2010/04/121) REPORTS:
a) F- 2010 -18 2010
Water & Sewer Volumetric Rates
b) CAO- 2010 -04
Winter Festival of Lights
Line of Credit
2) NEW BUSINESS:
3) ADJOURNMENT:
;PO`RA SERVICES COMMITTEE AGENDA
MEETING
Monday, April 12, 2010
4:00 p.m.
City Hall, Committee Room #2A & B
FIFTH MEETING
Monday, April 12, 2010
1) Approval of the March 22, 2010 Community Services Minutes.
2) REPORTS:
a) MW- 2010 -11
Tender 2010 - 152 -05
Weightman Bridge Rehabilitation
Portage Road crossing the Welland River
from Macklem Street to Bridgewater Street
b) MW- 2010 -15
Chippawa Boat Dock - Update Geoff Holman
c) R &C- 2010 -09
M.F. Ker Park Concession Agreement
d) R &C- 2010 -08
RFP -P09 -2010 - Supply and Delivery of
Over the Counter Beverages, Vending and
Relate Equipment
4) ADJOURNMENT:
STAFF CONTACT:
Todd Harrison
Ken Todd
ES COMMIT AGENDA'
STAFF CONTACT:
Geoff Holman
Dale Morton
Dale Morton
Alex Herlovitch
e) PD- 2010 -29
CB &FIG - 2010 -002, 4519 -4525 Queen Street
f) TS- 2010 -23
Falls Shuttle Service Amendment Karl Dren
3) NEW BUSINESS:
PRESENT:
STAFF:
GUEST:
PRESS:
MINUTES OF CORPORATE SERVICES COMMITTEE MEETING
First Meeting
Monday, February 22, 2010, Committee Room 2, 5:00 P.M.
1) MINUTES
Chair Councillor Carolynn loannoni -, Mayor Ted Salci, Councillors: Jim
Diodati, Vince Kerrio, Victor Pietrangelo, Bart Mayes, Wayne Thomson,
Janice Wing and Shirley Fisher.
Ken Todd, Ed Dujlovic, Ken Burden, Ken Beaman, Lee Smith, Karl Dren,
Geoff Holman, Denyse Morrissey, Dean lorfida, Alex Herlovitch, Trent
Dark, Serge Felicetti and Teresa Fabbro- Steno.
David Coplen, Gateway Residential & Comm. Support Services of
Niagara, Kevin Harding, Winter Festival of Lights, Dino Fazio, Winter
Festival of Lights and Joe Mizsk
Corey Larocque, Niagara Falls Review
Gareth Vieira, Niagara This Week
MOVED on the motion of Mayor Salci, seconded by Councillor Kerrio that the
minutes of the January 25 2010 meeting be approved.
Motion: Carried
Action: Recommendation submitted to Council February 22, 2010.
2) REPORTS:
a) CPS - 2010 -01
Boys & Girls Club ISF Capital Project
MOVED on the motion of Councillor Kerrio, seconded by Mayor Salci:
1. That Council approve funding up to $2,000,000 for the municipal contribution
of the Boys and Girls Club Infrastructure Stimulus Fund (ISF) Capital Project;
2. That the City's funding be secured by a charge on the new building and
property and that the balance of the report recommendations be deferred.
Motion: Carried
Action: Recommendation submitted to Council February 22, 2010.
-2-
b) CPS - 2010 -02
Winter Festival of Lights Line of Credit
MOVED on the motion of Mayor Salci, seconded by Councillor Thomson that the
report be deferred until the next meeting to give staff an opportunity to work with the
Winter Festival of Lights staff on other possible options.
Motion: Carried
Action: Recommendation submitted to Council February 22, 2010.
c) HR- 2010 -02
Attrition Policy
MOVED on the motion Councillor Kerrio, seconded by Councillor Diodati that
Council approve an employment attrition policy subject to collective agreement
provisions and with the understanding that key priority services will not be
jeopradized.
Motion: Carried
Action: Recommendation submitted to Council February 22, 2010.
3) ADJOURNMENT
MOVED on the motion of Councillor Fisher, seconded by Mayor Salci that the
Corporate Services Committee adjourn.
REPORT TO: Councillor Victor Pietrangelo, Chair
and Members of the Corporate Services Committee
City of Niagara Falls, Ontario
SUBMITTED BY: Finance
SUBJECT: F- 2010 -18
2010 Water and Sewer Volumetric Rates
RECOMMENDATION
EXECUTIVE SUMMARY
F- 2010 -18
Niagaraplls April 12, 2010
That Council approve the 2010 Water and Sewer Volumetric Rates and Fixed Service
Charges and all other rates and fees as outlined in Appendix "A ".
That Council approve staffs participation with Regional staff and staff members of other
local municipalities to review the methodology for establishing water and wastewater rates
for 2011 and beyond.
That Council direct staff to review the billing process including the relationship with Niagara
Peninsula Energy Inc. and to develop an alternate account structure for Council's
consideration once the Regional review is completed.
The Municipal Utility budget establishes the expenditure levels and the user rates for the
year. The Municipal Utility Budget consists of a water budget and a sewer budget, with
rates for both services being established independently. Council approved the City's 2010
Municipal Utility Expenditures as reported in F- 2010 -12. This report establishes that the
City portion of rates will result in the monthly service charge increasing by 0.3 %.
The Region of Niagara has approved their 2010 rates for the delivery of water and the
treatment of waste water. Regional report PWA 24- 2010 /CSD 35 -2010 has recommended
that the methods of billing water and sewer remain the same as 2009, however, that the
2010 rates are greater than 2009. Staff has incorporated the Regional rates into the City's
volumetric rates. The increases included in the regional rate structure results in an
increase of 10.0% in the City's water and sewer volumetric rates. Staff has outlined the
changes in Appendix "A ".
The impact of the regional rate increases have been mitigated by the nominal rate increase
in the fixed monthly charges. The total combined impact of both rate increases on a
standard residential home that has consumption of 360 cubic meters per year is 5.6% or
$63.19. Properties with similar meter sizes which use more water will see an impact
greater than 5.6% while those account holders who consume Tess will have a lower
percentage increase.
April 12, 2010 - 2 - F- 2010 -18
BACKGROUND
The Municipality develops an annual operating budget for the operation of its water and
sewer distribution systems. The City is dependant upon the Region of Niagara for the
delivery of potable water and the treatment of wastewater. The City has responsibility to
operate its water and sewer systems and to bill user fees for the use of both water and
wastewater services. The user fees consist of both a fixed and volumetric charge. The
volumetric charge is based on the Region's costs for water supply and sewer treatment.
The fixed charge is based on the City's operating costs and transfer to capital.
Council has already approved F- 2010 -12 , 2010 Municipal Utility Budget which detailed the
City's expenditures and the corresponding water and sewer fixed service charges for a
standard residential meter.
The Region of Niagara has approved their 2010 rates for the delivery of water and the
treatment of waste water. Regional report PWA 24- 2010 /CSD 35 -2010 has recommended
that the methods of billing water and sewer remain the same as 2009. The Region has
approved that 75% of their billings to lower tier municipalities will be collected through a
variable volumetric rate, while 25% would be collected through a fixed charge. The
volumetric rate charged for water will rise from .0472 per cubic meter to 0.535 or 11.9%
while the fixed charge has increased from $2,593,065 to $2,615,478, an increase of
0.86 %.
The wastewater billings from the Region remains as a fixed annual charge of $11,954,011
Staff has incorporated the Regional rates into the City's volumetric rates.
Since the Regional rates are effective March 1, 2010, the City must approve its rates
immediately to ensure the regional increases are collected.
ANALYSIS /RATIONALE
As approved previously City report F- 2010 -12 has resulted in an increase in the fixed
service charge of 0.3 %. The fixed service charge is developed to cover all of the City's
maintenance costs of the City systems including the annual capital requirements. The
impact on a standard residential account holder with a 1 inch meter, is an increase in the
water and sewer fixed service charges of $1.27 per year. Larger meter sizes would be
charged a proportionately larger service charge. Appendix "A" provides the water and
sewer fixed service charges for all meter sizes. The impacts on the volumetric rates for
sewer and water are independently determined and have unique factors that impact each.
Impacts on the volumetric rate charges - water
There are three items which impact the volumetric rate. First, the Regional price increase
is a direct product cost and must be incorporated into the variable rate. As stated the rate
has increased by 13.2% from the amount charged in 2009. The second impact is the
estimated volume that the City can expect to bill its ratepayers. As the Region identified,
the volume of water sold to the City by the Region has been declining steadily since 2005.
Similarly, the volume of water billed to residents by the City has declined. In 2009, the
volume of water purchased from the Region by the City was the lowest this decade and as
a result, the City has used this volume as the estimated water billing. This is a divergence
from previous budget years wherein the City has used a three -year average for its
estimated billing. The third factor that impacts the volumetric rate is the un- billed water
volumes. Un- billed water can be defined as the percentage of water that is not billed by
April 12, 2010 - 3 - F- 2010 -18
the City but has been purchased from the Region. The City has used the three -year
average as a factor of 82.7% in the determination of water billed.
Impacts on the volumetric rate charaes - sewer
Unlike the water volumetric rate, the volumetric rate for sewer has only one factor
impacting its determination. Since 2008, the Region has billed the area municipalities'
sewage treatment as a fixed charge based on three year flows. While this has stabilised
the cost to a predictable amount, the City assumes all risks of flows in its billing. This is
because the sewer charges billed an individual account holder is based on water flow. As
has been identified previously, the quantities of water have declined and have been less
than estimated. This creates a revenue shortfall since the revenues are based on
declining flows while the costs are fixed. The Regional charges have been maintained at
last years charges however the declining water flows have resulted in a price increase for
treated sewage. The rate increase for wastewater consumption rate increases by 7.5%
to 1.03 per cubic meter.
It should be noted that stabilization reserves previously expected for 2009 was not
collected and that reserves accumulated in prior years were used to balance the sewer
budget in 2009. The combined impact of the rate increases is 10% on the volumetric rates.
FINANCIAL /STAFFING /LEGAL IMPLICATIONS
The two budgets are prepared annually with the objective to raise adequate revenues to
offset the expenditures required to operate the system. The revenues determined in both
budgets are dependent on the water consumed by account holders and subsequently billed
on the volumetric rate. Similar to the Region of Niagara which has seen declines in the
water sold to municipalities, the City of Niagara Falls has seen a decline in the volume of
water sold to ratepayers in the City. This reduction has had a negative impact on both
water and waste water budgets.
The implication of the proposed rate increases impact ratepayers differently. In essence
ratepayers who consume less water will see less of an impact than those large water
consumers. The chart below identifies impacts on various users.
User
Residential
Residential
Commercial
Commercial
Quantity
100 m
1 meter
360 m
1 meter
5,000 m
4" meter
800,000 m
4" meter
2009 Cost
$675.87 $689.40
$1,123.36 $1,186.94
$19,687.00 $20,578.00
$1,486,630.00 $1,387,962.00
2010 Cost I % Increase
2.72%
5.60%
4.50%
7.10%
April 12, 2010 - 4 - F- 2010 -18
CITY'S STRATEGIC COMMITMENT
Affordable water and waster water rates to City residents and businesses are extremely
important. Equally important is the need to raise sufficient funds to offset expenditures.
The rate structure - charged residents has been under review for the last few years. While
the City has embarked on a multi year study of its own rate structure without change, staff
believe that the existing rate structure should be maintained until the region has concluded
its review.
As the regional charge for both water and waste water are the largest costs on the
expenditure side, the rate structure review cannot be finalized until the Region determines
a long term rate structure. Changes made by the Region on rates, on the ratio of fixed to
variable and capital funding models each have major impacts on the City's costs.
Since the Region has started a process to develop a long term rate structure that
incorporates lower tier input, staff recommend that this process be completed before
altering the City's rate structure. The Region has requested that each lower tier
municipality make a resolution that allows its staff to participate. The costs of the study will
be borne by the Region, but as we have seen in the rate calculations these costs will be
recovered through regional charges to each lower tier. As a result, staff have maintained
the existing rate structure for 2010.
