
Energy Prices
•
Although inflation is a significant factor in future rate forecasts, price increases in energy
commodities – specifically electricity and natural gas – could have an impact on future
rate forecasts.
4
This inflationary-level rate is based on the Bank of Canada’s long-term inflation target of 2% and the historical nonresidential building price index which has traditionally averaged approximately 4%/year.
11
Water
2015 Budget and Forecast
•
•
Currently, electricity costs are forecasted to increase at an average of 6.2%/year from
2015 to 2019 (based on City of London forecasts); these increases are much higher
than general inflation trends.
While further energy efficiency projects are planned for the near future, increases in
energy prices greater than forecasted above could adversely impact future budgets.
Senior Government Funding Programs
•
•
Outside of the annual federal gas tax funding currently allocated to the Water utility and
the Huron Elgin London Project (HELP) that is winding down, there are currently no
senior government funding programs assisting Water. Previously, Water was able to
access funding under the Infrastructure Stimulus program to assist in funding critical
infrastructure works.
Included in the approved 2015 Water budget and described in further detail below are
various projects related to the City’s Industrial Land Development Strategy. The first
phase of these projects has been included in the budget based on the assumption that
two-thirds of the required funding would be provided by senior levels of government.
Should this funding not materialize, the capital plan will be adversely affected.
Revenue Overview
The following chart outlines the key factors driving the $3.86M (5.5%) increase in revenues in
the approved 2015 budget:
Explanation of Changes in Revenue
Change
($000's)
Revenue impact of reduced water consumption. Water consumption forecast has been
reduced from 41.0M m3 in 2014 to 40.1M m3 in 2015 as a result of the continuing trend
of water conservation.
(918)
Change in other revenues, primarily due to a larger than previously forecasted number of
water service applications.
58
7% rate increase for 2015.
4,723
Total Change in Revenues
3,863
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Water
2015 Budget and Forecast
Operating Budget Overview
The following chart outlines the key factors driving the $3.86M (5.5%) increase in expenditures
in the approved 2015 budget:
Explanation of Changes in Expenditures
Change
($000's)
Increase in the wholesale cost of purchasing water from the Elgin Area and Lake Huron Primary Water
Supply Systems. Rates will increase by 9% and 5% respectively. This increase is partially offset by a
reduction in the volume of water purchased.
837
Increase in purchased services, attributable to an inflationary increase in the charges to Water for
restoration services performed by Transportation Operations, increasing utility locate costs, and a
forecasted 12% increase in insurance premiums.
73
Increase in administrative costs, driven primarily by a 1.9% inflationary increase in the charges to
Water for corporate administrative services.
81
Minor decrease in forecasted personnel costs, partially offset by small anticipated increases in
materials and supplies and equipment rental costs.
(18)
Operating Related Subtotal
973
Increased contributions to reserve funds to reflect capital requirements outlined in the 20 Year Water
System Plan and the objective of maintaining sufficient reserve fund balances to support an estimated
asset base of $2.7 billion.
2,648
Increase in capital levy required to achieve the average long-term target of 75% of life cycle projects
funded on a pay-as-you-go basis, consistent with the corporate strategic financial plan.
256
Decreased debt servicing costs resulting from debt issued for prior years approved capital projects.
(14)
Capital Related Subtotal
2,890
Total Change in Expenditures
3,863
Capital Plan Overview
The Water Service Area remains proactive with initiatives to ensure that this service continues
to meet the demands and expectations of customers. Existing infrastructure requires
significant renewal (replacement and rehabilitation) work to ensure that future generations and
businesses are not faced with a water system that is failing, unreliable and expensive to
maintain. The City of London’s State of the Infrastructure Report 2013 identified a current
Water infrastructure gap of $1.9 million, which is forecasted to grow to $37.8 million in 10 years
if not addressed. The Water 20 Year Plan reflects the investment required to address the
current and future infrastructure gap.
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Water
2015 Budget and Forecast
The following chart highlights the 2015 capital plan and forecast for 2016-24:
Category
Lifecycle 5
Growth 6
Service Improvement 7
2015 Approved Budget
$22.8M
$5.9M
$1.3M
2016-2024 Forecast
$279.6M
$67.1M
$8.1M
The 2015 capital plan breaks down into the following categories of spending:
Category
Watermains
Meters
Reservoirs & Pumping Stations
Other Miscellaneous Capital Projects
TOTAL
2015 Approved Budget
$27.2M
$0.4M
$1.5M
$0.8M
$29.9M
5
Replacement or rehabilitation of existing infrastructure.
Provision of new services to growth areas of the city.
7
Initiatives to enhance the efficiency and/or effectiveness of services provided.
6
14
Water
2015 Budget and Forecast
Highlights of the 2015 capital plan are discussed in further detail below.
Lifecycle
2015 Approved Budget
$22.8M
•
•
2016-2019 Forecast
$116.8M
2020-2024 Forecast
$162.8M
EW3563-15 Main Rehabilitation Program (10 Year Program Forecast: $74.6M) – The
Main Rehabilitation Program is used for the cleaning and relining of watermains to
maintain flow capacity and provide safe drinking water. The Main Rehabilitation
Program targets areas of the City where water quality (taste, colour, chlorine residual)
has deteriorated due to prolonged water detention time and internal corrosion of the
watermain. Identification is driven, in part, by customer water quality complaints.
Cleaning and relining restores water quality and improves fire flow, while extending the
life of a watermain that would otherwise have to be replaced at a much higher cost, and
also reduces social impacts and disruption by utilizing trenchless technologies.
Trenchless technologies have been used by the Water Service Area since the mid
1990’s. Compared to open cut and surface restoration construction, trenchless methods
minimize the amount of excavation required, minimize damage to surface structures,
cause less traffic disruption and reduce noise and dust for homeowners. This
technology also allows installations to be made in areas where open excavation is
impractical, impossible, extremely difficult, or costly. Trenchless procedures are also
more environmentally friendly because they produce less construction emissions. With
continuously improving lining technology and increasing contractor competition in this
area, the cost to rehabilitate watermains is expected to decrease somewhat, allowing
more watermains to be renewed through rehabilitation rather than complete
replacement.
EW3765-15 & EW3787-15 Main Replacement Programs (10 Year Program Forecast:
$114.2M) – While main rehabilitation is preferred to pipe replacement, there are many
instances where lining or relining is impractical or infeasible and replacement of the
main is necessary. The Watermain Replacement Program is an annual program that is
coordinated with sewer work, roadworks and other utility replacements. This program
ensures that the water distribution system remains reliable, while coordination with other
works ensures that the infrastructure is replaced as cost effectively as possible.
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Water
2015 Budget and Forecast
•
EW3842-15 Replacement of Water Services (10 Year Program Forecast: $20.0M) –
This program has traditionally been dedicated to the replacement of lead water services
and was funded in the amount of $750,000 per year in recent years. One of the
recommendations from the Walkerton Inquiry report was, “lead service lines should be
located and replaced over time with safer materials.” The original intention of this
program was to enhance the safety of the water distribution system by addressing that
specific recommendation. In recent years, however, the Water service area has noted a
substantial increase in the number copper water services that are experiencing
premature failure well in advance of their anticipated life expectancy. As a result,
funding for this program has been increased from the previous $750,000/year to $2.0
million/year in order to address the emerging challenge. Funding levels will be reviewed
annually as more knowledge is obtained regarding the failure rate for copper water
services.
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Water
2015 Budget and Forecast
Growth
2015 Approved Budget
$5.9M
2016-2019 Forecast
$35.8M
2020-2024 Forecast
$31.2M
Industrial Land Development Strategy
(10 Year Forecast: $23.8M)
For more than 40 years, the City of London has been engaged in developing industrial
land. This work supports City Council’s priority of ‘A Strong Economy’ by attracting investment
and jobs to London. Council’s 2011-2014 Strategic Plan specifically recognizes the importance
of industrial land to London’s prosperity. Council directed the Civic Administration to develop a
comprehensive strategy to guide industrial land development efforts. In March 2014, the
Municipal Council adopted an Industrial Land Development Strategy (ILDS).
The estimated cost for land servicing in the first of two phases of the Industrial Land
Development Strategy over the next 5 years is $120 million. The City of London is to contribute
$40 million and is requesting $40 million from each of the federal and provincial governments,
a three-way split, to support this strategy. Of the $120 million estimated total servicing cost for
the first phase of the ILDS, $16.0 million has been earmarked for water servicing works in the
Water 5 year capital plan. One-third of these costs will be funded in the Water Budget through
Water rates. A further $7.8 million for water servicing is included in the capital plan for the
second phase of the ILDS beyond 5 years. Should funding from the federal and provincial
governments not be available or not be provided to the extent envisioned, the capital plans will
be adjusted accordingly to accommodate the funding available for the ILDS program.
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Water
2015 Budget and Forecast
Water Servicing for Infill and Intensification
(10 Year Forecast: $5.5M)
Infill and intensification, particularly in the downtown area, is a significant priority of
Administration and Council. While infill 8 and intensification can be less expensive from a
servicing standpoint than greenfield 9 development, it is not completely without cost. In many
cases the existing infrastructure servicing the locations where intensification is planned is
inadequate to manage the additional strain placed on it by the planned development. As a
result, it is necessary to upgrade the infrastructure to support the intensification needs. Based
on the estimates included in the 2014 Development Charges Background Study, a total of
$11.0 million has been added to the Water 20 year capital plan ($5.5 million in the first 10
years) to address infrastructure needs associated with infill and intensification projects. The
scheduling for these expenditures is still subject to actual development opportunities as they
arise.
Service Improvement
2015 Approved Budget
$1.3M
•
2016-2019 Forecast
$3.5M
2020-2024 Forecast
$4.6M
EW1630 District Meter Areas (10 Year Forecast: $2.0M) – This innovative 5-year
program was introduced as part of the 2014 budget and addresses recommendations in
the Value for Money audit conducted by PwC in 2011. The objective of this program is
to gradually reduce London’s non-revenue water, which has averaged approximately
10-11% in recent years. Best practice indicates that considerable savings can result
with the installation of properly designed District Meter Areas (DMA’s) throughout the
City – dividing the City into zones (50+) where pressure and flow is monitored to
determine if there are leaks. These savings in lost water will support ongoing
operational costs of the program and pay back the initial capital costs incurred. This
program also reduces the number of watermain breaks, property damage and customer
inconvenience, while minimizing staff time (including overtime) to repair future breaks.
An opportunity also exists to utilize DMA’s in new subdivisions to provide a mechanism
to charge for construction water usage.
Future Regulations
The City of London has responded to the Environmental Bill of Rights Registry on a proposal
paper about Stewardship, Leadership, Accountability – Safeguarding and Sustaining Ontario’s
8
9
Infill is the use of lands within a previously developed area for further construction.
Greenfield development is construction on new lands that have not previously been developed.
