6. 2009 Water and Wastewater Rate Budget – Proposed Timetable

Budget soutenu par les redevances d’eau et d’eaux usées de 2009 - Proposition de calendrier

Committee recommendations as amended

That Council approve the following :

1. Receive and table the 2009 Water and Wastewater Rate Draft Budgets and the 2010-2011 forecasts at the meeting of the Planning and Environment Committee to be held on October 14, 2008 with public delegations and consideration by the Planning and Environment Committee at a Special Meeting to be held on October 29, 2008 and then forward to City Council on November 12, 2008 for consideration and approval;

2. That the 2009 draft budget and the 2010-2011 forecasts be developed in accordance with the multi-year budget directions approved in 2008.

3. Delegate authority to set the 2010 timeframe for the Water and Wastewater Rate Budget to the Planning and Environment Committee.

4. Direct staff in the development of the 2009 Wastewater Capital Budget to increase the City’s financial commitment from the approved $20 million to match the federal commitment and that $33 million from the $77.27 million announced by the Premier also be allocated in the 2009 Wastewater Capital Budget for the prevention of sewer overflows to the Ottawa River. The amount allocated in this new fund will be $99 million from all three levels of government.

Recommandations modifiÉeS du Comité

Que le Conseil approuve ce que suit :

1. de prendre connaissance des budgets soutenus par les redevances d’eau et d’eaux usées préliminaires de 2009 ainsi que des prévisions budgétaires de 2010-2001 et de les déposer à la réunion du Comité de l’urbanisme et de l’environnement qui aura lieu le 14 octobre 2008 avec les délégations du public pour examen par ledit Comité durant une réunion extraordinaire prévue le 29 octobre 2008, pour être ensuite transmis au Conseil municipal le 12 novembre 2008 pour examen et approbation;

2. que le budget préliminaire de 2009 ainsi que les prévisions de 2010-2011 soient élaborés conformément aux orientations budgétaires pluriannuelles approuvées en 2008.

3. de déléguer au Comité de l’urbanisme et de l’environnement le pouvoir d’établir les délais d’exécution de 2010 en ce qui concerne le Budget soutenu par les redevances d’eau et des eaux usées;

4. de demander au personnel, durant l’élaboration du budget d’immobilisation des eaux usées, d’augmenter l’engagement financier de la Ville, ayant déjà approuvé 20 M$, dans le but d’égaliser l’engagement financier du gouvernement fédéral et que 33 M$ des 77,27 M$ annoncés par le premier ministre soient également alloués au budget d’immobilisation des eaux usées pour la prévention des débordements d’égouts dans la rivière des Outaouais. Le montant alloué à ce nouveau fonds est de 99 M$, prélevé auprès des trois paliers de gouvernement.

Documentation

1. City Treasurer report dated 28 August 2008 (ACS2008-CMR-FIN-0037).

2. Extract of Draft Minutes, 9 September 2008.

Report to/Rapport au :

Planning and Environment Committee

Comité de l'urbanisme et de l'environnement

and Council / et au Conseil

August 28, 2008 / le 28 aout 2008

Submitted by/Soumis par : Marian Simulik, City Treasurer, Trésorière municipale

Contact Person/Personne ressource : Tom Fedec, A/Manager of Financial Planning, Gestionnaire, Planification financière

Financial Services/Services financiers

(613) 580-2424 x 21316, Tom.Fedec@ottawa.ca

City Wide/à l'échelle de la Ville

Ref N°: ACS2008-CMR-FIN-0037

SUBJECT:	2009 Water and Wastewater Rate Budget – Proposed Timetable

OBJET :	Budget soutenu par les redevances d’eau et d’eaux usées de 2009 - Proposition de calendrier

REPORT RECOMMENDATION

That Planning and Environment Committee recommend Council:

2. That the 2009 draft budget and the 2010-2011 forecasts be developed in accordance with the multi-year budget directions approved in 2008.

RECOMMANDATION DU RAPPORT

Que le Comité de l’urbanisme et de l’environnement recommande au Conseil :

2. que le budget préliminaire de 2009 ainsi que les prévisions de 2010-2011 soient élaborés conformément aux orientations budgétaires pluriannuelles approuvées en 2008.

