THE CORPORATION OF THE CITY OF NELSON REQUEST FOR DECISION

DATE: December 7, 2015 Regular TOPIC: 2016 Water and Sewer Rates PROPOSAL: Introduction and first three readings of the Nelson Fees and

Charges Amendment (2016 Sewer and Water Rates) Bylaw No. 3326, 2016 PROPOSED BY: Staff _____________________________________________________________________ ANALYSIS SUMMARY: Annually, the City reviews the long-term operating and capital plan for the Water and Sewer utilities. The purpose is to ensure that rates are set at a level that ensures sufficient funds are available to cover the annual operating, capital expenses and provides for adequate reserves to fund future capital expenditures. The City of Nelson Fees and Charges Amendment (2016 Water and Sewer Rates) Bylaw No. 3326, 2016 is introduced and presented for first three readings. BACKGROUND: On November 12th & 24th of 2015, the City of Nelson Council held budget working sessions to review 2016 Water and Sewer utilities rate options. Staff presented an overview of the actual and projected 2015 operating and capital results of the two utilities. Furthermore, the potential 2016 rates in conjunction with the proposed operating and capital plan for the next 15 years were reviewed. Based on council direction three options were developed for review. All options included a revision of projected operating and capital expenditures. Under the first option the annual percentage rate increases were unchanged from those that had been projected and approved last year for the 2015 to 2029 period. The second option proposed a rise in the water rate increase from 3% to 4% and a drop in the sewer rate increase from 2% to 1% in the 2016 to 2020 years with the remaining annual increases staying as projected. The third option presented to Council proposed a rise in the water rate from 3% to 5% and a drop in the sewer rate increase from 2% to 0% in the 2016 to 2020 years with the remaining annual increases staying as projected. Following the presentations, Council confirmed that option 1 was their preferred option for 2016. Therefore, the City of Nelson Fees and Charges Amendment (2016 Water and Sewer Rates) Bylaw has been prepared to keep the rates consistent with what had been planned the prior year. Council noted that the proposed rate increases will ensure that the water & sewer utilities are sustainable and will allow the City to keep on target with implementing the Capital upgrades as outlined in the Water and Sewer Master Plans while maintaining an appropriate balance in the respective utility reserve accounts. From reviewing the Sewer and Water Master Plans, recommended capital upgrades as compared to the actual results to date for 2015, the following was noted:

Water System • The City has been averaging 1.8km in annual water line replacement – 2km was

suggested for the first 10 years (2006 to 2016). • The estimated waterline replacement cost per meter was originally $1,000.

Actual City waterline average per meter cost decreased to $525 in 2009 and has continued at this rate, being a direct result of the City creating a capital crew to do the work rather than contracting all the replacement work. The city has over 80km of water mains therefore the savings are in the tens of millions of dollars if the city can continue replacing at this cost.

• With the completion of the Hall Street PRV this year, all six primary PRV stations have been upgraded.

• Three of the five secondary PRV stations have been upgraded with the remaining two scheduled for upgrades by 2017.

• Installation of the UV disinfection system and building was completed at Mt. Station. The remaining instrument and electrical work will be completed after three phase power is installed in spring 2016 and the system will then be commissioned.

• ICI metering installation and data collection took place in 2015. Further metering and data collection will continue in 2016 with potential phased in metering in 2017 & 2018.

• Phase 1 Hall Street water main and line replacements were completed. Phase 2 is to commence in 2017 depending on grant funding.

Sewer System • The City has been averaging 2.5km in annual sewer line replacement – 1.3km

was suggested for the first 5 years (2011 to 2016). This is due to favorable pricing received through the CIPP program which has allowed for a greater amount of repair work to occur at a better price than conventional excavation..

• The estimated sewer replacement cost per meter was $525 – the actual City cost has been averaging $206 since 2010, which is also a result of the favorable pricing received through the CIPP program. The City has over 80km of sewer mains therefore the savings are in the tens of millions of dollars if the City can continue replacing at this cost.

• 68% of the metal sewer piping has been replaced or relined which was the worst mains in the system.

• Both of the recommended secondary lift stations (CPR & KFP) replacements are scheduled for upgrading in 2018 and 2020 respectively.