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Water
2015 Budget and Forecast
Water Resources for Future Generations. The main concern for London revolves around the
point of whether London is undertaking a transfer of water across a Great Lake basin
boundary. Staff at the City of London and Regional Water Supply Systems are fully engaged
with the appropriate Ministries to ensure the best interests of the City of London and other
regional municipalities are considered. A discussion document on the matter was issued in
early 2014, which is the initial step in introducing related regulations. Although the preliminary
interpretation of this discussion document is favourable for London, changes could still be
made prior to final regulations being enacted. The long term cost impacts, if any, as a result of
these regulations are not entirely known at this time.
The Water Opportunities Act introduced mandatory legislation which was anticipated in the
development of the Water Efficiency Program and Municipal Drinking Water Awareness Plan.
Other key elements of the Act incorporated within a “municipal water sustainability plan”
include an asset management plan and associated maintenance management system, a
financial plan and a risk assessment. These initiatives are either complete or well underway,
thereby putting the City in a good position to meet the requirements of the legislation and the
subsequent enabling regulations. Any further impacts on staff resources and financial
commitments will not be clear until the regulations of the Water Opportunities Act are put
forward, but it is clear that more effort will be required than was previously budgeted.
Future Forecasted Rate Increases
The Water service area continues to strive towards an efficient and effective water supply
system while achieving financial sustainability – rate increases at or near the rate of inflation
with appropriate use of debt financing, adequate reserves and appropriate investment in
capital – in accordance with the Financial Plan endorsed by Council. Consistent with the
forecast presented in the 2014 budget, a 7% increase is required for 2015, with inflationarylevel increases forecasted for 2016 and beyond (currently anticipated to be around 3%) based
on the information currently available. As discussed, there are a number of factors influencing
the 2015 budget and forecasts which may have a positive or adverse impact on future rates.
Conclusion
The City of London’s water distribution system has a replacement value of approximately $2.7
billion. Operating expenditures continue to be minimized in an effort to maximize capital
funding so that the infrastructure gap is managed to a sustainable level.
The Water service area remains committed to ensure that the citizens of London have access
to reliable, high quality, abundant water to satisfy all their water needs (drinking, food
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Water
2015 Budget and Forecast
preparation, sanitation, showers, laundry, outdoor water use, etc.). This essential service is an
integral part of the City’s strategic priorities regarding A Green & Growing City, A Sustainable
Infrastructure and A Strong Economy. Becoming financially sustainable provides value for
future generations and stable rate increases for current customers.
The approved 2015 Water budget presents a balanced cost/revenue plan in the amount of
$73.6 million based on a 7% rate increase for 2015, consistent with the financial sustainability
plan endorsed by Council during the 2013 budget process and confirmed during 2014 budget
deliberations. This represents an increase of $24/year for the average residential customer.
At just $1.01/day for the average residential customer, the 2015 Water Budget ensures:
•
•
•
•
•
Compliance with regulatory requirements;
Capital investments in existing and future growth needs;
Efficiency measures, now and in the future;
Sound Financial Management; and,
Achieving financial sustainability in 2016:
o Meet license requirements / move towards a sustainable infrastructure;
o Reserve fund balances approaching more adequate levels; and
o Financial flexibility to accommodate future needs.
20
Water
2015 Operating Budget
With Forecasts
Water
2015 Budget Highlights
($000's)
2015 Approved Budget
2014 Approved Budget
Increase Over 2014 Budget
Impact of Reduced Water Consumption & Increase in Other Revenues
Total Rate Increase
Water
Infrastructure
Charges
31%
Other
Revenues
1%
Capital Funding
& Debt
Servicing
43%
Administrative
Expenses
4%
5.5%
1.5%
7.0%
Billing &
Customer
Service
3%
Purchased
Services
4%
Materials &
Supplies
3%
Equipment
Rentals
2%
Fire Protection
Charges
4%
Customer
Assistance
Charges
1%
%
Expenditure Budget
$73,568
Revenue Budget
$73,568
Water Usage
Charges
63%
($000's)
$73,568
$69,705
$3,863
Purchase of
Water
29%
Personnel Costs
12%
21
Water
2015 Object of Expenditure and Source of Revenue Summary
($000's)
Object of Expenditure and Source of Revenue
Revenues
Residential
Commercial, Institutional, Industrial & Multi Family Residential
Water Usage Charges (1)
Water Infrastructure Charges (1)
(1)
Fire Protection Charges
(1)
Customer Assistance Charges
Other Revenues (2)
Total Revenues
Operating Related
Purchase of Water
Personnel Costs
Administrative, Other & Recovered Expenses
Billing & Customer Service
Purchased Services
Materials & Supplies
Equipment & Rentals
Total Operating Related
Financial Expenses
Capital Levy
Reserve Fund Contribution (3)
Debt Servicing Costs
Total Financial Expenses
Total Expenditures
2013
Actuals
2014
2015
Change
from
Revised Approved
Budget
Budget
2014
Prior
Year
Change
7,154
4,955
32,565
15,555
1,991
257
1,397
63,874
44,821
21,047
2,529
305
1,003
69,705
46,858
22,602
2,740
308
1,060
73,568
19,846
8,042
2,866
2,337
2,832
1,896
1,620
39,439
20,822
8,318
3,154
2,407
2,810
2,223
1,649
41,383
21,659
8,260
3,235
2,407
2,883
2,234
1,678
42,356
837
(58)
81
0
73
11
29
973
4.0%
-0.7%
2.6%
0.0%
2.6%
0.5%
1.8%
2.4%
13,600
10,578
257
24,435
16,856
11,102
364
28,322
17,112
13,750
350
31,212
256
2,648
(14)
2,890
1.5%
23.9%
-3.8%
10.2%
63,874
69,705
73,568
3,863
5.5%
2,037
1,555
211
3
57
3,863
(1) Reflects revised categorization of revenue accounts after the implementation of the new water rate structure effective March 1, 2013.
(2) Prior to 2014, meter revenues were included in Other Revenues. These charges are now reflected in Water Infrastructure Charges.
(3) Includes contributions to reserves for Local Improvements and Self Insurance.
4.5%
7.4%
8.3%
1.0%
5.7%
5.5%
22
Water
2015 Operating Program Budget Summary
($000's)
Program
Total Revenues
Engineering & Operations
Engineering
Water Operations
Purchase of Water
General Administration
Billing & Customer Service
Total Engineering & Operations
Total Capital Contributions & Financial Expenses
Total Expenditures
2013
Actuals
63,874
1,385
12,645
19,846
3,226
2,337
39,439
24,435
63,874
Change
2014
2015
from
Revised Approved
2014
Budget
Budget
69,705
73,568
3,863
1,757
13,369
20,822
3,028
2,407
41,383
28,322
69,705
1,738
13,400
21,659
3,152
2,407
42,356
31,212
73,568
(19)
31
837
124
0
973
2,890
3,863
Prior
Year
Change
5.5 %
-1.1%
0.2%
4.0%
4.1%
0.0%
2.4 %
10.2 %
5.5 %
23
Water
Overview of Program Changes - Revenue
($000's)
Explanation of Changes in Revenue
Revenue impact of reduced water consumption. Water consumption forecast has been
reduced from 41.0M m3 in 2014 to 40.1M m3 in 2015 as a result of the continuing trend of
water conservation.
Change in other revenues, primarily due to a larger than previously forecasted number of water
service applications.
7% rate increase for 2015.
Change
($000's)
(918)
58
4,723
Total Change in Revenues
3,863
24
Water
Overview of Program Changes - Expenditures
($000's)
Explanation of Changes in Expenditures
Change
($000's)
Increase in the wholesale cost of purchasing water from the Elgin Area and Lake Huron Primary Water
Supply Systems. Rates will increase by 9% and 5% respectively. This increase is partially offset by a
reduction in the volume of water purchased.
837
Increase in purchased services, attributable to an inflationary increase in the charges to Water for
restoration services performed by Transportation Operations, increasing utility locate costs, and a
forecasted 12% increase in insurance premiums.
73
Increase in administrative costs, driven primarily by a 1.9% inflationary increase in the charges to Water for
corporate administrative services.
81
Minor decrease in forecasted personnel costs, partially offset by small anticipated increases in materials and
supplies and equipment rental costs.
(18)
Operating Related Subtotal
973
Increased contributions to reserve funds to reflect capital requirements outlined in the 20 Year Water
System Plan and the objective of maintaining sufficient reserve fund balances to support an estimated asset
base of $2.7 billion.
2,648
Increase in capital levy required to achieve the average long-term target of 75% of life cycle projects funded
on a pay-as-you-go basis, consistent with the corporate strategic financial plan.
256
Decreased debt servicing costs resulting from debt issued for prior years approved capital projects.
(14)
Capital Related Subtotal
2,890
Total Change in Expenditures
3,863
25
Water
Four Year Operating Forecast
Revenue
Rate increases of 7% in 2015 and 3% thereafter have been incorporated into the 20 Year Water System Plan. While the
declining water consumption trend helps to postpone future works, it continues to place significant pressure on the City’s
capacity to raise funds to operate, maintain and improve the existing system. The implementation of the new water rate
structure in 2013 partially offsets declining consumption by shifting a greater portion of total revenues to fixed charges.
However, the City remains heavily dependent on water consumption to generate sufficient revenues. The projected rate
increases are offset by an anticipated average annual net consumption reduction of 1% per year until 2021. An average
net consumption increase of 0.75% per year is then forecasted until 2034. Deviations from these projections, changes to
the economic climate or legislative requirements may result in modifications to the 20 Year Water System Plan to ensure
sustainability is achieved and maintained.
Fixed revenue streams (Water Infrastructure Charge, Fire Protection Charge, etc.) are forecasted to increase at 1% per
year in addition to the approved rate increase for each respective year due to growth in the number of customer accounts.
Engineering & Operations
For 2016 to 2019, operating expenditures are projected to increase at an average annual rate of 2.1% per year. The
main driver of these increases are Purchase of Water costs, which are forecasted to increase an average of 2.7% per
year based on the current rate plans of the Lake Huron and Elgin Area Primary Water Supply Systems. Electricity costs
are also expected to put pressure on operating budgets with a cumulative increase of almost 25% by 2019, assuming
these costs are not curbed by further energy efficiency projects.
26
Water
Four Year Operating Forecast
The 2.1% average annual increase is consistent with various inflationary indicators published by the Bank of Canada and
other financial institutions and aligns with the objective of maintaining operating-related increases at or below
approximately 2%/year. With construction cost increases traditionally averaging approximately 4%/year over the past 10
years according to the Non-Residential Building Construction Price Index (NRBCPI), maintaining operating-related
increases at 2%/year is critical to maintaining an overall blended increase of 3%/year.
Capital Financing
The forecast from 2016 to 2019 projects the lifecycle renewal program to be 75% funded through capital levy. Achieving
the 75% capital levy is consistent with the Strategic Financial Plan to ensure that lifecycle renewal projects are primarily
funded on a "pay-as-you-go" basis.
Contributions to reserve funds will change depending on the timing of capital projects identified in the 20 Year Water
System Plan. It is imperative that adequate reserve fund balances be maintained to support an asset base with an
estimated replacement value of at least $2.7 billion.
