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2008/11/17~,~ ,, „ . CORPORATE SERVICES COMMITTEE AGENDA NINTH MEETING Monday, November 17, 2008 COMMITTEE ROOM #2 - 4:00 pm 1. Approval of the October 6, 2008 Corporate Services Minutes. 2. REPORTS: STAFF CONTACT CPS-2008-04 Ken Burden water and Sewer Rate Structure Update: Public Response COUNCIL CHAMBERS - 6:00 PM 3. 2009 FUNDING REQUESTS Deputations: Niagara Falls Tourism Niagara District Airport 4. 2009 BUDGET PRESENTATION 2009 Budget Introduction & Issues 5. Adjournment __ Nnagatl a,Fatls MINUTES OF CORPORATE SERVICES COMMITTEE Eighth Meeting, Monday, November 3, 2008, Council Chambers, 6:00 P.M. PRESENT: Mayor Ted 5alci, Councillor Victor Pietrangelo, Chair; Councillor Jim Diodati, Shirley Fisher, Vince Kerrio, Bart Moves, Wayne Thomson and Janice Wing STAFF: Ed Dujlovic, Ken Burden, Serge Felicetti, Dean lorfida, Ken Beaman, Denyse Morrissey, Alex Herlovitch, Todd Harrison and Lisa Wall. PRESS: Corey Larocque, Niagara Falls Review Lori Sherman, Niagara This Week 1. MINUTES It was ORDERED on the motion of Councillor Thomson and seconded by Councillor Kerrio that the minutes of the October 6, 2008 meeting be adopted as recorded. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. 2. 2009 FUNDING REQUESTS MOVED by Mayor Salci seconded by Councillor Diodati that the 2009 Budget request from the Niagara Falls Public Library be referred to the final budget deliberations. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. MOVED by Councillor Kerrio seconded by Mayor Salci that the 2009 Budget request from the GNGH Foundation be referred to the final budget deliberations. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. MOVED by Mayor Salci seconded by Councillor Diodati thatthe 2009 Budget request from the Niagara Falls Board of Museums be referred to the final budget deliberations. Conflict: Councillor Wing Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. -z- MOVED by Councillor Thomson seconded by Councillor Kerrio that the 2009 Budget request from the Women's Place of South Niagara be referred to the final budget deliberations. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. MOVED by CouncillorThomsonseconded by Councillor Maves that the 2009 Budget request from the YWCA Niagara Region be referred to the final budget deliberations. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. MOVED by CouncillorThomson seconded by Councillor Maves that the 2009 Budget request from Winter Festival of Lights, Niagara Chair-A-Van, St. John's Ambulance and Project SHARE be received and filed. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. 3. REPORTS: F-2008-42 2007 Municipal Performance Measures MOVED by Mayor Salci seconded by Councillor Diodati that Council receive this report for information and that staff post the information on the City's website. Motion: Carried Unanimously Action: Recommendation submitted to Council November 3, 2008. 4. ADJOURNMENT: MOVED by Councillor Diodati seconded by Mayor Salci that the regular meeting of the Corporate Services Committee be adjourned at 7:05 p.m. Motion: Carried Unanimously Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Members: Re: CPS-2008-04 Water and Sewer Rate Structure Update: Public Response RECOMMENDATION: That the Committee receives the Public Responses to the Public Consultation, 2. That the Committee recommends the endorsement of the eight principles received in the Water and Sewer Rate Structure Review by R.M. Loudon Ltd., 3. That the Committee does not recommend the endorsement of the nine recommendations received from R.M.Loudon Ltd. for a new water and sewer rate structure, and 4. That the Committee directs Staff to prepare recommendations for a water and sewer rate structure that fulfils the eight principles, considers the Region's review of water and sewer charges, and responds to the concerns raised via the Public Consultation. BACKGROUND: On May 5, 2008, the Corporate Services Committee received Staff Report CPS-2008-03 which addressed the Water and Sewer Rate Recommendations (see attached) provided by R.M. Loudon Ltd., a consultant engaged to provide a water and sewer rate structure review. Mr. Loudon presented a summary of the recommendations to the Committee, Members of the public also presented their views: -Following the discussion, the Committee directed "that additional analysis and public consultation should be undertaken to determine what is appropriate for a new water and sewer rate structure." Staff facilitated three public consultations which were held at City Hall on July 14,15, and 16, 2008. A total of 28 people~attended the three sessions; they represented residential, commercial, and industrial interests:' Attendees were requested to submitwritten questions ~~~~~•- Working Together to Serve Our Community i Corporate Services Division November 17, 2008 - 2 - CPS-2008-04 or comments on the water and sewer rate recommendations. Several submissions were received and are available to view on the City's web site. This report summarizes the submissions from the public. Written comments received at the Public Consultations a) In order to budget effectively, we need to know the rates ... in advance. b) Water used in production ...should be granted a rebate for the sewer portion. c) W ater not going into the sewage system does not get treated, (e.g., water going into a lawn or garden does not go into the sewer). Therefore, don't charge for a service not given. d) The study lacks the appropriate data to support the proposed new rate structure. The main concept proposed (arbitrarily shifting more City Budget Costs towards volumetric billings) is actually opposite to the facts within the study, and would unfairly penalize a small number of customers. e) The larger water users are proportionally less of a cost burden to the City, then the small usage accounts. f) The Regional Municipality of Niagara Joint Water and Wastewater Cost Recovery Methodology Review Working Group advised that the Group will reconvene to examine the municipal experience of recent changes in regional water and sewer charges, and to make recommendations on new, or revisions to, the regional water and sewer charges. Submission from Niagara Casinos Niagara Casinos engaged The Mitchell Partnership Inc., Consulting Engineers (TMP) to conduct a review of the Water and Sewer Rate Structure Review prepared by the City's consultant, R.M.Loudon Ltd. The following points are excerpts from the Executive Summary of the TMP report. • Regional volumetric rates and City service charges, together, make up the City water and sewer bill. • All City water users, regardless of size, pay the same water and sewer rates per cubic meter of water. • Increased infrastructure spending, not waterconsumption, has resulted in Citycosts increasing at a faster rate than Regional charges. • City spending on water and sewer infrastructure is unrelated to water consumption and the proposed Alternative rate structure ...arbitrarily and disproportionately "passes off' the cost ... to large water users. • Underthe proposed Alternative rate structure ...total water and sewer charges for the Niagara Casinos will increase by an estimated $545,000 per year. For an average water user, total water and sewer charges will decrease by roughly $81.00 per year. • For the reasons noted, Council should not move forward with the proposed Alternative rate structure at the present time. Submission from The Chamber of Commerce Niagara Falls Canada The Chamberof Commerce, Niagara falls, Canada partnered with several other community stakeholders to commission a review of the R.M.Loudon Ltd. Water and Sewer Rate November 17, 2008 - 3 - CPS-2008-04 Structure Review study. The group engaged BMA Management Consulting (BMA) to conduct the review. The following points are excerpts from the Executive Summary of the BMA report. • A variety of alternative rate structures can be used depending on the goals and objectives of the municipality. • It is extremely important that the rate structure be responsive to the unique circumstances and values of the community. • The process to date does not appear to have included a formalization and endorsement of the recommended priority principles by Council. • The recommendation to lowerthe fixed service charge will clearly increase revenue instability which is one of the key priorities identified in the report. • The report recommends a "conservative approach" to future rate setting and also the need to establish appropriate Stabilization Reserves and policies. These policies should be articulated in the report and included in the impact analysis. • The capital costs to service the Residential sector are much higher than Institutional, Commercial and Industrial (ICI) sector, however, based on the recommendations in the Loudon Report, the majority of the replacement costs will be paid by the ICI sector. • While the Loudon Report states that the AWWA factors were used for meter capacity ratios, there were some inconsistencies at 3" or less and the factors used above the 3"threshold were extremely high and could not be substantiated based on the information included in the report. • The costs of water leakage and sewer inflow and infiltration (I&I) ...are recovered through the volumetric rate. 1% of the users pay 45% of these costs and the remaining 99% of customers pay 55% of the costs. • Water leakage and sewer I&I costs are not related to volumes consumed but are more related to the length of pipe attributed to each customer class. A fairer and more equitable approach would be to recover these costs by customer class. • The recommended rate structure supports afford-ability, from a residential perspective, since a large portion of the fixed costs has been transferred to the ICI sector through a volumetric charge. However ...the recommendations in the Loudon Report will negatively impact these (ICI) sectors and may cause afford- ability issues especially in light of the current economic environment. Concerns identified via the Public Consultations Several concerns can be identified from the Public Consultations. Whether the public responses were informal comments or summaries of consultant studies, the concerns are similar in nature but different in perspective. The economic impact of adjusting the water and sewer rate structure is the most important issue of public concern. The monthly fixed rate has secured the needed revenues to fund the rapid expansion of the City's program of water and sewer infrastructure renewal. November 17, 2008 - 4 - CPS-20,08-04 However, the annual increase has continually surpassed the inflation rate, and has negatively impacted the ratepayers' ability to pay. Similarly, the volumetric rate has secured the needed revenues to pay the Regional charges for water consumed and sewer treated, and also for water leakage and sewer inflows and infiltration. The volumetric rate, which includes an allowance for the unaccounted forvolumes, charges these unrelated losses to ratepayers in direct proportion to their actual usage. Again, the rate structure has negatively impacted the ratepayers' ability to control their costs through conservation or by penalizing ratepayers whose water usage does not enter the sewer system. The technical review of the water and sewer rate structure has raised several other public concerns about the proposed water and sewer rate structure. • lack of attention to the rapid increase of fixed monthly charges • lack of consistent meter servicing among condominium residential ratepayers • lack of attention to the volumetric rates' inclusion of cost allowances for water leakage and sewer inflows and infiltration • lack of sewer rebates for water used in production processes, or used to irrigate lawns and gardens • lack of formalized and endorsed principles for determining a rate structure • lack of sufficiently identified and quantified costs and their impact on rates • lack of consistent and accurate factors used for the meter-sized rates • lack of sufficient examination of other rate structure options • lack of addressing the unique circumstances and the values of the community's customer classes and their respective sensitivity to rates • lack of reserve fund analysis for establishing and maintaining rate stabilization In summary, the Public Consultation responses have demonstrated that the Committee should not accept the recommendations prepared by R.M.Loudon Ltd., however, the Committee should recommend the endorsement of the eight principles received in the Water and Sewer Rate Structure Review. Due to the length of time already taken for the water and sewer rate structure discussions, the Committee may want to direct Staff to prepare recommendations for a water and sewer rate structure that fulfils the eight principles, considers the Region's review ofwater and sewer charges, and responds to the concerns raised via the Public Consultation. Recommended by Ken Burden, Executive D' ctor of Corporate Services Respectfully submitted: ~ \ Jc , Ed Dujlovic, Executive irec or of Community Services S:STikky120081Ken Burden 2008\CPS-2008-04 -Water and Sewer Rate Public Response.wpd City of Niagara Falls Water & Sewage Rate Structure Review Pagel ofl City of Niagara Water & Sewage Rate Structure Review Recommendations Following the April 14, 2008 Presentation of the Final Report to the Corporate Services Committee The following are recommendations following on the April 14, 2008 presentation by M. Loudon to the City of Niagara Falls Corporate Services Committee of the R.M. Loudon Ltd. Water & Sewage Rate Structure Review, Final Report, dated Apri12, 2008. Feedback from the Committee was helpful in developing the recommendations. It is recommended: 1. That the principles checked off below in Column A -User Rate Format Priority, are recommended for adoption with respect to the formulation of the water and sewage rates: Principles A -User Rate Format Priorit B -Other Methods are More Suitable for Implementation Revenue adequacy & security Legality Practicality Fairness & User Pay Affordability Simplicity Conservation & Water use efficiency Encourage industrial development The principles in Column B may also be City priorities, but they are best implemented using other strategies. 2. That combined water and sewage rates be used to bill customers with City water and sewage services. A separate water-only rate would still be required for water- only customers. Awater-only rate with volumetric and service charge components is preferred for the water-only customers, but a water rate expressed as a percentage of the combined water and sewage rates is acceptable if necessary for administrative reasons. 3. That atwo-part rate format with asingle-block volumetric rate and service charges varying by meter size continue, but without the current approach of Recommendations NF User Rate Recommendations April 172008. doc 1 R. M Loudon Ltd Ciry of Niagara Falls Water & Sewage Rate Structure Review Recommendations Paget of 2 linking Regional costs to the volumetric rate and City costs to the service charge. 4. That the proportion of costs allocated to the volumetric charge be increased to 75% and the proportion of costs allocated to service charges be decreased to 25%. (Note that customers' bills will have varying percentage shares of volumetric charges and service charges depending on volume used by the customer and the customer's meter size.) 5. That aphase-in from the current rate formulation to the 25%:75% cost allocation approach over a period of two to three years be considered 6. That the 25%:75% service chazge versus volumetric rate cost split approach be revisited for the 2013 water and sewage user rates. That in recognition of the high cost of supplying water to meet seasonal irrigation demands and to encourage conservation, no special rate or billing concessions be adopted for residential summer increases in usage. 8. That, in order to offset the potential loss in revenue security resulting from a reduction in revenues generated from fixed charges (i.e. a reduced service chazge component), projections used to set future user rates be made on a conservative basis and a Rate Stabilization Reserve Fund to cushion against unexpected user rate revenue shortfalls be established and funded. A target level for the RSRF along with a funding approach need to be established. 9. That in general the installation of bulk meters is preferred over individual unit metering by the City for residential multi-unit customers such as condominium corporations and apartment buildings. Multi-unit customers with individual direct connections to City mains and shut-offs at the property line, such as freehold townhouse developments, would continue to have individual City meters. R. M. Loudon Ltd., April 17, 2008 NF User Rate Recommendations April 17 2008. doc 2 R. M. Loudon Ltd R ~~ g ~ `~~ ~'. "~ ~ w ° o ~°?