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220711 Regular Council Meeting AgendaThe Corporation of the Town of Tillsonburg Council Meeting AGENDA Monday, July 11, 2022 6:00 PM Council Chambers 200 Broadway, 2nd Floor 1.Call to Order 2.Closed Session (None) 3.Moment of Silence 4.Adoption of Agenda Proposed Resolution #1 Moved By: ________________ Seconded By: ________________ THAT the Agenda as prepared for the Council meeting of July 11, 2022, be approved. 5. Disclosures of Pecuniary Interest and the General Nature Thereof 6.Adoption of Council Minutes of Previous Meeting Proposed Resolution #2 Moved By: ________________ Seconded By: ________________ THAT the minutes from the June 27, 2022 Council meeting and of the June 28, 2022 Special Council meeting, be approved. 7.Presentations 7.1.2021 Financial Statements Presented by: Dianne Latta, CPA, CA of Millard, Rouse and Rosebrugh LLP (virtual) Proposed Resolution #3 Moved By: ________________ Seconded By: ________________ THAT Council approves the 2021 Financial Statements as presented; AND THAT the 2021 Management Letter be received. 7.2.Delegation from Resident Matt Sholtz RE: Road Naming in Tillsonburg Proposed Resolution #4 Moved By: ________________ Seconded By: ________________ THAT the delegation from Matt Sholtz regarding Road Naming in the Town of Tillsonburg be received as information. 8.Public Meetings Proposed Resolution #5 Moved By: ________________ Seconded By: ________________ THAT Council move into the Committee of Adjustment to hear an application for Minor Variance at ____ p.m. 8.1.Minor Variance Application A 09-22 - 31 Victoria Street Proposed Resolution #6 Moved By: ________________ Seconded By: ________________ THAT the Town of Tillsonburg Committee of Adjustment approves application File A 09-22 submitted by Town of Tillsonburg Non-Profit Housing Corporation, for lands described as Part of Lots 687-690, 715, Plan 500, Parts 1-7 of 41R-10118 in the Town of Tillsonburg, as it relates to: 1. Relief from Section 5.24.1.6 – Parking Space and Parking Aisle Standards – Table 5.24.1.6 – Parking Space and Aisle Standards – Minimum Perpendicular Width of the Aisle, to decrease the minimum perpendicular width of the aisle for 90 degree parking from 7.3 m (24 ft) to 6.9 m (22.6 ft). Proposed Resolution #7 Moved By: ________________ Seconded By: ________________ THAT Council move out of Committee of Adjustment and move back into regular Council session at _____ p.m. Page 2 of 650 8.2.Zone Change Application - ZN 7-22-03 - Landmark Homes Inc. Proposed Resolution #8 Moved By: ________________ Seconded By: ________________ THAT the Council of the Town of Tillsonburg approves the zone change application submitted by Landmark Homes Inc, whereby the lands described Lots 90, 91 & 92, Registered Plan 41M-144, in the Town of Tillsonburg known municipally as 3, 5 & 7 Sycamore Drive are to be rezoned from ‘Special Low Density Residential Type 1A Zone (R1A-23)’ to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject property with reduced lot frontages, lot area, front yard depth, and interior side yard widths. 8.3.Zone Change Application ZN 7-22-04 - Jacob Hiebert Proposed Resolution #9 Moved By: ________________ Seconded By: ________________ THAT the Council of the Town of Tillsonburg approves the zone change application submitted by Landmark Homes Inc, whereby the lands described Lots 43 & 44, Registered Plan 41M-144, in the Town of Tillsonburg known municipally as 158 & 160 Concession Street West are to be rezoned from ‘Low Density Residential Type 1A Zone (R1A)’ to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject property with reduced lot frontages, lot area, front yard depth, and interior side yard widths. 8.4.Official Plan & Zone Change Amendment OP 22-06-7 & ZN 7-22-06 - Tillsonburg Developments Inc. & W.H. Developments Inc. Proposed Resolution #10 Moved By: ________________ Seconded By: ________________ THAT the Council of the Town of Tillsonburg advise County Council that the Town supports the application to amend the Official Plan (File No. OP 22-06-7), submitted by Tillsonburg Developments Inc & W.H. Developments Inc., for lands described as Lot 17, Registered Plan 41M-205 in the Town of Tillsonburg, to re-designate the subject lands from Service Commercial to Low and Medium Density Residential; AND FURTHER THAT the Council of the Town of Tillsonburg approves-in-principle the zone change application (File No. ZN 7-22-06) submitted by Tillsonburg Developments Inc & W.H. Developments Inc., for lands described as Lot 17, Registered Plan 41M-205, in the Town of Tillsonburg, to rezone the lands from ‘Special Service Commercial Zone (CC-10)’ to ‘Low Density Residential Type 3 Zone (R3)’ & ‘Special Medium Density Residential Zone (RM-sp)’ to permit the Page 3 of 650 development of 6 residential street-fronting townhouse units. 9.Planning Reports 10.Deputation(s) on Committee Reports 11.Information Items 11.1.Footprints in the Sand Foundation - Congratulations on 150 Years 11.2.Ontario Energy Board - Notice to Enbridge Customers Proposed Resolution #11 Moved By: ________________ Seconded By: ________________ THAT the information item from Footprints in the Sand Foundation dated June 16, 2022 and from the Ontario Energy Board dated June 17, 2022, be received as information. 12.Staff Reports 12.1.Chief Administrative Officer 12.1.1.CAO 22-02 Recommendations regarding MOUD with Tillsonburg Hydro Incorporated (THI) Proposed Resolution #12 Moved By: ________________ Seconded By: ________________ THAT Council receives Report CAO 22-04 Recommendations regarding MOUD with Tillsonburg Hydro Incorporated (THI); AND THAT Council endorses the recommendations contained within Report CAO 22-02 Recommendations regarding MOUD with Tillsonburg Hydro Incorporated (THI). 12.2.Corporate Services 12.3.Economic Development 12.3.1.EDM 22-17 EDAC Resolution Regarding Zoning Bylaw Height Restrictions Proposed Resolution #13 Moved By: ________________ Seconded By: ________________ Page 4 of 650 THAT the resolution from the Economic Development Advisory Committee regarding the existing maximum height restrictions for residential buildings within the Town of Tillsonburg be referred to Oxford County Planning for review. 12.3.2.EDM 22-18 Contract Award – RFP 2022-001 Real Estate Services Proposed Resolution #14 Moved By: ________________ Seconded By: ________________ THAT the RFP 2022-001 Real Estate Services contract be awarded to Avison Young for a period until December 31, 2023 with the option to extend the contract by two 1 year periods subject to the Town entering into listing agreements for specific properties at the Town’s sole and absolute discretion. 12.3.3.EDM 22-19 Offer to Purchase – Part of Lot 4, Van Norman Innovation Park Proposed Resolution #15 Moved By: ________________ Seconded By: ________________ THAT a by-law be brought forward to authorize the Mayor and Clerk to enter into an agreement of purchase and sale with Schep’s Bakeries Ltd for property described as part of Block 1, Plan 41M-381 (part of lot 4) in the Van Norman Innovation Park. 12.4.Finance 12.4.1.FIN 22-17 - Council Expense Policy Amendments Proposed Resolution #16 Moved By: ________________ Seconded By: ________________ THAT the amendments to the Council Expense Policy 2-008 be approved, effective July 1, 2022. 12.4.2.FIN 22-18 - 2021 Summary of Reserves and Trusts Proposed Resolution #17 Moved By: ________________ Seconded By: ________________ THAT Council receives report FIN 22-18, 2021 Summary of Reserves and Trusts, as information. Page 5 of 650 12.4.3.2021 Surplus Allocation Proposed Resolution #18 Moved By: ________________ Seconded By: ________________ THAT the 2021 surplus of $1,006,934 be allocated to the following reserves: 1. $244,352 be transferred to the Fleet and Equipment Reserve 2. $21,770 be transferred to the Airport Reserve 3. $77,958 be transferred to the Asset Management Reserve 4. $24,000 be transferred to the Economic Development Reserve 5. $307,328 be transferred to the Facility Infrastructure Reserve, to cover the $254,000 budgeted in 2022 capital budget for design work for a new Town Hall, and $53,328 to cover the Town’s portion of a 2021 capital project for a Facilities Assessment 6. $22,904 be transferred to the Insurance Reserve 7. The balance of the surplus of $308,622 be transferred to the Tax Rate Stabilization reserve 12.5.Fire and Emergency Services 12.6.Operations and Development 12.6.1.OPD 22-28 RFT 2022-003 – Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line Proposed Resolution #19 Moved By: ________________ Seconded By: ________________ THAT Council not award Tender RFT 2022 – 003 – Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line as the lowest bid received exceeds the total budget by $355,487.98 (net HST included); AND THAT Council directs staff to find cost savings within the project design and re-tender for 2023 construction. 12.6.2.OPD 21-39 Utilization of the 2021 Tillsonburg Regional Airport Grant Proposed Resolution #20 Moved By: ________________ Seconded By: ________________ THAT report OPD 22-30 2021 2021 Tillsonburg Regional Airport Master Plan – Implementation Update be received as information. Page 6 of 650 12.6.3.OPD 22-31 Bagged Leaf and Yard Waste Collection Program Proposed Resolution #21 Moved By: ________________ Seconded By: ________________ THAT Council authorizes staff to explore the change in the former Loose Leaf Collection Program to Curbside Bagged Leaf and Yard Waste Collection Program; AND THAT Council directs staff to proceed with submitting a Request for Tender to retain a qualified waste collection contractor to provide a Curbside Bagged Leaf and Yard Waste Collection Service in 2022. 12.6.4.OPD 22-29 RFP 2022-010 Supply and Delivery of a 4-Wheel Drive Articulating Sidewalk Tractor Results Proposed Resolution #22 Moved By: ________________ Seconded By: ________________ THAT Council awards RFP 2022-010 Supply and Delivery of a 4-Wheel Drive Articulating Sidewalk Tractor to Work Equipment Ltd. of Courtland, Ontario at a cost of $176,400.96 (net HST included); AND THAT Council authorizes funding of the purchase as $135,828.74 from Development Charges (Residential Share) and $40,572.22 from Taxation. 12.7.Recreation, Culture and Parks 12.7.1.RCP 22-14 Tillsonburg Fair Facility Request August 20 2022 Proposed Resolution #23 Moved By: ________________ Seconded By: ________________ THAT Council receives Staff Report RCP 22-14 as information; and THAT Council approves the request from the Tillsonburg Tri-County Agricultural Society to waive the facility rental fee for the use of Lion’s Auditorium on Aug 20, 2022 from 9 am to noon to host the Fair’s Baby Show. 13.New Business 14.Consideration of Committee Minutes 14.1.Committee Minutes Page 7 of 650 Proposed Resolution #24 Moved By: ________________ Seconded By: ________________ THAT the June 14, 2022 Economic Development Advisory Committee Minutes be received as information. 15.Motions/Notice of Motions 16.Resolutions/Resolutions Resulting from Closed Session 17.By-Laws 17.1.A by-law to establish the Rate of Remuneration for Members of the Council of the Corporation of the Town of Tillsonburg for the 2022 — 2026 term of Council and to Repeal By-Law 4207. 17.2.A by-law to amend Zoning By-Law Number 3295, as amend. (ZN 7-22-03) 17.3.A by-law to amend Zoning By-Law Number 3295, as amended. (ZN 7-22-04) 17.4.A by-law to authorize the execution of an agreement of Purchase and sale with Schep’s Bakeries Ltd. for property described as part of Block 1, Plan 41M-381 (part of lot 4) in the Van Norman Innovation Park. Proposed Resolution #25 Moved By: ________________ Seconded By: ________________ THAT a by-law to establish the Rate of Remuneration for Members of the Council of the Corporation of the Town of Tillsonburg for the 2022 — 2026 term of Council; and A by-law to amend Zoning By-Law Number 3295, as amend. (ZN 7-22-03); and A by-law to amend Zoning By-Law Number 3295, as amended. (ZN 7-22-04); and A by-law to authorize the execution of an agreement of Purchase and sale with Schep’s Bakeries Ltd. for property described as part of Block 1, Plan 41M-381 (part of lot 4) in the Van Norman Innovation Park, 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. 18.Confirm Proceedings By-law Proposed Resolution #26 Moved By: ________________ Seconded By: ________________ Page 8 of 650 THAT By-Law 2022-050, to Confirm the Proceedings of the Council meeting held on July 11, 2022, 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. 19.Items of Public Interest August 8, 2022 Council Meeting• September 12, 2022 Council Meeting• 20.Adjournment Proposed Resolution #27 Moved By: ________________ Seconded By: ________________ THAT the Council meeting of July 11, 2022 be adjourned at ______ p.m. Page 9 of 650 1 The Corporation of the Town of Tillsonburg Council Meeting MINUTES Monday, June 27, 2022 6:00 PM Council Chambers 200 Broadway, 2nd Floor ATTENDANCE: Mayor Molnar Deputy Mayor Beres Councillor Esseltine Councillor Gilvesy Councillor Luciani Councillor Parker Councillor Rosehart Staff: Kyle Pratt, Chief Administrative Officer Michelle Smibert, Director of Corporate Services/Clerk Renato Pullia, Interim Director of Finance/Treasurer Carlos Reyes, Director of Operations and Development Cephas Panschow, Development Commissioner Ann Wright, Interim Deputy Clerk Julie Columbus, Director of Recreations, Culture & Parks Regrets: Shane Caskanette, Fire Chief _____________________________________________________________________ 1. Call to Order Chair, Mayor Molnar, called the meeting to order at 6:00 p.m. 2. Closed Session 3. Adoption of Agenda Resolution # 2022-213 Page 10 of 650 2 Moved By: Councillor Esseltine Seconded By: Councillor Rosehart THAT the Agenda as prepared for the Council meeting of June 27, 2022, be approved; AND THAT Council consider items under section 8. of the agenda after item 7.1. Carried 4. Moment of Silence 5. Disclosures of Pecuniary Interest and the General Nature Thereof No disclosures of pecuniary interests were declared. 6. Adoption of Council Minutes of Previous Meeting Resolution # 2022-214 Moved By: Councillor Rosehart Seconded By: Councillor Luciani THAT the minutes from the regular council meeting held on June 16, 2022, be approved. Carried 7. Presentations 7.1 Tillsonburg 150 Committee Update Joan Weston, Chair of the Tillsonburg 150 Committee provided an overview of the Tillsonburg 150 day of celebration combined with Canada Celebrations on July 1st, 2022. 7.2 Boundary Adjustment Committee Presentation Resolution # 2022-215 Moved By: Councillor Luciani Seconded By: Councillor Parker THAT the Council for the Town of Tillsonburg receives the presentation from the Boundary Adjustment Committee dated June 27, 2022; AND THAT Council approves the Boundary Adjustment Committee request that a consultant be retained to review the existing 2020 Page 11 of 650 3 Population, Household and Employment Forecasts and Employment Lands Study versus current growth/ development applications and provide the information to Town Council and County for consideration in the 2023 county population household, employment lands forecast; AND THAT the consultant also be retained to support the Town of Tillsonburg in their review of the future Population, Household and Employment Forecasts and Employment Lands Study; AND FURTHER THAT staff be directed to bring back an implementation report. Carried 8. Public Meetings 8.1 Court of Revision Resolution # 2022-216 Moved By: Councillor Parker Seconded By: Deputy Mayor Beres THAT Council move into the Court of Revision to consider any assessment appeals to the JA Smith Municipal drain with members Marcel Vanhooren (Norfolk County), Dave Beres, and Penny Esseltine. Carried 8.1.1 Call to Order Chair, Deputy Mayor Dave Beres called the Court of Revision to order at 6:37pm. 8.1.2 Disclosure of Pecuniary Interest and General Nature Thereof No disclosures of pecuniary interests were declared. 8.1.3 Delegations & Presentations 8.1.3.1 JA Smith Drain - Armetec Realignment Brandon Wider, P.Eng of Spriet Associates was in attendance and provided an over view of the drain and the assessment. Page 12 of 650 4 Peter Penner, President/ Project Manager from CJDL Consulting engineers was also present. 8.1.3.1.1 Order of Appeals No appeals were received. 8.1.3.1.2 Questions from Members No questions from the members. 8.1.3.1.3 Deliberations of the Court of Revision (Only required if a change in assessment is being considered) No change in assessments were considered so no deliberations were required. 8.1.3.1.4 Decision Resolution # 2022-217 Moved By: Councillor Esseltine Seconded By: Marcel Vanhooren THAT the assessment as levied in the report by Spriet Associates dated March 22, 2022 and adopted by Provisional By-law 2022-041 to pay for drainage works known as the JA Smith Municipal Drain be confirmed. Carried 8.1 Court of Revision 8.1.4 Adjournment Resolution # 2022-218 Moved By: Councillor Gilvesy Seconded By: Deputy Mayor Beres THAT the Court of Revision of June 27, 2022 be adjourned and the regular Council meeting resume at 6:40 p.m. Carried Page 13 of 650 5 8.2 Zone Change Application ZN7-22-2 - Arimas Real Estate Investors Inc. County Planner Eric Gilbert provided a review of the Planning Report and noted that a letter of opposition was received today by Carolyn Simpson, resident at 370 Broadway Street. The Planning department recommended that the application be approved. Opportunity was provided for questions from Council to the Planner. The Applicant Cheral Boyd, owner of Arimas Real Estate Investors Inc. was in attendance to speak to the application and was in agreeance with the Planning departments' recommendation. Opportunity was provided for questions from Council to the applicant. Two members of the public were in attendance and spoke in opposition of the application. Diana Kindy of 239 Broadway Street, and the Helen, another neighbouring property owner, whose last name and address was not provided. Resolution # 2022-219 Moved By: Councillor Gilvesy Seconded By: Councillor Rosehart THAT the Council of the Town of Tillsonburg approves the zone change application submitted by Arimas Real Estate Investors Inc. whereby the lands described Part Lots 604 & 605, Plan 500, in the Town of Tillsonburg known municipally as 368 Broadway are to be rezoned from ‘Low Density Residential Type 1 Zone (R1)’ to ‘Low Density Residential Type 2 Zone (R2)’ to facilitate the development of a duplex on the subject lands. Carried 9. Planning Reports 9.1 CP 2022-165- ARU Amendments Resolution # 2022-220 Moved By: Councillor Luciani Seconded By: Councillor Parker THAT the Council of the Town of Tillsonburg directs staff to proceed with public and agency consultation regarding amendments to the Official Plan Page 14 of 650 6 and Zoning By-law related to the implementation of policies and provisions enabling Additional Residential Units in accordance with Provincial direction as set out in the More Homes, More Choices Act and accompanying regulations. Carried 10. Deputation(s) on Committee Reports 11. Information Items 12. Staff Reports 12.1 Chief Administrative Officer 12.2 Corporate Services 12.2.1 CS 22-12 Joint Audit Compliance Committee Resolution # 2022-221 Moved By: Councillor Parker Seconded By: Deputy Mayor Beres THAT Council approve the formation of a Joint Compliance Audit Committee with the other Oxford County municipalities for the 2022-2026 term; AND THAT the following members be appointed to the 2022 Joint Compliance Audit Committee: • David Morris • Carol Symons • Keith Reibling • Joyce McAndrew • Christene Scrimgeour AND FURTHER THAT the above appointments be formalized by by-law. Carried 12.2.2 CS 22-15 Restricted Acts after Nomination Day Page 15 of 650 7 Resolution # 2022-222 Moved By: Councillor Rosehart Seconded By: Councillor Gilvesy That Council receives the Restricted Acts after Nomination Day report as information. Carried 12.2.3 CS 22-16 Election Accessibility Plan Resolution # 2022-223 Moved By: Councillor Luciani Seconded By: Councillor Esseltine THAT the Town of Tillsonburg Election Accessibility plan be received by Council for information. Carried 12.3 Economic Development 12.4 Finance 12.4.1 FIN 22-16 - BIA MOU Amendment to Change Payment Frequency Resolution # 2022-224 Moved By: Councillor Gilvesy Seconded By: Councillor Esseltine THAT the amendment to the 2022 Downtown Tillsonburg Business Improvement Area Memorandum of Understanding to change the payment frequency from quarterly to monthly, effective July 1, 2022, be approved. Carried 12.4.2 FIN 22-15 - 2022 Q1 COVID Impact Report Resolution # 2022-225 Page 16 of 650 8 Moved By: Councillor Esseltine Seconded By: Councillor Rosehart THAT Report FIN 22-15 2022 Q1 Covid-19 Impact Report be received as information. Carried 12.5 Fire and Emergency Services 12.6 Operations and Development 12.6.1 OPD 22-26 - Building and By-Law Enforcement Supervisor Appointment Resolution # 2022-226 Moved By: Councillor Rosehart Seconded By: Councillor Luciani THAT a By-Law to appoint Mark Russell as a Building Official and By-Law Enforcement Officer for the Town of Tillsonburg be brought forward for Council consideration Carried 12.6.2 OPD 22-21 2021 Fourth Quarter Operations and Development Services Resolution # 2022-227 Moved By: Councillor Luciani Seconded By: Councillor Parker THAT report OPD 22-21 2021 Fourth Quarter Operations and Development Services be received as information. Carried 12.7 Recreation, Culture and Parks 13. New Business 14. Consideration of Committee Minutes 14.1 Committee Minutes Page 17 of 650 9 Resolution # 2022-228 Moved By: Councillor Parker Seconded By: Deputy Mayor Beres THAT the following Council Committee minutes be received as information: May 25, 2022 Affordable and Attainable Housing Advisory Committee Minutes June 7, 2022 Boundary Adjustment Committee Minutes June 10, 2022 Tillsonburg 150 Ad Hoc Committee Minutes June 20, 2022 Tillsonburg 150 Ad Hoc Committee Minutes Carried 15. Motions/Notice of Motions 16. Resolutions/Resolutions Resulting from Closed Session 17. By-Laws 17.1 By-Law 2022-045 a by-law to amend Zoning By-Law Number 3295, as amended. (ZN 7-22-02) 17.2 By-Law 2022-046 a by-law to amend Zoning By-Law Number 3295, as amended. (ZN 7-21-12) 17.3 By-Law 2022-047 a by-law to appoint a Joint Compliance Audit Committee 17.4 By-Law 2022-048 a by-law to appoint a Building Official, Property Standards Officer and By-Law Enforcement Officer (Mark Russell) Resolution # 2022-229 Moved By: Deputy Mayor Beres Seconded By: Councillor Gilvesy THAT By-Law 2022-045 a by-law to amend Zoning By-Law Number 3295, as amended. (ZN 7-22-02), By-Law 2022-046 a by-law to amend Zoning By-Law Number 3295, as amended. (ZN 7-21-12); Page 18 of 650 10 By-Law 2022-047 a by-law to appoint a Joint Compliance Audit Committee; and By-Law 2022-048 a by-law to appoint a Building Official, Property Standards Officer and By-Law Enforcement Officer (Mark Russell), 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 18. Confirm Proceedings By-law Resolution # 2022-230 Moved By: Councillor Gilvesy Seconded By: Councillor Esseltine THAT By-Law 2022-044, to Confirm the Proceedings of the Council meeting held on June 27, 2022, 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 19. Items of Public Interest • June 28, 2022 Special Meeting of Council - THI Annual General Meeting 12:00 p.m. • July 11, 2022 Regular Meeting of Council 6:00 p.m. 20. Adjournment Resolution # 2022-231 Moved By: Councillor Esseltine Seconded By: Councillor Rosehart THAT the Council meeting of June 27, 2022 be adjourned at 7:29 p.m. Carried Page 19 of 650 1 The Corporation of the Town of Tillsonburg Special Council Meeting MINUTES Tuesday, June 28, 2022 12:00 PM Council Chambers 200 Broadway, 2nd Floor ATTENDANCE: Mayor Molnar Deputy Mayor Beres Councillor Esseltine Councillor Gilvesy Councillor Luciani Councillor Rosehart Regrets: Councillor Parker Staff: Kyle Pratt, Chief Administrative Officer Ann Wright, Interim Deputy Clerk Gina Armand, Legislative and Records Coordinator Ravi Baichan, General Manager, Hydro Michael DeJong, Financial Utility Analyst _____________________________________________________________________ 1. Call to Order Chair, Mayor Stephan Molnar called the meeting to order. 2. Closed Session (none) 3. Adoption of Agenda Resolution # 2022-232 Moved By: Councillor Gilvesy Seconded By: Councillor Esseltine Page 20 of 650 2 THAT the Agenda as prepared for the Special Council meeting of June 28, 2022, be approved. Carried 4. Disclosures of Pecuniary Interest and the General Nature Thereof No Disclosures of Pecuniary Interest were declared. 5. Tillsonburg Hydro Inc. Annual Meeting Resolution # 2022-233 Moved By: Councillor Esseltine Seconded By: Councillor Gilvesy THAT Council move into the Annual General Meeting of the Shareholder of Tillsonburg Hydro Inc. at 12:03 p.m. Carried 6. Motions/Notice of Motions (none) 7. Confirm Proceedings By-law Resolution # 2022-234 Moved By: Councillor Gilvesy Seconded By: Councillor Parker THAT By-Law 2022-049, to confirm the proceedings of the special council meeting held on June 28, 2022, 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 8. Adjournment Resolution # 2022-235 Moved By: Councillor Rosehart Seconded By: Councillor Gilvesy THAT the Special Council meeting of June 28, 2022, be adjourned at 12:23 p.m. Carried Page 21 of 650 Page 22 of 650 Page 23 of 650 Page 24 of 650 Page 25 of 650 Page 26 of 650 Page 27 of 650 Page 28 of 650 Page 29 of 650 Page 30 of 650 Page 31 of 650 Page 32 of 650 Page 33 of 650 Page 34 of 650 Page 35 of 650 Page 36 of 650 Page 37 of 650 Page 38 of 650 Page 39 of 650 Page 40 of 650 Page 41 of 650 Page 42 of 650 Page 43 of 650 Page 44 of 650 Page 45 of 650 Page 46 of 650 Page 47 of 650 Page 48 of 650 Page 49 of 650 Page 50 of 650 Page 51 of 650 Page 52 of 650 Page 53 of 650 Page 54 of 650 Page 55 of 650 Page 56 of 650 Page 57 of 650 Page 58 of 650 Page 59 of 650 Page 60 of 650 Page 61 of 650 Page 62 of 650 Page 63 of 650 Page 64 of 650 Page 65 of 650 Page 66 of 650 Page 67 of 650 Page 68 of 650 Page 69 of 650 Page 70 of 650 Page 71 of 650 Page 72 of 650 Page 73 of 650 July 11, 2022 Confidential The Corporation of the Town of Tillsonburg 200 Broadway, Suite 204 Tillsonburg Ontario N4G 5A7 Attention: Members of Council: Re:Management Letter This letter has been prepared to assist you with your review of the consolidated financial statements of The Corporation of the Town of Tillsonburg for the year ending December 31, 2021. We look forward to meeting with you and discussing the matters outlined below. Audit Status We have completed the audit of the consolidated financial statements, with the exception of the following items: 1. Completing our discussions with Council; 2. Obtaining evidence of the Councils approval of the consolidated financial statement Significant Risks The following is a list of the significant risks that we identified during the engagement as well as our audit responses: #Description of each significant risk Audit response 1 Revenue recognition Risk: Under Canadian GAAS, we are required to evaluate the risk of fraud in revenue recognition. We performed a walkthrough of management’s process for identifying, communicating and updating for new tax and user fee rates. We also tested the design and implementation of controls over the review/approval of inputted new rates and over the billing system, including the gathering of data and the use of appropriate rates. We performed operating effectiveness testing on the revenue and also performed the substantive analytical procedures on the revenue. Millard, Rouse & Rosebrugh LLP 21 Oxford Street, Tillsonburg, ON N4G 2G2 T: 519.688.9991 Toll Free: 1.888.242.9802 F: 519.688.2576 TILLSONBURG NORWICH DELHI SIMCOE BRANTFORD HAGERSVILLE PORT DOVER www.millards.com Page 74 of 650 Significant Risks (continued) 2 The presumed risk of fraud relating to revenue recognition relates to the accuracy and occurrence of incorrect manual inputs of new and revised rates into the billing system. The incorrect entering of new/revised rates could result in incorrect invoicing and the inaccurate posting of revenue to the general ledger. We discussed fraud with management. We ask that the Council members alert us to any actual or suspected fraud affecting the Company. We tested a sample of journal entries made throughout the period, and adjustments made at the end of the reporting period. We evaluated the business rationale for any significant unusual transactions. We determined whether the judgments and decisions related to management estimates indicate a possible bias, which included performing retrospective analysis of significant accounting estimates. Significant Matters Arising Changes to Audit Plan There were no changes to the audit plan (as previously presented to you). Other Matters We have not identified any other significant matters that we wish to bring to your attention at this time. Comments on Accounting Practices Accounting Policies The significant accounting policies used by the entity are outlined in Note 2 to the consolidated financial statements. a. There were no significant changes in accounting policies b. We did not identify any alternative accounting policies that would have been more appropriate in the circumstances c. We did not identify any significant accounting policies in controversial or emerging areas. Significant Accounting Estimates The following significant estimates/judgments are contained in the financial statements: Allowanced for doubtful accounts Value of inventory Deferred revenue Book value of capital assets Based on audit work performed, we are satisfied with the estimates made by management. Significant Financial Statement Disclosures We did not identify any financial statement disclosures that are particularly significant, sensitive or require significant judgments, that we believe should be specifically drawn to your attention. Other Audit Matters of Governance Interest We did not identify any other matters to bring to your attention at this time. Millard, Rouse & Rosebrugh LLP CHARTERED PROFESSIONAL ACCOUNTANTS Page 75 of 650 Other Audit Matters of Governance Interest (continued) We would like to thank management and staff for the assistance they provided to us during the audit. This letter was prepared for the sole use of those charged with governance of The Corporation of the Town of Tillsonburg to carry out and discharge their responsibilities. The content should not be disclosed to any third party without our prior written consent, and we assume no responsibility to any other person. Yours truly, Millard, Rouse & Rosebrugh LLP Chartered Professional Accountants Dianne Latta, CPA, CA on behalf of Dianne Latta CPA Professional Corporation Partner Millard, Rouse & Rosebrugh LLP CHARTERED PROFESSIONAL ACCOUNTANTS Page 76 of 650 Community Planning P. O. Box 1614, 21 Reeve Street Woodstock Ontario N4S 7Y3 Phone: 519-539-9800  Fax: 519-421-4712 Web site: www.oxfordcounty.ca Our File: A09-22 APPLICATION FOR MINOR VARIANCE TO: Town of Tillsonburg Committee of Adjustment MEETING: July 11, 2022 REPORT NUMBER: 2022-290 OWNER: Town of Tillsonburg Non-Profit Housing Corporation P.O. Box 203, Tillsonburg ON, N4G 4H5 AGENT: Jason Hunwicks (Reinders & Law Limited) 64 Ontario Street North, Milton ON, L9T 2T1 REQUESTED VARIANCE: 1. Relief from Section 5.24.1.6 – Parking Space and Parking Aisle Standards – Table 5.24.1.6 – Parking Space and Aisle Standards – Minimum Perpendicular Width of the Aisle, to decrease the minimum perpendicular width of the aisle for 90 degree parking from 7.3 m (24 ft) to 6.9 m (22.6 ft). LOCATION: The subject property is described as Lots 687-690, 715, Plan 500, Parts 1-7 of 41R-10118 in the Town of Tillsonburg. The property is located on the west side of Victoria Street, between Ann Street and Concession Street West, and is municipally known as 31 Victoria Street, Tillsonburg. BACKGROUND INFORMATION: COUNTY OF OXFORD OFFICIAL PLAN: Schedule ‘T-1’ Town of Tillsonburg Land Use Plan Residential Schedule ‘T-2’ Town of Tillsonburg Residential Density Plan Low Density Residential TOWN OF TILLSONBURG ZONING BY-LAW: Special Low Density Residential Type 3 Zone (R3-21) SURROUNDING USES: Low density residential uses to the north, south and east, open space/ravine lands to the west. Page 77 of 650 File Number: A09-22 Report Number 2022-290 Page 2 COMMENTS: (a) Purpose of the Application: The proposed minor variance has been requested to facilitate the development of a multiple unit dwelling consisting of 18 dwelling units through the re-use of the existing vacant building and a proposed 1,115 m2 (12,000 ft2) addition to the existing building. The subject property has a lot area of 6,339 m2 (1.6 ac) and contains an existing building with an approximate area of 475 m2 (5,113 ft2) that was formerly used as a place of worship. The area west of the building consists of ravine lands and is wooded, and the remaining area of the site is a paved parking area with landscaped planting strips and fencing along the boundary of adjacent properties. Plate 1, Location Map with Existing Zoning, shows the location of the subject property and the zoning in the immediate vicinity. Plate 2, 2020 Aerial Map, provides an aerial view of the subject lands and surrounding properties. Plate 3, Applicant’s Site Plan, shows the dimensions of the proposed dwelling on the subject lands. (b) Agency Comments: The Town Chief Building Official and the Town Fire Chief and the have indicated they have no concerns with the proposal. Oxford County Public Works Department indicated that any new plumbing in the additional structure shall be served by existing plumbing through the existing building. (c) Public Consultation: Public Notice was provided to surrounding property owners on June 30, 2022 in accordance with the requirements of the Planning Act. As of the writing of this report, no comments or concerns had been received from the public. (d) Intent and Purpose of the Official Plan: The subject lands are designated ‘Low Density Residential’ according to the County of Oxford Official Plan. Within the ‘Low Density Residential’ designation, permitted land uses primarily consist of low density housing forms including single detached dwellings, duplexes, street fronting townhouses, and multiple unit dwellings as well as accessory uses thereto. The use of the lands for an affordable housing development consisting of a multiple unit dwelling conforms to the ‘Low Density Residential’ and ‘Housing’ policies of the Official Plan. (e) Intent and Purpose of the Zoning By-law: The subject property is zoned ‘Special Low Density Residential Type 3 Zone (R3-21)’ in the Town Zoning By-law. The ‘R3-21’ zone permits the development of a multiple unit dwelling consisting of 18 dwelling units. Page 78 of 650 File Number: A09-22 Report Number 2022-290 Page 3 The parking provisions in Section 5.24 require that 1.5 spaces be provided for each dwelling unit, that the parking area be setback at least 1.0 m (3.29 ft) from an interior lot line providing there is a fence erected, and requires that the parking aisle for 90 degree parking spaces be at least 7.3 m (23.9 ft) wide to accommodate opposing traffic and to provide for safe vehicular movements in the parking lot. In this instance, it is not anticipated that the minor reduction to 6.9 m (22.6 ft) will negatively affect vehicular movements in the parking lot due to the size of the lot, and the fact that many of the tenants of the affordable housing development do not have more than 1 vehicle. The parking lot is expected to have modest demand and turnover. As part of the site plan approval process the applicant will be required to illustrate typical turning movements that will be reviewed by the Town Engineering Department and Town Building and By-Law Services Department to ensure that the reduced parking aisle will function as intended, and maintains the general intent and purpose of the Zoning By-Law. (f) Desirable Development/Use: It is the opinion of this Office that the applicant’s request can be considered minor and desirable for the development of the subject property. As the proposed relief will facilitate the development of an affordable housing project that will remain compliant with the remaining R3 Zone provisions, and the requested relief is not anticipated to negatively impact vehicular access, egress, or parking, it can be considered desirable development for the property. In light of the foregoing, it is the opinion of this Office that the requested relief is in keeping with the general intent and purpose of the Official Plan and Town Zoning By-law and can be given favourable consideration. RECOMMENDATION: That the Town of Tillsonburg Committee of Adjustment approve Application File A09/22 submitted by Town of Tillsonburg Non-Profit Housing Corporation, for lands described as Part of Lots 687-690, 715, Plan 500, Parts 1-7 of 41R-10118 in the Town of Tillsonburg, as it relates to: 1. Relief from Section 5.24.1.6 – Parking Space and Parking Aisle Standards – Table 5.24.1.6 – Parking Space and Aisle Standards – Minimum Perpendicular Width of the Aisle, to decrease the minimum perpendicular width of the aisle for 90 degree parking from 7.3 m (24 ft) to 6.9 m (22.6 ft). As the proposed variance is: (i) deemed to be a minor variance from the provisions of the Town of Tillsonburg Zoning By- law No. 3295; (ii) considered desirable for the appropriate development or use of the land; (iii) in-keeping with the general intent and purpose of the Town of Tillsonburg Zoning By-law No. 3295; and Page 79 of 650 File Number: A09-22 Report Number 2022-290 Page 4 (iv) in-keeping with the general intent and purpose of the Official Plan. Authored by: original signed by Eric Gilbert, MCIP, RPP Senior Planner Approved for submission by: original signed by Gordon Hough, RPP Director Page 80 of 650 June 28, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 1020 Notes NAD_1983_UTM_Zone_17N 51 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 1 - Location Map with Existing Zoning File No.: A-09/22 - Town of Tillsonburg Non-Profit Housing Corp Lots 715 & 690, Part Lots 687-689, Plan 500, Town of Tillsonburg- 31 Victoria Street Victoria Street Gowrie Street West Ann Street Concession Street West Page 81 of 650 June 28, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 510 Notes NAD_1983_UTM_Zone_17N 26 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 2 - 2020 Aerial Map File No.: A-09/22 - Town of Tillsonburg Non-Profit Housing Corp Lots 715 & 690, Part Lots 687-689, Plan 500, Town of Tillsonburg- 31 Victoria Street Victoria Street Ann Street Page 82 of 650 1 TOWN OF TILLSONBURG Cyril J. Demeyere Limited P.O. Box 606, 261 Broadway Tillsonburg, Ontario. N4G 4J1 Tel: 519-688-1000 866-302-9886 Fax: 519-842-3235 cjdl@cjdleng.com BY PERMIT ONLY P Rb-93 VAN ACCESSIBLEVICTORIA STREET1.0m 6.91 Plate 3 - Applicant's Site Plan File No.: A-09/22 - Town of Tillsonburg Non-Profit Housing Corp Lots 715 & 690, Part Lots 687-689, Plan 500, Town of Tillsonburg- 31 Victoria Street Page 83 of 650 FORM 1 PLANNING ACT, 1990 APPLICATION FOR MINOR VARIANCE OR PERMISSION Town of Tillsonburg Committee of Adjustment Fee $1,200.00 ($2,300.00 - See Note 1 - Page 4) Building, By-Law & Planning Services 10 Lisgar Avenue Tillsonburg ON N4G 5A7 For Office Use Only PIN#: ROLL#: FILE: The undersigned hereby applied to the Committee of Adjustment for the Town of Tillsonburg under Section 44 of the Planning Act, 1990, for relief, as described in this application form By-Law No. 3295 (as amended). Name and Address of Owner Name and Address of Applicant/Agent (if applicable) Postal Code: Telephone Number: Postal Code: Telephone Number: Email: Email: 1.Name and addresses of any mortgagees, holders of charges or other encumbrances: 2.Nature and extent of relief applied for: To be completed by the applicant. (include By-Law Section if known) 3.Why is it not possible to comply with the Provision of the By-Law? 4.Legal Description of Subject land: Lot Number(s)Plan Number or Concession Part Number(s)Reference Plan Number Street Address (if any) The lot is located on the side of the Street lying between Street and Street For office use only Tillsonburg Non-profit Housing Corporation PO Box 203, Tillsonburg ON Jason Hunwicks (Reinders + Law Ltd) 64 Ontario Street North, Milton ON L9T 2T1 905-457-1618 ext. 1316N4G 4H5 519-842-4890 totil@golden.net jasonh@reinders.ca Requesting reduction in Parking Aisle width to 6.9m, where requirement is 7.3m as per By-Law 3295, Section 5.0, 5.24.1.6. Request is required based on existing site width of 20.42m in order to provide the required amount of parking spaces and 1.5m required side yard setback to parking. 687-690, 715 41R-101181-7 500 31 Victoria Street West Ann Concession West Page 84 of 650 5.Dimensions of land affected: Frontage Depth (average) Area Width of Street 6.Particulars of all buildings and structures on or proposed for the subject land: (specify ground floor area, gross floor area, number of stories, width, length, height, etc.) Existing: Proposed: 7.Location of all buildings and structures on or proposed for the subject land: (specify distance from side, rear and front lot lines as well as lot coverage.) Please include a copy of a survey with all measurements. A copy of a survey/ site plan prepared by an Ontario Land Surveyor or Consulting Engineer must accompany this application with all necessary measurements. Existing: Proposed: 8.Date of acquisition of subject land: 9.Date of Construction of all buildings and structures on subject land (if known): 10.Existing uses of the subject property 11.Existing uses of abutting properties: 12.Length of time the existing uses of the subject property have continued: 13.Municipal Services available (please check all appropriate boxes) Water Connected Sanitary Sewers Connected Storm Sewers 20.42m 6,465 sq.m. Existing building to remain GFA = 479 sq.m. Previous use was Place of worship Existing building (GFA = 479 sq.m.) to be renovated and converted into 8 residential units. Proposed addition (GFA = 718 sq.m.) with 10 residential units. Provide 27 total parking spaces. 6.1m from Side Yard (North), 30.7m from Side Yard (South), 60.3m from Rear Yard, 46.5m from Front Yard Existing to remain. Addition: 22.3m from Side Yard (North), 5.6m from Side Yard (South), 4.74m from Side Yard (East), 62.1m from Rear Yard, 29.3m from Front Yard Vacant (previously place of worship), Zoning: R3-21 Residential and Minor Institutional Zoning X X X X X Page 85 of 650 Page 86 of 650 Page 87 of 650 Page 1 of 6 Report No: CP 2022-263 COMMUNITY PLANNING Council Date: July 11, 2022 To: Mayor and Members of Tillsonburg Council From: Eric Gilbert, Senior Planner, Community Planning Application for Zone Change ZN 7-22-03 – Landmark Homes Inc. REPORT HIGHLIGHTS  The application for Zone Change proposes to rezone the subject properties from ‘Special Low Density Residential Type 1A Zone (R1A-23)’ to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to permit the development of semi-detached dwellings on the subject properties.  Special provisions have also been proposed for a reduced lot frontage, reduced lot area, reduced front yard depth, and reduced minimum interior side yard width.  