Comox Strathcona Waste Management Service

Function 391January 14, 2016

2016 – 2020 ProposedFinancial Plan

CSWM Financial Plan (FP) Process

Today we are presenting the 2016-2020 proposed FP. Estimates have been made regarding project carry forward amounts, 2015 surplus c/f amounts, more refined costing, etc.);

CSWM Board considers and approves the CSWM service financial plan;

As per CSWM FP policy - Only changes of an administrative error nature are made subsequent to the CSWM board approval;

At March 22/24 CVRD board meetings, financial plan bylaw presented for 1st, 2nd, 3rd readings and then adoption;

Statutory deadline March 31st.

Budget Type Content Presentation Status

Preliminary  Budget summary (1 yr) & details

Nov 5, 2015

Four years of comparative actuals

Nov 5, 2015

Proposed  Budget summary (5 yrs) & details

Jan 14, 2016

Recommended Budget summary (5 yrs) & details

Feb 11, 2016

Adopted (CVRD)

Budget summary (5 yrs) Mar 24, 2016

Financial Plan Approval Process (as per FP policy)

• Source of Revenue- Tipping Fees- Tax Requisition

• Tipping fees are at the maximum acceptable rates as of 2016- “waste leakage”.

• Capital projects will need to be funded from tax requisition - based on the 2016 completed roll assessments, the maximum the service can collect is $17,387,738.

Revenue Sources:

ITEM 2016 2017 2018 2019 2020

RESIDENTIAL TAX RATE ESTIMATE (PER$1,000 OF ASSESSED VALUE) 0.0484 0.0968 0.1453 0.1937 0.1937

PROPOSED REQUISITION $1,000,000 $2,000,000 $3,000,000 $4,000,000 $4,000,000

• Table 1 provides the proposed tax requisition amounts for each of the next five years.

• For 2016, a residential home assessed at $350,000 taxes will be $16.94.

• For 2019, a residential home assessed at $350,000 taxes will be $67.80.

Revenue Sources:

Table 1

• 2014 actual tipping fee revenue was $6,724,923.

• The current projection for the total tipping fee revenue for 2015 is estimated at $8,091,318.

• Shortfall in the 2015 budget revenue of $411,247 ($8,502,565).

Revenue Sources:

• The projected tipping fee revenue for 2016 is estimated at $9,165,885.

• MMBC diversion program incentives from January to the end of November are $101,421 ($35,221).

Revenue Sources:

Table 2: Summarized 2016 proposed vs 2015 adopted budget

Personnel:• A landfill gas (LFG) technician position will be initiated in 2016 on a

part-time basis. This position will transition to a full-time position in 2017.

• Bylaw officer nine month term position( illegal dumping prevention plan implementation) - commencing June 2016.

Operations:Table 3 highlights significant changes in required operating amounts from 2015 budget value to 2016 proposed budget for various budget line items.

Table 3OPERATIONS

OBJECTCODE 2015 BV 2016 PB INCREASE

(DECREASE)MUNICIPAL CONTRACT 216 $145,520 $217,800 $72,280CONTRACTS‐OPERATING 262 2,705,000 2,346,000 (359,000)

RECYCLING/DIVERSION INITIATIVES 303 664,947 1,345,349 680,402

OTHER PROFESSIONAL FEES 387 246,750 441,750 195,000CONTRACT SERVICES‐EQUIPMENT/MACHINERY

438 219,365 296,441 77,076

REPAIRS/MTCE MACH/EQUIP 447 18,000 77,500 59,500MINOR CAPITAL 468 307,200 317,500 10,300PRINCIPAL/INTEREST 505,506 677,005 913,667 236,662

CONTRACT DESCRIPTION ISSUED FINAL COMPLETIONCVWMC PHASE 1 CLOSURE WORK:1 OVERALL CONTRACTOR MAY 2015 JUNE 2016 (ANTICIPATED)2 FLARE STATION EQUIPMENT MAY 2015 FEBRUARY 20163 PROJECT MANAGEMENT, CONSTRUCTION

QUALITY ASSURANCE MARCH 2015 JUNE 2016 (ANTICIPATED)

CVWMC CELL 1 NEW ENGINEERED LANDFILLEXPANSION‐ CELL 1:1 CELL 1 ENGINEERING DESIGN AUGUST 2013 APRIL 20162 LEACHATE TREATMENT SYSTEM DESIGN PROPOSED JANUARY 2016 JUNE 20163 CVWMC THIRD PARTY DESIGN REVIEW SEPTEMBER 2015 DECEMBER 20154 CELL 1 ENGINEERING CONSTRUCTION PROPOSED AUGUST 2016 APRIL 20175 LEACHATE TREATMENT SYSTEM CONSTRUCTION PROPOSED AUGUST 2016 APRIL 2017

Capital:Table 4 provides a summary of current contracts for capital projects.

Table 4

ITEM 2016 2017 2018 2019 2020 TOTALCVWMC CLOSURE $3,050,000 $105,000 $2,500,000 $5,655,000CVWMC NEW ENGINEEREDLANDFILL EXPANSION

11,975,000 9,700,000 21,675,000

CVWMC DROP OFF BIN WALLEXPANSION

455,000 455,000

CVWMC WATER SUPPLY FOR FIRESUPPRESSION

514,000 514,000

SAYWARD LANDFILL CLOSURE 90,000 300,000 390,000

CORTES ISLAND LANDFILLCLOSURE

90,000 300,000 390,000

ZEBALLOS LAND PURCHASE 200,000 200,000CRWMC CLOSURE 250,000 3,150,000 6,200,000 125,000 9,725,000

TOTALS: $15,025,000 $11,024,000 $5,830,000 $6,800,000 $325,000 $39,004,000

Capital:The major capital projects for the next five years are listed in table 5.