°'' ~®~-g ,.~~, a ~ &°e$°=~ '`° ,' •e a ®e a "_~., ° e`a a ~. ~Y~ ~~~Q~ ~~d ~~QC~ ~~~Q ~~~a~~C~Q ~~~~~~ a°~ 6~~~P~ ~~~~ ~~ F~rece.tfve Summary Watsr. RateSfructureri;evibw - -City et Fliagarq Palls WaterRata$t-ueture Reviavr . - City of Niagara Fella Because.of revenue. instability, the report recommends a"conservative approach" to future rate sefting and also the need to establish appropriate Stabilization F3eserves and. policies. The palicies'.for these reserves or how a "conservative approach'tb rata setting-will be funded have not been included inane report: These policy decisions will impact rates. In order to make:an informed d@oision; these policies should"be articulated in the repbrt.and included in the;impact ahalysis: • Moving io the 25°/a/75°la-fixed to volumetric needs to be-ratwnalized more ciearfy in the Loudon Report,as these is-evidence=to canalude"that the current approach atready provides a mdre appropriate allocation basednn the actual underlying costs. Itappears that the 25°!° allocation was arbitrarily selected: are,requised,tor non-residential development.- This analysis clearly shows fhatthe capttat casts to.service tharesidential sectarare much;6igher thati•the lCt sector,,however,based on.the recommendations in the LoudiSn Repoli; She majorityof the replacement costs wilt be _. paid':for by the!IGI sector!. ' ' • Under the proposed rate structure, tfiere are several problems with respect to the:;treatment of capital. Frstly, not all fized•capital'costs have:-been included iri UteAxed service charge..- Secndly, the cost of infrastructure to service each lass is not recognized, as previously poipt~ cut. These problems are e,Qmpounded by the fact Ehat the City infrastructure is ih need of increased capitalispendmg which will put an increased burden on highwalume risers imthe tGl sector: • The;AWWA manual provides the maximum safetlow or capacity of 5/8', 1°, 1.5"; 2" and:3" meters. The ratios of these capacities, relative'foahai of a+5l8" teeter; era computed, and range from 2.5;for a i" meter up to 15.0 far a 3° meter. as pointed out by A+N4VA, while cepadty ratlos'for meters larger than,3" can •be.comouted.4he use nf'scrrh rarias nr ~~~~o Water Rate StructureRavfaw Cfty QPRtagara Balls • tt can be argued'that.these leakage and IBl costs acano related to volumes consumed -but are more related to the length of pipe attributed to: each customer class. There are pcoportionaliq more kilometers Of pipe in the Residential class relative to the volumes consumed'compared:with the ICbdiass. A fairer and mare eguitatile approach would be to rewver these costs by customer class. • Oho of the objectives of the rata radiew is to recommend a rate stmcture that best satisfies the public'concems. However, the report appears to be heavily weighted on the residehtial perspective tparticulariy one resident), with limited consideration for the ICI sector or Other positions.. • A balanced and objective approach is needed; particularly given that the ICl sector plays a more significant role in the economic viability of the oommuhity In Niagara Falls compared fo the majority of otharmuniapalities in pntario. • Tha Loudon Report does not provide sufficient evidence as to tivhy a declining block structure was not recommended to recognize the drfference. in costs related :t0-each property class, particularly in light df the fiact that a largerportion of fixed casts Mane been recommended to ba recovered through the vcilumetric rate. Due consideration is needed in terms of thelfairness and.equity;of the recommended approach. T'he recommended rate structure supports. affordability, from a rgsidentlal perspective: since a large portionof the fixed casts hays bean transferred to IGI sector: through a velumetric charge. However, the.IGisesdor in';generai plays a vital role in the Iocat economy. The manufacturing sector has already bean hard tilt as identified in the Urban Metrics Inc. report and Is ezpacted tt> see further declinesjin job growth and the tourism industry is beginning to feel the: impacts of a softehing economy. Tile recammendatlons in the Loudon Report wi4'negativaty impact these sectors and may douse affordability issues especially in light Of the current:ecanomicenvironment. The ex[sting rate structure which already. provides_a fair and,eguitatale,.allocation of dusts taae recovered from different customer classes continues to support the Clty'sunderiying prmciplas and priorities. Based on ine above rioted issues and concerns, lt.i§ recommendad:that additianai analysis and rationalization be undertaken prior to making any change to ffie existing ,_ _- ., - ._ _..~ _ _ ........... .......... w, ...~, impact reta8 rates and decision-making. As such; it is prudent for the'Gity to postpone any decision until the results of the Region'sstudy have bean released and the impact on the retail Water:Rata Struzture-Review Cfty of'Nisgara. Ealis ta't-PdingPrinctvles The Loudon Report states that "it isvsetut4o.aonsider and dedide wtrich principles-wilt be used be ore decWing cost recovery methods-and developing the:format of the charges. In any case it isimpartaht for the Gity to agree as3hey are: used to set strategy." While the report outlines prndiples and suggests a need;(p decide which principles are most appropriate, the process does not appear to Mave included a,formalizatidn and endprsement of the reepmmended priority principles by Council, nor does it: identify hdvJ',these priorities'were established. As `the Ciry addresses water, wastewater financial challenges, it (s extremely. impc7rant that the--rate structure be resppnsive to the unique circumstances and~vatues dithe . community and beset with afiocu5 an tfie mid to long term impacts of these decisions. Assuming the principles outlined in the ,Loudon report do, in :fact, reflect the priorities of the municipality, the following g+3neral observations have been made with respect to the;propased rate structure: Priorities included revenue adequacy & security, legality, practicality, simplicity and::°above alt else taimess and user atblity to pay. As will be'discussed in this review, while some of ttie recommendahahs put forward tor. She rate structure achieve these pririctples, .other recommendations, in tact; have net met these•piinciples:(e:g. fairness and equity, revenue adequacy andsecurity). : The i report states that conservation, water use efficiency and encouraging. industrial with respect: to the undartyirig; s~gnitlcantly incieasing aesis to contrary to the. Gty o6jaetivescor development... Recommendations .That the pr/nc/ples o guts de conservation and has no4been turfy rationalized This recommendation also -has the impact of volume commercial': and industrial users which is in other policy documents of encouraging: industrial rate setttng,proaess be appioved.by-Couttcll to ~un)fy's'co/tecUve-v/sion for the future and-the of Niagara Fats: Watsr Rata Structure Review City o1 Niagara Falls lnereased.Revenue instabltity This. year is-a prime example of what rah happen when consumption does not faliaw predictable patterns. With cne at the wettest summers, consumption is-well belbwprojections across,Ontario, resulting in revenue stiortfafisdn a number'of municipalities. The current rate structure employed by the Gity is buffered to agreater extent-than a number of municipalities because the. existing rated ruGUre. has a relatively large fiiced cast comporreht.. Under the proposed rate structure; the City will-be at increased-risk if consumptions are lower. than projected. Further, even -though eonsumption to date in -.2008 is dawn sighificantly in ane City, expenditures-.have not bean: reduced 6y a commensurate amount because sa m;my of tfSe costs-are fixed arid not tied`to the vafumes consumed. This turthee refnforcesfhe need to clearly; determine the appropriate vests o be included #n the,fixed service ctaarge and wftat wilt be included in the uolumetric rate. Without sucFi distinction;; the City 1s at risk. of additional 'revenue shortfalls'in future years when wnsump{lon is less tfan,predtctetl: increased Bud ei r: R ufr'ments Resu! in , fn Increa d„Rates To asse'so ' ` s,: One of the key principles idehtif#ed. in the LouOori'.Report, is revenue adequacy and security. The report states'-chat revenues mustbeadequate to meet financing needs.:. Tha recommendation to lower the fixed;service charge, however, w#II cieariv increase revenue n 'li and has not been:adequately rationalized from a f8mess and gqu#ty perspective as all capital costs~were not included in the+fixed sentice charge; To mitigate the revenue stability- r#sk;, the Laudon Aepart includes the idlkawing `"that in order to offset ,the potential loss in revenue securiry.resuiting froth a reduction #n revenues genaratedtram-fined costs,=projections used tc set future-rates be made on a conservative=basis (implies increasing ra#es) and a Rate Stabilization Reserve Fund'to cushion',against unexpected •user ra#e revenue,s6or2fails be established antl funded. R target level for;the'Ra4e Stabilization Reserve Fund-along with a funding,approacti (note this:impties budget#ng for a surplus) heads to tae esfablieYied:" - NS~gamernCm.pyrc. tHatsrRato-Structure Cityof'Niaga 1n accordance with the recommended "conservative approach" to #uture rata_ setting; this tmp(iesthat the city should either: • Reduce the: projected' consumption. which wilt increase.•the overall voiiametric rater to all customers -#his free notheen ietiected inthe impact ariatysis; or , • Establish a budgeted' transfer to a Rate Stabilization Reserue Fund which wauid also increase caststo ail customers- this hasnot-been reflected m the 'impact ahalysis While the use of a conservative basis is appropriate, iri ,light ofi ttie inorease>in rsuenue instability, the impact analysts included n the report does no~,csflect how hls recommendation will be implemehted. As such, it is anticipated that tt+s actuaFinersassswiil, Fn tact; he greater than:what has been presented in the report. The extent to wtifch this will increase rite impact on customers wilt be deterrriined by theassumpitons that will ialtimately6'e u~d to set rates in 2009: The report states he need to establish'appropriate! Reserve policies, however, the poBces oh funda5gsources and~targets ~Mave not bean included which wiltimpact rates. in orde~ta make an informed decision these ipolicies should be !artic impactanalysis. The level of Statstlization Reserves required wIU deper • Type of rate structure -_the more that costs are the Tess need there is for a Stabil~ation Resen, d in the report' and included ih the several factors tnctuding: rats structuro, more eserves will undoubtedly he required than are eurrentty required * ' t3nderlying Gosts -when most rwsts are fixed, in that they are not impacted ky volumes consumed, as is the case in the City's budget, there is-a greater need for Stabilization .Reserves, particularly when these fixed costs are recovered though the xotumetric charge. Further, commencing in 20f17, the :Regional costs tor. sewer ware based an a tined amount; irrespective of consumption (based en a $year rolling average}. As such; there is a-need fora ition I Sewer Stabilization Fiesarves io provide downside protection against the 'Regional eewer costs which are being recommended by the Laudon Report to be recovered tlirouoh the uriumarric rar~- Recommendatfons Watergate Stnictare Review City of Niagara Falis To Increase tranaparericy;. !f is recomtnendad-that the Impact ana/ysfs be :updated to reflect the recommendatlonmade tn:fhe Loudon Reportrt© use a `conservative 6asts to setttitg tuture rates: •' Further, !t is recommended that fihe report. Include atear potfctes shateinents wtth respects to Stabttlzaflon Reserve targets and funding. That:-the reporb.speetflca7Jy address: the l:fty's downside risks associated with an economic downturn to the tourism Industry and-document the reasons why a. tow ilxed rate companeht Js appropKate. arad'finaNy meettagislative regiiiremerits: f E For example, iMe Region'sfult regardless of the votumes.treat+ average ($t i,2 million to the F}ej Wkiite.sufficient breakdown of tFie k detailed analysis, the foliAwng lab allocation based:: on the Loudon Rep yoWmetria breakdown. It should tie are consen+atlve in that there may k well-as some of tfte water{egional=e< Water Rath -Structure Revi®w - C#ty oi'Niagara Falls- ~n oi_ wastewater costs to the Gity is fixed, in that, ity has=a-fixed amounUbased on a three,yearroiling )47}. However, this cost +s curiehfly on the volumetric ~emain on the volumetric rate even thoughthe Citys ~, regardless of volumes consumed. Justifcat_ia_ ri for .oudon Repoli: costs was not included in the-report to undertake a 9entify the current albeation tc fixed, the proposed commendations as well as oi+r analysis of the fixed to d that the assumptions used forour analysis of-fxed ddional costs in the-local operations that. are fixed~as -Water Rate: Structure:~.Revlaw Gity.of~Ni@gara-Falls ii Water Rate•Stru~ture Review City of Niagara-Falls The foibwngsummadzes ttia allocations of current allocation,,tne recommendations contained in the Loudon Report as wolf as our arralysiS of the underlyingco§fss From a fatmess and equity perspective;. the actual; underlying, costs attributed to fixed is 62°le compared with the recommended 25% in thee. Loudon Report. On the City related exppdditures, a report prepared entitled "Finanetrig Water-'Infr`astracfiire; which wasco- authored by Mr. Loudon, "the number oficustomers(or geographic size of the system} has the greatest Impact on distribution (or Collection}'systems andsustomer-related-costa;(such as meter read'mg)." .Yet, as rioted above, the proposed rate structure does not allocate he majority ofi the local system costs to fixed. tattle an allocation of,;~ fixed costs to kle recovered from the tined service charge rmproves revenue-stability and is fair-and equttabte, rrreeting two Gity abjeotives, it is ganeralty riot practicat sines it results in `a bw volumetric charge which; discourages: conservation (nof spedificatiy idenE'rfted•as a Gity priority irr he rate structure} and negativeiy'impacts'bw volume users (affordability objedive}c, Water Rato StructuraRerisw Ctty of Niagara Faiis Henchmarkina The tbllowing benchmarking tattle prouides a comparisdn of-the percentage of fared-to fatal waterlsewer casts for a Residential customer that consumes 300 m' annually; As shown below; the average percentage across thesurvey is 31%: MdSOga~p~lCwlerp YC Water:itate $tructuro,ftavfaw - City of Niagara Faila Cabital Cost Recovery-andAllocatlon The pevelopment Charges Acf requires that a deveiopment charge background study -must be completed by City' Council before passing a development charges by-law. This study requires that the municipality examihe each service to which a deveiopinant ehacge would relate, of the long term capital and operating costsfor capital infrastructure required for the service. The requirement of-the Act is for a development forecast whic6,refers to residential; cornmeiolal, industrial-and institutional develgpmerit, A background study was prepared by the C. N. Watson & Assoaates for the City in 20i3A, in accordance with the Act. As stated in the report; the charges caloulatad represeht tlie`full ana ofner assumptions wrucn are rasporisive to the requirements of the DGA, Cver the 10 year period;-the City ptapulation.s expected to increase by 7"/, and non-residential floor area is forecast to increase by 20% from 2004=20i 4. - -- - water Rate Struetoro ReWaw - ~ - - _ -City et Niagara Fatts -. The Niagara Falis ocal economy is hlghy dependent on the tourism-industry, Intact, on.a sur- vey of 80 Cntatio municipalities, Niagara Falls has the highest commercial assessment with 26°lo- of: the total assessment base-as cammerc+ai, more than double the survey average ofi 10:8°l0. Underihe proposed rate structure, there are several problems,with respect ko-the treatmi3n# of capifai.. Firstly, riot ail fixed;capitai costs-have been included ipthe fixed' ervice charge as dis- cussed: earlier in the report: Secondly, the cost of inirastruefure to sero"rce each class is-not recogriized. These prgblems are compaundad by the fact thatihe City irt(rastcucture is in need at increased capital spendingswhich wick put a further burden on-the ICI sector. Water Rate SfructuroRsviww City: of'Niagara Faits The AW WA manual provides the maximum safe flow or capacity of 5/8", 1 ", 1.5", I2", 3" meters tabutaYed. The -ratios of these capacities, relative to that of a 5/8' muter, are computed, and range 'from 25 fora 7" meter up to 15:0 fora 