27
Water
Four Year Operating Forecast
($000's)
Program
Water Rate Increase Forecast
2015
2016
Approved Budget
Budget Forecast
7.0%
3.0%
Incr. /(Decr.)
Over 2015
$
%
2017
Budget
Forecast
3.0%
Incr. /(Decr.)
Over 2016
$
%
2018
Budget
Forecast
3.0%
Incr. /(Decr.)
Over 2017
$
%
2019
Budget
Forecast
3.0%
Incr. /(Decr.)
Over 2018
$
%
Revenues
Water Usage Charges
Water Infrastructure Charges
Fire Protection Charges
Customer Assistance Charges
Other Revenues
46,858
22,602
2,740
308
1,060
47,904
23,503
2,851
311
1,085
1,046
901
111
3
25
2.3%
4.0%
4.1%
1.0%
2.4%
48,964
24,442
2,966
314
1,110
1,060
939
115
3
25
2.3%
4.0%
4.0%
1.0%
2.3%
50,038
25,419
3,085
317
1,136
1,074
977
119
3
26
2.2%
4.0%
4.0%
1.0%
2.3%
50,872
26,434
3,209
320
1,163
834
1,015
124
3
27
1.7%
4.0%
4.0%
0.9%
2.4%
Total Revenues
73,568
75,654
2,086
2.8%
77,796
2,142
2.8%
79,995
2,199
2.8%
81,998
2,003
2.5%
Engineering
Water Operations
Purchase of Water
General Administration & Financial Expenses
Billing & Customer Service
1,738
13,400
21,659
3,152
2,407
1,742
13,613
22,608
3,176
2,407
4
213
949
24
0
0.2%
1.6%
4.4%
0.8%
0.0%
1,746
13,808
23,202
3,260
2,407
4
195
594
84
0
0.2%
1.4%
2.6%
2.6%
0.0%
1,751
14,008
23,684
3,395
2,407
5
200
482
135
0
0.3%
1.4%
2.1%
4.1%
0.0%
1,757
14,275
24,113
3,491
2,407
6
267
429
96
0
0.3%
1.9%
1.8%
2.8%
0.0%
Total Engineering & Operations
42,356
43,546
1,190
2.8%
44,423
877
2.0%
45,245
822
1.9%
46,043
798
1.8%
Capital Levy
Reserve Fund Contribution
Debt Servicing Costs
17,112
13,750
350
18,823
12,874
411
1,711
(876)
61
10.0%
-6.4%
17.4%
19,764
13,198
411
941
324
0
5.0%
2.5%
0.0%
20,000
14,339
411
236
1,141
0
1.2%
8.6%
0.0%
20,100
15,444
411
100
1,105
0
0.5%
7.7%
0.0%
Total Capital Funding
31,212
32,108
896
2.9%
33,373
1,265
3.9%
34,750
1,377
4.1%
35,955
1,205
3.5%
Total Expenditures
73,568
75,654
2,086
2.8%
77,796
2,142
2.8%
79,995
2,199
2.8%
81,998
2,003
2.5%
Engineering & Operations
Capital Funding
28
Water
Performance Measures and Staffing
Performance Measures
Activity Measures
Water sold in million cubic meters
Lead services replaced
Water meters installed
% of existing watermains renewed
Efficiency Measures
Average cost for residential customer (1)
Average residential consumption (m3 per year)
Non revenue water (% of pumped) (2)
Effectiveness / Quality / Satisfaction Measures
# of boil water advisories
# of watermain breaks per 100 km (3)
# of customers with a service interruption of more than 2 hours
Ministry of Environment Report Card score (4)
Water quality complaints (5)
Staffing
Full-time equivalents #
Increase / (Decrease) over previous year
Full-time employees #
Increase / (Decrease) over previous year
2013
2014
2015
Actual
Revised
Approved
41.7
368
8,500
1.20%
40.5
400
8,500
1.26%
40.1
500
15,000
1.25%
39.8
500
15,000
1.49%
39.5
500
15,000
1.41%
39.2
500
15,000
1.40%
38.7
500
15,000
1.40%
$327
176.3
8.9
$343
171.9
10.8
$367
168.9
10.6
$378
167.1
10.4
$389
165.2
10.2
$401
163.3
10.0
$413
161.6
10.0
0
9.5
2,400
100.0%
188
Budget
94.5
0
10.0
3,000
100.0%
300
Budget
95.3
0.8
84
3
0
8.1
3,000
100.0%
300
0
8.0
3,000
100.0%
300
0
8.0
3,000
100.0%
300
0
7.9
3,000
100.0%
295
0
7.9
3,000
100.0%
290
96.4
1.1
84
0
96.4
0.0
84
0
96.4
0.0
84
0
96.4
0.0
84
0
96.4
0.0
84
0
81
2016
2017
2018
2019
Forecast
Notes:
(1) The average cost per household estimate for 2015-2019 is based on 2014 forecasted consumption of 171.9 m3 and does not incorporate future projected
consumption declines. Actual cost per household may be lower as a result.
(2) Dependent on non-revenue usage (fire, flushing, meter inaccuracy), main breaks, and leakage.
(3) Dependent on renewal programs and weather (temperature).
(4) A score lower than 100% does not indicate that drinking water was unsafe at any time.
(5) Number of complaints in 2013 is a mixture of "per event” and “individual complaints" versus absolute number of complaints. Process of complaints logging is
under review from a "best practices" perspective. 2014 complaints are expected to increase as more hydrants are flow tested, which may agitate rust sediment in
cast iron watermains.
29
Water
2015 Capital Budget
With Forecasts
Water
Capital Expenditure Linkage to Safe Drinking Water Act
The Safe Drinking Water Act (2002) became a statutory requirement on January 1, 2013. The purpose of this Act is to
ensure the provision of safe drinking water by regulating drinking water supply and testing. Elements of this legislation
include accreditation of licensed operators, mandated training and certification, and prescribed testing standards.
Additionally, a statutory standard of care is required on the part of elected officials and other individuals having oversight
responsibility to prevent waterborne disease outbreaks.
The Safe Drinking Water Act outlines 5 "barriers" that must be achieved to ensure compliance with the legislation:
(1) Source Water Protection
(2) Effective Treatment
(3) Secure Distribution
(4) Effective Monitoring
(5) Effective Management
The Water capital program is intended to address these "barriers". Some capital projects address multiple "barriers" while
others address only one. Each capital project on the subsequent pages has been categorized according to the following
legend to identify the "barriers" it is intended to address:
SWP
ET
SD
MON
MGT
Source Water Protection
Effective Treatment
Secure Distribution
Effective Monitoring
Effective Management
30
Water
Capital Program
($000's)
Service Grouping:
Water
2015 Approved -
$29,921
Committee:
Civic Works Committee
2016 - 2019 Forecast -
$156,185
Objective:
Page
Number
35
The Water Capital program includes transmission and distribution piping, pumping stations, and reservoir storage to meet
the growth demands of the city as well as repair and rehabilitation to extend the life cycle of existing infrastructure. The
elements in this program are generally outlined in such engineering studies and documents as the London Water Master
Plan or the Water Distribution System Needs Analysis, or resulting from ongoing modeling and analysis of the existing
system.
Project
Number
Project
EW1612-15 Meters & Devices
Life Cycle
Renewal
Growth
Service
Improvement
400
51
EW1630
District Meter Areas
500
51
EW1631
Corporate Asset Management Contribution
200
51
EW1632
Customer Billing Process
35
EW3409-15 Pumping Stations Major Repairs
50
150
35
EW3525
Cathodic Protection Program
700
35
EW3526
Arva Pumping Station Upgrades
250
51
EW3527
Asset Maintenance Management System
36
EW3528
Drinking Water Quality Management Standard
36
EW3538
CPP AFO Monitoring Program
43
EW3551
Hyde Park - Sarnia Road High Level Watermain Phase II
37
EW3563-15 Main Rehabilitation
200
10
150
97
5,143
37
EW3572
Commissioners Road Watermain Replacement
1,000
44
EW3582
Tillman Road High Level Watermain
689
44
EW3590
Uplands Pumping Station Upgrade
332
44
EW3591
Hyde Park Pumping Station Upgrade
645
31
Water
Capital Program
($000's)
Service Grouping:
Water
2015 Approved -
$29,921
Committee:
Civic Works Committee
2016 - 2019 Forecast -
$156,185
Life Cycle
Renewal
Page
Number
Project
Number
45
EW3592
Infill & Intensification Nodes Water Servicing
45
EW3594
Industrial Water Servicing
46
EW3595
Hyde Park Road Feeder Watermain
38
EW3624
Burbrook Watermain Upgrade Phase II
600
38
EW3627
SCADA Equipment Replacement
105
46
EW3628
Expansion of Southeast Pressure Zone
600
48
EW3694
Kilally Road (A30) Highbury Avenue to Clarke Road
130
49
EW3697
Southdale Road (2030) Bostwick Road to Wonderland Road
770
39
EW3702
Fanshawe Park Road Watermain Replacement
39
EW3710
Downtown Watermain Replacement
40
52
Project
EW3717-15 Inspect Trunk Concrete Pressure Pipes
EW3743
EW3765-15 Main Replacement Engineering
50
EW3772-15 Water Efficiency Program
41
EW3787-15 Main Replacement with Major Roadworks
42
EW3818
1,200
380
184
1,500
750
320
7,250
350
2,574
142
Watermain Internal Oversizing Subsidy
EW3842-15 Replace Lead and Copper Water Services
Total by Classification
Total 2015 Water Capital
Service
Improvement
550
Watermain Extensions
41
50
Growth
2,000
$22,766
$5,885
$1,270
$29,921
32
Water
Capital Expenditure Summary by Classification
($000's)
Prior
2020 to
Years
2014
2015
2016
2017
2018
2019
2024
Total
Life Cycle Renewal
12,305
22,982
22,766
32,832
29,474
27,753
26,788
162,775
337,675
Growth
12,706
4,144
5,885
7,452
7,321
4,593
16,482
31,203
89,786
Service Improvement
2,140
630
1,270
1,420
680
1,340
50
4,600
12,130
27,151
27,756
29,921
41,704
37,475
33,686
43,320
Water
Total Water
198,578 439,591
(1) The 2014 Approved Capital Budget increased from $27.7 to $27.8 million mainly due to HELP funding in the amount of $1.6 million
being reallocated to the Southeast Reservoir offset by a reduction to the rate supported budget by (-$1.1 million) for a net increase of $0.5
million, establishing a budget for the Watermain internal oversizing subsidy $0.1 million offset by the deferral of the Highbury Avenue
watermain budget (-$0.5 million).
Prior
Water
Tangible Capital Asset
Non-Tangible Capital Asset (2)
Total Water
2020 to
Years
2014
2015
2016
2017
2018
2019
2024
Total
23,469
3,682
26,245
1,511
28,211
1,710
39,673
2,031
35,565
1,910
32,376
1,310
41,920
1,400
191,638
6,940
419,097
20,494
27,151
27,756
29,921
41,704
37,475
33,686
43,320
198,578 439,591
(2) A separate non-tangible capital asset (Non-TCA) section has been added because Non-TCA projects could be classified as Life Cycle,
Growth, or Service Improvement. Non-TCA are expenditures that will not result in the creation of a tangible asset (having physical
substance). It should be noted that the Non-TCA summary only includes projects that are 100% Non-TCA.
