170110 Council Budget MINATTENDANCE
Mayor Stephen Molnar
Councillor Maxwell Adam Councillor Penny Esseltine
Councillor Chris Rosehart
Regrets: Deputy Mayor Dave Beres, Councillor Jim Hayes, Councillor Brian Stephenson
Staff: David Calder, CAO
Dave Rushton, Director of Finance/Treasurer Rick Cox, Director of Recreation, Culture & Parks
Jeff Smith, Fire Chief
Tricia Smith, Deputy Clerk
Regrets: Donna Wilson, Town Clerk, Kevin DeLeebeeck, Director of Operations, Geno
Vanhaelewyn, Chief Building Official
1.Call to Order
The meeting was called to order at 9:10 a.m.
2.Adoption of Agenda
Agenda item 7.1 Sections 5 & 8 were deferred to the January 24, 2017 Budget Council
Meeting.
Resolution #1
Moved By: Councillor Rosehart Seconded By: Councillor Esseltine
THAT the Agenda as prepared for the Budget Council meeting of Tuesday, January 10,
2017, be adopted as amended.
Carried
The Corporation of the Town of Tillsonburg
BUDGET COUNCIL MEETING
Tuesday, January 10, 2017
9:00 AM
Council Chambers
200 Broadway, 2nd Floor
MINUTES
Council Meeting Minutes, January 10, 2017 2
3. Moment of Silence
4. Disclosures of Pecuniary Interest and the General Nature Thereof
There were no disclosures of pecuniary interest declared.
5. Adoption of Council Minutes of Previous Meeting
5.1. Minutes of the Meeting of December 1, 2016
Minutes, December 1, 2016
Resolution #2
Moved By: Councillor Esseltine Seconded By: Councillor Rosehart
THAT the Minutes of the December 1, 2016 Budget Meeting, be approved.
Carried
6. Overview of the 2017 Proposed Budget – David Calder, CAO
The CAO provided an overview of the 2017 Proposed Budget.
Additional “white papers” will be coming forward for Council’s consideration.
7. 2017 Draft Budget – Dave Rushton, Director of Finance
7.1. 2017 Budget Package
Section 1 - Introduction & Overview
The Director of Finance provided an introduction and overview of the 2017 draft budget.
Staff to provide the Tax Vacancy Rebate Rate to Council.
The new carbon tax will impact upon electricity and gas rates in 2017.
Staff is recommending allocating reserve funds for ease in tracking purposes and to
fund specific future projects.
Staff is recommending the liquidation of the non-cash reserve account to keep the cash
received in the reserve and put unsaleable land with parks.
Council recessed at 10:11 a.m.
Council resumed at 10:20 a.m.
Council Meeting Minutes, January 10, 2017 3
Section 3 - Finance
The Manager of Finance provided a review of the Finance Department Business Plan.
An increase in the availability of on-line services is being proposed.
Target date for the Debt Policy & Reserve Policy is the second quarter of 2017.
Customer Service Centre delivery model in progress. Staff will be bringing back a
report for the 2017 business plan deliberations.
A joint purchase is being considered with the County of Oxford for a telephone system
in order to achieve cost savings.
Staff to circulate the 2014 IT Strategic Review to Council.
Staff to provide council with historical data of Community Group Grant Requests.
Staff to provide a report to Council on the 2016 Cultural Advisory Committee financial
commitments.
Section 4 - Human Resources
The Human Resources Manager provided a review of the Human Resources Business
Plan.
Staff to provide a report to Council outlining the 5-year trend on Health & Dental costs
and note benefit package options.
Councillor compensation review to be included in the 2017 Human Resources Business
Plan.
Section 6 - Recreation, Culture & Parks
The Director of Recreation, Culture & Parks provided a review of the RCP Business
Plan.
Staff to report additional information on the revenues projected from the proposed user
fee levy surcharge to offset pool deck replacement costs and future improvements and
identify the collection period.
Staff to provide a report to council on options for the Carroll Trail repairs.
Staff to provide a report on the TCC Energy Retrofit pre-tender technical design to
council.
Staff to provide a report regarding the Beautification Working Group’s proposed
beautification efforts, as well as the analysis of costs and benefits of Town beautification
by Town staff or by contracting out.
Council Meeting Minutes, January 10, 2017 4
Moved By: Councillor Adam Seconded By: Councillor Esseltine
THAT the five-year update to the Parks, Recreation & Cultural Strategic Master Plan be
removed from the 2017 RCP Business Plan objectives and Budget ($30,000).
Carried
Council took a Lunch Break at 12:27 p.m.
Council resumed at 1:22 p.m.
Section 7 - Fire Services
The Fire Chief provided a review of the Fire Services Business Plan.
Staff to provide an interim report to council on the status of the Fire Strategic Plan.
Staff to bring forward the Fire Rescue Services By-Law in Q1 for amendment.
Staff to provide a report to council on the after-hours customer service support provided
by Fire Dispatch staff.
The rate of remuneration for Fire Fighters is to be circulated by staff to Council.
Section 9 - Economic Development & Marketing
The Development Commissioner provided a review of the Economic Development &
Marketing Business Plan.
Staff to circulate the Downtown Revitalization Study to Council.
Section 10 - Capital Budget Overview
The Director of Finance provided a review of the proposed capital budget.
Staff to provide a further review of the draft capital budget at the January 24, 2017
Budget meeting.
Council discussed time sensitive projects that required pre-budget approval.
Moved By: Councillor Adam Seconded By: Councillor Rosehart
THAT capital project X55 Riverview Reconstruction Stage 2 receive 2017 pre-budget
approval in the amounts of $420,000 (roads) and $197,500 (storm sewers) to prepare
tender documents in order to receive competitive pricing.
Carried
Council Meeting Minutes, January 10, 2017 5
Moved By: Councillor Esseltine Seconded By: Councillor Adam
THAT Council pre-approve the Indoor Pool Deck replacement and maintenance (X17
2017) in the 2017 budget and further that financing of the project be reviewed.
Carried
Moved By: Councillor Esseltine Seconded By: Councillor Adam
THAT Council defer Agenda Items 7.2, 7.3, 7.4, 7.5 and 7.6 until the Budget Meeting of
January 24, 2017.
Carried
8. Council Budget Discussions
9. 2017 Tax Levy Resolution
Resolution #8
Moved By: Councillor Esseltine Seconded By: Councillor Adam
THAT Council receive the 2017 Budget Package, as information.
Carried
10. By-Laws
By-Laws from the Meeting of January 10, 2017
Resolution #9
Moved By: Councillor Rosehart Seconded By: Councillor Adam
9.1 THAT By-Law 4073, To confirm the proceedings of Council at its meeting held on the
10th day of January, 2017, be read for a first, second and third and final reading and
that the Mayor and the Clerk be and are hereby authorized to sign the same, and place
the corporate seal thereunto.
Carried
11. Adjournment
Resolution #10
Moved By: Councillor Esseltine Seconded By: Councillor Rosehart
THAT the Council Meeting of January 10, 2017 be adjourned at 3:28 p.m.
Carried
Table of Contents
Agenda 2
Minutes, December 1, 2016
Minutes, December 1, 2016 5
2017 Budget Package
Section 1 - Introduction & Overview 11
Section 3 - Finance 28
Section 4 - Human Resources 38
Section 5 - Operations 45
Section 6 - Recreation, Culture & Parks 72
Section 7 - Fire Services 89
Section 8 - Building, Planning & By-Law 105
Section 9 - Economic Development & Marketing 115
Section 10 - Capital Budget Overview 124
Section 11 - Long Term Debt Repayment 130
Section 12 - Consolidated PSAB Summary 132
FIN 17-03, Tax Rates Explained
FIN 17-03 133
FIN 17-04, Funding the Asset Management Plan
FIN 17-04 135
FIN 17-05, Reserves
FIN 17-05 136
Reserve Policy 138
OPS 17-03, White Paper – Business Case for 1.0 FTE
Mechanic
OPS 17-03 141
RCP 17-02 – Budget Issue Paper – Utility Cost Increases
RCP 17-02 ? Budget Issue Paper - Utility Cost
Increases 143
The Mysteries of Electricity Pricing in Ontario 146
Guide to Electricity Pricing in Ontario 152
By-Law 4073, To confirm the proceedings of council
By-Law 4073 168
1
1. Call to Order
2. Adoption of Agenda
Proposed Resolution #1
THAT the Agenda as prepared for the Budget Council meeting of Tuesday, January 10,
2017, be adopted.