3" meter. As painted:. out by AWWA, while capacity ratios for meters larger than 3" can be computed, the use of 'such ratios far large meters-may or may not prouide a true iridicatiori of the potential demand requirements of the larye'metors. While-the toudon report states that She AWWA factors were used for meter capacity ratios, Ehere-were some inconsistencies at 3° or less and the factorsused-above the 3" tttreshald were extremely high and could not'be substantiated. The fotlowing table summarizes the comparisonoPthe AWWAfactors against those lased in the Loudon P^~~~ t i Ppgs i& WatsrRsteStructureReview - Gttyof'Niagara fails 6enchmarking Recammaedeftona WstoFffateStructureRavipw - Cfty of Niagarw Falls Water Rite 8trueture Rerlevr City of Niagxn Falls Fairness andEauitv3or Leaka,~,relJ&1 Gost=Recoyerv Asewater flows through the s approximately-l5°!a of waterE orderfior the Gity to recoup'$ the. amount ctiargad by the Therefore, although the City charged $D.6D24 per m' to ge 0 ity's distnbuticm system. h 20D7; lost due to leakage Therefore, fn teglon,ii-is necessary to-gross up ~g'the City's retail consumption. :r to the Region, ~nsumers ara lance the. Regional reijuirerrtents. Wate-Rafe$tructure ReWaw - City of Niagara Fa(!s To illusfrate this situation, where similar in#ormaton was:not readily availabterfar the Gity of Niagara Falts,2he following graphies:re#lect the situation in the Gity of Londoai - -- Water Rata 8tnreture-Review Clty af,Niagara Falls No-t9eco nJfFon.of Class:Difffi~rences;Fn the..Fro o ed tYMform. -- oli~metr~ are One af'tha objoctives of the riste review;is to rocommend a rate structure that best _attsfiesahe public =_aencems. _ ~ Ftowever, ;the report appeam -[o be heauily we~hted on the residentai perspective (particularly one'-residentj;':-with {invited cansideraiion for the ICI sector: or other positions. Public accountability meansahat rates and expenditures "should be designed rn ways thatare clear to taxpayers.so that pclicymakers can be made accountable to the taxpayers For the services they deliver and the-costs they incur. The mare°direct the relationship between the bene#lcs"cries of a;govemment service -and payment for that service the greater the.; degree: of accountability. Matching taxes and' user fees with beneficiaries increases the- level: of accountability -people know what they; are getting for the tax paid or-lee charged and are' better fable to judge whether the expenditure tavei is appropriate." {Financing Water lnfrestrrteture-'ihayValkertori lnquiry} A balanced.and~o6jedive approach is noeded, papicuiarly given that ilia lCl sector ptays a more signtficanf rote in Niagara Fatis dire to a.Iarger IGI sector than'the majority, of other muniapalitles in Ontario. '. The Loudon Report appropriately recommends the differentiation of costs to berecovered through the fixed service' charge based on fhe.size of the meter {which.is a proxy for customer class as described:-above}; however, it does not=doso for theivalumetric-cnarge. Again, this negatively impacta;large asers and raises issues with respect to fairness.arfd equity _and pubilg -_ accountability, partfcularly in; ignt of the _fact'that, as shown previcusiy, a significantly greater percentage of infrastructure costs are related to the residential sector, l=oudon.r~commends using a=uniform volumetric charge to recover operating costa=as weEl as some fixedcosts that. nave been allocated id volumetric, lntight of this, the following provides same alternative options that should 6e considered'with respect to #ne volumetric rate:' Decfinina Block'Rate UBiities:may consider using..: a declining tatock rate structure when:. • A smgierate structure is used for all customer classes of service System costs declfne with increasing water usage {i.e. economies of some) ~~~ _ _ _Pmge to -'~ .. ,. - . - %v~ ~ A.F.rv M - - - 'ej' q.t^u.Fa: sig.-~.r ..:rSV 4n - y Water Rate.Stemcture Review City ofNiagsra Falls A .declining or decreasing block rate is a rate structure in which,tfie unit price of each succeeding black of usage is charged;at a lowerrate khan tfie'preuious block{s).. As stated In the Pnhoiptes oi> Water, Rates, Fees and Charges by AWWA, Manual dt Waler Supply Practides, as with any rate structure, the decliningblack rate can 6e appropnate:given certain situations and cosYCansideraFions In effect, this type of rate structure provides an indirect way of allocating costs. to different customer classes-whose unit cost of service may vary. .For example, the black rate carr be set at thresholds tp coincide with usage; patterns: of a itypicai large IGI user, thereby charging them Eess per unit;a§ consumption passes a set threshold. An initial block may be designed to recover casts associated with the volumetrfb-use aril demand requirements of residential and §mail commercial customers: An apProach,used in soma municipalities, ineluding the Regien of Durham, the City: of London; the Town of Grimsby, the City of Thorold the Ci#y of North Bay. anti the City of Thunder Bay: is to use $ declinIng;7ate structure. This°ts gonerally implemented to recognize economies-ot scale whereby larger users'&re serviced by fewer (though larger) pipes which should be' recognized in'the revenue recovery. The approacli!is that the:-basic rate,pays the majority of, the infrastructure cost, while the additional volumes iconsumed'are charged on an frcn;mental basis.,.:' , This structure is designed to reflect the facLthat at= a certain,leveE of consumption, ttie cost of provrding fhe sarvice.decreases f.e. the fitted costs: a) the utilRy(not IncludEd in the fixed service charge;haue already been met. The infrastructure to service' large water customers is propcrtionatety less expensive than" mediumor small customers. 'A declining.block rate structure is; uggested so that elf customirs pay ihe,taasic rate up to a threshold to cover off the=infrastructure cost and`then foccustomers using mgre than the threshold, a Power xate is charged to cover off th'e incremental' cost tor. services that vary with vafumes consumed ti'wih respect to the treatment of large water users; fairness and equity, CWWA makes the following comments: "The Issue of Crow to teat water users is a.aerttral corieem. []n thw nna-ti9,~ r~..,a ~1,,.. tNaterRateStructure. Review _City of NisgariaFalis The following summarizes the addantages of-a Deciining-Block'Raie against-the report's proposed principles: Fairness and'-Equity ~ f ar lower-rates stmptyi toy beusec that takes into 'is equitable io entity discounts ning blackaate strucure iaffers a mechanism to recover cost differences based,on class water use grid ~,!a declining;bipck raterstructure;appears to eanfiictwith:tne.goals and resource mnservafian. Because declinfrig block rates may t ting'consutnption rasher than eonsantation, they are ofteri viewed to conservation. Many. customers; unfamiliar with the -rate design `• ie declining block rate structure to' be a gciaistiiy discount-or "anti- avauiable to' large volume users. of water: in aciualHy, wb. Water-Rate StruGfure ~ Rsvtow City of Niagara Fa11s. Alfvnment.;with.Economic DetrelonmentF/nttlafives Urban Metrics lnc.: was hued ta.prepare.a comprehensive review of long erm residential-and employment land needs for the City of Niagara falls. As stated `in their report, 'Niagara Region is wrdety considered to be amongst the most vibrant economic areas of the country. In 200.7 the:Gonferance Board of Canada rated Niagara Region as the:fourtM #astest growing economy in the country, behind Gafgary; Edmonton and Vahcouver. TEie City of Niagara FaAS has:tieen; and continues to be a major contributor to the: gverall economic prosperity of the: Region. The tourism-sector cdntinues to be the main economic driver New attractions such as ttie Fairview Casino, Great Wolf Lodge and the other ma}or reinvestment initiatives taking piace,aoiass virtually~ali segments of the: hospitality sector have helped to re-pq'sition anti._invigorate Niagaras~brand a& a "must-see destinatien" on the world°stagee New investment in==the sector, combined with other ongoing and ptarttaed infrastructure praJects throughout the Region Witt have a significant: mpaet on, future economic spending patterns, providing additEonai and sustained growth timulus foetwth businesses and householdsai~ke." "UFlita thc, in. vrn.., ..n.i ...... ~..... .....a_. __ ._. _ ._ __ _.~ .~ trad{tionaliy locate within industrial areas such as transportation; construction, wholesale trade and ether largo space extenslue businesses."' ~- ~ Ntafer-RataSteuctur®'.Raviow fifty of Nlagarw-Falls Realanal Rate SYructure.Retriew The: Region of Niagara is: in the. process of reviewing its wholesale rate structure which will directly impact qn-City's ret~it rates. As suah, it-may be prudent fa wait until the results of the Regan"s study: are complete and the impact of anyrecommeridedch~nges are [mown prior to implementing anew retail rate structure in ttie City. This wiltavold temporary fluctuations; ~~V{io7 Consulting NIAGARA Engineers CASINO NIAGARA/ NIAGARA FALLSVIEW CASINO RESORT WATER AND SEWER RATE STRUCTURE SUMMARY REPORT TO NIAGARA FALLS CITY COUNCIL The Mitchell Partnership lnc. 26 Hiscott St., Unit 104 St. Catharines, ON L2R 1C6 Tel.: 905-687-9778 Fax: 905-687-8147 tmp@tmpniagara.com www.tmptoronto.com Project No.: 08-6001-040 Date: Sept 30, 2008 p ~~V`rc~ Consulting NIAGARA Engineers Executive Summary i ' 1. Regional volumetric rates and City service charges, together, make up the City water and sewer bill. 2. All City water users, regardless of size, pay the same water and sewer rates per cubic meter of water. 3. From 2001 to 2007, Regional volumetric rates increased 20%, while City service charges increased 81 %. Council-approved funding for water and sewer infrastructure increased from $2,720,000 to $8,725,000 per year (220.7%) over this 7 year period. Increased infrastructure spending, not water consumption, has resulted in City costs increasing at a faster rate than Regional charges. 4. The Loudon Report recommends that water users pay more for water to offset increases in City spending on water and sewer infrastructure. City spending on water and sewer infrastructure is unrelated to water consumption and the proposed Alternative rate structure does not solve any "problem" (whether real or perceived) with the City service charge. Rather, it arbitrarily and disproportionately "passes ofF' the cost of water and sewer infrastructure spending to large water users whose water consumption is not responsible for the infrastructure spending. 5. Under the proposed Alternative rate structure -with an increased volumetric rate (75%) and reduced service charge (25%) -total water and sewer charges for the Niagara Casinos will increase by an estimated $545,000 per year. For an average water user, total water and sewer charges will decrease by roughly $81.00 per year. 6. For the reasons noted, Council should not move forward with the proposed Alternative rate structure at the present time. i '~~VI~ Consulting NIAGARA Engineers Expanded Executive Summary 1. Regional volumetric rates and City service charges, together, make up the City water and sewer bill. j Regional Volumetric Rates ~ Volumetric rates charged by the City to water users recover Regional volumetric charges. The Region wholesales water supply and sewage treatment and bills ~ the City based on volumes flowing through Regional treatment plants. These volumetric rates are then billed by the City to users of water based on the volume ~ of water flowing through each user's water meter. It is a cost recovery model, where users pay their share of the costs of water supply and sewage treatment ~ based on the volume of water used. to addition, water users are also billed at the above-noted rates for: (i) i unaccounted for water losses -- the 15% difference between volume of water billed by the Region and City-billed consumption caused by water main leakage, main flushing and fire fighting; and {ii) extraneous flows entering the sewer system -- the 35% flow added into sewers between customer and treatment due to inflow (surface water) and infiltration (ground water). Citv fFixedl Service Charge Fixed service charges recover City costs. These are costs associated with meeting the City's legal obligations: {i) to provide safe, potable water in sufficient supply for all users, and (ii) to provide for the collection of sanitary sewage. Money spent by the City on water and sewer infrastructure is recovered by billing a service charge to all municipal water users. Other costs recovered through the fixed service charge include water and sewer billing, lateral and main maintenance, insurance and City labour costs. The need for these capital dollars does not vary with the volume of water consumed. It is a cost recovery model z 1~VI~ Consulting NIAGARA Engineers and the service charge is determined by taking the total amount required by the City to operate and maintain the water and sewer system, and dividing by the number of users in each category (based on water meter size). As of 2007, 1% of customers = 294 customers; 99% of customers = 26,555 customers. Regional volumetric charges and City service charges are designed to collect sufficient revenues to offset the direct costs associated with each. As noted in the Water and Sewer Rate Structure Summary Review prepared by BMA Management Consulting Inc. for The Niagara Falls Chamber of Commerce (the "BMA Report"), 70% to 90% of water and sewer utility costs are fixed. Fixed costs are incurred whether or not customers consume water and are associated with providing the service at the point of consumer use (ex. water and sewer mains, laterals and trunks, etc.). A smaller portion of a utility system's costs are variable and change with the volume of water consumed (ex. chemicals and power for water treatment, pumping, etc.). 2. Alt City water users, regardless of size, pay the same water and sewer rates per cubic meter of water. No "Volume Discount" for Laroe Users All Ciry water users pay water and sewer costs at the same rates based on the volume of water they consume and return into the sewer system. For 2007 the water and sewer charges were $0.6024/m3 and $0.8544/m3, respectively. There is no "volume discount" for large users, and metering ensures that users are only billed for the volume of water they actually consume. As noted, the volumetric rates charged by the Region are billed by the City to users of water based on the volume of water flowing through each user's water meter. Since it is not practical to meter sewer discharges, sewage charges are based on the volume of water f 1~VI~ Consulting NwGAttA Engineers ° consumed (under the assumption that water consumption correlates 1:1 to r sewage discharges). The Cost of Being a Large Water User Large water users also pay a disproportionate share of unaccounted for water losses and extraneous flows entering the sewer system. That is, large users pay more than smaller users for: (i) water they don't actually use, and (ii) for water they never return to the sewer system. As noted in the BMA Report, the cost of unaccounted for water losses and extraneous flows entering the sewer system totals approximately $5.9 million per year and is recovered through the volumetric rate. Therefore, 1 % of customers (294 users) pay 45% of these costs. This translates to $2.65 million, or an average of $9,015 per user per year. The remaining 99% of customers {26,555 users} pay 55%. This translates to $3.24 million, or an average of $122 per user per year. Increasing the volumetric rate to 75% (as recommended in the Loudon Report) will only serve to increase the already heavy burden on the 1% of customers who make up the ICI sector in Niagara Falls. In the case of Niagara Casinos (with water consumption of 1,005,780 m3), unaccounted for water losses and extraneous flows entering the sewer system added $361,000 to water and sewer charges in 2007. Under the Alternative rate structure in the Loudon Report, the cost to Niagara Casinos for water it doesn't actually use and for water it never returns to the sewer system will increase to approximately $465,690 per year (an increase of $104,690 at current rates). Regional Review of Retail Rates for Water and Sewer As noted in the BMA Report, the Region is currently undertaking a rate structure review which will impact retail rates for water supply and sewage treatment. 4 '~~VI~ Consulting NIAGARA Engineers Should retail rates increase (which we can expect they will), the financial impact of adopting the Alternative rate structure in the Loudon Report will be even more dramatic for large water users in Niagara Falls. Not only will they be paying higher retail rates per cubic metre of water supply and sewage treatment, the shift to a dramatically higher volumetric rate (75%) will further add to total water and sewer charges. 