33
Water
Capital Source of Financing Summary
($000's)
Prior
Water
Years
2020 to
(1)
2014
2015
2016
2017
2018
2019
2024
Totals
RATE SUPPORTED
Capital Levy
5,839
16,856
17,112
18,823
19,764
20,000
20,100
111,815
230,309
Capital Water Reserve Fund
10,085
6,353
7,537
15,071
12,010
8,772
7,153
48,139
115,120
Industrial Oversizing Water Reserve Fund
5,707
223
5,930
Debenture
Total Rate Supported
21,631
23,432
24,649
33,894
31,774
28,772
NON-RATE SUPPORTED
Debenture - Non Rate Supported (City Services Water Reserve Fund)
City Services Water Reserve Fund (2)
10,227
10,227
27,253
170,181
361,586
2,333
6,569
8,902
4,533
2,200
4,100
4,088
2,209
2,616
10,939
16,693
47,378
357
28
28
28
278
28
28
390
1,165
419
184
634
414
250
100
2,625
4,626
1,667
800
2,800
2,800
1,600
2,667
630
10
160
260
Total Non-Rate Supported
5,520
4,324
5,272
7,810
5,701
4,914
Total Sources of Financing
27,151
27,756
29,921
41,704
37,475
33,686
City Services Corporate Services Reserve Fund (2)
Federal Gas Tax Grant
Senior Government Funding
Other Contributions (Prov Grants, Cash Pmts)
420
12,334
2,120
3,600
16,067
28,397
78,005
43,320
198,578
439,591
(1) Prior years' totals only include projects with current or future budget allocations.
(2) Growth splits for 2014 and beyond are consistent with the 2014 Development Charges Study.
34
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW1612-15 Meters & Devices
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
MGT
Prior
Years
2014
400
2015
400
2016
400
2017
400
2018
400
2019
400
2020 to
2024
2,000
Total
4,400
1,800
1,800
1,800
1,800
9,000
18,000
Purchase and installation of new water meters, valves and
related equipment. Includes cost of meters for all new
development and for individual metering of existing
condominiums as required. Ensures fair billing based on
actual water consumption.
2015 Financing: Capital Levy
EW1627-15 Meter Replacement Program
MGT
1,800
SD
150
150
150
150
150
150
750
1,650
400
700
700
700
700
700
2,500
6,675
250
50
50
50
50
250
3,394
Residential water meter replacement strategy to eliminate
backlog of water meters that have surpassed their useful life.
EW3409-15 Pumping Stations Major Repairs
Ongoing annual maintenance and upgrades to the water
pumping stations and bulk water stations.
2015 Financing: Capital Levy
EW3525 Cathodic Protection Program
SD
275
SD
2,694
To implement, test and monitor Cathodic Protection on steel,
concrete and ductile iron watermains to prolong the lifespan
of existing watermains.
2015 Financing: Capital Levy
EW3526 Arva Pumping Station Upgrades
To undertake major pump and valve maintenance/
replacement. Equipment is 40 years old and requires
ongoing repairs and/or is no longer performing effectively or
efficiently.
2015 Financing: Capital Levy
35
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
* EW3528 Drinking Water Quality Management Standard
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
Prior
Years
2014
2015
2016
2017
2018
2019
2020 to
2024
Total
MON, MGT
170
10
10
50
10
10
50
90
400
1,000
1,000
The "Safe Drinking Water Act " and the "Drinking Water
Quality Management Standard" legislation requires the City,
as the operating authority, to be accredited. The
requirements are fulfilled by establishing and maintaining a
quality management system, including internal and external
auditing.
2015 Financing: Capital Levy
EW3534 Boler Road Watermain Replacement
SD
To replace the watermain on Boler Road from
Commissioners Road to Riverside Drive. New watermain
required to replace existing main which has surpassed its
useful life.
EW3537 Dundas Redevelopment
SD
100
900
150
200
1,000
Watermain replacement will be undertaken in coordination
with Transportation Project (TS1135) including significant
streetscape improvements to renew Dundas Street from
Talbot Street to Wellington Street. Exact phasing and scope
of work is to be determined as part of the engineering predesign activities.
* EW3538 CPP AFO Monitoring Program
SD, MON, MGT
200
200
150
200
200
1,000
2,300
Annual monitoring costs associated with the installation of an
acoustic fibre optic cable inside mains to alert City staff to
potential failures of large diameter watermains.
2015 Financing: Capital Levy
Note: * represents projects that are classified as non-tangible capital assets. These expenditures will not result in the creation of a tangible asset (having physical
substance).
36
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3540 Elgin Middlesex Pumping Station - Capital
Maintenance
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
Prior
Years
2014
SD
1,943
557
SD
600
2015
2016
2017
2018
2019
2020 to
2024
Total
50
50
50
300
2,950
300
1,200
43,740
79,535
Project required for the ongoing, annual capital maintenance
of London's components in the Elgin-Middlesex (London)
Pumping Station at St. Thomas.
EW3541 Elgin Middlesex Pumping Station - SCADA
Upgrade
300
To repair and upgrade equipment controllers and the
computerized SCADA system at Elgin Middlesex Pumping
Station.
EW3563-15 Main Rehabilitation
SD
4,930
5,143
SD
50
1,000
5,658
6,173
6,688
7,203
An annual program for the rehabilitation of existing
watermains throughout the City of London in order to
maintain flow capacity and provide safe, cost effective water.
2015 Financing: Capital Levy
EW3572 Commissioners Road Watermain Replacement
1,050
To replace the existing 300mm watermain on
Commissioners Road from Topping Lane to Andover Drive
with a new 300mm watermain. Also, to inspect the structural
condition of the existing 900mm watermain on
Commissioners Road West.
2015 Financing: Water Reserve Fund
37
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3580 Huron Street River Crossing Remedial Work
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
SD
Prior
Years
570
SD
953
2014
2015
2016
3,200
2020 to
2024
400
Total
4,270
485
16,025
17,463
1,400
4,700
9,400
285
675
2017
2018
2019
100
To replace the existing 600mm trunk watermain under the
Thames River between Huron Street and Philip Aziz Avenue
by means of underground horizontal directional drilling at a
greater depth to protect the watermain from erosion in the
Thames River.
EW3617 Long Term Water Storage Requirements
In anticipation of Springbank Reservoir Cell #2 reaching the
end of its service life, this project is to study London's water
storage needs and ultimately construct a new reservoir.
Study will assess the timing, amount and location for
reservoir capacity.
EW3624 Burbrook Watermain Upgrade Phase II
1,000
SD
600
1,700
Replacement of watermain and water services in the existing
Burbrook Trunk Storm Sewer and Burbrook Lateral area.
New watermain required to replace undersized existing
system which has surpassed its useful life. Coordinated with
sewer projects ES3054 and ES3058.
2015 Financing: Water Reserve Fund
EW3627 SCADA Equipment Replacement
SD, MON, MGT
165
105
120
The planned replacement of existing SCADA equipment
having exceeded its useful life.
2015 Financing: Capital Levy
38
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3656-2 Wellington Road Area Watermain
Replacement - Phase II (Thames River to Base Line
Road)
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
Prior
Years
2014
SD
752
1,100
2015
2016
2017
2018
2019
2020 to
2024
1,000
Total
2,852
To replace the watermain on Wellington Road from the
Thames River to Base Line Road. New watermain required
to replace existing system which has surpassed its useful
life. Coordinated with sewer project ES2464 - Separation
and CSO Program.
EW3674 Wharncliffe Road Watermain Replacement
800
SD
800
To replace watermain on Wharncliffe Road between Becher
Street and Springbank Drive. Coordinated with
transportation project TS1355 - Wharncliffe Road Widening.
EW3702 Fanshawe Park Road Watermain Replacement
184
SD
1,658
1,842
To replace the watermain on Fanshawe Park Road from
Adelaide Street to Highbury Avenue. Coordinated with
transportation project TS1475-2 and sewer project ES4424.
2015 Financing: Federal Gas Tax Grant
EW3708 Trunk Watermain Valve Chambers
SD
820
SD
1,605
400
500
800
2,520
To install new valves on existing trunk watermains.
EW3710 Downtown Watermain Replacement
105
1,500
105
1,500
3,210
8,025
To replace deficient watermains and services. Watermain
and water services undersized or useful life has been
surpassed. Coordinated with sewer project ES2414.
2015 Financing: Water Reserve Fund
39
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3713 Sarnia Road Watermain Replacement
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
SD
Prior
Years
2014
2015
2016
200
2017
1,466
2018
2019
2020 to
2024
SD, MON
620
750
750
750
750
750
3,750
SWP
331
331
300
Total
1,666
To replace the watermain on Sarnia Road from Wonderland
Road to Sleightholme Road. New watermain required to
replace existing system which has surpassed its useful life.
* EW3717-15 Inspect Trunk Concrete Pressure Pipes
8,120
Annual program to inspect existing large diameter
watermains (450mm to 1,350mm).
2015 Financing: Capital Levy
* EW3754-15 Abandoned Wells Decommissioning
962
To decommission former London Public Utilities Commission
production wells that are abandoned. Ontario Regulation
903.Section 21 (3) requires that the wells be properly
decommissioned.
Note: * represents projects that are classified as non-tangible capital assets. These expenditures will not result in the creation of a tangible asset (having physical
substance).
40
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
SD
EW3765-15 Main Replacement Engineering
Prior
Years
2014
7,039
2015
7,250
2016
8,800
2017
8,800
2018
8,800
2019
8,800
2020 to
2024
44,000
Total
93,489
SD
2,605
2,574
2,800
2,800
2,800
2,800
14,000
30,379
SD
935
935
935
935
935
4,675
9,350
An annual program for replacement of watermains and water
services as outlined in the Condition Assessment Program
Needs Study. New watermain and water services required
to replace existing systems which have surpassed their
useful life. Water supply required to provide fire flows to the
community. Coordinated with sewer project ES2414 Sewer
Replacement Program.
2015 Financing:
Capital Levy
$6,430
820
Water Reserve Fund
Total Financing
$7,250
EW3787-15 Main Replacement with Major Roadworks
Replacement of watermains that have reached their useful
life. Coordinated with major roadworks.
2015 Financing: Capital Levy
EW3833-15 Main Replacement Maintenance
Watermain replacements in conjunction with sewer and road
replacements.
41
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3842-15 Replace Lead and Copper Water Services
Category: Life Cycle Renewal
Safe Drinking
Water Act
Classification
SD
Prior
Years
2014
750
2015
2,000
2016
2,000
2017
2,000
2018
2,000
2019
2,000
2020 to
2024
10,000
Total
20,750
Fifteen year program to replace lead water services.
Recommendation from the Walkerton Inquiry Report states
"lead service lines should be located and replaced over time
with safer materials". This work has been incorporated into
our Lead Service Replacement Program. Concurrent
program to replace leaking copper services which have been
found to prematurely fail.