Similarly, in 2001 the City engaged Niagara Falls Hydro, now Niagara Peninsula Energy
Inc. (NPEI) to provide meter reading and billing functions for the municipality. NPEI si
required to change the process of billing its hydro customers because of the introduction
of smart hydro billing. This will have an impact on the method and cost of the billing
function performed by NPEI for the City. Staff recommend that a review of this process
and relationship be performed prior to the development of the 2001 Utility Budget.
LIST OF ATTACHMENTS
Appendix "A"
Regional Report PWA 24- 2010 /CSD 35 -2010
F- 2010 -12 2010 Municipal Utility Budget
Recommended by:
TH
Todd Harrisbn, Direc r of Financial Services
Respectfully submitted:
Ken Todd, Chief Administrative Officer
April 12, 2010 - 5 - F- 2010 -18
Meter Size
15 mm
16 mm
25 mm
37 mm
50 mm
75 mm
100 mm
150 mm
200 mm
250 mm
Water Rates:
Appendix "A"
Water Consumption Rate $0.8605 per cubic metre
After Due Date $0.9035 per cubic metre
Sewer Rates:
Service charge as set out in section 1
Water rates as set out in section 2
Flat rates as set out in sections 3 and 4
2010 Water Service Rates 2010 Sewer Service Rates
$21.88 $20.20
$21.88 $20.20
$21.88 $20.20
$65.65 $60.60
$131.29 $121.21
$262.59 $242.41
$481.41 $444.43
$919.05 $848.45
$1,641.16 $1,515.09
$2,297.62 $2,121.13
92.30%
120.02%
108.90%
Niagara Region
That this Committee recommend to Regional Council that the following be approved:
A) Water System
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
REPORT TO: Chair and Members of the Public Works Committee
and
Co- Chairs and Members of the Corporate Services Committee
SUBJECT: 2010 Water and Wastewater Budget Rate and
Requisition Setting
1) That the volumetric water requisition for the area municipalities be established as
follows;
a) That the uniform rate charged to the area municipalities for actual consumption of
water be established at $0 535 per cubic meter (Option 2 in Chart 3) for the period
March 1, 2010 to February 28, 2011;
b) That the area municipal water consumption charges in A) 1)a) be billed monthly
based on actual monthly volumes;
2) That the fixed water requisitions for the area municipalities be established as follows:
a) That $10,504,571, representing 25% of Regional 2010 water costs, be apportioned
to each area municipality based on their three year average proportionate share of
the Region's three year average total water flows;
b) That the apportionments of recommendation A) 2)a) be requisitioned to the area
municipalities as contained in Schedule A of this report in twelve equal monthly
billings effective March 1, 2010;
3) That the Regional water treatment budget of $44,541,100 gross and $42,018,284 net be
approved, representing an increase of 1 7% in the operating budget and an overall net
3% increase to the water requisitions
1
B) Wastewater System
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
1) That the 2010 Regional wastewater treatment costs be apportioned to the area
municipalities based on their three year average proportionate share of the Region's three
year average total wastewater flows,
a) That the wastewater requisitions for the area municipalities be established as
contained in Schedule B of this report;
b) That the apportionments identified in recommendation B) 1 a) be requisitioned to the
area municipalities in twelve equal monthly billings effective March 1, 2010;
c) That the Regional wastewater treatment budget of $61,391,169 gross and
$59,391,038 net be approved, representing an increase of 1 7% in the operating
budget and an overall net 3% increase to the wastewater requisitions
C) The Regional Clerk be directed to ensure that the appropriate by -laws be prepared for
presentation to Regional Council
D) That the Region and Area Municipalities Rate Study of Report PWA 104 - 2009 /CSD 131-
2009 Water and Wastewater Common Rate Setting and Cost Recovery Review proceed in
order to review rate methodologies
E) This report be circulated to the area municipal Clerks for information
EXECUTIVE SUMMARY
The cost recovery recommendations being made in this report are based on the Region's water
and wastewater rate methodology adopted for implementation in 2009/10 and 2010/11 as
approved in Report CSD 57- 2009 /PWA 34 -2009
The wastewater recovery methodology is a fixed allocation based on average of the immediate
past three year flow apportionments The water recovery methodology is a 25% fixed
apportionment based on the immediate past three year averages with the remaining 75% based on
actual consumption The volumetric rate set to cost recover actual consumption is calculated
based on projected water production. A number of options relative to projected water production
and corresponding rates were analyzed The combined effect of the water and wastewater
increase for 2010 as recommended in Option 2 would be 7,2%
The report also seeks approval of the 2010 water and wastewater operating budgets as well as
provides an update for the proposed rate methodology study proposed in report PWA 104-
2009 /CSD 131 -2009 Water and Wastewater Common Rate Setting and Cost Recovery Review..
2
FINANCIAL IMPLICATIONS
Approval of the recommendations contained in this report will see the Region recover $42 0 million
for water and $59 4 million for wastewater systems costs, for the twelve month period beginning
March 1, 2010 As per the 2010 budget targets allocated to Regional operations, the amounts of
$42 0 million for water and $59 4 million for wastewater represent an increase of 1 7% in the
operating budgets and an overall net 3% increase respectively
Over the past six years the Region has under- recovered its budgeted revenue by approximately
$22 million
PURPOSE
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
This report establishes the requisitions for the recovery of Regional water and wastewater systems
costs from the area municipalities commencing March 1, 2010 through February 28, 2011
BACKGROUND
Since its inception, Niagara Region has recovered its water and wastewater costs from its
constituent area municipalities. Many different methodologies have been applied over the years
In 2009, the consulting firm BMA Management Consulting Inc was retained to assist the Region
and area municipalities with a water and wastewater cost recovery review
As a result of this review, the following was recommended.
Water
• That 50% of Regional water costs be recovered annually from area municipalities based on
their proportionate share of the Region's prior year water flows
• That 50% of Regional water costs be recovered from the area municipalities based on
actual metered water flows multiplied by the Region's annually set uniform wholesale water
rate
Wastewater
• That total Regional wastewater costs be recovered annually from the area municipalities
based on their proportionate share of the Region's most recent three -year average water
flows
The water methodology was reviewed by Regional Council and amended to allow for a phase in of
the fixed portion. As a result the 2009/10 water methodology was revised as follows
• "That 25% of 2009 and 2010 Regional Water costs be recovered from area municipalities
based on their proportional share of the Region's three prior year average water flows;
3
Chart 1
• That 75% of Regional water costs be recovered from area municipalities based on actual
metered water flows in 2009 and 2010 multiplied by the Region's annually set uniform
water rate for the respective year;
• That an increase in fixed apportionment be considered when setting the rate structure in
2011.."
REPORT
WASTEWATER
Projected expenditures for 2010 wastewater will increase 3% over 2009 to $59..4 million
Commencing in 2009, 100% of Regional wastewater costs have been apportioned to the
area municipalities based on their three year average historical wastewater flows, The 2010
apportionment of Regional wastewater costs are as contained in Schedule B Actual and
budgeted recoveries for wastewater are as seen below in Chart 1
Wastewater Revenue
Actual & Budgeted
4
1 ® Actual ®Budget
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
WATER
Demand and weather are key variables that directly influence water consumption. Niagara
Region has experienced a steady decline (on average 2.3% per annum dating back to 1991)
in overall consumption as shown in Chart 2 below
Chart 2
Actual & Projected Water Flows (19 Years)
60000 •
55 000
50000 t " = •r =2 L _
1991 1952 1993 1694 1995 1909 1497 1999 1599 2000 2001 2002 2003 2004 2006 2006 2007 2006 20
Year
DActual
5
® Projected
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
Other variables contributing to this decline include leak mitigation, water conservation, price
elasticity, metering, demand management, changes in plumbing codes, fixtures and appliances as
well as changes to the Industry/Commercial/Institutional (ICI) market either through closures or
enhanced conservation to minimize their operating costs
Water flow projections are critical in the determination of uniform wholesale rates. Rates are
calculated based on the revenue required divided by the estimated water production Since 75% of
revenues are determined by this calculation of flows multiplied by uniform rates, the closer to reality
projected flows actually are, the closer will be expected revenue levels required to maintain the
self - financing, self - sustaining system. Historically, the Region has over - projected volume which has
led to under - recovered budget dollars, as seen in Chart 2 and Chart 3
Chart 3
1999
2000
2001
2002
Water Revenue
Actual & Budgeted
2003
6
2004
2005
2006
2007
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
2000
2009
1 n Actual la Budget
The Niagara Region has made efforts to move away from 100% volumetric rates to recover water
costs. The prime reason for moving to a greater fixed component is that the costs of water
production and transmission are largely fixed Volumetric pricing in an environment of reduced
consumption is out of sync with the fixed costs of operating a water system, and to that extent,
financial risk is introduced into the outcomes Over the past six years the Region has under -
recovered its budgeted revenue by approximately $22 million,
A) 25% Fixed Cost Recovery
Commencing in 2009, 25% of the Region's water costs have been recovered from the area
municipalities by way of a fixed requisition The area municipal fixed cost apportionment is
based on their three -year historical water consumption The 2010 apportionment of Regional
fixed water costs is as contained in Schedule A
B) 75% Volumetric Cost Recovery
Prior to 2009, it was noted that the estimated water production methodology resulted in inflated
estimates which in turn resulted in sustained shortfalls in required revenues due to lower water
sales.. In 2009, a regression or trending model was used to estimate production to offset this
inflated estimate
Even with trending, actual flows in 2009 were considerably Tess than projected and the associated
impact is outlined in Table 1
Table 1
Volumetric Revenue $30,595,838
Recovery 75/25
Volumetric Revenue I $20,397,225
Recovery 50 -50
* February revenue estimated
2010 Rate
Table 2
Volumetric Flows
2009
2010 based on 19 yr Trend
2010 based on 2009 Actual
2010 based on 5 yr Trend
Projected
Actual ML
58,856
March 2009 — February 2010
Actual* 1 Deficit
7
$27,826,558
$18,529,422
The 2009 projected volumetric flow was based on an 18 year trending which resulted in a rate of
$0 472 per cubic meter (based on 75% volumetric).
Also included within Report CSD 57- 2009 /PWA 34 -2009, 2009 Water and Wastewater Rate
Setting and Cost Recovery Review, was an analysis for a five -year trend which resulted in an
estimated production of 60,223 ML (closer to the 2009 actual) This estimated production would
have resulted in a rate of $0.508 The 18 year trend, with the higher projected water production
was approved for the purposes of setting the 2009 volumetric rate
Should the 50% volumetric approach versus the 75% volumetric approach have been applied in
2009, a $1 9M volumetric based deficit would have occurred versus the approximate $2,8M
deficit (as shown in Table 1) However, the 75% volumetric based approach was approved to
support water conservation and water metering efforts
A number of options have been reviewed for setting the 2010 projected volume These options are
shown in Table 2 as well as Chart 2
Projected ML
64,896
62,554
58,856
55,099
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
($2,769,280)
($1,867,803)
Financial Risk
from 5 year trend
$3 7 million
$2.0 million
$0
The options identified in Table 2 above provide an overview of potential financial risk. The more
conservative forecast of projected flows (five year trending) would provide the Region less
financial risk in setting volumetric rates, Using the 19 year trend to establish 2010 rates
presents the highest financial risk and based on historical trends it is unlikely that these
projected flows would materialize and thus a revenue shortfall would occur While there is
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
always an element of fiscal risk in setting volumetric projected flows in rate setting, holding the
2010 projected volumes at the 2009 actual may present a more balanced approach for risk
mitigation
The level of risk applies to area municipalities as well While the 2009 production resulted in a
shortfall for the Region, local area municipalities may have experienced revenue shortfalls in
2009, each with a different level of exposure contingent upon their fixed apportionments and
their estimated sales. The practice of a combined fixed and volumetric methodology is common
to the area municipalities, and other than a purely fixed model, there is an element of risk for all
municipalities Each area municipality has the rate setting control in their jurisdiction to manage
their respective exposure to revenue shortfall For the Region's 25% fixed/75% volumetric rate
structure, the Region's financial risk can be mitigated by selection of a volumetric rate set to
more realistic projected flows.