3. Moment of Silence
4. Disclosures of Pecuniary Interest and the General Nature Thereof
5. Adoption of Council Minutes of Previous Meeting
5.1. Minutes of the Meeting of December 1, 2016
Minutes, December 1, 2016
Proposed Resolution #2
THAT the Minutes of the December 1, 2016 Budget Meeting, be approved.
6. Overview of the 2017 Proposed Budget – David Calder, CAO
7. 2017 Draft Budget – Dave Rushton, Director of Finance
7.1. 2017 Budget Package
Section 1 - Introduction & Overview
Section 3 - Finance
Section 4 - Human Resources
Section 5 - Operations
The Corporation of the Town of Tillsonburg
BUDGET COUNCIL MEETING
Tuesday, January 10, 2017
9:00 AM
Council Chambers
200 Broadway, 2nd Floor
AGENDA
2
Council Meeting – Agenda 2
Section 6 - Recreation, Culture & Parks
Section 7 - Fire Services
Section 8 - Building, Planning & By-Law
Section 9 - Economic Development & Marketing
Section 10 - Capital Budget Overview
Section 11 - Long Term Debt Repayment
Section 12 - Consolidated PSAB Summary
7.2. FIN 17-03, Tax Rates Explained
FIN 17-03
Proposed Resolution #3
THAT Council receive Report FIN 17-03, Tax Rates Explained, as information.
7.3. FIN 17-04, Funding the Asset Management Plan
FIN 17-04
Proposed Resolution #4
THAT Council receive Report FIN 17-04, Funding the Asset Management Plan;
AND THAT council directs staff to bring forward a capital budget in the fall using the
amount of the increase in property value assessment (growth) towards funding the
Asset Management Plan.
7.4. FIN 17-05, Reserves
FIN 17-05
Reserve Policy
Proposed Resolution #5
THAT Council receive Report FIN 17-05, Reserves;
AND THAT Council directs staff to bring forward an updated reserve policy;
AND FURTHER THAT Council accepts the general reserve fund to be reported through
the use of proposed reserves.
3
Council Meeting – Agenda 3
7.5. OPS 17-03, White Paper – Business Case for 1.0 FTE Mechanic
OPS 17-03
Proposed Resolution #6
THAT Council receive Report OPS 17-03, White Paper – Business Case for 1.0 FTE
Mechanic as information.
7.6. RCP 17-02, Budget Issue Paper – Utility Cost Increases
RCP 17-02 - Budget Issue Paper - Utility Cost Increases
The Mysteries of Electricity Pricing in Ontario
Guide to Electricity Pricing in Ontario
Proposed Resolution #7
THAT Council receive Report RCP 17-02, Budget Issue Paper – Utility Cost Increases,
as information.
8. Council Budget Discussions
9. 2017 Tax Levy Resolution
Proposed Resolution #8
THAT Council receive the 2017 Budget Package;
AND THAT Council approve a tax levy rate increase of 3.3% and the tax supported
operating budget of $12,865,100.00 and capital budget of $1,206,600.00.
10. By-Laws
By-Laws from the Meeting of January 10, 2017
Proposed Resolution #9
9.1 THAT By-Law 4073, To confirm the proceedings of Council at its meeting held on the
10th day of January, 2017, be read for a first, second and third and final reading and
that the Mayor and the Clerk be and are hereby authorized to sign the same, and place
the corporate seal thereunto.
11. Adjournment
Proposed Resolution #10
THAT the Council Meeting of January 10, 2017 be adjourned at _____ p.m.
4
ATTENDANCE Mayor Stephen Molnar
Deputy Mayor Dave Beres
Councillor Maxwell Adam
Councillor Penny Esseltine
Councillor Jim Hayes Councillor Chris Rosehart
Councillor Brian Stephenson
Staff:
David Calder, CAO David Rushton, Director of Finance/Treasurer
Janelle Costantino, Manager of Finance
Rick Cox, Director of Recreation, Culture & Parks
Kevin DeLeebeeck, Director of Operations
Jeff Smith, Fire Chief Tricia Smith, Deputy Clerk
Regrets: Donna Wilson, Town Clerk
1. Call to Order
The meeting was called to order at 4:01 p.m.
2. Adoption of Agenda
Resolution #1
Moved By: Councillor Hayes Seconded By: Councillor Rosehart
THAT the Agenda as prepared for the Council meeting of Thursday, December 1,
2016, be adopted.
Carried
The Corporation of the Town of Tillsonburg
BUDGET COUNCIL MEETING
Thursday, December 01, 2016
4:00 PM
Council Chambers
200 Broadway, 2nd Floor
MINUTES
5
Council Meeting Minutes, December 1, 2016 2
3. Moment of Silence
4. Disclosures of Pecuniary Interest and the General Nature Thereof
There were no disclosures of pecuniary interest declared.
Councillor Adam joined the meeting at 6:15 p.m.
5. Adoption of Council Minutes of Previous Meeting
5.1. Minutes of the Meeting of November 22, 2016
Minutes, November 22, 2016
Resolution #2
Moved By: Councillor Hayes Seconded By: Councillor Rosehart
THAT the Minutes of the Budget Council Meeting of November 22, 2016, be
approved.
Carried
6. Budget Requests
Limited to 15 minutes each
6.1. Tillsonburg District Chamber of Commerce Budget Request
2015 Financial Statements
6.2. Tillsonburg & District Multi-Service Centre Budget Request
Cover Letter
Multi-Service Centre Statistics: Tillsonburg
2015/16 Financial Statements
6.3. Tillsonburg Station Arts Centre Budget Request
Proposed Service Agreement
6.4. Town of Tillsonburg Cultural Advisory Committee Budget Request
Cover Letter
6
Council Meeting Minutes, December 1, 2016 3
6.5. Big Brothers Big Sisters of Ingersoll, Tillsonburg & Area Budget Request
Cover Letter
Municipal Grant Request
2015 Financial Statements
6.6. Lake Lisgar Revitalization Committee Budget Request
2015 Financial Statements
6.7. Heritage, Beautification & Cemetery Advisory Committee Budget Request
Multi-Year Plan
A recommendation was made for the allocation of resources to the Parks,
Culture & Recreation 2017 Budget for beautification efforts in the Town.
6.8. Upper Deck Youth Services Budget Request
Cover Letter
2014-2016 Financial Statements
6.9. Cross Country Jeepers Budget Request
Cover Letter
6.10. Tillsonburg Police Services Board Budget Request
2015 Financial Statements
6.11. Tillsonburg Business Improvement Area Budget Request
2017 BIA Business Plan
2017 Budget
2015 Financial Statements
Councillor Stephenson left the meeting at 6:50 p.m.
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Council Meeting Minutes, December 1, 2016 4
6.12. Tillsonburg Turtlefest Budget Request
2016 Financial Statements
2015 Financial Statements
Applicant to provide a breakdown of the $5000 in costs for incorporation
to Council.
6.13. Family Day Organizing Committee Budget Request
2016 Event Report
2015 Financial Statements
6.14. Community Transportation Steering Committee Budget Request
2017 Budget & 2015-16 Financial Statements
MTO Community Transportation Pilot Program grant ending March 31,
2017.
A recommendation was made for the Town to apply for Provincial Gas Tax
Funds to provide support for the continuation of the Community
Transportation Pilot Program.
A request was made for pre-budget approval.
Council requested information on community support for the continuation
of the pilot program as part of the committee’s next report to council.
Staff to follow up with Council in regards to the availability of 2017
Provincial Gas Tax funding.
Resolution #3
Moved By: Councillor Adam Seconded By: Deputy Mayor Beres
Notwithstanding any circulated resolutions on the Budget Agenda of
December 1, 2016, be it resolved that the Community Budget requests as
presented be received as information.
Carried
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Council Meeting Minutes, December 1, 2016 5
6.15. FIN16-35 2017 Community Budget Requests
FIN16-35 2017 Community Budget Requests
2017 Community budget request summary sheet
Resolution #4
Moved By: Deputy Mayor Beres Seconded By: Councillor Adam
THAT Council receives FIN16-35 2017 Community Budget Requests as
information;
AND THAT any received community grant requests be referred to the 2017
budget deliberations.