2015 Financing: Water Reserve Fund
Balance of approved projects for prior years
comparison
Total Life Cycle Renewal
1,558
12,305 22,982
1,558
22,766
32,832
29,474
27,753
26,788
162,775 337,675
42
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
* EW1503 Development Charges Background Study
Category: Growth
Safe Drinking
Water Act
Classification
MGT
Prior
Years
144
2014
2015
2016
2017
60
208
1,871
2018
2019
2020 to
2024
60
Total
264
Background study to determine future watermain needs to
service growth, including timing and growth splits. Growth
splits are consistent with the 2014 Development Charges
Study. 100% Growth Related (100% DC Rate Supported).
EW2310 Western Road Watermain Replacement (Oxford
Street to Sarnia Road)
SD
2,079
To replace the watermain on Western Road from Oxford
Street to Sarnia Road. Growth splits are consistent with the
2014 Development Charges Study. 10% Growth Related
(10% DC Rate Supported).
* EW3312 Water Distribution System Master Plan
MGT
310
SD
218
190
190
690
To update the City's Water Distribution System Master Plan to
support the calculation of Development Charges. Growth
splits are consistent with the 2014 Development Charges
Study. 100% Growth Related (94.3% DC Rate Supported).
EW3551 Hyde Park - Sarnia Road High Level Watermain
Phase II
1,153
97
874
2,342
Construction of 400mm, 450mm and 600mm watermains in
the high level area of northwest London. Watermain
installation required to service customers in the Hyde Park
High Level area. Growth splits are consistent with the 2014
Development Charges Study. 100% Growth Related (100%
DC Rate Supported).
2015 Financing: Development Charges
Note: * represents projects that are classified as non-tangible capital assets. These expenditures will not result in the creation of a tangible asset (having physical
substance).
43
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3582 Tillman Road High Level Watermain
Category: Growth
Safe Drinking
Water Act
Classification
SD
Prior
Years
2016
2017
2018
2019
2020 to
2024
2014
2015
689
SD
28
332
360
SD
55
645
700
Total
689
To install a 600mm watermain in the Talbot Area on Tillman
Road from Southdale Road south to the end. Growth splits
are consistent with the 2014 Development Charges Study.
100% Growth Related (100% DC Rate Supported).
2015 Financing: Development Charges
EW3590 Uplands Pumping Station Upgrade
To upgrade the Uplands Pumping Station to serve future
growth in north London. Growth splits are consistent with the
2014 Development Charges Study. 100% Growth Related
(100% DC Rate Supported).
2015 Financing: Development Charges
EW3591 Hyde Park Pumping Station Upgrade
To upgrade the Hyde Park Pumping Station to serve future
growth in northwest London. Growth splits are consistent with
the 2014 Development Charge Study. 100% Growth Related
(100% DC Rate Supported).
2015 Financing: Development Charges
44
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
Category: Growth
Safe Drinking
Water Act
Classification
SD
EW3592 Infill & Intensification Nodes Water Servicing
Prior
Years
2014
2015
550
2016
550
2017
550
2018
550
2019
550
2020 to
2024
2,750
Total
5,500
1,200
4,200
4,200
2,400
4,000
7,775
23,775
Contingency amount for the provision of growth triggered
water servicing infrastructure. Future budget amounts to be
verified through detailed engineering studies. Growth splits
are consistent with the 2014 Development Charges Study.
95% Growth Related (95% DC Rate Supported).
2015 Financing:
Water Reserve Fund
Development Charges
Total Financing
$28
522
$550
EW3594 Industrial Water Servicing
SD
For water servicing of future light and general industrial land to
provide an adequate inventory of large block "shovel ready"
land in strategic locations. Project coordinated with other
industrial servicing accounts (Internal Servicing, Sanitary,
Storm and Stormwater Management). Growth splits are
consistent with the 2014 Development Charges Study. 100%
Growth Related (100% DC Rate Supported).
2015 Financing:
Senior Government Funding
Development Charges
Total Financing
$800
400
$1,200
45
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
Category: Growth
Safe Drinking
Water Act
Classification
SD
EW3595 Hyde Park Road Feeder Watermain
Prior
Years
227
2014
2,110
2015
380
2016
2017
2018
2019
2020 to
2024
Total
2,717
To construct a 750mm watermain on Hyde Park Road from
Sarnia Road to Royal York Road. Watermain installation
required for water supply to west London. Coordinated with
sewer project ES2493 and transportation project TS1477-1.
Growth splits are consistent with the 2014 Development
Charges Study. 35% Growth Related (35% DC Rate
Supported).
2015 Financing:
Water Reserve Fund
Development Charges
Total Financing
$247
133
$380
EW3625 Dingman-Wonderland Feeder Watermain Phase I
(Dingman Drive to Exeter Road)
SD
1,681
1,681
To construct a new 400mm watermain on Wonderland Road
between Dingman Drive and Exeter Road. Growth splits are
consistent with 2014 Development Charges Study. 95%
Growth Related (95% DC Rate Supported).
EW3628 Expansion of Southeast Pressure Zone
SD
2,100
600
2,700
To install pressure regulating valves and associated piping to
delineate a new pressure zone to service portions of
southeast London with the Southeast Reservoir & Pumping
Station. Growth splits are consistent with 2014 Development
Charges Study. 40% Growth Related (28.4% DC Rate
Supported).
2015 Financing:
Water Reserve Fund
Development Charges
Total Financing
$360
240
$600
46
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3652-2 Wickerson High Level Watermain Phase II
(Wickerson Road)
Category: Growth
Safe Drinking
Water Act
Classification
Prior
Years
2014
2015
2016
2017
2018
2019
SD
2020 to
2024
Total
1,361
1,361
2,988
3,320
1,427
1,427
Construction of 400mm watermain in the high level area of
southwest London on Wickerson Road between Wickerson
Gate and Southdale Road. Watermain installation required to
service future customers in the Wickerson area. Growth splits
are consistent with the 2014 Development Charges Study.
100% Growth Related (100% DC Rate Supported).
EW3654 Arva Pumping Station Upgrade
332
SD
Upgrades to the Arva Pumping Station, including pump
replacements, will be required as water demand increases.
Growth splits are consistent with the 2014 Development
Charges Study. 50% Growth Related (50% DC Rate
Supported).
EW3657 Westmount Area High Level System Distribution
Improvements Phase I
SD
To upsize the existing watermain to 450mm watermain on
Viscount Road between Wonderland Road and Andover
Drive. Project required to upgrade high level water supply.
Growth splits are consistent with the 2014 Development
Charges Study. 100% Growth Related (100% DC Rate
Supported).
EW3658 Westmount Pumping Station to Viscount Road
High Level Water Reinforcement
SD
134
1,212
1,346
To replace and upsize the existing 300mm and 400mm
watermain on Wonderland Road (Westmount Pumping
Station to Viscount Road) with 600mm watermain. Project
required to upgrade high level water supply. Growth splits are
consistent with the 2014 Development Charges Study. 100%
Growth Related (100% DC Rate Supported).
47
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3666-2 Wonderland Road North Feeder Watermain
Phase II (Gainsborough to Sunningdale)
Category: Growth
Safe Drinking
Water Act
Classification
Prior
Years
2020 to
2024
Total
SD
7,684
7,684
SD
1,257
1,257
2014
2015
2016
2017
2018
2019
To construct a 900mm watermain on Wonderland Road North
from Sunningdale Road to Fanshawe Park Road and a
750mm watermain from Fanshawe Park Road to
Gainsborough Road. Project required to upgrade north
London area water supply. Coordinated with transportation
projects TS1156 and TS1354. Growth splits are consistent
with the 2014 Development Charges Study. 45% Growth
Related (45% DC Rate Supported).
EW3675 Summercrest Southdale High Level (2004)
To construct 400mm watermains in the high level area of
southwest London on Southdale Road between Wickerson
Road and Bramblewood Place. Growth splits are consistent
with the 2014 Development Charge Study. 100% Growth
Related (100% DC Rate Supported).
EW3692 Medway - Wonderland Road Trunk Watermains
SD
100
1,103
9,928
11,131
To construct 1,500mm watermains from the Arva Pumping
Station to the north London area. Trunk watermains required
to supply future customers in north and west London. Growth
splits are consistent with the 2014 Development Charges
Study. 100% Growth Related (100% DC Rate Supported).
EW3694 Kilally Road (A30) Highbury Avenue to Clarke
Road
SD
130
1,170
1,300
Installation of a new 400mm watermain on Kilally Road from
Highbury Avenue to Clarke Road. Growth splits are
consistent with the 2014 Development Charges Study. 100%
Growth Related (100% DC Rate Supported).
2015 Financing: Development Charges
48
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW3697 Southdale Road (2030) Bostwick Road to
Wonderland Road
Category: Growth
Safe Drinking
Water Act
Classification
SD
Prior
Years
2014
2015
2016
2017
2018
2019
2020 to
2024
770
Total
770
To construct a 400mm watermain on Southdale Road from
Bostwick Road to Wonderland Road. This watermain is
required for growth in the Bostwick Area. Growth splits are
consistent with the 2014 Development Charge Study. 100%
Growth Related (100% DC Rate Supported).
2015 Financing: Development Charges
EW3709 Green Valley Road at Hubrey Road
SD
6
60
66
Installation of a 600mm watermain at the intersection of Green
Valley Road and Hubrey Road. Growth splits are consistent
with the 2014 Development Charges Study. 100% Growth
Related (100% DC Rate Supported).
EW3712-2 White Oak Road Watermain Upsizing Phase II
(B5)
SD
2,030
2,030
To construct a new 450mm trunk watermain through the
proposed subdivision east of White Oak Road between
Dingman Drive and Exeter Road. Growth splits are consistent
with the 2014 Development Charge Study. 100% Growth
Related (100% DC Rate Supported).
49
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
Category: Growth
Safe Drinking
Water Act
Classification
MGT
* EW3772-15 Water Efficiency Program
Prior
Years
2014
350
2015
350
2016
350
2017
350
2018
350
2019
350
2020 to
2024
1,750
Total
3,850
142
100
100
50
50
250
692
To undertake a water efficiency strategy to promote
awareness of water issues. Water efficiency/conservation
program is a requirement of the new Municipal Water
Licensing Plan. Growth splits are consistent with the 2014
Development Charges Study. 8% Growth Related (8% DC
Rate Supported).
2015 Financing:
Water Reserve Fund
Development Charges
Total Financing
$322
28
$350
EW3818 Watermain Internal Oversizing Subsidy
SD, MGT
Funding source for watermain oversizing claims by land
developers. Claims are to be paid in accordance with
Schedule 8 of the current Development Charges By-law.
Review and approval of these claims is provided by the
Development Finance Division. Growth splits are consistent
with the 2014 Development Charges Study. 100% Growth
Related (100% DC Rate Supported).