Table 5

Proposed for 2016:CVWMC closure works

Project work will include:• Perimeter LFG and condensate collection system. • Placement of the final soil cover and hydroseeding.• Consultant services for Project management of phase 1 closure.

CVWMC new engineered landfill• Cell 1 design and construction tender documents.• Leachate treatment facility tender documents for design and

built. • Construction of Cell 1 of the new engineered landfill-August

2016.• Construction of the leachate treatment system-August 2016.

Capital:

2017

1. CVWMC new engineered landfill• Continue construction of Cell 1 of the engineered

landfill to be completed in April of 2017.• Continue the construction of the leachate treatment

system to be completed in April of 2017.

2. CRWMC landfill• Complete the design of the landfill phase 2 closure

and strategy of the LFG collection system.

Capital:

• At the June 2015 CSWM board meeting, only $1,000,000 of the required $21,550,000 (under Loan Authorization Bylaw No. 351, 2014) was approved to proceed with the engineering design of Cell 1 of the new engineered landfill.

• The following provides the key milestones for board approval: Interim borrowing bylaw required to be approved for the

$20,550,000 by February 2016. Approval of construction contract for the Cell 1 engineered

landfill and leachate treatment by June 2016.

Capital:

ITEM DESCRIPTION OF PROPOSED CAPITAL EXPENDITURE 20161 CVWMC EXCAVATOR (USED) 250,0002 CVWMC FRONTEND LOADER 300,0003 CVWMC OFFICE TRAILER (CFW) 110,0004 CVWMC GPS UNIT 35,0005 CVWMC YARD BINS FOR DIVERSION PROGRAM 36,5006 TRANSFER STATIONS YARD BINS 22,0007 CVWMC ASPHALT PAVING FOR ORGANIC COMPOSTING PILOT

PROJECT50,000

8 CVWMC OPERATIONS FUEL TANK REPLACEMENT/SOILREMEDIATION

100,000

9 CIWMC SKID STEER 60,000TOTAL $ 963,500

Capital:Table 6 provides the following 2016 capital expenditures that are included in the proposed financial plan.

Table 6

Capital:

• A 10 year strategy is being developed to identify the best overall options for extending the lifespan of all waste management centre landfills within the CSWM service area. The strategy will:• Ensure all options meet MoE requirements • Provide the least financial burden to the CSWM

service and to tax payers.

• The CSWM service drafted a letter to MoE on October 14, 2015 to request that the closure of the landfills at CRWMC, Tahsis and Zeballos be deferred.

• MoE responded with a letter on December 22, 2015 providing their recommendations for the CSWM service to follow. • CSWM service to develop a strategy to implement the LFG

collection system at the CRWMC landfill that allows collection and flaring of the gas. • CRWMC landfill will be out of compliance due to the landfill

gas management regulation (LFGMR) that takes effect January 2016.

MoE Feedback:

• Delay of the landfill closure may result in infiltration, storm water and leachate management issues that could impact compliance with the operational certificate and other obligations under the Environmental Management Act.

• The ministry did not foresee any concerns with deferring the closure of the Tahsis and Zeballos landfills

• The CSWM service can continue to operate the landfills for approximately 10 years.

• if there is no indication of environmental impacts to surface water or groundwater.

• Changes that are implemented by the CSWM service will need to be addressed and updated in the 2017/2018 SWMP.

MoE Feedback:

RESERVE FUND BALANCE

FUTURE EXPENDITURE 749,899

CAPITAL WORKS 1,193,822

ENGINEERED LANDFILL CONSTRUCTION 2,234,328

LANDFILL CLOSURE 941,435

TOTAL $5,119,484

Reserves:Table 7 provides current reserve fund balances (December 31, 2014) for the various reserve funds available to the CSWM service.

Table 7

• Annual contribution of $100,000 to the future expenditure reserve fund.• Desired balance reserve is $2 million.

• Annual minimum contribution of $60,000 to the capital works reserve fund• Assist with asset management in the replacement of equipment and

infrastructure.

• Landfill closure reserve fund will be fully depleted by 2018. • Starting 2020, annual contribution of $250,000 will be required for the

future closure of the new engineered landfill (Per the AECOM, CVRD’s Waste Management System Model report ).

Reserves:

RESERVE FUND BALANCEDECEMBER 2020

FUTURE EXPENDITURE 1,349,899CAPITAL WORKS 4,228,555ENGINEERED LANDFILL CONSTRUCTION 1,103,328LANDFILL CLOSURE 250,000

TOTAL $6,931,782

Reserves:The December 2020 estimated balances of reserve funds are provided in Table 8.

Table 8

DEBT TYPE 2016 2017 2018 2019 2020INTERIM CAPITAL PROJECTS 243,467 585,900 628,900 611,251 0

LONG TERM – CAPITALPROJECTS

0 0 0 420,023 3,165,340

HOST AGREEMENTS 670,200 670,200 854,007 851,998 363,674DEBT COST 913,667 1,256,100 1,482,907 1,883,272 3,529,014

• Temporary borrowing bylaws are required to facilitate the interim financing.• Paid down in 2019 by long term borrowing.

• The long term debt requirement for the proposed FP is $42 million. The corresponding debt payments are reflected in table 9.

Debt:

Table 9

1. THAT the 2016 – 2020 proposed financial plan for the Comox Strathcona waste management (CSWM) solid waste service, function 391, be approved.

2. THAT a temporary borrowing bylaw for the remainder of project funds, for the Comox Valley new landfill expansion (CVWMC Cell 1 new engineered landfill expansion and leachate treatment system) in the amount of $20,550,000, be approved.

RECOMMENDATIONS FROM THE CHIEFADMINISTRATIVE OFFICER:

Questions ?