Carried
7. Council Budget Discussions
8. By-Laws
By-Laws from the Meeting of December 1, 2016
Resolution #5
Moved By: Deputy Mayor Beres Seconded By: Councillor Adam
8.1 THAT By-Law 4062, To amend Zoning By-Law Number 3295, as
amended (ZN 7-16-07), be read for a first, second and third and final
reading and that the Mayor and the Clerk be and are hereby authorized to
sign the same, and place the corporate seal thereunto.
Carried
Resolution #6
Moved By: Deputy Mayor Beres Seconded By: Councillor Adam
8.2 THAT By-Law 4061, To confirm the proceedings of Council at its meeting
held on the 1st day of December, 2016, be read for a first, second, third
and final reading and that the Mayor and the Clerk be and are hereby
authorized to sign the same, and place the corporate seal thereunto.
Carried
9
Council Meeting Minutes, December 1, 2016 6
9. Adjournment
Resolution #7
Moved By: Councillor Hayes Seconded By: Councillor Rosehart
THAT the Budget Council Meeting of December 1, 2016, be adjourned at 7:58 p.m.
Carried
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TOWN OF TILLSONBURG2017 Business PlanHuman ResourcesTuesday, January 10, 201738
2HR ServicesRecruitmentSalary AdministrationHRISBenefit AdministrationPolicy & ProceduresEmployee RelationsHealth & Safety/WellnessLabour Relations2017 Business Plan | Human Resources39
32017 BusinessObjectives2017 Business Plan | Human ResourcesItemOwner Budget Value Target Date1.5 % Costing of Living IncreaseHR Manager $72,000 Q2-Q4Health & Dental renewal increaseHR Manager $43,000 Q1-Q4Payroll deduction increase (CPP, EI, WSIB)HR Manager $34,000 (FT) Q1 – Q4Compensation Review – Pay EquityHR Manager $10,000 Q4Health and Safety/Management TrainingHR Manager $5,000 Q1-Q4Succession Planning Program Training and DevelopmentHR Manager $2,500 Q1-Q440
4Risks•Competitive compensation pressures. •Changing health and safety legislation. 2017 Business Plan | Human Resources41
5Opportunities•Increasing the cost of living supports recruitment and retention. •Succession Planning program to provide for business continuity. •Compensation review to ensure we are continuing to remain in compliance with the Pay Equity Act.2017 Business Plan | Human Resources42
6Future Departmental Directions: 3 year outlook• 2018 to 2020• Continuation of Succession Planning Program2017 Business Plan | Human Resources43
7Human Resources2017 Business Plan | Human Resources2016 2017Total FTE Requirements127.32 130.79Change from previous year- 3.47Department FTE ChangeBuilding & By-Law 0.33Clerk’s Department 0.33Economic Development 0.10Hydro Operations 2.00Operations 0.16Recreation, Culture & Parks 0.552017 FTE Changes by Department44
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2016 Sub-Total Total 2017 Sub-Total Total
Budget Budget
REVENUES
Operating ($18,815,300) ($19,732,342)
Capital (3,418,800) (7,277,900)
LESS:
Transfer from other funds 1,111,000 2,104,900
Proceeds on debenture issue 1,007,300 861,500
Proceeds on user pay debtenture issue 625,000
TOTAL REVENUE -13,278,200 (20,115,800) -8,863,042 (24,043,842)
EXPENSES
Operating 18,675,300 19,732,443
Non-Tangible Capital 558,700 110,000
Capital 5,322,000 7,167,900
LESS:
Transfer to other funds (709,500) (365,800)
Capital Expenses (5,322,000) (7,167,900)
Debt Principal payments (887,500) (983,121)
TOTAL EXPENSES 17,637,000 17,637,000 18,493,522 18,493,522
ANNUAL SURPLUS: before exclusions (2,478,800) (5,550,320)
EXCLUSIONS:
Amortization of TCA 2,339,700 2,413,600
Post Employment Benefits
Solid Waste Landfill Closure and Post-Closures
TOTAL EXCLUSIONS 4,679,400 2,339,700 2,413,600
ANNUAL SURPLUS: after exclusions (139,100) 7,963,920 (3,136,720)
132
Report Title Tax Rates Explained
Report No. FIN 17-03
Author Dave Rushton
Meeting Type BUDGET MEETING
Council Date JANUARY 10, 2017
Attachments
RECOMMENDATION
THAT Council receives report FIN 17-03 Tax Rates as information.
EXECUTIVE SUMMARY
To explain the difference between Tax rates and the General Levy imposed by the Town. BACKGROUND
There are two factors which affect the amount of taxes paid by residents of the Town. The first is the General Levy tax rate, and the second is the change in assessment value of a property.
The General tax rate is determined through the budget process. An increase in budget dollars will result in an increase of the general levy tax rate.
The change in Current Value Assessment (CVA or growth) is determined by MPAC based on a variety of
factors. MPAC performs reassessments every 4 years, in which 2017 is year one of the next
reassessment cycle.
Properties with an increase in CVA will see an increase of their property value phased-in over the 4 year
period. Properties with a decrease in CVA will see the decreased value in year one.
An additional impact is the weighting factor provided to each class such as multi-residential, commercial and industrial which are greater than the residential (RT) zoned properties. Farms are taxed at 25% of their value for property tax purposes.
The combination of these factors is what determines a change in tax dollars paid by a municipal taxpayer. 2017 Impact An increase in the budget of $603,200 is proposed. MPAC’s reassessment has resulted in an overall average increase in weighted CVA of 1.1%. A summary of changes in the weighted CVA has been
provided below. Residential class has seen growth in new homes and increased property values while non-residential have decreased. Based on last year’s tax levy, this means the residents will see an
increase of $150,000, before any budgeting impact is factored in.
Page 1 / 2 Tax Rates Explained
133
Since the proposed increase is $603,200 and $150,000 is accounted for through growth, the remaining difference of $453,200 must be funded through a general levy increase. This will result in an overall levy
increase of 3.3% over last year’s tax rate.
What will Residents Pay?
As you can see from the chart above, the value of residential properties has increased by almost 2%,
while non-residential classes combined have decreased by 15%. Unfortunately, when the CVA of
commercial, industrial, farmland or vacant land decreases, the residential class picks up the differential as this will always be our largest growing tax class.
The Median residential CVA increased from $221,750 to $226,000.
The average tax levy for the Median household in 2016 would have been $1,604.21. With the proposed tax dollar increase of $603,200, the same household will pay $1,689.36 in 2017, a difference of $85.15 per year, or $7.10 per month
As discussed in the Asset Management Plan, an increase in the levy is needed to build towards a plan
that will allow us to sustain the assets we have. Based on this year, $25.86 of the median resident’s tax
increase of $85.15 would go to capital.
2017 General Levy PRELIMINARY
2017 2016
2017 2017 WEIGHTED/ WEIGHTED/
Phase - In TAX DISCOUNTED DISCOUNTED
CVA RATIO CVA CVA
RESIDENTIAL 1,292,511,258 1 1,292,511,258 1,256,827,097
MULTI-RESIDENTIAL 51,345,425 2.74 140,686,465 144,847,634
COMMERCIAL 142,270,968 1.9018 270,570,927 276,357,943
COMMERCIAL NEW CONSTRUCTION 9,915,950 1.9018 18,858,154 18,103,234
VACANT UNITS/EXCESS LAND 1,046,739 1.9018 1,393,482 1,760,791
VACANT LAND 1,983,250 1.9018 2,640,221 3,007,849
COM'L NEW CONST. - EXCESS LAND 34,300 1.9018 45,662 49,257
INDUSTRIAL 29,683,125 2.63 78,066,619 81,833,055
INDUSTRIAL NEW CONSTRUCTION 1,744,750 2.63 4,588,693 4,576,200
VACANT UNITS/EXCESS LAND 597,225 2.63 1,020,956 1,422,475
VACANT LAND 719,725 2.63 1,230,370 1,006,212
LARGE INDUSTRIAL 23,542,400 2.63 61,916,512 63,305,749
VACANT UNITS/EXCESS LAND 44,400 2.63 75,902 330,571
PIPELINES 5,011,500 1.2593 6,310,982 6,086,197
FARMLAND 7,941,475 0.25 1,985,369 1,703,325
FARMLAND DEV PH 1 1,306,075 1 587,734 533,385
1,569,698,565 1,882,489,304 1,861,750,973
Page 2 / 2 Tax Rates Explained
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Report Title Funding the Asset Management Plan
Report No. FIN 17-04
Author Dave Rushton
Meeting Type BUDGET MEETING
Council Date JANUARY 10, 2017
Attachments
RECOMMENDATION
THAT Council receives report FIN 17-04 funding the Asset Management Plan;
AND THAT council directs staff to bring forward a capital budget in the fall using the amount of the
increase in property value assessment (growth) towards funding the Asset Management Plan.