Planning staff are recommending that the application be supported, as it is consistent with the policies of the Provincial Policy Statement and conforms with the relevant policies of the Official Plan respecting intensification and development within Low Density Residential Areas. DISCUSSION Background OWNER: Landmark Homes Inc. 130 Guelph Avenue, Cambridge ON N3C 1A4 APPLICANT: Jacob Hiebert 4 Feltz Drive, Ingersoll ON N5C 4E9 AGENT: Trevor Benjamins, Cyril J. Demeyere Limited 261 Broadway, Tillsonburg ON N4G 4H8 LOCATION: The subject properties are described as Lots 90, 91, & 92, Plan 41M-144, in the Town of Tillsonburg. The lands are located on the south side of Sycamore Drive, between William Street and Beech Boulevard, and are municipally known as 3, 5 & 7 Sycamore Drive, Tillsonburg. Page 88 of 650 Report No: CP 2022-263 COMMUNITY PLANNING Council Date: July 11, 2022 Page 2 of 6 COUNTY OF OXFORD OFFICIAL PLAN: Schedule “T-1” Town of Tillsonburg Land Use Plan Residential Schedule “T-2” Town of Tillsonburg Residential Density Low Density Residential Plan TOWN OF TILLSONBURG ZONING BY-LAW NO.3295: Existing Zoning: Special Low Density Residential Type 1A Zone (R1A-23) Proposed Zoning: Special Low Density Residential Type 2 Zone (R2-sp) PROPOSAL: The application for Zone Change proposes to rezone the lands to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject lands. Special provisions have been requested for each lot, as follows:  Reduce the minimum required lot frontage from 10.5 m (34.4 ft) to 7.7 m (25.2 ft);  Reduce the minimum required lot area from 315 sq m (3,390.7 sq ft) to 260 sq m (2,798.6 sq ft);  Reduce the minimum required front yard depth from 7 m (22.9 ft) to 6 m (19.6 ft);  Reduced the minimum required interior side yard width from 3.0 m (9.8 ft) and 1.2 m (3.9 ft) to 1.2 m (3.9 ft). The subject lands consist of three abutting vacant residential lots (90, 91 & 92) within Registered Plan 41M-144. The lot areas range from 555 m2 (5,980 ft2) to 559 m2 (6,017 ft2). Surrounding land uses include low density residential uses consisting of single detached dwellings to the north and east fronting on William Street, and new single detached dwellings fronting on Beech Boulevard to the west. Plate 1, Location Map with Existing Zoning, shows the location of the subject property and the existing zoning in the immediate vicinity. Plate 2, 2020 Aerial Map, provides an aerial view of the subject property. Plates 3, Proposed Dwelling Design, illustrates the proposed building elevations and dwelling design for the semi-detached dwellings. Application Review PROVINCIAL POLICY STATEMENT: The 2020 Provincial Policy Statement (PPS) provides policy direction on matters of provincial interest related to land use planning and development. Under Section 3 of the Planning Act, where a municipality is exercising its authority affecting a planning matter, such decisions “shall be consistent with” all policy statements issued under the Act. Page 89 of 650 Report No: CP 2022-263 COMMUNITY PLANNING Council Date: July 11, 2022 Page 3 of 6 Section 1.1.1 provides that healthy liveable and safe communities are sustained by accommodating an appropriate range and mix of residential housing (including additional units, affordable housing, and housing for older persons) to meet long-term needs, and promoting cost- effective development that minimizes land consumption and servicing costs. Section 1.1.3.1 of the PPS states that Settlement Areas will be the focus of growth and their vitality and regeneration shall be promoted. Land use patterns within settlement areas shall be based on:  densities and mix of land uses which are appropriate for, and efficiently use the infrastructure and public service facilities which are planned or available;  support active transportation;  efficiently use land and resources;  a range of uses and opportunities for intensification and redevelopment in accordance with the criteria in policy 1.1.3.3, where this can be accommodated. Section 1.1.3.4 directs that appropriate development standards shall be promoted which facilitate intensification, redevelopment and compact form, while avoiding or mitigating risks to public health and safety. Further, Section 1.4 Housing, specifically ss. 1.4.3, states that planning authorities shall provide for an appropriate range and mix of housing types and densities to meet projected requirements of current and future residents of the regional market area by:  Establishing and implementing minimum targets for the provision of housing which is affordable to low and moderate income households;  Permitting and facilitating all forms of housing required to meet the social, health and well-being requirements of current and future residents;  Permitting and facilitating all types of residential intensification, including additional residential units and redevelopment, in accordance with policy 1.3.3.3;  Directing the development of new housing towards locations where appropriate levels of infrastructure and public service facilities are or will be available to support current and projected needs;  Promoting densities for new housing which efficiently use land, resources, infrastructure and public service facilities, and support the use of active transportation and transit in areas where it exists or is to be developed; and  Establishing development standards for residential intensification, redevelopment and new residential development which minimize the cost of housing and facilitate compact form, while maintaining appropriate levels of public health and safety. OFFICIAL PLAN: The subject property is designated Low Density Residential as per Schedule T-2, Residential Density Plan for the Town of Tillsonburg, as contained in the Official Plan. Low density residential districts are those lands that are primarily developed or planned for a variety of low-rise, low density housing forms including both executive and smaller single- detached dwellings, semi-detached, duplex and converted dwellings, townhouses and other, similar development. Within these areas, it is intended that there will be a mixing and integration of different forms of housing to achieve a low overall density of use. Section 8.2.1 of the Official Plan (Housing Development and Residential Areas - Strategic Approach) identifies a number of strategies "to provide present and future residents of Tillsonburg with a choice of adequate and affordable housing which meets their needs". Page 90 of 650 Report No: CP 2022-263 COMMUNITY PLANNING Council Date: July 11, 2022 Page 4 of 6 The strategies developed to achieve this goal include:  Accommodating the present and future demand for housing in Tillsonburg through the efficient use of vacant residentially-designated lands, underutilized parcels in built-up areas and existing housing stock in all neighbourhoods, with the objective of also reducing energy consumption, decreasing the financial burden of underutilized municipal services, and relieving pressure for development of natural areas and open spaces;  Facilitating a choice of housing type, tenure, cost and location that meets the changing needs of all types of households by providing for a variety and mix of housing throughout the Town;  Increasing the supply of affordable housing by integrating adequate housing for low and moderate income households and those with special needs throughout the Town and establish and monitor minimum affordable housing targets to ensure that the percentage of affordable housing is maintained or enhanced;  Promoting and facilitating the provision of affordable housing through the co-operative efforts of all levels of government, the private sector and volunteer interest groups through such means as technical assistance, land conveyances, joint ventures, regulatory measures, and incentives. Policies contained within Section 8.2.2.5 – Residential Intensification and Redevelopment, promote residential intensification in appropriate locations to make more efficient use of existing land, infrastructure, and public services. Residential intensification is permitted in appropriate locations within the Residential and Central Areas of the Town, subject to complying with the policies of the associated land use designations pertaining to the density, form and scale of residential development being proposed. Section 8.2.4.1.1 of the Official Plan provides that when considering proposals for street-oriented infilling, the introduction of new residential housing into an established streetscape pattern will only be permitted if the proposal is deemed to be consistent with the characteristics of existing development on both sides of the same street. In order that street oriented infill projects are sensitive to the continuity of the existing residential streetscape, the Town Council and the County Land Division Committee will ensure that:  The proposal is consistent with street frontage, setbacks and spacing of existing development within a two-block area on the same street;  The proposal complies with Section 8.2.4.1.4 (Infilling Policies). As per Section 8.2.4.1.4, when considering all infill proposals, Town Council must be satisfied that vehicular access points are acceptable, municipal services can adequately accommodate the proposal and stormwater is adequately controlled. Further, the Council must also ensure that any desirable vegetation is retained where possible and the impact on environmental constraints is mitigated, the proposal complies with the Zoning By-Law and impacts to heritage resources are considered. TOWN OF TILLSONBURG ZONING BY-LAW: The subject property is currently zoned ‘Special Low Density Residential Type 1A Zone (R1A- 23)’, according to the Town of Tillsonburg Zoning By-law. The R1A-23 zone permits a single detached dwelling, a home occupation, and accessory uses thereto, with a reduced front yard depth of 6 m (19.7 ft) and reduced rear yard depth of 9 m (29.5 ft). The applicant is proposing to rezone the subject property to ‘Low Density Residential Type 2 Zone (R2)’ to permit the construction of semi-detached dwellings on each of the lots. Page 91 of 650 Report No: CP 2022-263 COMMUNITY PLANNING Council Date: July 11, 2022 Page 5 of 6 Special provisions have been proposed for the special R2 Zone has outlined in the ‘Proposal’ section of this report. AGENCY COMMENTS: Oxford County Public Works Department indicated that each property currently is serviced by one water and sanitary service. If additional water or sanitary services are required, they will be granted in accordance with County policy and applicable fees will apply. The Downtown Tillsonburg BIA indicated that they have no issues with this proposal. PUBLIC CONSULTATION: Notice of complete application and notice of public meeting regarding this application were circulated to surrounding property owners within 120 m (400’) on two occasions, June 16, 2022 and June 27, 2022, in accordance with the requirements of the Planning Act. As of the preparation of this report, no comments or concerns from the public had been received. Planning Analysis The application for Zone Change proposes to rezone the lands to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject properties. The proposal is consistent with the PPS direction to provide for an appropriate diversity of housing types and densities to meet the needs of current and future residents. If approved, the additional dwelling units will provide an additional housing rental supply for the current and future residents of the Town and represents an efficient use of existing municipal infrastructure. The proposal is consistent with the Planning Act and PPS direction to permit and facilitate all forms of residential intensification and redevelopment, including additional units. The proposal complies with the policies contained within Section 8.2.2.2 of the Official Plan that encourage the creation of housing opportunities that may result in a mix of tenure forms, such as ownership, rental, and cooperative, throughout the Town. The proposal is also consistent with the policy direction within Section 8.2.2.5 that promotes residential intensification in appropriate locations to make more efficient use of existing land, infrastructure, and public services. The proposed development is considered to be a form of street-oriented infill development. In Low Density Residential Areas, infill development may be permitted subject to meeting the Official Plan criteria as set out in Sections 8.2.4.1.1 & 8.2.4.1.4. Although there are no semi-detached dwellings or housing forms other than single detached dwellings in the immediate vicinity of the subject properties, it is opinion of Planning staff that the proposed semi-detached dwellings will be compatible with existing and planned development, and can co-exist without negative impacts. Semi-detached dwellings are a permitted housing form in the Low Density Residential designation, and the proposed setbacks of the semi-detached dwellings will be similar to the setbacks of existing and planned development in the vicinity. The semi-detached dwellings will provide all required parking, and the proposal will support the Official Plan goals of providing a variety of housing types and densities to meet the needs of current and future residents of the Town. The proposal will also comply with the remaining criteria respecting infill development within Section 8.2.4.1.4 of the Official Plan. Page 92 of 650 Report No: CP 2022-263 COMMUNITY PLANNING Council Date: July 11, 2022 Page 6 of 6 In light of the foregoing, it is the opinion of this Office that the application for zone change is consistent with the policies of the Provincial Policy Statement and maintains the general intent and purpose of the Official Plan. RECOMMENDATION It is recommended that the Council of the Town of Tillsonburg approve the zone change application submitted by Landmark Homes Inc, whereby the lands described Lots 90, 91 & 92, Registered Plan 41M-144, in the Town of Tillsonburg known municipally as 3, 5 & 7 Sycamore Drive are to be rezoned from ‘Special Low Density Residential Type 1A Zone (R1A-23)’ to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject property with reduced lot frontages, lot area, front yard depth, and interior side yard widths. SIGNATURES Authored by: ‘original signed by’ Eric Gilbert, MCIP RPP Senior Planner Approved for submission: ‘original signed by’ Gordon K. Hough, RPP Director Page 93 of 650 May 18, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 1020 Notes NAD_1983_UTM_Zone_17N 51 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 1: Location Map with Existing Zoning ZN 7-22-03 - Landmark Homes Inc. Lots 90, 91, 92, Plan 41M-144 - 3, 5, 7 Sycamore Drive, Tillsonburg Subject Properties Page 94 of 650 May 18, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 510 Notes NAD_1983_UTM_Zone_17N 26 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 2: 2020 Aerial Map ZN 7-22-03 - Landmark Homes Inc. Lots 90, 91, 92, Plan 41M-144 - 3, 5, 7 Sycamore Drive, Tillsonburg Subject Properties Page 95 of 650 NORTH ELEVATION Scale 3/16"-1'-0" 12 4[::7" 35YRS _/ ,,--SHINGLES I I LINTEL SCHEDULE FOR MASONARY VENEERS as per 9.20.5.2B 2016 OBC BRICK STONE 3 1/2"X 3 1/2" X 1/4" 8'-1" 7'-9" 4"X 3 1/2" X 1/4" 8'-9" 8'-2" 4 7 /8"X 3 1/2" X 5/16" 10'-10" 10'-1" 4 7 /8"X 3 1/2" X 3/8" 11'-5" 10'-8" 4 7 /8"X 3 1/2" X 1/2" 11 '-9" 10'-11" 5 7 /8"X 3 1/2" X 3/8" 12'-7" 11'-8" 5 7 /8"X 3 1/2" X 1/2" 13'-5" 12'-5" 5 7 /8"X 4" X 1/2" 13'-6" 12'-7" 7 1/8"X 4" X 3/8" 14'-1" 13'-1" 7 1/8"X 4" X 1/2" 15'-1" 14'-0" -..------I --I = --,_ __. ~ ~ ,_ -I I- ~ --I " --I STONE ...., I ...., I -~ L ~ ' I I I -1 _.l__ I I I .- :ii--I• - I --I --!!!!!!!!!! -I I 36X96 ~ -·-L_. GENERAL NOTES: FOUNDATION PLAN NOTES: L ALL DIMENSIONS TO EXTERIOR FOUNDATION WALLS 2. ALL FOOTINGS SHALL BEAR DIRECTLY ON ~l~lw.'~s~~~~F.\ASSUMED SOIL BEARING 3, APPROVED GRANULAR FILL SHALL BE COMPACTED IN 6" LAYERS TO 95% STANDARD PROCTOR MAXIMUM DRY DENSITY. 4. ~7.gz~~~M~&l~~W5::~ FROM FROST ACTION. 5. CONCRETE FOR FLOOR SLABS SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF 25 MPa. ALL OTHER CONCRETE SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF t~&IJiltMWW8RWISE SPECIFIED. 6. REINFORCING STEEL TO HA VE MINIMUM 1112" COVER, MAXIMUM 2" COVER AT BOTTOM OF SLAB. I review and take responsibility for the design work on behalf ofa fim1 registered under subsection 2.17.4. of the 0.B.C. I "m q""lifiod, ""d tho finn i~d, i<> tho 'pprnpcimo """,/"togNi" Tony Wall BCIN: 22052 SQUARE FOOTAGE MAIN FLOOR-UNIT 1-2 730 SQ.Fr. UPPER FLOOR-UNIT 1-2 939 SQ.Fr. GARAGE-UNIT 1-2 294 SQ.Fr. O/A FOOTPRINT SQ. Fr. 2168 SQ.FT. DATE: DESCRJPTION: 04/07 PERMIT ISSUE ( *PROPERTY OF VIEW-IT DESIGN* VIEW-IT DESIGN RR# I PORT BURWELL OFFICE: 519-SSl-1173 FAX: 519-874-4087 HIEBERT RES YIZI TRILLIUM DRNE TILLSONBURG, ONT PROPOSED HOUSE PLANS ELEVATIONS DRAWNBY: TONYWALL SCALE: SEEDWG BCIN: 29620 PO# 21101 DATE: APRIL 2021 A4 SHEET NO, 4 OF 12 J Plate 3: Proposed Dwelling Design ZN 7-22-03 - Landmark Homes Inc. Lots 90, 91, 92, Plan 41M-144 - 3, 5, 7 Sycamore Drive, Tillsonburg Page 96 of 650 WEST ELEVATION .i2·-o· Scale 3/16"-1'-0" ' I I I I I I [ I I I I [ I I I h0NGB0 · I I I/ ~SIDING I l-~~~~~~~-;;z::::~SID~~IN~G~-==~'::::::::::::::::::::::::::::::::::~ I I I I I I ~ ,__ MEMBRANE ROOF -~----I•=~ -~ ~ ~ ~ ~ ~-~ ~ ~ ~ - 111 D SIDIN<L::::::;" =-=~ I I --I -1_·1~1LJ=~-=~p,____.J==~~-;=::!!:tii===-=====-======-=====-======-======-=====-======-=====-======-=====-======-====~~=====-=tt----r.o.sUBFLOOR j_J ~ I. .• .11 I I I I ~::_ _ _J I L __ 1 __ _J I PRE-FAB GALV. I I -_:-r'-- 'b I ;... I WINDOW WELL TYP. I [: = t = = = = = = = = = = = = = = = = = = = = = ~~~~~!"= = ========I==========~ - - _ lrn~ GENERAL NOTES: FOUNDATION PLAN NOTES: I. Al.L DIMENSIONS TO EXTERIOR FOUNDATION WALLS 2. ALL FOOTINGS SHALL BEAR DIRECTLY ON ~l~lw.'~s~~~~F.\ASSUMED SOIL BEARING 3, APPROVED GRANULAR FILL SHALL BE COMPACTED IN 6" LAYERS TO 95% STANDARD PROCTOR MAXIMUM DRY DENSITY. 4. ~7.gz~~~M~&l~~W5::~ FROM FROST ACTION. 5. CONCRETE FOR FLOOR SLABS SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF 25 MPa. ALL OTHER CONCRETE SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF t~&IJiltMWW8RWISE SPECIFIED. 6. REINFORCING STEEL TO HA VE MINIMUM 1112" COVER, MAXIMUM 2" COVER AT BOTTOM OF SLAB . I review and take responsibility for the design work on behalf ofa fim1 registered under subsection 2.17.4. of the 0.B.C. I "m q""J;fiod. ""d tho finn ;~d. ;,. tho 'pprnpc;mo """,/"togN;" Tony Wall BCIN: 22052 SQUARE FOOTAGE MAIN FLOOR-UNIT 1-2 730 SQ.Fr. UPPER FLOOR-UNIT 1-2 939 SQ.Fr. GARAGE-UNIT 1-2 294 SQ.Fr. O/A FOOTPRINT SQ. Fr. 2168 SQ.FT. DATE: DESCRJPTION: 04/07 PERMIT ISSUE ( *PROPERTY OF VIEW-IT DESIGN* J VIEW-IT DESIGN RR# I PORT BURWELL OFFICE: 519-SSl-1173 FAX: 519-874-4087 HIEBERT RES YIZI TRILLIUM DRIVE TILLSONBURG, ONT PROPOSED HOUSE PLANS ELEVATIONS DRAWNBY: TONYWALL SCALE: SEE DWG BCIN: 29620 PO# 21101 DATE: APRIL 2021 A5 SHEET NO. 5 OF 12 Plate 3: Proposed Dwelling Design ZN 7-22-03 - Landmark Homes Inc. Lots 90, 91, 92, Plan 41M-144 - 3, 5, 7 Sycamore Drive, Tillsonburg Page 97 of 650 EAST ELEVATION Scale 3/16"-1'-0" 12 4i;::::::'"'° 35YRS _/ ~SHINGLES I I I I I I I I I "<'lNGB<'lb ,, - /-'.SID!Nfr , I I i----r---.r= SIDING I -/='oIDil'I .,_ I 30X60 I I I I " I MEMBRANE ROOF '":'I -~· ~ ---------_ _,_. ---"1 -. -:CJ D 111 -11 ~ r--I I---1 1---J -I -1.---J -I I ~ -I I --~ I i -I ,.=-smING 1..1...,r_p;;;;; STONE :x/ ,_. r I _..., -I GO-rl -~ ' I I I I r-1 --I ·I -I I --1 -----------------------·-I -§ --111 Ill .1 I -I I I I I I L_~7~ I L __ 1 __ _J I PRE-FAB GALV. I WINDOW WELL TYP, I I 'il~J ___ -t = = ========I========== ~~~'!'fr=====================::]= l 2·-0·.J. ~ GENERAL NOTES: FOUNDATION PLAN NOTES: I. ALL DIMENSIONS TO EXTERIOR FOUNDATION WALLS 2. ALL FOOTINGS SHALL BEAR DIRECTLY ON ~l~lw.'~s~~~~F.\ASSUMED SOIL BEARING 3, APPROVED GRANULAR FILL SHALL BE COMPACTED IN 6" LAYERS TO 95% STANDARD PROCTOR MAXIMUM DRY DENSITY. 4. ~7.gz~~~M~&l~~W5::~ FROM FROST ACTION. 5. CONCRETE FOR FLOOR SLABS SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF 25 MPa. ALL OTHER CONCRETE SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF t~&IJiltMWW8RWISE SPECIFIED. 6. REINFORCING STEEL TO HA VE MINIMUM 1112" COVER, MAXIMUM 2" COVER AT BOTTOM OF SLAB, I review and take responsibility for the design work on behalf ofa fim1 registered under subsection 2.17.4. of the 0.B.C. I "m q""J;fiod, ""d tho finn ;~d, ;,. tho 'PP"P';"'' """,/"togN;" Tony Wall BCIN: 22052 SQUARE FOOTAGE MAIN FLOOR-UNIT 1-2 730 SQ.Fr. UPPER FLOOR-UNIT 1-2 939 SQ.Fr. GARAGE-UNIT 1-2 294 SQ.Fr. O/A FOOTPRINT SQ. Fr. 2168 SQ.FT. DATE: DESCRJPTION: 04/07 PERMIT ISSUE ( *PROPERTY OF VIEW-IT DESIGN* VIEW-IT DESIGN RR# I PORT BURWELL OFFICE: 519-SSl-1173 FAX: 519-874-4087 HIEBERT RES YIZI TRILLIUM DRIVE TILLSONBURG, ONT PROPOSED HOUSE PLANS ELEVATIONS DRAWNBY: TONYWALL SCALE: SEE DWG BCIN: 29620 PO# 21101 DATE: APRIL 2021 A6 SHEET NO, 6 OF 12 J Plate 3: Proposed Dwelling Design ZN 7-22-03 - Landmark Homes Inc. Lots 90, 91, 92, Plan 41M-144 - 3, 5, 7 Sycamore Drive, Tillsonburg Page 98 of 650 ZN 7-22-03 Page 99 of 650 Page 100 of 650 Page 101 of 650 Page 102 of 650 Page 103 of 650 Page 1 of 6 Report No: CP 2022-264 COMMUNITY PLANNING Council Date: July 11, 2022 To: Mayor and Members of Tillsonburg Council From: Eric Gilbert, Senior Planner, Community Planning Application for Zone Change ZN 7-22-04 – Jacob Hiebert REPORT HIGHLIGHTS  The application for Zone Change proposes to rezone the subject properties from ‘Low Density Residential Type 1A Zone (R1A)’ to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to permit the development of semi-detached dwellings on the subject properties.  Special provisions are being proposed reduced lot frontage, reduced lot area, reduced front yard depth, and reduced minimum interior side yard width.  Planning staff are recommending that the application be supported, as it is consistent with the policies of the Provincial Policy Statement and conforms with the relevant policies of the Official Plan respecting intensification and development within Low Density Residential Areas. DISCUSSION Background OWNER: Jacob Hiebert 4 Feltz Drive, Ingersoll ON N5C 4E9 AGENT: Trevor Benjamins, Cyril J. Demeyere Limited 261 Broadway, Tillsonburg ON N4G 4H8 LOCATION: The subject lands are described as Lots 43 & 44, Plan 41M-144, in the Town of Tillsonburg. The lands are located on the north side of Concession Street West, between Beech Boulevard and Quarter Town Line, and are municipally known as 158 & 160 Concession Street West, Tillsonburg. Page 104 of 650 Report No: CP 2022-264 COMMUNITY PLANNING Council Date: July 11, 2022 Page 2 of 6 COUNTY OF OXFORD OFFICIAL PLAN: Schedule “T-1” Town of Tillsonburg Land Use Plan Residential Schedule “T-2” Town of Tillsonburg Residential Density Low Density Residential Plan TOWN OF TILLSONBURG ZONING BY-LAW NO.3295: Existing Zoning: Low Density Residential Type 1A Zone (R1A) Proposed Zoning: Special Low Density Residential Type 2 Zone (R2-sp) PROPOSAL: The application for Zone Change proposes to rezone the lands to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject lands. Special provisions are proposed to be included in the special R2 Zone, as follows:  Reduce the minimum required lot frontage from 10.5 m (34.4 ft) to 7.7 m (25.2 ft);  Reduce the minimum required lot area from 315 sq m (3,390.7 sq ft) to 260 sq m (2,798.6 sq ft);  Reduce the minimum required front yard depth from 7 m (22.9 ft) to 6 m (19.6 ft);  Reduced the minimum required interior side yard width from 3.0 m (9.8 ft) and 1.2 m (3.9 ft) to 1.2 m (3.9 ft). The subject lands consist of two abutting vacant residential lots within Registered Plan 41M-144, each with a lot area of approximately 593 m2 (6,383 ft2). Surrounding land uses include low density residential uses consisting of single detached dwellings to the north and west fronting on Concession Street West, an institutional use to the east, and vacant residential land to the south. Plate 1, Location Map with Existing Zoning, shows the location of the subject property and the existing zoning in the immediate vicinity. Plate 2, 2020 Aerial Map, provides an aerial view of the subject property. Plates 3, Proposed Dwelling Design, illustrates the proposed building elevations and dwelling design for the semi-detached dwellings. Application Review PROVINCIAL POLICY STATEMENT: The 2020 Provincial Policy Statement (PPS) provides policy direction on matters of provincial interest related to land use planning and development. Under Section 3 of the Planning Act, where a municipality is exercising its authority affecting a planning matter, such decisions “shall be consistent with” all policy statements issued under the Act. Page 105 of 650 Report No: CP 2022-264 COMMUNITY PLANNING Council Date: July 11, 2022 Page 3 of 6 Section 1.1.1 provides that healthy liveable and safe communities are sustained by accommodating an appropriate range and mix of residential housing (including additional units, affordable housing, and housing for older persons) to meet long-term needs, and promoting cost- effective development that minimizes land consumption and servicing costs. Section 1.1.3.1 of the PPS states that Settlement Areas will be the focus of growth and their vitality and regeneration shall be promoted. Land use patterns within settlement areas shall be based on:  densities and mix of land uses which are appropriate for, and efficiently use the infrastructure and public service facilities which are planned or available;  support active transportation;  efficiently use land and resources;  a range of uses and opportunities for intensification and redevelopment in accordance with the criteria in policy 1.1.3.3, where this can be accommodated. Section 1.1.3.4 directs that appropriate development standards shall be promoted which facilitate intensification, redevelopment and compact form, while avoiding or mitigating risks to public health and safety. Further, Section 1.4 Housing, specifically ss. 1.4.3, states that planning authorities shall provide for an appropriate range and mix of housing types and densities to meet projected requirements of current and future residents of the regional market area by:  Establishing and implementing minimum targets for the provision of housing which is affordable to low and moderate income households;  Permitting and facilitating all forms of housing required to meet the social, health and well-being requirements of current and future residents;  Permitting and facilitating all types of residential intensification, including additional residential units and redevelopment, in accordance with policy 1.3.3.3;  Directing the development of new housing towards locations where appropriate levels of infrastructure and public service facilities are or will be available to support current and projected needs;  Promoting densities for new housing which efficiently use land, resources, infrastructure and public service facilities, and support the use of active transportation and transit in areas where it exists or is to be developed; and  Establishing development standards for residential intensification, redevelopment and new residential development which minimize the cost of housing and facilitate compact form, while maintaining appropriate levels of public health and safety. OFFICIAL PLAN: The subject property is designated Low Density Residential as per Schedule T-2, Residential Density Plan for the Town of Tillsonburg, as contained in the Official Plan. Low density residential districts are those lands that are primarily developed or planned for a variety of low-rise, low density housing forms including both executive and smaller single- detached dwellings, semi-detached, duplex and converted dwellings, townhouses and other, similar development. Within these areas, it is intended that there will be a mixing and integration of different forms of housing to achieve a low overall density of use. Section 8.2.1 of the Official Plan (Housing Development and Residential Areas - Strategic Approach) identifies a number of strategies "to provide present and future residents of Tillsonburg with a choice of adequate and affordable housing which meets their needs". Page 106 of 650 Report No: CP 2022-264 COMMUNITY PLANNING Council Date: July 11, 2022 Page 4 of 6 The strategies developed to achieve this goal include:  Accommodating the present and future demand for housing in Tillsonburg through the efficient use of vacant residentially-designated lands, underutilized parcels in built-up areas and existing housing stock in all neighbourhoods, with the objective of also reducing energy consumption, decreasing the financial burden of underutilized municipal services, and relieving pressure for development of natural areas and open spaces;  Facilitating a choice of housing type, tenure, cost and location that meets the changing needs of all types of households by providing for a variety and mix of housing throughout the Town;  Increasing the supply of affordable housing by integrating adequate housing for low and moderate income households and those with special needs throughout the Town and establish and monitor minimum affordable housing targets to ensure that the percentage of affordable housing is maintained or enhanced;  Promoting and facilitating the provision of affordable housing through the co-operative efforts of all levels of government, the private sector and volunteer interest groups through such means as technical assistance, land conveyances, joint ventures, regulatory measures, and incentives. Policies contained within Section 8.2.2.5 – Residential Intensification and Redevelopment, promote residential intensification in appropriate locations to make more efficient use of existing land, infrastructure, and public services. Residential intensification is permitted in appropriate locations within the Residential and Central Areas of the Town, subject to complying with the policies of the associated land use designations pertaining to the density, form and scale of residential development being proposed. Section 8.2.4.1.1 of the Official Plan provides that when considering proposals for street-oriented infilling, the introduction of new residential housing into an established streetscape pattern will only be permitted if the proposal is deemed to be consistent with the characteristics of existing development on both sides of the same street. In order that street oriented infill projects are sensitive to the continuity of the existing residential streetscape, the Town Council and the County Land Division Committee will ensure that:  The proposal is consistent with street frontage, setbacks and spacing of existing development within a two-block area on the same street;  The proposal complies with Section 8.2.4.1.4 (Infilling Policies). As per Section 8.2.4.1.4, when considering all infill proposals, Town Council must be satisfied that vehicular access points are acceptable, municipal services can adequately accommodate the proposal and stormwater is adequately controlled. Further, the Council must also ensure that any desirable vegetation is retained where possible and the impact on environmental constraints is mitigated, the proposal complies with the Zoning By-Law and impacts to heritage resources are considered. TOWN OF TILLSONBURG ZONING BY-LAW: The subject property is currently zoned ‘Low Density Residential Type 1A Zone (R1A)’, according to the Town of Tillsonburg Zoning By-law. The R1A zone permits a single detached dwelling, a home occupation, and accessory uses thereto. The applicant is proposing to rezone the subject property to ‘Low Density Residential Type 2 Zone (R2)’ to permit the construction of semi-detached dwellings on each of the lots. Page 107 of 650 Report No: CP 2022-264 COMMUNITY PLANNING Council Date: July 11, 2022 Page 5 of 6 Special provisions are proposed for each lot and have been outlined in detail in the ‘Proposal’ section of this report. AGENCY COMMENTS: Oxford County Public Works Department indicated that each property currently is serviced by one water and sanitary service. If additional water or sanitary services are required, they will be granted in accordance with County policy and applicable fees will apply. The Downtown Tillsonburg BIA indicated that they have no issues with this proposal. PUBLIC CONSULTATION: Notice of complete application and notice of public meeting regarding this application were circulated to surrounding property owners within 120 m (400’) on two occasions, June 16, 2022 & June 27, 2022, in accordance with the requirements of the Planning Act. As of the preparation of this report, no comments or concerns from the public had been received. Planning Analysis The application for Zone Change proposes to rezone the lands to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject properties. The proposal is consistent with the PPS direction to provide for an appropriate diversity of housing types and densities to meet the needs of current and future residents. If approved, the additional dwelling units will provide an additional housing rental supply for the current and future residents of the Town and represents an efficient use of existing municipal infrastructure. The proposal is consistent with the Planning Act and PPS direction to permit and facilitate all forms of residential intensification and redevelopment, including additional units. The proposal complies with the policies contained within Section 8.2.2.2 of the Official Plan that encourage the creation of housing opportunities that may result in a mix of tenure forms, such as ownership, rental, and cooperative, throughout the Town. The proposal is also consistent with the policy direction within Section 8.2.2.5 that promotes residential intensification in appropriate locations to make more efficient use of existing land, infrastructure, and public services. The proposed development is considered to be a form of street-oriented infill development. In Low Density Residential Areas, infill development may be permitted subject to meeting the Official Plan criteria as set out in Sections 8.2.4.1.1 and 8.2.4.1.4. Although there are no semi-detached dwellings or housing forms other than single detached dwellings in the immediate vicinity of the subject properties, it is opinion of Planning staff that the proposed semi-detached dwellings will be compatible with existing and planned development. Semi-detached dwellings are a permitted housing form in the Low Density Residential designation, and the proposed setbacks of the semi-detached dwellings will be similar to the setbacks of existing and planned development in the vicinity. Lands to the south on the opposite side of Concession Street West are designated for High Density Residential development and the lands to the immediate east are occupied by . The proposal will comply with the remaining criteria respecting infill development within Section 8.2.4.1.4 of the Official Plan. Page 108 of 650 Report No: CP 2022-264 COMMUNITY PLANNING Council Date: July 11, 2022 Page 6 of 6 It is recommended that the special provisions established in the ‘R2-32’ zone through application ZN 7-22-03 be used for this application and any other similar requests within the Oak Park Estates subdivision development. In light of the foregoing, it is the opinion of this Office that the application for zone change is consistent with the policies of the Provincial Policy Statement and maintains the general intent and purpose of the Official Plan. RECOMMENDATION It is recommended that the Council of the Town of Tillsonburg approve the zone change application submitted by Landmark Homes Inc, whereby the lands described Lots 43 & 44, Registered Plan 41M-144, in the Town of Tillsonburg known municipally as 158 & 160 Concession Street West are to be rezoned from ‘Low Density Residential Type 1A Zone (R1A)’ to ‘Special Low Density Residential Type 2 Zone (R2-sp)’ to facilitate the development of semi-detached dwellings on the subject property with reduced lot frontages, lot area, front yard depth, and interior side yard widths. SIGNATURES Authored by: ‘original signed by’ Eric Gilbert, MCIP RPP Senior Planner Approved for submission: ‘original signed by’ Gordon K. Hough, RPP Director Page 109 of 650 May 18, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 1020 Notes NAD_1983_UTM_Zone_17N 51 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 1: Location Map with Existing Zoning ZN 7-22-04 - Jacob Hiebert Lots 43 & 44, Plan 41M-144 - 158 & 160 Concession Street West, Tillsonburg Subject Properties Page 110 of 650 May 18, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 510 Notes NAD_1983_UTM_Zone_17N 26 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 2: 2020 Aerial Map ZN 7-22-04 - Jacob Hiebert Lots 43 & 44, Plan 41M-144 - 158 & 160 Concession Street West, Tillsonburg Subject Properties Page 111 of 650 NORTH ELEVATION Scale 3/16"-1'-0" 12 4[::7" 35YRS _/ ,,--SHINGLES I I LINTEL SCHEDULE FOR MASONARY VENEERS as per 9.20.5.2B 2016 OBC BRICK STONE 3 1/2"X 3 1/2" X 1/4" 8'-1" 7'-9" 4"X 3 1/2" X 1/4" 8'-9" 8'-2" 4 7 /8"X 3 1/2" X 5/16" 10'-10" 10'-1" 4 7 /8"X 3 1/2" X 3/8" 11'-5" 10'-8" 4 7 /8"X 3 1/2" X 1/2" 11 '-9" 10'-11" 5 7 /8"X 3 1/2" X 3/8" 12'-7" 11'-8" 5 7 /8"X 3 1/2" X 1/2" 13'-5" 12'-5" 5 7 /8"X 4" X 1/2" 13'-6" 12'-7" 7 1/8"X 4" X 3/8" 14'-1" 13'-1" 7 1/8"X 4" X 1/2" 15'-1" 14'-0" -..------I --I = --,_ __. ~ ~ ,_ -I I- ~ --I " --I STONE ...., I ...., I -~ L ~ ' I I I -1 _.l__ I I I .- :ii--I• - I --I --!!!!!!!!!! -I I 36X96 ~ -·-L_. GENERAL NOTES: FOUNDATION PLAN NOTES: L ALL DIMENSIONS TO EXTERIOR FOUNDATION WALLS 2. ALL FOOTINGS SHALL BEAR DIRECTLY ON ~l~lw.'~s~~~~F.\ASSUMED SOIL BEARING 3, APPROVED GRANULAR FILL SHALL BE COMPACTED IN 6" LAYERS TO 95% STANDARD PROCTOR MAXIMUM DRY DENSITY. 4. ~7.gz~~~M~&l~~W5::~ FROM FROST ACTION. 5. CONCRETE FOR FLOOR SLABS SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF 25 MPa. ALL OTHER CONCRETE SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF t~&IJiltMWW8RWISE SPECIFIED. 6. REINFORCING STEEL TO HA VE MINIMUM 1112" COVER, MAXIMUM 2" COVER AT BOTTOM OF SLAB. I review and take responsibility for the design work on behalf ofa fim1 registered under subsection 2.17.4. of the 0.B.C. I "m q""lifiod, ""d tho finn i~d, i<> tho 'pprnpcimo """,/"togNi" Tony Wall BCIN: 22052 SQUARE FOOTAGE MAIN FLOOR-UNIT 1-2 730 SQ.Fr. UPPER FLOOR-UNIT 1-2 939 SQ.Fr. GARAGE-UNIT 1-2 294 SQ.Fr. O/A FOOTPRINT SQ. Fr. 2168 SQ.FT. DATE: DESCRJPTION: 04/07 PERMIT ISSUE ( *PROPERTY OF VIEW-IT DESIGN* VIEW-IT DESIGN RR# I PORT BURWELL OFFICE: 519-SSl-1173 FAX: 519-874-4087 HIEBERT RES YIZI TRILLIUM DRNE TILLSONBURG, ONT PROPOSED HOUSE PLANS ELEVATIONS DRAWNBY: TONYWALL SCALE: SEEDWG BCIN: 29620 PO# 21101 DATE: APRIL 2021 A4 SHEET NO, 4 OF 12 J Plate 3: Proposed Dwelling Design ZN 7-22-03 - Landmark Homes Inc. Lots 44 & 45, Plan 41M-144 - 158 & 160 Concession Street West, Tillsonburg Page 112 of 650 WEST ELEVATION .i2·-o· Scale 3/16"-1'-0" ' I I I I I I [ I I I I [ I I I h0NGB0 · I I I/ ~SIDING I l-~~~~~~~-;;z::::~SID~~IN~G~-==~'::::::::::::::::::::::::::::::::::~ I I I I I I ~ ,__ MEMBRANE ROOF -~----I•=~ -~ ~ ~ ~ ~ ~-~ ~ ~ ~ - 111 D SIDIN<L::::::;" =-=~ I I --I -1_·1~1LJ=~-=~p,____.J==~~-;=::!!:tii===-=====-======-=====-======-======-=====-======-=====-======-=====-======-====~~=====-=tt----r.o.sUBFLOOR j_J ~ I. .• .11 I I I I ~::_ _ _J I L __ 1 __ _J I PRE-FAB GALV. I I -_:-r'-- 'b I ;... I WINDOW WELL TYP. I [: = t = = = = = = = = = = = = = = = = = = = = = ~~~~~!"= = ========I==========~ - - _ lrn~ GENERAL NOTES: FOUNDATION PLAN NOTES: I. Al.L DIMENSIONS TO EXTERIOR FOUNDATION WALLS 2. ALL FOOTINGS SHALL BEAR DIRECTLY ON ~l~lw.'~s~~~~F.\ASSUMED SOIL BEARING 3, APPROVED GRANULAR FILL SHALL BE COMPACTED IN 6" LAYERS TO 95% STANDARD PROCTOR MAXIMUM DRY DENSITY. 4. ~7.gz~~~M~&l~~W5::~ FROM FROST ACTION. 5. CONCRETE FOR FLOOR SLABS SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF 25 MPa. ALL OTHER CONCRETE SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF t~&IJiltMWW8RWISE SPECIFIED. 6. REINFORCING STEEL TO HA VE MINIMUM 1112" COVER, MAXIMUM 2" COVER AT BOTTOM OF SLAB . I review and take responsibility for the design work on behalf ofa fim1 registered under subsection 2.17.4. of the 0.B.C. I "m q""J;fiod. ""d tho finn ;~d. ;,. tho 'pprnpc;mo """,/"togN;" Tony Wall BCIN: 22052 SQUARE FOOTAGE MAIN FLOOR-UNIT 1-2 730 SQ.Fr. UPPER FLOOR-UNIT 1-2 939 SQ.Fr. GARAGE-UNIT 1-2 294 SQ.Fr. O/A FOOTPRINT SQ. Fr. 2168 SQ.FT. DATE: DESCRJPTION: 04/07 PERMIT ISSUE ( *PROPERTY OF VIEW-IT DESIGN* J VIEW-IT DESIGN RR# I PORT BURWELL OFFICE: 519-SSl-1173 FAX: 519-874-4087 HIEBERT RES YIZI TRILLIUM DRIVE TILLSONBURG, ONT PROPOSED HOUSE PLANS ELEVATIONS DRAWNBY: TONYWALL SCALE: SEE DWG BCIN: 29620 PO# 21101 DATE: APRIL 2021 A5 SHEET NO. 5 OF 12 Plate 3: Proposed Dwelling Design ZN 7-22-03 - Landmark Homes Inc. Lots 44 & 45, Plan 41M-144 - 158 & 160 Concession Street West, Tillsonburg Page 113 of 650 EAST ELEVATION Scale 3/16"-1'-0" 12 4i;::::::'"'° 35YRS _/ ~SHINGLES I I I I I I I I I "<'lNGB<'lb ,, - /-'.SID!Nfr , I I i----r---.r= SIDING I -/='oIDil'I .,_ I 30X60 I I I I " I MEMBRANE ROOF '":'I -~· ~ ---------_ _,_. ---"1 -. -:CJ D 111 -11 ~ r--I I---1 1---J -I -1.---J -I I ~ -I I --~ I i -I ,.=-smING 1..1...,r_p;;;;; STONE :x/ ,_. r I _..., -I GO-rl -~ ' I I I I r-1 --I ·I -I I --1 -----------------------·-I -§ --111 Ill .1 I -I I I I I I L_~7~ I L __ 1 __ _J I PRE-FAB GALV. I WINDOW WELL TYP, I I 'il~J ___ -t = = ========I========== ~~~'!'fr=====================::]= l 2·-0·.J. ~ GENERAL NOTES: FOUNDATION PLAN NOTES: I. ALL DIMENSIONS TO EXTERIOR FOUNDATION WALLS 2. ALL FOOTINGS SHALL BEAR DIRECTLY ON ~l~lw.'~s~~~~F.\ASSUMED SOIL BEARING 3, APPROVED GRANULAR FILL SHALL BE COMPACTED IN 6" LAYERS TO 95% STANDARD PROCTOR MAXIMUM DRY DENSITY. 4. ~7.gz~~~M~&l~~W5::~ FROM FROST ACTION. 5. CONCRETE FOR FLOOR SLABS SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF 25 MPa. ALL OTHER CONCRETE SHALL HA VE A MINIMUM 28 DAY COMPRESSIVE STRENGTH OF t~&IJiltMWW8RWISE SPECIFIED. 6. REINFORCING STEEL TO HA VE MINIMUM 1112" COVER, MAXIMUM 2" COVER AT BOTTOM OF SLAB, I review and take responsibility for the design work on behalf ofa fim1 registered under subsection 2.17.4. of the 0.B.C. I "m q""J;fiod, ""d tho finn ;~d, ;,. tho 'PP"P';"'' """,/"togN;" Tony Wall BCIN: 22052 SQUARE FOOTAGE MAIN FLOOR-UNIT 1-2 730 SQ.Fr. UPPER FLOOR-UNIT 1-2 939 SQ.Fr. GARAGE-UNIT 1-2 294 SQ.Fr. O/A FOOTPRINT SQ. Fr. 2168 SQ.FT. DATE: DESCRJPTION: 04/07 PERMIT ISSUE ( *PROPERTY OF VIEW-IT DESIGN* VIEW-IT DESIGN RR# I PORT BURWELL OFFICE: 519-SSl-1173 FAX: 519-874-4087 HIEBERT RES YIZI TRILLIUM DRIVE TILLSONBURG, ONT PROPOSED HOUSE PLANS ELEVATIONS DRAWNBY: TONYWALL SCALE: SEE DWG BCIN: 29620 PO# 21101 DATE: APRIL 2021 A6 SHEET NO, 6 OF 12 J Plate 3: Proposed Dwelling Design ZN 7-22-03 - Landmark Homes Inc. Lots 44 & 45, Plan 41M-144 - 158 & 160 Concession Street West, Tillsonburg Page 114 of 650 Page 115 of 650 Page 116 of 650 Page 117 of 650 Page 118 of 650 Page 119 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 To: Mayor and Members of Town of Tillsonburg Council From: Eric Gilbert, Senior Planner, Community Planning Applications for Official Plan Amendment & Zone Change OP 22-06-7 & ZN 7-22-06 Tillsonburg Developments Inc. & W.H. Developments Inc. REPORT HIGHLIGHTS  The application for Official Plan Amendment and zone change proposes to redesignate the subject property from Service Commercial to Residential and Medium Density Residential to facilitate the development of a six unit townhouse block.  The 6 townhouses would be constructed east of an existing single detached dwelling located on the lands, which is proposed to be retained.  Planning Staff are recommending approval of the application as the proposal is generally consistent with the policies of the Provincial Policy Statement, supports the strategic initiatives and objectives of the Official Plan, and complies with the Official Plan policies respecting medium density development. DISCUSSION Background OWNERS: Tillsonburg Developments Inc & W.H. Developments Inc. 146 Tillson Avenue Tillsonburg, ON N4G 4G8 AGENT: Trevor Benjamins, Cyril J. Demeyere Limited 261 Broadway, Tillsonburg ON N4G 4H8 LOCATION: The subject lands front on the south side of North Street East, west of Tillson Avenue. The lands are legally described as Lot 17, Plan 41M-205, and are known municipally as 133 North Street East. Page 120 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 2 of 8 COUNTY OF OXFORD OFFICIAL PLAN: Existing: Schedule “T-1” Town of Tillsonburg Land Use Plan Service Commercial Proposed: Schedule “T-1” Town of Tillsonburg Land Use Plan Residential Schedule “T-2” Town of Tillsonburg Residential Density Plan Medium Density Residential Recommended: Schedule “T-1” Town of Tillsonburg Land Use Plan Residential Schedule “T-2” Town of Tillsonburg Residential Density Plan Medium Density Residential Low Density Residential TOWN OF TILLSONBURG ZONING BY-LAW NO. 3295: Existing Zoning: ‘Special Service Commercial Holding Zone (SC-10(H))’ Proposed Zoning: ‘Special Low Density Residential Type 3 Zone (R3-Special)’ Recommended Zoning: ‘Low Density Residential Type 3 Zone (R3)’ ‘Special Medium Density Residential Zone (RM-special)’ PROPOSAL: The purpose of the Official Plan amendment is to re-designate the subject lands from ‘Service Commercial’ to ‘Residential’ and ‘Medium Density Residential’ to facilitate the development of 6 street fronting townhouse dwellings, and to retain the existing single detached dwelling on the property. The proposed zone change proposes to rezone the properties from ‘Special Service Commercial Holding Zone (SC-10 (H))’ to ‘Special Low Density Residential Type 3 Zone (R3-sp)’, including the following special provisions:  Reduce the minimum lot area for an end townhouse unit from 330 sq m to 259 sq m;  Reduce the minimum lot frontage for an interior townhouse unit from 8 m to 7.3 m;  Reduce the minimum lot frontage for an end townhouse unit from 11 m to 9.1 m;  Reduce the interior side yard width for an end townhouse unit from 3 m to 1.8 m;  Increase the maximum permitted lot coverage from 40% to 46%; Page 121 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 3 of 8 The subject property has a total area of 2534 m2 (0.63 ac). The area proposed to be developed for townhoues is approximately 1780 m2 (0.44 ac.) and is currently vacant. The existing single detached dwelling was conditionally severed through application B21-119-7, and has an area of 734 m2 (7,900 ft2). Surrounding land uses include existing and planned residential uses to the south and north, with an automobile service station to the east and medium density residential uses farther to the west. Plate 1, Location Map with Existing Zoning, indicates the location of the subject property as well as the existing zoning in the immediate vicinity. Plate 2, 2020 Aerial Map, provides an aerial view of the subject lands as of spring, 2020. Plate 3, Applicant’s Sketch, shows the proposed townhouse development on the subject lands. Application Review 2020 Provincial Policy Statement (PPS) The 2020 Provincial Policy Statement (PPS) provides policy direction on matters of provincial interest related to land use planning and development. Under Section 3 of the Planning Act, where a municipality is exercising its authority affecting a planning matter, such decisions “shall be consistent with” all policy statements issued under the Act. Section 1.1.1 provides that healthy liveable and safe communities are sustained by accommodating an appropriate range and mix of residential housing (including additional units, affordable housing, and housing for older persons) to meet long-term needs, and promoting cost- effective development that minimizes land consumption and servicing costs. Section 1.1.3.1 of the PPS states that Settlement Areas will be the focus of growth and their vitality and regeneration shall be promoted. Land use patterns within settlement areas shall be based on:  densities and mix of land uses which are appropriate for, and efficiently use the infrastructure and public service facilities which are planned or available;  support active transportation;  efficiently use land and resources;  a range of uses and opportunities for intensification and redevelopment in accordance with the criteria in policy 1.1.3.3, where this can be accommodated. Section 1.1.3.4 directs that appropriate development standards shall be promoted which facilitate intensification, redevelopment and compact form, while avoiding or mitigating risks to public health and safety. Further, Section 1.4 Housing, specifically ss. 1.4.3, states that planning authorities shall provide for an appropriate range and mix of housing types and densities to meet projected requirements of current and future residents of the regional market area by:  Establishing and implementing minimum targets for the provision of housing which is affordable to low and moderate income households;  Permitting and facilitating all forms of housing required to meet the social, health and well-being requirements of current and future residents; Page 122 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 4 of 8  Permitting and facilitating all types of residential intensification, including additional residential units and redevelopment, in accordance with policy 1.3.3.3;  Directing the development of new housing towards locations where appropriate levels of infrastructure and public service facilities are or will be available to support current and projected needs;  Promoting densities for new housing which efficiently use land, resources, infrastructure and public service facilities, and support the use of active transportation and transit in areas where it exists or is to be developed; and  Establishing development standards for residential intensification, redevelopment and new residential development which minimize the cost of housing and facilitate compact form, while maintaining appropriate levels of public health and safety. OFFICIAL PLAN The subject property is located within the ‘Service Commercial’ designation according to the Official Plan. Service Commercial areas are those that provide locations for a broad range of commercial uses that, for the most part, are not suited to locations within the Central Area because of their requirements for large lot area, access or exposure requirements or due to compatibility conflicts with residential development. Generally, Service Commercial uses cater to vehicular traffic and single purpose shopping trips where customers are typically generated from passing traffic or a wide ranging market area. Uses permitted within the Service Commercial designation include hotels, motels, automotive sales and service, furniture and appliance sales and service, farm implement sales, business services, convenience commercial uses, retail food stores, recreation and entertainment uses, gas bars, car wash facilities, retail sales of automotive supplies, automated teller machines and kiosks, tourism information outlets or kiosks, restaurants and fast food outlets, uses which require large areas for on-site storage of goods or vehicles and other types of commercial uses that offer service to the travelling public, business and industry. Medium Density Residential areas are lands that are primarily developed or planned for low to medium profile multiple unit development that exceeds densities established for Low Density Residential areas. Residential uses within Medium Density Residential areas include townhouses, medium density cluster development, converted dwellings, and low-rise apartments. The maximum net residential density in the Medium Density Residential area is 62 units per hectare (25 units per acre), and no building shall exceed four stories in height at street elevation. Within areas of new Medium Density Residential development, the minimum net residential density shall be 31 units per hectare (13 units per acre). The proposed development of the townhouses results in a net residential density of 34 units per hectare (14 units per acre). Any lands proposed for Medium Density Residential Development not identified on Schedule “T- 2” will require an amendment to the Official Plan. In addition to the locational policies identified, when considering proposals to designate lands for Medium Density Residential development, Town Council and County Council will be guided by the following site specific criteria:  The size, configuration and topography of the site is such that there is sufficient flexibility in site design to mitigate adverse effects on the amenities and character of any adjacent Low Density Residential area through adequate buffering and screening;  The location of vehicular access points and the likely effects of traffic generated by the proposal on Town streets has been assessed and is acceptable; Page 123 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 5 of 8  Adequate hard servicing capacity including water distribution, sanitary and storm sewers, power and gas distribution facilities is or will be available to accommodate the proposed development;  Off-street parking and outdoor amenity areas can be provided;  The effect of the proposed development on environmental resources or the effect of environmental constraints on the proposed development will be addressed and mitigated as outlines in Section 3.2. Existing Low Density residential uses in a Medium Density Residential area may be recognized as permitted uses in the Zoning By-Law. All proposals for medium density residential development shall be subject to site plan control. When considering any specific proposal for medium density residential development, Town Council will be satisfied that the criteria of Section 8.2.8 are adequately addressed. TOWN OF TILLSONBURG ZONING BY-LAW: The subject property is currently zoned ‘Special Service Commercial Holding Zone (SC-10 (H))’ in the Town of Tillsonburg Zoning By-Law. Permitted uses within the SC-10 (H) zone include a builder’s supply shop and yard, a farm implement dealer, a farm produce outlet, a motor vehicle sales establishment, a public use, a retail nursery, a taxi stand or station, a tire sales establishment, a real estate office, a brewer’s retail outlet, and other uses permitted in the SC zone provided the Holding Provision is lifted. The purpose of the Holding Provision is to ensure that the property has been connected to the municipal sanitary sewer system. The proposed zone change proposes to rezone the properties from ‘Special Service Commercial Holding Zone (SC-10 (H))’ to ‘Special Low Density Residential Type 3 Zone (R3-sp)’, including a number of special provisions as detailed in the ‘Proposal’ section of this report. Planning staff have reviewed the overall proposal and recommend that the lands to be developed for the townhouse units be rezoned to ‘Special Medium Density Residential Zone (RM-sp)’ to better implement the proposed Official Plan designation. The relief being sought from the provisions of the R3 zone would not be required, save for the interior side yard width and the increased lot coverage. A street-fronting townhouse is a permitted use within the RM zone. The Medium Density Residential zone requires a minimum lot area of 150 m2 (1,614.6 ft2 ) per dwelling unit or 240 m2 (2,583.4 ft2 ) for an end unit, except in no case shall the lot area for an end unit on a corner lot be less than 330 m2 (3,552.2 ft2 ). The RM zone also provides for a maximum lot area of 320 m2 (3,445 ft2), minimum lot frontage of 5 m (16.4 ft) for interior units and 8 m (26.2 ft) for end units, a minimum interior side yard width of 3 m (9.8 ft), a minimum rear yard depth of 7.5 m (24.6 ft), and a maximum lot coverage of 40%. It is also recommended that the existing single detached dwelling located on the lands be zoned R3, as existing single detached dwellings are permitted within the R3 zone, subject to the provisions of the R2 zone. Page 124 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 6 of 8 AGENCY COMMENTS: Oxford County Public Works Department provided the following comments:  With respect to the two (2) existing sanitary and water services; the Owner shall be aware that a water connection fee of - $15,966 & Sanitary connection fee of $24,668 shall be paid to the County of Oxford in accordance with By-Law 6348-2021.  With respect to the additional four (4) service connections; the connection fees shall be subject to the County of Oxford fees and charges as per By-law no. 4889-2007 (2022 fees - $3500 for each connection of water-main (up to 25mm) and $6000 to $9000 for each sewer connection - Depending on depth).  