Chart 3
80 000 000
75 000 000
70.000 000
�b `gym
`gym,
r
• 55 000 000
50 000.000
55 000 000
50,000 000
Actual Howe (2009)
-Comparison of Flows
Using 5 & 19 Year Ungar Regression
and 2009 Actual
Option
2010 Projected
2009 . Projected 19 Year Trend
64,896 ML / 62,555 ML
2005 Actual
60,792 ML
8
2005 Projected
70,705 ML
2009 Actual
68,856 ML
/
/ • ...a
° Option2
Actual
2009
58,856 ML
II
2005 2005 2007 2005 2009 20 20
Linear (29 Ysara) -- —Lirtaar ( 5eaar)
Option 3
2010
Projected
5 Year Trend
55,100 ML
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
Chart 3 illustrates the projected and actual flows for 2008 and 2009 The 2008 projected
estimate was based on an averaging of past estimates while the 2009 estimate was based on
the trending of 18 years of actual production While the 'gap' between estimated and
experienced was less in 2009 over 2008, a significant shortfall occurred again in 2009 Chart 3
illustrates 2010 estimates based on 19 and five year trends with projected flows being higher
based on the 19 year trend and substantially less for the five year trend
The 2010 projected flows outlined above in Table 3 thus result in the establishment of the
following potential rates
Table 3
2009 (actual)
2010 -- 19 yr. Trend (Option 1)
2010 Based on 2009 Actual (Option 2)
2010 — 5 yr Trend (Option 3)
RATE METHODOLOGY
Summary
Volumetric Flows
9
Projected
Flows (m
62,554,900
58,856,689
55,099,446
Volumetric
Rates
per m
$0 472
$0 504
$0.535
$0 572
Blended
Rate
Change
(Volumetric
& Fixed)
6,9%
11 9%
17 8%
In Report PWA 104- 2009 /CSD 131 -2009 Water and Wastewater Common Rate Setting and
Cost Recovery Review, it was recommended that each of the area municipalities be requested
to undertake a Memorandum of Understanding with the Region to review the potential for a
common rate methodology As of February 21, 2010, only three formal responses agreeing to
the undertaking have been received However, at the recent area Treasurer's meeting of
February 12, 2010 and a Chief Administrative Officer's meeting of February 26, 2010, it was
agreed verbally that all municipalities would participate subject to no financial burden to the area
municipalities. Staff believe that the study can be completed within the identified budget
allocation of $50,000 and thus will be proceeding with the study
In conclusion it is recommended that the budgeted water requisition for 2010 of $42,018,284 be
approved and that it be apportioned to the area municipalities based on a 75% volumetric /25%
fixed rate structure Additionally, that the Regional wastewater budget of $59,391,038 net be
approved and that it be apportioned to the area municipalities based on their three year average
historical flows.
Therefore, the combined effect of the water and wastewater rate change for 2010 would be 7 2%,
as seen below in Table 4
Table 4
Volumetric Flows
2010 -19 yr„ trend (Option 1)
2010 - Based on 09 actual flows (Option 2)
2010 - 5 yr regression (Option 3)
It is recommended that the uniform rate charged to the area municipality for actual consumption
of water be established at $0 535 per cubic metre (Option 2) This rate is based on financial risk
mitigation as water production less than that estimated will result in revenue shortfalls and it will
be necessary to recover these operating revenue shortfalls from capital infrastructure reserve
funds set aside for planned capital works. The consequence of this situation is the reduction of
the capital program and /or deferral of planned capital water projects.
Submitted by:
Ken6eth J Brothers, P. ng
Commissioner of Public Works
Approved by:
Mike Trojan
Chief Administrative
10
Combined
Water Water &
Rate Wastewater WasteWater
Increase Increase Increase
69% 30% 49%
11 9% 3 0% 7 2%
17.8% 3.0% 10.1%
Submitted by:
ohn Bergsm
Commissiga er of Corporate Services
PWA 24 -2010
March 9, 2010
CSD 35 -2010
March 10, 2010
This report was prepared by Debbie Williams, Senior Financial Analyst, Kyle Moate, Manager
Infrastructure Planning & Asset Management, Mike Janas, Associate Director, Water Operations
and reviewed by Betty Matthews- Malone, Director, Water & Wastewater Services, Dan Pilon,
Associate Director SQI, Gord Locker; Treasurer /Director Financial Management, Ken Brothers,
Commissioner of Public Works, and John Bergsma, Commissioner of Corporate Services
Schedule A
Schedule B
Area Municipality
Niagara Falls
1 Port Colborne
1 St. Catharines
1 Thorold
1 Welland
Fort Erie
Grimsby
Lincoln
NOTL
Pelham
West Lincoln
Total
Area
Municipality
Niagara Falls
Port Colborne
St. Catharines
Thorold
Welland
Fort Erie
Grimsby
Lincoln
NOTL
Pelham
West Lincoln
Total
2010/2011
Water Treatment Requisition
Annual Monthly
$2,615,478
$535,743
$3,096,898
$434,560
$1,269,716
$801,792
$460,791
$409,027
$493,837
$263,257
$123,472
$10,504,571
2010/2011
Wastewater Treatment
Annual
$11,954,011
$3,241,304
$17,995,405
$2,470,627
$9,263,595
$5,289,250 I
$3,200,422
$2,261,660
$1,829,357
$1,149,111
$736,298
$59,391,040
11
$217,956
$44, 645 1
$258,075 J
$36,213 f
$105,810 J
$66,816
$38,399
$34,086
$41,153
$21,938
$10,289
$875,380
Requisition
Monthly
$996,168
$270,109
$1,499,617
$205, 886
$771,966
$440,771
$266, 702
$188,472
$152,446
$95,759
$61,358
$4,949,254
PWA 24 -2010
March 9, 2010
CSD 3 5-201 0
March 10, 2010
Niagarayglq February 22, 2010
REPORT TO: Councillor Victor Pietrangelo, Chair
and Members of the Corporate Services Committee
City of Niagara Falls, Ontario
SUBMITTED BY: Finance
SUBJECT: F-2010-12
2010 Municipal Utility Budget
RECOMMENDATION
That Council approve the City's 2010 Municipal Utility Expenditures,
EXECUTIVE SUMMARY
BACKGROUND
F- 2010 -12
That Council establish final water and sewer rates for 2010 once the Region establishes
their rates for water and wastewater treatment.
The Municipal Utility budget establishes the expenditure levels and the user rates for the
year. The Municipal Utility Budgets consist of a water budget and a sewer budget, with
rates for both services being established independently. At the present time, the Region
of Niagara has not established its rates for 2010 for either the delivery of water or the
treatment of waste water. The Region has indicated that the method of billing water,
specifically as it relates to the relationship between costs collected on a fixed basis vs
volumetric basis has not been determined for 2010. As the decision made by the Region
may have a significant impact on rates charged by the City of Niagara Falls to its users, it
is prudent to wait until the Region decides before approving the final City rates. It is
expected that the regional rates will be finalized by March 31, 2010.
This report identifies for the Council, the City's costs of operating both the water distribution
system and the wastewater system.
The Municipality develops an annual operating budget for the operation of its water and
sewer distribution systems. The City is dependant upon the Region of Niagara for the
delivery of potable water and the treatment of wastewater. The City has responsibility to
bill its residents for the use of both water and wastewater. The user fees consists of both
a fixed and variable charge. The variable charge is based on the billings of the Region
while the fixed charges to residents is primarily the City's operating costs and transfer to
capital.
February 22, 2010 - 2 - F- 2010 -12
ANALYSIS /RATIONALE
As the Municipal Utility Budget consists of two independent parts, the water budget and the
sewer budget, the analysis will address each of these independently.
Water:
As indicated earlier the costs outlined in this report relate only to the distribution and
delivery costs of the City's distribution system and does not relate to the cost of water
purchases, since the Region has not established the method of billing the lower tier
municipalities as of this date.
The City water expenditures are outlined in attachment 1. The projected annual
expenditures for the City's water operation is projected to increase by 0.9% or $76,586 to
$8,645,057 from $ 8,568,471 budgeted in 2009. The main drivers of this cost increase
include an increased allowance for uncollected water accounts, an increase in the cost of
billing and collection by NPEI and training of City staff in accordance with increased
training standards set by the Province of Ontario. These cost increases are partly offset
by the reallocation of staff and benefit costs from the water budget to the sewer budget.
The Transfer to own funds, which is the Water contribution to the Capital Works Budget
will remain at $4.1M annually.
Sewer:
As indicated earlier the costs outlined in this report relate only to the distribution and
delivery costs of the City's distribution system and does not relate to the cost of wastewater
treatment. While the regional billing for waste water has been billed as a fixed amount for
the last three years, the Region's pending decision on the established method of billing
water to the lower tier municipalities will impact the volumetric sewer rate as well and staff's
intention is to address both volumetric rates at the same time.
The City sewer expenditures are outlined in attachment 2. The projected annual
expenditures for the City's water operation is projected to increase by 1.2% or $90,976 to
$7,733,667 from $ 7,642,691 budgeted in 2009. The main drivers of this cost increase
include the reallocation of staff and benefit costs from the water budget to the sewer
budget and an increase in the WSIB costs.
The Transfer to own funds, which is the Sewer Budget contribution to the Capital Works
Budget will remain at $4.245M annually.
Net Impact:
The net impact of the proposed increases in the City's responsibilities to the combined
water and sewer service charges is shown in chart 6. The expenditure increases proposed
in both water and sewer budgets result in an increase of 0.3% annually, or an increase of
$0.11 per month on a standard residential meter. The expenditure increases to existing
ratepayers are minimal offset by an increase in the number of meters billed.
TH
February 22, 2010 - 3 - F- 2010 -12
FINANCIAL /STAFFING /LEGAL IMPLICATIONS
The rates and fees will be brought back to Council for approval once the Region decided
on the method of billing the City for its water purchases. However, to facilitate the approval
of the Capital Budget, staff recommend that Council approve the Transfer amounts for both
water and sewer budgets as outlined above.
LIST OF ATTACHMENTS
Chart 1 - Utility - Water
Chart 2 - Utility - Sewer
Recommended by:
Approved by:
Respectfully submitted:
. e64 /tioic__
Todd Ha director of Financial Services
K. E. Burden, Executive Director, Corporate Services
I 42/) , —/ 11 0 1 \
Ken Tdddd, Chief Administrative Officer
CHART 1
Monthly Fixed Rate:
WATER: Expenditures:
Salaries and Wages
WSIB, Health, Safety, Wellness
Employee Benefits
Long Term Debt Interest
Materials
Personnel Development
Memberships and Conference
Advertising
Insurance
Utilities
Contracted Services
Financial Expenses
Long Term Debt Principal
Transfers to Own Funds
Internal Transfer
Less:
Water Stand Pipe [Tank Truck 72,000cm] Revenue
Water Transfer and Shut -off fees
Sundry Revenue
Fire Hydrants [Transfer from General Purposes Fund]
Transfer from Reserve
Net Service Expenditures
Weighted Number of Customer Accounts
Monthly Service Rate
2010
$ 1,754,784 $
15,000
404,763
15,968
382,292
25,000
10,800
82,380
22,500
1,336,098
159,000
110,239
4,100,000
226,233
8,645,057
55,024
25,000
90,000
170,024 $
8,475,033 $
32,235
$
$
21.88 $
2009 Change
1,760,126 -0.3%
61,000 -75.4%
422,430 -4.2%
21,967 -27.3%
372,292 2.7%
18,000 38.9%
#DIV /0!
27,486 -60.7%
70,867 16.2%
23,500 -4.3%
1,247,722 7.1%
131,200 21.2%
104,463 5,5%
4,100,000 0.0%
207,418 9.1%
8,568,471 0.9%
54,731 0.5%
25,000 0.0%
90,000 0.0%
#DIV /01
- 0.0%
169,731 0.2%
8,398,740 0.9%
32,008 0.7%
21.99 -0.5%
SEWER: CHART 2
Expenditures
Salaries and Wages $ 717,644 $ 678,533 5.8%
WSIB, Health, Safety, Wellness 71,000 23,500 202.1%
Employee Benefits 172,232 162,848 5.8%
Long Term Debt Interest 14,059 19,255 -27.0%
Materials 150,000 150,000 0.0%
Insurance 98,650 87,493 12.8%
Insurance Claims 1,000 #DIV/Ol
Contacted Services 1,855,000 1,842,500 0.7%
Financial Expenses 224,000 194,900 14,9%
Regional Fixed Charges #DIV /0!