• Phase 1 Hall Street sewer upgrades were completed. Phase 2 is to commence in 2017 depending on grant funding.

Based on the initial discussions with Council and the review of the Sewer and Water Master Plans, Staff is recommending the following changes to 2016 rates, discounts and potential future capital expenditures:

• A 3% increase in Water rates and a 2% increase in Sewer rates. • Continue the strategic ICI/residential metering installation and data collection

project and analyze the data collected for the 2015-2016 period. • Put the implementation of Phase 2 of the meter rate increase that was approved

in 2013 that would see the metered rate doubled from the 2012 rate with the increase phased in over 3 years starting in 2013 on hold until further meter data information has been collected. The meter rate is to only be increased by the normal increases to the other water and sewer rates. Implementation of the 33% meter rate increase is scheduled for 2018 & 2019.

With these increases, rates for a Single Family Dwelling (SFD) will be:

SFD

2015 Rate (after discount)

2016 Rate (after discount)

Net change

WATER $512.10 $527.40 $15.30 SEWER $445.50 $454.50 $9.00 ANNUAL TOTAL $957.60 $981.90 $24.30 PER MONTH $79.80 $81.83 $2.03

BENEFITS OR DISADVANTAGES AND NEGATIVE IMPACTS: The Water and Sewer utilities are based on a fee for service model. The rates charged for water and sewer must pay for operating and capital costs as well as build adequate reserves to fund future capital expenditures. Water and sewer are core services of the City and must be properly managed to ensure that these services can be provided into the future. The proposed options are provided to help Council determine how best to align water and sewer rates with Council priorities. Nelson is one of the few communities across Canada where water and sewer rates are sufficient to fund both projected capital upgrades and build reserves. LEGISLATIVE IMPACTS, PRECEDENTS, POLICIES: It is within Council’s authority to set the rates for the sewer and water utilities. COSTS AND BUDGET IMPACT - REVENUE GENERATION: The overall revenues will cover the projected cost increases for water and sewer operating and capital costs over the next year. IMPACT ON SUSTAINABILITY OBJECTIVES AND STAFF RESOURCES: N/A COMMUNICATION: Once the amended bylaws are approved by Council invoices with the new rates will be sent out to residents late January to early February 2016. OPTIONS AND ALTERNATIVES: 1. The bylaws are given first three readings 2. Refer the matter back to staff for further review ATTACHMENTS: • Bylaw 3326, 2016 • Water and Sewer Capital Reserve spreadsheets • Water and Sewer main maps

RECOMMENDATION: That Council passes the following resolutions:

1. That the “The Corporation of the City of Nelson Fees and Charges Amendment

(2016 Water and Sewer Rates) Bylaw No. 3326, 2016" be introduced and read a first time and read a second time by title only.

2. That the “The Corporation of the City of Nelson Fees and Charges Amendment (2016 Water and Sewer Rates) Bylaw No. 3326, 2016" be read a third time by title only.

AUTHOR: REVIEWED BY:

_______________________________ ____________________________ CHIEF FINANCIAL OFFICER CITY MANAGER

THE CORPORATION OF THE CITY OF NELSON

BYLAW NO. 3326

BEING A BYLAW TO AMEND “THE CORPORATION OF THE CITY OF NELSON FEES

AND CHARGES BYLAW NO. 3092, 2008” _____________________________________________________________________ WHEREAS it is deemed necessary to amend “The Corporation of the City of Nelson Fees and Charges Bylaw No. 3092, 2008” (hereinafter called “the said Bylaw”); NOW THEREFORE the Council of The Corporation of the City of Nelson, in open meeting assembled enacts as follows: 1. That the said Bylaw be amended by deleting in entirety Schedules “H” – Water Rates

and Charges; and “I” – Sewer Rates and Charges; and that Schedules “H” – 2016 Water Rates and Charges; and “I” – 2016 Sewer Rates and Charges be added to the said Bylaw as replacement Schedules.

2. This bylaw shall take effect immediately.

3. This bylaw shall be cited as "The Corporation of the City of Nelson Fees and Charges Amendment (2016 Water and Sewer Rates) Bylaw No. 3326, 2016".