3. From 2001 to 2007, Regional volumetric rates increased 20%, while City service charges increased 81%. Council-approved funding for water and sewer infrastructure increased from $2,720,000 to $8,725,000 (220.7%) over this 7 year period. Increased infrastructure spending, not water consumption, has resulted in City costs increasing at a faster rate than Regional charges. Higher Citv Spending on Water and Sewer Infrastructure As noted in the BMA Report, the water and wastewater industry is the most capital intensive of all utility sectors. In the City's case, infrastructure spending was approved by Council to deal with "challenges" that the City faced. Major sewer separation projects in older parts of the City are prime examples. The result is that the water and sewer infrastructure in the City is improved, but funds needed to be generated to cover the costs of replacement and refurbishment. These funds were/are generated by the City through the water and sewer service charge on the water and sewer bill. Under the current rate system, all users of water (large and small) pay a share of the infrastructure spending via the service charge {which is determined by the size of water meter servicing a particular property). s 1~VI~ Consulting NIAGARA Engineers On its face, an 81 % increase in the service charge may seem unreasonable and difficult to explain. In fact, "Service charges too high" was identified as the number one "major concern" arising out of the public forum in January, 2008, and the Alternative rate structure proposed in the Loudon Report -with an increased volumetric rate (75%) and a reduced service charge (25%) -was proffered as one which "addresses the first major concern expressed at the public forum." An 81 % increase in the service charge is not unreasonable or difficult to explain when you consider tha# the increase coincided with higher City spending on water and sewer infrastructure. Between 2001 and 2007 the City budget for water and sewer infrastructure increased at a much higher rate (220.7%) than Regional costs for water supply and sewage treatment (20%). Total funding for water and sewer infrastructure increased from $2,720,000 to $8,725,000 per year over this 7 year period. Council-approved this infrastructure spending "to deal with the challenges that the City faced", and this has resulted in the service charge increasing at a faster rate than the Regional charges. During this period, all water users (large and small) continued to pay the same volumetric water and treatment rates per cubic metre of water. All water users were also asked to pay a share of the increased infrastructure spending being undertaken by Council via the service charge on the water and sewer bill. Between 2001 and 2007 the service charge for a user with a standard size water meter (15 to 25mm pipe) increased as follows: 2001 service charge: $21.37 per month 2007 service charge: $38.65 per month Increase: $17.28 per month ($207.36 per year) s 1~VIro~ Consulting NIAGARA Engineers Niagara Casinos (with a 150mm pipe) currently pays a service charge of $3,246.56 per month ($1,623.28 per month for each of Casino Niagara and Niagara Fallsview Casino Resort). "Normalized" Infrastructure Spending As noted by City Staff in Report CPS-2008-03 dated May 5, 2008, if Council- approved infrastructure spending increased by 3% per year (22.99% over 7 years; the same rate of increase in Regional volumetric rates) spending in 2007 would have been approximately $3;345,000 (which is $5,380,000 less than approved). Using the 3% per year scenario, total water/sewer charges in Niagara Falls for 2007 would have been $644 (based on 240 m3/year), which is even lower than the $732 under the Alternative rate structure proposed in the Loudon Report. Under this scenario, it is unlikely that Council would even be considering a change to the rate structure, as the "perception of unfairness" amongst rate payers would not exist (to the extent it truly exists at all). That is, total water/sewer charges for average water users would be at an "acceptable" level because the funds required by the City to cover water and sewer infrastructure spending would be more "manageable". i ~_ i~ ~# ~~ ~~ ~3 ,~ :~ '~~VI~ Consulting NIAGARA Engineers 4. The Loudon Report recommends that water users pay more for water to offset increases in City spending on water and sewer infrastructure. This City spending on water and sewer infrastructure is unrelated to water consumption and the proposed Alternative rate structure does not solve any "problem" (whether real or perceived) with the City service charge. Rather, it arbitrarily and disproportionately "passes off' the cost of water and sewer infrastructure spending to large water users whose water consumption is not responsible for the infrastructure spending. Current Rate Structure More Fair and Equitable There is no data to suggest that the dramatically higher City spending on water and sewer infrastructure from 2001 to 2007 was driven to any significant degree (if at all) by water consumption (by large users in particular). In fact, ongoing projects like sewer separation in older parts of the City have absolutely nothing to do with water consumption. Water and sewer infrastructure (sewer in particular) had aged to the point where money needed to be spent on refurbishment, or to completely replace portions of the system that had deteriorated beyond repair. Money spent by the City on water and sewer infrastructure is recovered by billing a service charge to all municipal water users (based on meter size). This is the most equitable way of recovering the cost of water and sewer infrastructure spending. As noted in the BMA Report, the existing rate structure provides a fair and equitable allocation of costs to be recovered from different customer classes and supports Council's endorsed principles and priorities. It also provides a more appropriate allocation of the actual costs of maintaining and operating the City's water and sewer system than the Alternative rate structure proposed in the Loudon Report. B ~~V~~ Consulting NIAGARA Engineers It is not fair, on the other hand, to recommend that water users pay more for water to offset increases in City spending on water and sewer infrastructure. This City spending is unrelated to water consumption and benefits all rate payers, large and small alike. The Loudon Report's proposed Alternative rate structure does not solve any `problem" (whether real or perceived) with the City service charge. Rather, it arbitrarily and disproportionately "passes off' the cost of water and sewer infrastructure spending to large water users whose water consumption is not responsible for the infrastructure spending. As noted in the BMA Report, the capital costs to service the residential sector are much higher than the ICI sector. Based on the recommendations in the Loudon Report, however, the majority of the replacement and refurbishment costs for the City's water and sewer infrastructure will be paid for by the ICI sector. As stated by the Canadian Waterworks Association, "The volumetric charge for water servicing should contain only those costs which vary with volumes of water supplied and wastewater treated. Costs unrelated to volumes supplied and treated are more appropriately recovered through (fixed) service charges." The Alternative rate structure proposed in the Loudon Report "flips" this equation by recommending that water users pay a dramatically higher volumetric rate in order to offset increases in City spending on water and sewer infrastructure. Citv's Caoital Budget The City's Capital Budget suggests that spending on water and sewer infrastructure will continue to increase at the rate it has over the past 7 years. Because this higher spending on water and sewer infrastructure is not being driven by water consumption, the funds to cover the costs of same should not be derived by arbitrarily increasing volumetric rates. s 1~VIro~ Consulting NIAGARA Engineers In addition, the data suggests that the increased spending on water and sewer infrastructure has and will continue to yield dividends through less unaccounted for water and extraneous flows entering the sewer system. This will result in a decrease in water and sewer charges for all water users. That is to say, water and sewer rates in Niagara Falls are likely to decrease "naturally" on a going forvvard basis as a result of the improvements to the "newer" water and sewer system that have been achieved with increased infrastructure spending. There is no need, therefore, to "artificially" alter the rate structure until such time as the full extent of those dividends can be realized in coming years. Mr. Bielawski's Premise There was a strong sentiment expressed by one residential user that the current rate structure was inappropriate. Mr. Bielawski's premise was that the service charge is much too high and, in fact, would best be eliminated entirely, with a volume-only charge applied. Mr. Bielawski carried out research on usage by: (i) meter size; and (ii) associated number of units (such as in hotels). This approach is flawed in several respects. Most notably, Mr. Bielawski's approach assumes that water consumption is the sole determinant of the cost of operating a municipal water and sewer system. It fails to recognize that the vast majority of costs associated with operating and maintaining a water and sewer system are fixed costs, unaffected by the volume of water flowing through that system. Even if no water flowed through the system for a given period of time, the City would have costs associated with maintaining its existing water and sewer infrastructure. These costs are recovered through the service charge which, as noted above, has risen over the past 7 years due to significantly higher infrastructure spending, not as a result of increased Regional charges for water. ~o 1~VI~ Consulting NIAGARA Engineers If the volume of water consumed by large users was completely removed from the equation, the City would still need to generate funds to recover the costs associated with having and maintaining a municipal water and sewer system for the remaining water users. 5. Under the proposed Alternative rate structure -with an increased volumetric rate (75%) and reduced service charge (25%) -total water and sewer charges for the Niagara Casinos will increase by an estimated $545,000 per year. For an average water user, total water and sewer charges will decrease by roughly $81.00 per year. A sudden and immediate increase in water and sewer charges is an important matter for the business of the Niagara Casinos. As the largest employer in the Niagara Region, Niagara Casinos is constantly under pressure to protect the livelihoods of its almost 5,000 employees. Unexpected and, in our respectful submission, unjustifiable expenditures such as that recommended in the Loudon Report require adjustments to spending in other areas. Niagara Casinos are not unique in this regard. Other large water users will feel the same pressures brought to bear if the Loudon Report's recommendations are adopted. To be clear, Niagara Casinos is not advocating a rate structure under which it does not pay its "fair share" of water and sewer infrastructure spending. On the contrary, Niagara Casinos submits that an improved water and sewer infrastructure benefits all City water users (large and small alike), and the funds to pay for same are properly collected from users in all customer classes. The recommendation that water users pay more for water to offset increases in City spending on water and sewer infrastructure is, quite simply, an arbitrary and unfair way of generating the needed funds for infrastructure spending. ~~ '~~VI`c"~ Consulting NwGArsn Engineers 6. For the reasons noted, Council should not move forward with the proposed Alternative rate structure at the present time. More analysis and public consultation must be undertaken to determine: (i) if a new water and sewer rate structure in Niagara Falls is _ necessary at this time; and (ii) if so, what is the most appropriate and equitable rate structure, having regard to Council-endorsed principles and priorities. r The Alternative rate structure recommended in the Loudon Report (with a I significantly lower fixed service charge} brings with it a level of revenue uncertainty that does not exist under the current rate structure. As stated by the ~, Canadian Waterworks Association, "Being very capital intensive implies that a water rate system with a high variable cost component may cause serious problems with regard to revenue stability." To mitigate against this acknowledged revenue uncertainty, the Loudon Report proposes a Rate Stabilization Reserve Fund, which is a fund paid into by water users "to provide revenue security against revenue fluctuations resulting from a higher volumetric rate." As noted in the BMA Report, however, policies for funding sources and targets for the Fund have not been set out in the Loudon Report. In order to make an informed decision on a rate structure, these policies must be articulated and included in an impact analysis for all rate payers to see. With a significantly higher volumetric rate, large water users like Niagara Casinos will be forced to explore ways to conserve water in a more aggressive manner than they currently are( As with any business, if a cost benefit analysis demonstrates that capitdl expenditures are recoverable within a reasonable period of time, projects that~were once "too expensive' will be undertaken. In the iz ~ ~~VI~ Consulting NIAGARA Engineers case of Niagara Casinos, this could include significant capital expenditures on cooling towers and the use of "grey water" to service exterior areas. All of these conservation measures (which at one time were cost prohibitive) will serve to exacerbate the revenue uncertainty that accompanies the Alternative rate structure recommended in the Loudon Report. For the reasons stated, it is respectfully submitted that Council should not move forward with the proposed Alternative rate structure at the present time. It is recommended, instead, that the City undertake a campaign to educate all water users on what drives the cost of the municipal water and sewer system i (especially the service charge component of the water bill). If it is explained that water consumption does not drive the need for replacing water and sewer pipes that have aged beyond repair (Father Time is the culprit), and that the funds for replacing those sewers are generated equally amongst water users based on the size of water meter servicing their property (i.e. all residential users pay the same ~ service charge, just as all large users pay the same service charge), the "perception of unfairness' that allegedly exists amongst rate payers would not exist. City Staff has taken some preliminary steps to educate municipal water users with respect to the items that drive the cost of the municipal water and sewer ~ i system. The following appears on the City of Niagara Falls website: ; Water Information Water and Sewer Rate Structure Review r,r In 2001, the City of Niagara Falls began to implement use-based billing structure (water meters). A water and sewer billing was implemented that comprised of fixed and volumetric charges. Each 73 ~~V~~ Consulting Nu~cnwa Engineers charge is designed to collect sufficient revenues to offset the relevant direct costs. The fixed monthly charge is not related to the direct costs of consumption. The fixed charges are intended to offset the fixed costs of maintaining the water and sanitary sewer systems. The City has the responsibility to provide safe potable water in sufficient supply for all users including fire suppression. The City is responsible for providing the collection of sanitary sewage. The direct operating costs of labour and materials, and the direct construction costs of repairs and maintenance are incurred regardless of the users' consumption. The fixed monthly charges are not dependent upon or related to the amount of consumption ~ incurred. ~I In 2007, Niagara Falls City Council directed a review of the Water I and Sewer rate to ensure that such principles as fairness, conservation, revenue sufficiency, amongst others, are still inherent in the Water and Sewer rate structure. Building upon this message is, in our respectful submission, preferable to adopting an Alternative rate structure that is arbitrary and unfair to a small minority of users who make up the ICI sector in the City of Niagara Falls. is ld~~~ Consulting N4AGARA Engineers Questions That Need to be Answered from the Loudon Report Is the so-called "perception of unfairness" related to seasonal use enough to change the way user rates are calculated across the entire City? ~ 2. What was the sample size used to conclude that a "perception of unfairness" exists amongst rate payers related to seasonal use? 3. Has a calculation been done to demonstrate to those who believe that unfairness exists related to seasonal use what savings (if any) they can expect to realize if the user rate system is changed as recommended? 