Long Term Debt Principal 95,592 90,583 5.5%
Transfers to Own Funds 4,245,000 4,245,000 0.0%
Internal Transfers 89,490 148,079 - 39.6%
$ 7,733,667 $ 7,642,691 1.2%
Less:
Sewer Lateral Cleaning $ 30,000 $ 30,000 0.0%
OPG #DIV /0!
Sundry Revenue 0.0%
Transfer from Reserve - 0.0%
$ 30,000 $ 30,000 0.0%
Net Service Expenditures $ 7.703,667 $ 7,612,691 1.2%
Weighted Number of Customer Accounts 31,864 31,575 0.9%
Monthly Service Rate $ 20.20 $ 19.99 1.1%
Estimated Billable Revenue [3mos @ 2008, 9 mos @ 2009] $ 7,703,667 $ 7,612,691 1.2%
Sewer Rate percentage of Water Rate 92.3% 90.9% 1.6%
COMBINED SERVICE RATES:
Water Rate per month
Sewer Rate per month
Total Combined Rate per month
Increase per month
Increase per year
21.88 $
20.20
42.08 $
0.11
1.27
21.99
19.99
41.98
-0.5%
1.1%
0.3%
Niagaira all's
REPORT TO:
SUBMITTED BY:
SUBJECT:
W.Ya>ts`3 aiaa uGGki.i`,1,411411Y$311.41i■IiL 11 6ni 11 IIIY1hII III I dot 1i 111 ill 11 io
RECOMMENDATION
That Council deny the request to guarantee the line of credit, however, should Council
consider approval of the request that the approval be in keeping with the following
guidelines;
1. The am nt of cre guarantee b e City should be limited- te=tih� an - • rant
pay e to the stival on a nual basis (4.3 and Iimit-e o a maximum
riod of 5 ears. That Council approve the credit guarantee for the WFOL for
$400,000, subject to staff being satisfied with the WFOL financials.
EXECUTIVE SUMMARY
Councillor Victor Pietrangelo, Chair
and Members of Corporate Services Committee
City of Niagara Falls, Ontario
Chief Administrative Officer
CAO 2010 - 04
Winter Festival of Lights
Line of Credit
CAO- 2010 -04
April 12, 2010
h 1 I . L 11 h • I
2. The City's credit guarantee will only be utilized after the WFOL's $100,000 line of
credit has been fully utilized.
3. A annual review of the WFOL financial situation will take place prior to Council's
approval of future grants to the festival.
4. T r. \,;ll ; ghee at anytime with notiee-to-t-h-e-i-ntu6staJ
p ies. That the City pay down the debt $100,000 annually, through a reduction in
the WFOL grant, commencing in 2011.
5. WFOL must provide monthly financial statements to the City during the period of
time that the City is the credit guarantor.
6. The annual credit guarantee amount be reduced annually in keeping with the WFOL
improved financial situation.
The Winter Festival of Lights (WFOL) has requested the City guarantee a $500,000 line
of credit arranged with the RBC Royal Bank. At the Corporate Services Committee
meeting held on February 22, 2010, staff presented report CPS - 2010 -02 (attached) which
recommended that Council decline the request to guarantee the line of credit.
Council deferred the matter in order that staff could have further discussions with the
WFOL and their banking institution regarding this proposal.
April 12, 2010 2 CAO- 2010 -04
On March 1, 2010, a meeting was held with representatives from the WFOL and their
bankers. The WFOL restated their request for a line of credit or loan guarantee for up to
$500,000. The line of credit would cover WFOL's portion of Capital expenditures and
operational expenses for the new Rink at the Brink attraction. It should be noted that this
request is in addition to the grant that was approved by Council at their meeting held on
March 8, 2010 in the amount of $342,000.
BACKGROUND
In 2009 the Winter Festival of Lights constructed a new outdoor skating rink on Niagara
Park Commission land's called the "Rink at the Brink." With the assistance of both the
Festival and Provincial government, a capital investment of approximately $700,000 was
spent to construct this facility. The objective of this new venture was to increase
attendance at the festival, create media exposure for the City of Niagara Falls, promote
partnership with industry partners, create jobs and assist in the retention of existing jobs
in the tourist sector and offer additional programming for the visitors to the festival.
As a result of a cash flow issue resulting from the payment of the grants from the Federal
government, the Festival needs a line of credit to assist with paying outstanding bills, some
of which date back to the Fall of 2009.
The WFOL also has requested that the Niagara Parks Commission allow the festival to
leave the rink in its current state and location during the upcoming summer months. Under
the current arrangement, the WFOL will have to dismantle the rink and reinstate the
property to its original condition for the summer. The rink would then be reconstructed in
the Fall for the 2010 -2011 winter season. The estimated cost to carry -out this work is
estimated at $180,000 per year.
The Niagara Parks Commission, at their meeting held on March 19, 2010 turned down the
request by the Festival to leave the structure up for this year, thereby requiring the
expenditure of the $180,000 by the WFOL.
City staff delayed reporting back to Council pending the decision of the Niagara Parks
Commission. If the request to the Niagara Parks Commission had been approved, the
amount requested by the WFOL would have been reduced from $500,000 to $400,000.
In the meantime, staff has advanced a greater portion of the annual grant to the festival
to assist with their immediate cash flow. A six (6) month advance was provided. Usually
equal installments are provided on a monthly basis.
ANALYSIS /RATIONALE
At the meeting held on March 1, 2010, the WFOL outlined their request for financial
assistance in greater detail. Representatives from RBC Royal Bank were also in
attendance. The following is a summary of the WFOL and the RBC Royal Bank's position:
Winter Festival of Lights requires a guarantee from the City in order for the festival
to secure funds to cover capital and operational expenses related to the Rink at the
Brink. The WFOL is not able to secure the funds on their own.
RBC Royal Bank will adjust the existing line of credit from $75,000 to $100,000 and
adjust to the monthly interest rate to prime.
April 12, 2010 3 CAO- 2010 -04
• The credit could take the form of a short term loan or line of credit and be for a 5-
year period.
• The amount of the credit guarantee could be reduced on an annual basis if the
WFOL financial situation improves.
As a result of the meeting, staff has put together the following option for consideration by
Council. If Council is to consider granting the request, staff would suggest the following
guidelines be put in place;
The amount of credit guarantee by the City should be limited to the annual grant
payable to the festival on an annual basis ($342,000) and limited to a maximum
period of 5- years.
• The City's credit guarantee will only be utilized after the WFOL's $100,000 line of
credit has been fully utilized.
• A annual review of the WFOL financial situation will take place prior to Council's
approval of future grants to the festival.
• The City can withdraw their guarantee at anytime with notice to the interested
parties.
• WFOL must provide monthly financial statements to the City during the period of
time that the City is the credit guarantor.
• The annual credit guarantee amount be reduced annually in keeping with the WFOL
improved financial situation.
FINANCIAL IMPLICATIONS
As previously stated in Report CPS - 2010 -02, staff has concerns with respect to the risk the
City is assuming by guaranteeing the loan for the WFOL. The guarantee would allow
WFOL creditors, namely RBC Royal Bank to requisition the City to pay the outstanding
liabilities of the WFOL to a maximum of $500,000.
If Council considers approval of the request, staff would recommend that the liability not
exceed the current annual commitment to the festival, which is $342,000. This is the
amount of the annual grant and should the WFOL not be successful in this venture, the
City would simply withhold the grant for the next year to cover the loss.
CITY'S STRATEGIC COMMITMENT
Approval of the request from the WFOL would assist in the strengthening and promotion
of economic activity within the City.
LIST OF ATTACHMENTS
• CPS - 2010 -02
April 12, 2010
4 CAO- 2010 -04
Recommended and
Respectfully submitted:
KenVTodd, Chief Administrative Officer
R: \COUNCIL \2010 REPORTS \CAO - 2010 -04 - Winter Festival of Lights.wpd
NiagaraJalls
REPORT TO: Councillor Victor Pietrangelo, Chair
and Members of the Corporate Services Committee
City of Niagara Falls, Ontario
SUBMITTED BY: Corporate Services
SUBJECT: CPS - 2010 -02 Winter Festival of Lights: Line of Credit
RECOMMENDATION
That Council decline the request to guarantee a Line of Credit for the Winter Festival of
Lights
EXECUTIVE SUMMARY
The Winter Festival of Lights (WFOL) has requested the City to guarantee a $500,000
credit facility arranged with RBC Royal Bank. The City does not authorize a guarantee of
a credit facility for other organizations. The guarantee would place the City at risk to pay
WFOL creditors for any outstanding financial commitments to a maximum of $500,000.
Authorizing a guarantee for WFOL may encourage other organizations to make similar
requests to the City. The Council should decline the request as the City provides an
annual grant to WFOL.
BACKGROUND
On February 10, 2010 the CAO received a written request from Dino Fazio, General
Manager, Winter Festival of Lights (WFOL). The request was for the City of Niagara Falls
to guarantee a $500,000 credit facility arranged with RBC Royal Bank. The credit facility
would be a Line of Credit to cover WFOL's portion of capital expenditures and operational
expenses for the new Rink at the Brink attraction. The request included a Draft 2010 -11
Budget for the Winter Festival of Lights /Rink at the Brink. Council has previously received
WFOL's request for a 2010 annual grant of $342,000.
ANALYSIS /RATIONALE
CPS - 2010 -02
February 22, 2010
As per the March 31, 2009 Financial Statements, WFOL had a $75,000 Line of Credit for
operating expenses. Staff has requested an up -to -date financial statement. The new
credit facility amount of $500,000 is a significant increase. The new amount is
approximately 40% of WFOL 2010 -11 budget revenues and is approximately 50% of net
capital assets, which has likely cautioned RBC Royal Bank to demand a guarantor.
Mr.Fazio cited an example of a municipal guarantee of a credit facility for a local
organization. The example is the Niagara Wine Festival in St.Catharines. Staff has
confirmed that the City of St.Catharines acts as a guarantor for a $100,000 Line of Credit
for the Niagara Wine Festival. The Festival Board requested the financial assistance in
order to satisfy accumulated financial commitments. St.Catharines staff perform regular
monitoring duties to insure that the organization maintains the conditions of the agreement.
Since WFOL is a permissive grant recipient and that the guarantee of a credit facility would
put the City at risk, Staff recommends that Council decline the request.
However, the Council may want to consider an agreement with WFOL in order to grant the
request. The agreement could require certain financial performance conditions, similar to
the St.Catharines example. The agreement may also include the registration of a charge
on WFOL capital assets. As per the Notes to WFOL Financial Statements March 31,
2009, Net Capital Assets totalled $417,107 ; in addition WFOL acquired $565,170 Rink at
the Brink Capital Assets. Further, the agreement would stipulate that the amount of the
credit facility would not exceed the amount of the City's annual grant to WFOL, which is
currently $342,000 .
LIST OF ATTACHMENTS
O
The City has received many requests from worthy organizations for financial assistance.
The City does authorize permissive grants and fees for service, but does not guarantee the
credit facilities of such organizations. WFOL is a current recipient of an annual grant of
$342,000, and has already submitted their request for a 2010 grant.
The guarantee would place the City at risk, The guarantee would enable WFOL creditors,
namely RBC Royal Bank, to requisition the City to pay for any outstanding financial
commitments to a maximum of $500,000. This $500,000 liability would be in addition to
the annual grant to WFOL. Authorizing a guarantee of a credit facility for WFOL may
encourage other organizations to make similar requests to the City.
Approved by:
Respectfully submitted:
KB
February 22, 2010 -2 - CPS - 2010 -02
FINANCIAL/STAFFING /LEGAL IMPLICATIONS
Feb.10 /10 Letter from Dino Fazio, General Manager, Winter Festival of Lights
Oct.28/09 2010 Municipal Grant Application from Winter Festival of Lights
Schedule of Rink at the Brink Capital Assets
/ati4.04
K. E. Burden, Executive Director, Corporate Services
L
Ken Todd, Chief Administrative Officer
February 10, 2010
Mr. Ken Todd, CAO
The City of Niagara Falls
City Hall, P.O. Box 1023
4310 Queen Street
Niagara Falls, ON L2E 6X5
RE: Credit Facility Guarantee
Dear Ken:
Further to our meeting of February 8 the Winter Festival of Lights has arranged for a $500,000
credit facility with RBC Royal Bank to cover its portion of capital expenditures as well as
operational expenses for the Rink at the Brink. However, the bank requires a guarantee from the
City of Niagara Falls in order for the Festival to secure these funds. While the Festival has never
made such a request of the City in the past, its requirement is not unique as the Niagara Wine
Festival in St. Catharines has been required to secure a similar guarantee for its credit needs.