The above noted fees shall be made payable at time of severance or at time of application to connect.  County Public Works will require a security deposit for the work within Oxford Road 20.  Municipal consent through County Public Works – Transportation division will be required prior to works being completed on North Street. This will include submission of the contractor’s traffic control plan, WSIB, insurance certificate ($5M general liability) for County review & acceptance. Tillsonburg Hydro Inc. indicated that if the proposed 6 unit town homes are located on one land parcel, only 1 utility electrical service entrance will be permitted on the property. As such, a gang of meter bases will have to be installed on one of the proposed units if the hydro requirement is to meter all units separately. Town of Tillsonburg Engineering Services Department indicated that the minimum interior side yard width for townhouses should be at least 1.5 m. This provides the minimum distance to allow for a swale and a walking path. The project will be subject to site plan approval. The Town Development Commissioner provided the following comments: The 2020 Hemson Growth Projections and Comprehensive Review indicated that within the Town of Tillsonburg there is a surplus of residential land in Town in 2039 in the amount of 66 hectares (Table 37, page 57). The study also indicated within the Town there are 18 hectares of vacant or underutilized commercial or institutional land within the Town (Table 40, page 61). The Official Plan Amendment/Zoning By-Law Amendment is a minor conversion of commercial land to residential so the impact is minor; however, in general, the Development Commissioner continues to be concerned about the lack of supply of commercially zoned lands, with a variety of locations and sizes, within the Town. The Tillsonburg District Chamber of Commerce, Economic Development Advisory Committee, and Downtown Tillsonburg BIA indicated that they had no objections or concerns with the subject application. PUBLIC CONSULTATION: Notice of complete application regarding the proposed planning applications was provided to surrounding property owners in accordance with the requirements of the Planning Act on June 6, 2002, and notification of a public meeting was provided on June 27, 2022. At the time of writing this report, no comments or concerns have been received from the public. Page 125 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 7 of 8 Planning Analysis The Town and County have received applications to amend the Official Plan and the Town’s Zoning By-law to facilitate the development of a 6 unit townhouse development and retain an existing single detached dwelling on land currently designated and zoned for service commercial purposes. It is the opinion of staff that the subject amendments are consistent with the relevant policies of the PPS as the proposal is a form of development that promotes intensification and provides a mix of housing types to accommodate current and future residents of the regional market area. The development is also considered to be an efficient use of lands, available municipal services and infrastructure. The policies of the Official Plan direct that prior to considering any proposal to redesignate service commercial lands for other purposes, Town and County Council must be assured that the Town has adequate supply of service commercial lands relative to expected growth. Based on the most recent land supply estimates (Hemson Phase 1 Comprehensive Review, March 2020), Tillsonburg’s gross developable supply of commercial and institutional lands is approximately 18 ha (44.5 ac.). In light of the size of the site to be developed through this proposal (approximately 0.17 ha or 0.44 ac.), it is Planning staff’s opinion that the proposal will have minimal impact on the supply of vacant service commercial lands within the Town of Tillsonburg. Staff are of the opinion that the subject lands are suitable for medium density residential development as the property is located on North Street East, being an arterial road. As such, the 6 townhouse units are not anticipated to impact traffic and vehicle turning movements in the neighbourhood. Staff are also satisfied that the proposed townhouse development is suitable for the area as it is small in scale and is in proximity to a larger townhouse development to the west, existing single detached dwellings and semi-detached dwellings to the south, and planned medium density development to the north-west. As such, staff are of the opinion that the proposed development is appropriate for the area as it will be in keeping with the nature, character and scale of adjacent uses and is therefore not anticipated to have a negative impact on surrounding uses. The site is also able to provide adequate off-street parking and is located in an area where services and amenities such as schools, leisure facilities, shopping and parks are within a reasonable distance. More specifically, the Trans Canada Trail is only 250 m away, and parks within Northcrest Estates are less than 1 km from the subject property. Further to the above-noted locational criteria, this office is also satisfied that the subject lands are of sufficient size to allow for the mitigation of adverse effects of development on the amenity and character of the neighbourhood through site design, setbacks, screening and/or buffering. The proposed townhouses are 2-storeys in height, which is similar to the surrounding residential uses to the south. Further, the subject proposal is consistent with the policies for the medium density residential designation. The portion of the subject lands proposed for the townhouse development comprises approximately 1,780 m2 (0.44 ac.) in lot area and the applicant’s proposal for 6 townhouse units constitutes a net residential density of 34 units per hectare (14 units per acre). According to the definitions for residential density as contained in the Official Plan, this development falls within the medium density range. Page 126 of 650 Report No: CP 2022-285 COMMUNITY PLANNING Council Date: July 11, 2022 Page 8 of 8 As the existing single detached dwelling that was recently severed through consent application B21-119-7 will continue to exist on its own separate lot, planning staff recommend that it be designated ‘Low Density Residential’ and zoned ‘Low Density Residential Type 3 Zone (R3)’ to recognize the existing single detached dwelling, and to provide opportunities for further residential density, being next to the Medium Density townhouse development. The lands including the single detached dwelling will meet the provisions of the R3 zone, which permits an existing single detached dwelling. Planning staff recommend that the proposed townhouses be rexoned to ‘Special Medium Density Residential Zone (RM-sp)’ to implement the requested density of the Medium Density Residential designation. The proposed townhouses will only require relief from the minimum required interior side yard width and maximum permitted lot coverage; the proposed lot areas and lot frontages will be in compliance with the RM zone. With respect to the requested relief to reduce the minimum interior side yard width for an end unit, staff are satisfied that the site is of adequate size to provide landscaping, screening, parking, grading and drainage. Further, the proposed building will still be located further from the property line than if the development were a single detached dwelling. With respect to the increased lot coverage, Planning staff note that the total lot coverage from the townhouse units is likely to be similar to the total impervious surface resulting from a commercial development, and through the site plan process all technical matters such as parking, grading, stormwater management, landscaping and privacy screening will be addressed to ensure compatibility with the surrounding uses. In light of the foregoing, it is the opinion of staff that the proposed Official Plan amendment and zone change are consistent with the policies of the PPS and supports the objectives and strategic initiatives of the Official Plan. RECOMMENDATIONS That the Council of the Town of Tillsonburg advise County Council that the Town supports the application to amend the Official Plan (File No. OP 22-06-7), submitted by Tillsonburg Developments Inc & W.H. Developments Inc., for lands described as Lot 17, Registered Plan 41M-205 in the Town of Tillsonburg, to re-designate the subject lands from Service Commercial to Low and Medium Density Residential; And further, that the Council of the Town of Tillsonburg approve-in-principle the zone change application (File No. ZN 7-22-06) submitted by Tillsonburg Developments Inc & W.H. Developments Inc., for lands described as Lot 17, Registered Plan 41M-205, in the Town of Tillsonburg, to rezone the lands from ‘Special Service Commercial Zone (CC-10)’ to ‘Low Density Residential Type 3 Zone (R3)’ & ‘Special Medium Density Residential Zone (RM-sp)’ to permit the development of 6 residential street-fronting townhouse units. SIGNATURES Authored by: Eric Gilbert, MCIP, RPP Senior Planner Approved for submission: Gordon K. Hough, RPP Director Page 127 of 650 May 27, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 1020 Notes NAD_1983_UTM_Zone_17N 51 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 1: Location Map with Existing Zoning File Nos: OP 22-06-7, ZN 7-22-06 - Tillsonburg Developments Inc Lot 17, Plan 41M-205- 133 North Street East, Town of Tillsonburg North Street East Subject Lands Tillson Avenue Sandy Court Nelson Street Page 128 of 650 May 27, 2022 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 610 Notes NAD_1983_UTM_Zone_17N 30 Meters Zoning Floodlines Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Land Use Zoning (Displays 1:16000 to 1:500) Plate 2: 2020 Aerial Map File Nos: OP 22-06-7, ZN 7-22-06 - Tillsonburg Developments Inc Lot 17, Plan 41M-205- 133 North Street East, Town of Tillsonburg North Street East Tillson Avenue Sandy Court Subject Lands Cranberry Road Existing Dwelling Severed Through B21-119-7 Page 129 of 650 Cyril J. Demeyere Limited P.O. Box 460, 261 Broadway Tillsonburg, Ontario. N4G 4H8 Tel: 519-688-1000 866-302-9886 Fax: 519-842-3235 cjdl@cjdleng.com TOWN OF TILLSONBURG 6 56 1 EXISTING RESIDENTIAL SWM AREA NORTH STREET EAST - OXFORD ROAD 20 Plate 3: Applicant's Sketch File Nos: OP 22-06-7, ZN 7-22-06 - Tillsonburg Developments Inc Lot 17, Plan 41M-205- 133 North Street East, Town of Tillsonburg Page 130 of 650 - 1 - 1.0 PURPOSE OF THE AMENDMENT The purpose of the Official Plan amendment is to re-designate the subject lands from ‘Service Commercial’ to ‘Residential’ & ‘Medium Density Residential’ to facilitate the development of 6 street fronting townhouse dwellings, and to retain the existing single detached dwelling on the property. 2.0 LOCATION OF LANDS AFFECTED This amendment applies to lands described as Part of Lot 17, Registered Plan 41M-205 in the Town of Tillsonburg. The subject lands are located on the south side of North Street East, between Tillson Avenue and Coulthard Street, and are municipally known as 133 North Street East, Tillsonburg. 3.0 BASIS FOR THE AMENDMENT The purpose of the Official Plan amendment is to re-designate the subject lands from ‘Service Commercial’ to ‘Residential’ & ‘Medium Density Residential’ to facilitate the development of 6 street fronting townhouse dwellings, and to retain the existing single detached dwelling on the property. The proposed amendment will amend Schedule “T-1” & “T-2” to redesignate the lands from Service Commercial to Residential, and Medium & Low Density Residential. It is the opinion of Council that the proposed townhouse development is suitable for the area as it is small in scale and is proximity a larger townhouse development to the west, existing single detached dwellings and semi-detached dwellings to the south, and planned medium density development to the north-west. As such, Council is satisfied that the proposed development is appropriate for the area as it will be in keeping with the nature, character and scale of adjacent uses and is therefore not anticipated to have a negative impact on surrounding uses. The site is also able to provide adequate off-street parking and is located in an area where services and amenities such as schools, leisure facilities, shopping and parks are within a reasonable distance. More specifically, the Trans Canada Trail is only 250 m away, and parks within Northcrest Estates are less than 1 km from the subject property. Further to the above-noted locational criteria, Council is also satisfied that the subject lands are of sufficient size to allow for the mitigation of adverse effects of development on the amenity and character of the neighbourhood through site design, setbacks, screening and/or buffering. The proposed townhouses are 2-storeys in height, which is similar to the surrounding residential uses to the south. Further, the subject proposal is consistent with the policies for the medium density residential designation. The portion of the subject lands proposed for the townhouse development comprises approximately 1,780 m2 (0.44 ac.) in lot area and the applicant’s proposal for 6 townhouse units constitutes a net residential density of 34 units per hectare (14 units per acre). According to the definitions for residential density as contained in the Official Plan, this development falls within the medium density range. Council is also of the opinion that the proposed use will be adequately served by utilities, sewer and water facilities and the proposed re-designation of the lands will have no impact on natural features, or be affected by natural hazards in the vicinity. Page 131 of 650 - 2 - Council is satisfied that the existing single detached dwelling proposed to be retained on a separate lot is appropriate to be recognized as an existing low density residential use. In light of the foregoing, it is the opinion of Council that the proposal is consistent with the policies of the PPS and supports the strategic initiatives and objectives of the Official Plan. 4.0 DETAILS OF THE AMENDMENT 4.1 That Schedule “T-1” – Town of Tillsonburg Land Use Plan, is hereby amended by designating those lands identified as “ITEM 1” on Schedule “A” attached hereto as “Residential”. 4.2 That Schedule “T-2” – Town of Tillsonburg Residential Density Plan, is hereby amended by designating those lands identified as “ITEM 1” on Schedule “A” attached hereto as “Medium Density Residential”. 4.3 That Schedule “T-2” – Town of Tillsonburg Residential Density Plan, is hereby amended by designating those lands identified as “ITEM 2” on Schedule “A” attached hereto as “Low Density Residential”. 5.0 IMPLEMENTATION This Official Plan Amendment shall be implemented in accordance with the implementation policies of the Official Plan. 6.0 INTERPRETATION This Official Plan Amendment shall be interpreted in accordance with the interpretation policies of the Official Plan. Page 132 of 650 OP 22-06-7 19-Apr-22 000280242 Page 133 of 650 Page 134 of 650 Page 135 of 650 Page 136 of 650 Page 137 of 650 Page 138 of 650 PLANNING JUSTIFICATION REPORT PROPOSED TOWNHOUSE DEVELOPMENT 133 NORTH STREET EAST TILLSONBURG, ONTARIO 21067 April 14, 2022 Page 139 of 650 PLANNING JUSTIFICATION REPORT PROPOSED TOWNHOUSE DEVELOPMENT 133 NORTH STREET EAST, TILLSONBURG, ONTARIO TABLE OF CONTENTS PAGE 1.0 INTRODUCTION 1 2.0 SUBJECT LANDS 1 3.0 SURROUNDING LAND USES 4 4.0 ARCHITECTURAL ELEVATIONS 9 5.0 PROPOSED AMENDMENTS 9 5.1 PROPOSED OFFICIAL PLAN AMENDMENT (OPA) 9 5.2 PROPOSED ZONING BY-LAW AMENDMENT (ZBA) 11 6.0 PLANNING IMPACT ANALYSIS 12 6.1 PROVINCIAL POLICY STATEMENT 12 6.2 COUNTY OF OXFORD OFFICIAL PLAN 13 6.3 TOWN OF TILLSONBURG ZONING BYLAW 3295 15 7.0 TECHNICAL STUDIES 17 7.1 SERVICING REPORT 17 8.0 SUMMARY AND CONCLUSIONS 18 9.0 REFERENCES - STUDIES 19 Page 140 of 650 Page 1 21067 April 14, 2022 PLANNING JUSTIFICATION REPORT PROPOSED TOWNHOUSE DEVELOPMENT 133 NORTH STREET EAST, TILLSONBURG, ONTARIO 1.0 INTRODUCTION This report provides planning impact analysis regarding the proposal of Tillsonburg Developments Inc. and W. H. Developments Inc. for the development of 6 street-fronting townhouse dwelling units on lands located on the retained parcel resulting from a recent land severance provisional consent of the Oxford County Land Division Committee, subject to four conditions. The subject property is located at 133 North Street East in the northeast portion of the Town of Tillsonburg, County of Oxford, Ontario, as depicted in Figure 1 herein. The severed parcel contains the existing single detached dwelling that is connected to full municipal services. The proposed development of 6 street fronting townhouse dwelling units on the retained parcel as depicted on Figure 2 herein would make efficient use of the existing municipal services subject to new connections to the subject property. In the reconstruction of North Street by the Town of Tillsonburg in 2014, the vacant portion of the parcel was proposed to be developed as two single detached dwellings and the existing single detached dwelling was also serviced at this time. There is an existing fire hydrant located on the east side of the site that will be relocated slightly to support the proposed construction of the townhouse dwelling units. The proposal requires an amendment to the Official Plan for the County of Oxford (OPA) as well as an amendment to the Zoning Bylaw for the Town of Tillsonburg (ZBA). A pre-consultation meeting with the County of Oxford occurred on October 28th, 2021 to discuss the proposed applications and submission requirements. All information identified as required to support the OPA and ZBA will be submitted concurrently with applications to the County of Oxford and the Town of Tillsonburg respectively. The proposed townhouse dwelling units will be subject to site plan control to address detailed matters under Section 41 of the Planning Act and will be future freehold ownership opportunities through part lot control exemption. 2.0 SUBJECT LANDS The property which is the subject of the OPA and ZBA proposals is located on the south side of North Street East, lying between Coulthard Street and Tillson Ave (see Figure 1). The legal description of the subject property is Lot 17 on Registered Plan 41M-205, in the Town of Tillsonburg, County of Oxford. The Oxford County Land Division Committee granted provisional consent on March 3rd, 2022 to sever the existing single detached dwelling unit with approximately 754.1 square meters and to retain the Page 141 of 650 Page 2 Figure 1: Subject Lands Page 142 of 650 Page 3 Figure 2: Proposed Site Plan Page 143 of 650 Page 4 date of March 30, 2022. No appeals have been confirmed. The retained parcel is the subject of the vacant lands east of the dwelling comprising approximately 1780.9 square meters subject to an appeal proposed 6 townhouse dwelling units. The subject lands are very flat and only have a few trees in the northwestern area of the site. Figure 3 herein shows the severance of the single-detached unit. Both the severed and retained parcels require an OPA designation change from Service Commercial to Medium Density Residential. The retained parcel will require a zoning change from Service Commercial Special to site-specific Low Density Residential Type 3 (R3-XX) for the proposed townhouse dwelling units. The severed parcel will also require a zoning change to Low Density Residential Type 3 (R3). Figure 3 depicts the two parcels which are the subject of the provisional consent. Subject to final consent for the land severance, the property subject of the street fronting townhouse dwelling units’ proposal comprises 47.49 meters frontage on North Street East and 35.37 meters depth for an approximate area of 1780.9 square meters or .178 hectares. 3.0 SURROUNDING LAND USES In terms of existing land use, the site is primarily surrounded by one and two-storey single detached dwelling development as depicted on Figure 4 herein all of which are a combination of brick and siding building materials. East of the subject lands at 143 North Street East is Danbrook Automotive with its parking lot situated on an adjacent parcel to the east with a single detached dwelling located at the southwest corner of North Street East and Tillson Avenue followed by two single detached dwellings fronting on Tillson Avenue. Further east of the subject lands beyond Tillson Avenue are primarily single detached dwellings. To the immediate south abutting the subject property are four single detached dwellings fronting on Sandy Court. There is also a vacant lot south of the existing single detached dwelling that is a stormwater management pond for Sandy Court. To the north are seven single detached dwellings between the Canadian Pacific Railway (CPR) line and Cranberry Road. Further south beyond Sandy Court is an inactive railroad that has been converted into a paved trail network by the Town of Tillsonburg. This paved trail continues past Broadway (west of subject property) and ends just west of Tillson Avenue. Further east of Tillson Avenue the trail continues on as a gravel trail. The trail also connects to a gravel trail going north and south alongside the active Canadian Pacific Railway, this trail provides a point of access for future residents to the paved trail south of the subject property. The trail provides passive recreational opportunities for surrounding areas as well as for the proposed development. Further south beyond the paved trail is Martinrea which is an industrial use located at 301 Tillson Ave approximately 300 meters from the subject property. Southeast of the paved trail is Kissner Milling Company Limited which is also an industrial use located at 22 Clarke Street East. West of the subject lands is a single detached dwelling located at 131 North Street East followed by the Canadian Pacific Railway right-of-way, tracks, trail network and a broad wooded area designated as Open Space by the County of Oxford Official Plan which is identified on Figure 4. Further west of the subject lands beyond the active CPR Railway tracks on the south side of North Street East is 101 North Street East, which was recently developed with rental units that comprise one and two-storey townhouse dwelling units. These townhouse dwelling units are a mix of brick and siding building materials, ensuring that the proposed development would be compatible with the nearby existing residential development. This development is comprised of 59 townhouse dwelling units. It should be noted that the development at 101 North Street is sufficiently recent so as not to show on Figure 4 aerial photography. Further west of 101 North Street East is Northcrest Estates subdivision (Phase 1 is Page 144 of 650 Page 5 Figure 3: Severance of Single Detached Unit, Retained Parcel for Townhouse Development Page 145 of 650 Page 6 Figure 4: Surrounding Land Use Page 146 of 650 Page 7 south of North Street East and Phase 2 is north of North Street East), which is composed of a mix of single-detached dwellings and townhouse dwelling units that also use a mix of building materials and are mostly 2 storey in height. Phase 1 of Northcrest Estates is currently finishing development with Phase 2 development proposed for summer 2022. The site is a prime area for infill development of vacant land on existing full municipal services with no natural heritage features directly adjacent to the subject lands. In addition, there are existing sidewalks on both sides of North Street East providing for ready pedestrian access to surrounding areas including nearby commercial and recreational uses. The following photos depict surrounding land uses: Looking south at the existing single detached dwelling located at 133 North Street East, to be severed Photo: Trevor Benjamins, 23 February 2022 Page 147 of 650 Page 8 Looking south at retained lot proposed for street fronting townhouse dwelling units Photo: Trevor Benjamins, 23 February 2022 Looking southwest at retained lot proposed for street fronting townhouse dwelling units Photo: Trevor Benjamins, 23 February 2022 Page 148 of 650 Page 9 Recently developed 101 North Street East, 2 Storey Townhouse Rental units Photo: Trevor Benjamins, 11 March 2022 4.0 ARCHITECTURAL ELEVATIONS The proposed development consists of 6 two-storey street-fronting townhouse dwelling units with attached single car garages. As has been noted, heights of surrounding existing residential development are a mix of one, one and a half, and two-storey dwellings. The recently developed 101 North Street East consists of one and two-storey townhouse dwelling units which also use a mixture of building materials of both brick and siding. The building materials that will be used in the proposed development will be a mix of brick and siding, with board and batten in the gable ends of each unit. This should ensure that the proposed townhouse dwelling units would be compatible with surrounding land uses. The proposed architectural elevations of the townhouse dwelling units are shown on Figure 5 herein. 5.0 PROPOSED AMENDMENTS 5.1 PROPOSED OFFICIAL PLAN AMENDMENT (OPA) The purpose of the proposed amendment to the Oxford County Official Plan (OP) is to change the designation of the subject property from Service Commercial to Residential and Medium Density Residential (see Appendix A maps) to permit the 6 street-fronting townhouses which, as was addressed in Section 4.0 herein, will be compatible with existing residential development in the vicinity. The OPA would also apply to the existing single detached dwelling located on the severed parcel. Specifically, the OPA would change the designation of both the severed and retained parcels on OP Schedule “T-1” Town of Tillsonburg Land Use Plan from Service Commercial to Residential as well as changing the designation of both the severed and retained parcels to Medium Density Residential on OP Schedule “T-2” Town of Tillsonburg Residential Density Plan. Page 149 of 650 Page 10 Figure 5: Architectural Elevations Page 150 of 650 Page 11 OP Section 8.2.5 Medium Density Residential Areas stipulates minimum net residential density shall be 31 units per hectare and have a maximum of 62 units per hectare. Medium Density Residential is appropriate to the proposed development because the resulting density would marginally exceed the Low Density Residential Areas 30 units per net hectare maximum at 33.7 units per net hectare per OP Section 8.2.4 Low Density Residential Areas. 5.2 PROPOSED ZONING BYLAW AMENDMENT (ZBA) The subject property is currently zoned on Schedule ”A” Key Map 7 of the Town of Tillsonburg Zoning Bylaw 3295, as amended (ZB) as Service Commercial Special SC-10(H) (see Appendix B map). The proposed ZBA would change the zoning of the retained parcel to site-specific Low Density Residential Type 3 (R3-XX). The R3 Zone permits the following uses per ZB Section 8.1 LOW DENSITY RESIDENTIAL – TYPE 3 ZONE (R3). a converted dwelling, containing not more than 4 dwelling units. a single detached dwelling, converted dwelling, duplex dwelling or semi-detached dwelling existing on the date of passing of this By-Law, in accordance with the provisions contained in Section 7.2. a group home, in accordance with the provisions of Section 5.12 of this By-Law; a home occupation, in accordance with the provisions of Section 5.13 of this By-Law; a public use in accordance with the provisions of Section 5.27 of this By-Law; a multiple-unit dwelling, containing not more than 4 dwelling units; a street fronting townhouse dwelling Section 8.2 of the ZB provides zoning regulations for street fronting townhouse dwelling units. There are a total of four requested site-specific provisions required for the proposed site plan as follows: 1. Minimum lot area for an end unit 322 square meters as opposed to 330 square meters per ZB Section 8.2 2. Minimum lot frontage of 7.3 meters for each townhouse dwelling unit as opposed to 8 meters per dwelling unit as well as 9.1 meters for the two end units as opposed to 11 meters per ZB Section 8.2. 3. Minimum interior side yard setback of 1.8 meters as opposed to 3 meters for end dwelling units per ZB Section 8.2. 4. Increase the maximum lot coverage of 45.1% as opposed to 40% required per ZB Section 8.2. Accordingly, the following site-specific R3 zoning is proposed: Location: Lands West of Tillson Ave, North of Sandy Court and South of North Street East, (R3-XX) Notwithstanding any provision of this By-Law to the contrary, no person shall within any R3-XX use any lot, or erect, alter or use any building or structure for any purpose except the following: Lot Area Minimum 259m2 per dwelling unit or 322m2 for an end unit Lot Frontage Minimum 7.3m per dwelling unit or 9.1m for an end unit Interior Side Yard Minimum 1.8m Page 151 of 650 Page 12 Lot Coverage Maximum 45.1% of the Lot Area. That all other provisions of the R3 Zone in Section 8.2 of this By-Law, as amended, shall apply, and further that all other provisions of this By-Law, as amended, that are consistent with the provisions herein contained shall continue to apply mutatis mutandis. The severed parcel with the single detached dwelling would be rezoned from Service Commercial Special SC-10(H) to the standard Low Density Residential Type 3 (R3) zone. The setbacks for the existing single detached dwelling located on the severed parcel would meet the R3 zone provisions. Accordingly, the severed parcel with the single detached dwelling would be rezoned from Service Commercial Special SC-10(H) to the standard Low Density Residential Type 3 (R3) zone. 6.0 PLANNING IMPACT ANALYSIS 6.1 PROVINCIAL POLICY STATEMENT The Provincial Policy Statement (PPS) came into effect on May 1st, 2020 and provides policy direction on matters of provincial interest related to land use planning and development within the Province of Ontario under the Planning Act. Decisions of municipalities regarding proposed land division such as OPAs and ZBAs are required to be consistent with applicable PPS policy under Planning Act legislative authority. The proposed OPA and ZBA to permit 6 street-fronting townhouse dwelling units subject to site plan approval under Section 41 of the Planning Act would be consistent with PPS policy as follows: • The proposed street-fronting townhouse dwelling units would add to the Town’s mix of residential densities and be a relatively affordable market-based housing option further to PPS Section 1.1.1 b). • The proposed development would be compact, cost-effective and efficient land use that would minimize land consumption and servicing costs further to PPS Section 1.1.1 a) and 1.1.1. e). • The Town of Tillsonburg is one of the primary, fully serviced settlement areas of Oxford County intended to be the focus of growth and development and the proposed development would be an enhancement to its vitality and regeneration further to PPS Section 1.1.3.1. • The proposed development would efficiently use land and resources and be connected to full municipal services. The proposed development would use existing infrastructure efficiently as the services were planned for residential development and are immediately available. This would avoid the need for unjustified and uneconomical expansion of services further to PPS Section 1.1.3.2 a) and b). • The surrounding land uses are already under development or developed for residential purposes and the proposed development would provide additional supply and range of housing options through intensification further to PPS Section 1.1.3.3. • The lands west of the subject property have recently been approved for residential development of similar townhouse dwelling units and the subject property is adjacent or proximate to existing residential development north, west, east and south of the subject property. The proposed development would have a compact form and allow for efficient land use and infrastructure use further to PPS Section 1.1.3.6. Page 152 of 650 Page 13 • As the proposed development would change the designation of land from Service Commercial to Residential, it would be a conversion of an employment area to residential land so subject to PPS Section 1.3.2.5. It should be noted this Service Commercial Area of Tillsonburg has not been identified as provincially or regionally significant. As will be indicated in Section 5.2 of this report, the County of Oxford Phase 1 Comprehensive Review (Hemson, 2020) concluded that there would not appear to be an immediate need for additional commercial lands in Tillsonburg which relates to PPS Section 1.3.2.5 a). Moreover, the subject property is relatively small and has not been used for any commercial purpose for a considerable period of time. Moreover, the existing dwelling to the west beyond the dwelling on the subject property is zoned as a Future Development Zone (FD) so most likely legal non-conforming relative to its zoning. For these reasons, the proposed OPA would not adversely affect the overall viability of the employment area. Further, the subject property has access to existing service infrastructure as required by PPS Section 1.3.2.5 c). • The proposed development will assist the Town in enhancing the range and mix of housing options and densities available in the immediate area further to PPS Section 1.4.1 • If approved, the density of the proposed development of street-fronting townhouse dwelling units would efficiently use land, infrastructure, and public service facilities further to PPS Section 1.4.3 d). • The proposed development would contribute to establishing development standards for residential intensification, minimizing the cost of housing, and facilitating compact form further to PPS Section 1.4.3 f). • As will be addressed in Section 7.1 of this report, the proposed development would be connected to full municipal services which are the preferred form of servicing for settlement area, thus protecting the environment and minimizing potential risks to human health and safety further to PPS Section 1.6.6.2. Conclusion: Based on the foregoing analysis, the proposed development would be consistent with the PPS. 6.2 COUNTY OF OXFORD OFFICIAL PLAN The County of Oxford Official Plan (OP) was adopted by Oxford County Council on December 13th, 1995, and was approved by the Ministry of Municipal Affairs and Housing on March 31st, 1997. The County OP was updated by OPA No. 256 which was approved by the County of Oxford on February 10th, 2021. The subject lands are currently designated as Service Commercial on Schedule “T-1” Town of Tillsonburg Land Use Plan and, as a result, the subject lands are not designated on Schedule “T-2” Town of Tillsonburg Residential Density Plan. Both of these schedules are found herein in Appendix A. The subject lands are located on North Street East (Oxford County Road No. 20), which is an Arterial Road based on Town of Tillsonburg Transportation Network Plan Schedule “T-4”. The proposed development is grouped and laneway access to each of the townhouse units is limited with 3 shared driveways, therefore, conforming with OP Section 5.1.2.1 Development Adjacent to County Roads. The proposed development also has municipal lighting located across the street which will assist future residents in accessing these driveways. Page 153 of 650 Page 14 The parcel of land that is going to be severed for the development of the townhouse dwelling units, is an underutilized parcel in a built-up residential area with full municipal service availability further to OP 8.2.1 Accommodating Housing Demands thereby reducing energy consumption, decreasing the financial burden of underutilized municipal services, and relieving pressure for development of natural areas and open spaces. The proposed development conforms with the OP Section 8.2.2.1 Affordability in that typically townhomes are a more cost-effective option to construct over single detached dwellings. The proposed development would provide an option for residential intensification as the land is currently vacant and medium density residential is being proposed. The proposed development consisting of street fronting townhouse dwelling units gives an opportunity to increase the variety and affordability of dwelling types within the Town. The subject property is vacant in an area of Tillsonburg that is substantially developed so within the built area and, therefore, in conformity with OP Section 8.2.2.1 Residential Intensification. The proposed development of the townhouse dwelling units is 33.7 units per net hectares marginally above the Low Density Residential Areas maximum of 30 units per hectare (which primarily applies to surrounding residential development) but well below the Medium Density Residential maximum of 62 units per net hectare. In addition, townhouses are permitted by both the Low Density Residential Areas and the Medium Residential Areas policies. The proposed development of 6 street fronting townhouse dwelling units conforms with OP Section 8.2.5 Location criteria for further designation as follows: • The shared laneway access to each townhouse dwelling unit directly abuts North Street which is an Arterial Road, ensuring traffic generated would not have to flow through surrounding residential areas. • The proposed development is within the Town of Tillsonburg which ensures it is close to the commercial opportunities within a very short distance. • The proposed development is in close proximity to recently developed townhouses at 101 North Street East. The proposed development of 6 street fronting townhouse dwelling units also conforms with OP Section 8.2.5 Site Specific Evaluation Criteria. as follows: • The subject property is sufficiently sized to accommodate the proposed development and is compact in a form that minimizes the impact on adjacent single detached dwellings. Required R3 Zone rear yard setbacks would be maintained and any required landscaping can be addressed during the site plan approval process. • The proposed development has 3 shared driveways (6 total) abutting the Arterial Road, which creates a low amount of added traffic slow-down for this type of road. • The proposed development will be connected to full municipal services, including water, storm sewers, and sanitary sewers, as well as hydro. • Off-street parking is provided through shared driveways and individual unit garages; private amenity areas will be provided on the rear yards of each unit. • The retained parcel for the proposed townhouse development is a vacant, underutilized site that has only a few trees and is otherwise level, mowed grass and located some distance from the Open Space Area to the west. This ensures that the development of this site will not have any impact on environmental resources within the Town. OP Section 8.3.1.2 lists Service Commercial Areas among land use designations considered to be Employment Lands. As was noted under PPS discussion, the Oxford County Phase 1 Comprehensive Page 154 of 650 Page 15 Review was prepared by Hemson Consulting Ltd in March 2020 provides population, household, and employment forecasts from 2019 to 2039 for Oxford County as a whole as well as the Town of Tillsonburg. This report will inform potential updates to the Oxford County Official Plan and assess designated land needed within the Town of Tillsonburg. The highlights relating to this proposed development from this study include the following: • The Town of Tillsonburg contributed to 15.8% of the County of Oxford population growth from 2001 to 2016. (Table 8, Page 18) • Population of Tillsonburg grew from 2001 (14,610) to 2016 (16,310). (Table 6, Page 17) • From the 16,310 population recorded in 2016, the population is expected to grow by 5,840 residents within Tillsonburg by 2046. (Table 23, Page 41) • The total household unit growth is expected to grow by 2,047 units within the Town of Tillsonburg by 2039. (Table 35, Page 54) • The Town of Tillsonburg is also expected to grow as a place of work, as well as offer more employment lands to meet projected needs. (Table 25, Page 42) • Within the Town of Tillsonburg there could be a surplus of residential land projected in serviced areas by 2039 by 66 hectares. (Table 37, Page 57) • Within the Town of Tillsonburg there are 18 hectares of vacant or underutilized commercial or Institutional land within the city. (Table 40, Page 61) Although it was concluded that there could be a potential surplus of residential designated land within the Town by 2039, the Town is still expected to grow and will continue to need residential land. The report also highlights the vacant land supply for commercial or institutional land concluding: “Overall, there would not appear to be an immediate need for additional commercial or institutional lands to accommodate the job growth expected for most Area Municipalities.” (Page 61, Last Paragraph) Given the foregoing conclusions noted in the Comprehensive Review, there are no material negative impacts of the proposed OPA to convert this vacant Service Commercial property to Residential and Medium Density Residential Areas, especially given the relatively minor extent of the proposed redesignation. Further, the proposed development would conform with the Medium Density Residential Areas policies of the OP. Conclusion: Based on the foregoing analysis, the proposed development would conform with the OP. 6.3 TOWN OF TILLSONBURG ZONING BYLAW NO. 3295 The Town of Tillsonburg Zoning Bylaw (ZB) No. 3295, as amended, was passed by Council on May 28th, 2008. Both the severed and retained parcels are currently zoned as Service Commercial Special SC-10 (H). ZB Section 14.5.10 contains the SC-10(H) regulations: 14.5.10 LOCATION: NORTH STREET, BETWEEN TILLSON AVENUE AND THE CP RAILWAY, SC-10(H) 14.5.10.1 Notwithstanding any provision of this By-Law to the contrary, no person shall within any SC-10 (H) Zone use any lot, or erect, alter or use any building or structure for any purpose except the following permitted interim uses: Page 155 of 650 Page 16 14.5.10.1.1 RESIDENTIAL USES an existing single detached dwelling. 14.5.10.1.2 NON-RESIDENTIAL USES a builder’s supply shop and yard; a farm implement dealer; a farm produce retail outlet; a motor vehicle sales establishment; a public use in accordance with the provisions of Section 5.19 hereof; a retail nursery; a taxi stand or station; a tire sales establishment; a real estate office; a Brewer’s Retail Outlet; and all uses permitted in Table 14.1, provided the Holding (H) symbol is removed in accordance with Section 14.5.10.3.1 of this By-Law. 14.5.10.3 Notwithstanding any provision of this By-Law to the contrary, no person shall within any SC-10(H) Zone shall use any lot, or erect, alter or use any building or structure except in accordance with the following provisions: 14.5.10.3.1 R REMOVAL OF THE HOLDING PROVISION Development for uses not listed in Sections 14.5.10.1 of this By-Law, but which would otherwise be permitted in Section 14.1, shall only be permitted at such time as written confirmation that the property has been connected to municipal sanitary sewer has been obtained from the County of Oxford and the holding provision has been removed in accordance with the requirements of the Planning Act, RSO 1990, as amended. 14.5.10.4 That all other provisions of the SC Zone in Section 14.2 of this By-Law, as amended, shall apply, and further that all other provisions of this By-Law, as amended, that are consistent with the provisions herein contained shall continue to apply mutatis mutandis. While the zone provisions permit the existing single detached dwelling, the only other uses permitted are non-residential. Since the proposed development is for the purpose of residential land use, it is appropriate that the severed lot containing the existing dwelling be also subject to the ZBA to change its zoning to Low Density Residential Type 3 (R3) consistent with the proposed site-specific R3 zoning of the townhouse dwellings. The uses permitted in ZB Section 8.1 LOW DENSITY RESIDENTIAL – TYPE 3 ZONE (R3) are previously stated in Section 5.2 of this report. Zoning regulations for the proposed site-specific Low Density Residential Type 3 (R3-XX) zone are provided by ZB Section 8.2 as follows relative to the proposed development as depicted on the Figure 2 Proposed Site Plan: Page 156 of 650 Page 17 The proposed site plan will have garbage stored internally within each of the townhouse dwelling units. The site-specific zoning accommodations requested are reasonable and will result in development that is compatible with the area. It should be noted that the abutting commercial use to the east of the subject property zoned as Service Commercial (SC) has approximately 12 meters westerly interior side yard setback thereby exceeding the minimum 9 metres required under ZB Section 14.2 when a commercial property abuts a residential zone which would apply if the property is rezoned as proposed. The existing single detached dwelling would comply with R3 zoning regulations applicable to a single detached dwelling per ZB Section 8.2. Conclusion: Based on the foregoing analysis, the proposed development would conform with the Town of Tillsonburg ZB subject to the proposed rezoning. 7.0 TECHNICAL STUDIES 7.1 SERVICING REPORT Cyril J. Demeyere Limited prepared a Functional Servicing Report (FSR) for the proposed development issued on April 6, 2022. The report outlines within Section 4 of the report how the subject property would be connected to sanitary sewers as follows: Standard Provisions of R3 Zone Proposed Zoning Number of Dwellings or Dwelling Units, Maximum 8 dwelling units per building 6 dwelling units per building Lot Area, Minimum 240m2 per dwelling unit or 330m2 for an end unit 259m2 per dwelling unit or 322m2 for an end unit (Requested site-specific Provision) Lot Frontage Minimum 8m per dwelling unit or 11m for an end unit 7.3m per dwelling unit or 9.1m for an end unit (Requested site-specific Provision) Lot Depth Minimum 30 m 35.38m Front Yard Minimum Depth 7.5m 7.61m Rear yard, minimum Depth 7.5m 10.09m Interior Side Yard, Minimum Width 3m 1.8m (Requested site-specific Provision) Setback, Minimum Distance from Centerline of an Arterial Road 20.5m 23.12m Lot Coverage, Maximum 40% of Lot Area 45.1% (Requested site-specific Provision) Landscaped Open Space, Minimum 30% of Lot Area 46.8% Height of Building, Maximum 11m 11m Amenity Area, Minimum 48m2 per dwelling unit 101m2 Page 157 of 650 Page 18 The sanitary servicing outlet for the proposed development is an existing 450mmø sanitary sewer which runs directly in front of the proposed development on North Street. This sanitary sewer ultimately outlets through a series of connecting sewers to the Tillsonburg Wastewater Treatment Facility. Each unit will have a 100mmø PVC lateral connection individually connected to the 450mmø sanitary sewer on North Street. The total sanitary design flow from all 6 units is calculated to e 0.42 l/s. All calculations were completed in accordance with Oxford County Design Criteria. Section 5 of the FSR stipulates how the subject property would be connected to municipal water as follows: As part of the construction of North Street circa 2014, new watermains were installed along its length with a 250mmø watermain installed in this area to service this site. The base domestic demand was calculated to be 0.09 l/s for the site with a 0.20 l/s may. day demand and 0.35 l/s peak hour demand. The OBC fire flow requirement was calculated to be 75.0 l/s, while the FUS fire flow was determined to be 113.0 l/s. The resulting max. day demand + fire flow, using the FUS fire flow, is 113.20 l/s with a peak hour flow of 0.35 l/s. Appendix B of the report provides more detailed calculations. Section 6 of the FSR stipulates how the subject property would be connected to a municipal stormwater main as follows: Storm PDC’s will be provided to each of the individual units off the existing 525mmø storm main on North Street. As referenced throughout the FSR, the proposed development was planned in 2014 for residential development. If approved, it would be connected to full municipal services that would adequately service the proposed development. 8.0 SUMMARY AND CONCLUSIONS Based on the foregoing discussion and analysis, the proposed OPA and ZBA for the medium density townhouse residential development at 133 North Street East, Tillsonburg would be consistent with the PPS and conform with the OP and ZB subject to rezoning. Moreover, it would be in the public interest and would result in good land use planning. The County of Oxford Phase 1 Comprehensive Review concluded (in Section 6.2) that there would not appear to be an immediate need for additional commercial lands and the proposed OPA would not adversely affect the overall viability of this relatively small employment area. The proposed development also would constitute residential intensification and appropriate infilling on long vacant land, providing home ownership opportunities in future, and facilitating a compact form. It would be connected to full municipal services that are immediately available and have an adequate supply to meet the needs of the proposed development. The additional townhouse dwelling units would assist the Town of Tillsonburg in meeting its growth projections and targets and, as noted, could potentially assist in achieving more relative affordability as townhouse dwellings are generally more affordable to construct than single detached dwellings. The subject property would have adequate setbacks from the easterly adjacent commercial property to ensure the townhouse dwelling units are compatible with that use. The proposed development would provide an additional supply range of housing options through intensification. The subject property is an ideal site to further develop as it is sufficiently sized to accommodate the proposed development and Page 158 of 650 Page 19 is compact in a form that minimizes land consumption and potential impacts on adjacent single detached dwellings. The Town of Tillsonburg will also have the opportunity to address landscaping if required and other detailed issues during the site plan approval process. The proposed development has shared driveways which creates minimal added traffic slow-down on North Street East. Off-street parking is provided through shared driveways and individual unit garages and private amenity areas will be provided on the rear yards of each unit. The proposed development would be consistent with the PPS and conform with the Medium Density Residential Areas policies of the OP as well as the regulations of the ZB for the Low Density Residential Type 3 (R3) Zone subject to the site-specific zoning regulations required which are reasonable and would not impact compatibility. The severed parcel with the existing single detached dwelling would comply with the standard Low Density Residential Type 3 (R3) zoning provisions. 