BACKGROUND

As part of the multi-year budget directions that Council approved in 2007 for the development of the 2008 budget, the Rate-supported budget (Water and Sewer operations) was separated from the Tax-supported budget. A separate process was developed whereby the 2008 Rate-supported budgets were tabled and approved during the first quarter of 2008. As indicated in the 2009 Budget Directions report, staff intended to follow a similar process for the 2009 budgets, however different timelines are now being recommended.

The current timeline for the adoption of the 2009 Tax-supported budget by Council is scheduled for December 5, 2008. It is recommended that the timeline for Council adoption for the Rate‑supported budget be scheduled for November 12, 2008

DISCUSSION

It is recommended that the 2009 Water and Wastewater draft budget be tabled at the regularly scheduled meeting of the Planning and Environment Committee (PEC) on October 14, 2008, with public delegations and debate to be held at a special meeting of PEC on October 29, 2008. This timeframe will accommodate Council approval on November 12, 2008 and permit the introduction of a rate increase for January 1 2009.

An earlier timeframe for budget approval will allow closer timing for the Tax and Rate Budgets approvals which will assist with the implementation of those capital works projects for which funds from both Tax and Rate are required (i.e. the Integrated Capital Works program.). An earlier approval will also provide more opportunity to implement the approved services. With a later (spring or April) Rate Budget approval, as was the case in 2008, it becomes very difficult to implement the approved service and authority changes within the Calendar Year for which Budget authority is provided.

It is further recommended that the budget review and approval process follow that utilized for the 2008 rate-support budget and that a special meeting of PEC be convened on October 29, 2008 to allow for public delegations and a full debate on the budget. If this approach is supported, it is suggested that the rate-supported budget not be brought before the Budget Working Group.

The rate-supported budget will be developed in keeping with the multi-year budget directions approved as part of the 2008 rate-supported budget, which includes a rate increase of 9% in 2009 and forecasted increases of 9% and 5% for 2010 and 2011, respectively. Changes to the presentation format of the rate-supported budget will be reviewed in conjunction with the recommendations contained in the report from Plamondon & Associates. Potential changes that can be accommodated within this timeframe will be implemented.

CONSULTATION

This report has been prepared in consultation with the Public Works and Services Department and the Chair of PEC. Public Consultation will commence through tabling the report at the PEC on October 14, 2008. Public delegations on these documents will be held at the special PEC meeting on October 29, 2008 with Council consideration and adoption on November 12, 2008.

FINANCIAL IMPLICATIONS

There are no financial implications associated with this report.

STRATEGIC DIRECTION

The budget directions as contained in the report are in accordance with Council’s objective of advancing the City towards financial sustainability.

DISPOSITION

Upon approval of this report, staff will commence development of the 2009 draft operating and capital rate-supported budgets for tabling on October 14, 2008.

2009 Water and Wastewater Rate Budget – Proposed Timetable

Budget soutenu par les redevances d’eau et d’eaux usées de 2009 - Proposition de calendrier

ACS2008-CMR-FIN-0037 City Wide/à l'échelle de la Ville

Chair Hume explained that Committee and Council approval is required to set the timetable and suggested the delegation of this responsibility to the Committee might be appropriate.

In response to questions from the Chair, Ms. Simulik explained that the budget is based on projects suggested by the Water and Wastewater Services branch. At this time a 9 per cent rate increase is being projected, in which 2 per cent accounts for operating and general inflation and 7 per cent accounts for bridging the gap to undertake capital works. The infusion of $66 million from other levels of government would impact the projected increase.

Ms. Simulik explained that only some projects have been identified to date to deal with the Ottawa River. The $100 million fund to deal with the Ottawa River issue, which would include matching municipal dollars, would set aside debt authority, lessening the impact in any one year of any potential rate increase. By putting debt authority, it will not have an impact until two years time when and if the debt is issued.

As an example, Chair Hume stated that next year the City would go forward with the Fleet Street regulator, a $10 million project. Ms. Simulik clarified that in this case the City was initially funding the entire project. The portion now funded from senior governments frees up some money and cash could be used as opposed to debt.

In reply to Councillor Desroches, Dixon Weir, Director of Water and Wastewater Services confirmed that the enhancement to the Lead Pipe Replacement Program would not form part of the next budget, but the initial $1 million per year capital fund would be included. A report on an accelerated program will be part of the supporting information available for discussion during budget.