4. Has the cost of implementing a change to the user rate system been weighed against the relatively small savings to be realized by individual residential users? 5. Fairness is achieved when charges are as close as reasonably possible to the actual cost of providing the service to each customer. How can the Fairness and User Pay principle be achieved, therefore, without a specific and detailed residential versus non-residential analysis being carried out (especially when 1% of customers currently account for 45% of water consumption)? [1% of customers = 294 customers; 99% of customers = 26,555 customers]. We concur with Staffs comment that Fairness and User Pay should not receive more weighting (at this stage, anyway) based on public forums held in January and attended by approximately 25 members of the public. 6. Is the acknowledged revenue uncertainty associated with the recommended rate structure justifiable or desirable? Doesn't the proposed Rate Stabilization Reserve Fund simply perpetuate the arbitrary change to the breakdown between volume and fixed changes, and the corresponding revenue uncertainty that it brings? 15 "~~VI~ Consulting NIAGARA Engineers Technical Overview The City of Niagara Falls purchases treated water from the Region of Niagara and distributes water to local users through aCity-owned piping network. The City similarly owns a sewer piping network to collect from water users and direct sewer flow to wastewater treatment facilities owned and operated by the Region of Niagara. The Region's costs of the water supply and wastewater treatment are passed on to the City on a consumption (variable) basis. In 2000 the City commissioned a study by Loudon and Fortin to make recommendations for a fair rate structure. The City adopted the recommended rate structure from the study comprised of a volumetric rate based charge from the Region and service charge rate to recover municipal costs which include the capital and operational costs of the water distribution piping systems, sewer collection piping systems, metering and administrative charges. The rate structure which has variances over time, currently has a proportional split of approximately 57% for variable costs attributed to Regional charges and 43% for fixed service costs of the City. Following a presentation by a small group of citizens concerned about the water and sewer costs, the city commissioned a study by R.M. Loudon to re-evaluate the rate structure. The study recommended the modification of the current rate structure, by shifting a portion of the City's fixed costs to a consumption based rate, with a resulting arbitrary proportional split of approximately 75% for variable costs attributed to Regional charges and a portion of the fixed service costs of the City and 25% for the remaining fixed service costs of the City. ~s ld~~~ Consulting NwGArsA Engineers The effect of the study recommendation is that large volume consumers would be burdened by a disproportionate amount of the fixed services costs of the City. This arrangement has effect of large users partially subsidizing a portion of the infrastructure that serves and benefits small volume consumers. Cost increases of water and sewer is a concern shared by all users. Costs from ~ 2001 to 2007 have increased approximately 20% for Regional volumetric rates, i and 81% for City service charges. The primary reason for the increases in the City charges is attributed to the condition of infrastructure. The piping network can be described as having a high ~ proportion of aged and outdated sewage collection and water distribution piping. Inadequate infrastructure spending, or deferment of costs in the past, has become an increasing burden for current users. To address infrastructure shortcomings, the City has increased funding for capital improvements and repair from $2,720,000 to $8,725,000 during this period. The proposed rate structure in the Loudon Report would result in large volume consumers (which represent less than 5% of users) paying a disproportionate amount to offset increases in City spending on the water and sewer infrastructure. Large volume consumers (such as the Niagara Casinos) would unfairly shoulder the increased infrastructure costs of the City, which are unrelated to water consumption. A user-pay based rate structure primarily founded on a principal of fairness is contrary to an unfairly allocated rate structure. Upgrading of the water and sewer infrastructure is unrelated to water consumption. 17 0 ,I ld~~~ Consulting NIAGARA Engineers Water and Sewer Cost Components Water/sewer bills for customers in Niagara Falls consist of a single consolidated utility charge and include both municipal and regional costs of providing these services. Water/sewer costs are typically allocated to two broad categories: service charges, which are primarily associated with the fixed costs of providing the utility service, and consumption-based charges that are incurced proportional to the volume of water consumed. Since sewer discharges are not practical to meter, the sewage charges are based on the volume of water consumed, under the assumption that water consumption correlates to sewage discharges. I The City owns, operates, and maintains the municipal water distribution and sewage collection systems. The infrastructure of these systems requires capital expenditures for upgrade, repair, refurbishment and expansion in addition to other fixed costs are incurred in respect of the water and sewer systems including maintenance, revenue metering, collection and administration. i The Region provides the supply and transmission of water from Regional water treatment plants to a number of municipalities in the Niagara Region. Similarly the Region collects sewage and wastewater from local municipalities and treats sewage in their wastewater treatment facilities. The cost of the Region to operate and maintain its infrastructure is recovered from municipalities as consumption- based wholesale charges. ~a '~~Vltc~ Consulting NIAGARA Engineers The Regional charges to municipalities are based on revenue neutral flow- through costs. The Region makes adjustments to reflect the differences between metering of the City and Region. For the water supply these adjustments include approximately 15% additional water consumption than is billed to customers based on water main leakage losses, main flushing and fire fighting testing and consumption. For the sewage/wastewater the adjustments include approximately 35% additional extraneous flow that enters the sewer system due to surface and ground water inflow and infiltration. In addition to the foregoing, the City also incurs infrastructure costs which are attributed to the use of combined sewer overFlows (CSOs). Some combined sewers in the City were installed as late at the turn of the 20`h century as a cost savings measure. Since CSOs are now considered to represent a significant source of pollution, considerable capital expenditures are required to separate the sewers and/or install abatement facilities that meet current MOE criteria and environmental targets as set out in the current Great Lakes Water Quality agreement between Canada and the USA. Although the City has adopted a policy of separating sewers it is estimated that approximately 30% of the sewage/wastewater system in Niagara Falls is comprised of CSOs. The costs associated with this infrastructure issue are significant and will require cost recovery well into the future until the systems are fully separated or acceptable abatement remedies are in effect where separation has not or cannot be feasibly completed. The majority of the items listed above represent fixed service costs. The other major category of cost represents variable, consumption based items attributed to quantity of water consumed and water disposed into the wastewater/sewer ~s ~~VI~ Consulting NIAGARA Engineers systems. Cost related to pumping, mechanical and chemical treatment, etc. contribute to these consumption costs. The City developed a rationale to determine the percentage allocation of the fixed and variable costs using recommendations in a November 2000 Loudon & Fortin report. The water/sewer billing rates set by the City resulted in a cost recovery distribution of approximately 43% of fixed service charges and 57% consumption based charges. In response to a request to the City by a ratepayer to bias the recovery costs formula to a primarily consumption based model, the City commissioned a report to re-evaluate the rate structure. Based on the recommendations in an April 2008 R.M. Loudon report the city is considering an adjustment of waterlsewer billing rates that would result in a cost recovery distribution of approximately 25% fixed service charges and 75% consumption based charges. The waterlsewer rate structure should not arbitrarily set the percentage allocation of the fixed and variable costs, nor should it result in a situation where large consumers unfairly subsidize the fixed service charges that should be shared with small consumers. zo ~~V~ro'7 Consulting NIAGARA Engineers II I :~ ~~ i~ Description of Water and Sewer Infrastructure The water and sewage systems include extensive infrastructure that is owned and operated both the City and the Region. The following is a summary of the City's infrastructure assets: Asset List Len th A e Value km ears $M 1 Sanita and Combined Sewers 422 1890 to 2008 316.5 2 Storm Sewers 314 1960 to 2008 235.5 3 Water main 420 1880 to 2008 302.4 TOTAL 1156 1880 to 2008 854.4 The following is a summary of the Region's infrastructure assets: Asset List A e Value ears $M 1/2 Waste Water Treatment Plants & Sewers 13 WWT & 110 Pum in Stations 600 3 Water Treatment Plants & water mains 6 WT 400 TOTAL 1000 To ensure ongoing operation and proper functioning of the utility systems, a considerable amount of capital needs to be invested into the City and Regional infrastructure. The main issues currently facing the City are: 1 aged water piping systems that experiences failures; 2 excessive water losses; 3 aged sewer systems which experience blockages, failures; 4 excessive infiltration into deteriorated sewer piping sections; and 5 extensive amount of outdated CSO piping. The amount of combined sewers in the City is approximately 30%. This is a concern, not only for negative environmental impacts, but also result in z~ '~~VI~ Consulting NIAGARA Engineers considerable amounts of storm water that enters the sanitary sewer system and flows into the Region's wastewater treatment facilities. The cost of this non- sewage treatment is needlessly passed on to the users. The attached diagram illustrates the extent of the areas in the City which still have outdated CSO piping systems. zz l~~l~ Gonsutting NIAGARA Engineers ~_ - _ ._. s.' _~S~ZlS ~<: ~ J Q a --- ~ ~ ~ N ; ~~~ W ~ff~4 o a z i ~ a ~ K ,;: < "-` THO~2~EDSTONER< ,.. naT~' ~ i Jk`: Z~,~. W ...,.,~. ~.a.._ ,..: ~~a t,UND ~ ': ~,~ / ~ ~' `~ = ' p ~ _~ ` ' ~° a~ ~ r t ~~`~ ~ ~ i _ U1, ~ q ~ ~`'V " z ' a U ~`~ ~ 0 ° ~ ~ ' ~ ~ NFGR a 3'64 ~ '- ~ . `> ~ . ¢ b " ~ s SiYe yi 23 ld~~~ Consulting NIAGARA Engineers The cost to separate all of these combined sewers is in the neighborhood of $100 million. The 2001 budget allocated $2.3 million to the sewer separation program. Due to the high cost, it will 6e some time before all sewers in the City can be fully separated. The following list of current tasks undertaken in 2007 by City staff gives some insight into the type of ongoing operational and maintenance activities dedicated to the wafer and sewer infrastructure. This is followed by a list of issues, and a summary of the resources that the City has identified that will be required in the near term. City staff activities dedicated to the water and sewer infrastructure in 2007: System Ta # System Descri tion # of staff Current Activities ~ Sanitary and Combined Sewers 13 -1447 lateral service calls & 89 replaced -started a lateral lining program z Storm Sewers -1500 catch basins cleaned tie All Sewers -20% or sewers, video ins ected 3 atermain 8 -2600 hydrants flowed and inspected -1000 valves exercised -81 breaks repaired -50 hydrants replaced , -25 valves replaced -25% leak detection za r "~~VI~ Consulting NIAGARA Engineers Current issues affecting the sewer and watermain infrastructure system are as follows: System Current issues Resolution Tag# 1/2 -Basement flooding occurring -Upgrade of sewers -Combined overFlow bypass discharge -CSO separation/treatment -A a and condition -Re lacement 3 -Poor C-factor {fouling/excessive Replacement water pressure loss} -Inadequate fire flow -Upgrade of watermains -Age and Water main breaks -Replacement -Water ualit -Re lacement Financial resources required in the near future for the safe and reliable operation of the water and sewer infrastructure. Proposed Capital Program for Water and Sewer Assets: S stem Ta # System Descri tion $M Re wired Work 1 Sanitary and Combined Sewers 46.7 Separation of Combined Sewers 1/2 All Sewers 12.7 Sewer re lacement 3 Watermain 29 Water Main Re lacement Total 88.4 ss ~' -~~Vl fo7 Consulting Nu-caru Engineers ~~ ~~ The following table indicates the trend of capital required for the water and sewer infrastructure from the year 2000: ITEM 2000 2001 2002 2003 2004 2005 2006 2007 $M $M $M $M $M $M $M $M Water 1.3 1.5 1.8 2.0 2.3 2.6 3.3 4.6 Sewer 1.4 1.9 2.0 2.7 4.1 4.7 4.0 4.1 Total 2.7 3.4 3.8 4.7 6.4 7.3 7.3 8.7 The benefits of the capital projects are numerous. Separation of CSOs leads to a reduction of sewage treatment costs by diverting storm water from sewage i ~ treatment plants, and are cost avoidance measures of abatement upgrade projects. Adverse environmental effects attributed to wastewater treatment plants bypass during heavy rainfall events is prevented by the separation of storm and sanitary sewers. Sewer main replacement has the effect of reducing ground water infiltration. Water main replacement reduces leakage losses, the need for main flushing and improves the quality of water by reducing the need for chlorine dosing when water-borne bacteria becomes evident. I Some municipalities place sewage charges on their property tax bills. When such a method is used, the sewage rates are determined by assessment value of the home. Using water consumption rates seems to be a more logical way of determining these charges. A resident's tax bill could increase 30% and the water bill would decrease. Because of Provincial capping requirements (certain classes of taxes can only rise a certain percentage per year), homeowners would be subsidizing the sewer ' charges of commercial classes. zs 1~VI~ Consulting NIAGARA Engineers System Customers ,' ~~ ~, I I~ i i i r Niagara Falls has a population of approximately 80,000 residents. There are an estimated 33,000 dwellings, with an average of 2.5 persons per dwelling. Statistics Canada indicates that the average person's daily water consumption is 9 litres. An average household in Niagara Falls, therefore, consumes approximately 23 litres of water per day. The customer distribution indicates that the largest class represents 94% of the water utility users. The summary table is as follows: 2008 Data Water Sewer Distribution Meter Size # # unmetered 125 121 0.5 15mm 5/8" 25,401 25,255 94.0 18mm 3/4" 462 477 1.8 25mm 1" 362 356 1.3 37mm 11/2° 231 228 0.9 50mm 2" 301 295 1.1 75mm 3" 74 72 0.3 t00mm 4" 38 36 0.1 150mm 6" 17 15 0.1 200mm 8" 2 1 0.0 250mm 10" 2 2 0.0 Total 27,035 26,858 100.0 Small Volume Users u to 2" 95.5 Lar a Volume Users > 3° 4.5 System Infrastructure Cost Characteristics Since the cost of water supply is passed on from the Region to the City on a consumption (variable) basis, it is appropriate that these costs are recovered from customers on a similar basis. The City's water system supplies water to the entire community in a gridded network arrangement. Approximately 94% of the distribution serves residential z~ Y '~~VI~ Consulting NIAGARA Engineers properties, which represents the bulk of the infrastructure. The remaining high volume commercial and industrial customers represent the remaining 6% of the system. i ~ The following map indicates the extensive coverage. Commercial development is generally concentrated in a small area and, therefore, is readily serviced by the water infrastructure. The residential areas are much more spread out throughout the City and require the bulk of the 420 km of pipe network that serves the City water piping distribution system. The Water Distribution Systems in the City of Niagara Falls shown below illustrate the small portion of the infrastructure that would be used to serve a typical -arge consumer, such as the Niagara Casinos: M A 2e i l d~~~ Consulting NIAGARA Engineers ~~ i' I~ ~~ :~ ~:~ ~~ ,~ ~~ ~' zs ~.