9.0 REFERENCES - STUDIES 1. Hemson Consulting Limited, Phase 1 Comprehensive Review, 2020 2. Functional Servicing Report (FSR), Cyril J Demeyere Limited, April 2022 ** ** ** All of which is respectfully submitted by, Trevor Benjamins OPPI Pre-candidate Associate Planning Technician Cyril J. Demeyere Limited. And Barbara G. Rosser, RPP, MCIP Professional Land Use Planner Associate to Cyril J. Demeyere Limited. TB/kc Page 159 of 650 APPENDIX ‘A’ County of Oxford Official Plan, Schedule "T-1" Town of Tillsonburg Land Use Plan County of Oxford Official Plan, Schedule "T-2" Town of Tillsonburg Residential Density Plan County of Oxford Official Plan, Schedule "T-4" Town of Tillsonburg Transportation Network Plan Page 160 of 650 SubjectProperty Page 161 of 650 SubjectProperty Page 162 of 650 SubjectProperty Page 163 of 650 APPENDIX ‘B’ Town of Tillsonburg Zoning Bylaw 3295, as amended Schedule "A" Key Map 7 Page 164 of 650 ################################################################################################################################################################################################################################################################################################################################ ########################################################################################## ## ## #################################################################### ## ######################################################################################################################################## ## ## ## ########################################################## ## ## ## ## ## ## ## ## ## ## ########################################################################################## #################################################################################### ## ## ## ## ################################################################################################################################################################################################ ################################################## ## ## ## ## ## ## ######################## ######## ## ## ## ################################################################## ## ## ############## ## ## ############################################## ########## ######## ######################## ## ################ ## ################ ## ## ## ###### ##########################################################################################################################################################################################################################################################################################################################################################################################################################################################################!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!MG QUEEN STSC(H) MG STREET R1 R2 SEE KEY MAP 6TILLSON AVENUEFOURTH MG NORTH STREET EASTSEE KEY MAP 5 MGC P RSEE KEY MAP 16SEE KEY MAP 15R1-12 SIXTH CLARKE ST R2 KING STREETMG LISGAR AVENUESTREET C P R FIFTH ST SC-10(H)SC SEE KEY MAP 8SANDY CRTFDOS2OS1R2 R2R2-24 SCHEDULE "A"KEY MAP 7 Jan 13, 2021 TOWN OF TILLSONBURG LATEST AMENDING BY-LAW: NOTES: ALL DIMENSIONS ARE IN METRES.PRODUCED BY THE COUNTY OF OXFORD USING DATA UNDERLICENSE FROM THE UPPER THAMES RIVER AND GRAND RIVERCONSERVATION AUTHORITIES, TERANET ENTERPRISES INC.,AND THE PROVINCE OF ONTARIO, Copyright 2021.¹!!!!!!!100 YEAR FLOOD LINE ENVIRONMENTAL PROTECTION 2 OVERLAYSee General Provisions 5.30.2 ENVIRONMENTAL PROTECTION 1 OVERLAYSee General Provisions 5.30.1 FLOOD AND FILL AREASee General Provisions 5.8 2020-100 REGULATORY FLOOD AND FILL LINES#*#*#*#*#*#*#*#*SCALE 1:6,245 Subject Property Page 165 of 650 ZN 7-22-06 19-Apr-22 000280242 Page 166 of 650 Page 167 of 650 Page 168 of 650 Page 169 of 650 Page 170 of 650 Page 171 of 650 ONTARIO ENERGY BOARD NOTICE TO CUSTOMERS OF ENBRIDGE GAS INC. Enbridge Gas Inc. has applied to dispose of the balances of certain deferral and variance accounts. Learn more. Have your say. If the application is approved as filed, a typical residential customer of Enbridge Gas Inc. will see the following one-time billing adjustment, effective January 1, 2023: EGD Rate Zone (former Enbridge Gas Distribution Inc. customers) • Residential Rate 1 Sales Service and Direct Purchase customers will see a one-time billing charge of $5.01, effective January 1, 2023. Union Rate Zone (former Union Gas Limited customers) • Union South Residential Rate M1 Sales Service customers will see a one-time billing charge of $9.34, effective January 1, 2023. • Union South Residential Rate M1 Direct Purchase customers will see a one-time billing charge of $1.91, effective January 1, 2023. • Union North-West Residential Rate 01 Sales Service and Direct Purchase customers will receive a one-time billing credit of $17.33, effective January 1, 2023. • Union North-East Residential Rate 01 Sales Service and Direct Purchase customers will see a one-time billing charge of $7.78, effective January 1, 2023. Other customers, including businesses, may also be affected. Under the OEB-approved Earnings Sharing Mechanism, Enbridge Gas Inc. is required to share with customers any earnings that are 150 basis points over the OEB-approved return on equity. Enbridge Gas Inc. says that its 2021 earnings were below the 150 basis point threshold and as a result it is not proposing to share any earnings with customers. THE ONTARIO ENERGY BOARD WILL HOLD A PUBLIC HEARING The Ontario Energy Board (OEB) will hold a public hearing to consider Enbridge Gas’s application. During this hearing, which could be an oral or written hearing, we will review Enbridge Gas’s 2021 earnings and the deferral account balances that are requested for disposition. We will also hear questions and arguments from individuals that have registered to participate (called intervenors) in the OEB’s hearing. At the end of this hearing, the OEB will decide whether to approve Enbridge Gas’s request to dispose of the deferral account balances. The OEB is an independent and impartial public agency. We make decisions that serve the public interest. Our goal is to promote a financially viable and efficient energy sector that provides you with reliable energy services at a reasonable cost. BE INFORMED AND HAVE YOUR SAY You have the right to information regarding this application and to be involved in the process. • You can review Enbridge Gas’s application on the OEB’s website now • You can file a letter with your comments, which will be considered during the hearing • You can become an intervenor. As an intervenor, you can ask questions about Enbridge Gas’s application and make arguments on whether the OEB should approve Enbridge Gas’s request. Apply by July 8, 2022 or the hearing will go ahead without you and you will not receive any further notice of the proceeding • At the end of the process, you can review the OEB’s decision and its reasons on our website The OEB intends to consider cost awards in this proceeding that are in accordance with the Practice Direction on Cost Awards and only in relation to the following: 1) The review of the following deferral and variance accounts: EGD Rate Zone (former Enbridge Gas Distribution Inc.) Accounts • Storage and Transportation Deferral Account • Transactional Services Deferral Account • Unaccounted for Gas Variance Account • Average Use True-Up Variance Account • Deferred Rebate Account • Transition Impact of Accounting Changes Deferral Account • OEB Cost Assessment Variance Account • Dawn Access Costs Deferral Account Page 172 of 650 Union Rate Zones (former Union Gas Limited) Accounts • Upstream Transportation Optimization Deferral Account • Unabsorbed Demand Costs Variance Account • Short-Term Storage and Other Balancing Services • Normalized Average Consumption Deferral Account • Deferral Clearing Variance Account Variance Account • OEB Cost Assessment Variance Account • Parkway West Project Costs Deferral Account • Lobo D/Bright C/Dawn H Compressor Project Costs Deferral Account • Panhandle Reinforcement Project Costs Deferral Account • Unaccounted for Gas Volume Variance Account • Unaccounted for Gas Price Variance Account Enbridge Gas Inc. Accounts • Tax Variance - Accelerated Capital Cost Allowance – Enbridge Gas Inc. • Integrated Resource Planning Operating Costs Deferral Account 2) The review of Enbridge Gas Inc.’s 2021 earnings, earnings sharing calculations and the 2021 Performance Scorecard. 3) The review of the methodology for the allocation and disposition of the deferral and variance account balances. LEARN MORE These proposed charges relate to Enbridge Gas’s distribution services. The above referenced billing adjustment will appear as a separate line on your bill. Our file number for this case is EB-2022-0110. To learn more about this hearing, find instructions on how to file a letter with your comments or become an intervenor, or to access any document related to this case, please select the file number EB-2022-0110 from the list on the OEB website: www.oeb.ca/notice. You can also phone our Public Information Centre at 1-877-632-2727 with any questions. ORAL VS. WRITTEN HEARINGS There are two types of OEB hearings – oral and written. Enbridge Gas has applied for a written hearing. The OEB will determine at a later date whether to proceed by way of a written or oral hearing. If you think an oral hearing is needed, you can write to the OEB to explain why by July 8, 2022. PRIVACY If you write a letter of comment, your name and the content of your letter will be put on the public record and the OEB website. However, your personal telephone number, home address and email address will be removed. If you are a business, all your information will remain public. If you apply to become an intervenor, all information will be public. This rate hearing will be held under section 36 of the Ontario Energy Board Act, 1998, S.O. 1998, c.15, Schedule B. Page 173 of 650 Richard Wathy Technical Manager Regulatory Applications Regulatory Affairs tel 519-365-5376 Richard.Wathy@enbridge.com EGIRegulatoryProceedings@enbridge.com Enbridge Gas Inc. P. O. Box 2001 50 Keil Drive North Chatham, ON N7M 5M1 June 17, 2022 VIA RESS AND EMAIL Nancy Marconi Registrar Ontario Energy Board 2300 Yonge Street, 27th Floor Toronto, ON M4P 1E4 Dear Nancy Marconi: Re: Enbridge Gas Inc. (Enbridge Gas) Ontario Energy Board (OEB) File No.: EB-2022-0110 2021 Utility Earnings and Disposition of Deferral & Variance Account Balances Application and Evidence Further to the submission filed on May 31, 2022, enclosed please find the following updated exhibits: In the event that you have any questions on the above or would like to discuss in more detail, please do not hesitate to contact me. Sincerely, (Original Digitally Signed) Richard Wathy Technical Manager, Regulatory Applications cc.: D. Stevens (Aird & Berlis) Exhibit Correction B-3-1, Page 2 and 6 The 2021 Actual balance for Corporate Shared Services and Compensation and Benefits were misstated, resulting in an incorrect $ and % change for those categories. There was no impact on Total Utility O&M. An updated Table 1 and Appendix A has been provided. Page 174 of 650 Filed: 2022-06-10 EB-2022-0110 Exhibit A Tab 1 Page 1 of 5 EXHIBIT LIST A – Overview and Introduction Exhibit Tab Schedule Contents A 1 Exhibit List 2 Application 3 Overview and Approvals Required B- Utility Results and Earning Sharing Exhibit Tab Schedule Contents B 1 2021 Earnings Sharing Amount and Determination Process 1 Return on Rate Base & Equity and Earning Sharing Determination 2 Utility Income 3 Utility Income Tax 4 Utility Rate Base and Continuity Schedules 5 Capital Structure and Cost of Capital 6 Reconciliation of Audited Income to Corporate 2 1 Delivery Revenue by Service Type and Rate Class 2 Total Customers and Revenue by Service Type and Rate Class Page 175 of 650 Filed: 2022-06-10 EB-2022-0110 Exhibit A Tab 1 Page 2 of 5 B- Utility Results and Earning Sharing Exhibit Tab Schedule Contents B 2 3 Revenue from Regulated Storage and Transportation of Gas 4 Other Revenue 3 1 Operating and Maintenance Expense 2 3 Capital Expenditure Summary of Capital Cost Allowance C- Enbridge Gas Inc 2021 Deferral and Variance Accounts Exhibit Tab Schedule Contents C 1 Enbridge Gas Inc Deferral and Variance Accounts 1 Deferral and Variance Actual and Forecast Balances 2 Summary of Accounting Policy Changes Deferral Account 3 Calculation of Bill C-97 Accelerated CCA Impact on TVDA Page 176 of 650 Filed: 2022-06-10 EB-2022-0110 Exhibit A Tab 1 Page 3 of 5 D - EGD Rate Zone Deferral and Variance Accounts Exhibit Tab Schedule Contents D 1 1 2 3 4 5 6 Deferral & Variance Accounts Requested for Clearance – EGD Rate Zone Breakdown of the Storage and Transportation Deferral Account Breakdown of Transactional Services Revenue by Type of Transaction 2021 UAFVA Breakdown of the Average Use True-up Variance Account Storage RFP Letter Storage RFP Summary (Redacted) E – Union Rate Zones Deferral and Variance Accounts Exhibit Tab Schedule Contents E 1 Deferral & Variance Accounts Requested for Clearance – Union Rate Zones 1 Breakdown of Upstream Transportation Optimization Deferral Account 2 Breakdown of Short Term Storage Deferral Account Appendix A – 2021 Storage Space and Deliverability 3 Summary of Non-Utility Storage Balances Page 177 of 650 Filed: 2022-06-10 EB-2022-0110 Exhibit A Tab 1 Page 4 of 5 E – Union Rate Zones Deferral and Variance Accounts Exhibit Tab Schedule Contents E 1 4 Allocation of Short Term Peak Storage Revenues between Utility/Non-Utility 5 Breakdown of Deferral Clearing Variance Account 6 Calculation of Balances by Rate Class in the NAC Deferral Account 7 Calculation of Allocation of Short Term Transportation Revenues to the Lobo D / Bright C / Dawn H Compressor Project Cost Deferral Account F – Rate Allocation Exhibit Tab Schedule Contents F 1 Allocation and Disposition of 2020 Deferral and Variance Account Balances 1 Split of EGI Account Balances to Rate Zones 2 1 2 3 EGD - Unit Rate and Type of Service EGD - Balances to be Cleared EGD - Classification and Allocation of Deferral and Variance Account Balances 4 EGD - Allocation by Type of Service 5 EGD - Unit Rate by Type of Service 6 EGD - Bill Adjustment for Typical Customers Page 178 of 650 Updated: 2022-06-10 EB-2022-0110 Exhibit A Tab 1 Page 5 of 5 /u F – Rate Allocation Exhibit Tab Schedule Contents F 3 1 2 Union – Unit Rate and Type of Service Union - Balances to be Cleared 3 Union – Classification and Allocation of Deferral Variance Account Balances 4 Union - Unit Rates for Disposition 5 Union - Bill Adjustment for Typical Customer G – OEB Scorecard Exhibit Tab Schedule Contents G 1 2021 Scorecard Results 1 OEB Scorecard H – IRP Annual Report Exhibit Tab Schedule Contents H 1 IRP Annual Report and IRP Technical Working Group Report Page 179 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 2 Page 1 of 5 ONTARIO ENERGY BOARD IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Schedule. B); AND IN THE MATTER OF an Application by Enbridge Gas Inc. for an order or orders clearing certain commodity and non-commodity related deferral or variance accounts. APPLICATION 1. Enbridge Gas Distribution Inc. (referred to in the evidence as EGD, Enbridge or the Company) and Union Gas Limited (referred to in the evidence as Union or the Company) (together the Utilities) were Ontario corporations incorporated under the laws of the Province of Ontario carrying on the business of selling, distributing, transmitting and storing natural gas within the meaning assigned in the Ontario Energy Board Act, 1998 (the Act). In the August 30, 2018 EB-2017-0306/0307 Decision and Order (the MAADs Decision), the Ontario Energy Board (OEB) approved the amalgamation of the Utilities, as well as a five-year deferred rebasing term during which a price cap rate-setting model would apply. 2. Effective January 1, 2019 the Utilities amalgamated to become Enbridge Gas Inc. (Enbridge Gas). Following amalgamation, Enbridge Gas has maintained the existing rates zones of EGD and Union (the EGD, Union North West, Union North East and Union South rate zones).1 Enbridge Gas has also maintained most of the existing deferral and variance accounts for each Rate Zone. 1 Collectively the Union North West, Union North East and Union South rates zones are referred to as “Union rate zones”. Union North West and Union North East are collectively referred to as “Union North”. Page 180 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 2 Page 2 of 5 3. Enbridge Gas, the Applicant, hereby applies to the OEB, pursuant to Section 36 of the Ontario Energy Board Act, 1998, for an Order or Orders approving the clearance or disposition of amounts recorded in certain deferral or variance accounts. Earnings Sharing 4. In the MAADs Decision, the OEB approved, among other things, an asymmetrical earnings sharing mechanism (ESM) during the deferred rebasing period, where each year any earnings in excess of 150 basis points over the OEB-approved return on equity (ROE) would be shared 50/50 between the Utilities and ratepayers. 5. In 2021, Enbridge Gas’s actual utility earnings did not exceed the OEB-approved ROE by more than 150 basis points. Accordingly, no ESM amount is proposed to be shared with ratepayers. Enbridge Gas Inc. 6. The OEB has approved several deferral and variance accounts that relate to Enbridge Gas as a whole (and not to specific Rate Zone(s)). These accounts are listed at Exhibit C, Tab 1, Schedule 1. 7. Enbridge Gas proposes to clear the 2021 balance in the Tax Variance Deferral Account (TVDA). Enbridge Gas is not seeking approval to clear any part of the balance in the Accounting Policy Changes Deferral Account (APCDA), in the Covid-19 Emergency Incremental Cost Deferral Account (COVEICDA) and in the Incremental Capital Module Deferral Account (ICMDA). Details on these accounts are presented in this application for information purposes. The balances in these accounts will be brought forward for clearance in a future application. Page 181 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 2 Page 3 of 5 EGD Rate Zone 8. As approved in the MAADs Decision and the 2019 Rates Case (EB-2018-0305), Enbridge Gas has maintained substantially the same deferral and variance accounts for the EGD rate zone as during its 2014-2018 Custom IR term. 9. Enbridge Gas seeks approval to clear the final balances of certain EGD rate zone deferral and variance accounts for 2021 as set out at Exhibit C, Tab 1, Schedule 1. Union Rate Zones 10. As approved in the MAADs Decision and the 2019 Rates Case (EB-2018-0305), Enbridge Gas has maintained substantially the same deferral and variance accounts for the Union Rate Zones as during its 2014-2018 IR term. 11. Enbridge Gas seeks approval to clear the final balances of certain Union rate zones deferral and variance accounts for 2021 as set out at Exhibit C, Tab 1, Schedule 1. Relief Requested 12. Enbridge Gas therefore applies to the OEB for such final, interim or other orders as may be necessary or appropriate for the clearance or disposition of the 2021 deferral and variance accounts requested in Exhibit C, Tab 1, Schedule 1. The proposed manner of disposition is described at Exhibit F. Enbridge Gas proposes to clear the balances in these accounts with the first available QRAM application following the OEB’s approval, as early as January 1, 2023. 13. Enbridge Gas requests that certain information included at Exhibit D, Tab 1, Schedule 6 be treated as confidential under the OEB’s Practice Direction on Confidential Filings. Equivalent information has been treated as confidential in prior deferral and variance account clearance proceedings. Page 182 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 2 Page 4 of 5 14. Enbridge Gas requests that this proceeding be heard in writing. 15. Enbridge Gas further applies to the OEB pursuant to the provisions in the Act and the OEB’s Rules of Practice and Procedure for such final, interim or other Orders and directions as may be appropriate in relation to the Application and the proper conduct of this proceeding. 16. This Application is supported by written evidence. This evidence may be amended from time to time as required by the OEB, or as circumstances may require. 17. The persons affected by this application are the customers resident or located in the municipalities, police villages and First Nations reserves served by Enbridge Gas, together with those to whom Enbridge Gas sells gas, or on whose behalf Enbridge Gas distributes, transmits or stores gas. It is impractical to set out in this application the names and addresses of such persons because they are too numerous. 18. Enbridge Gas requests that a copy of every document filed with the OEB in this proceeding be served on the Applicant and Applicant’s counsel, as follows: The Applicant: Mr. Richard Wathy Technical Manager, Regulatory Applications Enbridge Gas Inc. Address for personal service Enbridge Gas Inc. P. O. Box 2001 50 Keil Drive North Chatham, ON N7M 5M1 Telephone: 519-365-5376 Fax: (519) 436-4641 Email: Richard.Wathy@enbridge.com EGIRegulatoryproceedings@enbridge.com Page 183 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 2 Page 5 of 5 - and – The Applicant’s counsel: Mr. David Stevens Aird & Berlis LLP Address for personal service Brookfield Place, P.O. Box 754 and mailing address: Suite 1800, 181 Bay Street Toronto, Ontario M5J 2T9 Telephone: 416-863-1500 Fax: 416-863-1515 Email: dstevens@airdberlis.com DATED: May 31, 2022, at Chatham, Ontario ENBRIDGE GAS INC. [Original digitally signed by] __________________________ Richard Wathy Technical Manager, Regulatory Applications Page 184 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 3 Page 1 of 3 Plus Appendix 2021 DEFERRAL ACCOUNT DISPOSITION AND EARNINGS SHARING OVERVIEW AND APPROVALS REQUESTED 1.Enbridge Gas Inc. (Enbridge Gas) is applying to the Ontario Energy Board (OEB) pursuant to section 36 of the OEB Act for approval to dispose and recover certain 2021 deferral and variance account final balances for Enbridge Gas, and the Enbridge Gas Distribution (EGD) and Union Gas (Union)1 rate zones. Enbridge Gas is also presenting the 2021 earnings sharing mechanism (ESM) calculations for the amalgamated utility. 2.The evidence in this Application is organized as follows: Exhibit A: Overview and Introduction Exhibit B: 2021 Utility Results and Earnings Sharing Amount Exhibit C: Enbridge Gas Inc. 2021 Deferral and Variance Accounts Exhibit D: EGD Rate Zone Deferral and Variance Accounts Exhibit E: Union Rate Zones Deferral and Variance Accounts Exhibit F: Rate Allocation Exhibit G: OEB Scorecard Exhibit H: IRP Annual Report (to be filed at a later date) 3.Enbridge Gas proposes that the impacts which result from the disposition of 2021 deferral and variance account balances be implemented with the first available QRAM application following the OEB’s approval, as early as January 1, 2023, to align with other rate changes implemented through the Quarterly Rate Adjustment Mechanism (QRAM). 1 “Union rate zones” collectively refers to Union North West, Union North East and Union South. Page 185 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 3 Page 2 of 3 Plus Appendix 1.Relief requested 4.Enbridge Gas seeks approval to clear the final balances of certain Enbridge Gas, EGD rate zone, and Union rate zones 2021 deferral and variance accounts. The balances of the 2021 deferral and variance accounts are set out at Exhibit C, Tab 1, Schedule 1. For ease of reference, a copy of Exhibit C, Tab 1, Schedule 1 is attached at Appendix A to this exhibit. 5.Explanations for the balances in each account are set out at Exhibit C (Enbridge Gas Inc.), Exhibit D (EGD rate zone) and Exhibit E (Union rate zones). The evidence also indicates which accounts Enbridge Gas does not seek to clear in this proceeding. The proposed clearance methodology for the accounts being cleared is set out at Exhibit F. 6.In the MAADs Decision (EB-2017-0306/0307), the OEB approved, among other things, an asymmetrical earnings sharing mechanism (ESM) during the 2019-2023 deferred rebasing period, where each year any earnings in excess of 150 basis points over the OEB-approved return on equity (ROE) would be shared 50/50 between Enbridge Gas and ratepayers. 7.Enbridge Gas’s actual 2021 utility earnings did not exceed the OEB-approved ROE by more than 150 basis points. Accordingly, no ESM amount is proposed to be shared with ratepayers. 2.Disposition of deferral and variance accounts 8.Integration of the legacy billing systems for EGD and Union Gas enables Enbridge Gas to dispose of balances in the 2021 deferral and variance accounts as a one-time adjustment for all customers. Enbridge Gas proposes to dispose of the 2021 deferral Page 186 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 3 Page 3 of 3 Plus Appendix and variance accounts as a one-time adjustment for all general service, in-franchise contract and ex-franchise rate classes. 9.The proposed approach to the one-time adjustment is consistent between the EGD and Union rate zones and, subject to OEB approval as to timing, will be disposed of as part of the January 2023 bills that customers receive in Febraury 2023. 3.Parkway west project costs account interim disposition 10. Enbridge Gas is seeking interim disposition of the 2021 balance in the Parkway West Project Costs Deferral Account (179-136), consistent with the 2016 to 2020 deferral and variance account disposition proceedings. In the 2016 deferral account proceeding, the OEB noted that “all parties agreed that the 2016 balance in the Parkway West Project Costs Account should be disposed of only on an interim basis to allow the OEB to perform a prudence review of the capital overspend prior to final disposition of the balance in the account.”2 Consistent with this direction, Enbridge Gas will seek approval of the final disposition of this account as part of a subsequent proceeding when all the project costs have been incurred and the prudence of the project costs are assessed. 2 EB-2017-0091 Updated Settlement Agreement Proposal, page 12. Page 187 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit A Tab 3 Appendix A Page 1 of 1 Col. 1 Col. 2 Col. 3 Col.4 Line AccountNo.Account Description Acronym Principal Interest Total Reference ($000's)($000's)($000's)EGD Rate Zone Commodity Related Accounts 1.Storage and Transportation D/A 2021 S&TDA 7,942.5 97.0 8,039.5 D-1, Page 2 2.Transactional Services D/A 2021 TSDA (3,904.1) (35.4) (3,939.6) D-1, Page 4 3.Unaccounted for Gas V/A 2021 UAFVA 753.9 4.5 758.4 D-1, Page 6 4.Total commodity related accounts 4,792.2 66.2 4,858.4 EGD Rate Zone Non Commodity Related Accounts 5.Average Use True-Up V/A 2021 AUTUVA 14,934.3 135.5 15,069.8 D-1, Page 10 6.Gas Distribution Access Rule Impact D/A 2021 GDARIDA - - - D-1, Page 23 7.Deferred Rebate Account 2021 DRA 4,359.4 53.5 4,412.9 D-1, Page 12 8.Transition Impact of Accounting Changes D/A 2021 TIACDA 4,435.8 - 4,435.8 D-1, Page 1 9.Electric Program Earnings Sharing D/A 2021 EPESDA - - - D-1, Page 23 10.Open Bill Revenue V/A 2021 OBRVA - - - D-1, Page 23 11.Ex-Franchise Third Party Billing Services V/A 2021 EXFTPBSVA - - - D-1, Page 23 12.RNG Injection Service V/A 2021 RNGISVA - - - D-1, Page 23 13.OEB Cost Assessment V/A 2021 OEBCAVA 2,550.3 31.5 2,581.8 D-1, Page 13 14.Dawn Access Costs D/A 2021 DACDA 1,968.0 17.9 1,985.9 D-1, Page 16 15.Pension and OPEB Forecast Accrual vs. Actual Cash Payment Di 2021 P&OPEBFAVACPDVA - - - D-1, Page 23 16.Total EGD Rate Zone (for clearance) 33,040.0 304.5 33,344.6 Union Rate Zones Gas Supply Accounts OEB Account Number 17.Upstream Transportation Optimization 179-131 2021 8,616.3 78.2 8,694.5 E-1, Page 6 18.Spot Gas Variance Account 179-107 2021 - - - E-1, Page 58 19.Unabsorbed Demand Costs Variance Account 179-108 2021 (1,665.6) (28.3) (1,693.9) E-1, Page 1 20.Base Service North T-Service TransCanada Capacity 179-153 2021 83.5 0.9 84.4 E-1, Page 52 21.Total Gas Supply Accounts 7,034.2 50.8 7,085.0 Union Rate Zones Storage Accounts 22.Short-Term Storage and Other Balancing Services 179-70 2021 3,576.9 32.5 3,609.4 E-1, Page 8 Union Rate Zones Other Accounts 23.Normalized Average Consumption 179-133 2021 18,997.4 239.4 19,236.8 E-1, Page 13 24.Deferral Clearing Variance Account 179-132 2021 (3,120.4) (45.3) (3,165.7) E-1, Page 21 25.OEB Cost Assessment Variance Account 179-151 2021 907.1 11.4 918.5 E-1, Page 49 26.Unbundled Services Unauthorized Storage Overrun 179-103 2021 - - - E-1, Page 58 27.Gas Distribution Access Rule Costs 179-112 2021 - - - E-1, Page 58 28.Conservation Demand Management 179-123 2021 - - - E-1, Page 58 29.Parkway West Project Costs 179-136 2021 (603.3) (6.4) (609.7) E-1, Page 25 30.Brantford-Kirkwall/Parkway D Project Costs 179-137 2021 (45.0) (0.4) (45.4) E-1, Page 29 31.Lobo C Compressor/Hamilton-Milton Pipeline Project Costs 179-142 2021 24.0 0.4 24.4 E-1, Page 41 32.Lobo D/Bright C/Dawn H Compressor Project Costs 179-144 2021 (112.1) (3.6) (115.7) E-1, Page 44 33.Burlington-Oakville Project Costs 179-149 2021 (51.0) (0.5) (51.5) E-1, Page 47 34.Panhandle Reinforcement Project Costs 179-156 2021 (3,162.0) (35.9) (3,197.9) E-1, Page 53 35.Sudbury Replacement Project 179-162 2021 - - - E-1, Page 58 36.Parkway Obligation Rate Variance 179-138 2021 - - - E-1, Page 58 37.Unauthorized Overrun Non-Compliance Account 179-143 2021 - - - E-1, Page 58 38.Pension and OPEB Forecast Accrual vs. Actual Cash Payment Di 179-157 2021 - (1,345.6) (1,345.6) E-1, Page 56 39.Unaccounted for Gas Volume Variance Account 179-135 2021 20,501.3 176.9 20,678.2 E-1, Page 31 40.Unaccounted for Gas Price Variance Account 179-141 2021 3,358.3 31.8 3,390.1 E-1, Page 38 41.Total Other Accounts 36,694.3 (977.8) 35,716.5 42.Total Union Rate Zones (for clearance) 47,305.4 (894.6) 46,410.8 EGI Accounts43.Earnings Sharing D/A 179-382 2021 - - - C-1, Page 1 44.Tax Variance - Accelerated CCA - EGI 179-383 2021 (19,162.6) (227.2) (19,389.8) C-1, Page 12 45.IRP Operating Costs Deferral Account 179-385 2021 57.7 0.5 58.2 C-1, Page 15 46.IRP Capital Costs Deferral Account 179-386 2021 - - - C-1, Page 1 47.Expansion of Natural Gas Distribution Systems V/A 179-380 2021 - - - C-1, Page 1 48.Total EGI Accounts (for clearance)(19,104.9) (226.7) (19,331.6) 49.Total Deferral and Variance Accounts (for clearance)61,240.5 (816.7) 60,423.8 Not Being Requested for Clearance50.Accounting Policy Changes D/A - Pension - EGI 179-120 2021 169,431.8 - 169,431.8 C-1, Page 2 51.Accounting Policy Changes D/A - Other - EGI 179-120 2019 (1,749.5) (52.8) (1,802.3) C-1, Page 2 52.Accounting Policy Changes D/A - Other - EGI 179-120 2020 (14,789.5) (249.4) (15,038.9) C-1, Page 2 53.Accounting Policy Changes D/A - Other - EGI 179-120 2021 (13,864.6) (168.8) (14,033.4) C-1, Page 2 54.Tax Variance - Integration Capital Additions - EGI 179-383 2020 (3,736.3) (28.6) (3,764.8) C-1, Page 12 55.Tax Variance - Integration Capital Additions - EGI 179-383 2021 (10,462.6) (80.0) (10,542.7) C-1, Page 12 56.Incremental Capital Module Deferral Account - EGD 2020 ICMDA 2020 (254.0) (3.2) (257.2) C-1, Page 1 57.Incremental Capital Module Deferral Account - EGD 2021 ICMDA 2021 175.5 2.0 177.5 C-1, Page 1 58.Incremental Capital Module Deferral Account - UGL 179-159 2019 (6,869.6) (196.1) (7,065.7) C-1, Page 1 59.Incremental Capital Module Deferral Account - UGL 179-159 2020 (5,615.4) (91.9) (5,707.2) C-1, Page 1 60.Incremental Capital Module Deferral Account - UGL 179-159 2021 (14,353.4) (147.2) (14,500.6) C-1, Page 1 61.Impacts Arising from the COVID-19 Emergency D/A - EGI 2020 IACEDA 2020 1,377.5 20.3 1,397.8 C-1, Page 1 62.Impacts Arising from the COVID-19 Emergency D/A - EGI 2021 IACEDA 2021 34.3 0.4 34.7 C-1, Page 1 63.Total of Accounts not being requested for clearance 99,324.2 (995.3) 98,328.9 January 1, 2023Forecast for clearance at ENBRIDGE GASDEFERRAL & VARIANCE ACCOUNTACTUAL & FORECAST BALANCES Page 188 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Page 1 of 5 2021 ENBRIDGE GAS INC. EARNINGS SHARING AMOUNT AND DETERMINATION PROCESS 1. For the year ended December 31, 2021, Enbridge Gas Inc. (Enbridge Gas, or the Company) is not in an earnings sharing position, as its achieved return on rate base and return on equity are below the threshold required for sharing. The earnings sharing calculation is shown at Exhibit B, Tab 1, Schedule 1, while supporting schedules that show the calculation of utility rate base, utility income and taxes, and the utility capital structure components, are contained in the balance of the B Exhibits. Exhibit B, Tab 1, Schedule 6 sets out a reconciliation of audited income to corporate income. 2. The earnings sharing amount was determined in accordance with the following prescribed methodology as identified within the EB-2017-0306/0307 OEB Decision and Order, dated August 30, 2018, at pages 28 and 29, and within the EB-2017-0306 pre-filed evidence at Exhibit B, Tab 1, at pages 42 and 43: • if in any calendar year during the deferred rebasing term, Enbridge Gas’s actual utility ROE is more than 150 basis points above the OEB-approved ROE for that year (updated annually by the OEB), then the resultant amount shall be shared equally (i.e., 50/50) between Enbridge Gas and its ratepayers; • for the purposes of the ESM, Enbridge Gas shall calculate its earnings using generally accepted accounting principles (GAAP) consistent with its external reporting, including the regulatory rules prescribed by the OEB from time to time; • all revenues and costs that would otherwise be included in a cost of service application shall be included in the earnings sharing calculation. Page 189 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Page 2 of 5 3. While the threshold or benchmark for Enbridge Gas’s earnings sharing has changed from that of each legacy utility1, the general process followed for calculating earnings sharing amounts is consistent with each utilities prior incentive regulation terms. 4. As articulated above, within Exhibit B, Tab 1, Schedule 1, the Company has calculated earnings for sharing in two ways for confirmation purposes. 5. In part A), a return on rate base method is shown, while in part B), a return on equity from a deemed equity embedded within rate base perspective is shown. Column 2 within the exhibit provides references indicating where additional evidence in support of the determination of the amounts in the calculation can be found. Column 3 contains results shown in millions of dollars, or percentages. 1. Part A) 6. The level of utility income, $846.5 million (Line 4) divided by the level of utility rate base, $14,216.1 million (Line 5) generates a utility return on rate base of 5.954% (Line 6). 7. When compared to the Company’s required rate of return for ESM determination, of 6.167% (Line 7), as determined within the capital structure required in support of the determined rate base amount (inclusive of the 150 basis point deadband on ROE before earnings sharing is triggered), there is a resulting deficiency of 0.213% (Line 8) on total rate base. 8. As shown in Lines 9 through 11, the deficiency of 0.213% multiplied by the rate base of $14,216.1 million, produces a net under earnings or deficiency of $30.3 million, which from a pre-tax perspective ($30.3 million divided by the reciprocal, 73.5%, of 1 Enbridge Gas Distribution Inc. (EGD) and Union Gas Limited (Union). Page 190 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Page 3 of 5 the corporate tax rate which is 26.5%), results in a $41.2 million gross amount of under earnings, and therefore nothing to be shared equally between ratepayers and the Company. Column 2 provides supporting evidence references. 2. Part B) (Confirming the Calculated Earnings Sharing) 9. Net utility income applicable to common equity is first determined. 10. The $889.6 million (Line 14) of utility income before income tax, less utility taxes of $43.1 million (Line 19), produces the $846.5 million of utility income used in part A) above (at Line 4). 11. In order to determine utility net income applicable to a deemed common equity percentage within rate base, all long term debt, short term debt and preference share costs must also be reduced against the part A) $846.5 million utility income. 12. These reductions are shown at Lines 15, 16 and 17 which, along with the utility income tax reduction already mentioned and shown at Line 19, results in a net income applicable to common equity of $473.3 million, shown at Line 20. 13. The $473.3 million, divided by the deemed common equity level of $5,117.8 million (Line 21, calculated as 36% of the $14,216.1 million rate base) produces a return on equity of 9.249% (Line 23). When comparing the 9.249% achieved return on equity to the threshold ROE percentage of 9.840% (Line 22), which is the OEB-approved formula return on equity for 2021 of 8.340% plus the 150 basis point deadband before sharing, there is a deficiency in ROE of 0.591% (Line 24). 14. The 0.591% multiplied by the common equity level of $5,117.8 million (Line 21) produces a net under earnings or deficiency of $30.3 million, which from a pre-tax perspective ($30.3 million divided by the reciprocal, 73.5%, of the corporate tax Page 191 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Page 4 of 5 rate), results in a $41.2 million gross amount of under earnings, and therefore nothing to be shared equally between ratepayers and the Company. Column 2 provides supporting evidence references. 3. Process Description 15. The calculation of utility earnings and any earnings sharing requirement starts with financial results contained within the Enbridge Gas corporate trial balance. The Company notes that corporate trial balance includes the elimination of transactions between each of the rate zones. This predominantly relates to the elimination of regulated and unregulated storage and transmission revenues that would have been reflected in the Union rate zones, offset by a corresponding elimination of gas costs that would have been reflected for the EGD rate zone. This reflects the fact that from a corporate perspective, EGD rate zone delivery revenues are contributing to the costs of Union rate zones regulated and unregulated storage and transmission services. 16. From there, in order to calculate the utility rate base, income, and capital structure results, and supporting evidence exhibits, various adjustments, regroupings or eliminations are required. This is accomplished by following and applying regulatory rules as prescribed by the OEB and the standards associated with cost of service rate related accounting processes. Examples are: • determination of rate base amounts using the average of monthly averages value concept, • elimination of corporate interest expense due to the treatment of interest expense as embedded in the capital structure balanced to rate base; and, • elimination of corporate income taxes due to the determination of income taxes specific to utility results. Page 192 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Page 5 of 5 17. In addition, Enbridge Gas has made the appropriate adjustments in relation to non- standard legacy EGD and Union rate regulated items which the OEB has either decided in the past or are required in order to determine an appropriate utility return on equity. Examples are: • rate base disallowance from EBRO 473 and 479 Decisions (Mississauga Southern Link project amounts), • exclusion of non-utility or unregulated activities; and, • elimination of approved shareholder incentives (such as Demand Side Management incentives, amounts related to Transactional Services, short- term storage, and net optimization incentives, and amounts related to Open Bill program incentives). Page 193 of 650 Col. 1 Col. 2 Col. 3 Line No.Description Reference Actual 1.Part A) Return on Rate Base & Revenue (Deficiency) / Sufficiency ($Millions) & (%'s) 2. Utility Income before Income Tax (Ex. B, Tab 1, Sch. 2)889.6 3. Less: Income Taxes (Ex. B, Tab 1, Sch. 3)43.1 4.Utility Income 846.5 5.Utility Rate Base (Ex. B, Tab 1, Sch. 4)14,216.1 6. Indicated Return on Rate Base %(line 4 / line 5)5.955% 7. Less: Required Rate of Return %(Ex. B, Tab 1, Sch. 5)6.167% 8.(Deficiency) / Sufficiency %-0.213% 9. Net Earnings (Deficiency) / Sufficiency (line 5 x line 8)(30.2) 10. Provision for Income Taxes (10.9) 11.Gross Earnings (Deficiency) / Sufficiency (line 9 / 73.5%)(41.1) 12.50% Earnings sharing to ratepayers (if line 11 > 1, line 11 x 50%)- 13.Part B) Return on Equity & Revenue (Deficiency) / Sufficiency 14. Utility Income before Income Tax (Ex. B, Tab 1, Sch. 2)889.6 15. Less: Long Term Debt Costs (Ex. B, Tab 1, Sch. 5)371.3 16. Less: Short Term Debt Costs (Ex. B, Tab 1, Sch. 5)1.9 17. Less: Cost of Preferred Capital (Ex. B, Tab 1, Sch. 5)0.0 18. Net Income before Income Taxes 516.5 19. Less: Income Taxes (Ex. B, Tab 1, Sch. 3)43.1 20.Net Income Applicable to Common Equity (line 18 - line 19)473.4 21. Common Equity (Ex. B, Tab 1, Sch. 5)5,117.8 22. Approved ROE (including deadband before earning sharing) % (Board-approved + 150bp)9.840% 23. Achieved Rate of Return on Equity %(line 20 / line 21)9.249% 24.Resulting (Deficiency) / Sufficiency in Return on Equity %-0.591% 25. Net Earnings (Deficiency) / Sufficiency (line 21 x line 24)(30.2) 26. Provision for Income Taxes (10.9) 27.Gross Earnings (Deficiency) / Sufficiency (line 25 / 73.5%)(41.1) 28.50% Earnings sharing to ratepayers (if line 27 > 1, line 27 x 50%)- FOR THE YEAR ENDED DECEMBER 31, 2021 SUMMARY RETURN ON RATE BASE & EQUITY & EARNINGS SHARING DETERMINATION ENBRIDGE GAS INC. ONTARIO UTILITY Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 1 Page 1 of 1 Page 194 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Unregulated Utility Corporate Storage Adjustments IncomeLineNo.Reference (a)(b)(c)(d) = (a)-(b)+(c) ($Millions) 1.Gas sales and distribution (Ex. B, Tab 2, Sch. 2)4,513.2 - (32.6) (i)4,480.6 2.Transportation (Ex. B, Tab 2, Sch. 3)143.0 0.4 (0.8) (ii)142.0 3.Storage (Ex. B, Tab 2, Sch. 3)159.7 153.6 (0.1) (iii)6.0 4.Other operating revenue (Ex. B, Tab 2, Sch. 4)64.3 1.8 (13.4) (iv)49.1 5.Other income (Ex. B, Tab 2, Sch. 4)7.2 - (6.3) (viii)0.9 6.Total operating revenue 4,887.4 155.8 (53.1) 4,678.5 7.Gas costs 2,146.2 20.2 (15.4) (i)2,110.6 8.Operation and maintenance (Ex. B, Tab 3, Sch. 1)938.6 18.5 (4.0) (v)916.2 9.Depreciation and amortization expense 676.8 14.9 (22.6) (vi)639.3 10. Fixed financing costs 6.3 - 0.5 (vii)6.8 11.Municipal and other taxes 117.9 1.8 - 116.1 12.Cost of service 3,885.8 55.4 (41.5) 3,788.9 13.Utility income before income taxes 889.6 14.Income tax expense (Ex. B, Tab 1, Sch. 3)43.1 15. Utility income 846.5 Notes on Adjustments: (i)Reclassification of Union rate zone optimization revenue as a cost of gas reduction (15.4) Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.2) (32.6) (ii)(0.8) (iii)Elimination of the Union rate zone shareholder portion of net short-term storage revenue (before tax)(0.1) (iv)(4.3) Elimination of EGD rate zone Open Bill shareholder incentive 0.3 Elimination of EGD rate zone shareholder portion of transactional service revenues (1.8) Elimination of demand-side management incentive (6.9) Elimination of EGD rate zone net revenue from ABC T-service, considered to be non-utility (0.8) (13.4) (v)Elimination of donations (3.6) Elimination of EB-2021-0204 Assurance of Voluntary Compliance amount (0.1) Elimination of non-utility costs and expenses relating to support of the EGD rate zone ABC T-service program (0.3) (4.0) (vi)Eliminate amortization of PPD (purchase price discrepancy)(22.5) Eliminate depreciation on disallowed Mississauga Southern Link amounts (EBRO 473 & 479)(0.1) (22.6) (vii) 0.5 (viii)Elimination of interest income from investments not included in utility rate base (0.1) Elimination of interest income from affiliates (1.6) (4.6) (6.3) EGI UTILITY INCOME 2021 ACTUAL Elimination of the Union rate zone shareholder portion of net optimization activity (before tax) Interest on security deposits held during the year and included in elimination of corporate interest exp. Expense incurred to reduce bad debt. The average amount of the security deposit held during the year is applied as a reduction to the allowance for working capital in rate base Elimination of the revenue indemnification received from Enbridge Inc. related to a non-utility Corporate tax planning Part VI.1 tax transfer to EGI Adjust EGD rate zone OBA costs to reflect EB-2013-0099 approved unit costs agreed to be used for determining net revenue Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 2 Page 1 of 1 Page 195 of 650 Col. 1 Col. 2 Col. 3 Line No.Federal Provincial Combined ($Millions) ($Millions) ($Millions) 1. Utility income before income taxes 889.6 889.6 Add 2. Depreciation and amortization 639.3 639.3 3. Accrual based pension and OPEB costs 37.6 37.6 4. Other non-deductible items 0.3 0.3 5. Total Add Back 677.2 677.2 6. Sub-total 1,566.9 1,566.9 Deduct 7. Capital cost allowance 829.4 829.4 8. Items capitalized for regulatory purposes 152.9 152.9 9. Amortization of share/debenture issue expense 0.4 0.4 10. Amortization of C.D.E. and C.O.G.P.E - - 11. Other 6.3 6.3 12. Cash based pension and OPEB costs 42.1 42.1 13. Total Deduction 1,031.1 1,031.1 14. Taxable income 535.8 535.8 15. Income tax rates 15.00% 11.50% 16. Tax provision excluding interest shield 80.4 61.6 142.0 Tax shield on interest expense 17. Rate base 14,216.1 18. Return component of debt 2.62% 19. Interest expense 373.1 20. Combined tax rate 26.50% 21. Income tax credit (98.9) 22. Total utility income taxes 43.1 CALCULATION OF EGI UTILITY TAXABLE INCOME AND INCOME TAX EXPENSE 2021 ACTUAL Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 3 Page 1 of 1 Page 196 of 650 Col. 1 Col. 2 Line 2021 2020 No.Actual Actual ($Millions) ($Millions) Property, Plant, and Equipment 1. Gross property, plant, and equipment 21,522.4 20,582.1 2. Accumulated depreciation (7,994.0) (7,571.2) 3. Net property, plant, and equipment 13,528.4 13,010.8 Allowance for Working Capital 4. Materials and supplies 92.5 82.2 5. ABC receivable (15.5) (22.3) 6. Customer security deposits (68.9) (81.8) 7. Prepaid expenses 4.7 3.1 8. Balancing gas 59.5 59.5 9. Gas in storage 594.7 487.5 10. Working cash allowance 20.9 23.0 11. Total Working Capital 687.7 551.2 12. Utility Rate Base 14,216.1 13,562.0 2021 ACTUAL EGI UTILITY RATE BASE Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 1 of 8 Page 197 of 650 Col. 1 Col. 2 Col. 3 Gross Net Property,Property, Line Plant, and Accumulated Plant, and No.Equipment Depreciation Equipment ($Millions) ($Millions) ($Millions) EGD Rate Zone 1. Underground storage plant 485.6 (148.5) 337.1 2. Distribution plant 9,640.8 (3,070.8) 6,570.0 3. General plant 660.6 (493.6) 167.0 4. Plant held for future use 1.7 (1.4) 0.2 5.EGD Rate Zone Total 10,788.6 (3,714.3) 7,074.3 Union Rate Zones 6. Intangible plant 1.7 (1.3) 0.4 7. Local storage plant 32.0 (17.8) 14.2 8. Underground storage plant 831.3 (335.4) 495.9 9. Transmission plant 3,767.4 (1,188.6) 2,578.8 10. Distribution plant - Southern operations 3,529.2 (1,515.5) 2,013.7 11. Distribution plant - Northern and Eastern operations 2,134.6 (980.1) 1,154.5 12. General plant 437.6 (241.0) 196.7 13.Union Rate Zones Total 10,733.8 (4,279.7) 6,454.1 14.EGI Total 21,522.4 (7,994.0) 13,528.4 EGI UTILITY PROPERTY, PLANT, AND EQUIPMENT SUMMARY STATEMENT - AVERAGE OF MONTHLY AVERAGES 2021 ACTUAL Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 2 of 8 Page 198 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Opening Closing Utility Average of Line Balance Balance Regulatory Balance Monthly No.Dec.2020 Additions Retirements Dec.2021 Adjustment Dec.2021 Averages ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) EGD Rate Zone Underground Storage Plant 1. Land and gas storage rights (450/451)47.6 1.3 - 48.9 (1.0) 47.9 46.6 2. Structures and improvements (452)31.5 0.6 - 32.1 (0.1) 32.0 31.5 3. Wells (453)70.0 22.4 - 92.4 - 92.4 71.0 4. Well equipment (454)12.6 0.7 - 13.4 - 13.4 12.7 5. Field Lines (455)115.4 12.3 - 127.7 - 127.7 115.9 6. Compressor equipment (456)159.7 36.4 - 196.2 (0.5) 195.7 164.3 7. Measuring and regulating equipment (457)11.2 - - 11.2 - 11.2 11.2 8. Base pressure gas (458)32.4 - - 32.4 - 32.4 32.4 9. Sub-Total 480.5 73.8 - 554.3 (1.5) 552.7 485.6 EGD Rate Zone Distribution Plant 10. Renewable Natural Gas (461)- - - - - - - 11. Land (470)53.7 0.5 - 54.2 - 54.2 54.0 12. Offers to purchase (470)- - - - - - - 13. Land rights intangibles (471)63.8 - - 63.8 - 63.8 63.8 14. Structures and improvements (472)151.0 47.1 (4.7) 193.4 (0.3) 193.1 155.1 15. Services, house reg & meter install. (473/474) 3,306.0 204.9 (9.9) 3,501.0 - 3,501.0 3,372.2 16. Mains (475)4,727.4 158.0 73.5 4,958.8 (2.2) 4,956.6 4,780.5 17. NGV station compressors (476)5.5 (0.3) - 5.2 - 5.2 5.2 18. Measuring and