To put in plainly, without the City guarantee, the Festival would not be able to secure the funds
and would thus be forced into dire financial consequences and would not be able to maintain its
future operations.
As requested, please find attached copies of the Winter Festival of Lights 2010 -11 projected
budget. Please note that it has not yet been vetted by the WFOL Finance Committee nor
approved by the WFOL Board.
While we are expecting a near break -even result, there are several assumptions detailed within
the budget that could alter its projections.
If you have any questions, please feel free to contact me 905 374 -1616 x. 46.
Sincerely,
WINTER FEST AL OF LIGHTS
Dino Fazi
General anager
Encl.
e
NIAGARA FALLS ONTARIO +CNADA
cc: Joe Mizsk, WFOL Chair
5400 Robinson Street, 2nd Floor
Niagara Falls, ON L2G 3X4
Tel: 905 -374 -1616 e Fax: 905-374-4683
Email :Info @wfol.com ^ WFOL,com
2010 -11 WINTER FESTIVAL OF UG
(Fiscal Year - Ending March 31, 2011)
REVENUE
Public Funding
Celebrate Ontario 2010
City of Niagara Falls
Employment Ontario (JCP)
Ontario Tourism (OTMPC - TEMPP)
TOTAL - Public Funding
Sponsorship & Advertising
Sponsors
Rink Advertisements
Co -op Marketing/WFOL.com Advertisements
WFOL Magazine Advertisements
TOTAL - Sponsorship & Advertising
Operational Funding
Donations, Events, Merchandise & Other
RATB Admissions (net of taxes)
TOTAL - Operational Funding
1
TOTAL REVENUES 1
1
Cash Summary of Operations 1
Total Revenues 1
Total Expenses'
Surplus/(Deficit) Before Depreciation'
Net Cash Before Capital Expenditures
Deduct: Capital Expenditures
Net Cash Position, End of Year
FITS / RINK AT THE BRINK BUDGET
$
$
$
$
$
WFOL
ESTIMATE
342,000.00
45,000.00
387,000.00
186,400.00 1 $
$
35,000.00 $
60,000.00 $
281,400.00 $
209,525.00 $
- $
209,525.00 1 $
877,925.00 1 $
877,925.00 $
830,321.88 1 $
47,603.12 1-$
1
$ 47,603.12 1-$
$ 44,037.00 1 $
1
$ 3,566.121-$
RATB
ESTIMATE
$
$
$
$
- I$
1
I
20,000.00 $
30, 000.00 1 $
- I$
- I$
50,000.00 $
13,000.00 1 $
284,950.00 1 $
297,950.00 1 $
1
347,950.00 1 $
1
1
347,950.00 1 $
359,567.00 1 $
11,617.00 + $
11,617.00 1 $
- 1$
1
11,617.00 14
WFOL / RATB
COMBINED
342,000.00
45,000.00
387,000.00
206,400.00
30,000.00
35,000.00
60, 000.00
331,400.00
222, 525.00
284,950.00
507,475.00
1,225,875.00
1,225,875.00
1,189,888.88
35,986.12
35,986.12
44,037.00
8,050.88
2010 -11 WINTER FESTIVAL OF LIGHTS / RINK AT THE BRINK BUDGET
(Fiscal Year- Eroding March 31, 2011)
OPERATING EXPENSES
Administration
_Payroll
Marketing
Activities /Events /Operations
Light & Display Maintenance
Debt Repayment/Interest Fees
Contingency
TOTAL OPERATING EXPENSES $
I
CAPITAL EXPENDITURES 1
Capital Expenditures 1 $
TOTAL CAPITAL EXPENDITURES' $
I
ASSUMPTIONS
WFOL
ESTIMATE
98,375.00 $
323,503.00 $
105,003.45 $
140,436.49 1 $
142,203.94 1 $
10,800.00 1 $
10,000.00 $
830,321.88 $
44,037.00 $
44,037.00 1 $
RATB WFOLIRATB
ESTIMATE COMBINED
25,559.00 $ 123,934.00
100,026,00 $ 423,529.00
50,000.00 $ 155,003.45
120,982.00 $ 261,418.49
- $ 142,203.94
48,000.00 $ 58,800.00
15,000.00 $ 25,000.00
359,567.00 $ 1,189,888.88
- $ 44,037.00
- 1 $ 44,037.00
I
1 1
I 1 1
WFOL secures Canadian Jr. Hockey Exhibition Game in December 2010 (City assistance will be required to secure ice time).
NPC approves extension of WFOL operations to January 31, 2011.
NPC allows the Rink at the Brink facility to remain installed rather than tom down after the 2010 -11 season.
Provincial and municipal funding levels remain the same as 2009.
October 28, 2009
NIAGARA tival Nights
Mr. Todd Harrison, Director of Finance
Corporate Services Department
The City of Niagara Falls
4310 Queen Street, P.O. Box 1023
Niagara Falls, ON L2E 6X5
RE: 2010 Municipal Grant Application
Dear Todd:
First, I wanted to thank you for allowing us an extension to the submission deadline.
5400 Robinson Street, 2nd Floor
Niagara Falls, ON L2G 3X4
Tel: 905 - 374 -1616 • Fax: 905 -374 -4683
Email: info @wfol,com • WFOL,com
With the 2009 Winter Festival of Lights fast approaching we are in hyper- operational mode and
suffice it to say, extremely busy. Nevertheless, I enclose herein for your review the 2010 Winter
Festival of Lights Municipal Grant Application.
The Winter Festival of Lights Board respectfully requests 2010 City of Niagara Falls funding in
the amount of $342,000, which is a 0% increase from our 2009 approved municipal grant. I
would like to point out that this represents a significant decrease in the percentage of the
Festival's budget that is derived from municipal funding. As it stands, City funding would
decrease from 35% of the Festival's budget in 2009 to less than 25% in 2010.
That said, the support received from the City of Niagara Falls is still a integral part of the Winter
Festival of Lights' ability to continue to be a powerful driver of the local economy in the winter
months while enhancing the social fabric of the community.
Sincerely,
WINTER EESTIV: Ii OF LIGHTS
Encl.
Dino Fazi
General anager
cc: Joe Miszk, WFOL Chair
Corporate Services Committee, City of Niagara Falls
Dean Iorfida, City Clerk
Miegairg
4310 Queen Street P.O. Box 1023
Niagara Falls, Ontario L2E 8X5
TEL. (905) 356 -7521 Ext. 4286
FAX (905) 356 -2016
1
APPLICATION FOR GRANT
DEADLINE FOR SUBMISSION - October 23. 2009
Section one:
1. Name and address of organization:
Name: Winter Festival of Lights
Address: 5400 Robinson Street. 2nd Floor
Postal Code: L2G2A6 Telephone Number: 905 - 374 -1616 x 46
2. Name of contact person within organization:
Name: Dino Fazio
Office /position held: General Manager
Address: 5400 Robinson Street, 2nd Floor
Postal Code: L2G2A6 Telephone: Home: 905 - 329 -2334 Office: 905- 374 -1616 x 46
3. Under what classification are you requesting a grant?
Complete section as indicated:
A CAPITAL EQUIPMENT B PROJECT FUNDING
C SEED FUNDING ® SPECIAL, FUNDING J
4. Amount of grant requested:_1342,000
5. Amount of any previous grant received: $342 000
6. Reason for requesting a grant:
Municipal
Grant Application
The Winter Festival of Lights has grown tremendously over the past five years, in both the quantity and quality
of its illuminations and events, and Its relevance to the local tourism community and residents alike. It is
responsible for attracting visitors to Niagara Fails during the local tourism Industry's off- season; enhancing the
economic impact of off - season tourism on the community; promoting activities that will enhance the
2
Municipal
Grant Application
participation of residents and pride in their community; and providing local residents opportunities for a
healthy, lifestyle through active participation and volunteering.
Section two:
Classification `D' Request for Special Funding or Operational Funding
Where the service can be provided without City support under normal circumstances but because of
unforeseen or extraordinary circumstances, a special or operational funding may be required.
(1) Amount of request $ 342,000,,.
(II) Provide details of operational funding needed,
The municipally- granted funds received by the Winter Festival of Lights are used for operational expenses
Including wages, rent, insurance, utilities and so forth. Whenever possible, the Festival attempts to secure
sponsorship or other revenue sources to offset expenses.
(iii) Describe your organizations' fund raising plans.
The Winter Festival of Lights endeavors to raise funds from a variety of soures. It employs a Manager —
Sponsorship & Sales, to actively pursue corporate sponsorships, as well as website, magazine and rink board
advertisements. Collectively, this is expected to generate nearly 25 percent of the Festival's 2010 budget.
Whenever feasible, it applies for funding from a variety of public sources including: Ontario Tourism Marketing
Partnership Corporation TEMP Program, Employment Ontario Job Creations Program, Celebrate Ontario 2009;
The Ontario Trillium Foundation; and the federal Marquee Tourism Events Program.
Lastly, the Winter Festival of Lights generates revenues by holding fundraising events, through donations at
Dufferin Islands and Rink at the Brink ticket sales. Collectively, this should generate over 45 percent of the
Festival's 2010 budget.
Section three:
1. Financial data required. Attached If No,
Yes /No Date Available
A. Financial Statement for prior
year including donations, fund
raising events, and all
expenditures including salaries,
administration, rental, equipment,
travel, etc,
B. Budget for current year including
detailed estimated expenditures
and revenue.
YES
YES
i" iaig itset'itVg
Section four:
3
1. Names and addresses of executive officers, directors or board of managem
Andrew Bilous, Director — 3719 Gunning Drive, Niagara Falls, ON 12G 6L5
Jack Custers, Director 7170 MacLeod Rd, Niagara Falls, ON L2E 1H4
Jim Diodati, Director — 6542 January Dr., Niagara Falls, ON L2J 4J4
Dave Gillies, Director -7127 Stanley Ave, Niagara Falls, ON L2G 7K2
Kevin Harding, Director - -•
John Kernahan, Director -7400 Portage Rd., Niagara Falls, ON L2E 612
Joe Miszk, Chair— 8921 Sodom Rd., Niagara Falls, ON L2E 656
Joyce Morocco, Director— 5400 Robinson St., Niagara Falls, ON 12G 2A6
Wayne Thomson, Director— 6700 Failsview Blvd., Niagara Falls, ON L2G 3W6
Bob VanKleek, Director — 829 Richmond St., London, ON N6A 3H7
Michael Yerich, Director -5339 Murray Hill, Niagara Falls, L2G 2J3
Serge Felicetti Non- Voting, Director -4310 Queen St., Niagara Falls, L2E 2M1
Sarah Wood, Non - Voting, Director 7400 Portage Rd., Niagara Falls L2E 6T2
2. Describe the general aims and function of your organization, the geographic
brief history of the organization. Attach Constitution, if available.
The mission of the Winter Festival of Lights is to produce the foremost illumination
while organizing events that will appeal to both locals and visitors to Niagara Falls.
Its mandate is to: Attract visitors to Niagara Falls during the local tourism industry's
economic impact of off - season tourism on the community; Promote activities that
of residents and pride in their community; and Provide opportunities for a healthy,
through active participation and volunteering.
Municipal
Grant Application
ent.
area of operation and a
festival in North America
off - season; Enhance the
will enhance the participation
lifestyle to local residents
The Winter Festival of Lights includes over 100 animated displays and 3 million lights found along the Niagara
Parkway arid within the City of Niagara Falls. Its calendar of festive events includes: WFOL Opening Ceremonies
which includes one of Canada's only appearances by Walt Disney® World Resort characters like Mickey & Minnie
Mouse; weekly Fireworks over the Falls; Sparkle lighting Awards; Christmas Concert Series; Industry Lights
Luncheon Fundraiser; CY ItC Candy Cane Lane 5k Race & Fun Run; Volunteer Recruitment BBQ and Volunteer
Appreciation Party; and a fundraising Golf Tournament.