-- !~ I~ . I I I~ :~ I' 1~VI~ Consulting NIAGARA Engineers The following map indicates the extent of the sewers in the City. Similar to the water distribution network, the sewer service for large volume consumers (such as the Niagara Casinos) utilize a small portion of the overall sewer services network. Although there is higher initial cost for larger service installations, on a per capita basis of use these larger services represent a much lower unit cost to the overall system. The economies of scale include reduced administration and maintenance when the costs are normalized by the large number of users on a 30 1~VI1c7 Consulting NIAGARA Engineers Inge connection. This rationale extends to hotels, commercial developments, and residents in apartments and single metered townhouses or condominiums. The following table demonstrates the effects of economies of scale by utilizing larger connections to service large volume users: IZE Piping Flow Capacity USGPM Piping Flow Ratio note 1 AW WA Capacity Ratio note 2 Piping Cost perfoof notes 3- 6 Piping Cost Ratio AWWA Cost Ratio 3/4"0 4 1 1 $3.68 1.0 1.1 1"e 7.8 2 2.5 $4.73 1.3 1.4 1-1/2"0 24 6 5 $1.80 0.5 1.8 2"m 48 12 8 $2.50 0.7 2.9 3"e 140 35 15 $4.51 1.2 11.0 4"s 280 70 $6.20 1.7 14 6"m 800 200 $10.65 2.9 21 8"m 1700 425 $16.40 4.5 29 10"a 3000 750 $21.00 5.7 40 rvoces: 1 Piping flowrate capacity based on 4'/100' friction rate 2 AWWA standards sets maximum safe flow and capacity for water meter 3 Piping Installation Cost using pricing from Means Plumbing Cost Data 2003 4 Pipe sized using Type'K' soft copper, ASTM 688M for sizes 3/4" to 1" 5 Pipe sized using PVC, Class 160 (SDR26) for sizes 1.5" to 8" 6 Pipe sized using PVC, Class 150 (SDR78) for sizes 10" Flowrates for all users are determined by an engineering calculation procedure which applies fixture units (FU) to plumbing fixtures. This methodology includes a conversion of FUs to an equivalent flowrate based on Hunter's Curves. This principle is generally adapted by plumbing codes and result in the application of a probabilistic function to the FU loads. The conversion tables are found in the Ontario Building Code. The flowrate required by users is based on the type and 31 ,~ - '~~Vlto~ Consulting _ NIAGARA Engineers ~' number of fixtures used in each building. Generally the flow rate for most small I residential properties results in a service size of/<" (20mm). The table above is intended to illustrate the concept of economies of scale. A single large water connection (such as 10") has the potential to feed in the order of 750 homes using an equivalent flow basis ratio. Using a relative cost basis ratio, the increased cost for this larger service is in the order of magnitude of 6 times higher. AWWA recognized this situation and suggested using a similar cost ratio with more conservative numbers. The illustration shows that large consumers, and common services that supply water to a large number of individual residents in dwellings such as apartments, condominiums and malls etc., represent a lower i cost to the City, both for initial installation and for subsequent maintenance and administration in comparison to numerous small services for small volume water consuming customers. The costs benefit a{I users of the community. The water infrastructure piping network needs to be sized generously to reduce pressure losses attributed to water flow over significant distances to reach all areas of the community with sufficient capacity to accommodate the high flow rates of water that are in i reserve for fire fighting situations. Oversizing of watermains is necessary in many of the areas of the community to ensure that adequate pressure reaches the outer limits of the distribution in the boundaries of the City and meet fire fighting reserve capacity. Due to the broad based nature of the City's water distribution system, the watermain assets would be considered as fixed resources. The costs of maintenance, administration, billing etc., of the system would be distributed 32 ~~VI~ Consulting NIAGARA Engineers gross the network that is in place for what is considered to be mostly for the ~nefit of small volume users, which represent approximately 95% of the City astomers. i~ Billing History Prior to 2001 the City used a flat rate billing structure for residential users and metered billing for commercial and industrial users. !' In 2001 atwo-part rate structure was adopted with water and sewer charges ~ ~i based on a monthly meter connection service charge, and consumption charges ' based on metered water readings. The simplicity of correlating sewage charges ~I with water consumption was incorporated into the rate structure. Service charges were used to fund the water and sewer system maintenance costs, and consumption charges were used to fund the City expenditures for water and sewer charges from the Region. ! In 2005 the City's water and sewer rate structure of fixed service charges was expanded to reflect AWWA principles. This underlying principal is that larger serves not only have an incrementally high cost of repair or replacement but they also have the capacity to serve multiple users which would pay a higher proportion of the fixed service charges in comparison to single dwelling consumers. This rate change would be considered to be consistent with respect to fair cost principle for recovery of water and sewer costs from users. 33 r 1~VI~ Consulting NIAGAru Engineers System Costs and Revenue The proportion of City and Region costs vary over time due to differences in the type of assets and the requirements to maintain and operate the different systems. The following table indicates a breakdown of the total costs of the water and sewer utility services from 2001 and 2007 that must be recovered from the City's water and sewer customers: Re Tonal vs Cit Cost Share $M 2001 2002 2003 2004 2005 2006 2007 Water Re Tonal 5.3 6.0 6.4 6.9 7.0 8.2 8.4 Ci /Other 5.6 5.9 6.4 7.3 8.0 7.6 8.0 Total 10.9 11.8 12.8 14.2 15.0 15.8 16.4 Sewa e Re Tonal 9.9 10.4 11.2 11.4 10.5 11.6 11.2 Cit /Other 3.3 3.7 3.5 4.4 4.9 5.7 7.1 Total 13.2 14.1 14.7 15.8 15.4 17.3 18.2 Combined Water/Sewer Costs $M Re Tonal 15.2 16.3 17.6 18.3 17.5 19.8 19.6 Ci /Other 9.0 9.6 10.0 11.7 12.9 13.3 15.1 Total 24.2 25.9 27.6 30.0 30.4 33.1 34.7 Combined Water/Sewer Costs Re Tonal 62.9 63.0 63.8 61.0 57.6 59.9 56.5 Cit lOther 37.1 37.0 36.2 39.0 42.4 40.1 43.5 of Re Tonal char es of overall costs Water 0.49 0.50 0.50 0.49 0.47 0.52 0.51 Sewa a 0.75 0.74 0.76 0.72 0.68 0.67 0.61 of Re Tonal Combined Water ~ Sewa a costs variable Combined Water/Sewer 0.63 0.63 0.64 0.61 0.58 0.60 0.57 of Remainin Cit costs of Combined Water & Sewa a fixed Fixed costs 0.37 0.37 0.36 0.39 0.42 0.40 0.43 34 1~VI~ Consulting NIAGARA Engineers The proportion of fixed costs has been rising since the adoption of the two-part j ~ rate structure in 2001. The cost increase would be mainly attributed to the increase the capital spending to modernize the infrastructure. Principles used to set a Rate Structure The guiding principles presented include the following; Fairness and user pay Revenue adequacy & security Legality Practicality Simplicity These principles support an equitable rate structure that is firmly based on a user pay approach. This supports the current rate structure, whereby the variable costs attributed to the expenditures to the Region for the consumption based supply of treated water and treated wastewater, and the fixed costs attributed to the distribution of water services throughout the community and collection and transfer of sewage to the Region, are billed to the users of the system in the manner which is presently prescribed the City. The principals not recommended include the following: Affordability Conservation Encouragement of industrial development These principles would result in other types of alternate rate structures which would not be considered to be appropriate. 35 l d~~~ Consulting NIAGARA Engineers a Review of Water & Sewage Rate Structure Report prepared by R.M. Loudon-April 2008 In 2008 the City commissioned a study to assess the fairness and equity of the current waterlsewer rate structure. This report was prepared and presented by R.M Loudon Ltd. and details the current rate structure, complaints and downfalls, an Alternative rate structure and the corresponding impact it would have on customers and the City. One of the recommendations of thi: report was an Alternative rate structure in which 25% of City water revenues come from service charges and the remaining 75% from volumetric charges. This proposed structure is significantly different than the current model and impacts consumers of all sizes. This rate structure has the effect of large water consumers subsidizing the service charge portion of water bills of the small water consumption users in the municipally. Some highlights of the report are summarized below, with page references to the April 2, 2008 Loudon report. Current Rate Structure The current rate structure was recommended in 2000. It was preferred and adopted by the City based on recommendations highlighted as follows: t. Use of a two-part rate structure with service charges to fund the system maintenance and consumption charges to fund expenditures for water and sewer charges from the Region. 2. Revenue neutral structure 3. Savings for low consumption users from previous rate structures 4. Increases for high consumption users from previous rate structures 5. Equitable sharing of costs by commercial users 6. Revenue security 36 ~"'""'~ _ f~ r "~~VI~ Consulting t NIAGARA Engineers Average Consumption Relative to Infrastructure ' f The median consumer uses 211 m3/yr. Niagara Fallsview Casino is the largest consumer at 884,720 m3/year, or approximately 4,200 times the amount of the average household [Loudon Report pg. 26]. There are nominally higher infrastructure costs associated with the Casino than a single home (larger tap off City mains, larger water meter), however, there is a far greater infrastructure cost required for 4,200 homes than for a single, large user. Fire Protection Costs A percentage of the budget is attributed to fire protection costs. This percentage ^ is determined arbitrarily, using estimates and a previous R.M. Loudon report from r 1983 for the City of Peterborough [Loudon Report pg. 43-44j. Although the magnitude of these results is not significant to the final cost breakdown, the water oh reserve benefits all users of the community who should share equally for this service. Information Sources ' The City commissioned R.M Loudon to undertake an independent study of the r water/sewer rate structure in response to complaints from a concerned citizen who represented a small group of City residents. Some of the supporting information in the Loudon Report was provided by the concerned rate-paying city resident, which may be considered an inappropriate biased source. [Loudon Report pg. 14] Proposed Changes and Impact on Fairness 1. The benefits of the current service charge portion of the rate structure are acknowledged, as are the fixed nature of local service costs. The service charge has the advantage of revenue stability. It allocates local costs, 37 ~~V~~ Consulting NIAGArtA Engineers ' which are largely fixed and not variable by volume, to the fixed charge portion of the utility bill. In this respect the charge can be considered fair [Loudon Report pg. 44]. This is important, given the Council's priority of I i ~ meeting the 'Fairness & User Pay' guiding principle [Loudon Report pg. 34]. T 2. Despite the accepted fairness of the current model, a new rate structure is arbitrarily proposed: "A target level of cost recovery from the service charge has been set at 25% of the total costs with the volumetric charge recovering the remaining 75%." [Loudon Report pg. 45] 3. This target level of 25175 recovery from servicelvolumetric charges is ' chosen without any theoretical or mathematical support, and thus is inappropriate to base a recommended rate structure on. 4. The proposed 25/75 division of service/volumetric revenue significantly differs from the historical division of approximately 40/60. [Loudon Report Pg. 10] 5. The calculation process of the alternative rate structure is sound, however, it is based on the initial 25!75 division of costs, making its validity questionable. 3B ,M M I 1~V~~ Consulting NIAGARA Engineers Impact of Proposed Alternative Rate Structure 1. A complaint with the current rate structure is the unbalanced service charges between homeowners and various condo unit residents [Loudon Report pg. 76]. For example: 1.1. A homeowner has 1 meter and pays the applicable service charge. 1.2.Some condo buildings have •a meter in each unit, and thus each pay the applicable service charge. 1.3. Some condo buildings have 1 main water meter, and thus the applicable service charge is divided amongst the units. 2. This is a valid complaint, however, the proposed 25175 rate structure does not address this disparity in any way, shape or form. 3. The following table shows one citizen's 'Customer Service Charge Cost/Unit' table, with the addition of service charges under the proposed rate structure. 39 4. There is an overall decrease in service charges under the proposed Alternative rate structure, however, it does not address the disparity that was the primary cause for complaint. The larger buildings that share one service i~ ~~VI~ Consulting NacaRa Engineers charge see a decrease of 48-54%, while the units with separate meters see a decrease of only 40%. 5. This issue cannot be rectified with a change in rate structure, since some multi-unit residences share a meter and some do not. 6. Under the proposed Alternative rate structure, the water utility costs for larger users would increase significantly, while the smaller customers would see a moderate decrease. Under the 2007 consumption profile [Loudon Report pg. 26], customers using less then 243 m3/year (over 85% of customers) would ~ have a decreased annual water bill, while the remaining larger users would see a significant increase in costs to balance out revenues. Annuat water charges for a selection of users (25`h-, 50t"-, 75"'-percentiles and the Niagara Casinos) under old and new rate structures are shown in the following table: 40 '~~VI~ Consulting NIAGARA Engineers I~ i Effects of Water & Sewage Rate Structure Report recommended by R.M. Loudon-April 2008 The impact of the shift of costs for rate payers is summarized below. Annual Charges under Current and Proposed Rate Structure Table ,. Current Service $463.80 72.13% Volumetric $179.21 27.87% 25`"-percentile Annual Total $643.01 (123) Proposed Service $277.68 54.34% Volumetric $233.33 45.66% Annual Total $511.01 Chan a -$132.00 -20.53% Current Service $463.80 60.14% Volumetric $307.43 39.86% 50'"-percentile Annual Total $771.23 (211) Proposed Service $277.68 40.96% Volumetric $400.27 59.04% Annual Total $677.95 Chan a -$93.31 -12.10% Current Service $463.80 49.95% Volumetric $464.78 50.05% 75"'-percentile Annual Total $928.58 (319) Proposed Service $277.68 31.45% Volumetric $605.14 68.55% Annual Total $882.82 Chan a -$45.76 -4.93% Current Service $19,479.36 1.49% Volumetric $1,289,037.04 98.51% Fallsview Casino Annual Total $1,308,516.40 (884,720) Proposed Service $11,117.28 0.66% Volumetric $1,678,313.84 99.34% Annual Total $1,689,431.12 Chan a $380,914.72 29.11% 41 '~~~I~ Consulting NIAGARA Engineers r' Comparisons with other cities: Ottawa 31.71 3171.24 1.159 1.159 2.318 Waterloo 2.51 78.46 1.120 1.190 2.310 Cambridge 8.84 118.56 1.057 1.065 2.122 NF Proposed 23.14 926.44 0.858 1.039 1.897 Hamilton 6.55 101.52 0.913 0.913 1.826 Newmarket 12.00 12.00 0.925 0.853 1.778 NF Current 38.65 1623.28 0.602 0.854 1.456 As the above table shows, rate structures can vary considerably between cities, based on their unique circumstances. A variety of differences between cities (existence of water towers, location from which source water is drawn, age of infrastructure, population growth and density, etc.) influence the costs required to provide the water/sewer utility and, therefore, can warrant a higher or lower service charge Since there are a wide variety of possible rate structures available to the City, the chosen model should be based on economically