regulating equip. (477)684.7 22.6 (8.8) 698.5 (0.5) 698.0 693.5 19. Meters (478)519.6 29.0 (21.3) 527.3 - 527.3 516.5 20. Sub-Total 9,511.7 461.7 28.9 10,002.2 (3.1) 9,999.2 9,640.8 EGD Rate Zone General Plant 21. Lease improvements (482)0.1 (0.0) - 0.1 (0.2) (0.1) (0.1) 22. Office furniture and equipment (483)21.0 (0.2) - 20.7 - 20.7 20.5 23. Transportation equipment (484)61.7 5.1 (1.4) 65.4 (0.1) 65.4 59.4 24. NGV conversion kits (484)2.9 (0.0) - 2.9 - 2.9 2.8 25. Heavy work equipment (485)20.2 2.9 - 23.1 - 23.1 20.3 26. Tools and work equipment (486)59.3 0.6 - 59.8 - 59.8 58.4 27. Rental equipment (487)1.8 (0.0) - 1.8 - 1.8 1.8 28. NGV rental compressors (487)20.2 (12.4) - 7.8 - 7.8 19.2 29. NGV cylinders (484 and 487)1.0 (0.4) - 0.6 - 0.6 0.6 30. Communication structures & equip. (488)3.7 (0.1) (1.8) 1.8 - 1.8 2.6 31. Computer equipment (490)32.1 2.3 (7.2) 27.1 - 27.1 30.3 32. Software Aquired/Developed (491)254.3 3.5 (23.5) 234.2 - 234.2 243.4 33. CIS (491)127.1 10.9 (124.1) 13.8 - 13.8 111.2 34. WAMS (489)92.1 (2.2) - 89.9 - 89.9 90.0 35. Sub-Total 697.4 9.8 (158.0) 549.2 (0.3) 548.9 660.6 EGI UTILITY GROSS PLANT YEAR END BALANCES AND AVERAGE OF MONTHLY AVERAGES 2021 ACTUAL Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 3 of 8 Page 199 of 650 EGD Rate Zone Plant held for future use 36. Inactive services (102)1.7 - - 1.7 - 1.7 1.7 37. EGD Rate Zone Total 10,691.2 545.3 (129.1) 11,107.3 (4.8) 11,102.5 10,788.6 Union Rate Zones Intangible Plant 38. Franchises and consents (401)1.2 - - 1.2 - 1.2 1.2 39. Other intangible plant (402)0.5 - - 0.5 - 0.5 0.5 40. Sub-Total 1.7 - - 1.7 - 1.7 1.7 Union Rate Zones Local Storage Plant 41. Land (440)0.0 - - 0.0 - 0.0 0.0 42. Structures and improvements (442)5.2 0.7 - 5.9 - 5.9 5.2 43. Gas holders - storage (443)4.6 0.8 - 5.4 - 5.4 4.6 44. Gas holders - equipment (443)20.2 0.0 - 20.2 - 20.2 20.2 45. Regulatory Overheads 1.8 0.3 - 2.1 - 2.1 1.9 46. Sub-Total 31.8 1.8 - 33.6 - 33.6 32.0 Union Rate Zones Underground Storage Plant 47. Land (450)7.2 2.4 - 9.6 - 9.6 7.3 48. Land rights (451)32.0 - - 32.0 - 32.0 32.0 49. Structures and improvements (452)69.3 0.9 - 70.2 - 70.2 69.4 50. Wells (453)48.0 1.1 - 49.1 - 49.1 48.5 51. Field Lines (455)50.6 0.5 - 51.1 - 51.1 50.8 52. Compressor equipment (456)470.1 2.9 - 473.0 - 473.0 470.6 53. Measuring and regulating equipment (457)86.4 (23.6) - 62.8 - 62.8 85.5 54. Base pressure gas (458)36.2 - - 36.2 - 36.2 36.2 55. Regulatory Overheads 18.1 3.6 - 21.7 - 21.7 19.4 56. Sub-Total 817.9 (12.1) - 805.8 - 805.8 819.7 Union Rate Zones Transmission Plant 57. Land (460)82.2 2.5 - 84.7 - 84.7 82.6 58. Land rights (461)67.5 0.9 - 68.3 - 68.3 67.6 59. Structures & improvements (462/463/464)166.3 0.8 - 167.1 - 167.1 166.3 60. Mains (465)1,954.5 61.9 (4.1) 2,012.3 - 2,012.3 1,963.6 61. Compressor equipment (466)942.6 3.0 - 945.7 - 945.7 943.4 62. Measuring & regulating equipment (467)321.0 45.0 - 366.0 - 366.0 325.7 63. Line Pack Gas 7.5 0.0 - 7.5 - 7.5 7.5 64. Regulatory Overheads 200.1 31.4 - 231.5 - 231.5 210.7 65. Sub-Total 3,741.6 145.5 (4.1) 3,883.1 - 3,883.1 3,767.4 Union Rate Zones Distribution Plant - Southern Operations 66. Land (470)12.6 4.1 - 16.7 - 16.7 15.3 67. Land rights (471)8.9 0.2 - 9.1 - 9.1 8.9 68. Structures and improvements (472)139.6 6.6 - 146.2 - 146.2 140.9 69. Services - metallic (473)128.4 2.4 (0.3) 130.5 - 130.5 129.2 70. Services - plastic (473)956.7 41.1 (1.8) 996.0 - 996.0 974.7 71. Regulators (474)97.1 13.4 (5.8) 104.8 - 104.8 102.6 72. House regulators & meter installations (474)76.9 10.3 - 87.2 - 87.2 78.1 73. Mains - metallic (475)581.8 103.5 (0.9) 684.3 - 684.3 598.0 74. Mains - plastic (475)706.4 44.4 (0.5) 750.3 - 750.3 721.0 75. Measuring & regulating equipment (477)60.3 13.1 - 73.4 - 73.4 61.4 76. Meters (478)373.3 21.4 (3.3) 391.4 - 391.4 380.8 77. Regulatory Overheads 315.2 40.4 - 355.6 - 355.6 329.9 78. Sub-total 3,457.2 300.8 (12.7) 3,745.4 - 3,745.4 3,540.8 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 4 of 8 Page 200 of 650 Union Rate Zones Distribution Plant - Northern & Eastern Operations 79. Land (470)5.0 0.3 - 5.3 - 5.3 5.2 80. Land rights (471)10.6 0.3 - 10.9 - 10.9 10.7 81. Structures and improvements (472)68.6 2.9 - 71.4 - 71.4 69.1 82. Services - metallic (473)110.1 1.4 (0.2) 111.2 - 111.2 110.5 83. Services - plastic (473)489.6 17.0 (0.8) 505.8 - 505.8 495.6 84. Regulators (474)39.0 0.8 (2.1) 37.7 - 37.7 39.2 85. House regulators & meter installations (474)41.5 0.7 - 42.3 - 42.3 41.7 86. Mains - metallic (475)680.5 40.2 (0.8) 719.9 - 719.9 688.0 87. Mains - plastic (475)238.7 7.9 (0.2) 246.3 - 246.3 240.5 88. Measuring & regulating equipment (477)151.3 4.2 - 155.5 - 155.5 152.2 89. Meters (478)96.8 6.3 (0.9) 102.2 - 102.2 97.3 90. Regulatory Overheads 173.1 32.5 - 205.6 - 205.6 184.5 91. Sub-total 2,104.7 114.4 (5.0) 2,214.1 - 2,214.1 2,134.6 Union Rate Zones General Plant 92. Land (480)0.5 - - 0.5 - 0.5 0.5 93. Structures & improvements (482)73.8 16.3 - 90.2 - 90.2 78.4 94. Office furniture and equipment (483)10.1 0.0 (0.9) 9.3 - 9.3 10.0 95. Office equipment - computers (483)129.2 53.0 (69.1) 113.1 - 113.1 140.1 96. Transportation equipment (484)64.6 6.4 (5.1) 65.9 - 65.9 64.7 97. Heavy work equipment (485)19.2 2.3 (0.5) 21.0 - 21.0 19.3 98. Tools and work equipment (486)39.2 2.2 (6.1) 35.3 - 35.3 38.8 99. NGV fuel equipment (487)3.2 1.3 - 4.5 - 4.5 3.3 100. Communication equipment (488)14.3 0.1 (4.9) 9.4 - 9.4 13.0 101. Regulatory Overheads 64.3 15.8 (9.8) 70.3 - 70.3 69.4 102. Sub-total 418.6 97.4 (96.5) 419.5 - 419.5 437.6 103. Union Rate Zones Total 10,573.6 647.9 (118.3) 11,103.2 - 11,103.2 10,733.8 104. EGI Total 21,264.7 1,193.2 (247.4) 22,210.5 (4.8) 22,205.7 21,522.4 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 5 of 8 Page 201 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Opening Costs Closing Utility Average of Line Balance Net of Balance Regulatory Balance Monthly No.Dec.2020 Additions Retirements Proceeds Dec.2021 Adjustment Dec.2021 Averages ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) EGD Rate Zone Underground Storage Plant 1. Land and gas storage rights (451)(26.6) (0.5) - - (27.1) - (27.1) (26.8) 2. Structures and improvements (452)(2.3) (0.6) - - (2.9) 0.1 (2.8) (2.5) 3. Wells (453)(14.3) (1.2) - - (15.5) - (15.5) (14.8) 4. Well equipment (454)(7.8) (0.8) - - (8.6) - (8.6) (8.1) 5. Field Lines (455)(32.2) (1.8) - - (34.0) - (34.0) (33.1) 6. Compressor equipment (456)(53.2) (4.5) - - (57.7) 0.3 (57.4) (55.0) 7. Measuring and regulating equipment (457)(7.9) (0.3) - - (8.3) - (8.3) (8.1) 8.Sub-Total (144.2) (9.7) - - (154.0) 0.3 (153.6) (148.5) EGD Rate Zone Distribution Plant 9. Renewable Natural Gas (461)- - - - - - - - 10. Land rights intangibles (471)(5.7) (0.8) - - (6.5) - (6.5) (6.1) 11. Structures and improvements (472)(42.9) (10.2) 4.7 - (48.3) 0.3 (48.0) (42.7) 12.Services, house reg & meter install. (473/474)(1,104.3) (76.4) 9.9 28.4 (1,142.4) - (1,142.4) (1,126.2) 13. Mains (475)(1,295.9) (109.4) (73.5) 16.9 (1,461.9) 2.2 (1,459.7) (1,322.2) 14. NGV station compressors (476)(3.3) (0.3) - - (3.6) - (3.6) (3.4) 15. Measuring and regulating equip. (477)(252.4) (15.1) 8.8 0.7 (257.9) 0.5 (257.4) (254.4) 16. Meters (478)(303.2) (41.0) 21.3 0.0 (323.0) - (323.0) (315.7) 17.Sub-Total (3,007.7) (253.1) (28.9) 46.1 (3,243.6) 3.0 (3,240.5) (3,070.8) EGD Rate Zone General Plant 18. Lease improvements (482)(0.1) 0.0 - - (0.1) 0.2 0.1 0.1 19. Office furniture and equipment (483)(12.6) (1.9) - - (14.4) - (14.4) (13.4) 20. Transportation equipment (484)(32.2) (5.3) 1.4 (0.1) (36.3) 0.1 (36.3) (33.7) 21. NGV conversion kits (484)0.4 (0.3) - - 0.2 - 0.2 0.3 22. Heavy work equipment (485)(6.0) (0.6) - - (6.6) - (6.6) (6.3) 23. Tools and work equipment (486)(22.3) (1.9) - - (24.1) - (24.1) (23.0) 24. Rental equipment (487)(1.1) 0.0 - - (1.1) - (1.1) (1.1) 25. NGV rental compressors (487)(2.7) 0.2 - - (2.4) - (2.4) (3.3) 26. NGV cylinders (484 and 487)(0.5) (0.0) - - (0.5) - (0.5) (0.5) 27. Communication structures & equip. (488)(1.4) (0.2) 1.8 - 0.1 - 0.1 (0.6) 28. Computer equipment (490)(31.6) (1.9) 7.2 - (26.4) - (26.4) (29.8) 29. Software Aquired/Developed (491)(229.9) (6.9) 23.5 - (213.3) - (213.3) (230.5) 30. CIS (491)(127.1) (18.3) 124.1 - (21.3) - (21.3) (109.9) 31. WAMS (489)(38.4) (8.1) - - (46.4) - (46.4) (42.0) 32.Sub-Total (505.5) (45.2) 158.0 (0.1) (392.7) 0.3 (392.5) (493.6) EGD Rate Zone Plant held for future use 33. Inactive services (102)(1.4) (0.0) - - (1.4) - (1.4) (1.4) 34.EGD Rate Zone Total (3,658.8) (308.0) 129.1 46.0 (3,791.7) 3.6 (3,788.1) (3,714.3) Union Rate Zones Intangible Plant 35. Franchises and consents (401)(0.9) (0.1) - - (1.0) - (1.0) (1.0) 36. Other intangible plant (402)(0.3) (0.2) - - (0.5) - (0.5) (0.3) 37.Sub-Total (1.2) (0.3) - - (1.5) - (1.5) (1.3) EGI UTILITY PLANT CONTINUITY OF ACCUMULATED DEPRECIATION YEAR END BALANCES AND AVERAGE OF MONTHLY AVERAGES 2021 ACTUAL Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 6 of 8 Page 202 of 650 Union Rate Zones Local Storage Plant 38. Structures and improvements (442)(2.7) (0.1) - 0.2 (2.7) - (2.7) (2.7) 39. Gas holders - storage (443)(3.8) (0.1) - - (3.9) - (3.9) (3.9) 40. Gas holders - equipment (443)(10.3) (0.7) - 0.0 (11.0) - (11.0) (10.6) 41. Regulatory Overheads (0.5) (0.1) - - (0.6) - (0.6) (0.5) 42.Sub-Total (17.3) (1.0) - 0.2 (18.2) - (18.2) (17.8) Union Rate Zones Underground Storage Plant 43. Land rights (451)(18.1) (0.7) - - (18.8) - (18.8) (18.4) 44. Structures and improvements (452)(42.1) (1.7) - - (43.9) - (43.9) (43.0) 45. Wells (453)(33.0) (1.2) - - (34.2) - (34.2) (33.6) 46. Field Lines (455)(28.4) (1.2) - - (29.6) - (29.6) (29.1) 47. Compressor equipment (456)(155.6) (12.6) - 0.0 (168.2) - (168.2) (161.9) 48. Measuring & regulating equipment (457)(44.3) 1.2 - 0.1 (43.0) - (43.0) (45.4) 49. Regulatory Overheads (3.6) (0.5) - - (4.1) - (4.1) (4.0) 50.Sub-Total (325.1) (16.7) - 0.1 (341.7) - (341.7) (335.4) Union Rate Zones Transmission Plant 51. Land rights (461)(18.1) (1.2) - - (19.3) - (19.3) (18.7) 52. Structures & improvements (462/463/464)(43.5) (3.4) - 0.1 (46.8) - (46.8) (45.1) 53. Mains (465)(662.8) (38.9) 4.1 0.4 (697.3) - (697.3) (682.0) 54. Compressor equipment (466)(293.9) (30.5) - 0.0 (324.3) - (324.3) (309.1) 55. Measuring & regulating equipment (467)(104.0) (12.2) - 0.0 (116.2) - (116.2) (108.4) 56. Regulatory Overheads (22.8) (5.2) - - (28.0) - (28.0) (25.3) 57.Sub-Total (1,145.1) (91.4) 4.1 0.5 (1,231.9) - (1,231.9) (1,188.6) Union Rate Zones Distribution Plant - Southern Operations 58. Land rights (471)(2.3) (0.1) - - (2.4) - (2.4) (2.3) 59. Structures and improvements (472)(44.3) (3.1) - 0.0 (47.4) - (47.4) (45.8) 60. Services - metallic (473)(107.3) (3.6) 0.3 1.8 (108.8) - (108.8) (108.7) 61. Services - plastic (473)(428.6) (24.5) 1.8 6.8 (444.5) - (444.5) (437.2) 62. Regulators (474)(41.7) (4.8) 5.8 - (40.8) - (40.8) (43.1) 63. House regulators & meter installations (474) (30.1) (2.2) - 0.0 (32.3) - (32.3) (31.2) 64. Mains - metallic (475)(363.6) (16.8) 0.9 3.6 (375.9) - (375.9) (370.5) 65. Mains - plastic (475)(285.4) (16.6) 0.5 0.5 (300.9) - (300.9) (293.3) 66. Measuring & regulating equipment (477)(21.5) (2.4) - 0.3 (23.6) - (23.6) (22.4) 67. Meters (478)(106.8) (14.5) 3.3 (0.1) (118.0) - (118.0) (112.0) 68. Regulatory Overheads (44.5) (9.4) - - (53.9) - (53.9) (48.9) 69.Sub-Total (1,476.1) (98.1) 12.7 13.1 (1,548.5) - (1,548.5) (1,515.5) Union Rate Zones Distribution Plant - Northern & Eastern Operations 70. Land rights intangibles (471)(4.3) (0.2) - - (4.5) - (4.5) (4.4) 71. Structures and improvements (472)(26.7) (1.7) - - (28.3) - (28.3) (27.5) 72. Services - metallic (473)(78.6) (3.6) 0.2 0.5 (81.4) - (81.4) (80.2) 73. Services - plastic (473)(219.0) (12.9) 0.8 0.4 (230.7) - (230.7) (225.3) 74. Regulators (474)(15.6) (1.8) 2.1 (0.0) (15.3) - (15.3) (16.1) 75. House regulators & meter installations (474) (16.5) (1.2) - 0.0 (17.7) - (17.7) (17.1) 76. Mains - metallic (475)(348.4) (20.7) 0.8 1.5 (366.9) - (366.9) (358.3) 77. Mains - plastic (475)(114.2) (5.7) 0.2 0.0 (119.6) - (119.6) (117.0) 78. Measuring & regulating equipment (477)(77.3) (5.7) - 0.3 (82.7) - (82.7) (80.0) 79. Meters (478)(25.5) (3.9) 0.9 0.0 (28.6) - (28.6) (26.9) 80. Regulatory Overheads (24.8) (5.2) - - (30.0) - (30.0) (27.3) 81.Sub-Total (950.9) (62.7) 5.0 2.7 (1,005.9) - (1,005.9) (980.1) Union Rate Zones General Plant 82. Structures & improvements (482)(15.7) (1.6) - - (17.3) - (17.3) (16.5) 83. Office furniture and equipment (483)(6.4) (0.7) 0.9 0.0 (6.2) - (6.2) (6.6) 84. Office equipment - computers (483)(90.5) (25.2) 69.1 - (46.6) - (46.6) (96.3) 85. Transportation equipment (484)(48.1) (8.7) 5.1 (1.2) (52.8) - (52.8) (50.8) 86. Heavy work equipment (485)(5.3) (1.3) 0.5 - (6.2) - (6.2) (5.8) 87. Tools and work equipment (486)(20.8) (2.4) 6.1 - (17.2) - (17.2) (21.1) 88. NGV fuel equipment (487)(1.4) (0.1) - - (1.6) - (1.6) (1.5) 89. Communication equipment (488)(9.4) (0.7) 4.9 - (5.1) - (5.1) (8.5) 90. Regulatory Overheads (31.0) (6.3) 9.8 - (27.5) - (27.5) (33.9) 91.Sub-Total (228.7) (47.1) 96.5 (1.2) (180.5) - (180.5) (241.0) 92.Union Rate Zones Total (4,144.3) (317.4) 118.3 15.4 (4,328.1) - (4,328.1) (4,279.7) 93.EGI Total (7,803.2) (625.4) 247.4 61.4 (8,119.8) 3.6 (8,116.2) (7,994.0) Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 7 of 8 Page 203 of 650 EGI WORKING CAPITAL COMPONENTS MONTH END BALANCES AND AVERAGE OF MONTHLY AVERAGES 2021 ACTUAL Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Materials Customer Working Line and ABC Security Prepaid Balancing Gas in Cash No.Supplies Receivable Deposits Expenses Gas Storage Allowance Total ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) 1. January 1 87.5 (14.7) (78.3) (0.4) 59.5 657.3 20.9 731.8 2. January 31 88.2 (9.5) (71.3) (11.0) 59.5 558.1 20.9 634.7 3. February 88.6 (15.2) (71.2) (4.0) 59.5 426.1 20.9 504.6 4. March 89.8 (34.9) (71.3) 3.7 59.5 325.3 20.9 392.8 5. April 92.4 (26.5) (71.2) 7.0 59.5 308.0 20.9 389.9 6. May 92.8 (25.6) (72.4) 6.7 59.5 360.6 20.9 442.4 7. June 94.4 (31.1) (66.2) 7.5 59.5 475.2 20.9 560.1 8. July 95.7 (15.3) (66.6) 4.0 59.5 569.9 20.9 668.0 9. August 98.4 (9.2) (66.7) 9.0 59.5 664.2 20.9 776.0 10. September 91.9 (12.2) (66.0) 11.8 59.5 762.0 20.9 867.8 11. October 93.4 2.2 (65.8) 13.3 59.5 984.0 20.9 1,107.4 12. November 94.8 3.5 (65.9) 8.6 59.5 926.4 20.9 1,047.7 13. December 91.4 (10.0) (65.1) (0.8) 59.5 895.1 20.9 990.9 14. Avg. of monthly avgs. 92.5 (15.5) (68.9) 4.7 59.5 594.7 20.9 687.7 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 4 Page 8 of 8 Page 204 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 (Col. 1x Col. 3) Line Return Interest No.Principal Component Cost Rate Component & Return ($Millions) %%%($Millions) 1. Long and Medium-Term Debt 8,505.3 59.83 4.37 2.612 371.3 2. Short-Term Debt 593.1 4.17 0.31 0.013 1.9 3. Total Debt 9,098.3 64.00 2.625 4. Preference Shares - - - - - 5. Common Equity 5,117.8 36.00 9.84 3.542 503.6 6.Total Rate Base 14,216.1 100.00 6.167 876.7 EGI SUMMARY OF CAPITAL STRUCTURE & COST OF CAPITAL 2021 ACTUAL Utility Capital Structure Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 5 Page 1 of 4 Page 205 of 650 CALCULATION OF COST RATES FOR EGI CAPITAL STRUCTURE COMPONENTS 2021 ACTUAL Col. 1 Col. 2 Col. 3 Average of Line Monthly Carrying No.Averages Cost ($Millions)($Millions) Long and Medium-Term Debt 1. Debt Summary 8,833.5 381.1 2. Unamortized Finance Costs (103.3) - 3. (Profit)/Loss on Redemption - - 4.8,730.2 381.1 5. Percentage Allocation of Debt to Unregulated 2.58%(224.9) (9.8) 6.Net Regulated Long and Medium-Term Debt 8,505.3 371.3 7.Calculated Cost Rate 4.37% Short-Term Debt 8.Calculated Cost Rate 0.31% Preference Shares 9. Preference Share Summary - - 10. Unamortized Finance Costs - - 11. (Profit)/Loss on Redemption - - 12.- - 13.Calculated Cost Rate 0.00% Common Equity 14. Board Formula ROE 8.34% 15. Threshold before earnings sharing 1.50% 16.ROE for earnings sharing determination 9.84% Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 5 Page 2 of 4 Page 206 of 650 EGI SUMMARY STATEMENT OF PRINCIPAL AND CARRYING COST OF TERM DEBT 2021 ACTUAL Col. 1 Col. 2 Col. 3 Average of Line Coupon Monthly Averages Effective Carrying No. Rate Maturity Date Principal Cost Rate Cost ($Millions)($Millions) Medium Term Notes 1. 8.85% October 2, 2025 20.0 8.97%1.8 2. 7.60% October 29, 2026 100.0 8.09%8.1 3. 6.65% November 3, 2027 100.0 6.71%6.7 4. 6.10% May 19, 2028 100.0 6.16%6.2 5. 6.05% July 5, 2023 100.0 6.38%6.4 6. 6.90% November 15, 2032 150.0 6.95%10.4 7. 6.16% December 16, 2033 150.0 6.18%9.3 8. 5.21% February 25, 2036 300.0 5.18%15.5 9. 4.77% December 17, 2021 167.7 5.31%8.9 10. 4.95% November 22, 2050 200.0 4.99%10.0 11. 4.95% November 22, 2050 100.0 4.73%4.7 12. 4.50% November 23, 2043 200.0 4.20%8.4 13. 3.15% August 22, 2024 215.0 3.24%7.0 14. 4.00% August 22, 2044 215.0 3.89%8.4 15. 4.00% August 22, 2044 170.0 4.44%7.5 16. 3.31% September 11, 2025 400.0 3.62%14.5 17. 2.50% August 5, 2026 300.0 3.42%10.3 18. 3.51% November 29, 2047 300.0 3.53%10.6 19. 2.37% August 9, 2029 400.0 3.23%12.9 20. 3.01% August 9, 2049 300.0 3.03%9.1 21. 2.90% April 1, 2030 600.0 3.41%20.4 22. 3.65% April 1, 2050 600.0 3.67%22.0 23. 2.35% September 1, 2031 138.5 2.94%4.1 24. 3.20% September 1, 2051 124.0 3.22%4.0 25. 8.65% November 10, 2025 125.0 8.77%11.0 26. 5.46% September 11, 2036 165.0 5.49%9.1 27. 4.85% April 25, 2022 125.0 4.91%6.1 28. 6.05% September 2, 2038 300.0 6.10%18.3 29. 5.20% July 23, 2040 250.0 5.27%13.2 30. 4.88% June 21, 2041 300.0 4.92%14.8 31. 3.79% July 10, 2023 250.0 3.87%9.7 32. 2.76% June 2, 2021 83.3 2.85%2.4 33. 4.20% June 2, 2044 250.0 4.24%10.6 34. 4.20% June 2, 2044 250.0 4.27%10.7 35. 3.19% September 17, 2025 200.0 3.26%6.5 36. 2.81% June 1, 2026 250.0 2.87%7.2 37. 3.80% June 1, 2046 250.0 3.84%9.6 38. 3.59% November 22, 2047 250.0 3.64%9.1 39. 2.88% November 22, 2027 250.0 2.95%7.4 40.8,748.5 372.7 Long-Term Debentures 41. 9.85% December 2, 2024 85.0 9.910%8.4 42.85.0 8.4 43. Total Term Debt 8,833.5 381.1 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 5 Page 3 of 4 Page 207 of 650 EGI UNAMORTIZED DEBT DISCOUNT AND EXPENSE AVERAGE OF MONTHLY AVERAGES 2021 ACTUAL Col. 1 Unamortized Line Debt Discount No.and Expense ($Millions) 1. January 1 100.9 2. January 31 99.8 3. February 98.8 4. March 97.7 5. April 96.7 6. May 95.6 7. June 94.6 8. July 93.5 9. August 92.5 10. September 121.8 11. October 120.5 12. November 119.2 13. December 118.1 14. Average of Monthly Averages 103.3 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 5 Page 4 of 4 Page 208 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Audited Corporate Income Income Line no. ($ millions) (as per Financial Statements) (as per Utility Income Schedule) Variance Reference Operating Revenues 1.Gas sales and distribution 3,996.4 4,513.2 2.Storage, transportation and other 896.7 - 3.Transportation - 143.0 4.Storage - 159.7 5.Other operating revenue - 64.3 6.Other Income 42.9 7.2 7.Total operating revenue 4,936.0 4,887.4 (48.6) (a) Operating Expenses 8.Gas Costs 2,146.2 2,146.2 - 9.Operation and maintenance 1,105.1 938.6 (166.5) (b) 10.Depreciation and amortization expense 676.8 676.8 - 11.Fixed financing costs - 6.3 6.3 (c) 12.Municipal and other taxes - 117.9 117.9 (d) 13.Cost of service 3,928.1 3,885.8 (42.3) 14.Income before interest and income taxes 1,007.9 1,001.6 (6.3) 15.Interest and financing expenses 393.9 - (393.9) (e) 16.Income before income taxes 614.0 1,001.6 387.6 17.Income taxes 62.9 - (62.9) (f) 18. Net Income 551.1 1,001.6 450.5 Col. 2 - Corporate income as reported in Exhibit B, Tab 1, Schedule 2, Column 1 a)Audited Total Operating Revenue 4,936.0 Reclassify pension related other revenue to O&M (36.0) Reclassify EGD rate zone Open Bill and ABC T-service O&M against program revenues in other revenue (12.8) Reclassify other expenses out of other income to O&M 0.2 Corporate Total Operating Revenue 4,887.4 b)Audited Operation and Maintenance 1,105.1 Reclassify pension related other revenue to O&M (36.0) Reclassify Municipal & Property Taxes out of O&M (117.9) Reclassify EGD rate zone Open Bill and ABC T-service O&M against program revenues in other revenue (12.8) Reclassify other expenses out of other income to O&M 0.2 Corporate Operation and Maintenance 938.6 c)Audited Fixed Financing Costs - Reclassify fixed financing costs from interest and financing expenses 6.3 Corporate Fixed Financing Costs 6.3 d)Audited Municipal and Other Taxes - Reclassify Municipal and other taxes included within O&M costs 117.9 Corporate Municipal and Other Taxes 117.9 e)Audited Interest and Financing expenses 393.9 Reclassify fixed financing costs from interest and financing expenses (6.3) Elimination of interest expense and the amortization of debt issue and discount costs which are determined through the regulated capital structure Corporate Interest and Financing expenses - f)Audited Income Taxes 62.9 Elimination of corporate income taxes which will be calculated on a utility stand-alone basis (62.9) Corporate Income Taxes - RECONCILIATION OF AUDITED EGI INCOME (PER FINANCIAL STATEMENTS) TO CORPORATE INCOME FOR UTILITY INCOME DETERMINATION PURPOSES 2021 ACTUAL (387.6) Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 1 Schedule 6 Page 1 of 1 Page 209 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Line No.Sales ABC-T ABC-Unbundled Bundled-T T-Service Total 1 General Service 2 Rate 1 920.6 16.4 0.0 (0.0)0.0 937.0 3 Rate 6 288.5 78.0 0.0 28.4 0.0 394.9 4 Rate 9 0.0 0.0 0.0 0.0 0.0 0.0 5 Total EGD Rate Zone 1,209.1 94.4 0.0 28.4 0.0 1,331.8 6 Rate M1 463.7 16.9 0.0 1.4 0.0 482.0 7 Rate M2 33.0 20.7 0.0 14.2 0.0 67.98Rate 01 173.9 7.4 0.0 0.9 0.0 182.2 9 Rate 10 10.5 5.8 0.0 4.4 0.2 21.0 10 Total Union Rate Zones 681.1 50.9 0.0 20.9 0.2 753.1 11 Total General Service 1,890.2 145.3 0.0 49.3 0.2 2,084.9 12 Wholesale - Utility 13 Rate M9 0.7 0.0 0.0 1.0 0.0 1.7 14 Rate M10 0.0 0.0 0.0 0.0 0.0 0.015Total Wholesale - Utility 0.7 0.0 0.0 1.0 0.0 1.7 16 Contract Sales 17 Rate 100 0.6 0.3 0.0 1.1 0.0 2.0 18 Rate 110 2.6 4.6 0.0 24.0 0.0 31.2 19 Rate 115 0.0 0.0 0.0 5.4 0.0 5.4 20 Rate 125 0.0 0.0 0.0 0.0 11.9 11.921Rate 135 0.2 0.2 0.0 1.2 0.0 1.5 22 Rate 145 0.0 0.1 0.0 1.5 0.0 1.7 23 Rate 170 0.1 0.2 0.0 2.6 0.0 2.9 24 Rate 200 3.2 0.0 0.0 1.6 0.0 4.9 25 Rate 300 0.0 0.0 0.0 0.0 0.1 0.1 26 Rate 315 0.0 0.0 0.0 0.0 0.0 0.027Total EGD Rate Zone 6.7 5.4 0.0 37.4 11.9 61.5 28 Rate M4 4.0 2.3 0.0 26.5 0.0 32.8 29 Rate M7 2.3 0.5 0.0 20.7 0.0 23.4 30 Rate 20 0.8 0.1 0.0 3.0 20.7 24.7 31 Rate 100 0.0 0.0 0.0 0.0 11.5 11.5 32 Rate T-1 0.0 0.0 0.0 0.0 13.9 13.9 33 Rate T-2 0.0 0.0 0.0 0.0 75.9 75.934Rate T-3 0.0 0.0 0.0 0.0 7.2 7.2 35 Rate M5 0.2 0.2 0.0 2.2 0.0 2.5 36 Rate 25 2.7 0.0 0.0 0.4 2.7 5.8 37 Rate 30 0.0 0.0 0.0 0.0 0.0 0.0 38 Total Union Rate Zones 9.9 3.1 0.0 52.8 131.9 197.7 39 Total Contract Sales 16.6 8.5 0.0 90.3 143.9 259.2 40 Subtotal 1,907.5 153.8 0.0 140.6 144.1 2,345.9 41 Accounting Adjustments: 42 EGI Tax Variance (18.0) 43 EGI Accounting Policy Change (16.2) 44 EGD Average Use / Normalized Average Consumption 9.945EGD Dawn Access COS (DACDA)2.0 46 EGD Incremental Capital Module 0.2 47 EGD LRAM 0.0 48 EGD Federal Carbon Program 0.7 49 EGD Greenhouse Gas Emissions Administration 0.1 50 Union Average Use / Normalized Average Consumption 16.051Union Incremental Capital Module (14.0) 52 Union Capital Pass-through (4.4) 53 Union LRAM 0.7 54 Union Federal Carbon Program 1.5 55 Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.2) Total Utility Revenue 2,307.3 DELIVERY REVENUE BY SERVICE TYPE, RATE CLASS AND SERVICE CLASS ENBRIDGE GAS INC. FOR THE YEAR ENDED DECEMBER 31, 2021 Revenues ($ Millions) Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 1 Page 1 of 2 Page 210 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Line No.Sales ABC-T ABC-Unbundled Bundled-T T-Service Total 1 General Service 2 Rate 1 912.6 19.9 0.0 0.0 0.1 932.6 3 Rate 6 284.9 81.3 0.0 0.0 28.4 394.6 4 Rate 9 0.0 0.0 0.0 0.0 0.0 0.05Total EGD Rate Zone 1,197.5 101.2 0.0 0.0 28.5 1,327.3 6 Rate M1 448.2 18.7 (0.0)1.3 0.0 468.1 7 Rate M2 33.5 21.2 0.0 14.3 0.0 69.0 8 Rate 01 171.7 8.5 0.0 1.0 0.0 181.2 9 Rate 10 10.7 6.1 0.0 5.2 0.3 22.4 10 Total Union Rate Zones 664.1 54.5 (0.0)21.8 0.3 740.7 11 Total General Service 1,861.6 155.7 (0.0)21.8 28.8 2,068.0 12 Wholesale - Utility13Rate M9 0.6 0.0 0.0 0.9 0.0 1.6 14 Rate M10 0.0 0.0 0.0 0.0 0.0 0.0 15 Total Wholesale - Utility 0.7 0.0 0.0 0.9 0.0 1.6 16 Contract Sales 17 Rate 100 0.6 0.2 0.0 0.0 0.7 1.5 18 Rate 110 2.6 2.8 0.0 0.0 21.1 26.519Rate 115 0.3 0.0 0.0 0.0 5.1 5.4 20 Rate 125 0.0 0.0 11.5 0.0 0.0 11.5 21 Rate 135 0.1 0.1 0.0 0.0 1.1 1.3 22 Rate 145 0.0 0.1 0.0 0.0 1.0 1.1 23 Rate 170 0.1 0.2 0.0 0.0 2.3 2.5 24 Rate 200 3.1 0.0 0.0 0.0 1.4 4.525Rate 300 0.0 0.0 0.1 0.0 0.0 0.1 26 Rate 315 0.0 0.0 0.0 0.0 0.0 0.0 27 Total EGD Rate Zone 6.7 3.4 11.6 0.0 32.7 54.4 28 Rate M4 3.5 1.7 0.0 26.4 0.0 31.6 29 Rate M7 1.6 0.3 0.0 16.8 0.0 18.8 30 Rate 20 Storage 0.0 0.0 0.0 0.0 0.0 0.0 31 Rate 20 Transportation 0.9 0.1 0.0 2.7 21.2 25.032Rate 100 Storage 0.0 0.0 0.0 0.0 0.0 0.0 33 Rate 100 Transportation 0.0 0.0 0.0 0.0 11.3 11.3 34 Rate T-1 Storage 0.0 0.0 0.0 0.0 1.4 1.4 35 Rate T-1 Transportation 0.0 0.0 0.0 0.0 12.2 12.2 36 Rate T-2 Storage 0.0 0.0 0.0 0.0 7.2 7.2 37 Rate T-2 Transportation 0.0 0.0 0.0 0.0 66.9 66.938Rate T-3 Storage 0.0 0.0 0.0 0.0 1.4 1.4 39 Rate T-3 Transportation 0.0 0.0 0.0 0.0 5.8 5.8 40 Rate M5 0.1 0.1 0.0 2.0 0.0 2.3 41 Rate 25 1.1 0.0 0.0 0.0 2.8 3.8 42 Rate 30 0.0 0.0 0.0 0.0 0.0 0.0 43 Total Union Rate Zones 7.3 2.3 0.0 47.9 130.1 187.6 44 Total Contract Sales 14.0 5.7 11.6 47.9 162.7 241.9 45 Subtotal 1,876.3 161.4 11.6 70.7 191.6 2,311.5 46 Accounting Adjustments: 47 EGI Tax Variance (13.4) 48 EGI Accounting Policy Change (14.0) 49 EGD Average Use/ Normalized Average Consumption (2.5)50 EGD Dawn Access Cost 2.1 51 EGD Incremental Capital Module (0.3) 52 EGD Transactional Services Revenue 12.0 53 EGD LRAM 0.0 54 EGD Federal Carbon Program 0.6 55 EGD Greenhouse Gas Emissions Administration 0.256EGD Reverse 2019 Gas Supply Plan Cost Consequences reversed (3.9) 57 EGD Elimination of 2019 Gas Supply Plan Cost Consequences reversal 3.9 58 Union Average Use/ Normalized Average Consumption 6.7 59 Union Parkway Obligation Rate Variance 0.0 60 Union Incremental Capital Module (5.6) 61 Union Capital Pass-through (1.1)62 Union LRAM 1.4 63 Union Federal Carbon Program 1.2 64 Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.7) 66 Miscellaneous 0.7 Total Utility Revenue 2,281.9 DELIVERY REVENUE BY SERVICE TYPE, RATE CLASS AND SERVICE CLASS ENBRIDGE GAS INC. FOR THE YEAR ENDED DECEMBER 31, 2020 Revenues ($ Millions) Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 1 Page 2 of 2 Page 211 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 LineNo.Sales T-Service Total Sales T-Service Total Sales T-Service Total 1 General Service2Rate 1 2,064,173 34,054 2,098,227 4,665,992 82,730 4,748,722 1,749.7 18.5 1,768.3 3 Rate 6 147,546 22,416 169,962 2,740,101 1,698,331 4,438,432 775.8 144.3 920.1 4 Rate 9 2 0 2 3 0 3 0.0 0.0 0.0 5 Total EGD Rate Zone 2,211,721 56,470 2,268,191 7,406,097 1,781,061 9,187,158 2,525.6 162.8 2,688.3 6 Rate M1 1,140,908 29,855 1,170,763 2,728,007 169,080 2,897,087 853.1 18.3 871.47Rate M2 4,749 3,206 7,955 526,743 587,121 1,113,864 109.2 35.0 144.28Rate 01 351,562 10,059 361,621 871,182 58,759 929,941 364.2 12.8 377.1 9 Rate 10 1,369 878 2,247 148,728 163,067 311,794 40.9 20.0 60.9 10 Total Union Rate Zones 1,498,588 43,998 1,542,586 4,274,660 978,026 5,252,686 1,367.4 86.1 1,453.5 11 Total General Service 3,710,309 100,468 3,810,777 11,680,756 2,759,087 14,439,844 3,893.0 248.9 4,141.9 12 Wholesale - Utility 13 Rate M9 1 3 4 15,903 74,193 90,096 3.0 1.0 4.0 14 Rate M10 2 0 2 320 0 320 0.1 0.0 0.115Total Wholesale - Utility 3 3 6 16,223 74,193 90,415 3.1 1.0 4.1 16 Contract Sales17Rate 100 6 10 16 12,899 21,095 33,994 2.9 1.8 4.7 18 Rate 110 110 305 415 83,260 1,018,629 1,101,890 16.6 40.4 57.0 19 Rate 115 2 15 17 1,002 386,695 387,697 0.2 8.2 8.3 20 Rate 125 0 4 4 0 707,660 707,660 0.0 11.9 11.921Rate 135 7 35 42 2,624 60,488 63,112 0.6 1.6 2.222Rate 145 5 15 20 0 24,785 24,785 0.0 1.9 1.9 23 Rate 170 1 22 23 6,302 249,399 255,701 1.1 1.2 2.3 24 Rate 200 1 0 1 137,779 54,230 192,010 27.8 2.4 30.225Rate 300 0 2 2 0 269 269 0.0 0.1 0.126Rate 315 0 0 0 0 0 0 0.0 0.0 0.0 27 Total EGD Rate Zone 132 408 540 243,868 2,523,251 2,767,118 49.2 69.4 118.6 28 Rate M4 37 190 227 56,304 554,504 610,808 12.0 28.8 40.8 29 Rate M7 5 56 61 31,987 654,366 686,353 6.7 21.2 27.9 30 Rate 20 5 54 59 8,464 629,136 637,600 2.9 30.6 33.531Rate 100 0 12 12 0 958,587 958,587 0.0 11.5 11.532Rate T-1 0 39 39 0 453,007 453,007 0.0 13.9 13.9 33 Rate T-2 0 25 25 0 4,700,474 4,700,474 0.0 76.0 76.0 34 Rate T-3 0 1 1 0 241,187 241,187 0.0 7.2 7.235Rate M5 4 34 38 4,043 59,468 63,511 0.8 2.3 3.136Rate 25 37 30 67 79,188 64,709 143,898 15.6 3.1 18.8 37 Rate 30 0 0 0 0 0 0 0.0 0.0 0.0 38 Total Union Rate Zones 88 441 529 179,987 8,315,439 8,495,425 38.0 194.7 232.7 39 Total Contract Sales 220 849 1,069 423,854 10,838,690 11,262,544 87.2 264.1 351.3 40 Subtotal 3,710,532 101,320 3,811,852 12,120,833 13,671,970 25,792,803 3,983.3 514.0 4,497.3 41 Accounting Adjustments: 42 EGI Tax Variance (18.0) 43 EGI Accounting Policy Change (16.2)44 EGD Average Use / Normalized Average Consumption 15.445EGD Dawn Access COS (DACDA)2.0 46 EGD Incremental Capital Module 0.2 47 EGD LRAM 0.048EGD Federal Carbon Program 0.749EGD Greenhouse Gas Emissions Administration 0.1 50 EGD Transactional Services Revenue 12.0 51 Union Average Use / Normalized Average Consumption 19.052Union Incremental Capital Module (14.0)53 Union Capital Pass-through (4.4) 54 Union LRAM 0.7 55 Union Federal Carbon Program 1.556Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.2)57 Miscellaneous 1.4 58 Total Utility Revenue 4,480.6 (103M3)($ Millions) CUSTOMER METERS, VOLUMES AND REVENUES BY RATE CLASSENBRIDGE GAS INC. FOR THE YEAR ENDED DECEMBER 31, 2021 Customer Meters Throughput Volumes Revenues Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 2 Page 1 of 4 Page 212 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 LineNo.Sales T-Service Total Sales T-Service Total Sales T-Service Total 1 General Service 2 Rate 1 2,064,173 34,054 2,098,227 4,930,993 86,477 5,017,470 1,810.6 18.9 1,829.5 3 Rate 6 147,546 22,416 169,962 2,899,533 1,806,248 4,705,781 807.3 152.6 959.94Rate 9 2 0 2 3 0 3 0.0 0.0 0.0 5 Total EGD Rate Zone 2,211,721 56,470 2,268,191 7,830,529 1,892,725 9,723,254 2,617.9 171.6 2,789.5 6 Rate M1 1,140,908 29,855 1,170,763 2,901,101 179,808 3,080,909 881.4 18.7 900.1 7 Rate M2 4,749 3,206 7,955 559,108 623,195 1,182,303 114.6 36.8 151.4 8 Rate 01 351,562 10,059 361,621 935,043 63,066 998,109 381.5 13.4 395.0 9 Rate 10 1,369 878 2,247 157,870 173,090 330,960 43.0 21.1 64.110Total Union Rate Zones 1,498,588 43,998 1,542,586 4,553,121 1,039,160 5,592,281 1,420.5 90.1 1,510.6 11 Total General Service 3,710,309 100,468 3,810,777 12,383,650 2,931,885 15,315,535 4,038.4 261.6 4,300.1 12 Wholesale - Utility 13 Rate M9 1 3 4 15,903 74,193 90,096 3.0 1.0 4.0 14 Rate M10 2 0 2 320 0 320 0.1 0.0 0.1 15 Total Wholesale - Utility 3 3 6 16,223 74,193 90,415 3.1 1.0 4.1 16 Contract Sales 17 Rate 100 6 10 16 12,899 21,095 33,994 2.9 1.8 4.7 18 Rate 110 110 305 415 83,587 1,020,335 1,103,922 16.7 40.4 57.1 19 Rate 115 2 15 17 1,011 386,733 387,744 0.2 8.2 8.4 20 Rate 125 0 4 4 0 707,660 707,660 0.0 11.9 11.9 21 Rate 135 7 35 42 2,624 60,488 63,112 0.6 1.6 2.2 22 Rate 145 5 15 20 29 24,912 24,941 0.0 1.9 1.9 23 Rate 170 1 22 23 6,302 250,441 256,744 1.1 1.3 2.3 24 Rate 200 1 0 1 145,763 54,230 199,994 29.1 2.4 31.525Rate 300 0 2 2 0 269 269 0.0 0.1 0.1 26 Rate 315 0 0 0 0 0 0 0.0 0.0 0.0 27 Total EGD Rate Zone 132 408 540 252,216 2,526,164 2,778,379 50.5 69.5 120.0 28 Rate M4 37 190 227 56,304 554,504 610,808 12.0 28.8 40.8 29 Rate M7 5 56 61 31,987 654,366 686,353 6.7 21.2 27.9 30 Rate 20 5 54 59 8,464 629,136 637,600 2.9 30.6 33.531Rate 100 0 12 12 0 958,587 958,587 0.0 11.5 11.5 32 Rate T-1 0 39 39 0 453,007 453,007 0.0 13.9 13.9 33 Rate T-2 0 25 25 0 4,700,474 4,700,474 0.0 76.0 76.0 34 Rate T-3 0 1 1 0 241,187 241,187 0.0 7.2 7.2 35 Rate M5 4 34 38 4,043 59,468 63,511 0.8 2.3 3.1 36 Rate 25 37 30 67 79,188 64,709 143,898 15.6 3.1 18.8 37 Rate 30 0 0 0 0 0 0 0.0 0.0 0.0 38 Total Union Rate Zones 88 441 529 179,987 8,315,439 8,495,425 38.0 194.7 232.7 39 Total Contract Sales 220 849 1,069 432,202 10,841,602 11,273,805 88.5 264.1 352.7 40 Subtotal 3,710,532 101,320 3,811,852 12,832,075 13,847,680 26,679,755 4,130.0 526.8 4,656.8 41 Accounting Adjustments: 42 EGI Tax Variance (18.0) 43 EGI Accounting Policy Change (16.2) 44 EGD Average Use / Normalized Average Consumption 15.4 45 EGD Dawn Access COS (DACDA)2.0 46 EGD Incremental Capital Module 0.2 47 EGD LRAM 0.0 48 EGD Federal Carbon Program 0.7 49 EGD Greenhouse Gas Emissions Administration 0.1 50 EGD Transactional Services Revenue 12.0 51 Union Average Use / Normalized Average Consumption 19.0 52 Union Incremental Capital Module (14.0) 53 Union Capital Pass-through (4.4) 54 Union LRAM 0.7 55 Union Federal Carbon Program 1.5 56 Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.2) 57 Miscellaneous 1.4 58 Total Utility Revenue 4,640.1 (103M3)($ Millions) WEATHER NORMALIZED CUSTOMER METERS, VOLUMES AND REVENUES BY RATE CLASS ENBRIDGE GAS INC. FOR THE YEAR ENDED DECEMBER 31, 2021 Customer Meters Throughput Volumes Revenues Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 2 Page 2 of 4 Page 213 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 Line No.Sales T-Service Total Sales T-Service Total Sales T-Service Total 1 General Service2Rate 1 2,020,078 44,454 2,064,531 4,789,664 104,740 4,894,404 1,618.2 28.4 1,646.63Rate 6 145,283 23,801 169,084 2,810,280 1,840,046 4,650,326 663.4 187.5 850.94Rate 9 2 0 2 127 0 127 0.0 0.0 0.05Total EGD Rate Zone 2,165,363 68,254 2,233,617 7,600,071 1,944,786 9,544,857 2,281.6 215.9 2,497.5 6 Rate M1 1,128,040 35,176 1,163,216 2,815,940 187,938 3,003,878 772.5 19.9 792.4 7 Rate M2 4,324 3,571 7,895 571,025 633,316 1,204,341 99.3 35.6 134.88Rate 01 347,480 12,515 359,995 913,225 69,511 982,736 340.3 14.5 354.89Rate 10 1,156 982 2,138 155,265 187,391 342,656 37.1 21.9 58.910Total Union Rate Zones 1,481,000 52,244 1,533,244 4,455,454 1,078,157 5,533,611 1,249.1 91.9 1,341.0 11 Total General Service 3,646,363 120,498 3,766,861 12,055,525 3,022,943 15,078,468 3,530.7 307.8 3,838.5 12 Wholesale - Utility 13 Rate M9 1 3 4 16,236 72,529 88,765 2.5 0.9 3.514Rate M10 2 0 2 360 0 360 0.1 0.0 0.115Total Wholesale - Utility 3 3 6 16,596 72,529 89,125 2.6 0.9 3.5 16 Contract Sales 17 Rate 100 2 7 9 9,142 10,969 20,111 1.8 1.2 3.0 18 Rate 110 57 279 335 71,781 909,360 981,141 9.6 36.4 45.9 19 Rate 115 1 19 20 728 377,311 378,039 0.2 7.6 7.8 20 Rate 125 4 0 4 0 523,436 523,436 0.0 11.4 11.4 21 Rate 135 5 36 40 1,785 63,502 65,287 0.4 1.6 2.022Rate 145 3 19 22 628 22,768 23,396 0.3 1.3 1.623Rate 170 3 18 21 4,843 242,587 247,430 0.6 0.7 1.4 24 Rate 200 1 0 1 137,358 52,115 189,473 23.1 2.4 25.5 25 Rate 300 2 0 2 0 262 262 0.0 0.1 0.126Rate 315 0 0 0 0 0.0 0.027Total EGD Rate Zone 77 377 454 226,265 2,202,309 2,428,574 36.0 62.6 98.7 28 Rate M4 35 201 236 56,325 565,055 621,380 9.9 28.1 38.0 29 Rate M7 4 49 53 28,488 589,884 618,372 4.7 17.1 21.8 30 Rate 20 Storage 0 0 0 0 0 0 0.0 2.5 2.5 31 Rate 20 Transportation 4 53 57 9,423 769,053 778,476 3.1 27.5 30.632Rate 100 Storage 0 0 0 0 0 0 0.0 0.0 0.033Rate 100 Transportation 0 12 12 0 996,605 996,605 0.0 11.3 11.334Rate T-1 Storage 0 0 0 0 0 0 0.0 1.4 1.4 35 Rate T-1 Transportation 0 39 39 0 430,312 430,312 0.0 12.2 12.2 36 Rate T-2 Storage 0 0 0 0 0 0 0.0 7.2 7.2 37 Rate T-2 Transportation 0 25 25 0 4,017,975 4,017,975 0.0 66.9 66.9 38 Rate T-3 Storage 0 0 0 0 0 0 0.0 1.4 1.4 39 Rate T-3 Transportation 0 1 1 0 264,209 264,209 0.0 5.8 5.840Rate M5 5 33 38 2,712 59,105 61,817 0.4 2.1 2.641Rate 25 38 26 64 29,990 62,848 92,838 5.0 2.8 7.842Rate 30 0 0 0 0 0 0 0.0 0.0 0.043Total Union Rate Zones 86 439 525 126,938 7,755,045 7,881,983 23.1 186.2 209.4 44 Total Contract Sales 163 816 979 353,203 9,957,354 10,310,557 59.2 248.8 308.0 45 Subtotal 3,646,529 121,318 3,767,846 12,425,324 13,052,825 25,478,150 3,592.5 557.6 4,150.1 46 Accounting Adjustments: 47 EGI Tax Variance (13.4) 48 EGI Accounting Policy Change (14.0) 49 EGD Average Use/ Normalized Average Consumption (4.6) 50 EGD Dawn Access Cost 2.1 51 EGD Incremental Capital Module (0.3) 52 EGD Transactional Services Revenue 12.053EGD LRAM 0.054EGD Federal Carbon Program 0.655EGD Greenhouse Gas Emissions Administration 0.2 56 EGD Reverse 2019 Gas Supply Plan Cost Consequences reversed (3.9) 57 EGD Elimination of 2019 Gas Supply Plan Cost Consequences reversal 3.9 58 Union Average Use/ Normalized Average Consumption 7.2 59 Union Parkway Obligation Rate Variance 0.0 60 Union Incremental Capital Module (5.6) 61 Union Capital Pass-through (1.1)62 Union LRAM 1.463Union Federal Carbon Program 1.264Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.7) 66 Miscellaneous 0.7 67 Total Utility Revenue 4,118.8 FOR THE YEAR ENDED DECEMBER 31, 2020 CUSTOMER METERS, VOLUMES AND REVENUES BY RATE CLASS (103M3)($ Millions) ENBRIDGE GAS INC. Customer Meters Throughput Volumes Revenues Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 2 Page 3 of 4 Page 214 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 Line No.Sales T-Service Total Sales T-Service Total Sales T-Service Total 1 General Service2Rate 1 2,020,078 44,454 2,064,531 4,925,067 107,556 5,032,623 1,650.3 28.7 1,679.0 3 Rate 6 145,283 23,801 169,084 2,919,935 1,887,608 4,807,543 686.1 190.5 876.6 4 Rate 9 2 0 2 127 0 127 0.0 0.0 0.0 5 Total EGD Rate Zone 2,165,363 68,254 2,233,617 7,845,129 1,995,164 9,840,293 2,336.4 219.2 2,555.6 6 Rate M1 1,128,040 35,176 1,163,216 2,966,369 197,978 3,164,348 801.4 20.3 821.7 7 Rate M2 4,324 3,571 7,895 595,912 660,918 1,256,830 104.1 36.9 141.0 8 Rate 01 347,480 12,515 359,995 954,899 72,683 1,027,582 352.7 15.0 367.6 9 Rate 10 1,156 982 2,138 160,473 193,677 354,151 38.4 22.6 61.0 10 Total Union Rate Zones 1,481,000 52,244 1,533,244 4,677,654 1,125,257 5,802,911 1,296.5 94.8 1,391.3 11 Total General Service 3,646,363 120,498 3,766,861 12,522,783 3,120,421 15,643,204 3,632.9 314.0 3,946.9 12 Wholesale - Utility 13 Rate M9 1 3 4 16,236 72,529 88,765 2.5 0.9 3.5 14 Rate M10 2 0 2 360 0 360 0.1 0.0 0.115Total Wholesale - Utility 3 3 6 16,596 72,529 89,125 2.6 0.9 3.5 16 Contract Sales17Rate 100 2 7 9 9,142 10,969 20,111 1.8 1.2 3.0 18 Rate 110 57 279 335 71,936 910,575 982,511 9.6 36.4 46.0 19 Rate 115 1 19 20 730 377,426 378,156 0.2 7.6 7.8 20 Rate 125 4 0 4 0 523,436 523,436 0.0 11.4 11.4 21 Rate 135 5 36 40 1,785 63,502 65,287 0.4 1.6 2.0 22 Rate 145 3 19 22 628 22,937 23,565 0.3 1.3 1.623Rate 170 3 18 21 4,847 243,184 248,031 0.6 0.7 1.4 24 Rate 200 1 0 1 142,758 52,433 195,190 24.0 2.4 26.4 25 Rate 300 2 0 2 0 262 262 0.0 0.1 0.1 26 Rate 315 0 0 0 0 0.0 0.0 27 Total EGD Rate Zone 77 377 454 231,825 2,204,724 2,436,549 36.9 62.7 99.6 28 Rate M4 35 201 236 56,325 565,055 621,380 9.9 28.1 38.0 29 Rate M7 4 49 53 28,488 589,884 618,372 4.7 17.1 21.8 30 Rate 20 Storage 0 0 0 0 0 0 0.0 2.5 2.5 31 Rate 20 Transportation 4 53 57 9,423 769,053 778,476 3.1 27.5 30.6 32 Rate 100 Storage 0 0 0 0 0 0 0.0 0.0 0.0 33 Rate 100 Transportation 0 12 12 0 996,605 996,605 0.0 11.3 11.3 34 Rate T-1 Storage 0 0 0 0 0 0 0.0 1.4 1.4 35 Rate T-1 Transportation 0 39 39 0 430,312 430,312 0.0 12.2 12.2 36 Rate T-2 Storage 0 0 0 0 0 0 0.0 7.2 7.2 37 Rate T-2 Transportation 0 25 25 0 4,017,975 4,017,975 0.0 66.9 66.938Rate T-3 Storage 0 0 0 0 0 0 0.0 1.4 1.4 39 Rate T-3 Transportation 0 1 1 0 264,209 264,209 0.0 5.8 5.8 40 Rate M5 5 33 38 2,712 59,105 61,817 0.4 2.1 2.6 41 Rate 25 38 26 64 29,990 62,848 92,838 5.0 2.8 7.8 42 Rate 30 0 0 0 0 0 0 0.0 0.0 0.0 43 Total Union Rate Zones 86 439 525 126,938 7,755,045 7,881,983 23.1 186.2 209.4 44 Total Contract Sales 163 816 979 358,763 9,959,769 10,318,532 60.1 248.9 309.0 45 Subtotal 3,646,529 121,318 3,767,846 12,898,142 13,152,718 26,050,861 3,695.6 563.8 4,259.4 46 Accounting Adjustments: 47 EGI Tax Variance (13.4) EGI Elimination of 2018 Tax Variance 0.0 48 EGI Accounting Policy Change (14.0) 49 EGD Average Use/ Normalized Average Consumption (4.6) 50 EGD Dawn Access Cost 2.1 51 EGD Incremental Capital Module (0.3) EGD Elimination of 2018 Earnings Sharing Adjustment 0.0 52 EGD Transactional Services Revenue 12.0 53 EGD LRAM 0.0 54 EGD Federal Carbon Program 0.6 55 EGD Greenhouse Gas Emissions Administration 0.2 56 EGD Reverse 2019 Gas Supply Plan Cost Consequences (3.9)57 EGD Elimination of 2019 Gas Supply Plan Cost Consequences reversal 3.9 58 Union Average Use/ Normalized Average Consumption 7.2 59 Union Parkway Obligation Rate Variance 0.0 60 Union Incremental Capital Module (5.6) 61 Union Capital Pass-through (1.1) 62 Union LRAM 1.4 63 Union Federal Carbon Program 1.264Elimination of the UGL rate zone unregulated storage cost from EGD rate zone revenues (17.7) 66 Miscellaneous 0.7 67 Total Utility Revenue 4,224.3 ENBRIDGE GAS INC. FOR THE YEAR ENDED DECEMBER 31, 2020 WEATHER NORMALIZED CUSTOMER METERS, VOLUMES AND REVENUES BY RATE CLASS Customer Meters Throughput Volumes Revenues (103M3)($ Millions) Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 2 Page 4 of 4 Page 215 of 650 Line 2020 2021 No. Particulars ($000s)Actual Actual Revenue from Regulated Storage Services: 1 C1 Off-Peak Storage 1,002 433 2 Supplemental Balancing Services 1,016 640 3 Gas Loans 1 1 4 C1 Short Term Firm Peak Storage 2,715 1,536 5 Short Term Storage and Balancing Services Deferral 907 3,577 6 Rate 325: Transmission, Compression, & Storage 1,988 2,169 7 Less: Elimination of charges between EGD and Union rate zones (2,000)(2,226) 8 Total Regulated Storage Revenue Net of Deferral $5,630 $6,130 Revenue from Regulated Transportation Services: 9 M12 Transportation 206,677 206,637 10 M12-X Transportation 21,335 21,527 11 C1 Long Term Transportation 20,882 19,934 12 Rate 332: Gas Transmission 17,804 18,107 13 C1 Short Term Transportation 5,698 7,226 14 Gross Exchange Revenue 999 1,729 15 Rate 331: Gas Transmission 259 165 16 M13 Local Production 122 157 17 M16 Transportation 1,089 926 18 M17 transportation 109 545 19 S&T:Transportation Carbon Facility Collection 1,931 2,692 20 Other S&T Revenue 1,580 1,440 21 Less: Elimination of charges between EGD and Union rate zones (136,155)(138,489) 22 Total Regulated Transportation Revenue Net of Deferral $142,330 $142,597 EGI REVENUE FROM REGULATED STORAGE & TRANSPORTATION OF GAS 2021 ACTUAL Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 3 Page 1 of 1 Page 216 of 650 Col. 1 Col. 2 2020 2021 Line 1000000 Utility Utility No.Particulars Revenue Revenue ($Millions) ($Millions) 1. Late Payment Penalties 20.8 19.9 2. Account Opening Charges 9.8 11.1 3. Other Billing Revenue 3.0 3.2 4. Customer Billing Revenue 33.6 34.1 5. Open Bill Revenue 5.4 5.4 6. Distributor Consolidated Billing and Direct Purchase Administration Charges 2.4 2.3 7. Mid Market Transactions 1.1 1.2 8. CNG Rental Revenue 1.8 1.8 9. Other Operating Revenue 3.4 4.2 10.Total Other Revenue 47.7 49.1 11. Other Income 4.5 0.9 12.Total Other Revenue and Other Income 52.2 50.0 EGI UTILITY OTHER REVENUE AND OTHER INCOME 2021 ACTUALS Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 2 Schedule 4 Page 1 of 1 Page 217 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 1 Page 1 of 6 UTILITY O&M 1. This evidence explains the drivers in the Utility Operating and Maintenance (O&M) expense change from 2021 to 2020. 2. The Utility O&M schedule for 2021 preserves the presentation from the 2020 ESM Proceeding (EB-2021-0149) to provide transparency to all expense categories and in particular, segregating Corporate Shared Services (CSS), Demand Side Management (DSM), and Integration-related costs. The Company recognizes that this O&M presentation is useful to inform stakeholders about operating costs, and as such, has maintained the presentation to allow the driver explanations to be comparable between years. 3. Table 1 presents 2021 O&M expenses relative to the prior year. As in 2020, Enbridge Gas provided an appendix reconciling O&M results presented in the format of Table 1 compared to formats previous to 2019. Please refer to Appendix A for the reconciliation for 2021 results and presentation. Given the fact that Enbridge Gas now has three years of historical information presented in the format in Table 1, it is proposed that the reconciliation in Appendix A is no longer required or useful for the remaining deferred rebasing years of 2022 and 2023. Enbridge Gas requests approval to not provide the Appendix A reconciliation going forward after this proceeding. 4. Overall, O&M expenses decreased by $32.3 million primarily due to the non- recurrence of the one-time severance costs for voluntary workforce departures that occurred in 2020. Sustained synergy savings also contributed to the decrease. These decreases were partially offset by increases primarily in CSS, compensation and benefits, outside services, donations and memberships, and vehicle related repairs and maintenance. Page 218 of 650 Updated: 2022-06-17 EB-2022-0110 Exhibit B Tab 3 Schedule 1 Page 2 of 6 5. With the exclusion of $77.7 million of severance costs in 2020, the remaining integration-related costs (Line 15) increased by $2.4 million as integration initiatives continue to be pursued across all functional areas. 6. CSS costs (Line 13) include business functions such as Legal, Finance, Human Resources and Technology Information Services (TIS) that serve business units across the Enbridge enterprise. CSS costs are primarily comprised of compensation Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 2020 2021ActualActualLine No. Expense Categories ($M)($M)$ change % change 1 Compensation and Benefits 354.7 369.8 15.1 4.3%2 Employee Related Services and Development 1.5 1.5 (0.0)-2.0%3 Materials and Supplies 29.9 32.5 2.6 8.6%4 Outside Services 220.8 232.1 11.3 5.1%5 Transportation Related Repairs and Maintenance 6.9 5.7 (1.2) -17.8%6 Vehicle Related Repairs and Maintenance 14.3 19.8 5.5 38.1%7 Rents and Leases 9.9 11.1 1.2 11.7%8 Telecommunications 0.3 0.2 (0.1) -35.1%9 Travel and Entertainment 3.1 3.7 0.6 20.1%10 Donations and Memberships 3.2 11.3 8.1 258.1%11 Admin Expenses (1.6) (4.1)(2.5) 162.1%12 Allocations & Recoveries (17.8) (16.5)1.3 -7.1%13 Corporate Shared Services (CSS)187.8 218.1 30.3 16.1%14 DSM 132.3 132.1 (0.2)-0.1%15 Integration-Related Costs 125.2 49.8 (75.4) -60.2%16 Miscellaneous Expense 14.7 9.8 (4.9) -33.4%17 Capitalization on Non-CSS (119.5) (138.2)(18.7)15.7%18 O&M Subtotal before Eliminations 965.7 938.7 (27.0)-2.8% 19 Donations (0.6) (3.6)(3.0) 465.1%20 CDM Program 0.1 0.0 (0.1) -100.0%21 ABC T-service Program (0.2) (0.3)(0.1)76.3%22 Other Eliminations 0.0 (0.1)(0.1)23 Unregulated Adjustments (16.6) (18.5)(1.9)11.5%24 Total Unregulated/Non-Utility Eliminations (17.3) (22.5)(5.2)30.4% 25 Total Net Utility O&M Expense 948.5 916.2 (32.3)-3.4% Table 1 UTILITY O&M2021 & 2020 ACTUALS /U Page 219 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 1 Page 3 of 6 7. and benefits for CSS employees. Costs are charged to the individual business units based on appropriate cost allocation in relation to the services received. 8. CSS costs were $30.3 million higher than the prior year primarily due to: higher pension and benefits; higher information technology costs driven by cybersecurity investments resulting from government mandates in response to heightened threats to energy companies, deployment and sustainment costs of new technology to support business requirements; higher insurance costs from market conditions brought about by heightened pandemic risk; and lower overhead capitalization of CSS costs (please see Table 2 for more detail). 9. Compensation and benefits (Line 1) increased $15.1M from higher pension and benefits costs. The pension increase was the result of a higher actuarial valuation. Short-term incentive payments (STIP) were higher from stronger performance compared to 2020. Stock-based compensation (SBC) was similarly higher as a result of a higher share price. 10. Outside services (Line 4) increased $11.3M over the prior year primarily due to an increase in integrity spending, higher locates costs due to higher contract rates, higher postage costs from lower e-bill utilization, higher contract costs for call center, back-office billing and collections support, and increases in regulatory consulting costs related to rebasing preparations as well as higher regulatory fees reflecting the volume of proceedings including Integrated Resource Planning (IRP). 11. Donations and memberships (Lines 10 and 19) increased $5.1M (after elimination of donations not deducted for utility purposes) over the prior year due to higher sponsorships relative to 2020 when the pandemic curtailed sponsorship opportunities. Also contributing to the unfavorable variance is the transfer of Union Page 220 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 1 Page 4 of 6 Gas Low-Income Energy Assistance Program (LEAP) amounts to the Donations and Memberships category in 2021 for tracking and reporting alignment with Enbridge Gas Distribution (EGD) LEAP disbursements. The increase is offset in the Admin Expenses category (Line 11). 12. Vehicle-related repair expenses (Line 6) increased $5.5M in 2021 due to the higher maintenance and repairs needs of an aging fleet of vehicles, as well as from higher fuel prices. 1. 2021 Overhead Capitalization 13. The following section describes total overhead capitalization for both CSS (included in Line 13) and non-CSS cost categories (Line 17). 14. Overhead capitalization applies to all expense categories except integration-related costs, which are fully expensed. Total combined overhead capitalization was $10.4M more than the prior year (Table 2). 15. Non-CSS overhead capitalization increased by $18.7M driven by the increases in O&M expenses noted in the previous section. 