The Festival is an active promoter of both the benefits of volunteering and volunteer opportunities to the
community. We offer numerous opportunities to hundreds of local residents. In fact, 150 people volunteer
2800 hours to the 2008 Winter Festival of Lights. In particular, the Festival offers many opportunities to 1)
senior citizens—as part of a physically, socially and mentally active lifestyle and 2) students — as a method of
learning new skills, putting their existing education to real -world experiences, and networking within the
community.
Nilmig iernag
4
Municipal
Grant Application
We provide internship opportunities to both high school students and post - secondary students through their
co -op education departments, event management and tourism programs. In fact, we currently have both a
Westlane High School and Niagara College intern.
In the early 1980s, a group consisting of the Niagara Falls Canada Visitor and Convention Bureau (now Niagara
Falls Tourism), the City of Niagara Falls, The Niagara Parks Commission and numerous local businesses banded
together to discuss potential opportunities that would stimulate wintertime tourism to Niagara Falls at a time
when it was nearly non - existent. At that time, hotel occupancy rates hovered around 11 percent and many
tourist attractions closed for the season. Having seen the success experienced by the lights festival in Niagara
Falls, NY, it was decided that a similar event would also fare well in Niagara Falls, Ontario. As a result, the
Winter Festival of Lights was launched in 1983.
That year approximately 250,000 people and 35 motor coaches visited Niagara Falls during the Winter Festival of
Lights. Since then, it has grown to become Canada's largest lights festival and one of the premiere illumination
festivals in North America.
In 2008, it attracted over 1 million visitors including 749 motor coaches, and the Niagara Falis tourism industry
now experiences hotel occupancy rates that hover near 40 percent during the Winter Festival of Lights time
period.
During the 2008 event, 17,575 vehicle exit surveys were conducted at Dufferin islands. From those, we
extrapolated that Festival attendees primarily reside within Ontario (Niagara Region - 53% of which nearly 60%
are from Niagara Falls; 19% - Greater Toronto Area; Outside Niagara /GTA — 12%). The remainder hail from the
United States (12 %), Canada - outside Ontario (2 %) and outside North America (2%).
Demographically speaking, 74 percent are between 30 — 69 years old with a large portion of the remainder being
children under the age of 12 years old. This is consistent with the Festival being recognized as a wintertime,
family tradition for many.
in 1992, the Winter Festival of Lights was registered as an Ontario, not- for- profit Corporation. That same year, a
marketing relationship was launched with Disney Canada Inc. that introduced the infamous Enchantment of
Disney° displays.
Thanks in part to a staff with over 45 years of business and event management experience; a strong Board of
Directors consisting of community leaders including members of City Council; and hundreds of dedicated and
long- serving volunteers, the Winter Festival of lights has been successfully operating for over 26 years.
During that time, it has been honoured by a variety of festival and travel tourism organizations, and won many
awards. A brief list includes:
• North American Bus Association — Number One Event in Canada (1999)
O Attractions Canada — Award for Best Cultural Event (2002)
• WlnterLights Celebrations Competition (winter version of Communities in Bloom) Best Overall
Tourism /Promotion Award citing the Winter Festival of Lights(2005)
O WinterLights Celebrations Competition (winter version of Communities in Bloom) — Winner in the
50,000 +population category (2006)
NiliagoirajWiyF
Last operating year
Current year
Next year project
5
• Festivals & Events Ontario - Best Website and Official Printed Programme in the $500,000+ budget
category (2005)
• Festivals & Events Ontario - Best Merchandise /Souvenir Idea in the $500,000+ budget category (2006)
• Festivals & Events Ontario -• Best Newspaper Insert in the $500,000+ budget category (2007)
o Festivals & Events Ontario - Best Overall Marketing Campaign in the $500,000+ budget category (2006
& 2007)
U Niagara Falls Tourism Misty Awards for Progressive Development (2007)
• Festivals & Events Ontario - Top 50 Event (2005 - 2007) expanded to Top 100 (2008 - 2010)
✓ Winterlights Celebrations - City of Niagara Falls working with the Winter Festival of Lights and other
community partners, earned first place in the 50,000+ population category (2007); and
• American Bus Association'-Top 100 Internationally Known Events (2007 -- 2010)
3, Provide statistics relative to the population served.
Total Age Percentage from
number range Niagara Falls
SEE QUESTBON #2
Municipal
Grant Application
4, How does your organization assess the community need and how will the resident of Niagara
Falls benefit?
In its simplest terms, the Winter Festival of Lights helps fill the basic needs for positive social interaction,
physical health, culture and economic development, the specifics of which are discussed in detail in the
following question.
5. What service does your organization provide specifically for the residents of Niagara Fails?
The Winter Festival of Lights will benefit the community and its residents in the following manner:
Enhanced success for students and learners The Winter Festival of Lights has hundreds of volunteer
opportunities for students from which they can gain real -world experience, learn new skill sets, earn their
Community Service Hours, and network with potential future employers. Additionally, the Festival began a
student bursary program in 2008 distributing $200 bursaries to 10 very deserving students residing In Niagara
Falls. Lastly, the Festival provides internships for both secondary and post - secondary students.
Healthier and more physically active residents - Along with the numerous, active volunteer opportunities the
Festival offers residents, it also promotes an active wintertime lifestyle by hosting such events as the CYTEC
Candy Cane Lane 5k Race & Fun Run.
6
Municipal
Grant Application
Enhanced employment and economic potential for workers and families — A 2003 Festivals & Events Ontario
Economic Impact Study revealed that the Winter Festival of lights had an economic impact of $60.4 million
upon the local economy and was responsible for the creation and /or retention of over 2,000 jobs. Additionally,
the Rink at the Brink will be directly responsible for the creation of six (EFT) positions and its forecast modeled
by the Ontario Ministry of Tourism conservatively estimates it will have a further $3 million economic impact.
More effective volunteers and more people engaged in their community The Winter Festival of Lights has an
extensive volunteer base and a superior training program; as a result, many other organizations, including the
City of Niagara Fails, look for and are provided assistance from the Festival for volunteer recruitment.
The Festival also works with and provides assistance to, not - for -profit and charitable organizations Including
Project SHARE, Niagara Falls International Marathon, Rotary Club of Niagara Falls — Sunrise, Celebrate Old
Downtown, Boys & Girls Club, Big Brothers Big Sisters (new initiative to begin this year), Niagara Falls Tourism,
The Niagara Parks Commission and the City of Niagara Falls (Parks, Recreation & Culture Department primarily)
by providing them with equipment, materials, manpower, marketing support, and managerial advice for
numerous events, including Communities in Bloom, Rotary RlbFest, Niagara Falls Santa Claus Parade, Oylmpic
Torch Run and New Year's Eve Niagara Fails.
Additionally, the Festival supports opportunities for charitable organizations, like Project SHARE, to generate
revenues and food donations. For Instance, the CYTEC Candy Cane Lane 5k Race & Fun Run annually raises
thousands of dollars in monetary and food donations for the Project SHARE Christmas Basket Program.
Without this support, it could be argued that these organizations would look to the City of Niagara Falls for
support.
6, Include which City -owned facilities, if any, are being used by your organization.
No City -owned facilities are expected to be directly utilized by the Winter Festival of Lights in 2010.
Please forward any additional information which you feel may be of assistance In considering your
request (Attach pages if required).
As you may have heard, the Winter Festival of Lights is launching an outdoor ice skating facility to be known as
the Rink at the Brink, It will offer the experience of public ice skating in an iconic setting similar to the Rink at
Rockefeller Plaza in New York City yet more dramactic in that it provides the breathtaking experience of the
mighty cataracts with its stunning view and mighty roar! Located a stone's throw from the brink of the
Horseshoe Falls, it provides a magnificent location for viewing both the American and Horseshoe Falls. The
capital expenditures for this project are pegged at $700,000. It is being funded through provincial and federal
grant programs and the Festival's credit facilities.
As you undoubtedly realize, the tourism industry In Niagara Falls is largely driven by the summer season with
hotel occupancy rates averaging almost 85% over the months of June, July and August, and corresponding
average monthly hotel room revenues of $56.3 million. In comparison, hotel occupancy rates from November
1'1ta a9rap?!Ja
7
Municipal
Grant Application
to February 2009 averaged nearly 39% with average monthly hotel room revenues of $18.6 million (Smith Travel
Research March 2009).
The highs and lows of the local tourism industry were excruciatingly apparent in 2008 with Niagara Falls posting
the highest monthly occupancy rate In Ontario of 91.1% in August and the lowest rate of 26.4% in January. And
before the establishment of the Winter Festival of Lights the disparity between the summer and winter tourism
season was larger still with winter occupancy levels hovering around 11% in the Festival's inaugural year. As a
result, local tourism operators recognize the vital role the Winter Festival of Lights plays in attracting wintertime
tourism.
The Rink at the Brink's objectives are to: 1) Increase attendance at the Winter Festival of Lights; 2) improve its
current event programming and enhance its day time programming; 3) Create significant media exposure
opportunities for winter time Niagara Falls; 4) Provide a gated attraction that will allow the Festival to partner
with the local tourism industry to create and promote packages; 5) Increase tourism visitation and tourist
expenditures in Niagara Falls; 6) Create jobs and retain existing positions within the tourism industry during the
slower winter season; and 7) Enhance the Festival's operational effectiveness and its ability to deliver increased
programming to the community.
While the Festival is still largely dependent upon public funding, the Rink at the Brink will be sustainable through
self - generated revenues derived from ticket sales, skate and helmet rentals, private corporate functions,
ticketed events, rink board advertisements and sponsorships.
Admission to the Winter Festival of Lights is free which makes the prospect of creating value -added packages
(Le, tickets plus accommodations) with local tourism operators nearly non - existent (as we have yet to discover
how to provide a potential customer with more value than free). However, the Rink at the Brink will provide
local accommodation, restaurant and receptive tour operators the opportunity to create and market a variety of
packages. Furthermore, it is expected to attract significant media attention due to its iconic stature, which will
place a positive light upon visiting wintertime Niagara Falls, and just as importantly, it will justify ongoing and
increasing investment from all stakeholders in the Winter Festival of Lights and wintertime marketing.
Just as importantly, the Winter Festival of Lights and Rink at the Brink are expected to be a highlight attraction
trumpeted by the Niagara Convention and Civic Centre as 70 percent of Its business is predicted to occur In the
off- season.
Longer term, the Rink at the Brink will allow the Winter Festival of Lights to expand its organizational capacity
and is expected to extend the Winter Festival of Eights beyond its early January end date.