sound and logical principles, which the proposed 25/75 model is not. az NIAGARA - '~ FALLS ONE WONDER AFTER A N O T H E R NIAGARA FALL 5 T O U R I S M Mr. Todd Harrison Dir. Financial Services 4310 Queen Street PO Box 1023 Niagara Falls, ON L2E 6X5 C~ OCT 2 ~ Ciil~B October 22, 2008 Dear Mr. Harrison: As per your request dated September 25th, 2008, I respectfully submit this request far funding to the City of Niagara Falls on behalf of the Board and Members of Niagaza Falls Tourism. The past year, our industry has continued to struggle to attract the US visitor - a market essential to the tourism industry in Niagara Falls. Niagara Falls Tourism coordinated and delivered a more aggressive, coordinated and faz-reaching advertising strategy with a strong call to action to complete a sale for overnight visitation. With the assistance.of our fantastic Agency of Record, 180 Mazketing we were able to mitigate some of the downfall with a very successful and well-rounded campaign which included print advertising, outdoor in key US markets, editorial coverage at PR events, and a strong web component. There is much more that could have been done and, frankly, needs to be done. In addition, our organization is currently facing a major Human Resource issue. Although we have extremely intelligent, qualified and passionate staff members at Niagara Falls Towism, transforming Niagara Falls into a "Convention" Destination reaches beyond our current pool of expertise. In order to advance the organizations goals and provide the services our members so desperately need, additional funding is required. Although membership fees have been significantly increased, more funding will be necessary. Niagara Falls Tourism, therefore requests that a grant of $600,000.00 be considered for the coming year. A copy of our proposed budget is attached. I look forward to presenting our plan [o Council on November 17i° at which time I would be happy to answer any questions. In the interim, if you or a member of your staff have any questions or comments, please do not hesitate to contact me directly. My contact information is indicated below. Yours truly, Anna Pierce Executive Duector Niagara Falls Tourism 5400 Robinson Street Niagara Falls, ON L2G 2A6 Tel: (905) 356-6061 Ext. 17 Fax: (905)356-5567 E-mail: anierce(~niagazafallstourism com O1 O O N 00 O O N N N N C N d X W v C l0 V1 d 7 C d ~ N N ~ ~ O F- y N ,~ (0 ~ lL (YI m Q m zo 0 0 0 0 0 0 0 0 0 0 0 0 0 0 y o o o o c o o ~ 0 0 0 0 0 0 0 ,a ~ 0 O 0 O 0 O 0 h 0 O 0 N 0 O m 0 0 0 d' W I D , ~ ~ ~ ~ ~: ~ O f9 W O O N 0 0 0 0 0 0 O 0 0 0 0 0 0 O 0 0 0 0 0 0 O 0 0 0 0 0 0 O `O-~'- O 0 0 0 0 O O ~~~~' v:.-. ~ O O am O O 1D 3 rn o o c - ~ .- n m'=- M d' .- fA fA fA 01 ' ' EA EA b9 fR w ri< O.'. ; ' ^..: , 0 •. O N::'i' N 3 O N C N N c ~ ~ C f0 ~ N ~ C C C N ~ •- Q Iq ~ N = N d N I~ N d ~ IL lL ~ C ~' ~ d N L ~ N ~ O ' O O C f l ! C d ~ C ~ ` ~ ? 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M M /D r t0 W N N r N f9 r M O r f0 N d! r r r fR /R N Onz MIA /A ~ r~ fA f9 IA fA fR fA /A 1A N!A (9 IH V! fR V! fR N ~ ~ p'e; O' Nay iM1 4 e Ef~ Tte:- ~T{ ~.n' 2 ' Efi~ ; i ~ = + O O O O O O O O O O O O O O O O O O O O O O O O 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 O ~ _ O O O O O O O O O O O O O O O O O O O O O O O O G C C O 9 7~`i O O O O O O O O O O O O O O O O O O O O N O O N O O O O m{% O D N M 00 N O N In D O to IO N O N ~O - IO ~I) O O (D N O N ' 1~ ~ N I~ r M M N CO,,^: e N (fl fH H3 e fA ~ EA N fR N f9 fA N fA fi) ~ EA N d3 fA HT a0 ER fR fPr fA V fPr fA M tA Cfl W P M ~q N a O h (A O^' n' fA M w ~: w w c ' N~ d 'O G [Q ~ ~ a 3 m 0 i o n ~ ' I- c N C d ~ 'i A N N N ~ v > ~ ~O y U ~ ~; C N N N N C Q Q ~ H Cn d ~ o d d C c i c Q W d C d R .N.. ~ Y ..N. O N ~ N O c0 C C d K ~ ~ ~ w N N N N c y Y O r Ln N N J ~ O C c N W C c o ' C O O 0 is C d U (6 CL m C~ 00 d (~ N N 'p ~ O d N N 7 ~ y N C C C C i C d W m ~ C E - t (0 ~ U Q ~ O Y ~ Q N N _ d N d 0 ~ C C d d C a. f0 !0 l0 (0 x N d ,~ d d 'O N > d d ~ jp Vl /l/ Vl N c c ~J J d 0 + ' i ~ Q' ~ d C U C L .O ~ d (~ ~ 7 d U/ N N d d c t 3 E d c m U d - ~ dl ~ U U U ~ d U U 0 m Y ~ U > > N N d ~ N 0 d O C '7 C ~- 3 N C '6 d 10 R N N N N N O O ~ N y w w C C w C7 c4 m cn cn ~ ~ O ~ a° H U ~ ¢ a' a K w ~ ~ ~ m m ~ h h ~ ~ H crawlord smith(,, swallow NIAGARA FALLS TOURISM ASSOCIATION Financial Statements October 31, 2007 Crawford smith (,g~, swallow NIAGARA FALLS TOURISM ASSOCIATION Financial Statements October 31, 2007 Table of Contents Page Auditors' Report 1 Balance Sheet 2 Statement of Members' Deficiency 3 Statement of Operations -General Fund 4 Statement of Operations -Brochure Distribution 5 Statement of Cash Flows Notes to Financial Statements ~_g Schedule of Member Programs 9 Schedule of Co-op Advertising Programs lp Schedule of Advertising and Promotional Expenses 11 Crawlortl. Smim antl Swallow Crawford Charlere0 Accountants LLP 4]41 Oueen Street smith ~, Niagara Falls, Ontario Te ephone 1905) 356-4200 swallow Telecapier 19051356-3410 Ollices in: Niagara Falls, Ontario SL Catharines, Ontario Fort Erie, Ontario Niagara-on-Iheiake, Ontario Port Colborne, Ontario AUDITORS' REPORT To the Members of Niagara Falls Tourism Association We have audited the balance sheet of Niagara Falls Tourism Association as at October 31, 2007 and the statements of operations, members' deficiency and cash flows for the year then ended. These financial statements are the responsibility of the association's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the association as at October 31, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. ~,~ -- ~ ~~ Niagara Falls, Ontario January 11, 2008 CRAWFORD, SMITH AND SWALLOW CHARTERED ACCOUNTANTS LLP LICENSED PUBLIC ACCOUNTANTS NIAGARA FALLS TOURISM ASSOCIATION BALANCE SHEET October 31, 2007 Assets 2007 "~ rc 2006 »;, "- ' Y $ $ Current Assets ~"'' ~` ",-••y<: Cash '' ~~"~ °' '80 858~z 73,999 Accounts receivable „ ~ ~~; x.46 363 34,153 Prepaid expenses °l X12 377`-° 17 304 139,598`x`; 125,456 Fixed Assets -note 2 ~ ~~ 7,19~~~` 81 112 r'£gti Sfi~ c„~}F ~;~t211;542i? 206,568 Liabilities and Members' Deficiency ~~ = '~;~ ,~.~ :o ~~ ~~? Current Liabilities `F `<~~s~` "te'''a ~~`~"~ =- Accounts payable and accrued liabilities 206~503.~' 162 101 Deferred income '321 909 , 109,796 b~ ~~ ~~ ~~528,41=2;' 271,897 Members' Deficiency ~ F ~~ ~ "~ ` ~ ` ' General Fund , ~ ~'ti ~ ~ Net investment in capital assets ~~r ~ ' `7=1 944- i 81 112 Operating deficit ~~` ~- ~ : (419354); ; , (146,441) Brochure distribution ~~ ~~~~ ~30 540 ~ ~n <« ,~~- ,,~(31~6,87a)~= (65,329) ~~w211;542~u~ 206,568 Signed on behalf of the board: See accompanying notes Director Director crawlord smith CLiZ swallow 2 NIAGARA FALLS TOURISM ASSOCIATION STATEMENT OF MEMBERS' DEFICIENCY for the year ended October 31, 2007 2006 Balance, Beginning of Year 81 ~1~2~ (1~46~4~41) ~ ~ .= ~(65~329) "' (332,005) ~ Excess (Deficiency) of a^~~ r, ~ + „ ~ ~ Income Over Expenses ~ ~ ~`~ ~ .~ ~ r ~ ~ 4~ ~~, ~' ~~ ~~ for the Year (23 271) ,~ (258~810)~ ' 30 540 , '~(251~5 1)~ 266 676 ~ , Investment in Capital Assets ,~~ ~1 _4~~103 ~ u(14h103) ;' °~ ~_ ~ ,; ~~ Balance, End of Year .~71;944 (419;354) ~30;540 w:~ (316 870) (65 329 ~ _ ,, ; , ) See accompanying notes crawforrl smith ~& swallow NIAGARA FALLS TOURISM ASSOCIATION STATEMENT OF OPERATIONS -General Fund For the year ended October 31, 2007 2007 ~, 2006 ~~~pa `~n 4` i J Y Income ~ ' ~,~ ~'` City of Niagaza Falls ~1~280 000 ' E 330,000 Ontario Government Grant ~ r - t ;,108,258 ~ 70,000 Members' assessments ,3401543:; 332,047 Information Centre 36 9 ~„Y, 53,840 Rent 1 S 000, S onsorshi interest and sundr p p, ' y '~ ~ ~ ~1a1;~7,69r-,~` 42,582 Mx~ ` '. ,,,,~-€79;1~700 ;;~ 828,469 Program Revenue -~ . ~ ,, ~ ',,~,~~. ~~ -~ Member programs -schedule 1 ~ ~€342~310~" 313,410 Co-op advertising programs -schedule 2 ~ ~ 78;034 ~;, 293,034 ~~~ ~ ~; :..;;920;344` 606,444 ,17~12;04.4,~~' 1,434,913 Program Expenses ~~~',~ ~- ~~ Member programs -schedule 1 x.~,140~034' - ~ 186,047 Co-op advertising programs -schedule 2 ~~ ; ~~896~243#:-- 237,389 1 036 27 7~; :t 423 436 .. ., ~ , , ~~~~ 675 767 1,011,477 ~~ `~` Advertising and Promotional Expenses -schedule 3 ,_.~:~464,5.62"" 291,572 Net Revenue before Administrative Expenses ~`~211~,~2 5 ~~ z~ 719,905 Administrative Expenses `~~„„ _ , ~ ~' ' ~" Accounting and legal rz> „ ~ ;,~~~1~5;043, r ~ 8,518 Amortization and depreciation ~~~ ~= 12233 ~' 9,085 Bad debts `'Yi 11667>: , ;~ 1,287 Bank charges and interest ~ , ~~ }9 152 '' 7,048 Employment search fees =~~'~ ~ 1.(L 6,454 Equipment rental ~ ~h r ~17~052 s`=, 16,160 Insurance ~, -~-. «- 5;494 "` 8 477 Legal settlement X ~~~ 30 000 ~~ , Loss on disposal of fixed assets ~,, ~s ~~_ ' 3,730 Office supplies and miscellaneous ' 25 922 ~ 28 503 Postage and mail service a ~ y-~ = 1 2,95 5=~: ` E , 8,694 taxes and maintenance Rent utilities ~ y ~ r ;x66 814 ~~ 71 030 , , , Salaries and wages ~~270 715.>~ 272,419 Telephone ~,,- ~'~„~16 239 '= 11,824 °493286>' 453,229 Excess (Deficiency) of Income Over Expenses for the Year R;(282,081)~ 266,676 See accompanying notes 4 crawfort~ smith ~ swallow NIAGARA FALLS TOURISM ASSOCIATION STATEMENT OF OPERATIONS -Brochure Distribution for the year ended October 31, 2007 Revenue Brochure Distribution Expenses Bank charges Bad debts Insurance Office supplies and miscellaneous Rent Salaries and wages Excess of Revenue over Expenses for the Year ~_~_30;540a See accompanying notes crawtord smith C.B~ swallow NIAGARA FALLS TOURISM ASSOCIATION STATEMENT OF CASH FLOWS for the year ended October 31, 2007 =~~2007~ '~ 2006 ~ x„ ~::~ s Q` Operating Activities ~ ~ ~ ~„ Excess (deficiency) of income over expenses for the year °rr~ ~~ ~ .~ -Y t ~ ~ _ , ~~:~ . general fund ' ~~(282 081~f 266,676 Excess of income over expenses for the year -brochure ~ i '~ ~~~ distribution ' ~~30~540 Amortization and depreciation 23;271; 13,116 boss on disposal of capital assets ,~ ~ ~;~~''' 3.730 Changes in working capital components ~ ~ ~ Accounts receivable ~.~ ~ ~ ,(d2 210) . r cr . + s 145,773 Prepaid expenses a . - ~' 4 927~F 12,523 Accounts payable and accrued liabilities 2~~ ,~~~4440 (509,623) Deferred income ~ =~`~ 212-1#19~~ 74 53R ~, Funds provided by operating activities ~ _ _v~ 20962` 5,733 Investing Activities Increase (Decrease) in Cash Position x =~6'859~:~ (45,663) Cash Position, Beginning of Year : "~7~3 999 119 662 Cash Position, End of Year `~~~ 80,858; 73,999 See accompanying notes 6 craw£ort~ smith ~. swallow NIAGARA FALLS TOURISM ASSOCIATION NOTES TO FINANCIAL STATEMENTS for the year ended October 31, 2007 Organization Niagara Falls Tourism Association was created by letters patent in December 1970 under the laws of the Province of Ontario. Niagara Falls Tourism Association operates anon-profit organization which provides information to tourists visiting or planning to visit the City of Niagara Falls, Ontario. The association is considered anon-profit organization under the income tax act, and accordingly is exempt from income taxes. In 2001 the organization changed its operating name from the Niagara Resort and Tourist Association to Niagara Falls Tourism Association. 1. Significant Accounting Policies The financial statements of the association are the representations of management prepared in accordance with Canadian generally accepted accounting principles, consistently applied. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of periodic financial statements necessarily involves the use of estimates and approximations. These have been made using careful judgement in the light of available information. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the fr~unework of the accounting policies summarized below: Revenue recognition Revenue from memberships, grants and events are recognized as income when earned. The income received during the year for part of the next year and for the next complete calendar year is included in deferred income. Fixed assets and depreciation Fixed assets are recorded at cost. Expenditures for maintenance and repairs are charged to operating expenses. Depreciation is calculated using the declining balance method at rates designed to amortize the cast of fixed assets over their estimated useful lives as follows: Vans Office equipment Brochure racks Signs Leasehold improvements - 30 % - 20 % - 20 - 20 % - 5 year straight line Additions during the year are depreciated from the month of acquisition. Disposals are depreciated until the month of disposition. Gains or losses on assets sold or otherwise disposed of are included in the statement of operations. Foreign currency translation These financial statements are presented in Canadian dollars. Assets and liabilities denominated in foreign currencies are translated at the exchange rates in effect at the balance sheet date. Gains and losses on translation are reflected in net earnings of the period. 7 cratvlord smith Cd. swallow NIAGARA FALLS TOURISM ASSOCIATION NOTES TO FINANCIAL STATEMENTS for the year ended October 31, 2007 1. Significant Accounting Policies -continued Fund Accounting The organization follows the restricted fund method of accounting. The general fund reports day to day operations of the organization. The brochure distribution fund was established by the board of directors in November of 2007 to report the operating results of the brochure distribution program. 2. Fixed Assets ~"'$LO ~ ,~lleprecra[~on" ~ 2W7 ~'_,' 2006 k ~ $ '~~ ~, '"~ r$~ '` $ Vans ~ ~ ~ 2867.0 ~x 9~103~~~ ~~ ~ rl`9,567~, 27,953 Office equipment , .~,239~'665 ~' 205 8~6 n '~-u;~x33,8~9~~ 27,336 Brochure racks -~ ~~Sxi4~'436 '~ 43~828~ ~ ~=~ 10;608 " 13,260 Signs ~ ~ 330 ~ ` ~ a`284~~~~' 11D46 `" 1,308 leasehold imnrovements ~~ ~ •7.5349 ~6R~4~ 5~ x. ~..: fi R94u:: 1 t X55 ~3yY,4511 z 327;5(16 ~: 71;944,`; 81,112 3. Lease Obligation The organization leases office equipment and space under lease agreements which require the following annual payments: 2008 116,275 2009 100,702 2010 26,328 2011 24,819 2012 1,857 4. Financial Instruments The association's financial instruments consist of cash, accounts receivable and accounts payable. Unless otherwise noted, it is management's opinion that the association is not exposed to significant interest, currency or credit risks arising from these financial instruments. 5. Comparative Figures Prior period figures have been reclassified to conform with the current period's presentation. 8 crawforr3 smith CBS. swallow NIAGARA FALLS TOURISM ASSOCIATION SCHEDULE OF MEMBER PROGRAMS for the year ended October 31, 2007 Schedule 1 ;h 2007~ _3"; 20 06 ~ t°•'• '~2H ~ 0 `N Revenue i ~~~ ' ~ ~? Brochure Distribution x, ~ ~- "'~ 119 780 ~ ~~,~ #.- , Enquiry Kits 66992; = < ~ 48,881 Guide Niagara , ~"` ', 2 1 800M~ •- 14,900 Misty's ~ { `~~16 232 _" ~` 16,175 Website Advertising ~ ~~~ ~. ~s:~~237r286';} 113 674 ~-,: 3 42 310~ 313 410 ~ , ; , Expenses ~ 't~ ~*s '~ 3 ~ ~` ,~~- ' ~ BrochureDistribution ~~ `~~~~~~_: ~ ~ ~ 89,412 En ui Kits 9 rY ' " ~' ~' 949, ~ 24,741 Guide Niagara ~ 17~092 ~ # X 18,012 Honeymoon certificates ~ ~ 751 ~` Misty's ',.•~25 9 4 - 15,045 Tear-off maps ~ ~s z'= ~~z20,E9~~~ 20,924 Website Advertising 48~394`~~~~ 17 913 ~140~'~;034~ 186,047 Net Revenue (Loss) ~'* "x E ~'' '`'~~ Brochure distribution ~ti `"°_ x= ff~~ 30,368 En ui Kits 9 r3' tf ~ , ,~ X40 043 ,' ~ ` 24,140 Guide Niagara ~~' , ~4;708~ (3,112) Honeymoon certificates ~~ ~~ r~ ~ ' t(751s ~ Misty's ~~ ~(9=692)r 1 130 Tear-off maps , 'x `f(~(20 924)~~ , (20,924 ~ WebsiteAdvertisin g ~ ~'"~~`~ ,',,;tl $8~892,zir 95.761 202;276~~ 127,363 See accompanying notes 9 crawforrl smith ~ swallow NIAGARA FALLS TOURISM ASSOCIATION Schedule 2 SCHEDULE OF CO-OP ADVERTISING PROGRAMS for the year ended October 31, 2007 } ~ _k si ": 2007 ~ ;' 2006 Revenue ~-~.: y .y4x -: ~ ' ~ ,~ ~~" ' Dining and Shopping Guide ~~ 64500 ~; 71,775 Destination Planner ~ n.n ~ ~" ~7p p05 86 585 Meeting and convention programs t 66 639' { , 94,811 Miscellaneous Advertising ,~~~631`037" Ontario Tourism Spring, Summer, Fall and Winter x211 9 07'~=° 39,863 Travel and Trade - Asia/Pacific ~ ~~~~. ~~r~ X31 821 Travel and Trade -general , ~ `°` 7025=~~' ,.: . ~~ ~~~. ~578;034 293 034 ~~;r , Expenses ~ ~ ~ ~'< Dining and Shopping Guide ~~ 44,073~~ - 49,352 Destination Planner , uT76;1i19 66 478 Meeting and convention programs ~ ~~ ~ ~_z ~ 77 53,0 E ~ , 91,745 Miscellaneous Advertising , ,~ ~..; "7,2;977. Ontario Tourism Spring, Summer, Fall and Winter r ~ r ` 494 421,':°°:' 29 814 Travel and Trade - Asia/Pacific ; ~. 