16. CSS overhead capitalization decreased by $8.3M from the prior year primarily due to lower direct labour engaged in 2021 capital activity. With the completion of the labor- intensive Customer Information System (CIS) capital Information Technology (IT) project in 2020, direct labour burdens were lower in 2021 by comparison. While CSS costs increased, the increase was primarily due to higher pension and benefits, which flow to capital through burdening of direct and indirect labour. Page 221 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 1 Page 5 of 6 17. While reconciliation tables were provided in the 2020 ESM application (Appendices, EB-2021-0149) to aid in the understanding and adoption of the new schedule, as well as to provide visibility to Corporate Allocations and Recoveries as agreed to in the 2019 ESM Settlement Proposal, inbound allocations and outbound recoveries are no longer relevant for 2021 as all CSS costs are inbound to Enbridge Gas. Affiliates are similarly allocated their charges directly through Enbridge Inc. and not through Enbridge Gas. Table 3 summarizes the Total Corporate allocation, the CSS capitalization applied, and Total Net CSS. Variance explanations are as noted in previous sections. 2020 2021ActualActual Variance($M)($M)($M) CSS-related Capitalization Capitalization on Non-CSS (224.5) (234.9) (10.4) Table 2 Total Overhead Capitalization Impact on O&M (105.0) (96.7) 8.3 (119.5) (138.2) (18.7) 2020 2021 2020-2021 Variance Total Gross CSS 292.8 314.8 22.0Less: Capitalization of CSS (105.0)(96.7)8.3Net CSS 187.8 218.1 30.3 Table 3 Corporate Allocations and CSS Page 222 of 650 Updated: 2022-06-17 EB-2022-0110 Exhibit B Tab 3 Schedule 1 Page 6 of 6 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 Col. 10 Col. 11 2020-2021 2020-2021 Line No.Expense Categories ($M)2020As filed1 Central Functions Costs DSM & Integration Costs 2020 Revised 2021 Previous Format Central Functions Costs DSM & Integration Costs 2021 Revised $ change % change 1 Compensation and Benefits 572.2 (108.0) (109.5) 354.7 514.2 (112.8) (31.6) 369.8 15.2 4.3%2 Employee Related Services and Development 6.5 (4.8) (0.2)1.5 5.1 (3.1) (0.5) 1.5 (0.0) -2.0%3 Materials and Supplies 92.1 (5.3) (56.9) 29.9 97.7 (7.9) (57.3) 32.5 2.6 8.6%4 Outside Services 341.3 (36.6) (83.9) 220.8 364.0 (39.3) (92.6) 232.1 11.3 5.1%5 Transportation Related Repairs and Maintenance 9.8 (2.9) (0.0)6.9 9.2 (3.5) (0.0) 5.7 (1.2) -17.8%6 Vehicle Related Repairs and Maintenance 14.4 (0.0) (0.0) 14.3 19.9 (0.0) (0.1) 19.8 5.5 38.1%7 Rents and Leases 12.4 (2.5) (0.0)9.9 12.5 (1.4) - 11.1 1.2 11.7%8 Telecommunications 3.8 (3.5) (0.0)0.3 2.5 (2.3) 0.2 (0.1) -35.1%9 Travel and Entertainment 4.3 (0.9) (0.4)3.1 4.1 (0.3) (0.1) 3.7 0.6 20.1%10 Donations and Memberships 4.3 (0.2) (0.9)3.2 12.4 (0.3) (0.7) 11.3 8.1 258.1%11 Admin Expenses 0.9 0.8 (3.3) (1.6)(4.7) (1.2) 1.7 (4.1)(2.5) 162.1%12 Allocations & Recoveries 113.4 (128.8) (2.3) (17.8)126.2 (142.1) (0.7) (16.5)1.3 -7.1%13 Corporate Shared Services (CSS)187.8 187.8 - 218.1 218.1 30.3 16.1%14 DSM 132.3 132.3 - 132.1 132.1 (0.2) -0.1%15 Integration-Related Costs 125.2 125.2 - 49.8 49.8 (75.4) -60.2%16 Miscellaneous O&M Expense 14.7 14.7 9.8 9.8 (4.9) -33.4%17 Capitalization on non-CSS (224.3) 104.9 (119.5)(234.3) 96.0 (138.2)(18.7) 15.7%18 O&M Subtotal before Eliminations 965.7 (0.0) (0.0) 965.7 938.7 (0.0)0.0 938.7 (27.0) -2.8% 19 Donations (0.6)(0.6)(3.6)(3.6)(3.0) 465.1%20 CDM Program 0.1 0.1 0.0 0.0 (0.1) -100.0%21 ABC T-service Program (0.2)(0.2)(0.3)(0.3)(0.1) 76.3%22 Other Eliminations 0.0 0.0 (0.1)(0.1)(0.1)-23 Unregulated Adjustments (16.6)(16.6)(18.5)(18.5)(1.9) 11.5%24 Total Unregulated/Non-Utility Eliminations (17.3)(17.3)(22.5)(22.5)(5.2) 30.4% 25 Total Net Utility O&M Expense 948.5 948.5 916.2 916.2 (32.3) -3.4% Appendix A RECONCILIATION OF UTILITY O&M SCHEDULE2020 & 2021 Results 2020 ACTUAL 2021 ACTUAL /U Page 223 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 1 of 14 UTILITY CAPITAL EXPENDITURES 1.The purpose of this evidence is to provide information on Enbridge Gas’ 2021 utility capital expenditures within the EGD and Union rate zones. 2.The dollars presented are annual capital expenditures and are comparable to the presentation in the Asset Management Plan. Capital expenditures in ICM applications are presented on an in-service basis. 3.Table 2 below shows the regulated expenditures by Asset Class for each of the legacy rate zones. Further commentary regarding the year over year changes in capital expenditures are described by Asset Class in the narrative following Table 2. Col 1 Col 2 Col 3 EGD UG TOTAL EGI Distribution Plant 457.9 465.4 923.2 Transmission Plant - 128.6 128.6 General & Other Plant 113.0 74.3 187.3 Underground Storage Plant 59.5 12.2 71.7 630.4 680.4 1,310.8 Table 1 Summary of Capital Expenditures 2021 Actual ($millions) Page 224 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 2 of 14 Asset Class 2020 2021 Variance A Compression Stations 9.2 26.8 17.6 B Customer Connections 117.5 172.0 54.4 C Distribution Pipe 58.5 151.0 92.6 D Distribution Stations 33.7 43.4 9.8 E Fleet & Equipment 11.3 15.3 4.0 F Growth - Distribution System Reinforcement 8.4 13.4 5.0 G Real Estate & Workplace Services 22.2 40.2 18.0 H Technology Information Services (TIS)13.8 12.7 (1.1) I Transmission Pipe and Underground Storage 12.7 32.7 20.0 J Utilization 31.3 34.8 3.5 K EA Fixed Overhead 15.7 19.5 3.8 L Capitalized Overheads 131.9 - (131.9) M Integration Capital 19.2 44.8 25.6 N Community Expansion 20.2 13.5 (6.7) O Other 1.6 10.1 8.6 Total Capital Expenditures 507.2 630.4 123.2 Table 2 EGD Rate Zone by Asset Class($millions) Page 225 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 3 of 14 1.Descriptions of Asset Classes and Year over Year Variances 4.Effective January 2021, EGI is allocating capitalized overheads to projects based on the total pool of overheads and the total direct capital spend by rate zone. As a result, capitalized overheads are being reflected within the asset classes and will no longer shown as a separate asset class. This is consistent with the presentation of overheads in the Asset Management Plan and ICM applications (as of 2021). Asset Class 2020 2021 Variance A Compression Stations 17.3 15.5 (1.8) B Customer Connections 61.1 88.7 27.6 C Distribution Pipe 134.3 296.1 161.8 D Distribution Stations 27.7 47.8 20.1 E Fleet & Equipment 8.9 11.4 2.5 F Growth - Distribution System Reinforcement 61.6 35.1 (26.5) G Real Estate & Workplace Services 16.1 30.3 14.2 H Technology Information Services (TIS)9.0 10.1 1.2 I Transmission Pipe and Underground Storage 20.8 46.8 26.0 J Utilization 31.6 45.9 14.3 K EA Fixed Overhead 3.8 5.9 2.2 L Capitalized Overheads 90.3 - (90.3) M Integration Capital 19.3 42.7 23.4 N Community Expansion 0.7 3.8 3.1 O Other (2.5) 0.3 2.8 Total Capital Expenditures 500.0 680.4 180.4 Table 2 UG Rate Zone by Asset Class($millions) Page 226 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 4 of 14 A.Compression Stations EGI (Union rate zone) uses compressors to move natural gas throughout the natural gas transmission system by compressing natural gas into transmission pipelines designed for high pressure and flow. Compressors are also used for both rate zones to move gas in and out of underground storage reservoirs by providing a significant pressure increase at the expense of flow. Dehydration facilities are also included in the compression asset category. Dehydration facilities remove moisture from natural gas to ensure that the natural gas entering the transmission system meets the contractual standard of moisture content, and to avoid operational problems related to high moisture content. EGI operates one liquified natural gas (LNG) facility, the LNG facility serves to provide reserve capacity and balance operational loads during peak periods. The EGD rate zone increased due to the pacing of large growth projects in 2021 including: Ph 1 ($14.0M) and Ph 2 ($2.2M) of the Corunna (SCOR) Meter Area Upgrade. The Union rate zone had an overall decrease due to the timing of land purchases adjacent to facilities and the variability in the cost/timing of unplanned compressor failures that require capital treatment, countered by an increase in improvement projects. The inclusion of overheads is a $7.9M increase compared to 2020 spend. Page 227 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 5 of 14 B.Customer Connections This asset class includes: -The addition of new customers based on new housing or business starts; - Customers converting to natural gas from another fuel source; -Equipment and service upgrades to accommodate load growth of existing customers; and -General customer growth costs include materials and installation of mains and services to attach new customers as well as the costs associated with the meter and regulator installation at the customers site. In the EGD rate zone there was an increase in customers connected in 2021 compared to 2020. In both rate zones, the cost of labour and materials also increased due to shortages, inflation rates and unfavourable currency exchange rates. The inclusion of overheads is a $49.0M increase compared to 2020 spend. C.Distribution Pipe This asset class includes the maintenance, replacement, and renewal of pipelines and piping components (such as valves and fittings) used to transport natural gas within the distribution system or to end-use customers. It includes steel and plastic pipe, as well as services to customers. In the EGD rate, the increase was largely driven by the timing of vintage steel investments, the significant investment for NPS 20 Lake Shore Replacement (Cherry to Bathurst) ($20.9M), the return of the AMP fitting and other programs following curtailment in 2020 for COVID-19. Page 228 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 6 of 14 For the Union rate zone, the increase was driven by large ICM projects including the London Lines Replacement ($73.4M) and the West Portion of the Windsor Lines ($34.2M). Both rate zones saw increases in integrity retrofits and digs and relocations compared to 2020. Both rate zones saw cost variances driven by the deferral of work as a result of inflation and COVID-19 impacts to materials, accessibility and resources. The inclusion of overheads is a $83.2M increase compared to 2020 spend. D.Distribution Stations These assets are typically above grade facilities designed to reduce the operating pressure of natural gas pipeline systems through pressure control and over pressure protection. These facilities are used to transmit and/or distribute natural gas to reduced operating pressure pipeline systems which supply natural gas to cities and towns. The EGD rate zone variance is due to minor shifts in investment cost and timing. In the Union rate zone, the overall increase was driven by an increase in the Station Rebuilds & B and C Stations program and increased Integrity Assessments to establish the condition of the station components and adjust project scopes to address the integrity findings. This was partially offset by a decrease in both CNG stations and Gate, Feeder and A Stations due to Dawn CNG ($1.4M), Hamilton Gate 1 Rebuild ($9.3M) and Oxford Gate Station ($7.0M) requiring capital spend in 2020. The inclusion of overheads is a $17.1M increase compared to 2020 spend. Page 229 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 7 of 14 E.Fleet & Equipment The Fleet, Equipment and Tools asset class includes the vehicles, trailers, heavy equipment and tools owned by EGI to support its business needs. For the EGD rate zone, spend was pulled forward into 2021 for the TDW ProStopp tool ($4.1M) which improves safety for workers during construction activities. This was countered by a decrease in vehicle purchases due to delays in supply chain. The Union Gas rate zones did not have significant variances from 2020. The inclusion of overheads is a $5.0M increase compared to 2020 spend. F.Growth – Distribution System Reinforcement The Growth asset class includes reinforcements driven by customer and load growth. For the EGD rate zone, there was an overall increase due to investment cost and timing. For the Union rate zones, there was an overall decrease due to the larger Growth projects executed in 2020, including Kingsville Transmission ($9.8M) and Owen Sound Reinforcement Ph 4 ($56.4M). In 2021, the significant Growth projects were Byron Transmission Station ($14.0M) and Staples Reinforcement ($5.7M). The inclusion of overheads is a $9.0M increase compared to 2020 spend. Page 230 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 8 of 14 G.Real Estate and Workplace Services The Real Estate and Workplace Services (REWS) asset class includes properties (buildings and land) and furnishings. There is a base spend for each rate zone that supports building repairs and acquisition of furnishings. Variances are driven by the specific land purchases and building renovations that occur in a given year. Land acquisitions are driven by market availability and are aligned with the long- term strategies described in the Asset Management Plan. In 2021, there was a significant investment in lands to execute the SMOC/Coventry Facility Consolidation ($15.7M) and the Kennedy Road Expansion Project ($2.6M) in the EGD rate zone. For the Union rate zone, the significant investment was the new Belleville Property Construction ($7.5M). The significant real estate investments vary year over year due to market availability and project scope variation to meet business facility requirements. Significant renovations at for the VPC Annex/Metershop Area Renovations ($9.1M) in the EGD rate zone and the 50 Keil Drive Renovations ($6.1M 2nd Floor & $5.1M 3rd Floor) in the Union rate zone occurred in 2021. The inclusion of overheads is a $13.2M increase compared to 2020 spend. H.Technology Information Services The Technology Information Services (TIS) asset class includes: -General Hardware (Laptops/Desktops and Desktop sustainment equipment, networks, servers and security); -Specialized Hardware (to support specific business needs such as meter Page 231 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 9 of 14 reading equipment, call center network devices); -Software assets consisting of packaged applications, developed applications, and application infrastructure software; and -Communications assets including mobile phones and field devices (such as GPS devices, push-to-talk radios, leak survey field technology, and truck modems). For the EGD rate zone, there was a decrease in the TIS infrastructure compared to 2020 due to higher spends on Desktop Replacement ($2.9M) and the Microsoft Enterprise Agreement ($1.8M) in 2020. For the UG rate zone, there was no significant variance. The inclusion of overheads is a $4.3M increase compared to 2020 spend. I.Transmission Pipe and Underground Storage This asset class includes the pipelines that form the backbone of the gas transmission system as well as the underground storage reservoirs in St. Clair Township near Sarnia, Crowland Township in Welland, and in Chatham- Kent. Increases in the EGD rate zone were primarily related to the timing of land purchases at facilities, an increase in MOP verification and remediation replacement projects, the timing of the Wilksport (LWLK) Well Debris Filter improvement project ($2.5M) and an increase in retrofits & integrity digs for the Integrity Management Program. In the UG rate zone, the Sarnia Expansion Growth Projects ($10.8M Novacor Station & 21.1M NPS 20 Dow to Bluewater [LTC: EB-2019-0218]) were the Page 232 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 10 of 14 major driver to the increase. The 2021 replacement spend was lower than 2020, where the execution of the 2020 Trafalgar projects ($12.8M) took place. The inclusion of overheads is a $14.8M increase compared to 2020 spend. J.Utilization The utilization asset class includes measurement & regulation systems at customer premises, below ground and internal piping systems after the meter, and customer-owned systems1. The EGD rate zone saw reductions in planned meter exchanges as a result of COVID-19 and its impact on supply chain and contractor resources. Meter purchases in Union rate zone were higher in 2021 compared to 2020 as meters from 2020 were advanced and executed in 2019. The inclusion of overheads is a $15.1M increase compared to 2020 spend. K.EA Fixed Overheads The EA fixed overhead asset class includes cost for Alliance partner overheads and district contractor pre-work costs. The increase is due to additional planning work related to the Vintage Steel Program in the EGD rate zone and timing of payments for both EGD and Union rate zones. 1 For customer owned systems that are downstream of the meter, the asset class is accountable for inspection at the time of initial installation and after re-introduction of gas. Maintenance and remediation of these assets are the responsibility of the customer. Page 233 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 11 of 14 L.Capitalized Overheads As set out above, effective January 2021, EGI is allocating capitalized overheads to projects based on the total pool of overheads and the total direct capital spend by rate zone. As a result, capitalized overheads are being reflected within the asset classes and will no longer shown as a separate asset class. This is consistent with the presentation of overheads in the Asset Management Plan and ICM applications (as of 2021). Total combined overhead capitalization increased by $10M. The overhead increases are explained in B-3-1. M.Integration Capital Integration capital includes expenditures required to integrate the two legacy companies. EGI continues to evaluate projects to determine if they meet the criteria of integration capital: a one time incremental cost related to the amalgamation of the legacy utilities. Projects can be newly identified to address integration needs, or they may be driven by a need to replace an asset due to obsolescence. In either case, the project is classified as integration as it is driving a harmonized solution that adds value to the integrated utility. It is important to note that the work being addressed through some integration projects would have been required for either or both rate zones in the absence of amalgamation (because of factors such as obsolescence or growth), but the projects are nonetheless included as integration capital because the project is done for the amalgamated utility. An example of work related to integration expenditures would be the integration of the customer billing systems. These expenditures are excluded when calculating the thresholds for ICM capital. Page 234 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 12 of 14 The increase in the EGD rate zone is due to the purchase of land for the new GTA West site and the Integrated Utility Asset & Work Management project. The increase in the UG rate zone is due to the completion of the CIS Integration project and continued work on the Cost of Gas project. The inclusion of overheads is a $16.4M increase compared to 2020 spend. N.Community Expansion Community expansion provides natural gas services to communities not currently using natural gas. In response to the Ontario Energy Board’s (OEB) initiative to address the Government of Ontario’s desire to expand natural gas distribution systems to communities that currently do not have access to natural gas, EGI has filed proposals with the OEB designed to facilitate enhanced access to natural gas for non-served rural, remote and First Nation communities, and businesses in Ontario. In the EGD rate zone, the decrease in spend is primarily related to lower spend on the Fenelon Falls and Scugog Island projects due to construction completion, offset by the start of design work for the Community Expansion Phase 2 projects. In the Union rate zone, the increase in spend is related to construction with the Northshore & Peninsula project. 5.Table 3 below shows the Asset Classes with storage spend for each rate zone and the allocation of costs between the regulated and unregulated segments of EGI’s storage operations. Both the EGD and Union rate zones have OEB approved policies and methodologies for unregulated storage allocations. Allocations are Page 235 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 13 of 14 maintained at the individual asset level and updated annually to reflect additions and retirements to the assets. The allocations are applied to storage based capital projects in order to separate the regulated and unregulated costs. Regulated projects include indirect overhead allocations. 6.Compression Stations – significant regulated projects Corunna (SCOR) Meter Area Upgrade Phase 1 ($14.0M), Corunna (SCOR) Meter Area Upgrade Phase 2 ($2.2M), SCOR:100MODHdr Valves-Replace ($1.4M) and SCOR:60004 iBalance- Upgrade ($1.3M). 7.Transmission Pipe and Underground Storage – significant projects related to EGD’s regulated assets include Wilkesport MOP Remediation ($6.2M), NPS16 LAD-WLK Interconnect MOP ($4.1M), LLAD:, strategic land purchases at 2 locations around the underground storage facilities ($5M), Wilksport (LWLK) Well Debris Filter ($2.5M), NPS 16 Coveny Trans. Retrofit ($2.3M) and NPS 16 COV Gathering Retrofit ($2.2M). Significant unreglated projects include Pipeline and Meter Station –Upgrade ($6.2M). This is part of the 2020/2021 Storage Enhancement project (EB-2020-0074) which will increase the maximum operating pressure of the Black Creek, Coveny and Wilkesport pools. The Storage Enhancement projects are being executed in 2 phases in order to meet the growing market demand for incremental storage space. Asset Class Regulated Unregulated A Compression Stations 26.8 1.3 B Transmission Pipe and Underground Storage 32.7 13.0 Total Capital Expenditures 59.5 14.3 Table 3 EGD Rate Zone Storage by Asset Class 2021 Actual ($millions) Page 236 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 2 Page 14 of 14 8.Compression Stations – significant projects related to UG’s regulated assets include strategic land purchases at 3 locations around the underground storage facilities ($5.2M) and the Sandwich Gas Generator Overhaul ($0.7M). Transmission Pipe and Underground Storage – significant projects related to UG’s regulated assets include Sarnia Expansion – Bluewater Energy Park ($21M), Sarnia Expansion – Novacor Stn ($10.8M), NPS 34 Trafalgar Digs ($2.2M) and Panhandle Line Depth of Cover Mitigation ($2M). The INTE: 156 Storage and Pool Loop: Permanent L R Facilities ($3.4M) project has both a regulated and unregulated component due to the allocation applied to the storage pool assets. The SE 21/22 LCOR:Payne Tie-In ($2.4M) is an unregulated project and is part of the 2nd phase of the Storage Enhancement project (EB-2021-0079) described in paragraph 7 above. Asset Class Regulated Unregulated A Compression Stations 15.5 1.8 B Transmission Pipe and Underground Storage 46.8 9.2 Total Capital Expenditures 62.3 11.0 ($millions) Table 3 UG Rate Zone Storage by Asset Class Page 237 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col 8 Col. 9 Col. 10 Col. 11 UCC at True-up UCC At Total Additions Less: Lessor Eligible DepreciableLinePrior Year Filing from Filing Beginning Qualifying for of Cost or CCA UCC Rate CCA EndingNo.Particulars ($000s)EB-2021-0149 to Tax Return of Year Total Additions Accel. CCA Proceeds Additions Balance (%)FY2021 UCC (a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k) Class 1.1 Buildings, structures and improvements, services, meters, mains 2,298,694.5 - 2,298,694.5 - - - - 2,298,694.5 4%91,947.8 2,206,746.7 2.1 Non-residential building acquired after March 19, 2007 118,836.9 (386.3) 118,450.6 31,673.9 31,047.5 - 46,884.5 165,335.0 6%9,920.1 140,204.4 3.2 Mains acquired before 1988 162,237.1 (14.9) 162,222.2 - - - -162,222.2 6%9,733.3 152,488.9 4.3 Buildings acquired before 1988 2,996.9 - 2,996.9 - - - -2,996.9 5%149.8 2,847.0 5.6 Other buildings 80.3 (2.0) 78.3 - - - -78.3 10%7.8 70.5 6.7 Compression equipment acquired after February 22, 2005 490,024.8 (9.2) 490,015.5 5,851.4 5,789.8 - 8,715.5 498,731.0 15%74,809.7 421,057.3 7.8 Compression assets, office furniture, equipment 191,576.3 (190.8) 191,385.5 17,583.7 17,583.7 - 26,375.5 217,761.0 20%43,552.2 165,417.0 8.10 Transportation, computer equipment 28,978.1 42.8 29,020.9 8,412.0 8,412.0 (84.2) 12,575.9 41,512.6 30%12,453.8 24,894.9 9.12 Computer software, small tools 1,521.5 (1,521.5) - 60,466.4 57,423.4 - 58,944.9 58,944.9 100%58,944.9 1,521.5 10.13 Leasehold improvements 673.9 (110.1) 563.8 - - - -563.8 0%212.1 351.7 11.14.1 Intangibles 10,574.1 (4.9) 10,569.1 2,802.8 2,704.6 - 4,106.0 14,675.1 5%733.8 12,638.2 12.14.1 Intangibles (pre 2017)46,798.6 - 46,798.6 - - - -46,798.6 7%3,275.9 43,522.7 13.17 Roads, sidewalk, parking lot or storage areas 502.6 - 502.6 - - - -502.6 8%40.2 462.4 14.38 Heavy work equipment 10,956.3 (28.1) 10,928.2 2,587.3 2,587.3 - 3,880.9 14,809.1 30%4,442.7 9,072.7 15.41 Storage assets 51,577.1 3,707.2 55,284.2 56,745.2 52,156.7 - 80,529.3 135,813.6 25%33,953.4 78,076.1 16.45 Computers - Hardware acquired after March 22, 2004 6.3 - 6.3 - - - -6.3 45%2.8 3.4 17.49 Transmission pipeline additions acquired after February 23, 2005 744,028.8 8,131.1 752,159.9 75,728.0 75,728.0 - 113,592.0 865,751.9 8%69,260.2 758,627.8 18.50 Computers hardware acquired after March 18, 2007 14,927.1 315.9 15,243.1 22,927.3 16,965.5 - 28,429.2 43,672.3 55%24,019.7 14,150.7 19.51 Distribution pipelines acquired after March 18, 2007 5,303,987.9 (23,723.9) 5,280,264.0 836,580.8 834,194.2 - 1,252,484.7 6,532,748.7 6%391,964.9 5,724,879.9 20.Total 9,478,979.1 (13,794.8) 9,465,184.3 1,121,359.0 1,104,592.6 (84.2) 1,636,518.3 11,101,618.5 829,425.1 9,757,034.0 ENBRIDGE GAS SUMMARY OF CAPITAL COST ALLOWANCE (CCA) Filed: 2022-05-31 EB-2022-0110 Exhibit B Tab 3 Schedule 3 Page 1 of 1 Page 238 of 650 ACCOUNTS NOT BEING REQUESTED FOR CLEARANCE 1. The Company is not seeking clearance of the following accounts in this proceeding. For the following accounts, Enbridge Gas will carry the balances forward and seek clearance in appropriate future proceedings: Accounting Policy Changes Deferral Account - EGI Tax Variance Deferral Account – Integration-related Balances - EGI Impacts Arising from the COVID-19 Emergency Deferral Account - EGI Incremental Capital Module Deferral Account - EGD Rate Zone Incremental Capital Module Deferral Account - Union Rate Zones 2. The following accounts of Enbridge Gas have zero balances and are therefore not requested for clearance: IRP Capital Costs Deferral Account - EGI Earnings Sharing Mechanism Deferral Account - EGI Expansion of Natural Gas Distribution Systems Variance Account - EGI Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 1 of 16 Page 239 of 650 ENBRIDGE GAS – ACCOUNTING POLICY CHANGES DEFERRAL ACCOUNT (APCDA) (No. 179-381) 1.On August 30, 2018 the Ontario Energy Board (OEB) issued its Decision and Order for the amalgamation and rate setting mechanism (the MAADs Decision) approving the amalgamation of Enbridge Gas Distribution Inc. (EGD) and Union Gas Limited (Union) and the rate-setting framework1. In its Decision, the OEB established a deferral account to record the impact of any accounting changes required as a result of amalgamation that affect the revenue requirement.2 The OEB approved wording of the accounting order for the Accounting Policy Changes Deferral Account (APCDA) effective January 1, 2019 in its Decision and Order on Enbridge Gas’ 2019 Rates application3. 2.As per the EB-2020-0134 Decision on Settlement Proposal, as part of the settlement proposal, parties agreed to defer the review, allocation and disposition of all balances in the APCDA until the end of Enbridge Gas’s deferred rebasing term (2023). Parties noted that they required more information regarding the treatment of the balances and the extent of rate harmonization post-rebasing before approval of the balances and the disposition methodology can be considered4. 3.The Company continues to track the annual revenue requirement impact of accounting policy changes made as of the amalgamation date, January 1, 2019, as well as any further accounting policy changes adopted since that time. The cumulative balance of the APCDA as of December 31, 2021 is a receivable of $139.028 million, driven by the revenue requirement impact of five accounting 1 EB-2017-0306/0307, MAAD’s Decision and Order dated August 30, 2018; The Decision and Order was later amended by the OEB on September 17, 2018 with no material changes. 2 EB-2017-0306/0307, MAAD’s Decision and Order dated August 30, 2018, page 47. 3 EB-2018-0305, 2019 Rates Final Rate Order dated October 24, 2019, Appendix I, page 7. 4 EB-2020-0134, Decision on Setlement Proposal dated January 25, 2021, pages 4-5. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 2 of 16 Page 240 of 650 changes arising from (and since) amalgamation, which are detailed in the table below. The table categorizes each of the accounting policy changes, provides the cumulative opening balance as of the beginning of the period, details the current period revenue requirement impact being added to the cumulative balance, and finally provides the ending cumulative balance as of the end of the current period. The details of each item within the table below are described further in the remaining evidence presented. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 3 of 16 Page 241 of 650 Revenue Requirement $millions Capitalization vs Expense Interest During Construction Depreciation Expense Overhead Capitalization Subtotal Pension Expense Total Balance at January 1, 2021 (0.786) 0.887 (10.214) (6.427) (16.539) 181.465 164.926 Impact to 2021 revenue requirement: Expense (3.652) 0.076 (4.882) (4.735) (13.193) (12.033) (25.226) Cost of capital 0.125 0.112 0.687 0.668 1.592 - 1.592 Income tax (0.097) 0.274 (1.647) (0.794) (2.264) - (2.264) Total (3.624) 0.462 (5.842) (4.861) (13.865) (12.033) (25.898) Balance at December 31, 2021 (4.410) 1.349 (16.056) (11.288) (30.404) 169.432 139.028 4.Please refer to Exhibit C, Tab 1, Schedule 2 for the detailed 2021 revenue requirement calculation of the items presented above. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 4 of 16 Page 242 of 650 1.Capitalization vs Expense 5.Capitalization policies differed between EGD and Union with respect to whether the following items were capitalized or expensed as incurred: 6.Upon amalgamation, it was necessary for Enbridge Gas to align its capitalization policies where differences existed between legacy EGD and legacy Union. The policy alignment resulted in a net impact in 2021 between UGL and EGD Rate Zones of: •Lower O&M expense of approximately $3.638 million, offset by higher capitalization; and, •Gross revenue requirement decrease, or sufficiency of $3.624 million. 2.Interest During Construction 7.Interest During Construction (IDC) is a cost of constructing an asset which is included in the cost of property plant and equipment capitalized.5 IDC is recovered in rates through depreciation expense, along with a return on rate base over the life of 5 ASC 835-20-05-1. Union Policy EGD Policy EGI Policy •Verification of MaximumOperating PressureProgram (“MOP”); •Customer AssetsPrograms (Low PressureDelivery Meter Set andFarm Tap Programs); •Distribution IntegrityTechnology; •Distribution RecordsManagement Program;and, Expensed as incurred Capitalized Expensed as incurred •Integrity Digs resultingfrom integrity inspections Expensed as incurred Capitalized Capitalize Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 5 of 16 Page 243 of 650 the asset. Both Union and EGD capitalized IDC in accordance with US GAAP, however, IDC calculation was different in the legacy utilities, as seen below. 8.Upon amalgamation, it was necessary for Enbridge Gas to align its accounting treatment of IDC. The policy alignment resulted in the following for 2021: •Total 2021 net gross revenue requirement increase, or deficiency of $0.711 million. •A 2020 true-up to the EGD IDC WACD rate in 2021 resulted in a revenue requirement decrease, or sufficiency of $0.249 million. 3.Depreciation Expense 9.Depreciation rates for Union and EGD are based on depreciation studies that were approved by the OEB in prior proceedings. The respective depreciation studies for each EGD and Union Rate Zones continue to be used by Enbridge Gas. 10.Upon amalgamation, it was necessary for Enbridge Gas to align the depreciation policies of legacy EGD and legacy Union Gas with respect to how depreciation on assets is calculated. Union Policy EGD Policy EGI Policy Threshold IDC is only calculated on projects with capital spend of $1 million or greater, and that have a duration of greater than 12 months No threshold – applied to all capital projects regardless of size and duration No Threshold – applied to all capital projects regardless of size and duration Rate OEB prescribed interest rate for CWIP Weighted average cost of debt (WACD) OEB prescribed interest rate for CWIP Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 6 of 16 Page 244 of 650 11. Since many projects go into service late in the year, the EGD/Enbridge Gas policy would typically result in a lower first year depreciation expense than following the Union policy. 12. The policy alignment resulted in an impact in 2021 specific only to the UGL Rate Zone of: •A decrease in depreciation expense of approximately $4.882 million; and, •A gross revenue requirement decrease, or sufficiency of $5.842 million. 4.Overhead Capitalization 13. Following amalgamation, the Company sought to harmonize its overhead capitalization methodology and retained Ernst and Young (EY) to carry out the study. EY’s assessment was informed by historical legacy approaches, the amalgamated structure, US GAAP, the OEB’s Uniform System of Accounts, and Enbridge’s Enterprise Capitalization Policy. Recommendations of the study were implemented in January 2020. The study grouped costs into Operations Costs, Business Costs, Support Costs, and Pension and Benefits, each with their own capitalization treatment to more directly link with causal determinants of cost. 14. Prior to this harmonization, capitalized overheads in the legacy EGD approach were determined by the application of Departmental Labour Costs (DLC) rates and Administrative & General (A&G) rates to support costs for capital work in field operations and business support operations, as well as administrative functions that Union Policy EGD Policy EGI Policy Half year of depreciation in the first and last year of service, regardless of month the asset went into service Begin depreciation the month after the asset goes into service, and stops the month after retirement Begin depreciation the month after the asset goes into service, and stops the month after retirement Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 7 of 16 Page 245 of 650 support the overall business. In legacy UG, annual updates were carried out for support groups where capitalization rates were derived from time spent on capital activity. 15. The APCDA isolates the impact of the overhead capitalization policy change. The calculation takes the annual O&M spend with the new harmonized rates and subtracts from it O&M spend using the legacy rates to determine the APCDA impact. The policy change results in a decrease in O&M and offsetting increase in capitalized overheads, with the revenue requirement impact recorded in the APCDA. The net impact in 2021 between UGL and EGD Rate Zones was: •Lower net OM&A expenses of $5.4 million (offset by higher capitalization of overheads); and, •A gross revenue requirement decrease, or sufficiency of $4.861 million 5.Pension Expense – Unamortized Actuarial Gains/Losses and Prior Service Costs 16. Prior to December 31, 2018, Union recorded actuarial gains/losses and past service costs (Actuarial Losses) in Accumulated Other Comprehensive Income (AOCI) and amortized the balance over the expected average remaining service life (EARSL) of employees in accordance with ASC 715-30-35-24. This amortization expense was part of pension cost that was recognized annually and included in the forecast that underpinned rates. As a result of the Enbridge Inc. (EI) and Spectra merger (the Merger) on February 27, 2017, EI recorded the acquisition of Union through a purchase price allocation (PPA) in accordance with ASC 805. As a result, Union’s pension assets were adjusted on EI’s books to fair value and the unamortized Actuarial Losses of $250 million were reclassified from AOCI to Goodwill. These Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 8 of 16 Page 246 of 650 adjustments were not required to be pushed down6 and were not pushed down to the Union stand alone financial statements. Therefore, this adjustment did not impact Union financial statements or accounting at the time of the merger. 17. Approximately $39 million of Actuarial Losses were amortized between February 27, 2017 and December 31, 2018, resulting in a balance of $211 million remaining in Union’s AOCI at amalgamation (the Amalgamation) (January 1, 2019). 18. Upon amalgamation, US GAAP required the PPA recorded by Enbridge Inc. related to Union to be pushed down into the combined financial statements of Enbridge Gas.7 This resulted in the remaining unamortized Actuarial Losses on Union’s balance sheet to be reclassified from AOCI to Goodwill. 19. Although this appears to be a balance sheet reclassification only, the adjustment would have a significant impact on Enbridge Gas if not for regulatory accounting. AOCI is amortized as an annual expense whereas Goodwill is not. As such, this treatment would result in stranding the balance in Goodwill that would never be expensed. This is an accounting change that occurred only because of the amalgamation. Otherwise, Union would have continued to amortize Actuarial Losses as pension expense, just as it had done in the past. 6 Pushdown accounting refers to establishing a new basis of accounting in the separate financial statements of the acquired entity (or acquiree) after it is acquired. The acquisition adjustments recorded by the acquirer in a business combination under ASC Topic 805 are pushed down to the acquiree’s separate financial statements. 7 In accordance with ASC 805-50-30-5:“When accounting for a transfer of assets or exchange of shares between entities under common control, the entity that receives the net assets or the equity interests shall initially measure the recognized assets and liabilities transferred at their carrying amounts in the accounts of the transferring entity at the date of transfer. If the carrying amounts of the assets and liabilities transferred differ from the historical cost of the parent of the entities under common control, for example, because pushdown accounting had not been applied, then the financial statements of the receiving entity shall reflect the transferred assets and liabilities at the historical cost of the parent of the entities under common control.” Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 9 of 16 Page 247 of 650 20. The change in accounting policy has not altered the fact that Union has incurred the Actuarial Losses and should recover these costs over time, as is currently approved by the OEB. As noted previously, the balances represent the accumulation of Actuarial Losses incurred in relation to the pension assets that Enbridge Gas needs to continue to fund through cash contributions to the pension plans. Enbridge Gas’s funding requirements do not change simply because the accounting treatment has changed. Therefore, continued recovery in rates through the deferred rebasing period is appropriate and is consistent with the OEB’s approved approach for utilities. As noted in the “Report of the Ontario Energy Board – Regulatory Treatment of Pension and Other Post-employment Benefits (OPEBs) Costs – EB-2015-0040,” accrual based accounting for pensions under ASC 715 would result in a match to actual cash contributions by the end of the life of the plans. 21. Accordingly, Enbridge Gas adjusted the opening balance sheet at January 1, 2019, to record the $211 million balance previously recognized as AOCI in the financial records of Enbridge Gas as a regulatory asset (within the APCDA), instead of Goodwill. Enbridge Gas continues to draw down the regulatory asset by amortizing this balance as part of pension expense resulting in a regulatory asset balance of $169 million recognized in the APCDA at December 31, 2021. By continuing to follow this approach, Enbridge Gas ensures that its results during the deferred rebasing period reflect the accrual based pension expense recognized annually through amortization of the noted balance. 22. As noted in the EB-2020-0134 Interrogatory Response to LPMA8, the amortization of actuarial gains/losses and past service costs is a component of accrual-based pension expense. Base rates for both the EGD and Union rate zones include a 8 EB-2020-0134, Exhibit I.LPMA.4, page 2. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 10 of 16 Page 248 of 650 provision for accrual-based pension expenses as part of O&M. As communicated previously, commencing in 2019, the amortization of the unamortized actuarial gains/losses and past service costs through a drawdown of the pension balance in the APCDA results in the amortization continuing to form part of Enbridge Gas’s overall pension expense, consistent to amortization that would have occurred prior to amalgamation. 23. Enbridge Gas proposes to continue the annual amortization and inclusion as part of the accrual based pension costs recognized as part of O&M expense (consistent with the amortization of actuarial gains/losses and past service costs incurred after the Enbridge/Spectra merger in 2017). This proposal will draw down the balance in the APCDA throughout the deferred rebasing period and will result in the recognition of annual pension expenses consistent with amounts that would have been recognized had the accounting change not been required (i.e. utility earnings are not impacted). 24. As indicated in 2019 and 2020, in a continuing effort to manage the impact to ratepayers, Enbridge Gas is continuing with this approach throughout the deferred rebasing period and will propose a methodology for disposal of the residual balance in the APCDA related to pension costs at December 31, 2023, as part of rebasing. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 11 of 16 Page 249 of 650 ENBRIDGE GAS - TAX VARIANCE DEFERRAL ACCOUNT 1. Establishment of the Enbridge Gas Inc. - Tax Variance Deferral Account was approved in the OEB’s 2019 Rates (EB-2018-0305) Final Rate Order1. The purpose of this account is to record 50% of the revenue requirement impact of any tax rate changes, versus the tax rates included in rates that affect Enbridge Gas. In accordance with the OEB’s July 25, 2019 letter, Accounting Direction Regarding Bill C-97 and Other Changes in Regulatory or Legislated Tax Rules for Capital Cost Allowance, also accumulated in this account is 100% of the revenue requirement impact of any changes in Capital Cost Allowance (CCA) that are not reflected in base rates. This includes impacts related to Bill C-97 CCA rule changes, which became effective November 21, 2018, as well as any future CCA changes instituted by relevant regulatory or taxation bodies. Tax rate and CCA rule change impacts recorded in the account will, however, exclude tax rate and rule change impacts that are captured through other deferral account mechanisms (i.e., through the Incremental Capital Module Deferral Account and respective Capital Pass-through Project Deferral Accounts). 1 EB-2018-0305, Final Rate Order dated October 24, 2019, Appendix I, page 10. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 12 of 16 Page 250 of 650 2. The balance in the Enbridge Gas Tax Variance Deferral Account at the end of 2021 is comprised of the following: a. 2020 True up to T2 Filing balance 2 $0.468 million b. 2021 Non-integration related balance 3 $18.694 million c. 2020 Integration related balance 4 $3.736 million d. 2021 Integration related balance 5 $10.463 million Total Balance $33.361 million 3. As noted above, the balance requested for clearance within this proceeding is a credit of $19.163 million6, plus forecast interest of $0.227 million, for a total of $19.390 million. Of the principal balance in the account, $0.468 million relates to a true-up of the 2020 accelerated CCA impact, while $18.694 million relates to the 2021 accelerated CCA impact. The 2020 true-up amount reflects the impact of a variance between the 2020 qualifying additions captured in the 2020 Enbridge Gas Tax Variance Deferral Account examined in the EB-2021-0149 proceeding, and the final 2020 qualifying additions supporting EGI’s 2020 tax filing. The accelerated CCA impacts of Bill C-97 were the only tax rate changes that impacted 2021. 4. As noted in the account description, the Tax Variance Deferral Account does not include the accelerated CCA impacts related to capital pass-through and incremental capital module projects, which have been reflected in the determination of variances recorded in deferral accounts associated with those respective projects. 2 Seeking approval to dispose of balance in this proceeding. 3 Seeking approval to dispose of balance in this proceeding. 4 Balance to be carried forward through end of 2023 per direction in EB-2021-0149 Settlement Decision. 5 Balance to be carried forward through end of 2023 in line with decision on 2020 integration related balance. 6 Sum of $0.468 million + $18.694 million. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 13 of 16 Page 251 of 650 5. Consistent with the OEB’s EB-2021-0149 Decision and Order, dated January 27, 2021, the Tax Variance Deferral Account balance also includes the balances above that relate to accelerated CCA impacts of capital additions related to amalgamation/integration capital projects. Please see Exhibit C, Tab 1, Schedule 3 for continuity schedules supporting the calculation of the 2020 and 2021 accelerated CCA impacts of capital additions related to amalgamation/integration capital projects. The associated impacts of the annual integration related capital expenditures in 2020 and 2021 can be found in Exhibit B, Tab 3, Schedule 2. As per the direction in the Decision and Order, EGI will hold these cumulative balances in the account through 2023 and propose disposition within EGI’s 2024 rebasing application. 1. Income Tax - Bill C-97 (Accelerated CCA) 6. To calculate the annual income tax (or earnings) impact of accelerated CCA, Enbridge Gas has maintained a continuity of the 2018 – 2021 total annual capital additions which have qualified for accelerated CCA, and then removed the annual additions related to capital pass-through and incremental capital module. For the remaining qualifying additions, the cumulative annual CCA has been calculated utilizing the accelerated rates and compared against the cumulative annual CCA calculated at the non-accelerated rates. The annual income tax (or earnings) impact of the variance between the two methodologies was then grossed-up for taxes to determine the annual revenue requirement impact. These annual impacts, representing 100% of the revenue requirement impact, have been recorded each year in the Enbridge Gas Inc. – Tax Variance Deferral Account. Please see Exhibit C, Tab 1, Schedule 3 for continuity schedules supporting the calculation of the 2021 accelerated CCA impact. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 14 of 16 Page 252 of 650 ENBRIDGE GAS – INTEGRATED RESOURCE PLANNNING OPERATING COSTS DEFERRAL ACCOUNT 1. On July 22, 2021, the OEB released its Decision and Order (EB-2020-0091) for Enbridge Gas’ Integrated Resource Planning (IRP) Proposal. In this Decision, the OEB approved the establishment of an IRP Operating Costs Deferral Account for all IRP operations, maintenance, and administrations costs, and a separate IRP Capital Costs Deferral Account for IRP project plan costs. 2. On August 12, 2021, Enbridge Gas filed its draft accounting orders for the IRP Operating Costs Deferral Account and IRP Capital Cost Deferral Account. On September 2, 2021, the OEB found that the draft accounting orders were consistent with the Decision and Order and approved the accounts as filed. 3. The purpose of the IRP Operating Costs Deferral Account, as established in the OEB’s EB-2020-0091 Decision and Order, is to record incremental IRP general administrative costs, as well as incremental operating and maintenance costs and ongoing evaluation costs for approved IRP Plans. Operating costs associated with approved IRP Plans would also include all enabling payments to service providers, made as part of the IRP Plans. 4. The balance in the 2021 IRP Operating Costs Deferral Account that is being requested for clearance within this proceeding is a debit of $0.058 million, plus forecast interest of $0.0005 million, for a total of $0.058 million. This amount is attributable to incremental Enbridge Gas staff salaries for IRP related work performed in 2021. The OEB in its IRP Decision approved “incremental IRP administrative costs required to meet the increased workload related to IRP”1 … ‘ be treated as expenses and recorded in this account [operating costs deferral account].”2 1 EB-2020-0091, Decision and Order, page 71. 2 EB-2020-0091, Decision and Order, page 75. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 15 of 16 Page 253 of 650 5. Since, this application is the first opportunity for Enbridge Gas to propose a rate allocation methodology for the IRP Operating Cost Deferral Account at Exhibit F, Tab 1, the account is being submitted for clearance despite the relatively modest amount incurred in 2021. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Page 16 of 16 Page 254 of 650 Col. 1 Col. 2 Col. 3 Col.4 Line Account No. Account Description Acronym Principal Interest Total Reference ($000's) ($000's)($000's) EGD Rate Zone Commodity Related Accounts 1. Storage and Transportation D/A 2021 S&TDA 7,942.5 97.0 8,039.5 D-1, Page 2 2. Transactional Services D/A 2021 TSDA (3,904.1) (35.4) (3,939.6) D-1, Page 4 3. Unaccounted for Gas V/A 2021 UAFVA 753.9 4.5 758.4 D-1, Page 6 4. Total commodity related accounts 4,792.2 66.2 4,858.4 EGD Rate Zone Non Commodity Related Accounts 5. Average Use True-Up V/A 2021 AUTUVA 14,934.3 135.5 15,069.8 D-1, Page 10 6. Gas Distribution Access Rule Impact D/A 2021 GDARIDA - - - D-1, Page 23 7. Deferred Rebate Account 2021 DRA 4,359.4 53.5 4,412.9 D-1, Page 12 8. Transition Impact of Accounting Changes D/A 2021 TIACDA 4,435.8 - 4,435.8 D-1, Page 1 9. Electric Program Earnings Sharing D/A 2021 EPESDA - - - D-1, Page 23 10. Open Bill Revenue V/A 2021 OBRVA - - - D-1, Page 23 11. Ex-Franchise Third Party Billing Services V/A 2021 EXFTPBSVA - - - D-1, Page 23 12. RNG Injection Service V/A 2021 RNGISVA - - - D-1, Page 23 13. OEB Cost Assessment V/A 2021 OEBCAVA 2,550.3 31.5 2,581.8 D-1, Page 13 14. Dawn Access Costs D/A 2021 DACDA 1,968.0 17.9 1,985.9 D-1, Page 16 15.Pension and OPEB Forecast Accrual vs. Actual Cash Payment Differential V/A2021 P&OPEBFAVACPDVA - - - D-1, Page 23 16.Total EGD Rate Zone (for clearance) 33,040.0 304.5 33,344.6 Union Rate Zones Gas Supply Accounts OEB Account Number 17. Upstream Transportation Optimization 179-131 2021 8,616.3 78.2 8,694.5 E-1, Page 6 18. Spot Gas Variance Account 179-107 2021 - - - E-1, Page 58 19. Unabsorbed Demand Costs Variance Account 179-108 2021 (1,665.6) (28.3) (1,693.9) E-1, Page 1 20. Base Service North T-Service TransCanada Capacity 179-153 2021 83.5 0.9 84.4 E-1, Page 52 21. Total Gas Supply Accounts 7,034.2 50.8 7,085.0 Union Rate Zones Storage Accounts 22. Short-Term Storage and Other Balancing Services 179-70 2021 3,576.9 32.5 3,609.4 E-1, Page 8 Union Rate Zones Other Accounts 23. Normalized Average Consumption 179-133 2021 18,997.4 239.4 19,236.8 E-1, Page 13 24. Deferral Clearing Variance Account 179-132 2021 (3,120.4) (45.3) (3,165.7) E-1, Page 21 25. OEB Cost Assessment Variance Account 179-151 2021 907.1 11.4 918.5 E-1, Page 49 26. Unbundled Services Unauthorized Storage Overrun 179-103 2021 - - - E-1, Page 58 27. Gas Distribution Access Rule Costs 179-112 2021 - - - E-1, Page 58 28. Conservation Demand Management 179-123 2021 - - - E-1, Page 58 29. Parkway West Project Costs 179-136 2021 (603.3) (6.4) (609.7) E-1, Page 25 30. Brantford-Kirkwall/Parkway D Project Costs 179-137 2021 (45.0) (0.4) (45.4) E-1, Page 29 31. Lobo C Compressor/Hamilton-Milton Pipeline Project Costs 179-142 2021 24.0 0.4 24.4 E-1, Page 41 32. Lobo D/Bright C/Dawn H Compressor Project Costs 179-144 2021 (112.1) (3.6) (115.7) E-1, Page 44 33. Burlington-Oakville Project Costs 179-149 2021 (51.0) (0.5) (51.5) E-1, Page 47 34. Panhandle Reinforcement Project Costs 179-156 2021 (3,162.0) (35.9) (3,197.9) E-1, Page 53 35. Sudbury Replacement Project 179-162 2021 - - - E-1, Page 58 36. Parkway Obligation Rate Variance 179-138 2021 - - - E-1, Page 58 37. Unauthorized Overrun Non-Compliance Account 179-143 2021 - - - E-1, Page 58 38.Pension and OPEB Forecast Accrual vs. Actual Cash Payment Differential V/A179-157 2021 - (1,345.6) (1,345.6) E-1, Page 56 39. Unaccounted for Gas Volume Variance Account 179-135 2021 20,501.3 176.9 20,678.2 E-1, Page 31 40. Unaccounted for Gas Price Variance Account 179-141 2021 3,358.3 31.8 3,390.1 E-1, Page 38 41. Total Other Accounts 36,694.3 (977.8) 35,716.5 42.Total Union Rate Zones (for clearance) 47,305.4 (894.6) 46,410.8 EGI Accounts 43. Earnings Sharing D/A 179-382 2021 - - - C-1, Page 1 44. Tax Variance - Accelerated CCA - EGI 179-383 2021 (19,162.6) (227.2) (19,389.8) C-1, Page 12 45. IRP Operating Costs Deferral Account 179-385 2021 57.7 0.5 58.2 C-1, Page 15 46. IRP Capital Costs Deferral Account 179-386 2021 - - - C-1, Page 1 47. Expansion of Natural Gas Distribution Systems V/A 179-380 2021 - - - C-1, Page 1 48.Total EGI Accounts (for clearance)(19,104.9) (226.7) (19,331.6) 49.Total Deferral and Variance Accounts (for clearance)61,240.5 (816.7) 60,423.8 Not Being Requested for Clearance 50. Accounting Policy Changes D/A - Pension - EGI 179-120 2021 169,431.8 -169,431.8 C-1, Page 2 51. Accounting Policy Changes D/A - Other - EGI 179-120 2019 (1,749.5) (52.8) (1,802.3) C-1, Page 2 52. Accounting Policy Changes D/A - Other - EGI 179-120 2020 (14,789.5) (249.4) (15,038.9) C-1, Page 2 53. Accounting Policy Changes D/A - Other - EGI 179-120 2021 (13,864.6) (168.8) (14,033.4) C-1, Page 2 54. Tax Variance - Integration Capital Additions - EGI 179-383 2020 (3,736.3) (28.6) (3,764.8) C-1, Page 12 55. Tax Variance - Integration Capital Additions - EGI 179-383 2021 (10,462.6) (80.0) (10,542.7) C-1, Page 12 56. Incremental Capital Module Deferral Account - EGD 2020 ICMDA 2020 (254.0) (3.2) (257.2) C-1, Page 1 57. Incremental Capital Module Deferral Account - EGD 2021 ICMDA 2021 175.5 2.0 177.5 C-1, Page 1 58. Incremental Capital Module Deferral Account - UGL 179-159 2019 (6,869.6) (196.1) (7,065.7) C-1, Page 1 59. Incremental Capital Module Deferral Account - UGL 179-159 2020 (5,615.4) (91.9) (5,707.2) C-1, Page 1 60. Incremental Capital Module Deferral Account - UGL 179-159 2021 (14,353.4) (147.2) (14,500.6) C-1, Page 1 61. Impacts Arising from the COVID-19 Emergency D/A - EGI 2020 IACEDA 2020 1,377.5 20.3 1,397.8 C-1, Page 1 62. Impacts Arising from the COVID-19 Emergency D/A - EGI 2021 IACEDA 2021 34.3 0.4 34.7 C-1, Page 1 63.Total of Accounts not being requested for clearance 99,324.2 (995.3) 98,328.9 January 1, 2023 Forecast for clearance at ENBRIDGE GAS DEFERRAL & VARIANCE ACCOUNT ACTUAL & FORECAST BALANCES Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 1 Tab 1 Page 1 of 1 Page 255 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 Col. 10 Col. 11 Col. 12 Line No. ($000's) EGD - Change from Capital to O&M UGL - Change from O&M to Capital Capitalization Policy Alignment - Subtotal EGD - Change from IDC rate at WACD to Board Prescribed UGL - Elimination of IDC Threshold IDC Policy Alignment - Subtotal Depreciation Expense Policy Alignment EGD - Change in Overhead Capitalization UGL - Change in Overhead Capitalization Overhead Capitalization Alignment - Subtotal APCDA Total Actuarial Gains/Losses on UGL Pension Cost of capital 1. Rate base (6,664.9) 7,367.8 702.9 (253.1) 1,745.5 1,492.4 9,416.5 (5,043.7) 13,439.8 8,396.1 20,007.9 - 2. Required rate of return*6.20%7.30% 6.20%7.30% 7.30%6.20%7.30% 7.30% 3. Cost of capital* (413.2) 537.8 124.6 (15.7) 127.4 111.7 687.4 (312.7) 981.1 668.4 1,592.1 - Cost of service 4. Gas costs - - - - - - - - - - - - 5. Operation and Maintenance 916.2 (4,554.6) (3,638.4) - - - - 4,513.3 (9,930.1) (5,416.8) (9,055.2) (12,033.4) 6. Depreciation and amortization (162.0) 148.8 (13.2) (7.3) 83.5 76.2 (4,881.5) 180.2 502.1 682.3 (4,136.2) - 7. Municipal and other taxes - - - - - - - - - - - - 8. Cost of service 754.2 (4,405.8) (3,651.6) (7.3) 83.5 76.2 (4,881.5) 4,693.5 (9,428.0) (4,734.5) (13,191.4) (12,033.4) Income taxes on earnings 9. Excluding tax shield (128.3) 1,018.3 890.0 781.2 (430.4) 350.8 - (670.3) 1,267.4 597.1 1,837.9 3,188.9 10. Tax shield provided by interest expense 51.6 (78.1) (26.5) 2.0 (18.5) (16.5) (99.8) 39.0 (142.5) (103.5) (246.3) - 11. Income taxes on earnings (76.7) 940.2 863.5 783.2 (448.9) 334.3 (99.8) (631.3) 1,124.9 493.6 1,591.6 3,188.9 Taxes on (def) / suff. 12. Gross (def.) / suff. (360.0) 3,983.7 3,623.7 (1,034.3) 323.7 (710.6) 5,842.0 (5,101.4) 9,961.9 4,860.5 13,615.6 12,033.4 13. Net (def.) / suff. (264.6) 2,928.0 2,663.4 (760.2) 237.9 (522.3) 4,293.9 (3,749.5) 7,322.0 3,572.5 10,007.5 8,844.5 14. Taxes on (def.) / suff. 95.4 (1,055.7) (960.3) 274.1 (85.8) 188.3 (1,548.1) 1,351.9 (2,639.9) (1,288.0) (3,608.1) (3,188.9) 15. Revenue requirement 359.7 (3,983.5) (3,623.8) 1,034.3 (323.8) 710.5 (5,842.0) 5,101.4 (9,961.9) (4,860.5) (13,615.8) (12,033.4) 16. Gross revenue (def.) / suff. (359.7) 3,983.5 3,623.8 (1,034.3) 323.8 (710.5) 5,842.0 (5,101.4) 9,961.9 4,860.5 13,615.8 12,033.4 248.8 13,864.6 ENBRIDGE GAS SUMMARY OF ACCOUNTING POLICY CHANGES DEFERRAL ACCOUNT (NO. 179-381) UTILITY REVENUE REQUIREMENT *Union rate zones 2013 Board-approved rate of return is 7.3% and EGD rate zone 2018 Board-approved rate of return is 6.2%. 2020 True-Up to EGD IDC WACD rate Total Booked to 2021 APCDA Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 2 Page 1 of 1 Page 256 of 650 2018 Year-End Opening Opening Total Additions Additions Accel. CCA Regular CCA Closing Closing Line UCC UCC Qualifying for ICM & CPT CTA Net of ICM Depreciable Depreciable Rate Accelerated Regular UCC UCC No. Particulars ($000s)Accel. CCA Regular CCA Accel. CCA Additions Additions CPT & CTA UCC Balance UCC Balance (%)CCA CCA Accel. CCA Regular CCA (a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)(m) Class 1. 1 Buildings, structures and improvements, services, meters, mains - - - - - - - - 4%- - - - 2. 1 Non-residential building acquired after March 19, 2007 - - 2,952.7 1,724.3 - 1,228.4 1,842.6 614.2 6%110.6 36.9 1,117.8 1,191.5 3. 2 Mains acquired before 1988 - - - - - - - - 6%- - - - 4. 3 Buildings acquired before 1988 - - - - - - - - 5%- - - - 5. 6 Other buildings - - - - - - - - 10%- - - - 6. 7 Compression equipment acquired after February 22, 2005 - - 7,775.4 4,438.3 - 3,337.0 5,005.6 1,668.5 15%750.8 250.3 2,586.2 3,086.8 7. 8 Compression assets, office furniture, equipment - - 7,616.0 100.0 - 7,516.0 11,274.0 3,758.0 20%2,254.8 751.6 5,261.2 6,764.4 8. 10 Transportation, computer equipment - - 1,874.7 - - 1,874.7 2,812.0 937.3 30%843.6 281.2 1,031.1 1,593.5 9. 12 Computer software, small tools - - 11,185.5 - - 11,185.5 11,185.5 5,592.7 100% 11,185.5 5,592.7 - 5,592.7 10. 13 Leasehold improvements - - - - - - - - N/A - - - - 11. 14.1 Intangibles - - 82.0 - - 82.0 122.9 41.0 5%6.1 2.0 75.8 79.9 12. 14.1 Intangibles (pre 2017)- - - - - - - - 7%- - - - 13. 17 Roads, sidewalk, parking lot or storage areas - - - - - - - - 8%- - - - 14. 38 Heavy work equipment - - 823.6 - - 823.6 1,235.4 411.8 30%370.6 123.5 453.0 700.1 15. 41 Storage assets - - 379.1 141.0 - 238.1 357.2 119.1 25%89.3 29.8 148.8 208.4 16. 45 Computers - Hardware acquired after March 22, 2004 - - - - - - - - 45%- - - - 17. 49 Transmission pipeline additions acquired after February 23, 2005 - - 1,870.0 584.3 - 1,285.6 1,928.5 642.8 8%154.3 51.4 1,131.4 1,234.2 18. 50 Computers hardware acquired after March 18, 2007 - - 2,286.8 - - 2,286.8 3,430.1 1,143.4 55%1,886.6 628.9 400.2 1,657.9 19. 51 Distribution pipelines acquired after March 18, 2007 - - 62,357.7 1,078.0 - 61,279.7 91,919.5 30,639.8 6%5,515.2 1,838.4 55,764.5 59,441.3 20.Total $- - 99,203.4 8,066.0 - 91,137.4 131,113.3 45,568.7 $23,167.4 $9,586.7 67,970.0 81,550.6 ENBRIDGE GAS CALCULATION OF THE BILL C-97 ACCELERATED CCA IMPACT TO BE RECORDED IN THE TAX VARIANCE DEFERRAL ACCOUNT Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 3 Page 1 of 5 Page 257 of 650 2019 Year-End Opening Opening Total Additions Additions Accel. CCA Regular CCA Closing Closing Line UCC UCC Qualifying for ICM & CPT CTA Net of ICM Depreciable Depreciable Rate Accelerated Regular UCC UCCNo.Particulars ($000s)Accel. CCA Regular CCA Accel. CCA Additions Additions CPT & CTA UCC Balance UCC Balance (%)CCA CCA Accel. CCA Regular CCA (a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)(m) Class 1. 1 Buildings, structures and improvements, services, meters, mains - - - - - - - - 4%- - - - 2. 1 Non-residential building acquired after March 19, 2007 1,117.8 1,191.5 7,938.6 871.0 - 7,067.6 11,719.3 4,725.3 6%703.2 283.5 7,482.3 7,975.6 3. 2 Mains acquired before 1988 - - - - - - - - 6%- - - - 4. 3 Buildings acquired before 1988 - - - - - - - - 5%- - - - 5. 6 Other buildings - - - - - - - - 10%- - - - 6. 7 Compression equipment acquired after February 22, 2005 2,586.2 3,086.8 6,244.1 5,218.0 - 1,026.1 4,125.3 3,599.8 15%618.8 540.0 2,993.5 3,572.9 7. 8 Compression assets, office furniture, equipment 5,261.2 6,764.4 33,185.8 15,202.5 - 17,983.3 32,236.2 15,756.1 20%6,447.2 3,151.2 16,797.3 21,596.5 8. 10 Transportation, computer equipment 1,031.1 1,593.5 16,254.8 - - 16,254.8 25,413.3 9,720.9 30%7,624.0 2,916.3 9,661.9 14,932.0 9. 12 Computer software, small tools - 5,592.7 36,263.7 - - 36,263.7 36,263.7 23,724.6 100% 36,263.7 23,724.6 - 18,131.8 10. 13 Leasehold improvements - - - - - - - - N/A - - - - 11. 14.1 Intangibles 75.8 79.9 3,595.8 1,836.0 - 1,759.8 2,715.5 959.8 5%135.8 48.0 1,699.8 1,791.7 12. 14.1 Intangibles (pre 2017)- - - - - - - - 7%- - - - 13. 17 Roads, sidewalk, parking lot or storage areas - - - - - - - - 8%- - - - 14. 38 Heavy work equipment 453.0 700.1 4,166.1 - - 4,166.1 6,702.1 2,783.1 30%2,010.6 834.9 2,608.4 4,031.2 15. 41 Storage assets 148.8 208.4 735.5 - - 735.5 1,252.1 576.1 25%313.0 144.0 571.3 799.8 16. 45 Computers - Hardware acquired after March 22, 2004 - - - - - - - - 45%- - - - 17. 49 Transmission pipeline additions acquired after February 23, 2005 1,131.4 1,234.2 90,992.5 55,507.0 - 35,485.5 54,359.6 18,977.0 8%4,348.8 1,518.2 32,268.1 35,201.6 18. 50 Computers hardware acquired after March 18, 2007 400.2 1,657.9 29,431.1 - - 29,431.1 44,546.9 16,373.5 55%24,500.8 9,005.4 5,330.5 22,083.6 19. 51 Distribution pipelines acquired after March 18, 2007 55,764.5 59,441.3 499,719.3 988.6 - 498,730.7 803,860.5 308,806.6 6%48,231.6 18,528.4 506,263.5 539,643.6 20.Total $67,970.0 81,550.6 728,527.3 79,623.1 - 648,904.2 1,023,194.5 406,002.8 $131,197.5 $60,694.5 585,676.7 669,760.4 Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 3 Page 2 of 5 Page 258 of 650 2020 Year-End Opening Opening Total Additions Additions Accel. CCA Regular CCA Closing Closing Line UCC UCC Qualifying for ICM & CPT CTA Net of ICM Depreciable Depreciable Rate Accelerated Regular UCC UCCNo.Particulars ($000s)Accel. CCA Regular CCA Accel. CCA Additions Additions CPT & CTA UCC Balance UCC Balance (%)CCA CCA Accel. CCA Regular CCA (a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)(m) Class 1. 1 Buildings, structures and improvements, services, meters, mains - - - - - - - - 4%- - - - 2. 1 Non-residential building acquired after March 19, 2007 7,482.3 7,975.6 5,806.2 18.0 - 5,788.2 16,164.5 10,869.7 6%969.9 652.2 12,300.6 13,111.6 3. 2 Mains acquired before 1988 - - - - - - - - 6%- - - - 4. 3 Buildings acquired before 1988 - - - - - - - - 5%- - - - 5. 6 Other buildings - - - - - - - - 10%- - - - 6. 7 Compression equipment acquired after February 22, 2005 2,993.5 3,572.9 3,939.1 109.0 - 3,830.1 8,738.6 5,487.9 15%1,310.8 823.2 5,512.8 6,579.8 7. 8 Compression assets, office furniture, equipment 16,797.3 21,596.5 43,271.3 4,233.9 - 39,037.4 75,353.4 41,115.2 20%15,070.7 8,223.0 40,764.0 52,410.9 8. 10 Transportation, computer equipment 9,661.9 14,932.0 5,546.8 - - 5,546.8 17,982.1 17,705.4 30%5,394.6 5,311.6 9,814.1 15,167.2 9. 12 Computer software, small tools - 18,131.8 11,365.0 - 777.1 10,587.9 10,587.9 23,425.8 100% 10,587.9 23,425.8 - 5,293.9 10. 13 Leasehold improvements - - - - - - - - N/A - - - - 11. 14.1 Intangibles 1,699.8 1,791.7 2,214.1 199.4 - 2,014.7 4,721.9 2,799.1 5%236.1 140.0 3,478.5 3,666.5 12. 14.1 Intangibles (pre 2017)- - - - - - - - 7%- - - - 13. 17 Roads, sidewalk, parking lot or storage areas - - - - - - - - 8%- - - - 14. 38 Heavy work equipment 2,608.4 4,031.2 11,910.1 - - 11,910.1 20,473.6 9,986.3 30%6,142.1 2,995.9 8,376.4 12,945.4 15. 41 Storage assets 571.3 799.8 30,035.1 16.0 - 30,019.1 45,600.0 15,809.4 25%11,400.0 3,952.4 19,190.4 26,866.6 16. 45 Computers - Hardware acquired after March 22, 2004 - - - - - - - - 45%- - - - 17. 49 Transmission pipeline additions acquired after February 23, 2005 32,268.1 35,201.6 80,470.1 8,582.4 - 71,887.7 140,099.7 71,145.4 8%11,208.0 5,691.6 92,947.8 101,397.7 18. 50 Computers hardware acquired after March 18, 2007 5,330.5 22,083.6 40,091.6 - 18,135.0 21,956.6 38,265.5 33,061.9 55%21,046.0 18,184.1 6,241.1 25,856.2 19. 51 Distribution pipelines acquired after March 18, 2007 506,263.5 539,643.6 639,216.7 50,127.7 - 589,089.1 1,389,897.2 834,188.1 6%83,393.8 50,051.3 1,011,958.8 1,078,681.3 20.Total $585,676.7 669,760.4 873,866.1 63,286.3 18,912.2 791,667.7 1,767,884.3 1,065,594.3 $166,759.8 $119,451.0 1,210,584.6 1,341,977.1 Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 3 Page 3 of 5 Page 259 of 650 2021 Year-End Opening Opening Total Additions Additions Accel. CCA Regular CCA Closing Closing Line UCC UCC Qualifying for ICM & CPT CTA Net of ICM Depreciable Depreciable Rate Accelerated Regular UCC UCCNo.Particulars ($000s)Accel. CCA Regular CCA Accel. CCA Additions Additions CPT & CTA UCC Balance UCC Balance (%)CCA CCA Accel. CCA Regular CCA (a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)(m) Class 1. 1 Buildings, structures and improvements, services, meters, mains - - - - - - - - 4%- - - - 2. 1 Non-residential building acquired after March 19, 2007 12,300.6 13,111.6 31,455.0 - 1,723.1 29,731.9 56,898.5 27,977.6 6%3,413.9 1,678.7 38,618.6 41,164.9 3. 2 Mains acquired before 1988 - - - - - - - - 6%- - - - 4. 3 Buildings acquired before 1988 - - - - - - - - 5%- - - - 5. 6 Other buildings - - - - - - - - 10%- - - - 6. 7 Compression equipment acquired after February 22, 2005 5,512.8 6,579.8 5,851.4 - - 5,851.4 14,289.9 9,505.5 15%2,143.5 1,425.8 9,220.7 11,005.4 7. 8 Compression assets, office furniture, equipment 40,764.0 52,410.9 15,737.5 7,849.8 53.3 7,834.3 52,515.5 56,328.1 20%10,503.1 11,265.6 38,095.3 48,979.6 8. 10 Transportation, computer equipment 9,814.1 15,167.2 13,440.2 - - 13,440.2 29,974.3 21,887.3 30%8,992.3 6,566.2 14,261.9 22,041.2 9. 12 Computer software, small tools - 5,293.9 76,510.3 - 53,798.4 22,711.9 22,711.9 16,649.9 100% 22,711.9 16,649.9 - 11,356.0 10. 13 Leasehold improvements - - - - - - - - N/A - - - - 11. 14.1 Intangibles 3,478.5 3,666.5 2,802.8 18.9 - 2,784.0 7,654.4 5,058.5 5%382.7 252.9 5,879.7 6,197.5 12. 14.1 Intangibles (pre 2017)- - - - - - - - 7%- - - - 13. 17 Roads, sidewalk, parking lot or storage areas - - - - - - - - 8%- - - - 14. 38 Heavy work equipment 8,376.4 12,945.4 5,402.9 - - 5,402.9 16,480.9 15,646.9 30%4,944.3 4,694.1 8,835.1 13,654.3 15. 41 Storage assets 19,190.4 26,866.6 54,897.2 - - 54,897.2 101,536.3 54,315.2 25%25,384.1 13,578.8 48,703.6 68,185.0 16. 45 Computers - Hardware acquired after March 22, 2004 - - - - - - - - 45%- - - - 17. 49 Transmission pipeline additions acquired after February 23, 2005 92,947.8 101,397.7 75,856.8 - - 75,856.8 206,733.0 139,326.0 8%16,538.6 11,146.1 152,266.0 166,108.3 18. 50 Computers hardware acquired after March 18, 2007 6,241.1 25,856.2 7,950.3 - 14,327.6 (6,377.3) (3,324.8) 22,667.5 55%(1,828.6) 12,467.1 1,692.5 7,011.7 19. 51 Distribution pipelines acquired after March 18, 2007 1,011,958.8 1,078,681.3 810,728.0 104,174.2 - 706,553.7 2,071,789.4 1,431,958.2 6% 124,307.4 85,917.5 1,594,205.2 1,699,317.6 20.Total $1,210,584.6 1,341,977.1 1,100,632.4 112,042.9 69,902.3 918,687.2 2,577,259.4 1,801,320.7 $217,493.1 $165,642.7 1,911,778.6 2,095,021.6 2018 2019 2020 2021CCA Variance (i) - (j) 13,580.7 70,503.0 47,308.8 51,850.4 Tax Rate 26.5%26.5%26.5%26.5% Earnings Impact of Accelerated CCA 3,598.9 18,683.3 12,536.8 13,740.4 Earnings Impact Grossed-up for Taxes Recorded in the TVDA 4,896.4 25,419.4 17,056.9 18,694.4 Balances as filed in EB-2021-0149 4,896.4 25,133.9 16,588.8 N/A variance - 285.5 468.2 - Include adjustment to 2019 balance in 2020 TVDA - (285.5) 285.5 - Include adjustment to 2020 balance in 2021 TVDA - - (468.2) 468.2 Revised Balances 4,896.4 25,133.9 16,874.2 19,162.6 1 - Balance for 2019 was updated based on the change from EB-2020-0134 and Tax Filing on June 30, 2020. 2 - Balance for 2020 was updated based on the change from EB-2021-0149 and Tax Filing on June 30, 2021. Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 3 Page 4 of 5 Page 260 of 650 2020 Year-End - Integration Capital Additions Opening Opening Accel. CCA Regular CCA Closing Closing Line UCC UCC CTA Depreciable Depreciable Rate Accelerated Regular UCC UCCNo.Particulars ($000s)Accel. CCA Regular CCA Additions UCC Balance UCC Balance (%)CCA CCA Accel. CCA Regular CCA (a)(b)(c)(d)(e)(f)(g)(h)(i)(j) Class 1. 1 Buildings, structures and improvements, services, meters, mains - - - - - 4%- - - - 2. 1 Non-residential building acquired after March 19, 2007 - - - - - 6%- - - - 3. 2 Mains acquired before 1988 - - - - - 6%- - - - 4. 3 Buildings acquired before 1988 - - - - - 5%- - - - 5. 6 Other buildings - - - - - 10%- - - - 6. 7 Compression equipment acquired after February 22, 2005 - - - - - 15%- - - - 7. 8 Compression assets, office furniture, equipment - - - - - 20%- - - - 8. 10 Transportation, computer equipment - - - - - 30%- - - - 9. 12 Computer software, small tools - - 777.1 777.1 388.6 100%777.1 388.6 - 388.6 10. 13 Leasehold improvements - - - - - N/A - - - - 11. 14.1 Intangibles - - - - - 5%- - - - 12. 14.1 Intangibles (pre 2017)- - - - - 7%- - - - 13. 17 Roads, sidewalk, parking lot or storage areas - - - - - 8%- - - - 14. 38 Heavy work equipment - - - - - 30%- - - - 15. 41 Storage assets - - - - - 25%- - - - 16. 45 Computers - Hardware acquired after March 22, 2004 - - - - - 45%- - - - 17. 49 Transmission pipeline additions acquired after February 23, 2005 - - - - - 8%- - - - 18. 50 Computers hardware acquired after March 18, 2007 - - 18,135.0 27,202.5 9,067.5 55%14,961.4 4,987.1 3,173.6 13,147.9 19. 51 Distribution pipelines acquired after March 18, 2007 - - - - - 6%- - - - 20.Total $- - 18,912.2 27,979.7 9,456.1 $15,738.5 $5,375.7 3,173.6 13,536.5 2021 Year-End - Integration Capital Additions Opening Opening Accel. CCA Regular CCA Closing Closing Line UCC UCC CTA Depreciable Depreciable Rate Accelerated Regular UCC UCC No.Particulars ($000s)Accel. CCA Regular CCA Additions UCC Balance UCC Balance (%)CCA CCA Accel. CCA Regular CCA (a)(b)(c)(d)(e)(f)(g)(h)(i)(j) Class 1. 1 Buildings, structures and improvements, services, meters, mains - - - - - 4%- - - - 2. 1 Non-residential building acquired after March 19, 2007 - - 1,723.1 2,584.6 861.5 6%155.1 51.7 1,568.0 1,671.4 3. 2 Mains acquired before 1988 - - - - - 6%- - - - 4. 3 Buildings acquired before 1988 - - - - - 5%- - - - 5. 6 Other buildings - - - - - 10%- - - - 6. 7 Compression equipment acquired after February 22, 2005 - - - - - 15%- - - - 7. 8 Compression assets, office furniture, equipment - - 53.3 79.9 26.6 20%16.0 5.3 37.3 48.0 8. 10 Transportation, computer equipment - - - - - 30%- - - - 9. 12 Computer software, small tools - 388.6 53,798.4 53,798.4 27,287.8 100%53,798.4 27,287.8 - 26,899.2 10. 13 Leasehold improvements - - - - - N/A - - - - 11. 14.1 Intangibles - - - - - 5%- - - - 12. 14.1 Intangibles (pre 2017)- - - - - 7%- - - - 13. 17 Roads, sidewalk, parking lot or storage areas - - - - - 8%- - - - 14. 38 Heavy work equipment - - - - - 30%- - - - 15. 41 Storage assets - - - - - 25%- - - - 16. 45 Computers - Hardware acquired after March 22, 2004 - - - - - 45%- - - - 17. 49 Transmission pipeline additions acquired after February 23, 2005 - - - - - 8%- - - - 18. 50 Computers hardware acquired after March 18, 2007 3,173.6 13,147.9 14,327.6 24,665.0 20,311.7 55%13,565.7 11,171.4 3,935.5 16,304.0 19. 51 Distribution pipelines acquired after March 18, 2007 - - - - - 6%- - - - 20.Total $3,173.6 13,536.5 69,902.3 81,127.9 48,487.6 $67,535.2 $38,516.2 5,540.7 44,922.6 2020 2021 CCA Variance (i) - (j) 10,362.8 29,019.0 Tax Rate 26.5%26.5% Earnings Impact of Accelerated CCA 2,746.1 7,690.0 Earnings Impact Grossed-up for Taxes Related to Integrated Capital Additions 3,736.3 10,462.6 Filed: 2022-05-31 EB-2022-0110 Exhibit C Tab 1 Schedule 3 Page 5 of 5 Page 261 of 650 2022 TRANSITION IMPACT OF ACCOUNTING CHANGES DEFERRAL ACCOUNT – EGD RATE ZONE 1.The purpose of the Transition Impact of Accounting Changes Deferral Account (TIACDA) is to track the un-cleared Other Post Employment Benefit (OPEB) costs which the OEB has approved for recovery. Within EB-2011-0354, the OEB approved the recovery of OPEB costs, which were forecast to be $90 million at the end of 2012, evenly over a 20-year period, commencing in 2013. The OPEB costs needed to be recognized as a result of EGD having to account for post-employment expenses on an accrual basis, upon transition to USGAAP for corporate reporting purposes in 2012. The use of USGAAP for regulatory purposes was approved within the 2013 rate proceeding, EB-2011-0354. 2.The final amount recorded in the TIACDA as of the end of 2012 was $88.716 million. The first nine installments (for each of 2013 through 2021) of $4.436 million each (1/20 of $88.716 million), were approved for recovery within the EB-2013-0046, EB-2014-0195, EB-2015-0122, EB-2016-0142, EB-2017-0102, EB-2018-0131, EB-2019-0105, EB-2020-0134, and EB-2021-0149 proceedings. 3.Enbridge Gas is now requesting recovery of the tenth, or 2022 installment of the OEB-Approved TIACDA amount, in the amount of $4.436 million (1/20 of $88.716 million). As per the approved description and scope of the account, interest is not applicable to the balances to be cleared from the TIACDA. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 1 of 23 Page 262 of 650 2021 STORAGE & TRANSPORTATION DEFERRAL ACCOUNT EGD RATE ZONES 1.The purpose of the 2021 Storage & Transportation Deferral Account (S&TDA) is to record the difference between the forecast cost of Storage and Transportation included in the Company’s approved rates and the actual cost of Storage and Transportation incurred by the Company. Storage and Transportation cost includes cost of service and market-based pricing. 2.The S&TDA also records the variance between the forecast Storage and Transportation demand levels and the actual Storage and Transportation demand levels. In addition, the S&TDA is used to record amounts received by the Company related to deferral account dispositions of other utilities deferral accounts. 3.The balance in the 2021 S&TDA that the Company is proposing to collect from customers is $7.9 million plus interest. A detailed breakdown of the S&TDA is provided in Exhibit D, Tab 1, Schedule 1. 4.The primary driver for the balance in the 2021 S&TDA is higher than forecasted transportation prices and higher than forecasted market-based storage costs in 2021, partially offset by a $1.6M refund from the Union rate zone as part of Union’s 2019 deferral disposition. Transportation prices are determined by the OEB- approved M12 Rate Schedule. 5.As outlined in the 2021 Annual Update to the 5 Year Gas Supply Plan, Enbridge Gas purchases market-based storage services on behalf of customers in the EGD rate zone through a competitive blind storage RFP process. On January 4, 2021, Enbridge Gas initiated an RFP for market-based storage capacity with deliveries to Dawn. The RFP was conducted by Guidehouse Inc. The RFP requested offers of storage services with terms of up to 5 years commencing April 1, 2021 with firm Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 2 of 23 Page 263 of 650 injections from May to September and firm withdrawals from December to March. The RFP letter is provided as Exhibit D, Tab 1, Schedule 5. 6.Enbridge Gas required this annual replacement of third-party storage in order to reliably and cost effectively meet demand on peak winter days as well as retain late season deliverability. The RFP responses were received by Enbridge Gas on January 25, 2021 with conforming offers from three different counterparties with multiple terms, prices and injection/withdrawal parameters. The RFP manager made the recommendation and Enbridge Gas transacted based on the recommendation. Bids received and those that were selected are outlined in Confidential Exhibit D, Tab 1, Schedule 6. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 3 of 23 Page 264 of 650 2021 TRANSACTIONAL SERVICES DEFERRAL ACCOUNT EGD RATE ZONE 1.The concept of Transactional Services operates under the premise that if circumstances arise where the assets acquired by Enbridge Gas to meet customer demand are not fully required then those assets can be made available to generate third party revenue. Transactional Services are the optimization of these assets. 2. Transactional Services optimization can be grouped into two different categories – storage optimization and transportation optimization. Storage optimization transactions typically rely on the storage of or the loan of gas between two points in time at the same location (i.e. Dawn). Transportation optimization transactions typically rely on the exchange of gas on the day between two locations. 3.Any revenues received from Transactional Services are to be shared 90:10 between the ratepayer and the Company. The EGD rate zone rates include an upfront benefit of $12.0 million in Transactional Services revenue that has been applied to reduce the overall costs to be collected from EGD rate zone ratepayers. The purpose of the TSDA is to capture the difference between the total ratepayer share of transactional services revenue and the amount already included in rates. 4. During 2021 the Company generated a total of $17.5 million in net Transactional Services revenue, of which the ratepayer portion represents $15.8 million, through a combination of Storage and Transportation Optimization. Exhibit D, Tab 1, Schedule 2 provides a breakdown of Transactional Services revenue by type of transaction, and sets out the details of the amount, $3.8 million proposed to be credited to customers through the disposition of the 2021 TSDA. For comparison purposes the schedule also includes amounts recorded in the applicable TSDA accounts for years 2020, 2019, 2018, and 2017. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 4 of 23 Page 265 of 650 5.The transactions that Enbridge Gas entered into in 2021 contained the three elements of Transactional Services as were described in the Company’s evidence in EB-2013-0046 in that they were unplanned, the result of a Third-Party service request and were available because of temporary surplus capacity. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 5 of 23 Page 266 of 650 2021 UNACCOUNTED-FOR GAS VARIANCE ACCOUNT EGD RATE ZONE 1.This evidence provides the volumetric variance underpinning the balance in the 2021 Unaccounted-For Gas Variance Account (UAFVA). It will describe the 2021 variance relative to historical Unaccounted-For Gas (UAF) volumes for the EGD rate zone. 2.UAF is the difference between natural gas delivered into the distribution system as billed by third-party transmission entities (namely, TC Energy and Union Gas1), and natural gas consumed by the customers in the EGD rate zone and EGD own use gas and line pack gas. Owing to its residual nature, UAF cannot be measured directly. UAF can arise from meter differences, operational or external factors such as line leakage, unmetered uses, and third party damages. In addition, because gas volumes are affected by temperature and pressure, measurement is made more difficult. 3. The 2021 level of UAF for the EGD rate zone was determined to be 115,553 103m3. The variance of 8,876 103m3, which is the difference between actual UAF volume and the forecast UAF volume of 106,677 103m3, underpins the $0.7 million balance that is captured in the UAFVA. Exhibit D, Tab 1, Schedule 3 provides the detail calculations of the UAFVA balance. 4.The 2019 UAF study was filed as part of the 2020 rate application (EB-2019-0194). The report found that the primary sources for UAF include physical losses, retail meter variation and gate station meter variations. The report noted that 1 As of January 1, 2019, Union Gas Limited and Enbridge Gas Distribution merged to become Enbridge Gas Inc. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 6 of 23 Page 267 of 650 Enbridge Gas’ UAF levels are generally lower than competitive gas utilities over the past 10 years. The year-to-year fluctuations are a result of many factors including weather, estimation variation, measurement variation, and billing and accounting adjustments. The practices and initiatives to monitor and manage sources of UAF are generally consistent with those of other gas utilities. As part of the Decision and Order for the 2020 rate application (EB-2019-0194), EGI agreed to provide a “progress report” about the implementation of the UFG report recommendations in its 2022 rates application. A UFG Progress Report was filed as part of EB-2021-0148. The OEB noted that issues related to UFG were out of scope in the 2022 rate application, noting Enbridge Gas’s commitment “to assess its UFG forecasting methodology in the 2024 rebasing proceeding and to include information about the implementation of the UFG Report recommendations and other activities to address UFG, and the impacts of such activities.” 5.As shown in Tables 1 and 2 in the following pages, UAF within the EGD rate zone has been quite volatile over the years, showing some stability from 2010-2012, and followed by higher levels especially in 2014, 2016, 2018 and 2019. The 2021 UAF level falls within the 95% confidence interval, bounded by (9,125) 103m3 and 167,748 103m3. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 7 of 23 Page 268 of 650 Table 1: Unaccounted-For Gas Volumes (103 m3), 1991-2021 -40,000 -20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 1991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018201920202021103m3Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 8 of 23 Page 269 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 9 of 23 Page 270 of 650 2021 ACTUAL AVERAGE USE TRUE-UP VARIANCE ACCOUNT EGD RATE ZONE 1. The purpose of this evidence is to provide information in support of the 2021 Average Use True-up Variance Account (AUTUVA) balance. 2. Exhibit D, Tab 1, Schedule 4 details the calculations of the $14.93 million that will be collected from ratepayers. The collection is attributable to actual Rate 1 (residential) and Rate 6 (apartment, small commercial and industrial) average uses being lower than 2021 forecast levels. 3. Lower weather-normalized average uses are primarily attributable to higher actual natural gas prices and worse economic conditions than were forecast for 2021. Higher gas prices and lower employment growth have led to lower consumption for both Rate 1 and Rate 6 customers. Rate 6 customers and their consumption patterns are heavily impacted by the economic conditions under the COVID-19 pandemic. Lower GDP growth and higher (doubled) commercial vacancy rates in 2021 than were expected have been other factors which also contributed to lower average use for Rate 6 customers. 4. The purpose of the AUTUVA is to record (true-up) the revenue impact (exclusive of gas costs) of the normalized volumetric difference between the forecast of average use per customers in Rate 1 and Rate 6 and the actual weather-normalized average use experienced during the year. The revenue impact is calculated using a unit rate determined in the same manner as the impact used in the derivation of the Lost Revenue Adjustment Mechanism (LRAM). Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 10 of 23 Page 271 of 650 5. As detailed in Exhibit D, Tab 1, Schedule 4, the calculation of the volumetric variance between forecast average use and actual normalized average use subtracts the volumetric impact of Demand Side Management (DSM) programs in the year. As has been the case in previous applications, since the audited actual volume savings of 2021 DSM activities will not be available until a later date, the 2021 OEB-Approved Budget DSM volumes are used as an estimate of 2021 actuals. Without the exclusion of a DSM volumetric variance in the AUTUVA calculation, the impacts of DSM are inherently included. As a result, 2021 LRAM amounts which will be filed at a later date, will exclude the impact of Rate 1 and Rate 6 customers. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 11 of 23 Page 272 of 650 2021 DEFERRED REBATE ACCOUNT EGD RATE ZONE 1.The purpose of the 2021 Deferred Rebate Account (DRA), consistent with prior fiscal years, was to record any amounts payable to, or receivable from, EGD rate zone customers as a result of clearing Deferral and Variance Accounts, which remain outstanding due to the inability to locate such customers. 2.During 2021, the Company cleared 2017 and 2018 DSM related deferral accounts, approved as part of the EB-2020-0067 proceeding, over the April through June 2021 period. In addition, 2019 DSM related deferral accounts approved as part of the EB-2021-0072 proceeding, as well as the 2019 deferral accounts approved as part of the EB-2020-0134 proceeding, were cleared in October 2021. 3.The $4.4 million recorded in the 2021 DRA and requested for clearance (and corresponding interest of $53.5 thousand), reflects the outstanding amount resulting from the clearance of deferral and variance accounts in the EGD rate zone which occurred during 2021 and the inability to locate all the intended customers. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 12 of 23 Page 273 of 650 2021 ONTARIO ENERGY BOARD COST ASSESSMENT VARIANCE ACCOUNT EGD RATE ZONE 1. The purpose of the 2021 Ontario Energy Board Cost Assessment Variance Account (OEBCAVA) was to record any material variances between the OEB costs assessed to Enbridge Gas (relevant to the EGD rate zone) through application of the revised Cost Assessment Model (CAM), which became effective April 1, 2016, and the OEB costs which were included in EGD rate zone rates, which were determined through application of the prior Cost Assessment Model. The scope of the account is consistent with prior OEBCAVAs. However, in accordance with the EB-2020-0134 OEB-approved Settlement Proposal1, in EGI’s 2019 Earnings Sharing and Deferral Disposition proceeding, the base OEB costs assumed to be included in rates have been escalated to the reflect the growth in the amount recovered through rates, which results from annual price cap adjustments and customer growth. The OEBCAVA was originally approved for establishment by an OEB letter dated February 9, 2016, entitled: Revisions to the Ontario Energy Board Cost Assessment Model. 2. The amount recorded within the 2021 OEBCAVA is $2.550 million, plus interest of $0.032 million for a total debit balance of $2.582 million. This amount reflects the variance between OEB costs assessed to Enbridge Gas (relevant to EGD rate zone) in each quarter of fiscal 2021, utilizing the revised CAM, and EGD’s average quarterly OEB cost assessment under the prior CAM, escalated in accordance with the EB-2020-0134 OEB-approved Settlement Proposal. 3. In order to calculate the amount to be recovered through the 2021 EGD rate zone OEBCAVA, the Company first needed to apportion the actual 2021 OEB assessed costs between the legacy rate zones. Commencing with the OEB’s 2019 / 2020 1 EB-2020-0134, Decision on Settlement Proposal, January 25, 2021, pages 5-6. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 13 of 23 Page 274 of 650 fiscal first quarter assessment (for the period April 1, 2019 through June 30, 2019), and continuing since, EGI has been receiving one consolidated quarterly bill for the amalgamated utility. To apportion the quarterly assessments received in 2021 between rate zones, the assessments were prorated based on the total invoices received by each legacy utility for the OEB’s 2018 / 2019 fiscal year (for the period April 1, 2018 through March 31, 2019), the final year for which the OEB issued invoices to each legacy utility. Table 1 below shows the proration of the OEB’s 2018 / 2019 fiscal year assessments between each legacy utility / rate zone (59.76% EGD rate zone, 40.24% Union rate zones). Table 2 shows the apportionment of EGI’s 2021 assessed costs to the EGD rate zone, and the calculation of the amount recorded in the 2021 EGD rate zone OEBCAVA. 4. To calculate the amount for recovery through the 2021 EGD rate zone OEBCAVA, the Company also needed to establish the base comparator, reflecting the OEB costs included in EGD rate zone rates, determined through application of the prior Cost Assessment Model. In accordance with the EB-2020-0134 OEB-approved Settlement Proposal, the amount reflected in rates is to be increased, or escalated, to reflect the growth in the amount recovered as a result of annual price cap adjustments and customer growth. To establish the 2021 base comparator, the Company escalated the 2020 quarterly comparator of $0.773 million by the sum of the 2021 Price Cap Index (PCI) of 1.70%, and the EGD rate zone ICM threshold calculation Growth Factor (g) of 1.73%, which were approved as part of EGI’s 2021 Rate Application (EB-2020-0181). The escalation resulted in a 2021 quarterly comparator of $0.799 million ($0.773 million * (1 + (1.70% + 1.73%))). As noted above, Table 2 below shows the apportionment of EGI’s actual 2021 assessed costs to the EGD rate zone, and the calculation of the amount recorded in the 2021 EGD rate zone OEBCAVA utilizing a base comparator of $0.799 million. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 14 of 23 Page 275 of 650 5. Within this proceeding, the Company is requesting clearance of the principal and interest balances recorded in the 2021 OEBCAVA, in the amount of $2.550 million and $0.032 million respectively, as shown in Exhibit C, Tab 1, Schedule 1. OEB 2018/2019 Cost Assessments EGD UGL Total Apr. 1 to Jun. 30, 2018 1,467,963.00 988,479.00 2,456,442.00 Jul. 1 to Sep. 30, 2018 1,356,860.00 913,873.00 2,270,733.00 Oct. 1 to Dec. 31, 2018 1,356,860.00 913,873.00 2,270,733.00 Jan. 1 to Mar. 31, 2019 1,356,860.00 913,873.00 2,270,733.00 5,538,543.00 3,730,098.00 9,268,641.00 Percentage of Total 59.76% 40.24% 100.00% Table 1 Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 15 of 23 Page 276 of 650 2021 DAWN ACCESS COSTS DEFERRAL ACCOUNT EGD RATE ZONE 1.The purpose of the Dawn Access Costs Deferral Account (DACDA), as established in the EB-2014-0323 Settlement Agreement, was to record for recovery the revenue requirement impact of the incremental costs incurred to implement the Dawn Transportation Service (DTS), including the costs for required system changes. In addition, in accordance with Legacy EGD’s 2017 Rate Application Settlement Proposal (EB-2016-0215) the revenue requirement related to additional costs incurred to accommodate the heat value conversion modification, implemented in conjunction with the Dawn Transportation Service system development process, were also to be recorded within this account. Under the terms of the EB-2014-0323 Settlement Agreement, recovery of amounts recorded in the DACDA will be from all bundled customers, regardless of whether they are system or direct purchase and regardless of the service to which they currently subscribe, because all have the option of taking DTS if they so choose. Further details explaining the DACDA, including the recovery method, are included within Section 2.7 of the Settlement Agreement filed at Exhibit B, Tab 2, Schedule 1 of the EB-2014-0323 proceeding. 2.As was indicated in the EB-2018-0131, EB-2019-0105, EB-2020-0134, and EB-2021-0149 proceedings (in support of the clearance of the 2017 through 2020 revenue requirement amounts recorded in the 2017 through 2020 DACDAs), all incremental costs incurred by the Company to implement the DTS (and functionality for 2 additional receipt points) and heat value conversion modification were capital in nature. Capital costs of $6.5 million were incurred to develop, test, and integrate enhancements to the functionality of Enbridge’s EnTRAC and connected systems. The systems modifications were placed into service effective November 1, 2017, in conjunction with the implementation of Phase 2 of the Dawn Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 16 of 23 Page 277 of 650 Access Settlement. The annual revenue requirement amounts sought for refund/recovery in association with those capital costs, includes the typical items in a cost of service revenue requirement, such as total return on rate base, including interest and return on equity, depreciation, and income taxes. 3.Within this proceeding, the Company is requesting clearance of the 2021 revenue requirement, or principal balance, of $1.968 million (and corresponding interest of $0.0179 million) as part of the requested one-time rate rider adjustment in January 2023, as shown in the proposed clearance balances at Exhibit C, Tab 1, Schedule 1. As indicated above, this amount represents the 2021 revenue requirement associated with the capital spending incurred to accommodate the DTS and heat value changes, which were placed into service in 2017. The Company has used the 2021 actual required capital structure within the 2021 revenue requirement calculation (consistent with the use of the actual capital structures which were utilized in determining previous revenue requirements which were approved for clearance). There will also be revenue requirement amounts to be recorded in relation to this spending in 2022, at which point the costs will be fully depreciated. The 2021 amount was slightly lower than 2020, due to a declining rate base value and lower required rate of return resulting in a lower cost of capital, but was higher than 2017 and 2018 as both years’ revenue requirements benefited from a significant Capital Cost Allowance (CCA) tax deduction that does not repeat in subsequent years beyond 2018. 4.The revenue requirement sought for recovery will be allocated to the various rate classes based on the bundled annual deliveries of each rate class. 5.The determination of the 2021 DACDA revenue requirement deferral account amount and related costs are shown below. The approved 2017, 2018, 2019 & 2020 revenue requirement amounts are also shown for continuity.Page Break Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 17 of 23 Page 278 of 650 Page Break Col. 1 Col. 2 Col. 3 Col. 1 Col. 2 Col. 3 Col. 1 Col. 2 Col. 3 Col. 1 Col. 2 Col. 3 Col. 1 Col. 2 Col. 3 Line Indicated Return Indicated Return Indicated Return Indicated Return Indicated ReturnNo.Component Cost Rate Component Component Cost Rate Component Component Cost Rate Component Component Cost Rate Component Component Cost Rate Component % % % % % % % % % % % % % % % 1.Long-term debt 56.88 4.86 2.76 57.05 4.72 2.69 61.13 4.44 2.71 63.07 4.38 2.76 60.03 4.35 2.61 2.Short-term debt 5.57 1.05 0.06 5.65 1.81 0.10 2.87 2.04 0.06 0.93 0.60 0.01 3.97 0.31 0.01 3.62.45 2.82 62.70 2.80 64.00 2.77 64.00 2.77 64.00 2.62 4.Preference shares 1.55 2.32 0.04 1.30 2.98 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.Common equity 36.00 8.78 3.16 36.00 9.00 3.24 36.00 8.98 3.23 36.00 8.52 3.07 36.00 8.34 3.00 6.100.00 6.02 100.00 6.07 100.00 6.01 100.00 5.84 100.00 5.63 ($ 000's)2017 2018 2019 2020 2021 7.Ontario Utility Income 685.0 (521.2)(1,324.9)(1,349.0)(1,359.7) 8.Rate base 259.7 5,623.8 4,283.2 2,912.8 1,542.4 9.Indicated rate of return 263.77%(9.27)%(30.93)%(46.31)%(88.15)% 10.(Def.) / suff. in rate of return 257.75%(15.34)%(36.94)%(52.15)%(93.78)% 11.Net (def.) / suff.669.4 (862.7)(1,582.2)(1,519.0)(1,446.5) 12.Gross (def.) / suff.910.7 (1,173.7)(2,152.7)(2,066.7)(1,968.0) UTILITY CAPITAL STRUCTURE2021 DACDA IMPACTS 2019 Actual Capital Structure 2020 Actual Capital Structure 2021 Actual Capital Structure2017 Actual Capital Structure 2018 Actual Capital Structure Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 18 of 23 Page 279 of 650 ($ 000's)LineNo.2017 2018 2019 2020 2021 Property, plant, and equipment 1.Cost or redetermined value 264.4 6,421.6 6,453.2 6,453.2 6,453.2 2.Accumulated depreciation (4.7) (797.8) (2,170.0) (3,540.4) (4,910.8) 3.259.7 5,623.8 4,283.2 2,912.8 1,542.4 Allowance for working capital 4.Accounts receivable merchandisefinance plan - - - - - 5.Accounts receivable rebillableprojects - - - - - 6.Materials and supplies - - - - - 7.Mortgages receivable - - - - - 8.Customer security deposits - - - - - 9.Prepaid expenses - - - - - 10.Gas in storage - - - - - 11.Working cash allowance - - - - - 12.- - - - - 13.Ontario utility rate base 259.7 5,623.8 4,283.2 2,912.8 1,542.4 2021 DACDA IMPACTSUTILITY RATE BASE Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 19 of 23 Page 280 of 650 ($ 000's)LineNo.2017 2018 2019 2020 2021 Revenue1.Gas sales - - - - - 2.Transportation of gas - - - - - 3.Transmission and compression - - - - - 4.Other operating revenue - - - - - 5.Other income - - - - - 6.Total revenue - - - - - Costs and expenses7.Gas costs - - - - - 8.Operation and Maintenance - - - - - 9.Depreciation and amortization 112.3 1,372.4 1,370.4 1,370.4 1,370.4 10.Municipal and other taxes - - - - - 11.Total costs and expenses 112.3 1,372.4 1,370.4 1,370.4 1,370.4 12.Utility income before inc. taxes (112.3) (1,372.4) (1,370.4) (1,370.4) (1,370.4) Income taxes13.Excluding interest shield (795.4) (809.5) (14.1) - - 14.Tax shield on interest expense (1.9) (41.7) (31.4) (21.4) (10.7) 15.Total income taxes (797.3) (851.2) (45.5) (21.4) (10.7) 16.Ontario utility net income 685.0 (521.2) (1,324.9) (1,349.0) (1,359.7) UTILITY INCOME2021 DACDA IMPACTS Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 20 of 23 Page 281 of 650 ($ 000's)LineNo.2017 2018 2019 2020 2021 1.Utility income before income taxes (112.3) (1,372.4) (1,370.4) (1,370.4) (1,370.4) Add Backs2.Depreciation and amortization 112.3 1,372.4 1,370.4 1,370.4 1,370.4 3.Large corporation tax - - - - - 4.Other non-deductible items - - - - - 5.Any other add back(s)- - - - - 6.Total added back 112.3 1,372.4 1,370.4 1,370.4 1,370.4 7.Sub total - pre-tax income plus add backs - - - - - Deductions8.Capital cost allowance - Federal 3,001.6 3,054.9 53.2 - - 9.Capital cost allowance - Provincial 3,001.6 3,054.9 53.2 - - 10.Items capitalized for regulatory purposes - - - - - 11.Deduction for "grossed up" Part V1.1 tax - - - - - 12.Amortization of share and debt issue expense - - - - - 13.Amortization of cumulative eligible capital - - - - - 14.Amortization of C.D.E. & C.O.G.P.E.