Chair Hume voiced that although they have an expanded process for public delegations with regard to the rate budget, there has been some discussion around making it subject to the budget challenge process. He advised that discussions occurred with the Mayor and the City’s consultant, Bob Plamondon. He indicated he would report back if any changes to the process are necessary.

Ms. Simulik stated that Mr. Plamondon reviewed the rate budget process and felt that it is an enhanced substitution for the budget challenge group, as public delegations will be heard and one day is allotted for scrutiny and debate.

Councillor Holmes presented the following motion:

Whereas on July 9 City Council approved the following direction to City staff with respect to the development of the 2009 Wastewater Capital Budget:

"Establish $20 million in the 2009 Budget to match the $20 million provided by the Federal Government for prevention of sewer overflows to the City of Ottawa water bodies. That the $20 million federal contribution be considered as a down payment in order to address the total cost of river clean up."

Whereas on August 25 the Premier announced $77.27 million dollars in infrastructure funding for the City of Ottawa; and

Whereas at the same announcement the Premier indicated that a portion of this new funding should be allocated to the prevention of sewer overflows to the Ottawa River; and

Whereas on September 2 the Federal Government announced an additional $13 million in matching funding for the prevention of sewer overflows to the Ottawa River, which brings the total federal commitment to #33 million; and

Whereas on September 2 the Federal Government also committed to fund one third of the cost of the real time control program for Lebreton Flats/Fleet Street regulator which was scheduled to be funded in the 2009 Wastewater Capital Budget in the amount of $10 million; and

Therefore be it resolved that staff be directed to increase the City’s financial commitment from the approved $20 million to match the federal commitment and that $33 million from the $77.27 million announced by the Premier also be allocated in the 2009 Wastewater Capital Budget for the prevention of sewer overflows to the Ottawa River. The amount allocated in this new fund will be $99 million from all three levels of government.

Further that in the $99 million dollar fund be used to fund real time control program for the Lebreton Flats/Fleet Street regulator and that the City money formally allocated to this program stay within the fund established undertake future projects that prevent sewer overflows to the Ottawa River.

Councillor Harder suggested the motion should be considered as a Notice of Motion as it was not part of the meeting agenda and goes beyond the issue of the process timetable.

Tim Marc, Senior Legal Counsel advised that if the motion dealt with direction to the development of the 2009 budget, it would be in order; however any determination on the allocation of funds would require a two thirds vote to be introduced.

In response to questions from Councillor Desroches, Mr. Weir explained some projects have been identified and can proceed in the near future but others require further study, such as environmental assessments.

Councillor Monette explained that in theory he does not have a problem with the motion but it should be treated as a Notice of Motion to ensure all the facts are before the Committee.

Ms. Simulik explained that direction is needed as soon as possible because the Federal Government was very clear that equal contributions from federal, provincial and municipal levels would be required. She supported some form of direction on the allocation of the provincial funds to access the federal funding.

Councillor Desroches stated that he would not be supporting this motion; he felt that they were setting priorities, which should only occur when information on other priorities and potential projects is available.

As a result of the advise of senior legal counsel, Chair Hume ruled the motion in order and Councillor Holmes amended her motion accordingly. Chair Hume called for the question to be severed and the vote was called.

Moved by D. Holmes:

Whereas on July 9 City Council approved the following direction to City staff with respect to the development of the 2009 Wastewater Capital Budget:

Whereas on August 25 the Premier announced $77.27 million dollars in infrastructure funding for the City of Ottawa; and

Whereas at the same announcement the Premier indicated that a portion of this new funding should be allocated to the prevention of sewer overflows to the Ottawa River; and

Therefore be it resolved that staff be directed in the development of the 2009 Water and Wastewater Capital Budget:

1. To increase the City’s financial commitment from the approved $20 million for the prevention of sewer overflows to the Ottawa River.

CARRIED with S. Desroches and J. Harder dissenting.

2. To allocate $33 million from the $77.27 million announced by the Premier for the prevention of sewer overflows to the Ottawa River. The amount allocated in this new fund will be $99 million from all three levels of government.

CARRIED

YEAS (7): M. Bellemare, C. Doucet, D. Holmes, G. Hunter, B. Monette, P. Feltmate, P. Hume

NAYS (3): S. Desroches, J. Harder, S. Qadri

Moved by P. Feltmate:

That Planning and Environment Committee delegate authority to set the 2010 timeframe for the Water and Wastewater Rate Budget to the Planning and Environment Committee.