EXECUTIVE SUMMARY
To explain the support in taxation for sustaining the asset management plan.
BACKGROUND
The Director of Operations and the Deputy Treasurer have reviewed the Asset Management Plan with council and proposed that a capital tax levy be put in place. This would work towards providing us with funding to replace assets as they wear out rather than through debenture.
We are proposing to use the growth in property value as the source for increased funding. With this plan,
the funding of asset replacement would be funded through the tax on the increasing value of real estate.
The overall growth this year, after factoring in the increase in residential real estate values and the
decrease in the assessed values of non-residential values, is a 1.1% increase. We would like to see this
method as a consistent funding source in our plan to have a sustainable Asset Management Plan.
The benefits of this would be to allow an increase annually to the capital budget that is predictable. With this information, we could bring a capital budget before council in the fall for approval prior to the operating budget. This timing would allow us to get better pricing on our projects as we find first to
market often sees better pricing in tenders. It also allows us a better schedule to start and plan work during the winter prior to busy construction seasons.
With direction from council, we can bring the capital budget forward in the fall of 2017 using the growth rate for funding.
Page 1 / 1 Funding AMP
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Report Title Reserves
Report No. FIN 17- 05
Author Dave Rushton
Meeting Type BUDGET MEETING
Council Date JANUARY 10, 2017
Attachments Unrestricted Reserves and Reserve Policy
RECOMMENDATION
THAT Council receives report FIN 17-05 Reserves;
AND THAT Council directs staff to bring forward an updated reserve policy;
AND FURTHER THAT Council accepts the general reserve fund to be reported through the use of proposed reserves.
EXECUTIVE SUMMARY To explain the value of separating the monies collected for various projects and activities. BACKGROUND
“Reserves” are a provision or amount that is designated for a future purpose that extends beyond the
current fiscal year. Reserves are set up or utilized by resolution.
Prior to 2009, we maintained separate general ledger accounts for various reserves. In that year, we
reduced our tax rate and ended the year with a very large deficit. To assist with this, council directed that unrestricted reserves be used to offset the deficit. Since that time, funds have been put into the general
reserve fund rather than specific funds. In 2013, the attached Reserve Policy was established but general ledger accounts were not re-established. We would like to return to the practice of having unrestricted reserves maintained in the
same bank account but separate general ledger accounts. This will allow us to use the funds for the purpose for which they were collected and still leave them ultimately to the direction of council to redirect
them as necessary.
To demonstrate this, we have incorporated this in the 2017 Budget for information purposes. Some operating departments such as fleet, and beginning in 2017 IT, collect monies for future capital
purchases within their charges to other departments. We will be asking in the new policy for these funds
to be transferred into reserves for future year’s asset replacement.
With direction from council, staff will bring forward a revised “Reserve Policy” establishing the new
reserves. The policy will provide for direction of operation funds including monies collected for future projects and the use of reserves for surplus earnings or deficit.
Page 1 / 2 Reserves
136
UNRESTRICTED RESERVES
Reserve Investment Projected
Account Balance Transfers Transfers or Other Balance
Name 01-Jan-17 In - 2017 Out - 2017 Income 31-Dec-17
Income 20,000 20,000
Airport 57,450 57,400 50
Building - -
Council 13,400 13,400
CSC 32,703 32,700 3
Ec. Dev 849,271 531,500 317,771
Eng 38,156 38,100 56
Fire 14,000 45,000 14,000 45,000
Fleet 319,552 310,000 9,552
General 411,575 411,575
IT 302,192 65,000 290,000 77,192
Misc 220,000 220,000
Parking 180,214 36,000 144,214
Parks 21,918 21,918
Police 123,783 41,000 82,783
RCP 140,656 143,900 3,244-
Roads 92,754 92,900 146-
Roof 5,318 5,318
Museum 5,000 5,000 -
Election 44,000 44,000
Trans Stn 21,000 21,000 -
Non-cash 398,532 398,532
3,291,474 110,000 1,613,500 20,000 1,807,974
Page 2 / 2 Reserves
137
THE CORPORATION OF THE TOWN OF TILLSON BURG
RESERVE POLICY
APPOVAL DATE: REVISION DATE:
11/25/201 3
APPENDICES: N/A
Page 1
Page 1 of 3
138
BY-LAW No. 3779
OF THE
CORPORATION OF THE TOWN OF TILLSONBURG
A BY-LAW TO ESTABLISH A RESERVE POLICY
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWN OF TILLSONBURG
HEREBY ENACTS AS FOLLOWS:
1.0 DEFINITIONS
In this By-Law:
a) "Reserves" is a provision or amount that is designated for a future purpose that
extends beyond the current fiscal year. Reserves are set up or utilized by resolution.
All related interest earnings are reported as general operating earn ings.
b) "Reserve Fund" shall mean an amount set asid e by a by-law based on a statutory
requirement (obligatory reserve fund) or a specific designated purpose (discretionary
reserve fund). The Development Charges reserve fund, for example, is an obligatory
reserve fund, req uired by legislation that is maintained year over year to help fund
growth related capital projects. Or the Cemetery Maintenance Reserve Fund that is
maintained year over year to fund Cemetery repairs and maintenance expenditures.
Cash placed in a reserve fund earns interest.
2.0 POLICY STATEMENT
2.1 Objectives:
a. To establish reserves as approved by Council for:
i. future capital expenditures;
ii. operating projects or surpluses;
iii. sale of fixed assets or land
iv. unexpected or unplanned events;
v. th e reduction of debt financing;
vi. or any oth er pu rpose that Council designates;
Page 2
139
that would otherwise cause fluctuations in the operating or capital budgets.
b. To establish reserve funds through the adoption of a by-law for:
i. specific purposes as approved by Council.
c. All reserves held in cash will be held in a separate bank account.
3.0 ACCOUNTABILITY
The Director of Finance or his/her designate shall maintain accountability on behalf of Council
relating to the administration of reserves, including the process to transfer to and from
reserves once approved by Council.
Staff provides recommendations on the transfer of funds to and from reserves.
4.0 PRESCRIBED COUNCIL AUTHORITY
a. Establish new reserves;
b. Close existing reserves;
c. Amalgamate reserves;
d. Transfer funds to and from reserves via the approved annual budget;
e. Transfer funds to and from reserves through Council resolution not addressed through
the budget process.
5.0 REPORTING
Projected contributions and uses of reserves are provided as a component on the annual
budget process. Reserve and reserve fund balances are provided as a component of the
annual Town financial statements.
6.0 OTHER
Where any other By-law exists which is in conflict with a provision of this Policy, the provision
of this Policy shall be deemed to apply.
This Policy shall be reviewed and updated,y
date of its enactment. (
~Donna Wilson
DATED
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140
Report Title White Paper – Business Case for 1.0 FTE Mechanic
Report No. OPS 17-03
Author Senior Leadership Team
Meeting Type Budget Meeting
Council Date January 10, 2017
Attachments
RECOMMENDATION
THAT Council receive Report OPS 17-03 White Paper – Business Case for 1.0 FTE
Mechanic as information.
SUMMARY
Fleet Services is responsible for the stewardship of the Town’s fleet of vehicles and equipment
including compliance with applicable legislative requirements for various Town departments.