READ A FIRST TIME the day of , 2015 READ A SECOND TIME the day of , 2015 READ A THIRD TIME the day of , 2015 FINALLY PASSED AND ADOPTED the day of , 2015

_______________________ Mayor

_______________________ Corporate Officer

SCHEDULE "H" TO FEES AND CHARGES BYLAW NO. 3092, 2008 2016 Water User Rates and Charges

DEFINITIONS FOR THIS SCHEDULE FAMILY is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; APARTMENT or MULTI-FAMILY RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a residential strata unit; ROW HOUSE RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a residential strata unit. SINGLE FAMILY RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a residential strata unit. TWO FAMILY RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a strata residential unit. SECONDARY SUITE (CONFORMING) means a dwelling unit within a Single Family Residential Unit;

• having a total floor space of not more than 90 m2 in area, • having a floor space less than 40% of the habitable floor space of the building, • located within a building of residential occupancy containing only one other dwelling

unit, and located in and part of a building which is a single real estate entity; and • has been approved to occupy by a City of Nelson Building Inspector.

SECONDARY SUITE (NON-CONFORMING) means a dwelling unit within a Single Family Residential Unit;

• that does not conform to the requirements of the secondary suite (conforming) above and/or

• has not been approved to occupy by a City of Nelson Building Inspector. RESIDENTIAL STRATA UNIT means a dwelling unit that is classified as a residential strata lot as defined by the Strata Property Act.

SCHEDULE OF WATER USER RATES 2016

Annual Quarterly Charge Charge

SCHEDULE 1, RESIDENTIAL USE: (1) Each Single Family Residential Unit $ 586.00 $ 146.50 (2) Each Two Family Residential Unit $ 1171.00 $ 292.75 (3) Each Conforming Secondary Suite $ 294.00 $ 73.50 (4) Each Non-Conforming Secondary Suite $ 586.00 $ 146.50 (5) Each Residential Strata Unit $ 586.00 $ 146.50 (6) Each Row House Residential Unit $ 586.00 $ 146.50 (6) Apartments or Multi-Family Residential Units

-a- Each self-contained dwelling unit $ 469.00 $ 117.25 -b- Each additional room sharing bath $ 90.00 $ 22.50

(7) Each Manufactured Home in a Manufactured Home Park $ 469.00 $ 117.25 THE CITY RESERVES THE RIGHT TO METER ANY WATER SERVICE AT ITS SOLE DISCRETION SCHEDULE 2, COMMERCIAL & INDUSTRIAL USES: (1) Commercial, Manufacturing, Institutional or Industrial uses with a water meter:

basic charge of $78.25 per quarter, plus $.0315/cubic foot or $1.1169/cubic meter. (2) Offices, Retail, Shops, Community Halls, Theatres, Clubs, Bakeries, Beauty Salons,

Barber Shops, Banks, Garages, Service Stations, Warehouses and any other unclassified business or institutional use that does not have a water meter installed: -a-First Two Fixtures $ 728.00 $ 182.00 -b-Next Six Fixtures $ 261.00 ea $ 65.25 ea -c-Any Additional Fixtures $ 176.00 ea $ 44.00 ea

(3) Laundromats (without water meters)

-a-First Washing Machine $ 493.00 $ 123.25 -b-Each Additional Washing Machine $ 209.00 ea $ 52.25 ea

(4) Restaurants, Cafes and Lunch Counters (without water meters)

-a-Seating 30 persons or less $1,235.00 $308.75 -b-Each additional 10 Seats or Part Thereof $ 261.00 $ 65.25

(5) Motels (without water meters)

-a-Each unit having kitchen facility $ 329.00 $ 82.25 -b-Each unit without kitchen $ 209.00 $ 52.25

(6) Licenced Clubs $1,031.00 $ 257.75

SCHEDULE OF WATER USER RATES 2016

Annual Quarterly Charge Charge

(7) Hotels (without water meters) -a-Each unit with bath $ 209.00 $ 52.25 -b-Each unit sharing bath $ 83.00 $ 20.75 -c-Beer Parlour/Public House $1,031.00 $ 257.75 -d-Lounges $ 535.00 $ 133.75 -e-Restaurant (see restaurants) -f-Banquet Room $ 726.00 $ 181.50