2015 Financing: Development Charges
Balance of approved projects for prior years
comparison
Total Growth
9,707
348
12,706
4,144
10,055
5,885
7,452
7,321
4,593
16,482
31,203
89,786
Note: * represents projects that are classified as non-tangible capital assets. These expenditures will not result in the creation of a tangible asset (having physical
substance).
50
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
EW1630 District Meter Areas
Category: Service Improvement
Safe Drinking
Water Act
Classification
SD, MON, MGT
Prior
Years
2014
500
2015
500
2016
500
MON, MGT
200
200
MON, MGT
50
2017
500
2018
500
2019
2020 to
2024
Total
2,500
Program to develop a City-wide leak detection system that
incorporates elements of water modelling, fire hydrant
management, and billing audit confirmation to enhance the
cost effectiveness of water service delivery.
2015 Financing: Water Reserve Fund
*EW1631 Corporate Asset Management Contribution
400
New project for the water component of the Council approved
Corporate Asset Management Plan.
2015 Financing: Capital Levy
*EW1632 Customer Billing Process
50
50
100
250
260
520
To perform audits and develop enhanced water billing
reporting by London Hydro.
2015 Financing: Capital Levy
EW2405 New Vehicles & Equipment
SD, MGT
130
130
To purchase new vehicles to provide for planned
maintenance and growth of the water distribution system.
*EW3527 Asset Maintenance Management System
MON, MGT
1,300
200
200
1,700
To develop and implement an electronic inventory and
maintenance program for water and sewer infrastructure.
Project is a requirement of new legislation passed, the
"Sustainable Water and Sewage Systems Act".
2015 Financing: Capital Levy
Note: * represents projects that are classified as non-tangible capital assets. These expenditures will not result in the creation of a tangible asset (having physical
substance).
51
Water
Capital Expenditure Detail
($000's)
Service Grouping: Water
Category: Service Improvement
Safe Drinking
Water Act
Classification
SD
EW3743 Watermain Extensions
Prior
Years
840
2014
2015
320
2016
520
2017
2018
840
2019
2020 to
2024
1,680
Total
4,200
2,560
2,560
Cost sharing project for the watermain extensions to
unserviced parts of the urban growth area and beyond.
2015 Financing:
Water Reserve Fund
Other Contributions
Total Financing
EW3806 Local Improvement - White Oak Industrial
Subdivision Water Cost Sharing Phase II and III
$160
160
$320
SD
Cost sharing project for the installation of watermains in this
existing industrial area. Coordinated with sewer project
ES5246. City's share is approximately 25% of the total cost.
Balance of approved projects for prior years
0
comparison
Total Service Improvement
2,140
630
1,270
1,420
680
1,340
50
4,600
12,130
Total Water
27,151
27,756
29,921
41,704
37,475
33,686
43,320
198,578
439,591
52
Water
2015 Reserve Funds and Reserves
Water
Reserve Funds and Reserves
($000's)
New Capital Water
Reserve Fund (1)
Opening Balance
Contributions from Operating Water Rates
Additional Contribution (surplus)
Interest earned
Drawdowns - Current Year
Drawdowns - Prior Year
Total Drawdowns (2)
Ending Balance (3)
Actual Projected Approved
2013
2014
2015
$20,201
$24,766
$14,843
7,392
9,877
13,026
2,938
383
518
467
$30,914
$35,161
$28,336
4,196
6,353
7,537
1,952
13,965
$6,148
$20,318
$7,537
$24,766
$14,843
$20,799
2016
$20,799
11,168
2017
$17,395
10,139
Forecast
2018
$15,961
9,813
499
$32,466
15,071
437
$27,971
12,010
437
$26,211
8,772
491
$27,289
7,153
1,977
$56,643
48,139
$15,071
$17,395
$12,010
$15,961
$8,772
$17,439
$7,153
$20,136
$48,139
$8,504
2019
2020-2024
$17,439
$20,136
9,359
34,530
Notes:
(1) This reserve fund is intended to support the capital needs of the water system with an estimated replacement value of $2.7 billion.
(2) Drawdowns are based on full capital needs and not intended to project the actual cash flow of funds being utilized in a particular year.
(3) The reserve fund balance may increase/decrease subject to the 2014 year end operating position of the Water operating budget.
City Services - Water Levies
Reserve Fund
Opening Balance
Levies
Tsf from Industrial DC Incentive Program RF
Tsf from DC Incentive Program RF (1)
Interest earned
Refunds
Forecasted Future Debt
Drawdowns - Current Year
Drawdowns - Prior Year
Total Drawdowns (2)
Ending Balance
Actual Projected Approved
2013
2014
2015
$10,847
$12,064
$7,831
1,509
1,554
1,818
1,272
183
231
260
197
$12,587
$13,878
$11,301
25
6
527
(29)
$523
$12,064
2,200
3,841
$6,047
$7,831
2016
$7,201
1,894
1,272
177
181
$10,725
2017
$6,637
1,955
1,272
171
192
$10,227
Forecast
2018
$8,018
1,961
1,272
165
223
$11,639
4,100
4,088
2,209
2,616
10,939
268
16,693
$4,100
$7,201
$4,088
$6,637
$2,209
$8,018
$2,616
$9,023
$10,939
$1,609
$16,961
$1,894
Note:
(1) This transfer includes the Residential, Institutional and Commercial (DC) Incentive Program Reserve Funds.
(2) Drawdowns are based on full capital needs and not intended to project the actual cash flow of funds being utilized in a particular year.
2019
2020-2024
$9,023
$1,609
1,966
9,596
1,260
6,472
160
800
139
378
$12,548
$18,855
53
Water
Reserve Funds and Reserves
($000's)
Industrial Oversizing Water
Reserve Fund
Opening Balance
Contributions from Operating Water Rates
Interest earned
Tsf to Industrial DC Incentive Program RF (1)
Drawdowns - Current Year
Drawdowns - Prior Year
Total Drawdowns
Ending Balance
Actual Projected Approved
2013
2014
2015
$5,910
$5,940
$83
1,000
113
79
2
$6,023
$7,019
$85
5,100
223
83
1,613
$83
$6,936
$0
$5,940
$83
$85
2016
$85
2017
$87
Forecast
2018
$89
2019
$91
2020-2024
$93
2
$87
2
$89
2
$91
2
$93
14
$107
$0
$87
$0
$89
$0
$91
$0
$93
$0
$107
Notes:
(1) Reserve Fund is being phased out and available balance will be transferred to the Industrial DC Incentive Program Water Reserve Fund. This reserve fund will be
closed once all commitments have been made.
Industrial DC Incentive Program
Water Reserve Fund (1)
Opening Balance
Tsf from Industrial Oversizing Water RF
Contributions from Operating Water Rates
Interest earned
Tsf to City Services DC Water RF
Total Transfers
Ending Balance
Actual Projected Approved
2013
2014
2015
$0
$0
$5,168
5,100
500
68
127
$0
$5,168
$5,795
1,272
$0
$0
$1,272
$0
$5,168
$4,523
2016
$4,523
2017
$3,861
Forecast
2018
$3,181
2019
$2,483
2020-2024
$1,779
500
110
$5,133
1,272
$1,272
$3,861
500
92
$4,453
1,272
$1,272
$3,181
500
74
$3,755
1,272
$1,272
$2,483
500
56
$3,039
1,260
$1,260
$1,779
6,200
228
$8,207
6,472
$6,472
$1,735
Note:
(1) This reserve fund is being established to support development charge exemptions contained in various Community Improvement Plans (CIP). The reserve fund will be
funded annually from Operating Water Rates to support the industrial growth share of all water infrastructure projects.
54
Water
Reserve Funds and Reserves
($000's)
Lead Service Replacement Program
Reserve Fund (1)
Opening Balance
Contributions from Operating Water Rates
Repayment of Lead Replacement Program
Interest earned
Loans - Lead Replacement Program
Total Loans
Ending Balance
Actual Projected Approved
2013
2014
2015
$103
$103
$112
7
2
$112
9
$9
$103
2016
$121
2017
$130
Forecast
2018
$140
2019
2020-2024
$150
$157
6
3
$112
6
3
$121
6
3
$130
6
4
$140
6
4
$150
3
4
$157
9
23
$189
$0
$112
$0
$121
$0
$130
$0
$140
$0
$150
$0
$157
$0
$189
Note:
(1) The purpose of this reserve is to provide the funding mechanism for the Lead Service Extension Replacement Loan Program. Program is designed to assist with
the private portion of lead service replacement. Repayment will be made over 10 years. The funding requirement is dependent on the number of households who take
advantage of this pilot program. Any balance remaining in this reserve fund at the end of the Lead Service Replacement Loan Program will be returned to the New
Capital Water Reserve Fund.
Water Customer Assistance
Reserve Fund (1)
Opening Balance
Contributions from Operating Water Rates
Interest earned
Drawdowns - Current Year
Drawdowns - Prior Year
Total Drawdowns
Ending Balance
Actual Projected Approved
2013
2014
2015
$0
$30
$36
$30
5
8
1
1
$30
$36
$45
$0
$30
$0
$36
$0
$45
2016
$45
12
1
$58
2017
$58
15
2
$75
Forecast
2018
$75
18
2
$95
$0
$58
$0
$75
$0
$95
2019
2020-2024
$95
$119
21
153
3
25
$119
$297
$0
$119
$0
$297
Note:
(1) The Water Customer Assistance Reserve Fund was established in June 2013 to provide a source of funding for the Crisis Support, Crisis Prevention and Customer
Assistance programs, as part of the new "value based" funding model for Water and Wastewater approved by Council on December 11, 2012. Residential customers
are charged $0.25 per month to fund this program. Any annual surplus of revenues over expenditures for this program is contributed to this Reserve Fund to fund
Crisis Support, Crisis Prevention or Customer Assistance initiatives or reduce future monthly Customer Assistance charges.
55
Water
Reserve Funds and Reserves
($000's)
Efficiency, Effectiveness and
Economy Water Reserve (1)
Opening Balance
Contributions
Drawdowns
Ending Balance
Actual Projected Approved
2013
2014
2015
$428
$557
$594
129
37
$557
$594
$594
$557
$594
$594
2016
$594
2017
$594
Forecast
2018
$594
$594
$594
$594
$594
$594
$594
$594
$594
$594
$594
2019
2020-2024
$594
$594
Note:
(1) Beginning in 2004, all positions with some exceptions are subject to 90 days savings corporately. The savings from these positions are contributed to Efficiency,
Effectiveness and Economy reserves to be used as a one-time funding source for initiatives recommended by the Senior Leadership Team.
56
Water
2015 Debt Summary
Water
Debt Summary - Rate Supported
($ millions)
The Water capital budget forecast for the 2015 - 2024 capital plan includes rate supported debt financing of $10.2 million as
outlined in the table below.
Rate Supported - Projected Debt
Financing
Capital Projects Funded by Rate - Supported Debentures
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.4
3.8
As at June 30, 2014, the authorized but unissued debt was $0.5 million. The outstanding debt level projected for the end of
2014 is $2.4 million. The long term financial goal is to continue to fund water system capital works using pay-as-you-go
sources as the primary source of funding. For 2015, the annual debt servicing costs will be approximately $0.4 million as
outlined in the table below.