Services and responsibilities include:
•Preventative Maintenance
•24 hour / 7 days per week On-Call Service
•General Repairs and Documentation as per CVOR Reg 424
•Warranty Recovery & Tracking
•Recall Notification & Tracking
•Fuel Inventory Management
•Parts & Supplies Inventory Management
•Replacement Specifications and Bid Evaluation
•Surplus Vehicle Disposal Administration
•Vehicle Licensing, Registration and Insurance
•Motor Vehicle Inspection Station requirements as per HTA 601
•Annual Vehicle Inspection and Report as per HTA Reg 611
•Review all Driver Daily Inspection Reports as per HTA Reg 199
•Conduct Immediate Repairs of any critical defects reported as per HTA Reg 512
•Documentation of the Drivers Hours of Service as per HTA Reg 555
•Review Driver and Carrier Abstract as per CVOR Reg 424
•Vehicle Accident Damage Administration
The dedicated hard work of current staffing resources within Fleet Services is no longer
sufficient to regain and maintain compliance with the requirements of the Commercial Vehicle
Operator Registration (CVOR) Reg 424 for the Town.
The increased administrative demands as a result of changing legislative requirements to the
CVOR and various regulations under the Highway Traffic Act (HTA) has not only increased the
work load, but also the backlog of outstanding repairs, resulting in service level issues to user
departments (i.e. Roads, THI, Fire, Parks, etc.) that provide services to the community.
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141
Some of the risks associated with continuing status quo include:
• employee burn-out
• increased repair backlog
• increased/continued service level issues to user departments
• continued non-compliance with CVOR and HTA regulations
CONSULTATION / COMMUNICATION
As part of the 2017 draft budget development Senior Leadership discussed the possibility of
outsourcing mechanic services, but determined that contracting out would not alleviate the need to backfill during vacation or illness, nor assist with succession planning. In addition, due to the
nature of Town business, internal prioritization, knowledge, and expertise is required to ensure
operator and public safety. The Senior Leadership Team also discussed the importance of the
additional staff resource within Fleet Services to help mitigate service level issues to user
departments, prevent employee burn-out, and the importance of regaining CVOR compliance.
FUNDING IMPACT/ FUNDING SOURCE
The associated cost of $75,000 for the 1.0 FTE Mechanic has been included in the 2017 proposed draft budget.
Page 2 / 2
142
Report Title Budget Issue Paper: Utilities Cost Increases
Report No. RCP 17-02
Author Rick Cox, Director of Recreation, Culture & Parks
Meeting Type Budget Meeting
Council Date January 10, 2017
Attachments •The Mysteries of Electricity Pricing in Ontario
•Guide to Electricity Pricing in Ontario
RECOMMENDATION
THAT Report RCP 17-02 – Budget Issue Paper – Utility Cost Increases be received for information.
EXECUTIVE SUMMARY
Unit costs for utilities (electricity, gas & water) have risen over the last five years. Increases in
the budget allocation for utilities have not kept up with increases in actual costs. The largest
contributor to the increased cost is the increase in the unit cost of hydro.
BACKGROUND
The combined cost to the Town for utilities continues to rise year over year. 2012 was the last
year for which the annual budget allocation for utilities was not exceeded by actual utility costs.
The largest increase in cost that the Town is experiencing is for electricity. As an example, the amount the Town paid for streetlight hydro in 2012 was just over $186,000. By 2015 that
amount was almost $237,000, an increase of 27% over that time period.
Factors contributing to the unit rate of electricity:
The electricity price portion of the bill is broken down into two price components:
•Electricity Price: Also known as the spot price, the market clearing price (MCP) or the
Hourly Ontario Energy Price (HEOP)
•Global Adjustment: The global adjustment (GA) is the difference between the market
price and the electricity price contracted by the government. It is the “top-up” that most suppliers are paid when they generate electricity. This means that as the market price
goes up, the global adjustment goes down because suppliers are recovering more of their
Year Budget Actual*Difference
2011 905,999$ 915,051$ -1%
2012 935,383$ 881,010$ 6%
2013 843,630$ 895,679$ -6%
2014 866,250$ 872,656$ -1%
2015 949,921$ 966,254$ -2%
2016 980,500$ 1,052,837$ -7%
* 2016 value is projected as Jan-Nov 2016 actual plus 105% of Dec 2015 actuals
Page 1 / 3 RCP 17-02 Budget Issue Paper - Utility
143
costs from the market. As a consumer, the Town pays
both the electricity price and
the global adjustment.
Publications prepared by the
Environmental Commissioner of Ontario and Bruce Power are
attached with this issue paper
as additional explanation.
This cost/kWh graph illustrates the unit cost increase that is being experienced for our
largest hydro accounts at the Complex and for
streetlights. For Jan-Nov this year, the cost for hydro at
the Complex is approximately $363,000 at an average
unit cost of $0.152. If the 2013 average price of $0.119 was in effect, the same hydro would have cost
approximately $287,000.
Efforts to reduce the cost:
As per the Town’s Energy Conservation and Demand
Management plan approved in 2014, there are continual efforts to reduce consumption of utilities
through operational process changes and selection of
new equipment. An example of a process change that
results in substantial annual consumption savings was delaying the start-up of the Memorial ice
rink until after the Shriners’ annual Pork BBQ. This collaboration between the Town, the Shriners and the Agricultural Society has permanently reduced the amount of hydro used at the
Complex during the period of Aug-Nov by 7-9% depending on the weather. While there has
been ‘cost avoidance’ this has translated into little actual cost savings, as the 2016 hydro cost
for that period is 21% higher for 7% less hydro than in 2013.
Other process changes that have been implemented include:
• eliminating winter use of Summer Place (hydro savings)
• using passive solar to pre-heat water for the Waterpark (natural gas savings)
Since hydro is such a large component of the overall town utility cost it has and continues to be hydro consumption reductions that is the main focus. Further, the largest hydro account is the Complex, so the majority of interventions and changes are being made there in order to realize
the largest proportional benefit.
The 2017 draft capital budget includes two energy conservation-related projects to continue
efforts to reduce consumption. One will replace the high-pressure sodium lights above both rinks with new LED technology. The second is the start of implementing the energy retrofit project for the ice plant and pool HVAC that has been developed out of the I. B. Storey Inc.
study. In 2017, the design will be completed and tendered to secure firm costs for construction
in the summer of 2018.
Page 2 / 3 RCP 17-02 Budget Issue Paper - Utility
144
CONSULTATION/COMMUNICATION N/A
FINANCIAL IMPACT/FUNDING SOURCE
If the budget allocation for utility costs is inadequate, there is an impact on the Town’s in-year
financial position.
COMMUNITY STRATEGIC PLAN (CSP) IMPACT
This issue paper provides information in alignment with the following Objective of the Community
Strategic Plan:
• Objective 1 – Excellence in Local Government
Page 3 / 3 RCP 17-02 Budget Issue Paper - Utility
145
The Mysteries of Electricity Pricing in Ontari
Posted on February 20, 2013 by ECO
There is much confusion, misunderstanding and misrepresentation with regard to what the price of e
Ontario, and how we set that price. It seems to me that we must establish a clear understanding of
matter in order to have an intelligent public discussion on the topic. Accordingly, this blog will attemp
basics of electricity pricing. To be clear, I’m just going to focus on the mechanism that sets the price
electricity on your bill. I am ignoring the delivery charge, the regulatory charges and debt retirement
they tack on afterwards.
Hourly Ontario Energy Price (HOEP)
One key element in setting the price of electricity is called the Hourly Ontario Energy Price, or HOEP
“hope”). This price is set on a market, which works like this:
The Independent Electricity System Operator (IESO) predicts the demand of electricity for the next h
with this information, generators (for instance natural gas plants, nuclear power plants, or wind farm
bid to supply electricity to meet this demand. Also in theory, the cheapest suppliers would get contra
demand rises, the price would also rise, and more expensive generators would enter the market.
But this is not a free and open market that Adam Smith would recognise. The invisible hands in this
rummaging in our pockets. Almost all the generators playing in this market have prices that are fixed
or subsidized – so they will never lose money, no matter how low the market goes.
So lets look at a graph of the monthly weighted average HOEP from 2005 to 2012 to see how this w
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You can see that the highest HOEP was actually in 2005, where it touched 10¢/kWh. After that, the
off to between 4¢ and 6¢/kWh for a few years. When the economy collapsed in 2009, demand fell a
dropped, and has fluctuated in the 2¢ to 4¢/kWh range for the last 4 years.