SCHEDULE 3, INSTITUTIONAL USE: (1) Schools/Colleges/Universities

-a-First 1 to 5 classrooms $ 453.00 ea $113.25 ea -b-Next 6 to 10 Classrooms $ 319.00 ea $ 79.75 ea -c-Over 10 Classrooms $ 137.00 ea $ 34.25 ea

(2)Churches/Chapels $ 685.00 $ 171.25 (3)Daycare $ 586.00 $ 146.50 Note: Institutional uses with a water meter:

basic charge of $ 78.25 per quarter, plus $.0315/cubic foot or $1.1169/cubic meter. THE CITY RESERVES THE RIGHT TO METER ANY WATER SERVICE AT ITS SOLE DISCRETION

SCHEDULE "I" TO FEES AND CHARGES BYLAW NO. 3092, 2008 2016 Sewer Rates and Charges

DEFINITIONS FOR THIS SCHEDULE FAMILY is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; APARTMENT or MULTI-FAMILY RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a residential strata unit; ROW HOUSE RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a residential strata unit. SINGLE FAMILY RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a residential strata unit. TWO FAMILY RESIDENTIAL UNIT is as defined in the City of Nelson Land Use Regulation Bylaw No. 2243, 1987 as amended from time to time; and is not a strata residential unit. SECONDARY SUITE (CONFORMING) means a dwelling unit within a Single Family Residential Unit;

• having a total floor space of not more than 90 m2 in area, • having a floor space less than 40% of the habitable floor space of the building, • located within a building of residential occupancy containing only one other dwelling

unit, and located in and part of a building which is a single real estate entity; and • has been approved to occupy by a City of Nelson Building Inspector.

SECONDARY SUITE (NON-CONFORMING) means a dwelling unit within a Single Family Residential Unit;

• that does not conform to the requirements of the secondary suite (conforming) above and/or

• has not been approved to occupy by a City of Nelson Building Inspector. RESIDENTIAL STRATA UNIT means a dwelling unit that is classified as a residential strata lot as defined by the Strata Property Act.

SCHEDULE OF SEWER USER RATES 2016

Annual Quarterly Charge Charge

SCHEDULE 1, RESIDENTIAL USE: (1) Each Single Family Residential Unit $ 505.00 $ 126.25 (2) Each Two Family Residential Unit $ 1009.00 $ 252.25 (3) Each Conforming Secondary Suite $ 253.00 $ 63.25 (4) Each Non-Conforming Secondary Suite $ 505.00 $ 126.25 (5) Each Residential Strata Unit $ 505.00 $ 126.25 (6) Each Row House Residential Unit $ 505.00 $ 126.25 (6) Apartments or Multi-Family Residential Units

-a- Each self-contained dwelling unit $ 404.00 $ 101.00 -b- Each additional room sharing bath $ 93.00 $ 23.25

(7) Each Manufactured Home in a Manufactured Home Park $ 404.00 $ 101.00 THE CITY RESERVES THE RIGHT TO METER ANY WATER SERVICE AT ITS SOLE DISCRETION SCHEDULE 2, COMMERCIAL & INDUSTRIAL USES: (1) Commercial, Manufacturing, Institutional or Industrial uses with a water meter: basic

charge of $72.50 per quarter, plus $.0261/cubic foot or $.9291/cubic meter. (2) Offices, Retail, Shops, Community Halls, Theatres, Clubs, Bakeries, Beauty Salons,

Barber Shops, Banks, Garages, Service Stations, Warehouses and any other unclassified business or institutional use that does not have a water meter installed: -a-First Two Fixtures $ 580.00 $ 145.00 -b-Next Six Fixtures $ 217.00 ea $ 54.25 ea -c-Any Additional Fixtures $ 138.00 ea $ 34.50 ea

(3) Laundromats (without water meters)

-a-First Washing Machine $ 439.00 $ 109.75 -b-Each Additional Washing Machine $ 187.00 ea $ 46.75 ea

(4) Restaurants, Cafes and Lunch Counters (without water meters)

-a-Seating 30 persons or less $1,077.00 $269.25 -b-Each additional 10 Seats or Part Thereof $ 217.00 $ 54.25

(5) Motels (without water meters)