7. All groups may be expected to make a presentation to the Corporate Services Committee Meeting.
Check here if your organization would like to make a presentation to the Corporate Services Committee
Yes J No
check list to help? vau complete yoaay aoniicatio
1. A fully completed grant application form signed by and authorized officer.
2. Fill in and return the page that is relevant to your required classification.
o A Capital equipment
o B Project funding
o C Seed funding
D Special funding
3. Financial statements for the prior year.
4. Budget for the current year.
D ate our
Submitted
4310 Queen Street P.O. Box 1023
Niagara Falls, Ontario L2E 6X5
TEL. (905) 356 -7521 Ext. 4286
FAX (905) 356 -2016
Signature
se-1 ,, mA
Office o'r Position
Municipal
Grant Application
2010 COMBINED WINTER FESTIVAL OF
(Fiscal Year - Ending March 31, 2011)
REVENUE
Public Funding
Celebrate Ontario 2010
City of Niagara Falls
Employment Ontario (JCP)
Marquee Tourism Events Program (MTEP)
Ontario Tourism (OTMPC - TEMPP)
Ontario Trillium Foundation
TOTAL - Public Funding
Sponsorship & Advertising
Sponsors
Rinkboard Advertisements
WFOL.com Advertisements
Co -op Marketing Funds
WFOL Magazine Advertisements
TOTAL - Sponsorship & Advertising
Operational Funding
Donations, Events, Merchandise
RATB Admissions (net of taxes)
TOTAL - Operational Funding
TOTAL REVENUES
Cash Summary of Operations
Total Revenues
Total Expenses
Surplus /(Deficit) Before Depreciation
Net Cash Before Capital Expenditures I $
Deduct: Capital Expenditures l $
Net Cash Position, End of Year
LIGHTS / RINK
WFOL
ESTIMATE
$ 21,000.00 1 $
$ 342,000.00 1 $
$ - I$
$ - 1$
$ 45,000.00 1 $
$ - 1$
$ 408,000.00 $
186,400.00 I $
- $
12,500.00 $
24,500.00 1 $
60,000.00 $
283,400.00 I $
$ 191,562.50 $
$ - I$
$ 191,562.50 $
$ 882,962.50 $
$ 882,962.50 1 $
$ 853,454.68 1 $
$ 29,507.82 1 $
29,507.82 $
49,737.00 $
4 _ 20,229.18 1 $
AT THE BRI
RATB
ESTIMATE
20, 000.00
30,000.00
50,000.00
14,000.00
463,124.13
477,124.13
NK BUDGETS
WFOL /RATB
COMBINED
$ 21,000.00
$ 342,000.00
$
$
$ 45,000.00
$
$ 408,000.00
$ 206,400.00
$ 30,000.00
$ 12,500.00
$ 24,500.00
$ 60,000.00
$ 333,400.00
$ 205,562.50
$ 463,124.13
$ 668,686.63
527,124.13 1 $ 1,410,086.63
527,124.13 1 $ 1,410,086.63
505,427.81 1 $ 1,358,882.49
21,696.32 1 $ 51,204.14
21,696.32 1 $ 51,204.14
8,000.00 1 $ 57,737.00
1
13, 696.32 1 4 6,532.86
2010 COMBINED WINTER FESTIVAL OF LIGHTS / RINK AT THE BRINK BUDGETS
(Fiscal Year - Ending March 31, 2011)
RATB j WFOL / RATB
ESTIMATE 1
28,300.00 1 $
176, 026.61 1 $
100,000.00 1 $
191,101.20 1 $
- 1$
10,000.00 1 $
505,427.81 $
(OPERATING EXPENSES
Administration
Payroll
Marketing
Activities /Events /Operations
Light & Display Maintenance
Contingency
TOTAL OPERATING EXPENSES
CAPITAL EXPENDITURES
Capital Expenditures
Contingency
1$
1$
TOTAL CAPITAL EXPENDITURES' $
WFOL
ESTIMATE
107, 565.00
323,066.05
105,003.45
151,897.24
155, 922.94
10,000.00
853,454.68
COMBINED
135,865.00
499, 092.66
205, 003.45
342, 998.44
155, 922.94
20, 000.00
1,358,882.49
49,737.00 1 $ 8,000.00 1 $ 57,737.00
- 1$ - 1$
49,737.00 1 $ 8,000.00 1 $ 57,737.00
The Economic Impact of Rink at the Brink:
Impact of Domestic & International Tourists
in Niagara Region in 2009
This report was generated by
the Ontario Ministry of Tourism's TREIM model.
May 5, 2009
Note: The Ministry of Tourism does not take any responsibility for inputs that the user has
provided, nor for the interpretation of the results.
1. Introduction
This report provides an estimate of the economic impact that Rink at the Brink:
Impact of Domestic & International Tourists is expected to have on Ontario's
economy, in terms of Gross Domestic Product, employment and taxes
generated. The analysis is based on the following information the user has
provided to the MTR's Tourism Regional Economic Impact Model:
Number of Visitors for Activity (or Event) of Type Any Outdoors
Overnight
Origin
Ontario
Rest of Canada
USA
Overseas
!Total
Same Day
Total Number of Percent of
Visitors Visitors' Origin
38,160 70.00 %I
0 0.00 %1
9,5401 65.00 %1
01 0.00 %1
147,700
Given that the detailed breakdown of spending by the above visitors on category,
such as transportation, accommodation, etc. is not available from the user, the
TREIM utilized the average expenditure of visitors in Niagara Region with
characteristics closest to those provided by the user from Statistics Canada's
2004 Canadian Travel Survey and the International Travel Survey to generate
the detailed spending as followings (in dollars ):
Travel Services
Public Transportation
Private Transportation - Rental
Private Transportation - Operation
Local Transportation
Accommodation
Food & Beverage - At Stores
Food & Beverage - At Restaurants /Bars
Recreation & Entertainment
Retail - Clothing
Retail - Other
Total
1
Percent of
Visitors' Origin
30.00%
0.00%
35.00%
0.00%
Average Length of
Stay (nights)
$ $49,287
$20,788]
$616,3781
$16,7491
$294,9441
$230,5481
$715,392
$599 ,944
$291,251
$220,0711
$3,055, 3521
The user also has selected the following parameters:
• The visits take place in Niagara Region in 2009
• The impact is to be shown for Niagara Region and for Rest of Ontario
• Induced impacts of household spending are included
• Induced impacts of business investment are included
• The economic environment is as follows:
Custom
Ontario Real GDP
( %change)
Ontario CPI
( %change)
Ontario Population
( %change)
Ontario
Unemployment Rate
Government of
Canada 3 month T-
Bill Rate
2005
2.84%
2.19%
1.14%
6.59%
2.72%
2006
1.89%
1.76%
1.02%
6.27%
4.03%
2007
1.66%
2.53%
0.69%
6.52%
4.45%
2008
2.11%
1.84%
0.78%
6.38%
4.78%
2009
2,73%
1.96%
0.87%
7.98%
2.77%
2. Summary of Findings
Table 1. Economic Impacts of Rink at the Brink: Impact of Domestic &
International Tourists in Niagara Region in 2009 (in dollars )
Total Visitors' Spending
Gross Domestic Product (GDP)
Direct
Indirect
Induced
Total
Labour Income
Direct
Indirect
Induced
Total
Employment (Jobs)
Direct
Indirect
Induced
Total
Direct Taxes
Federal
Provincial
Municipal
Total
Total Taxes
Federal
Provincial
Municipal
Total
3
Niagara Region
$ 3,055,352
$ 1,347,653
$ 278,635
$ 215,522
$ 1,841,810
$ 810,873
$ 195,089
$ 135,567
$ 1,141,529
27
4
3
33
$ 391,466
$ 378,562
$ 2,451
$ 772,480
$ 572,746
$ 469,547
$ 4,816
$ 1,047,110
Rest of Ontario f
$ 117,416
$ 77,062
$ 164,044
$ 358,522
$ 81,723
$ 52,464
$ 105,890
$ 240,076
1
2
5
$ 27,618
$ 19,528
$ 241
$ 47,388
$ 81,465
$ 59,065
$ 11,612
$ 152,143
2
Table 2. Economic Impacts of Rink at the rink: Impact of Domestic &
International Tourists in Niagara Region on GDP by industry ( in dollars )
Industry
Crop and Animal Production
Forestry, Fishing and Hunting
Mining and Oil and Gas Extraction
Utilities
Construction
Manufacturing
Wholesale Trade
Retail Trade
Other Transportation and
Warehousing
Ground Passenger Transportation
(excl. Rail)
Information and Cultural Industries
Other Finance, Insurance, Real
Estate and Renting and Leasing
Car Renting and Leasing
Owner Occupied Housing
Professional, Scientific and
Technical Services
Other Administrative and Other
Support Services
Travel Agencies
Education Services
Health Care and Social
Assistance
Arts, Entertainment and
Recreation
Accommodation Services
Food & Beverage Services
Other Services (Except Public
Administration)
Operating, Office, Cafeteria, and
Laboratory Supplies
Travel & Entertainment,
Advertising & Promotion
Transportation Margins
Non - Profit Institutions Serving
Households
Government Sector
Net Indirect Taxes on Production
Total
Impact on Niagara Region Impact on Rest of Ontario
Direct GDP
$ 5,124
$ 32
$0
$0
$0
$ 34,406
$ 33,821
$ 148,335
$ 54,641
$ 10,838
$ 13,196
$0
$ 11,424
$0
$0
$0
$0
$ 1,030
$0
$ 204,007
$ 242,108
$ 209,738
$ 2,957
$0
$0
$0
$ 16,508
$ 19,983
$0
$ 1,347,653
4
Total GDP
$ 9,158
$ 503
$ 1,090
$ 28,665
$ 30,698
$ 57,546
$ 59,057
$ 200,935
$ 73,563
$ 14,011
$ 36,974
$ 93,727
$ 13,399
$ 42,413
$ 34,026
$ 19,457
$0
$ 2,210
$ 9,285
$ 211,695
$ 245,434
$ 218,351
$ 20,520
$0
$0
$0
$ 25,969
$ 34,797
$ 1,321
$ 1,841,810
Direct GDP
$ 2,486
$ 52
$0
$0
$0
$ 49,053
$ 16,791
$0
$ 18,925
$ 2,260
$ 1,884
$0
$0
$0
$0
$0
$0
$0
$0
$ 2,558
$ 8,036
$ 14,470
$0
$0
$0
$0
$0
$0
$0
$ 117,416
Total GDP
$ 5,414
$ 846
$ 1,326
$ 7,641
$ 6,496
$ 89,046
$ 33,543
$ 21,458
$ 30,021
$ 3,649
$ 13,354
$ 40,115
$ 1,069
$ 6,984
$ 16,428
$ 7,823
$0
$ 662
$ 5,955
$ 5,389
$ 10,421
$ 20,219
$ 6,098
$0
$0
$0
$ 2,664
$ 6,160
$ 10,872
$ 358,522
Appendix:
The Economic impact of Visits in Niagara Region and other Ontario regions: since no
Ontario region is economically self- sustaining, in order to produce the goods and
services demanded by its visitors, it will need to import some goods and services from
other regions. As such, some of the economic benefits of the visitors' spending in
Niagara Region will spill over to other Ontario regions, such as the one you have
selected as "additional ". If the second column of Table 1 contains only zeros, then that
means that Niagara Region does not trade with that region.
Gross Domestic Product (GDP): value of goods and services produced by labour and
capital located within a country (or region), regardless of nationality of labour or
ownership. This GDP is measured at market prices. Tourism GDP refers to the GDP
generated in those businesses that directly produce or provide goods and services for
travelers.
Direct impact: refers to the impact generated in businesses or sectors that produce or
provide goods and services directly to travelers, e.g. accommodations, restaurants,
recreations, travel agents, transportation and retail enterprises etc. Direct impact on
GDP, employment and tax revenues is also called tourism GDP, tourism employment
and tourism tax revenues.
Indirect impact: refers to the impact resulting from the expansion of demand from
businesses or sectors directly produce or provide goods and services to travelers, to
other businesses or sectors.
Induced impact: refers to the impact associated with the re- spending of labour income
and /or profits earned in the industries that serve travelers directly and indirectly.
Employment: refers to number of jobs, include full -time, part-time, seasonal
employment, as well as both employed and self - employed.
Federal tax revenues: include personal income tax, corporate income tax, commodity
tax (GST, gas tax, excise tax, excise duty, air tax and trading profits) and payroll
deduction that collected by the federal government.
Provincial tax revenues: include personal income tax, corporate income tax,
commodity tax (PST, gas tax, liquor gallonage tax, amusement tax and trading profits)
and employer health tax that collected by Ontario provincial government.
Municipal tax revenues: include business and personal property taxes that collected by
the municipalities. Collection, however, does not follow immediately the consumption or
production of goods and services in a municipality by visitors (as is the case with GST or
personal income taxes). Rather, these taxes show the percent of the total property taxes
collected by a municipality that can be attributed to tourism because of tourism's
contribution to the economic activity of the municipality and hence Its tax base.
Industry: The industry follows Statistics Canada's 1997 North America Industry
Classification System (NAICS) Input- Output small aggregation industry classification.