The key point here is that (outside of some of our older large hydro-electric facilities), no generator c
sell power at 4¢/kWh. So how is this possible?
Global Adjustment
This magic is done using a marvellous invention called the Global Adjustment (GA). This is an addit
charge collected from consumers to pay for those fixed prices, guarantees and subsidies if the HOE
So let’s plot the Global Adjustment on the same graph as above.
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We see that the Global Adjustment displays an almost opposite pattern to the HOEP. With one inter
exception (when it went negative), the GA for 2005 to 2009 varied between zero and 1¢/kWh. But th
HOEP price crashed, the GA jumped up to the 4¢/kWh range – and subsequently has crept even hi
going on here?
Remember that the Global Adjustment is the price guarantor for the generators. It actually went neg
2005, when high HOEP meant that Ontario Power Generation’s nuclear and large hydro plants were
more from the market price than their guarantee, and they had to kick back money. But for most of t
2009 period, the market HOEP was high enough to satisfy the pricing needs of the generators. It is
note on the graph that during that period when the HOEP hits 6¢ the Global Adjustment goes to zer
But that was a different economy. In 2009, Ontario saw a drop in demand, largely due to the recess
increase in supply (from new gas plants coming into service). The change in the supply-demand ba
that almost no generator could make their money on the HOEP, so the price guarantees kicked in, a
Adjustment became as large and then a larger hourly charge than the HOEP.
So what is the real price of electricity?
So to get the real price of electricity, you have to add the HOEP and the Global Adjustment together
that looks like on the same graph.
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The red line is the real market electricity price for the period 2005-2012. You can see that the price s
almost 8¢/kWh in heady days of 2005, but then fell back to the 5¢ to 6¢/kWh range through 2006-20
been gradually creeping upwards until the 2005 peak was exceeded, and it broke through 8¢/kWh in
Confusion reigns
This concept – that the HOEP is not the real market price, because you have to add in the Global A
the basis of a lot of confusion in the media and in various public discussions. And this is understand
of the way the information is presented. Take for example this screen shot of the IESO website:
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The site is very informative on a number of levels and you can clearly see the current level of the glo
adjustment. But the HOEP is presented as the “Hourly Price” and there is no attempt to add the HO
Global Adjustment together. So in this example, the public would conclude that the market price of e
2.5¢/kWh and not the correct 6.27¢/kWh.
I hope you now have a better understanding of the basis of wholesale electricity pricing – but we are
on your bill yet. To explain your bill we have to get into the intricacies of Time-of-Use pricing and the
Energy Board. And those will have to be the topic of another blog posting.
RELATED POSTS
◾Consciously Uncoupling: A Short-Term Solution to a Long-Term Problem
◾Reduce, Reuse, Recycle – can this mantra fit into our energy planning model?
◾The Time-of-Use Conundrum
◾Promoting Electricity Pricing Literacy (Part 3 of 3)
◾Promoting Electricity Pricing Literacy (Part 2 of 3)
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Your guide to electricity
pricing in Ontario
A guide designed to help you understand and decipher
the components of your electricity bill for your Ontario-based
commercial or manufacturing business.
- Samira Viswanathan, Market Regulatory Affairs Advisor, Bruce Power Direct
152
2Your guide to electricity pricing in Ontario
Table of Contents
Part 1: The Electricity Basics 3
kW versus kWh 3
Components of Your Electricity Bill 4
Major Energy Players in Ontario 4
Part 2: Factors that affect electricity price in Ontario 5
What makes up the electricity price? 5
Electricity Supply 7
Electricity Price 8
Weighted Average Example 8
Part 3: The Impact of the Global Adjustment on Electricity Price 10
What is The Global Adjustment and How Does it Impact Electricity Price? 10
The Role of the Independent Electricity System Operator (IESO) 11
Part 4: Types of Electricity Charges on Your Bill 13
1. Delivery Charges 13
2. Regulatory Charges 14
3. Debt Retirement Charge 14
4. Ontario Clean Energy Benefit (OCEB) 14
Part 5: Quick tips to reduce consumption and costs 15
For More Information 16
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3Your guide to electricity pricing in Ontario
Part 1: The Electricity Basics
ELECTRICITY BILLS ARE COMPLEX
It can be frustrating to consistently pay for something you don’t understand or don’t
have the transparency to verify. It’s even more painful when your electricity bills continue
to go up without a clear explanation of the cause. What is driving the electricity cost
increase? How can you reduce costs in this situation?
The first step to solving a problem is understanding it. This guide will help you understand
the main parts of your bill, how the electricity price is derived, and what parts of the bill
you can realistically influence and control.
Eventually, you will be able to use this knowledge to help with things like reducing your
demand charges, conserving electricity, making more informed investment decisions
and ultimately, helping you define key performance indicators (KPIs) for your business.
THE DIFFERENCE BETWEEN ENERGY (kWh) AND DEMAND (kW)
1 kilowatt (kW) – this is a measurement of energy
1 kW is like saying your car can go 1 km/hr – think of it like speed. In the electricity world
this is known as power, capacity or demand.
5 kWh is like saying your car went 5 km over a period of time – think of it like distance.
In the electricity world this is called energy or consumption.
So, if you are a business with a 1,000 kW demand, you may consume, over the course
of a month 1,000 kW × 30 days per month × 24 hours per day = 730,000 kWh in a month.
However, you may not always be going at a speed of 1,000 kW so to accurately measure
how far you have gone, your local distribution company (LDC), also called a utility, will
come and read your meter. Your electricity meter is like the odometer of your car.
Your electricity price is made up of both
demand (speed) and consumption (distance) charges.
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4Your guide to electricity pricing in Ontario
COMPONENTS OF YOUR ELECTRICITY BILL
Utilities vary how they display
your information but generally,
your bill is grouped into the
categories outlined in the
charts below.
BILL COMPONENT TYPE OF CHARGE
Electricity (includes the global adjustment) Consumption
Delivery Demand
Regulatory Charges Consumption
Debt Retirement Charge Consumption
HST Consumption and Demand (based on entire bill)
MAJOR ENERGY PLAYERS IN ONTARIO
Prior to deregulation, the electricity sector was essentially Ontario Hydro.
However, since deregulation in May 2002, the sector is now composed of:
1. Government of Ontario: controls overall direction and policy.
2. Ontario Energy Board: regulatory body.
3. Ontario Power Authority: electricity planner.
4. Independent Electricity System Operator (IESO): grid operator.
5. Hydro One: Transmitter and distributor. It is the only one of the 77 utilities
that is entirely owned by the province.
6. Ontario Power Generation (OPG): electricity generator. It is one of many
generators in Ontario, but is the only one to be entirely owned by the province.
7. Bruce Power: electricity generator. It is the largest nuclear plant in the world
responsible for 30% of the Province’s energy supply.
43%
13%
24%
9%
5%
6%
GA
HOEP
DELIVERY
REGULATORY
DEBT RETIREMENT CHARGE
HST
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5Your guide to electricity pricing in Ontario
Part 2: Factors that affect electricity price in Ontario
WHAT MAKES UP THE ELECTRICITY PRICE?
This is the consumption portion of your bill where you are billed
by a rate at c/kWh based on your meter reading, usually monthly.
The electricity price portion of your bill is further broken down into two price components:
1. Electricity Price: Also known as the spot price, the market clearing price (MCP),
or the Hourly Ontario Energy Price (HOEP)
2. Global Adjustment: This used to be the called the Provincial Benefit
Both of these prices are constantly changing but you are charged the weighted-average
price over the course of the month.
The electricity price is determined by the intersection of electricity demand and electricity
supply. Both demand and supply are constantly and simultaneously varying.
ELECTRICITYPRICE BROKEN DOWN
43%
13%
24%
9%
5%
6%
43%
24%
GA
HOEP
DELIVERY
REGULATORY
DEBT RETIREMENT CHARGE
HST
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6Your guide to electricity pricing in Ontario
ELECTRICITY DEMAND
Demand varies based on things like weather and economic activity. Things like air
conditioning and heating increase electricity demand. In exceptional circumstances
even a hockey game can influence demand.