-a-Each unit having kitchen facility $ 277.00 $ 69.25 -b-Each unit without kitchen $ 187.00 $ 46.75

(6) Licenced Clubs $ 931.00 $ 232.75

SCHEDULE OF SEWER USER RATES 2016

Annual Quarterly Charge Charge

(7) Hotels (without water meters) -a-Each unit with bath $ 187.00 $ 46.75 -b-Each unit sharing bath $ 89.00 $ 22.25 -c-Beer Parlour/Public House $ 931.00 $ 232.75 -d-Lounges $ 458.00 $ 114.50 -e-Restaurant (see restaurants) -f-Banquet Room $ 581.00 $ 145.25

SCHEDULE 3, INSTITUTIONAL USE: Annual Quarterly (1) Schools/Colleges/Universities

-a-First 1 to 5 classrooms $ 429.00 ea $107.25 ea -b-Next 6 to 10 Classrooms $ 272.00 ea $ 68.00 ea -c-Over 10 Classrooms $ 143.00 ea $ 35.75 ea

(2)Churches/Chapels $ 620.00 $ 155.00 (3)Daycare $ 505.00 $ 126.25 Note: Institutional uses with a water meter:

basic charge of $72.50 per quarter, plus $.0261/cubic foot or $.9291/cubic meter. THE CITY RESERVES THE RIGHT TO METER ANY WATER SERVICE AT ITS SOLE DISCRETION

City of Nelson Water Utility Capital Reserve - Updated Net Revenue Dec 7, 2015

9:25 AM11/30/2015

Option 1● Continuation of 3% annual rate increase until 2026● Includes secondary source study to determine suitable options and establishing an emergency water source● Includes Hall St watermain & line replacement design in 2016 & install in 2017 dependent of Gov't funding● Includes 33% increase in metered rate for 2018 & 2019● Continuation of ICI metering and data collection in 2016; phased in approach in 2017 & 2018● Includes Residential Metering phased in from 2019 & 2021 if Govt funding is available

Water Capital Reserve

Estimated Replacement Cost Water Features 11,848,083 13,178,083 15,569,583 16,744,019 21,686,784 26,207,188 27,525,758 29,341,164 30,064,192 30,235,851 31,028,490 31,247,485 36,464,356 36,732,598 37,673,008 37,992,487 Water Mains 79,170,000 80,357,550 81,562,913 82,786,357 84,028,152 85,288,575 86,567,903 87,866,422 89,184,418 90,522,184 91,880,017 93,258,217 94,657,091 96,076,947 97,518,101 98,980,873 Total Water System replacement cost 91,018,083 93,535,633 97,132,496 99,530,376 105,714,936 111,495,762 114,093,661 117,207,585 119,248,610 120,758,036 122,908,507 124,505,702 131,121,447 132,809,545 135,191,109 136,973,359 Percentage of Reserve 3.2% 2.9% 2.3% 2.4% 3.3% 3.0% 3.6% 3.3% 4.1% 5.5% 6.3% 7.8% 6.4% 7.8% 8.6% 10.1%

Var%

Projected 2015 Year

End Actuals 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Opening Reserve Balance 3,696,972$ 3,696,972$ 2,939,661$ 2,665,995$ 2,220,461$ 2,436,201$ 3,477,105$ 3,310,989$ 4,112,601$ 3,899,447$ 4,910,920$ 6,598,571$ 7,783,051$ 9,675,875$ 8,349,280$ 10,315,243$ 11,692,251$

Contributions 100% 2,310,535 2,310,598 2,204,033 2,236,467 2,342,376 2,448,802 2,356,054 2,439,582 2,525,752 2,638,202 2,729,910 2,824,519 2,922,118 2,976,576 3,031,906 3,088,118 3,227,807 Community Works Grant 200,000 200,000 200,000 Gov't Grant 666,000 2,733,333 2,733,333 400,000 - 1,750,000 - - Borrowing 1,533,333 - - - - - Expenditures 99% (3,131,846) (3,175,000) (2,530,000) (3,391,500) (2,174,436) (5,942,765) (5,520,404) (2,318,570) (2,815,406) (1,723,029) (1,171,659) (1,792,639) (1,218,994) (6,216,872) (1,268,242) (1,940,410) (1,319,479) Interest Income 113% 64,000 56,700 52,300 43,500 47,800 68,200 64,900 80,600 76,500 96,300 129,400 152,600 189,700 163,700 202,300 229,300 272,000 Ending Reserve Balance 102% 2,939,661$ 2,889,270$ 2,665,995$ 2,220,461$ 2,436,201$ 3,477,105$ 3,310,989$ 4,112,601$ 3,899,447$ 4,910,920$ 6,598,571$ 7,783,051$ 9,675,875$ 8,349,280$ 10,315,243$ 11,692,251$ 13,872,579$