Annual Debt Servicing Costs
(excluding Joint Boards)
Rate Supported Principal and Interest Payments (1)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.2
0.2
0.1
(1) Debt servicing costs will be covered by operating revenue generated by water rates.
The Water budget carries debt associated with the City's share of debt issued by the Joint Boards (debt issued for capital works
necessary to bring potable water from Lake Huron and Lake Erie to the City system). This will be approximately $14.7 million
at the end of 2014. Debt payments tied to the City's share of the Joint Board debt are made indirectly as the part of the
purchase of water rate charged to the City by the Joint Boards and is estimated to be approximately $1.4 million in 2015.
57
Water
Debt Summary - Non Rate Supported
($ millions)
Non rate supported debt in the Water budget is funded through Development Charges (DC), in accordance with the 2014 DC
Background Study, rather than water rates. The funding of this debt by the applicable reserve fund is identified in the reserve
fund section of the 2015 Water budget.
The Water capital budget forecast includes non rate supported (DC) debt financing of $8.9 million as part of the 2015 - 2024
capital plan as highlighted below.
Projected Debt Financing (Non Rate Supported)
Capital Projects Funded by Non Rate Supported
Debentures
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
0.0
0.0
0.0
0.0
2.3
1.6
0.0
0.0
0.3
4.7
At June 30, 2014, there is no authorized but unissued debt and no outstanding debt.
Annual Debt Servicing Costs funded through DC's
Non Rate Supported (DC) Principal and Interest
Payments
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.1
The debt projections are based on a modest pace of spending against approved capital project budgets and the proposed
capital plan. If the pace of spending increases, debt will be issued sooner, and the total debt outstanding along with the annual
debt servicing costs could exceed current projections.
58
Water
Appendix A
2015 Schedule of Rates and Charges
Water
2015 Schedule of Rates and Charges
Effective Date
All 2015 rates and charges came into effect on January 1, 2015.
Monthly Rates and Charges
All Customers
First
7 m3
Next
8 m3
Next
10 m3
Next
10 m3
Next
215 m3
Next
6,750 m3
Next
43,000 m3
Over
50,000 m3
2014 Approved Rates
2015 Approved Rates
$0.00/m3
$1.8688/m3
$2.4028/m3
$2.6698/m3
$1.0146/m3
$0.9611/m3
$0.8758/m3
$0.7797/m3
$0.00/m3
$1.9996/m3
$2.5710/m3
$2.8567/m3
$1.0856/m3
$1.0284/m3
$0.9371/m3
$0.8343/m3
59
Water
2015 Schedule of Rates and Charges (cont'd)
Water Meters / Water Infrastructure Charge
Meter Size
16 mm
19 mm
25 mm
40 mm
50 mm
76 mm
100 mm
150 mm
200 mm
250 mm
Monthly Fire Protection Charge
Low-density Residential
Institutional, Commercial, Industrial, Medium-density
Residential, High Rise under 5.0 hectares
Institutional, Commercial, Industrial, Medium-density
Residential, High Rise 5.0 hectares and over
Low Income Crisis Support, Crisis Prevention,
and Customer Assistance Charge
Residential
2014 Approved Rates
2015 Approved Rates
Monthly Rate
$13.12
$19.68
$32.80
$65.61
$104.98
$229.62
$393.64
$918.50
$1,574.55
$1,968.30
Monthly Rate
$14.04
$21.06
$35.10
$70.20
$112.33
$245.69
$421.19
$982.80
$1,684.77
$2,106.08
Monthly Rate
$1.35
Monthly Rate
$1.44
$9.00
$9.63
$45.00
$48.15
Monthly Rate
$0.25
Monthly Rate
$0.25
60
Water
2015 Schedule of Rates and Charges (cont'd)
2014 Approved Rates
2015 Approved Rates
As set by London Hydro
As set by London Hydro
As set by London Hydro
As set by London Hydro
As set by London Hydro
As set by London Hydro
$35.00*
$185.00*
$35.00
$185.00
As set by London Hydro
As set by London Hydro
$50.00 per property
$50.00 per property
$172.67
$293.90
$184.76
$314.47
$264.54
$283.06
Repair damaged meter
16 and 19 mm
25 mm and larger
$181.85
Time and material
$194.58
Time and material
Inspecting waterworks installations/disconnections
$104.70 per hour
$112.03 per hour
Miscellaneous Rates and Charges
Non-payment of account
Late payment charge
NSF cheques
Collection charges
Disconnection of service
During regular hours
After regular hours
Change of occupancy/Account set-up fee
Arrears certificate charges (non-payment/arrears)
Disconnect and reconnect meter at customer request
16 and 19 mm
25 mm and larger
Install water meter and remote read-out unit at customer
request
* Updated to reflect charges established by London Hydro.
61
Water
2015 Schedule of Rates and Charges (cont'd)
Meter checked for accuracy at customer's request and
found to be accurate
16 and 19 mm
25 mm and larger
Watermain Tapping Charges
Tap size of 50 mm or less
Tap size of greater than 50 mm
Tapping concrete mains or tap size
of greater than 300 mm
Water Rate for Temporary Connection for Construction
Single family structure
Duplex structure one service line
Up to 4 units
5 to 10 units
11 to 15 units
16 to 20 units
21 to 25 units
26 to 30 units
31 to 35 units
36 to 40 units
41 to 50 units
Over 50 units
Other structures per 93 m2 of floor space
2014 Approved Rates
2015 Approved Rates
$135.92
$183.68
$145.43
$196.54
$291.60
$583.20
$1,749.60
$312.01
$624.02
$1,872.07
$48.60
$48.60
$60.73
$91.05
$121.42
$151.83
$182.79
$212.48
$242.97
$273.33
$303.65
$6.15 per unit
$12.36
(minimum charge $30.89)
$52.00
$52.00
$64.98
$97.42
$129.92
$162.46
$195.59
$227.35
$259.98
$292.46
$324.91
$6.58 per unit
$13.23
(minimum charge $33.05)
62
Water
2015 Schedule of Rates and Charges (cont'd)
2014 Approved Rates
2015 Approved Rates
$37.79
$3.12
$40.44
$3.34
Residential (maximum 50 meters)
Commercial, Industrial and Institutional
$189.83 per meter
$201.90 per meter
$203.12 per meter
$216.03 per meter
Illegal Hydrant Connection Charge
$540.00/offence +
water consumption
$577.80/offence +
water consumption
$199.80
$37.80/week
$213.79
$40.45/week
$864.00
$2.89/m3
$924.48
$3.09/m3
Bulk Water Users
Smart Card (per card purchase cost)
Cost of Water per 1,000 L
Builder and Developer Charges
Based on actual frontage which directly abuts City
right-of-way
Temporary Hydrant Connection
Hydrant connection/disconnection
Hydrant occupancy
Water consumption:
Minimum charge (up to 300m3)
All additional m3
63
Water
Appendix B
2015 Business Plan
Business Plan: Drinking Water Supply
How does this service contribute to the results identified in the City of London Strategic Plan?
A Sustainable Infrastructure
Compliance with all regulatory requirements to operate, sustain, expand, and improve the
waterworks infrastructure to efficiently deliver high quality and reliable water supply to
London’s customers for all drinking, recreational, irrigation, sanitary, fire protection, and
institutional/commercial/industrial needs, while also providing education and encouraging
water conservation.
Name the main activities done to provide this service:
Name The Activities Done To Provide This Service
1. Water Quality Sampling and Reporting
2. Operation, Maintenance and Repair of the System
3. Renewal of Existing Infrastructure
4. Extension of Services for Growth
5. Water Meter Program (New & Replacement)
6. Water Billing Services through London Hydro
How Much Did We Do?
(optional)
Approx. 12,000 tests per year plus
continuous on-line testing at 10
locations
Approx. 40.1M m3 of water sold per
year
Approx. 20 km of existing
watermains replaced or
rehabilitated per year
Approx. 12 km of new watermains
assumed per year
Approx. 8,500 meters installed per
year
Approx. 1.2M bills per year
Is The City
Mandated To
Provide This
Service?
Yes
Can The
Level Of
Service Be
Changed?
No
Yes
Yes (with
limitations)
Yes (with
limitations)
Yes
Yes
Yes (by
resolution of
Council)
Yes (by
resolution of
Council)
Yes (with
limitations)
Yes (with
limitations)
Yes
64
Name The Activities Done To Provide This Service
7. Customer Assistance Program – At Your Service
How Much Did We Do?
(optional)
Approx. 50 customers assisted in
paying large water bills
Is The City
Mandated To
Provide This
Service?
Yes (by
resolution of
Council)
Can The
Level Of
Service Be
Changed?
Yes (with
limitations)
What is the current state of this service?
•
•
•
Current objectives of the Water utility include:
• Achieving a financially sustainable 1 utility and addressing lifecycle renewal, growth and economic development
objectives of the City while ensuring regulatory compliance
• Maintaining / improving the existing level of service provided to the citizens and businesses of London
• Improving on lost water revenue (non-revenue water)
• Reducing the number of lead service connections
• Assisting in the implementation of Industrial Land Development
These objectives are being driven by a number of factors, including:
• Customer expectations of the services that should be provided
• Council-approved level of service requirements
• Council-endorsed strategic initiatives
• City of London Strategic Plan
A number of challenges are facing the Water service area in the achievement of these objectives:
• Declining revenue base, aging infrastructure (much of which is reaching the end of its useful life at the same time),
increasing cost drivers over which the utility has no direct control (power, labour, etc.), an aging workforce, and everincreasing regulatory requirements
• Increasing customer expectations for improved service levels commensurate with the rising cost of the service
• Specific compliance issues drawing attention and effort away from overall compliance management
1
Financial Sustainability is defined as the movement toward annual rate increases that can be maintained at or near the annual rate of inflation
based on a combination of CPI and the Construction Price Index with appropriate use of debt financing, adequate reserve funds and the
appropriate investment in capital.
65
•
Some of the challenges noted above have been managed with positive results in 2014 through the following achievements:
• City-wide communication and education campaign on how customers can save on their water bill
• Revised revenue and expenditure forecasts
• Preparation of the City’s Water Growth Master Plan, new 2014 Development Charges Background Study and input to
the Industrial Land Development Strategy
• Compliance with the City’s Water Operational Plan under the Drinking Water Quality Management Standard, and
increased vigilance with respect to compliance under the Safe Drinking Water Act and the Fire Code. Achieved 100%
score on MOE Report Card (audit) for 2013
• Full implementation of a proactive preventative maintenance program for eliminating and/or substantively reducing the
risk of drinking water contamination in all flooded air and vacuum valve chambers within the distribution system
• Continuation of the program for replacement of lead services
• Moved towards implementation of a Computerized Maintenance Management System, to bring the utility’s
maintenance and work flow management up to industry standards. This will result in staff resource efficiencies,
enhanced documentation, and cost tracking of maintenance activities, while also ensuring compliance with regulatory
requirements
What has been done to manage the budget?