The graph below shows electricity demand on a typical Sunday (shown in grey) and
compares it to the Sunday when Canada beat the U.S. in the ice hockey 2010 Olympic
finals (shown in orange). Demand during the game was overall lower than a typical
Sunday, as many people were gathered together in one room to watch the game.
Spikes are noted during intermissions where people left where they were gathered to
cook food, turn on lights, or use the bathroom – all things which increase demand.
ONTARIO ELECTRICITYDEMANDFEBRUARY 28, 2010
FACE OFF FIRST INTERMISSIONBEGINS
SECONDINTERMISSIONBEGINS
THIRDINTERMISSIONBEGINS
CROSBYSCORES!
OVERTIMEBEGINS
TYPICALSUNDAY
SOURCE: IESO
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7Your guide to electricity pricing in Ontario
ELECTRICITY SUPPLY
Electricity supply comes from different fuel types, like wind, solar, hydro (waterpower),
natural gas, and nuclear. These fuels types have different supply characteristics, all of
which are needed to meet Ontario demand:
• Base-load supply includes sources like nuclear and hydro. They are low-cost,
reliable and supply electricity 24-7.
• Intermittent supply includes sources like wind and solar. They provide electricity
when the wind is blowing and the sun is shining.
• Peaking supply sources like gas and peaking hydro are used when demand
is at its highest – they are flexible but costly.
Different fuel types also have different trade-offs when looking at costs, environmental
aspects and reliability. There is a need for different types of supply but it is important
to recognize that among these sources, there are drawbacks and benefits.
The Ontario government looks at these trade-offs (shown below) to help them develop
energy policy in the province.
ONTARIOELECTRICITYSUPPLY
MORE FAVOURABLE LESS FAVOURABLE
*Denotes new generation plants Source: Electric Power Research Institute and Ontario Ministry of Energy
ENERGY
TYPE*
ELECTRICITY
COSTS
CAPITAL
COSTS FLEXIBILITY CARBON
EMISSIONS AVAILABILITY
Gas
Solar
Wind
Water
Nuclear
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8Your guide to electricity pricing in Ontario
ELECTRICITY PRICE
The price for electricity in Ontario is set every 5 minutes based on the intersection of
supply and demand and fluctuates like stock prices. This is called the market clearing
price (MCP). It is set in the following way:
• Electricity supply is offered into the market at its operating cost. Offers of supply
are stacked up from least costly to most expensive to meet demand. Where they
intersect is the market clearing price (MCP).
• In each hour there are 12 MCP’s, and the hourly average of the MCP is called the
Hourly Ontario Energy Price (HOEP). This is what you get charged by your local
utility.
On your electricity bill you see a volume-weighted average* HOEP, when in reality the
price fluctuates on a 5 minute basis. Many large industrial users attempt to estimate
upcoming hourly prices and adjust their consumption in light of changing hourly prices,
to avoid the highest priced hours and reduce their costs. Is there anything you can
adjust in your facility to avoid the highest priced hours of the day?
* WEIGHTED AVERAGE EXAMPLE
TIME ENERGY (kWh) HOEP (¢/kWh) COST ($)
9:00 AM 1400 1.43 19.95
10:00 AM 1500 1.81 27.20
11:00 AM 1600 2.38 38.05
12:00 PM 1600 3.24 51.90
1:00 PM 1500 3.35 50.27
TOTAL 7600 N/A 187.36
Weighted Average HOEP ($187.36/7600 kWh) = 2.47 ¢/kWh
HOURLYONTARIOENERGYPRICE
DEMAND (MW)$/MWh12 am 3 am 6 am 9 am 12 noon 3 pm 6 pm 9 pm 12 am
BASELOADNUCLEAR & HYDRO
INTERMITTENTWIND & SOLAR
PEAKINGNATURAL GAS & PEAKING HYDROMARKETCLEARINGPRICE
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9Your guide to electricity pricing in Ontario
The average HOEP for 2013 was 2.5 cents/kWh, and although you don’t see it reflected
in your bill, this 2.5 cents average is based on a lot of volatility over the year:
If you avoided the top 100 most expensive hours in 2013 you could lower your average price by 6%.
Price volatility was recently evident in the January 2014 polar vortex which caused major
price spikes.
As previously mentioned, the electricity price is derived from the intersection of supply
and demand. Supply of electricity comes from different sources which have their own
characteristics and trade-offs between costs, environmental friendliness, and reliability.
Demand changes based on weather and economic activity. As both supply and demand
are highly volatile the price fluctuates wildly on a 5 minute basis; however, the electricity
price you see on your bill is the hourly weighted average over the month.
MONTHLYCHARGE IN GLOBAL ADJUSTMENT(¢/kWh)
MONTHLYCHARGE IN GLOBAL ADJUSTMENT(¢/kWh)
-20
-10
0
10
20
30
40
50
HOEP cents/kWh01-Jan-1301-Feb-1301-Mar-1301-Apr-1301-May-1301-Jun-1301-Oct-1301-Jul-1301-Nov-1301-Aug-1301-Dec-1301-Sep-1360
70
HOEP cents/kWh27-Jan-1421-Jan-1415-Jan-1409-Jan-1425-Jan-1419-Jan-1413-Jan-1407-Jan-1403-Jan-1423-Jan-1417-Jan-1411-Jan-1405-Jan-1401-Jan-1440
35
30
25
20
15
10
5
0
-5
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10Your guide to electricity pricing in Ontario
Part 3: The Impact of the Global Adjustment on Electricity Price
Since suppliers offer their supply at their operating cost, the market clearing price can
often not be high enough for them to cover all of their costs. For example, the average
HOEP in 2013 was 2.5 cents/kWh, which was not enough for suppliers to cover the
costs of operating their plants.
To ensure Ontario has enough electricity supply, the government has signed long-term
contracts with most suppliers to make sure they will invest in Ontario, build power
plants, and be paid enough to cover their costs (plus a reasonable rate of return).
These costs are recovered through the global adjustment.
WHAT IS THE GLOBAL ADJUSTMENT AND HOW DOES IT IMPACT
ELECTRICITY PRICE?
The global adjustment is the difference between the market price and electricity price
contracted by the government. It is the “top-up” that most suppliers are paid when they
generate electricity.
This means that as the market price goes up, the global adjustment goes down as suppliers
are recovering more of their costs from the market and less from the global adjustment.
As a consumer, you pay both.
For example, if the Hourly Energy Ontario Price is 2 cents/kWh, and an electricity generator
has a contract with the government for 8 cents/kWh, the global adjustment is 6 cents/kWh.
You, as a consumer of this electricity are charged a total of 8 cents/kWh.
GLOBAL ADJUSTMENT
¢/kWhAverage Electricity Costs HOEP + Global Adjustment
8
9
7
6
5
4
3
2
1
0
HOEP
GA
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11Your guide to electricity pricing in Ontario
Suppliers have individual contracts, so the amount of the global adjustment will change
depending on which suppliers are meeting demand. One contract may be for 13 cents/kWh
while another is for 5 cents/kWh. The actual payment to a supplier will be the amount of
their contract multiplied by how much they generated:
13 cents/kWh * 300,000,000 kWh/month = $M 39/month
5 cents/kWh * 1,000,000,000 kWh/month = $M 50/month
Typically, the more expensive resources produce less kWh as they are used
at “peak” times, when Ontario consumption is at its highest.
THE ROLE OF THE INDEPENDENT ELECTRICITY SYSTEM OPERATOR (IESO)
Ontario’s grid operator, the Independent Electricity System Operator (the IESO) calculates
the monthly global adjustment which is then used to determine electricity price and billing.
They make two estimates and then provide a final actual amount:
• The 1st estimate is provided on the last business day of the month for the next
month (e.g., 1st estimate for October is published on Sept 30)
• The 2nd estimate is provided on the last business day of the month for the current
month (e.g. 2nd estimate for October is published on Oct 31)
• The final rate is published at the middle of the following month (e.g., the final October
rate is posted around November 15).
These preliminary estimates need to be made in advance of the final so that the LDCs
can bill their customers on time by using the 1st or 2nd estimate and then truing up their
customer in the following bill cycle. The majority of customers in Ontario are billed using
the first estimate of the global adjustment.