Capital PlanSource/Supply 50,000 620,000 650,000 800,000 4,000,000 3,500,000 500,000 1,500,000 500,000 - 500,000 - 4,000,000 - 500,000 - Secondary source & feasibility study 0% 0 50,000 120,000 150,000 300,000 3,500,000 3,500,000 Emergency source 500,000 Pipeline replacement 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Reservoir - treated water 500,000 1,500,000 Reservoir - fresh water 3,500,000

Water Distribution 100% 2,506,233 2,500,000 1,470,000 2,400,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 PRV upgrades 100% 525,000 525,000 50,000 400,000 Watermain replacement 100% 1,200,000 1,200,000 1,200,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Watermain & line replacement - Hall St 101% 781,233 775,000 200,000 1,000,000 Five Mile supply 20,000

Water Treatment 100% 625,613 625,000 440,000 275,000 290,000 600,000 600,000 600,000 - - - - - - - - - UV disinfection 112% 558,000 500,000 290,000 Demand management 40% 30,000 75,000 Strategic ICI metering & data collection 75% 37,613 50,000 150,000 Phased in ICI metering 275,000 290,000 Residential metering 600,000 600,000 600,000 Inflation consideration at 2% 66,500 84,436 342,765 420,404 218,570 315,406 223,029 171,659 292,639 218,994 1,216,872 268,242 440,410 319,479

2.00% 4.04% 6.12% 8.24% 10.41% 12.62% 14.87% 17.17% 19.51% 21.90% 24.34% 26.82% 29.36% 31.95%

Annual Capital Expenditures 99% 3,131,846$ 3,175,000$ 2,530,000$ 3,391,500$ 2,174,436$ 5,942,765$ 5,520,404$ 2,318,570$ 2,815,406$ 1,723,029$ 1,171,659$ 1,792,639$ 1,218,994$ 6,216,872$ 1,268,242$ 1,940,410$ 1,319,479$

Operational Plan 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 2.00% 2.00% 2.00% 2.00%Revenue from fees 98% 3,204,322 3,208,500 3,322,915 3,422,602 3,525,280 3,631,039 3,739,970 3,852,169 3,967,734 4,086,766 4,209,369 4,335,650 4,465,719 4,555,034 4,646,134 4,739,057 4,833,838 Metered revenue 105% 71,300 68,000 70,040 72,141 95,948 127,611 131,439 135,382 139,444 143,627 147,936 152,374 156,945 160,084 163,285 166,551 169,882

Other revenues (connec fees etc 1.5%>) 74% 231,150 312,750 162,750 165,191 167,669 170,184 172,737 175,328 177,958 180,627 183,337 186,087 188,878 191,711 194,587 197,506 200,468

Operating Expenditures 93% 1,090,101 1,172,516 1,245,535 1,317,332 1,340,385 1,373,895 1,408,242 1,443,448 1,479,535 1,516,523 1,554,436 1,593,297 1,633,129 1,673,958 1,715,807 1,758,702 1,802,669 Operating Expenditures (1.75% 2014 to 2018 then 2.5% >) 90% 1,013,976 1,128,766 1,201,020 1,272,038 1,294,298 1,326,656 1,359,822 1,393,818 1,428,663 1,464,380 1,500,989 1,538,514 1,576,977 1,616,401 1,656,811 1,698,232 1,740,687 New Services/renewals 131% 57,130 43,750 44,515 45,294 46,087 47,239 48,420 49,631 50,871 52,143 53,447 54,783 56,152 57,556 58,995 60,470 61,982

Debt Service (per schedule) 100% 106,136 106,136 106,136 106,136 106,136 106,136 279,849 279,849 279,849 256,295 256,295 256,295 256,295 256,295 256,295 256,295 173,713