58 087~~ , Travel and Trade - Qeneral , X73'036 ~; ~ ~-f ». x.896;243: 237,389 ~~~: Net Revenue (Loss) '£'~ '~~' ~=` ~.;. ' Dining and Shopping Guide ~ 20 427 ~` 22,423 Destination Planner ~ = „x(64 4j~ ~ ~~ ~: 20,107 Meeting and convention programs ~h ~(r10 891~)~; 3,066 Miscellaneous Advertising ~e'~='==(9;940)~~~ Ontario Tourism Spring, Summer, Fall and Winter x'(282£5 4) 3` 10,049 Travel and Trade - Asia/Pacific ~~(26`266)~a Travel and Trade -general ~6 ~,~~ =1=~,(2 91~1js: F~ ~ w ~' ';'(318,209)` 55 645 _, , See accompanying notes 10 Crawford srruth C8Z swallow NIAGARA FALLS TOURISM ASSOCIATION Schedule 3 SCHEDULE OF ADVERTISING AND PROMOTIONAL EXPENSES for the year ended October 31, 2007 2006 Association memberships r ;: ~1 3~672 ~ 11,046 Committee expenses , ,` ~"25,252 "' 6,207 Depreciation -brochure racks _ r ~2~692€'<< 3,315 Depreciation -vans ~~'~r`` ~~8,386: ~, 717 Information kiosks ~143~0661 ~ 89,076 Media advertising ~~, ~ ~~ ~ ~'s''`67,-1599 ;_~ 128 168 Office and miscellaneous ~ ~~ ~ r ~ ~" , 610 Other ~~ xw '~` ~ 1 322 Public relations `~' 26s365~~` „ , 1,850 Research `r 30~210~> Telephone ~~ ~: 349~1 sa 4 014 Travel and Trade Salaries ¢ ~- ~` ` , Asia/Pacific i~..~ fr -~~'' ~ ~31800z General ; 54 622 r. 45 247 Meeting and convention programs salaries , ~a5r7;447 a , ~, ~.~,- t~ ~~464 562~° 291 572 , , See accompanying notes Crawford smith ~. swallow NIAGARA DISTRICT AIRPORT gateway to the peninsula 1 November 2008 Mayor Ted Salci & City Council Via Mr. Dean lorfida City Clerk City of Niagara Falls P.O. Box 1023 Niagara Falls, ON L2E 6X5 Subject: Niagara District Airport Annual Budget for 2009 Please find the Niagara District Airport's operating and capital budget for 2009 attached. The budget for 2009 as approved by the Niagara District Airport Commission at its regular meeting on October 23th is in the rightmost column of the spreadsheet attached. Also shown for information purposes are the actual 2008 performance to the date on which the draft budget was prepared, the projected pertonnance to the end of 2008 and the budget for 2008. Some highlights of the proposed budget for your information The Municipal Grant figure shown in the budget is based on a per resident assessment of $1.18 and the Ontario Municipal Directory population figures for 2006, the same assessment that was requested for 2007 and 2008. Specifically, the requested levy from each community would be; St. Catharines $146,427.38 Niagara Falls $ 89,290.60 Niagara-on-the-Lake $ 16,119.98 With the exception of the revenue from Municipal grants, the overall revenue from other sources continues to grow. Several non-aviation events, including one feature film movie-shoot, were successfully completed. Such events are difficult to forecast; therefore, a conservative estimate for such events has been entered in the 2009 budget estimates; The total estimated revenue for 2009 is slightly lower than that budgeted far 2008. The reason for this change is the reduced revenues being realized from sale of aviation fuel at the airport. The Commission has plans for fuel provision at the airport that are explained below; The Commission is currently in negotiation with Imperial Esso and Air Mobile, the on-airport fuel sellers, to acquire the fuel tanks and trucks currently at the airport. This would give the Commission control over fuel services at the Airport and the ability to set fuel prices. The business case completed by the Commission indicates that a greater share of the fuel sales revenue will be the result. The largest item in the proposed capital program for 2009 is $75,000 for the purchase from Esso of the tanks and trucks; and .12 PO Box 640 Virgil, ON LOS 1T0 Phone: 905-684-7447 Fax:905-684-2433 info@n iagarad istrictai rport. ca -2- • Total forecast revenues for 2009 are $449,160. Total expenditures, including the capital program are $516,339. This deficit will be covered by excess revenues from past performance, which are projected to be $555,543 by the end of 2008. d° Last year we outlined to you that the budget being presented had no provisions in it for infrastructure renewal or preparation of potential development areas. This year's budget is the same, it includes no expenditures on infrastructure renewal. In 2007 and 2008, we highlighted the need for a minimum of $7.25 million to refurbish airport runways and taxiways. During 2008, the Commission applied to the Federal Government for assistance under a newly announced infrastructure program known as BuildCanada. The Federal Government tasked Transport Canada to evaluate the data and programs submitted by the Niagara District Airport. This evaluation was completed in May-June. Most of the projects were deemed to be viable and qualified for funding. The process of seeking both provincial and IocaVregional funding is on-going. It was suggested in the Marshall Macklin Monaghan strategic plan report and reiterated by the Liaison Committee that the Niagara District Airport Commission should report to each participating municipality at least once a year. I am pleased to take this direction and would take the opportunity of appearing before your Budget Committee or Council at your convenience. Richard Chair, ~ Attachments: 1. Airport Commission PO Box 640 Virgil, ON LOS 1 TO Phone:905-684-7447 Fax:905-684-2433 info@ nia g a rad istrictai rport. ca Niagara District Airport Commission Prepared by: Patti Gamble 2009 Budget Kenn Moody Jan -Sept 08 Projected 2008 Budget 2009 Budget 2008 Total Income 4010 • Interest on Reserves 5640.79 7600.00 5000.00 5000.00 4040 • Miscellaneous Revenue 4045 • Facilities Rental 27450.00 60000.00 4040 • Miscellaneous Revenue -Other 8431.76 31000.00 31000.00 Total 4040 ~ Miscellaneous Revenue 35881.76 67600.00 36000.00 36000.00 4050 • Municipal Grants 187733.94 250311.92 250000.00 250000.00 4060 • Land Rentals 98973.67 127821.46 124000.00 130000.00 4070 ~ landing Fees 2300.00 2600.00 5000.00 2500.00 4080 • Fuel Royalties 8903.98 17000.00 20000.00 15000.00 '4090 • Water Revenues 1693.66 3400.00 3000.00 3500.00 4110 • General Services 1389.12 3000.00 3200.00 1600.00 4120 • Office Rentals 5369.67 10972.12 7125.00 7160.00 4130 • Snow Plowing 900.00 1000.00 800.00 800.00 4140 • Parking 3125.50 3500.00 4000.00 1000.00 4150 • Vending Machines 633.10 1500.00 1500.00 1500.00 4200 • US Exchange/Interest 139.41 140.00 20.00 100.00 Total Income 352684.62 488845.50 454645.00 449160.00 Expense 5000 • Payroll Expenses 5010 • Wages, Full Time 66153.36 91728.67 80992.00 111500.00 5020 • Wages, Part Time 36882.93 41635.00 50470.00 24500.00 5030 ~ Overtime Paid 6914.84 8000.00 3090.00 5000.00 5040 • Vacation Pay 5279.41 9181.00 8549.00 9885.00 5310 • UI Expense -Employers Portion 2751.71 3261.91 3605.00 3300.00 5320 • CPP Expense -Employers Portion 4360.37 5409.29 3883.00 5488.00 5330 • WCB Expense 1686.41 2062.46 1941.00 2067.00 5350 ~ OMERS Retirement Fund -Employe 4965.70 6704.43 5842.00 7863.00 5370 • Medical Benefits 6765.06 6765.06 7210.00 11355.00 Total 5000 ~ Payroll Expenses 135759.79 174747.82 165582.00 180958.00 5050 • Training 4455.86 7000.00 12500.00 12500.00 5200 • Consulting Services 4500.00 4500.00 21000.00 10000.00 5500 • Hydro and Heating 11989.83 17000.00 24500.00 24500.00 5510 • Water and Sewage 1538.76 3000.00 6000.00 2500.00 5520 • Telephone Expense 3083.56 4587.00 4500.00 4800.00 5530 • PR and Advertising 7991.05 9000.00 25000.00 25000.00 5540 • Office and General Expense 6320.04 6000.00 10000.00 10000.00 5550 ~ Audit Fees 4100.00 7500.00 7500.00 7500.00 5560 • Legal Fees 5182.79 7000.00 5000.00 7500.00 5570 • Municipal Tax Expense ~ 0.00 6831.14 6831.14 6831.00 5580 • Conference, Convention & Meetin 2393.00 4500.00 5750.00 5750.00 5590 • Vending Machine Expense 489.91 600.00 600.00 600.00 5610 • Airport Insurance 16538.04 16538.04 17000.00 17000.00 5620 • Miscellaneous Expense 3105.18 3500.00 2000.00 3500.00 5625 ~ Bank Charges & Interest 58.05 70.00 100.00 - 100.00 Approved October 23, 2008 Page 1 of 2 Niagara District Airport Commission Prepared by: Patti Gamnle 2009 Budget Kenn Moody Jan -Sept OS Projected 2008 Budget 2009 Budget 5630 • Terminal Bldg. Expense 4296.19 8000.00 4000.00 7500.00 5640 • Garage Expense 3749.00 4000.00 2000.00 4000.00 5650 • Airfield Lighting Expense 5313.25 13000.00 2000.00 2500.00 5660 • Runway Maintenance Expense 6873.20 6700.00 5000.00 7500.00 5680 ~ Property & Roads Expense 18090.41 22000.00 35000.00 35000.00 5690 • Equipment Rental Expense 1905.98 2560.00 2200.00 2500.00 5700 • Vehicle Gas & Oil Expense 12514.07 15000.00 10000.00 15000.00 5720 • John Deere Gator 0.00 0.00 500.00 500.00 5730 • Ford Sander Expense 1248.33 1250.00 0.00 500.00 5740 • John Deere Tractor Expense 1513.34 2500.00 500.00 1000.00 5750 • International Plow Expense 0.00 0.00 0.00 1000.00 5770 ~ Sicard Sweeper Expense 479.61 500.00 0.00 500.00 5790 •Sicard Blower Expense 14.90 500.00 2500.00 2500.00 5830 ~ Misc. Equipment Expense 481.20 500.00 500.00 500.00 5840 • White Plow Expense 582.90 600.00 2000.00 2000.00 5850 • GMC Pickup Expense 1679.03 1700.00 500.00 1000.00 5890 -Bad Debt Expense 0.00 0.00 0.00 0.00 Total Expense 266247.27 353184.00 380563.14 402539.00 Excess of Revenue over Operating Expenditures 86437.35 735661.50 74081.86 46621.00 before Capital Expenditures Less Capital Expenditures -7342.38 -17342.38 -120000.00 113600.00 Reserves 437213.72 437213.72 432463.00 555542.84 Remaining Reserves 516308.69 5555342.84 386545.86 488363.84 Replace Sicard Snowblower 0.00 0.00 45000.00 Acquire a computer based SMS 0.00 10000.00 10000.00 reporting system Acquire & install two runway exit signs 0.00 0.00 5000.00 Replace Sign an Hwy 55 10000.00 Install Building Directory Signs 0.00 0.00 2500.00 Move Windsock blwen Rwy 06 and Twy A 0.00 - 0.00 2500.00 Pave the terminal parking lot 0.00 0.00 28000.00 Minor taxiway paving projects 2929.38 2929.38 5000.00 Tie Downs (10) 715.00 715.00 12000.00 Heat Pump 3698.00 3698.00 0.00 7342.38 17342.38 120000.00 Vehicle Upgrades 25000.00 Install Building Directory Signs 2500.00 Fuel Farm Acquistion 75000.00 Tie Downs 11300.00 113800.00 Approved October 23, 2008 Page 2 of 2 Ni~~ Board of Management November 12, 2008 Dean lorfida City Clerk City of Niagara Falls 4310 Queen Street PO Box 1023 Niagara Falls Ontario L2E 6X5 P.O. Box 5, Main Station Niagara Falls, Ontario L2E 688 Re: Downtown BIA Request for Events Funding Dear Dean, Tel.: (905) 354-0606 Fax: (905) 354-5541 bia @ niagarafal I sdowntown.c om www. niagazafallsdowntown.c om The summer and fall of 2008 have seen a variety of successful and exciting events in downtown Niagara Falls. An important purpose of these events was to reintroduce the community to downtown Niagara Falls with the goal that the community would take ownership and help us reclaim the downtown. We believe we have achieved this goal as we have seen many local artists establish a presence downtown and have heard from a number of local community groups regarding various projects they would like to initiate downtown. Springlicious showcased the culinary skills of some of Niagara's finest restaurants. It also filled an authentic need for community togetherness. We estimate that it attracted 30,000 to 35,000 people to the downtown core. Daredevil Days featured stuntmen, daredevils, buskers and circus performers. Despite challenging weather conditions, the event drew approximately 25,000 people as well as bringing national and international media exposure to Niagara Falls. The Days of Elvis brought some of North America's top Elvis tribute artists to Niagara Falls and again, despite extremely challenging weather conditions, drew attendees from a broad geographic area. All had fun and expressed an interest in seeing the festival grow over time. The Queen Art Festiva! was amulti-weekend festival showcasing the amazing artistic talent that has moved into the heart of our community. Twelve new art galleries have opened in downtown Niagara Falls this year. This festival was designed to introduce our new artists and their work to the community. On October 25th, three downtown restaurant venues hosted the first downtown Jazz Festival. Each venue featured local jazz musicians while 4triple5 also hosted a jam session providing an opportunity for local musicians to showcase their talent. In total, these festivals have cost in excess of $550,000 with an additional $150,000 being spent by the BIA in support activities in addition to the $210,000 contributed directly to the events. Substantial funding was also received for the events through provincial grants, sponsorships and city contributions. Downtown Niagara Falls: Where Friends Make the Difference Ni~~ Board of Management P.O. Box 5, Main Station Niagaza Falls, Ontario L2E 6S8 Tel.: (905) 354.0606 Fax: (905) 354-5541 bia @ niagazafallsdowntown.com www. niagazafall sdowntowacom This investment has already shown significant returns. During 2008, in large part due to the events, the downtown attracted the Gypsy Theatre group, The Buttery, Taps Brewery, The Butterfly Gallery, John Newbie, Ed Spera, Balzac's Coffee, MidB Bistro ~ Yoga Studio, The Watering Can and 4394 Gallery. All have relocated or added to their existing locations from high end areas such as, the Distillery District in Toronto, Niagara-on-the-Lake and others. These new businesses are in the process of converting our downtown into a unique, artistic, historic, entertainment and culinary district. This coming year we need to ensure the viability and sustainability of these investments by building on this amazing progress. It is imperative that we attract more world class businesses and renovate a larger part of our downtown. In 2009, Celebrate Old Downtown and the Downtown BIA plan to alter the events program somewhat by putting more focus on Queen Street and our many new retailers. As such, we are working on a program that will include an expanded Springlicious and a host of smaller ongoing weekly events including some of the features of Dare Devil Days and Days of Elvis. Funding options will again include provincial and federal grants, sponsorship, the BIA tax levy, event revenues and municipal funding. Our team is already working on securing important sponsorships for next year and grant applications are being prepared. However, in meetings with provincial officials in charge of grant decision making, it has been made clear to us that city financial participation is a primary focus in their deliberations to assess which festivals and groups receive funding and which do not. In short, they want to see municipal skin in the game. W hile we understand that there may be some reluctance for municipal funding of events based on historical precedence of the city not realizing a social or economic return on investment, in the downtown the reverse is the case. Never before has a city seen such a large and immediate return on investment as our downtown has experienced from these community events. The events have clearly illustrated their power to act as a catalyst that draws significant private sector investment as well as improving the social, cultural and educational experiences in our city. The BIA thus requests that the city contribute $100,000 toward Celebrate Old Downtown's events program for the 2009 calendar year. Sincerely yours, ~~ Ulrike I Gross, P.Eng. MBA Chair Downtown Board of Management Downtown Niagara Falls: Where Friends Make the Difference From: "Gross, Ulrike I" <UGross@ciminelli.com> To: "Dean lorfida" <diorfida@niagarafalls.ca> Date: 11/12/2008 2:27 PM Subject: BIA Events funding request Attachments: City Funding Request.pdf CC: "Serge Felicetti" <sfelicetti@niagarafalls.ca> Dean, Please find attached the letter regarding the request for funding from the BIA for 2009 events. I apologize for the long delay as the timing of this caught us somewhat off guard. Regards, Ulrike I. Gross P.Eng. MBA Managing Director Ciminelli Real Estate Corporation of Canada 4673 Ontario Ave., Suite 201 Niagara Falls, ON L2E 3R1 Office: (905) 356-9059Fax: (905) 356-1546 Cell: (905) 988-2271 From: Dean Iorfida To: Ulrike I Gross Date: 11/12/2008 3:19 PM Subject: Re: BIA Events funding request CC: Ken Burden; Serge Felicetti Thanks Ulrike, although the timing should come as no surprise. See a-mails below: »> Dean Io~da 11/10/2008 10:25 AM »> Please provide an update on your proposed request. »> Dean Iorfida 11/5/2008 1:06 PM »> Hi Ulrike: _ It is imperative that we have the request by the end of this week, Staff anticipate a difficult budget process this year; therefore, it will be impassible for this request to be entertained subsequent to the budget process. Thanks Dean Dean Iofida, City Clerk Niagara Falls 905-356-7521, Ext. 4271 905-356-9083 (Fax) »> Dean lo~da 10/24/2008 4:17 PM »> Hi Ulrike: Further to our meeting Tuesday, you indicated that the City would receive a funding request from Downtown for $100,000 far funding for events in 2009. Just to let you know our time frames, we will need to get that request by Tuesday (Oct. 28th) so we can include it for our November 3rd meeting when the various permissive grants are requested. Thanks Dean