If we look at the September 2013 1st estimate, the IESO had to:
• Estimate the amount of supply and the “top-up” money that will be paid to suppliers
(millions of dollars each month) = $M 666.7, and divide it by;
• Estimate of monthly of all Ontario consumption = 7,647,396 MWh, to arrive at
$63.08/MWh (or 6.308 cents/kWh)
*Note: 1 MWh = 1000 kWh.
This is no simple task and is why there is often a deviation between both estimates and
the actual rate. You can find the IESO’s global adjustment information here.
http://www.ieso.ca
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12Your guide to electricity pricing in Ontario
There is also variation in the global adjustment
month over month, as illustrated in the graph below.
It is difficult to predict the variation in global adjustment but it is clear that the global
adjustment is on the rise. It will continue to rise as suppliers with government contracts
build projects that require this “top-up” to the market price. The graph below shows the
increase in yearly global adjustment since 2009:
MONTHLYCHARGE IN GLOBAL ADJUSTMENT(¢/kWh)
YEARLYAVERAGE GLOBALADJUSTMENT(¢/kWh)Monthly Change in Global Adjustment (¢/kWh)JanJanMayMayOctOctFebFebJunJunNovNovMarMarAugAugJulJulDecDecAprAprSepSep3
2
1
0
-1
2012 2013
-2
-3
Yearly Average Global Adjustment (¢/kWh)2009 2010 2011 2012 2013
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
3.1
2.9
4.1
5.1
4.9
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13Your guide to electricity pricing in Ontario
You pay the global adjustment based on how much you consume. This amount varies all
the time as it is based on the “top-up” paid to suppliers of electricity and total amount of
consumption in the province for a given month.
Both the global adjustment and HOEP are energy consumption based charges.
If you had a monthly January 2014 meter reading of 730,000 kWh you would
get billed:
1. Electricity Price = 730,000 kWh * 5.7 cents/kWh (weighted average HOEP) = $41,61
2. Global Adjustment = 1,000,000 * 3.626 cents/kWh (GA 1st estimate) = $26,280
3. Total Electricity Charge = $67,890/month
Part 4: Types of Electricity Charges on Your Bill
1. DELIVERY CHARGES
This is the portion of your bill that utilities charge
to deliver electricity from a generator (e.g., Bruce
Power’s nuclear power plant) to the transmitter’s
system (e.g., Hydro One), to the distributor’s system
(e.g., Toronto Hydro), then to your business, as
depicted in the illustration.
There are 77 utilities that deliver electricity directly to homes and businesses in Ontario.
http://www.ieso.ca/imoweb/siteShared/local_dist.asp
The delivery charges on your bill cover the costs for a utility to build, operate and maintain
infrastructure, such as transmission lines, distribution lines, towers, poles and transformers.
It also includes costs that the utility needs to recover for billing, administration, day-to day
and emergency services, or any other service it provides.
The delivery charge is comprised of a fixed monthly charge and a variable charge.
For business and industry, both charges are based on your demand (kW).
The rate charged by utility companies is regulated by the Ontario Energy Board (OEB),
an independent government agency that serves the public interest. These rates are
determined on a five year cycle. The OEB reviews each rate application through a public
process, and then sets the rates for the distributor to charge. The rate application is
based on a distributor’s costs
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14Your guide to electricity pricing in Ontario
2. REGULATORY CHARGES
Regulatory charges are the costs of administering the electricity system and market,
maintaining the reliability of the provincial grid, and covers administration fees of the
IESO and the OPA. Utilities collect this charge and pass it through to the IESO who
operates the Ontario grid and the OPA who manages long term planning.
3. DEBT RETIREMENT CHARGE
The Debt Retirement Charge of 0.68¢ /kWh pays down the residual stranded debt of
the former Ontario Hydro. Utilities collect this money and pass it through to the Ontario
government. Although the debt was acquired in the past, it is paid by today’s electricity
customers since the electricity generation and transmission infrastructure financed by
the debt continue to be used by all Ontario’s electricity consumers.
By law, the Debt Retirement Charge will end when the government’s assets and the
estimated value of its other dedicated revenues from the electricity sector are sufficient
to service and retire the remaining amount of debt and other liabilities. The government
estimates that the Debt Retirement Charge will likely end between 2015 and 2018.
Click here for more information.
http://www.fin.gov.on.ca/en/tax/drc/index.html
4. ONTARIO CLEAN ENERGY BENEFIT (OCEB)
The Ontario Clean Energy Benefit takes 10% off the cost of up to 3,000 kWh/month
of electricity use. A medical exemption from the 3,000 kWh/month cap is available.
Medical Exemption.
http://www.energy.gov.on.ca/en/clean-energy-benefit/#qme#qme
Click here for more information.
http://www.energy.gov.on.ca/en/clean-energy-benefit
The OCEB expires on December 31, 2015.
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15Your guide to electricity pricing in Ontario
Based on the information in this guide, there are 6 things you can do to start reducing
consumption and saving money for your Ontario-based business today.
1. The electricity component of your bill is charged on a weighted consumption (kWh)
basis, so the less you consume the lower the portion of your bill will be. However we
now know that it also matters when you consume, so the best thing to do is avoid
consuming in times when the price of electricity is high. This typically happens in the
“peak” hours of the day from 7am to 7pm. You can also sign contracts with an electricity
retailer like Bruce Power Direct for a set price of electricity over a longer period of
time (e.g., 1 year).
2. Similarly, consume less during peak hours of the day. The global adjustment is
charged on a weighted consumption (kWh) basis, so the less you consume during
peak hours of the day, the lower this portion of your bill will be.
3. The delivery component of your bill is charged on a demand basis. Some utilities like
Toronto Hydro charge you based on your maximum demand and your demand during
peak hours (7am – 7pm on weekdays). Other utilities use your average demand. De-
pending on your utility, lowering your maximum, peak, or average demand will lower
your delivery costs.
4. The regulatory component makes up about 5% of your bill. The majority of this
charge is billed on a consumption basis; therefore, the less you consume, the less
you pay.
5. The Debt Retirement Charge is also a consumption based charge – the less you
consume, the less you pay.
Part 5: Quick tips to reduce consumption and costs
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For More Information
For more information on anything included in this guide, or advice on how to reduce
costs and consumption even further, please contact Bruce Power Direct:
CHRIS LOUGHREN
Manager, Commercial Energy Solutions
Bruce Power Direct
Email: chris.loughren@brucepower.com
Phone: 416-786-7336
Toll Free: 1-855-247-1122
BECOME AN EMPOWERED ELECTRICITY CONSUMER.
Let us help you understand electricity pricing in Ontario and start saving today.
167
THE CORPORATION OF THE TOWN OF TILLSONBURG
BY-LAW NUMBER 4073
BEING A BY-LAW to confirm the proceedings of Council at its meeting held on
the 10th day of January, 2017.
WHEREAS Section 5 (1) of the Municipal Act, 2001, as amended, provides that the
powers of a municipal corporation shall be exercised by its council;
AND WHEREAS Section 5 (3) of the Municipal Act, 2001, as amended, provides that
municipal powers shall be exercised by by-law;
AND WHEREAS it is deemed expedient that the proceedings of the Council of the
Town of Tillsonburg at this meeting be confirmed and adopted by by-law;
NOW THEREFORE THE MUNICIPAL COUNCIL OF THE CORPORATION OF THE
TOWN OF TILLSONBURG ENACTS AS FOLLOWS:
1.All actions of the Council of The Corporation of the Town of Tillsonburg at its
meeting held on January 10, 2017, with respect to every report, motion, by-law, or
other action passed and taken by the Council, including the exercise of natural
person powers, are hereby adopted, ratified and confirmed as if all such
proceedings were expressly embodied in this or a separate by-law.
2.The Mayor and the Clerk are authorized and directed to do all the things necessary
to give effect to the action of the Council of The Corporation of the Town of
Tillsonburg referred to in the preceding section.
3.The Mayor and the Clerk are authorized and directed to execute all documents
necessary in that behalf and to affix thereto the seal of The Corporation of the Town
of Tillsonburg.
4.This by-law shall come into full force and effect on the day of passing.
READ A FIRST AND SECOND TIME THIS 10th DAY of January, 2017.
READ A THIRD AND FINAL TIME AND PASSED THIS 10th DAY of January, 2017.
________________________________
MAYOR – Stephen Molnar
________________________________
TOWN CLERK – Donna Wilson
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