The service area has been actively managing its budget by implementing management lead initiatives aimed at creating efficiencies,
avoiding costs and generating revenue. These include the following:
Efficiencies / Costs Avoided
Previous 3 Years
•
•
•
Energy efficiency improvements at the Elgin Middlesex Pumping Station will result in energy savings in the order
$50,000/year while also receiving OPA grants totalling approximately $360,000
Energy efficiency improvements at the Arva Pumping Station will result in energy savings of approximately $10,000 per year
while receiving London Hydro grants of approximately $18,000
Continued use of trenchless technologies including vaccuum excavation, directional drilling and watermain relining has
avoided costs of approximately $4M (10,000 m @ $400/m)
66
Revenue Generation / User Fee Increases
Previous 3 Years
•
•
Implemented a new Water and Wastewater rate structure effective March 1, 2013. The purpose of this new rate structure was
to ensure fairness and equity for all customers while also balancing conservation efforts, economic development and the
need to provide a more stable, predictable revenue stream in response to declining consumption. The new rate structure also
included the implementation of the new Fire Protection Charge, generating approximately $2.5M of additional revenue per
year, consistent with the PwC audit recommendation.
Other rate increases over the past 3 years have been in keeping with the Council-endorsed rate plan in order to achieve
financial sustainability by 2016.
What is the future direction of this service?
•
•
•
•
Core business objectives will remain consistent; however, specific attention will be given to opportunities for synergistic
activities in four areas: regulatory compliance, growth, efficiency and best management practices, with sustainability being a
common theme in all areas.
The drivers for these four activity areas include: protecting public health and private property; meeting all regulatory
requirements; ensuring the Standard of Care provision is met; supporting Council’s objectives of economic development and
growth; gaining efficiencies to reduce long term costs; investing in succession planning; harnessing innovative technologies;
and maintaining a high level of service to consistently meet customers’ expectations.
Continuing focus on delivering a financially sustainable utility in the near term and maintaining infrastructure levels of service
at an appropriate level of risk as the 20-Year Capital Plan is implemented.
Continuing efforts to meet new regulatory requirements under the Safe Drinking Water Act, Fire Code, Water Opportunities
(and Conservation) Act, Clean Water Act (Source Water Protection Plans), and Green Energy Act (Electrical Efficiency).
67
What future initiatives can be contained within the existing service level budget?
2015 Budget
•
•
•
Compliance
• Completion of visual flow identification/colour coding of fire hydrants owned and maintained by the Water utility, in
accordance with the Fire Code, utilizing the City’s computerized hydraulic model (requiring validation through a
significant increase in field testing).
• Operate under the Source Water Protection Plan (in its first full year) as it relates to Risk Management Officer and
Risk Management Inspectors liaison with private property owners within well-head protection areas as mandated
under the Clean Water Act. Maintain 100% MOE Report Card score.
• Complete all works to implement the recently established air and vacuum valve chamber inspection program,
including chamber rehabilitation and valve replacement to eliminate and/or substantively reduce contamination risk as
required under the Safe Drinking Water Act.
• Continual improvement initiatives associated with the Drinking Water Quality Management System as required under
our Utility Licensing requirements included in the Safe Drinking Water Act. The City’s Council-endorsed Operational
Plan mandates an annual review of activities/procedures, with an accompanying report to Council regarding its status,
and identification of recommended improvement opportunities.
• Operate under a more rigorous Environmental Management approach to regulatory compliance by providing additional
resources (previously budgeted and approved) to plan, monitor and document our Drinking Water Quality
Management System.
• Develop a strategy to address abandoned water test wells which have not been properly decommissioned dating back
to the 1940’s.
Growth
• Assist in the undertaking of GMIS projects.
• Support the Industrial Land Development Strategy.
• Infill and intensification analysis of existing water distribution system utilizing the computerized hydraulic model.
Efficiency
• Assessing energy conservation opportunities at the City’s pumping stations, continuing to make energy efficiency
gains through installation of new, more energy efficient equipment, and reviewing for operational optimization
opportunities.
68
Continuing implementation of various leak detection strategies and technologies to reduce non-revenue water, to
analyze for water leakage and identify/prevent future watermain breaks.
• Continue to effectively and efficiently exchange residential water meters by meeting the Water Meter Replacement
Program targets.
Best Management Practices
• Update Water Financial Plan including a strategy for achieving an appropriate minimum reserve fund balance for the
water utility, consistent with corporate wide financial objectives.
• At full implementation of the new rate structure in January 2015, complete a review of 2013 rate structure
implementation and determine if revenue targets are being met.
• Financial monitoring of the major factors in the financial forecast: rate structure changes, consumption forecasts,
construction cost indexing, non-revenue water management and reserve fund balances.
• Initiate development of a Computerized Maintenance Management System, to bring the utility maintenance and work
flow management up to industry standards. This will result in staff resource efficiencies, enhanced documentation, and
cost tracking of maintenance activities, while also ensuring compliance with regulatory requirements.
• Continue with focused efforts in valve maintenance (rehabilitation, replacement, additions), to ensure operational
reliability, reducing customer impacts, and reduced staffing costs for emergency repairs of watermain breaks.
• Develop capacity to support succession plans that ensure appropriately experienced and certified staff performs the
necessary functions in accordance with regulatory requirements.
• Blend the approved Trunk Watermain Management Plan into the capital works and GMIS planning cycle in an effort to
implement new technologies for condition assessment of critical infrastructure that support corporate asset
management decision-making, optimize renewal efforts, and minimize the risks associated with the effects from large
diameter transmission main failures.
• Build on existing customer service and communication successes and develop a customer service charter in
conjunction with the At Your Service corporate service standards initiative. The charter will serve to limit the amount
of time it takes to handle billing and service related issues; increase visibility in the community; provide additional
avenues to find information and learn how to lower monthly bills; develop an enhanced customer contact website in
conjunction with London Hydro.
• Development of targeted campaigns using information gathered from Customer Assistance Program to determine the
most common issues affecting customers.
•
•
69
•
•
Develop teacher resource portal to allow TVDSB educators to find and incorporate water and water cycle related
information into Ontario curriculum taught with a focus on local issues. Implement and measure benefits of drinking
water education curriculum for local elementary and secondary schools.
Build a database to analyze and manage water customer, water system, and urban planning data.
2016-2018 Forecast
•
•
•
•
Compliance
• Achieving full compliance under the Fire Code with respect to colour coding of fire hydrants and maintaining the
currency of the colour coding to reflect changes in the distribution system.
• Full operational implementation of the Source Water Protection Plan will achieved in 2015 within well-head protection
areas. Additional consideration to be given to decommissioning of abandoned test wells.
• Undertaking of the air and vacuum valve ongoing maintenance program to eliminate and/or substantively reduce
contamination risk.
• Continual improvement initiatives associated with the Drinking Water Quality Management System will be ongoing,
summarized and reported to Council annually.
Growth
• Implement various GMIS/Development Charges-funded growth projects, including waterworks to support the Industrial
Land Development Strategy.
Efficiency
• Complete the Water Meter Replacement Program by 2019, by eliminating the backlog of residential water meters
requiring replacement and reach program sustainability going forward.
• Implement energy conservation projects at the City’s water pumping stations.
• Continue deployment and monitoring of District Meter Areas and other leak detection strategies, by analyzing leakage
rates, and to prevent future watermain breaks by identifying leaks prior to failure.
• Continue liaison with our large customers, using the water meter automated reading system to provide them with realtime consumption data. This data will also further assist in hydraulic model calibration accuracy, and reduce meter
reading costs.
Best Management Practices
• Explore utility management opportunities to operate effectively in the “post-financial sustainability” era and continue
with infrastructure sustainability as the 20-Year Capital Plan is carried out.
70
•
•
•
•
•
•
Development and optimization of the Computerized Maintenance Management System. Initiate long-term strategic
planning of assets based on preliminary results of the CMMS implementation.
Continue with the program(s) for monitoring, analyzing, and assessing the condition of large diameter transmission
mains, through full development of the implemented technologies.
Fully integrate the corporate asset management decision-making process with current Water utility asset management
practices.
Renewal of cathodic protection systems for corrosion control, and installation of new systems on existing pipes done
in conjunction with capital works projects.
Fully design an operational hydraulic model and water quality model to support long term planning, subdivision
development and servicing, intensification analysis, and operational planning and response to routine maintenance
and emergency situations, including threats to water quality.
Anticipated customer service initiatives will include:
• Develop business tools to measure and analyze water use and system data in conjunction with the hydraulic
model.
• Enhancement of London Hydro customer portal that incorporates behavior change messaging and better
recognition of customer water use.
• Development of interval water data portal for ICI customers through London Hydro meter reading contract.
• Expansion of “ThirstMobile” to include events outside of Victoria Park.
• Continued use of targeted value of water and conservation messaging.
• Develop a grey water/rainwater use strategy and program.
What service adjustments do you plan to make?
2015 Budget
•
None anticipated at this time.
2016-2018 Forecast
•
None anticipated at this time.
71
Key Performance Indicators
How Much?
Description of measure
1. Water sold in million cubic meters
2. Percentage of existing watermains renewed (1)
3. Number of lead services replaced (2)
4. Number of water meters installed (3)
2013
41.7
1.20%
368
8,500
2014
40.5
1.26%
400
8,500
2015
40.1
1.25%
500
15,000
2016
39.8
1.49%
500
15,000
2017
39.5
1.41%
500
15,000
2018
39.2
1.40%
500
15,000
2013
8.9%
$327
2014
10.8%
$343
2015
10.6%
$367
2016
10.4%
$378
2017
10.2%
$389
2018
10.0%
$401
2013
0
2,400
2014
0
3,000
2015
0
3,000
2016
0
3,000
2017
0
3,000
2018
0
3,000
9.5
188
100.0%
10.0
300
100.0%
8.1
300
100.0%
8.0
300
100.0%
8.0
300
100.0%
7.9
295
100.0%
How Well?
Description of measure
5. Non-revenue water (% of total pumped) (4)
6. Average annual cost for residential customer
Is Anyone Better Off?
Description of measure
7. Number of boil water advisories
8. Number of customers with service interruption of
more than 2 hours (5)
9. Number of watermain breaks per 100 km
10. Water quality complaints (6)
11. Ministry of Environment Report Card score
NOTES: 2013 values represent actual amounts; 2014-2018 values represent forecasts
(1) Renewal is defined as replacement or structural relining and does not include cement mortar relining or anode protection.
(2) Delivery of the Corrosion Plan is being re-evaluated for 2014.
(3) Meter replacement program delivery is being re-evaluated in 2014.
(4) Reduction in non-revenue water is based on implementation of District Meter Areas City-wide over 5 years.
(5) Number of customers out of service is an approximation based on watermain break records.
(6) Number of complaints in 2013 is a mixture of "per event” and “individual complaints" versus absolute number of complaints.
Process of complaints logging is under review from a "best practices" perspective. 2014 complaints are expected to increase as
more hydrants are flow tested, which may agitate rust sediment in cast iron watermains.
72
WATER
2015 Budget
January 27, 2015