Net Revenue Available for Capital 100% 2,310,535 2,310,598 2,204,033 2,236,467 2,342,376 2,448,802 2,356,054 2,439,582 2,525,752 2,638,202 2,729,910 2,824,519 2,922,118 2,976,576 3,031,906 3,088,118 3,227,807 72.11% 72.01% 66.33% 65.34% 66.45% 67.44% 63.00% 63.33% 63.66% 64.55% 64.85% 65.15% 65.43% 65.35% 65.26% 65.16% 66.78%

Water Rates - Single Family Annual Rate 569.00 586.00 604.00 622.00 641.00 660.00 680.00 700.00 721.00 743.00 765.00 788.00 804.00 820.00 836.00 853.00Less Discount 56.90 58.60 60.40 62.20 64.10 66.00 68.00 70.00 72.10 74.30 76.50 78.80 80.40 82.00 83.60 85.30Net 512.10 527.40 543.60 559.80 576.90 594.00 612.00 630.00 648.90 668.70 688.50 709.20 723.60 738.00 752.40 767.70

Water Main Construction

W E S

T A R M O F K O O

T E N A Y L A K E

City of Nelson Sewer Utility Capital Reserve - Updated Net Revenue Dec 7, 2015

9:26 AM11/30/2015

Option 1● Continuation of 2% annual rate increase● Hall St sewer upgrade design in 2016 & install in 2017 dependent on Gov't funding● Includes 33% increase in metered rate each year for 2018 & 2019

Wastewater Capital Reserve Estimated Replacement Cost Sanitary Features 11,168,908 11,961,908 13,098,908 13,909,508 13,980,931 14,746,336 14,887,968 17,685,380 22,324,728 22,453,473 22,512,000 22,676,246 22,749,259 22,877,428 22,837,341 23,076,950 Sanitary Mains 42,858,375 43,501,251 44,153,769 44,816,076 45,488,317 46,170,642 46,863,201 47,566,149 48,279,642 49,003,836 49,738,894 50,484,977 51,242,252 51,242,252 52,010,886 52,791,049 Total Water System assets 54,027,283 55,463,159 57,252,677 58,725,584 59,469,248 60,916,978 61,751,170 65,251,529 70,604,370 71,457,309 72,250,894 73,161,224 73,991,511 74,119,680 74,848,226 75,867,999 Percentage of Reserve 5.2% 5.1% 5.1% 4.6% 6.3% 6.0% 7.6% 4.0% 4.8% 5.5% 6.9% 7.6% 9.0% 9.6% 10.8% 11.3%

Projected 2015 Year

End Actuals 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Opening Reserve Balance 2,760,407$ 2,760,407$ 3,130,735$ 2,852,173$ 2,927,841$ 2,710,052$ 3,746,567$ 3,657,378$ 4,682,310$ 2,633,512$ 3,395,025$ 3,911,319$ 4,989,834$ 5,544,592$ 6,684,197$ 7,095,188$ 8,108,093$

Contributions 1,243,413 1,240,068 1,208,539 1,239,267 1,289,711 1,334,438 1,354,516 1,374,764 1,447,013 1,467,595 1,318,339 1,339,243 1,360,303 1,381,517 1,223,073 1,241,986 1,302,281 Community Works GrantRecoveryGovernment Grants - 666,000 - 2,666,667 - - - - - - - Borrowing - 1,500,000 Expenditures (925,085) (1,225,000) (1,543,000) (1,887,000) (1,560,600) (371,423) (1,515,405) (441,632) (3,547,412) (4,939,348) (878,745) (358,528) (914,246) (373,012) (951,181) (388,082) (989,609) Interest Income/recovery 52,000 55,500 55,900 57,400 53,100 73,500 71,700 91,800 51,600 66,600 76,700 97,800 108,700 131,100 139,100 159,000 168,400 Closing Reserve Balance 3,130,735$ 2,830,975$ 2,852,173$ 2,927,841$ 2,710,052$ 3,746,567$ 3,657,378$ 4,682,310$ 2,633,512$ 3,395,025$ 3,911,319$ 4,989,834$ 5,544,592$ 6,684,197$ 7,095,188$ 8,108,093$ 8,589,164$