WINTER FESTIVAL OF LIGHTS
Financial Statements
for the Year Ended March 31, 2009
and Auditors' Report to the Directors
DURWARD JONES SARKWELL & COMPANY LLP Chartered Accountants
WINTER FESTIVAL OF LIGHTS
FINANCIAL STATEMENTS
MARCH 31, 2009
CONTENTS
Auditors' Report to the Directors. 1
Statement of Operations. .2
Statement of Fund Balances , .3
Balance Sheet... ,., 4
Statement of Cash Flows.. ..... 5
Notes to the Financial Statements. . ......... . . 6 _9
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
CHARTERED ACCOUNTANTS
AUDITORS' REPORT
To the Directors of
Winter Festival of Lights:
DURWARD JONES BARKWELL
& COMPANY LLP
6100 Thorold Stone Road, Unit 1, P.O. Box 873
Niagara Falls, Ontario L2E 6V6
905.357, 5711 866.223.8459 Fax 905.357.7932
nfalls @djb.com www.djb.com
We have audited the balance sheet of Winter Festival of Lights as at March 31, 2009 and the
statements of operations, fund balances and cash flows for the year then ended These financial
statements are the responsibility of the organization's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
Except as explained in the following paragraph, 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 common with many non - profit organizations, Winter Festival of Lights derives revenue from
donations, sponsorships, and fundraising activities, the completeness of which is not susceptible to
satisfactory audit verification Accordingly, our verification of these revenues was limited to the
amounts recorded in the records of the organization and we were not able to determine whether any
adjustments might be necessary to donation, sponsorship and fundraising revenues, excess of
revenue over expense, assets and deficit.
In our opinion, except for the effect of adjustments, if any, which we might have determined to be
necessary had we been able to satisfy ourselves concerning the completeness of the donations,
sponsorships and fundraising activities referred to in the preceding paragraph, these financial
statements present fairly, in all material respects, the financial position of the organization as at
March 31, 2009 and the results of its operations and its cash flows for the year then ended in
accordance with Canadian generally accepted accounting principles.
May 29, 2009
Durward Jones Barkwell & Company LLP
Licensed Public Accountants
14- ,C 4- r
1
Big enough to know k
SMALL ENOUGH TO CARE
BURLINGTON • FORT ERIE GRIMSBY • HAMILTON • NIAGARA FALLS ST. CATHARINES STONEY CREEK • WELLAND
REVENUE
Government funding (Note 2)
Corporate funding
Festival events
Candle Light Stroll
Candy Cane Lane 5K Race
Dufferin Island
Mantini Sisters Concert
Other
Spring in Bloom
Fundraising events
Golf Tournament
Gospel Concert
Industry Luncheon
Merchandise
Other funding
EXPENDITURES
Advertising and promotion
Bad debts
Bank charges and interest
Capital campaign
Depreciation - Capital Fund
Festival events
Candle Light Stroll
Candy Cane Lane 5K Race
Fireworks
Mantini Sisters Concert
Misty Kids
New Year's Eve
Opening weekend
Shrek the Halls
Sparkle Awards
Spring in Bloom
Fundraising events
Golf Tournament
Gospel Concert
Industry Luncheon
Merchandise
JCP Program
Light display
Office administration and rent
Salaries and benefits
Sponsorship committee
Volunteer committee
WINTER FESTIVAL OF LIGHTS
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2009
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
2008
442,705
152,500
5,580
1,675
120,185
6,701
414
24,636
5,880
10,618
2,776
144,758
918,428
188,528
9
1,832
117,759
5,240
3,514
57,660
7,568
36,685
7,287
37,064
1,081
13,781
12,935
7,206
3,935
5,593
170,973
73,407
194,081
24,435
5,433
976,006
LOSS FROM OPERATIONS (57,578)
GAIN ON DISPOSAL OF ASSETS - CAPITAL FUND '<< -.'
456
NET LOSS ; _ s $ 4y {54,38 if ,, $ (57,122)
2
BALANCE, BEGINNING OF YEAR
EXCESS (DEFICIENCY) OF REVENUE
OVER EXPENDITURES
INVESTMENT IN CAPITAL ASSETS
BALANCE, END OF YEAR
WINTER FESTIVAL OF LIGHTS
STATEMENT OF FUND BALANCES
YEAR ENDED MARCH 31, 2009
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
436,416
3
Total
2008
493,538
(57,122)
ASSETS
Current assets
Cash
Accounts receivable
Inventory
Prepaid expenses
Capital assets (Note 3)
LIABILITIES
Current liabilities
Bank indebtedness (Note 4)
Accounts payable and accrued charges
Deferred revenue
Commitment (Note 6)
FUND BALANCES
Operating Fund - Unrestricted (Note 7)
Capital Fund - Invested in capital assets
Approved by the Board
WINTER FESTIVAL OF LIGHTS
BALANCE SHEET
MARCH 31, 2009
Director
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
2008
9,679
31,674
9,988
26,272
77,613
508,262
585,875
130,568
. Director
18,891
149,459
4
(71,846)
508,262
436,416
585,875
OPERATING ACTIVITIES
Net Toss
Items not affecting cash
Depreciation
Gain on disposal of assets
Changes in non -cash operating assets and liabilities
Accounts receivable
Inventory
Prepaid expenses
Accounts payable and accrued charges
Deferred revenue
INVESTING ACTIVITIES
Capital expenditures
Proceeds on disposal of assets
DECREASE IN CASH
CASH, BEGINNING OF YEAR
CASH (BANK INDEBTEDNESS), END OF YEAR
WINTER FESTIVAL OF LIGHTS
STATEMENT OF CASH FLOWS
YEAR ENDED MARCH 31, 2009
CASH (BANK INDEBTEDNESS) IS REPRESENTED BY:
Cash
Bank indebtedness
DURWARD JONES EARKWELL & COMPANY LLP Chartered Accountants
5
2008
(57,122)
117,759
(456)
60,181
15,353
826
(18,833)
110,146
(544)
167,129
(224,125)
7,000
(217,125)
(49,996)
59,675
9,679
9,679
9,679
WINTER FESTIVAL OF LIGHTS
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2009
1. SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION
Nature of business
Winter Festival of Lights was created by Letters Patent in June 1992 under the laws of the Province of Ontario
and operates as a non - profit organization which is responsible for promoting and organizing an event known as
the Winter Festival of Lights held each year in Niagara Falls, Ontario.
Fund accounting
The organization reports its activities using the fund method of accounting whereby financial statement
elements are reported by fund. Restricted funds have stipulations that specify how resources must be used.
Unrestricted funds have no stipulations.
The Operating Fund accounts for all of the organization's operating activities associated with the Winter
Festival of Lights.
The Capital Fund is a restricted fund which reports all of the organization's capital assets. Capital assets are
recorded at cost and are depreciated over their estimated useful lives using the declining - balance method at
the following rates.
Computer equipment 30%
Computer software 100%
Floats 40%
Furniture and equipment 20%
Light displays 20%
Mascots 30%
Power supply 10%
Inventory
Inventory is valued at the lower of cost or net realizable value Cost is determined on a first -in, first -out basis
6
Leasehold improvements are amortized on a straight line basis over a five -year period. Additions during the
year are depreciated from the month of acquisition Disposals are depreciated until the month of disposition.
Revenue recognition
Contributions are generally recognized as revenue in the year in which they are received. Donation pledges
are not legally enforceable and many pledges are due more than a year in the future.
Contributions to the General Fund which are received for use in a future period are accounted for as a deferred
revenue. Restricted contributions received for which a separate fund is not presented are also reported in the
Operating Fund but are deferred until the period in which the related expenses are incurred
Deferred revenue
Cash received prior to year end for expenditures or events in a subsequent year is recorded as deferred
revenue.
Contributed materials and services
The organization receives contributed materials and services which are not recognized in the financial
statements because of the difficulty in determining their fair value.
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
1. SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (continued)
Use of estimates
The preparation of financial statements in accordance with Canadian generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from management's best estimates, as additional information
becomes available in the future. Significant estimates and assumptions are used when accounting for items
such as the determination of useful lives of capital assets
2. GOVERNMENT FUNDING
City of Niagara Falls
Employment Ontario (JCP Program)
Ontario Ministry of Tourism and Recreation
Ontario Trillium Foundation
3. CAPITAL ASSETS
Computer software
Computer equipment
Furniture and equipment
Light displays
Mascots
Power supply
Leasehold improvements
4. BANK INDEBTEDNESS
WINTER FESTIVAL OF LIGHTS
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2009
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
2008
380,000
12,705
50,000
442,705
2008
Net Book
Value
$ 7,608
16,518
1,804
438,839
13,467
18,302
11,724
$ 508,262
7
The organization received sponsorships in the amount of $41,452 to acquire new light displays. These
sponsorships have been deducted from the cost of the related assets and depreciation is calculated on the net
amount.
The bank indebtedness is a line of credit arrangement which is due on demand and allows for a maximum
borrowings of $75,000. The bank indebtedness bears interest at 1% over the bank's prime rate of interest.
5. FINANCIAL INSTRUMENTS
WINTER FESTIVAL OF LIGHTS
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2009
8
The organization has classified cash as a financial asset held for trading. Financial assets classified as held
for trading are reported at fair value at each balance sheet date and any change in fair value is recognized in
net income in the period during which the change occurs. Accounts receivable are classified as loans and
receivables. Bank indebtedness and accounts payable and accrued charges are classified as other financial
liabilities. Financial instruments classified as loans and receivables and other financial liabilities are carried at
amortized cost using the effective interest method. Interest income or expense is included in net income over
the expected life of the instrument.
Fair Value
The following policies and assumptions were used to determine the fair value of each class of financial assets
and liabilities:
The fair value of cash, accounts receivable, accounts payable and accrued charges approximates their
carrying values due to the relatively short-term nature of these instruments. The fair value of bank
indebtedness approximates carrying value as this instrument bears interest at a rate that fluctuates with
market.
Market Risks
The organization is exposed to interest rate risk since changes in interest rates may impact the organization's
borrowing costs. The organization does not use any derivative instrument to reduce its exposure to interest
rate risk.
Unless otherwise noted, it is management's opinion that the organization is not exposed to significant currency,
liquidity and credit risks arising from its financial instruments.
6. COMMITMENT
The organization leases facilities under a lease agreement which expires in October 2009 and requires monthly
payments of $1,250 plus GST In addition, the organization is responsible for its pro -rata share of certain
common area expenses.
7. CHANGES IN ACCOUNTING POLICY
Effective April 1, 2008, the organization adopted the following sections of the Handbook of the Canadian
Institute of Chartered Accountants:
Inventories
CICA handbook Section 3031, Inventories, replaces corresponding Section 3030 and establishes new
standards for the measurement and disclosure of inventories This new section requires inventories to be
measured at the lower of cost and net realizable value, provides guidance on the determination of cost and
requires reversal of prior period write -downs when the net realizable value of impaired inventory subsequently
recovers. The adoption of this section had no material impact on the audited financial statements
Capital Disclosures
The Canadian Accounting Standards Board issued new accounting standard, CICA Section 1535, Capital
Disclosures. This section requires the disclosure of information that enables users of financial statements to
evaluate the entity's objectives, policies and processes for managing capital. This change in accounting policy
resulted in additional disclosures in the financial statements and did not impact the financial results of the
organization
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
8. CAPITAL MANAGEMENT
The organization defines its capital as the amounts included in its operating and capital fund balances.
The organization's objective when managing its capital is to safeguard the organization's ability to continue as a
going concern so that it can continue to provide the appropriate level of benefits and services to its
beneficiaries and its stakeholders.
The organization sets the amount of the captial fund in proportion to risk, manages the capital fund structure
and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the
underlying assets.
9. ECONOMIC DEPENDENCE
The organization is dependent upon continued government funding at various levels in addition to corporate
sponsorships, contributed materials and services, and volunteer involvement. The operations could not be
continued without this funding, contributions or volunteer support.
10. COMPARATIVE FIGURES
WINTER FESTIVAL OF LIGHTS
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2009
9
Certain of the prior year's figures have been reclassified to conform to the current year's financial statement
presentation.
DURWARD JONES BARKWELL & COMPANY LLP Chartered Accountants
Rink at the Brink: Assets
Ice Skating Rink (rinkboards, refrigeration unit,
piping systemhalide lights, and associated
equipment/supplies) $ 220,400.00
Rubber Mats $ 11,752.00
Rink Roofing System (80' W x 140' L x 36' H) $ 254,068.43
On -Site Storage Facility $ 37,166.00
Skate Sharpener $ 3,237.10
Skates & Helmets $ 15,959.74
Storage Lockers $ 12,586.35
Miscellanous $ 10,000.00
Total Actual Cost of Assets $ 565,169.62