Capital PlanSTP Upgrades - HVAC/ventilation - 168,000

- Headworks - RBC 50,000 100,000 2,000,000

Lift Stations 19,696 100,000 275,000 50,000 600,000 50,000 600,000 - - - - - - - - - Grit chamber & Surge tank - 150,000 150,000 50,000 150,000 - - - - - - - - - - - CIPP Relining 600,000 600,000 600,000 600,000 600,000 - 600,000 - 600,000 - 600,000 - 600,000 - 600,000 600,000 Sewer Main Upgrades 76,358 150,000 150,000 150,000 150,000 300,000 150,000 300,000 150,000 300,000 150,000 300,000 150,000 300,000 150,000 300,000 150,000 Forcemains - - - - - - - 400,000 4,000,000 - - - - - - - Sewer upgrades -Hall St Project 229,031 225,000 200,000 1,000,000 Inflation consideration at 2% 37,000 60,600 21,423 115,405 41,632 397,412 639,348 128,745 58,528 164,246 73,012 201,181 88,082 239,609

2.00% 4.04% 6.12% 8.24% 10.41% 12.62% 14.87% 17.17% 19.51% 21.90% 24.34% 26.82% 29.36% 31.95%Annual Capital Expenditures 925,085$ 1,225,000$ 1,543,000$ 1,887,000$ 1,560,600$ 371,423$ 1,515,405$ 441,632$ 3,547,412$ 4,939,348$ 878,745$ 358,528$ 914,246$ 373,012$ 951,181$ 388,082$ 989,609$

Operational plan 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Revenue from fees 2,790,519 2,800,745 2,872,456 2,929,906 2,988,504 3,048,274 3,109,239 3,171,424 3,234,852 3,299,550 3,365,540 3,432,851 3,501,508 3,571,539 3,642,969 3,715,829 3,790,145 Metered revenue 64,300 56,000 60,200 61,404 81,667 108,618 110,790 113,006 115,266 117,571 119,923 122,321 124,767 127,263 129,808 132,404 135,052

Other revenues 162,722 181,416 102,937 104,481 106,048 107,639 109,254 110,892 112,556 114,244 115,958 117,697 119,463 121,255 123,073 124,919 126,793

Operating Expenditures (1.75% 2014 to 2018 then 2.5% >) 1,601,291 1,623,611 1,652,024 1,680,934 1,710,350 1,753,109 1,796,937 1,841,860 1,887,907 1,935,105 1,983,482 2,033,069 2,083,896 2,135,993 2,189,393 2,244,128 2,300,231 New Services/renewals 29,714 31,358 31,907 32,465 33,033 33,859 34,706 35,573 36,463 37,374 38,309 39,266 40,248 41,254 42,286 43,343 44,426

Contribution to Gen. Operating (catch basin redirect) 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 Debt Service (per schedule) 93,124 93,124 93,124 93,124 93,124 93,124 93,124 93,124 41,291 41,291 211,291 211,291 211,291 211,291 211,291 211,291 170,000

Net Available for Capital 1,243,413 1,240,068 1,208,539 1,239,267 1,289,711 1,334,438 1,354,516 1,374,764 1,447,013 1,467,595 1,318,339 1,339,243 1,360,303 1,381,517 1,352,881 1,374,391 1,437,333 43.55% 43.41% 41.21% 41.43% 42.01% 42.27% 42.07% 41.86% 43.19% 42.95% 37.82% 37.67% 37.51% 37.35% 37.14% 36.99% 37.92%

Sewer Rates - Single FamilyAnnual Rate 495.00 505.00 515.00 525.00 536.00 547.00 558.00 569.00 580.00 592.00 604.00 616.00 628.00 641.00 654.00 667.00Less Discount 49.50 50.50 51.50 52.50 53.60 54.70 55.80 56.90 58.00 59.20 60.40 61.60 62.80 64.10 65.40 66.70Net 445.50 454.50 463.50 472.50 482.40 492.30 502.20 512.10 522.00 532.80 543.60 554.40 565.20 576.90 588.60 600.30

Sewer Main Construction

W E S

T A R M O F K O O

T E N A Y L A K E