- - - - - 15.Any other deduction(s)- - - - - 16.Total Deductions - Federal 3,001.6 3,054.9 53.2 - - 17.Total Deductions - Provincial 3,001.6 3,054.9 53.2 - - 18.Taxable income - Federal (3,001.6) (3,054.9) (53.2) - - 19.Taxable income - Provincial (3,001.6) (3,054.9) (53.2) - - 20.Income tax provision - Federal (450.2) (458.2) (8.0) - - 21.Income tax provision - Provincial (345.2) (351.3) (6.1) - - 22.Income tax provision - combined (795.4) (809.5) (14.1) - - 23.Part V1.1 tax - - - - - 24.Investment tax credit - - - - - 25.Total taxes excluding tax shield on interest expense (795.4) (809.5) (14.1) - - Tax shield on interest expense26.Rate base as adjusted 259.7 5,623.8 4,283.2 2,912.8 1,542.427.Return component of debt 2.82% 2.80% 2.77% 2.77% 2.62%28.Interest expense 7.3 157.5 118.6 80.7 40.429.Combined tax rate 26.500%26.500%26.500%26.500%26.500%30.Income tax credit (1.9) (41.7) (31.4) (21.4) (10.7) 31.Total income taxes (797.3) (851.2) (45.5) (21.4) (10.7) UTILITY TAXABLE INCOME AND INCOME TAX EXPENSE2021 DACDA IMPACTS Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 21 of 23 Page 282 of 650 ($ 000's) Line No.2017 2018 2019 2020 2021 Cost of capital1.Rate base 259.7 5,623.8 4,283.2 2,912.8 1,542.42.Required rate of return 6.02%6.07%6.01%5.84%5.63%3.Cost of capital 15.6 341.4 257.4 170.1 86.8 Cost of service4.Gas costs - - - - - 5.Operation and Maintenance - - - - - 6.Depreciation and amortization 112.3 1,372.4 1,370.4 1,370.4 1,370.4 7.Municipal and other taxes - - - - - 8.Cost of service 112.3 1,372.4 1,370.4 1,370.4 1,370.4 Misc. & Non-Op. Rev9.Other operating revenue - - - - - 10.Other income - - - - - 11.Misc, & Non-operating Rev.- - - - - Income taxes on earnings12.Excluding tax shield (795.4) (809.5) (14.1) - - 13.Tax shield provided by interest expense (1.9) (41.7) (31.4) (21.4) (10.7) 14.Income taxes on earnings (797.3) (851.2) (45.5) (21.4) (10.7) Taxes on (def) / suff.15.Gross (def.) / suff.910.7 (1,173.7) (2,152.7) (2,066.7) (1,968.0)16.Net (def.) / suff.669.4 (862.7)(1,582.2)(1,519.0)(1,446.5)17.Taxes on (def.) / suff.(241.3) 311.0 570.5 547.7 521.5 18.Revenue requirement (910.7)1,173.6 2,152.8 2,066.8 1,968.0 Revenue at existing Rates19.Gas sales 0.0 0.0 0.0 0.0 0.020.Transportation service 0.0 0.0 0.0 0.0 0.021.Transmission, compression and storage 0.0 0.0 0.0 0.0 0.022.Rounding adjustment 0.0 (0.1)0.1 0.0 0.023.Revenue at existing rates 0.0 (0.1)0.1 0.0 0.0 24.Gross revenue (def.) / suff.910.7 (1,173.7)(2,152.7)(2,066.8)(1,968.0) UTILITY REVENUE REQUIREMENT2021 DACDA IMPACTS Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 22 of 23 Page 283 of 650 ACCOUNTS WITH A ZERO BALANCE EGD RATE ZONE 1.The following 2021 accounts for the EGD Rate Zone have no balance, and are therefore not requested for clearance to customers: •Gas Distribution Access Rule Impact (GDARIDA) Deferral Account •Electric Program Earnings Sharing (EPESDA) Deferral Account •Pension and OPEB Forecast Accrual vs. Actual Cash Payment Differential Variance Account •Open Bill Revenue (OBRVA) Variance Account •Ex-Franchise Third Party Billing Services (EXTPBSDA) Deferral Account •RNG Injection Service (RNGISVA) Variance Account 2.Consistent with past annual deferral and variance account clearance proceedings, Enbridge Gas has not listed accounts that will be reviewed through other processes in Exhibit C, Tab 1, Schedule 1, and these accounts are not addressed in this proceeding. Examples include the PGVA, DSM related accounts and Federal Carbon Charge accounts. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Page 23 of 23 Page 284 of 650 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Line No.Contracted Union Capacity Budgeted Daily Contract Demand Volume Monthly Demand Toll Assumed in 2018 Budget Forecasted Annual Cost (2) Actual Daily Contract Demand Volume Monthly Demand Toll Effective January 1, 2021 to December 31, 2021 Annual Cost (3) Balance in the 2021 S&TDA (4) (GJ) ($/GJ) ($Millions)(GJ)($/GJ) ($Millions) ($Millions) 1. Union Gas Dawn to Lisgar 67,929 2.865 2.3 67,929 3.110 2.5 2. Union Gas Dawn to Parkway 2,792,173 3.402 114.0 2,792,173 3.665 122.8 3. Union Gas Dawn to Parkway - M12X 200,000 4.239 10.2 200,000 4.530 10.9 4. Union Gas F24 T 85,000 0.069 0.1 85,000 0.073 0.1 5. Union Transmission Costs 126.6 136.3 (9.7) 6. Dawn T Service Costs (11.2) (14.5) 3.4 7. Federal Carbon Costs - 0.9 (0.9) 8. Union & Third Party Market Based Storage 20.1 22.4 (2.3) 9.2019 Deferral Disposition - UG (1)- (1.6) 1.6 10. Total 135.5 143.5 (7.9) Notes (1) Transporation deferral adjustments related to 2019 S&TDA reduced actual costs by $1.6M M12 Transport ($1.6M), C1 Transport $0.003M, M16 Transport ($0.01M) (2) Col. 1 * Col. 2 * 12 (3) Col. 4 * Col. 5 * 12 (4) Col. 3 - Col. 6 BREAKDOWN OF THE 2021 STORAGE AND TRANSPORTATION DEFERRAL ACCOUNT ("2021 S&TDA") - EGD RATE ZONE Filed: 2021-05-31 EB-2021-0110 Exhibit D Tab 1 Schedule 1 Page 1 of 1 Page 285 of 650 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Line No.Particulars 2017 Transactional Services Revenue 2018 Transactional Services Revenue 2019 Transactional Services Revenue 2020 Transactional Services Revenue 2021 Transactional Services Revenue ($000's) ($000's) ($000's) ($000's) ($000's) 1. Storage Optimization 1,550.1 423.9 60.7 0.0 0.0 2. Transportation Optimization 10,393.3 14,292.4 13,084.5 17,643.4 17,509.0 3. Transactional Services Revenue 11,943.5 14,716.2 13,145.2 17,643.4 17,509.0 4. Amount Included in Rates 12,000.0 12,000.0 12,000.0 12,000.0 12,000.0 5. Less Ratepayer Portion of TS 10,749.1 13,244.6 11,830.7 15,879.1 15,758.1 6. TSDA sub-total 1,250.9 (1,244.6) 169.3 (3,879.1) (3,758.1) 7. ETT Revenue - Rider H 44.5 60.1 35.1 5.8 146.1 8. TSDA Total 1,206.4 (1,304.7) 134.3 (3,884.9) (3,904.1) TRANSACTIONAL SERVICES REVENUE BY TYPE OF TRANSACTION ("TSDA") - EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Schedule 2 Page 1 of 1 Page 286 of 650 Col . 1 Col . 2 Col . 3 Col . 4 Col . 5 Col . 6 Col . 7 Col . 8 Col . 9 Col . 10 Col . 11 Col . 12 Col . 13 Line No.Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 1.Budget UAF (103m3)17,032.9 18,951.5 16,299.1 11,722.9 6,619.6 3,359.7 2,496.5 2,411.9 2,463.2 3,884.2 8,289.1 13,146.5 106,677.0 2.PGVA Reference Price 161.8 161.8 161.8 166.2 166.2 166.2 160.4 160.4 160.4 199.0 199.0 199.0 3.Budget UAF Dollar 2,755,962.4 3,066,391.9 2,637,234.0 1,948,246.2 1,100,126.1 558,351.4 400,326.0 386,770.1 394,998.5 772,853.2 1,649,323.9 2,615,829.4 18,286,413.2 4.Actual UAF (103m3)16,278.8 17,595.3 14,023.7 9,948.2 7,948.8 4,076.4 3,400.6 3,549.0 3,538.1 3,692.1 8,429.5 11,809.8 104,290.4 5.UAF Annual Variance (103m3) (1)1,758.0 1,900.2 1,514.5 1,074.3 858.4 440.2 367.2 383.3 382.1 398.7 910.3 1,275.4 11,262.8 6.Total Actual UAF (103m3) (2)18,036.9 19,495.5 15,538.1 11,022.5 8,807.3 4,516.6 3,767.8 3,932.2 3,920.2 4,090.8 9,339.9 13,085.2 115,553.2 7.PGVA Rate 161.8 161.8 161.8 166.2 166.2 166.2 160.4 160.4 160.4 199.0 199.0 199.0 8.Actual UAF Dollar (3)2,918,401.4 3,154,418.6 2,514,103.6 1,831,852.2 1,463,696.7 750,628.0 604,199.2 630,563.0 628,642.4 813,972.6 1,858,413.3 2,603,645.1 19,772,536.2 9.UAFVA Volume Variane (4)162,439.0 88,026.7 (123,130.4)(116,394.0)363,570.7 192,276.6 203,873.1 243,792.9 233,643.9 41,119.4 209,089.4 (12,184.3)1,486,123.1 10.Line Pack Gas (LPG) Allocation (406,981.7) 11.2021 Damage Adjustment (207,750.3) 12.2020 Company Use True-up (117,507.2) 13.Total 2021 UAFVA (5)753,883.9 Notes (1) UAF Annual Varaince Allocation 16%17%13%10%8%4%3%3%3%4%8%11% 1,758.03 1,900.20 1,514.48 1,074.35 858.43 440.23 367.24 383.27 382.10 398.73 910.35 1,275.40 11,262.80 (2) Line 4 + Line 5 (3) Line 6 * Line 7 (4) Line 8 - Line 3 (5) Line 9 + Line 10 + Line 11 + Line 12 BREAKDOWN OF THE 2021 UNACCOUNTED-FOR GAS VARIANCE ACCOUNT ("2021 UAFVA") - EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Schedule 3 Page 1 of 1 Page 287 of 650 2022-05-31 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 Col. 10 Col. 11 Rate Class Budget Annual Use Normalized Actual Annual Use Normalized Usage Variance (1) Budget Customer Meters Normalized Volumetric Variance (2) DSM Budget DSM Actual DSM Volumetric Variance (3) Normalized Volumetric Variance Excluding DSM (4)Unit Rate AUTUVA: Revenue Impact, Exclusive of Gas Costs (5) (m3)(m3)(m3)(106m3)(106m3)(106m3)(106m3)(106m3)($/m3)($Millions) 1 2,452 2,404 (48) 2,088,486 (99.4)(4.8)(4.8)0.0 (99.4)0.0712 (7.07) 6 28,889 27,794 (1,094)170,204 (186.3)(10.8)(10.8)0.0 (186.3)0.0422 (7.86) Total (14.93) Notes (1)Col. 2 - Col. 1 (2)Col. 3 * Col. 4 (3)Col. 7 - Col. 6 (4)Col. 5 - Col. 8 (5)Col. 9 * Col. 10 2021 AVERAGE USE TRUE UP VARIANCE ACCOUNT - EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Schedule 4 Page 1 of 1 Page 288 of 650 1 Enbridge Gas Inc. 50 Keil Drive N Chatham, Ontario N7M 5M1 Canada January 4, 2021 Subject: Storage at Dawn, injections commencing April 1, 2021 Enbridge Gas Inc. operating as Enbridge Gas Distribution (Enbridge Gas) requires firm natural gas storage services with injections commencing April 1, 2021. This storage service request is being administered by Guidehouse (formerly Navigant Consulting) on behalf of Enbridge Gas. All questions and responses are to be directed to paul.moran@navigant.com. Due to the recent acquisition of Navigant Consulting by Guidehouse, we will continue to use the Navigant.com domain for purposes of this RFP. Do not contact Enbridge Gas directly regarding this process. Enbridge Gas is seeking a diverse portfolio of storage services that both meet and exceed the minimum requirements below. This includes those that allow higher deliverability and access to multiple nomination windows for each gas day. Enbridge Gas requires that these storage services meet the following specifications: Term: Up to five (5) years commencing April 1, 2021. To encourage storage contracts term diversity, Enbridge Gas is seeking service offerings of various term lengths. The amount placed will be at Enbridge Gas’s discretion. Term Potential to be contracted 1 - year 0 PJ’s 2 - year 0 - 1 PJ’s 3 - year 0 - 2 PJ’s 4 - year 0 - 2 PJ’s 5 - year 0 - 3 PJ’s Location: Enbridge Gas will deliver gas to Storage Provider at Union Dawn for injection, and Storage Provider will re-deliver gas to Enbridge Gas at Union Dawn for withdrawal. If any transportation capacity is included as part of the storage offering to facilitate Dawn injections and withdrawals, please provide details. Firm Injection Requirements: Must include the months from May 1 through Sept. 30 Firm Withdrawal Schedule: Must include the months from Dec. 1 through March 31 Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Schedule 5 Page 1 of 2 Page 289 of 650 2 Responses: Should you be interested in supplying this storage service to Enbridge Gas, please complete the attached Excel form, stating the delivery points, term, MSB and service attributes with the relevant pricing, including demand, commodity charges and other items indicated.1 The deadline to submit your proposal(s) is 2 p.m. Mountain Daylight Time on Jan. 25, 2021, after which time Enbridge Gas will contact the parties which submitted proposals that have been selected2. Please submit your proposal(s) to the attention of Paul Moran per the instructions in the enclosed attachment. Additional Information: Enbridge Gas invites all potential participants to review a presentation that has been posted in the Storage and Transportation section of its website, within Presentations. If you have questions regarding this RFP, please direct to the attention of Paul Moran at the email address provided above. The deadline for any queries is 12 p.m.(noon) Mountain Daylight Time on Jan. 12, 2021. All queries and responses will be provided to all parties on Jan. 15, 2021. Enbridge Gas will contact successful bidders following the close of the RFP process. Yours truly, Paul Moran Guidehouse 1 This storage service request may have Dodd Frank Act implications and may require specific clauses to be included in any storage agreement between the parties. Any such storage agreement will not be binding until a definitive agreement is executed by the parties. 2 Please note that successful suppliers must meet all of Enbridge’s credit criteria. Enbridge, in its sole discretion and for whatever reason, may accept or reject any and all proposals. Enbridge reserves the right at any time after the deadline to conduct negotiations with one or more of the bidders to the exclusion of others, and such negotiations may include changes to the storage service described in this letter. Filed: 2022-05-31 EB-2022-0110 Exhibit D Tab 1 Schedule 5 Page 2 of 2 Page 290 of 650 Number Respondent Term (Years)Amount (GJs)Withdrawal Ratchet Ratchet Score Annual Price Term (Years) Amount (GJs) start End Days max Daily withdrawal ratchet (minimum days to withdraw) Ratchet Score Annual Demand Variable Injection Variable Withdra wal Annual Price per 1 PJ Annual Price for Provided Volume Withdrawal Period Price REDACTED Filed: 2022-05-31, EB-2022-0110, Exhibit D, Tab 1, Schedule 6, Page 1 of 1Page 291 of 650 UNABSORBED DEMAND COSTS (UDC) VARIANCE ACCOUNT UNION RATE ZONES 1.The balance in the UDC Variance Account is a credit to ratepayers of $1.666 million plus interest as of December 31, 2022 of $0.028 million, for a total of $1.694 million. The $1.666 million balance is the difference between the actual UDC incurred by the Union Rate Zones and the amount of UDC collected in rates. 1.UDC Recovery in Rates 2.To meet customer demands across the Union rate zones and to meet the planned storage inventory levels at October 31, approved rates for the Union rate zones in 2021 included planned unutilized pipeline capacity of 11.3 PJ in Union North West, 3.1 PJ in Union North East and 0 PJ in Union South. The UDC volumes included in 2021 rates are based on the Gas Supply Plan filed in Union’s Dawn Reference Price proceeding1. 3.As discussed in the Enbridge Gas 5 Year Gas Supply Plan2, in Union North, the upstream transportation capacity (long-haul, short-haul and STS) is first sized to meet the design day requirements. The amount of transportation capacity needed to meet average annual demand requirements is less than the capacity required to meet design day requirements. Therefore, a portion of contracted capacity for the Union rate zones is planned to be unutilized. In a warmer than normal year, UDC may be incurred in Union South, and additional UDC in Union North, to balance supply with lower demands. The Union North and Union South transportation portfolios are managed on an integrated basis and the pipeline to leave unutilized, if necessary, is determined based on the least cost option. In the EB-2021-0149 1 EB-2015-0181, Exhibit A, Tab 2, Appendix A, Schedule 1. 2 EB-2019-0137, page 82. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 1 of 58 Page 292 of 650 Settlement Proposal related to the disposition of the 2020 UDC Variance account, Enbridge Gas agreed: “In future deferral and variance account clearance applications related to the deferred rebasing term, Enbridge Gas agrees that it will include evidence reporting on: UDC and transportation capacity released by rate zone, and the costs and revenues transferred between rate zones.3” Table 1 provides the capacity released by rate zone and the associated UDC costs and/or revenue. The path released does not determine where the UDC costs or associated revenue for the releases will be allocated. Instead, the costs and revenue are allocated based on the portion of the UDC variance driven by each respective rate zone, as can be seen in Table 2. Table 1 Capacity Released & Related Costs Incurred Line No. Particulars Union North East Union North West Union South Total Franchise Area 1 Capacity Released (TJ) 2,953 5,957 19,631 28,541 2 UDC Costs Incurred ($000's) 1,522 3,754 3,040 8,315 3 Released UDC Capacity ($000's) 0 (1,238) (123)(1,361) 4.Enbridge Gas collected $8.620 million in rates for UDC for the Union rate zones during 2021 and recorded an associated interest credit of $0.028 million (see Table 2). Actual UDC costs in 2021 were $8.315 million offset by $1.361 million in released capacity value, resulting in a net cost of $6.954 million (see Table 3). 3 EB-2021-0149, Exhibit N1, Tab 1, Schedule 1, page 15. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 2 of 58 Page 293 of 650 Actual UDC costs are allocated to Union North West, Union North East and Union South in proportion to the actual supply and demand variances which occurred in each respective area. 5.The variance between the amounts collected in rates and the actual UDC costs, including the interest credit of $0.028 million, results in a net credit to ratepayers in the UDC Variance Account of $1.694 million. 6.The balance applicable to sales service and bundled DP customers in Union North West is a credit of $4.806 million and in Union North East, a credit of $0.033 million. There is a debit of $3.145 million applicable to sales service customers in Union South. 7. Table 2 provides the derivation of the UDC variance account balances by operational area. Table 2 UDC Variance Account by Operational Area Line No. Particulars ($000’s) Union North East Union North West Union South Total Franchise Area 1 UDC Collected in Rates (1,511) (7,109) -(8,620) 2 UDC Costs Incurred (Table 3) 1,479 2,383 3,092 6,954 3 Variance (line 1 + line 2) (32)(4,726)3,092 (1,666) 4 Interest (1)(80)53 (28) 5 (Credit)/Debit to Operations Area (33)(4,806)3,145 (1,694) A description of each item in Table 2 is set out below: Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 3 of 58 Page 294 of 650 1.1 UDC Collected in Rates 8.The 2021 OEB-approved rates include $9.082 million of UDC associated with 14.4 PJ of planned unutilized pipeline capacity in Union North West and Union North East and no planned unutilized pipeline capacity in Union South. The total cost of UDC in rates assumes TC Energy final tolls effective January 1, 2021. On an actual basis in 2021, Enbridge Gas recovered $8.620 million in Union North West and Union North East and $0.0 million in Union South. 1.2 UDC Costs Incurred 9.The actual unutilized capacity in 2021 was 28.5 PJ. The level of unutilized capacity experienced in 2021 was largely due to planned unutilized capacity (and resulting UDC) and warmer than normal weather. 10. The costs reflected in the UDC Variance Account are the total demand charges for unutilized pipeline capacity totaling $8.315 million, partially offset, by the value of $1.361 million generated from releasing the pipeline transportation capacity to the market. Unutilized upstream transportation capacity is released and sold on the secondary market to minimize UDC. The value generated from the transportation releases is credited to the UDC Variance Account mitigating the overall UDC impact as shown in Table 3 below. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 4 of 58 Page 295 of 650 Table 3 UDC Costs Incurred Line No. Particulars ($000’s) Union North East Union North West Union South Total Franchise Area 1 UDC Costs Incurred 1,768 2,849 3,697 8,315 2 Released Capacity Revenue (289)(466)(605)(1,361) 3 Net UDC Costs (Credit)/Debit 1,479 2,383 3,092 6,954 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 5 of 58 Page 296 of 650 ACCOUNT NO. 179-131 UPSTREAM TRANSPORTATION OPTIMIZATION – UNION RATE ZONES 1.The Upstream Transportation Optimization Deferral Account was approved by the OEB in its EB-2011-0210 Decision to capture the variance between the ratepayers’ 90% share of actual net revenues from optimization activities, and the amount refunded to ratepayers in rates. The 2021 balance in this deferral account is a debit from ratepayers of $8.616 million plus interest of $.078 million for a total debit from ratepayers of $8.694 million. 2.In setting rates for 2021, the OEB approved a forecast of optimization revenue of $14.918 million. Of that amount, 90% or $13.426 million, was credited to ratepayers in the OEB-approved 2021 rates.1 On an actual basis, consistent with the method approved in its EB-2011-0210 Decision and Rate Order, Union credited $15.392 million in rates to ratepayers during 2021, $1.966 million greater than the OEB-approved amount of $13.426 million. The credit is due to actual sales service volumes exceeding the forecast sales service volumes in rates. The main driver of actual sales service volumes exceeding the forecasted amount is customer growth since 2013. 3.The Company earned $7.529 million in net revenues from upstream transportation optimization during 2021 in the Union Rate Zones. In accordance with the OEB-approved sharing methodology, 90% of this net revenue, or $6.776 million, is to be credited to customers. As stated above, $15.392 million has already been credited through rates; therefore, the deferral balance is a debit from ratepayers of $8.616 million ($15.392 million less $6.776 million). 1 Detailed schedule last filed at EB-2017-0087 (2018 Rates), Draft Rate Order, Working Papers, Schedule 14, page 1. The credit of $13.426 million to Union rate zone in-franchise customers is maintained in the setting of rates for the 2019-2023 deferred rebasing period in accordance with the approved rate-setting mechanism. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 6 of 58 Page 297 of 650 4.Exhibit E, Tab 1, Schedule 1, provides a summary of the calculation of the balance in this deferral account. 2021 actual Upstream Transportation Optimization revenue in the Union rate zones is lower than 2013 OEB-approved revenue primarily due to the elimination of the TransCanada FT-RAM program ($5.800 million) and changing market dynamics. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 7 of 58 Page 298 of 650 ACCOUNT NO. 179-70 SHORT-TERM STORAGE AND OTHER BALANCING SERVICES – UNION RATE ZONES 1.The Short-Term Storage and Other Balancing Services Deferral Account includes revenues from C1 Off-Peak Storage, Gas Loans, Supplemental Balancing Services and C1 Short-Term Firm Peak Storage. The deferral account compares the ratepayer share (90%) of net revenue for Short-Term Storage and Other Balancing Services with the amount credited to ratepayers in rates for Short-Term Storage and Other Balancing Services. The net revenue for Short-Term Storage and Other Balancing Services is determined by deducting the costs incurred to provide service from the gross revenue. The balance in this deferral account is a debit from ratepayers of $3.577 million, plus interest of $0.0325 million for a total debit from ratepayers of $3.609 million. 2.As shown in Table 3, the balance is calculated by comparing $0.974 million (ratepayer 90% share of the actual 2021 Short-Term Storage and Other Balancing Services net revenue of $1.082 million) to the net revenue included in Union rate zone rates of $4.551 million.1 The details of the balance are found at Exhibit E, Tab 1, Schedule 2. 1 EB-2011-0210, Decision and Rate Order, January 17, 2013, page 16. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 8 of 58 Page 299 of 650 Deferral Summary: Short-term Storage and Other Storage Services Line No. Particulars ($000’s) Actual 2021 1 Net Revenue 1,082 2 Ratepayer Portion (90%) 974 3 Approved in Rates 4,551 4 Deferral Balance Payable to/(Collectable from) Ratepayers (3,577) 3.Actual 2021 revenues from C1 Off-Peak Storage, Gas Loans and all other Balancing services of $1.075 million were $1.425 million lower than the 2013 OEB-approved forecast of $2.500 million. 4.The C1 Short-Term Firm Peak Storage revenues of $1.536 million were $6.347 million lower than the 2013 Board-approved forecast of $7.883 million. Actual Union rate zone utility storage requirements for 2021 were 8.3 PJ higher than the 2013 OEB-approved forecast, resulting in a decrease in the C1 Short-Term Firm Peak Storage available for sale (from 11.3 PJ in 2013 OEB-approved to 3.0 PJ in 2021). Union rate zone customers received the value of storage directly through the use of the storage space, rather than through the sale of short-term storage. 5.Year-over-year, actual utility storage requirements for 2021 were 0.7 PJ lower than the requirement in 2020, resulting in an increase in the C1 Short-Term Peak Storage available for sale (from 2.3 PJ in 2020 to 3.0 PJ in 2021). This is a result of a decrease in the storage requirement for utility customers. The storage requirement for the general service market was calculated using the OEB-approved aggregate excess methodology. The storage requirement for the contract market was calculated specifically for each customer using either the OEB-approved aggregate excess Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 9 of 58 Table 3 Page 300 of 650 methodology, the 15 times obligated Daily Contracted Quantity (DCQ) storage methodology, or the 10 times Firm Contract Demand (CD) storage methodology (for those customers who have elected the Customer Managed Service).2 Enbridge Gas has included the calculation for utility storage space requirements and the deliverability by rate class at Exhibit E, Tab 1, Schedule 2, Appendix A.3 6.The 2013 OEB-approved forecast implied an annual average value for C1 Short- Term Firm Peak Storage of $0.70/GJ ($7.883 million/11.3 PJ), and the actual average annual C1 Short-Term Firm Peak Storage value in 2021 was $0.51/GJ ($1.5 million/3.0 PJ). Please see Figure 1 for Short-Term Peak Storage values in US dollars. 2 EB-2016-0245, Decision and Rate Order, Schedule 1, Settlement Proposal, page 7. 3 EB-2021-0149, Decision on Settlement Proposal, Schedule 1, Settlement Proposal, page16. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 10 of 58 Page 301 of 650 1.Non-Utility Storage Balances for 2021 7.In its EB-2011-0210 Decision, the OEB directed legacy Union to file a report similar to that ordered in EB-2011-0038 to monitor the inventory related to non-utility storage operations. Exhibit E, Tab 1, Schedule 3 shows the non-utility inventory balances for October and November of 2021 (for legacy Union storage). 8.During the 2021 injection season, the non-utility storage balance peaked on November 18, 2021 at 98.9% full with a balance of 126.1 PJ compared to available space of 127.6 PJ. At October 31, 2021, the date to which the Company manages its storage balance, the non-utility balance was 95.1% of available space. The balance stayed below the total non-utility available space of 100% for the rest of 2021. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 11 of 58 Figure 1 Historical Short-Term Firm Peak Storage Values at Dawn 2013-2021 Page 302 of 650 9.In EB-2011-0210, the OEB further ordered Union to file a calculation for a storage encroachment payment from Union’s non-utility business to Union’s utility business, if Union’s non-utility business encroached on Union’s utility space. There was no encroachment of utility space in 2021 and therefore no calculation applies. 2.Sale of Non-Utility Storage Space 10. Enbridge Gas prioritizes the sale of its legacy Union utility storage ahead of the sale of its short-term non-utility storage and allocates short-term peak storage margins between utility and non-utility as directed by the OEB in EB-2011-0210.4 Margins from short-term peak storage services are proportionately split between the utility and non-utility customers based on the utility and non-utility share of the total quantity of short-term peak storage sold each calendar year. Short-term peak sales include any sale of storage space for a term of less than two storage years. 11. In 2021, Enbridge Gas sold a total of 3.0 PJ of short-term peak storage (legacy Union). The total 3.0 PJ was excess utility space, calculated by deducting 97.0 PJ of in-franchise utility requirement (as per the Gas Supply Plan) from the total 100 PJ of in-franchise utility storage. There was no sale of short-term peak storage from non- utility space. Total revenue from the sale of C1 Short-Term Peak Storage (Utility) in 2021 was $1.536 million. Details of the above sales are reflected in Exhibit E, Tab 1, Schedule 4. 4 EB-2011-0210, Decision and Order, pages 116-117. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 12 of 58 Page 303 of 650 ACCOUNT NO. 179-133 NORMALIZED AVERAGE CONSUMPTION (NAC) UNION RATE ZONES 1. The purpose of the NAC deferral account is to record the variance in delivery revenue and storage revenue and costs resulting from the difference between the target NAC included in OEB-approved rates and the actual NAC for general service rate classes Rate M1, Rate M2, Rate 01 and Rate 10. As described in Union’s 2014 Deferral Account Disposition1 proceeding, including the revenue from storage rates in the NAC deferral account requires storage-related costs associated with the difference in target and actual NAC to also be included in the deferral account balance. 2. For 2021, the balance in the NAC deferral account is a debit to ratepayers of $18.998 million plus interest of $0.239 million for a total debit to ratepayers of $19.237 million. 3. The NAC Deferral Account follows the same methodology agreed to by parties in Union’s 2014-2018 Incentive Regulation (IR) Settlement Agreement2 and as subsequently modified in Union’s 2015 Rates3 proceeding. 1. Target and Actual NAC 4. The 2021 target NAC used to calculate base rates for each rate class was approved by the OEB in Enbridge Gas’s 2021 Rates4 proceeding. The 2019 actual NAC, weather normalized using the 2021 weather normal, was used to determine the 2021 target NAC for each rate class to calculate base rates. Setting the 2021 target 1 EB-2015-0010. 2 EB-2013-0202. 3 EB-2014-0271. 4 EB-2020-0095. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 13 of 58 Page 304 of 650 NAC based on the 2019 actual NAC recognizes that over the two-year span to the current year, any volumes saved and lost revenues due to DSM activities will be captured by the variance between the target NAC and actual NAC. This is due to the inclusion of the DSM saved volumes within the actual reported consumption. 5. The 2021 forecast usage used to calculate Y factor unit rates for each rate class was approved by the OEB in Enbridge Gas’s 2021 Rates proceeding. The unit rates for pass-through (Y factor) costs are derived based on OEB-approved cost allocation and rate design methodologies and are passed through to customers at cost. 6. The 2021 actual NAC for each rate class is weather normalized using the 2021 weather normal, which is produced using the OEB-approved weather methodology consisting of a 50:50 average of the 30-year average and the 20-year trend estimates of annual heating degree-days. 7. Table 1 provides the 2021 target NAC and 2021 actual NAC by rate class for base rates. Table 1 2021 Target and Actual NAC - Base Rates Line No. Particulars (m3/customer) Rate 01 Rate 10 Rate M1 Rate M2 (a)(b)(c)(d) 1 2021 Target NAC 2,889 171,540 2,776 168,419 2 2021 Actual NAC 2,766 151,411 2,668 149,840 3 Variance (Target - Actual NAC) 124 20,129 108 18,580 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 14 of 58 Page 305 of 650 8. Table 2 provides the 2021 target and 2021 actual NAC by rate class for Y factor rates. Table 2 2021 Target and Actual NAC - Y Factor Rates Line No. Particulars (m3/customer) Rate 01 Rate 10 Rate M1 Rate M2 (a)(b)(c)(d) 1 2021 Target NAC 2,830 166,842 2,692 169,477 2 2021 Actual NAC 2,766 151,411 2,668 149,840 3 Variance (Target - Actual NAC) 64 15,431 24 19,637 2. Delivery and Storage Revenues 9. The deferral account balance is calculated by multiplying the variance between the weather normalized target NAC and the weather normalized actual NAC by the 2013 OEB-approved number of customers and the 2021 OEB-approved delivery and storage rates for each general service rate class. A credit balance in the NAC Deferral Account reflects that the actual NAC is greater than the target NAC, while a debit balance in the NAC Deferral Account reflects that the actual NAC is less than the target NAC. 10. Table 3 provides the NAC Deferral Account balances by rate class. The detailed calculation of the NAC Deferral Account balance can be found at Exhibit E, Tab 1, Schedule 6. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 15 of 58 Page 306 of 650 Table 3 2021 NAC Deferral Account Line No. Particulars ($000s) Rate 01 Rate 10 Rate M1 Rate M2 Total (a) (b) (c) (d) (e) 1 Delivery Revenue Balances 3,594 2,444 4,539 5,779 16,355 2 Storage Revenue Balances 1,873 1,407 916 886 5,081 3 Storage Cost Balances (201) (99) (890) (1,249) (2,438) 4 Interest 64 45 65 65 239 5 Total NAC Deferral Balance 5,330 3,797 4,629 5,481 19,237 3. Deferral Account Impacts 11. For Rate M1, the 2021 actual NAC is lower than the target NAC used to derive base rates by 108 m3/customer (Table 1, line 3, column (c)) and lower than the target NAC used to derive Y factor rates by 24 m3/customer (Table 2, line 3, column (c)). As shown in Table 3 above, this results in a delivery and storage revenue debit to ratepayers of $5.454 million ($4.539 million and $0.916 million respectively). In addition, the NAC volume variance decreases the Rate M1 storage requirement by 1.310 PJ. Accordingly, EGI must refund an amount of $0.890 million (Table 3, line 3, column (c)) to Rate M1 customers to recognize the decreased Rate M1 storage requirements. 12. For Rate M2, the 2021 actual NAC is lower than the target NAC used to derive base rates by 18,580 m3/customer (Table 1, line 3, column (d)) and lower than the target NAC used to derive Y factor rates by 19,637 m3/customer (Table 2, line 3, column (d)). As shown in Table 3 above, this results in a delivery and storage revenue debit to ratepayers of $6.665 million ($5.779 million and $0.886 million Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 16 of 58 Page 307 of 650 respectively). In addition, the NAC volume variance decreases the Rate M2 storage requirement by 1.840 PJ. Accordingly, EGI must refund $1.249 million (Table 3, line 3, column (d)) to Rate M2 customers to recognize the decreased Rate M2 storage requirements. 13. For Rate 01, the 2021 actual NAC is lower than the target NAC used to derive base rates by 124 m3/customer (Table 1, line 3, column (a)) and lower than the target NAC used to derive Y factor rates by 64 m3/customer (Table 2, line 3, column (a)). As shown in Table 3 above, this results in a delivery and storage revenue debit to ratepayers of $5.467 million ($3.594 million and $1.873 million respectively). In addition, the NAC volume variance decreased the Rate 01 storage requirement by 0.240 PJ. Accordingly, EGI must refund an amount of $0.201 million (Table 3, line 3, column (a)) to Rate 01 customers to recognize the decreased Rate 01 storage requirements. 14. For Rate 10, the 2021 actual NAC is lower than the target used to derive base rates NAC by 20,129 m3/customer (Table 1, line 3, column (b)) and lower than the target NAC used to derive Y factor rates by 15,431 m3/customer (Table 2, line 3, column (b)). As shown in Table 3 above, this results in a delivery and storage revenue debit to ratepayers of $3.851 million ($2.444 million and $1.407 million respectively). In addition, the NAC volume variance decreases the Rate 10 storage requirement by 0.120 PJ. Accordingly, EGI must refund $0.099 million (Table 3, line 3, column (b)) to Rate 10 customers to recognize the decreased Rate 10 storage requirements. 4. Storage Costs 15. The storage costs recognize that variances between the 2021 target NAC and the 2013 OEB-approved NAC change the storage requirements for each general service rate class. As OEB-approved storage rates are not updated during the IR term to reflect changes in storage requirements due to NAC variances, EGI must capture Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 17 of 58 Page 308 of 650 the NAC-related change in storage costs in the NAC Deferral Account for the Union rate zones as per the OEB’s Decision in Union’s 2013 Deferrals Disposition proceeding (EB-2014-0145), page. 9, “starting in 2014, the NAC Deferral Account, which replaces the Average Use Per Customer Deferral Account, will include storage related revenues and costs for general service rate classes.” 16. To determine the change in storage requirements for each general service rate class due to NAC variances, the Company calculated the NAC volume variance per customer between its 2021/2022 Gas Supply Plan and the 2013 OEB-approved volumes multiplied by the 2013 OEB-approved number of customers. 17. Using the OEB-approved aggregate excess methodology, EGI calculated the change in storage requirements for each of the general service rate classes due to variances in NAC. The 2021/2022 Gas Supply Plan volumes represent the April 1, 2021 to March 31, 2022 period, which are used to determine the storage requirements for general service rate classes effective November 1, 2021. These general service rate class storage requirements are then used in the calculation of the total in-franchise utility storage space requirement at November 1, 2021. The difference between the total in-franchise utility storage requirement and the total 100 PJ of utility storage represents the excess utility storage capacity available for sale (excess utility space) at November 1, 2021. 18. For Rate M1, the NAC volume variance between the 2021/2022 Gas Supply Plan and the 2013 OEB-approved volumes was a decrease of 6.254 PJ. The majority of the NAC volume variance decrease occurred in the winter months, which decreased the Rate M1 storage requirement by 1.310 PJ. This resulted in decreased storage costs of $0.890 million (Table 3, line 3, column (c)). Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 18 of 58 Page 309 of 650 19. For Rate M2, the NAC volume variance between the 2021/2022 Gas Supply Plan and the 2013 OEB-approved volumes was an increase of 4.705 PJ. The majority of the NAC volume variance increase occurred in the summer months, which decreased the Rate M2 storage requirement by 1.840 PJ and resulted in decreased storage costs of $1.249 million (Table 3, line 3, column (d)). 20. For Rate 01, the NAC volume variance between the 2021/2022 Gas Supply Plan and the 2013 OEB-approved volumes was an increase of 0.164 PJ. The majority of the NAC volume variance increase occurred in the summer months, which decreased the Rate 01 storage requirement by 0.240 PJ and decreased storage costs by $0.201 million (Table 3, line 3, column (a)). 21. For Rate 10, the NAC volume variance between the 2021/2022 Gas Supply Plan and the 2013 OEB-approved volumes was an increase of 0.543 PJ. The majority of the NAC volume variance increase occurred in the summer months, which decreased the Rate 10 storage requirement by 0.120 PJ and resulted in decreased storage costs of $0.099 million (Table 3, line 3, column (b)). 22. Overall, the NAC volume variance between the 2021/2022 Gas Supply Plan and the 2013 OEB-approved volumes resulted in a decrease in general service storage requirements of 3.510 PJ. Accordingly, EGI has included a storage cost credit of $2.438 million in the NAC Deferral Account. Please see Table 4 below for a summary of the change in general service storage requirements due to NAC volume variances by rate class. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 19 of 58 Page 310 of 650 Table 4 Change in General Service Storage Requirements from 2013 OEB-approved (based on weather normalized NAC) PJ PJ Rate M1 (1.310) Rate 01 (0.240) Rate M2 (1.840) Rate 10 (0.120) Total South (3.150) Total North (0.360) 23. The reduction in storage activity has decreased storage deliverability costs, the commodity-related costs at Dawn and storage inventory carrying costs. 24. The 3.510 PJ reduction in general service storage requirements due to NAC volume variances forms part of the 2.984 PJ of excess utility space available for sale for winter 2021/2022. The revenue from the sale of the 2.984 PJ of excess utility space is recorded in the Short-Term Storage and Other Balancing Deferral Account (Account No. 179-70). Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 20 of 58 Page 311 of 650 DEFERRAL CLEARING VARIANCE ACCOUNT– UNION RATE ZONES 1.The purpose of the Deferral Clearing Variance Account (DCVA) is to capture the differences between the forecast and actual volumes associated with the disposition of deferral account balances to the Union rate zones. The intent of the variance account is to minimize or eliminate the gains or losses to ratepayers and the Company as a result of volume variances associated with the disposition of deferral account balances. 2.The balance in this variance account is a credit to Union rate zones ratepayers of $3.120 million, plus interest to December 31, 2022 of a $0.046 million, for a total credit of $3.166 million. The balance includes the following residual balances from various dispositions, discussed further below: a.Prospective Recovery Account Dispositions ($ millions) i.2017/18 Demand Side Management (DSM)(1.990) ii.2019 Earnings Sharing and Deferrals (1.982) iii.2019 Federal Carbon Pricing Program (FCPP)(0.291) b.One-time Adjustment Account Dispositions i.2019 DSM 1.122 3.As reflected in Exhibit E, Tab 1, Schedule 2, page 1, Line 5, the overall balance also reflects a debit of $0.020 million in relation to the various deferral account dispositions including residual amounts not able to be disposed of as one-time billings and amounts related to manual rebills. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 21 of 58 Page 312 of 650 1.Prospective Recovery Account Dispositions 6.Of the account balance, a $3.971 million credit balance, plus interest of $0.589 credit, represents an under-refund/over-collection from ratepayers for dispositions disposed of using prospective recovery in the 2017/18 DSM Deferrals Disposition1 and 2019 Earnings Sharing and Deferrals Disposition2 proceedings. Please see Exhibit E, Tab 1, Schedule 5, page 1 for a summary of the deferral account balance disposed of using the prospective recovery method. Additionally, a $0.291 million credit is a residual balance from the disposition of 2019 federal carbon balances in the 2020 FCPP3 proceeding. 1.1Union Rate Zones 2017-2018 DSM Deferral (EB-2020-0067) 7.In its EB-2020-0067 Decision, the OEB approved the prospective disposition of the balances in the approved deferral accounts to rate classes through a temporary rate adjustment from April 1, 2021 to June 30, 2021. The total amount approved for prospective recovery from rate classes was a $24.196 million debit. Please see Exhibit E, Tab 1, Schedule 5, page 2, column (f), for the forecast amount to be recovered by rate class, based on the forecasted volumes as noted in column (a) of the same exhibit. 8.Actual volumes for the period April 1, 2021 to June 30, 2021 averaged approximately 4% greater than forecast due to colder weather in the same period. As a result of the actual volumes being greater than the forecasted volumes, the Company recovered $26.186 million, which is $1.990 million more than the balance approved for disposition. Please see Exhibit E, Tab 1, Schedule 5, page 2, column (g) for the actual disposition of deferral accounts and column (h) of the same exhibit for the variance between forecast and actual disposition. 1 EB-2020-0067. 2 EB-2020-0134. 3 EB-2019-0247. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 22 of 58 Page 313 of 650 1.2 Union Rate Zones 2019 Earnings Sharing and Deferrals Disposition (EB-2020-0134) 9.In its EB-2020-0134 Decision, the OEB approved the prospective disposition of the balances in the approved deferral accounts to rate classes through a temporary rate adjustment from October 1, 2021 to December 31, 2021. The total amount approved for prospective refund to rate classes was a $14.096 million credit. Please see Exhibit E, Tab 1, Schedule 5, page 3, column (e), for the forecast amount to be refunded by rate class, based on the forecasted volumes as noted in column (a) of the same exhibit. 10. Actual volumes for the period October 1, 2021 to December 31, 2021 averaged approximately 19% lower than forecast primarily due to warmer weather in the same period. As a result of the actual volumes being lower than the forecasted volumes, the Company refunded $12.115 million, which is $1.982 million less than the balance approved for disposition. Please see Exhibit E, Tab 1, Schedule 5, page 3, column (f) for the actual disposition amounts by rate class, based on the actual volumes as shown in column (b). Column (g) of the same exhibit shows the variance between forecast and actual disposition. 1.3 Union Rate Zones 2020 Federal Carbon Pricing Program (EB-2019-0247) 5.A $0.291 million credit balance pertains to over-collection from ratepayers related to the 2019 FCPP deferral and variance account disposition within the 2020 FCPP proceeding. In its EB-2019-0247 Decision, the OEB approved the prospective disposition of the balances in the 2019 FCPP deferral accounts to rate classes through a temporary rate adjustment from October 1, 2020 to December 31, 2020. 6.Following the OEB’s approval of 2019 balances, contract customers were subsequently exempted from the customer-related federal carbon levy. Enbridge Gas had already received approval to collect amounts from Union rate zones Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 23 of 58 Page 314 of 650 customers related to the exempted customers, therefore, the over-collection from customers requires a disposition to ratepayers. 2.One-time Adjustment Account Disposition 11. The 2019 DSM Deferrals Disposition was the first time Enbridge Gas used a common disposition methodology across the EGD and Union rate zones. The Rate Order of that proceeding reflects a one-time billing adjustment for all Enbridge Gas customers. 2.1 Union Rate Zones 2019 DSM Deferrals (EB-2021-0072) 12. A $1.122 million debit balance represents an under-collection from ratepayers for disposition using one-time-adjustment in the 2019 DSM Deferrals Disposition4 proceeding. In July of 2021, the Company received approval to clear the 2019 DSM deferral accounts within the EB-2021-0072 proceeding and dispose of the balance in October 2021. The billing adjustment was derived for each customer individually by applying the disposition unit rates to each customer’s actual consumption volume for the period July 1, 2019 to June 30, 2020 for the Union rate zone general service customers.5 The outstanding amount is as a result of the billing systems’ inability to locate all the intended customers. 4 EB-2021-0072. 5 Enbridge Gas Draft Rate Order, EB-2021-0072, June 30, 2021. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 24 of 58 Page 315 of 650 PARKWAY WEST PROJECT COSTS DEFERRAL ACCOUNT – UNION RATE ZONES 1.In its Parkway West Project (EB-2012-0433) Decision, the OEB approved the establishment of the Parkway West Project Costs Deferral Account to track the differences between the actual revenue requirement related to costs for the Parkway West Project and the revenue requirement included in rates. 2.The balance in this deferral account is a credit to Union rate zones ratepayers of $0.603 million plus interest of $0.006 million for a total credit balance of $0.609 million. The balance of $0.603 million represents the difference between the revenue requirement of $19.971 million included in 2021 rates (EB-2020-0095) and the calculation of the actual revenue requirement for 2021 of $19.368 million as shown in Table 1. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 25 of 58 Page 316 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 26 of 58 Page 317 of 650 1.Capital Expenditures 3.The actual 2021 capital expenditures on in-service assets are $0.015 million higher than 2021 OEB-approved as shown in Table 2. 4.Plant infrastructure costs were $0.015 million higher than costs included in 2021 OEB-approved rates due to consulting fees regarding the heritage homes discussed in the Company’s 2019 Earnings Sharing and Deferrals Disposition interrogatory response to OEB staff1. Enbridge Gas plans to mothball the heritage homes in 2022. 2.Average Investment 5.The average investment decrease of $1.367 million from OEB-approved is due to the cumulative capital expenditures being $1.444 million lower than OEB-approved. 3.Operating Expenses 6.Operating and maintenance expenses were $0.335 million below the costs included in the 2021 OEB-approved rates. The decrease is a result of a Long-term Service Agreement (LTSA) that was included in 2021 OEB-approved rates but not incurred in actual O&M expense. The Company elected not to enter an LTSA, that would 1 EB-2020-0134, EGI 2019 Earnings Sharing and Deferrals Disposition, Exhibit I.STAFF.25, a). Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 27 of 58 Page 318 of 650 have provided loss of critical unit coverage should the Company experience operational issues with Parkway B, as with the commissioning of Parkway D it was determined that it provided the required backup. 7.Property taxes were $0.191 million lower than costs included in 2021 OEB-approved rates. The decrease is a result of the Municipal Property Assessment Corporation (MPAC) deciding not to apply a Land Classification tax charge that was expected for 2019 and onwards. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 28 of 58 Page 319 of 650 BRANTFORD KIRKWALL/PARKWAY D PROJECT COSTS UNION RATE ZONES 1.In its Brantford-Kirkwall/Parkway D (EB-2013-0074) Decision, the OEB approved the establishment of the Brantford-Kirkwall/Parkway D Project Costs Deferral Account to track the differences between the actual revenue requirement related to costs for the Brantford-Kirkwall/Parkway D Project and the revenue requirement included in rates. 2. The balance in this deferral account is a credit to Union rate zone ratepayers of $0.045 million plus interest of $0.003 million for a total credit balance of $0.045 million. The balance of $0.045 million represents the difference between the revenue requirement of $15.329 million included in 2021 rates (EB-2020-0095) and the calculation of the actual revenue requirement for 2021 of $15.284 million as shown in Table 1. The small decline in the actual revenue requirement results from minor underages in the capital cost and municipal taxes of the project. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 29 of 58 Page 320 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 30 of 58 Page 321 of 650 UNACCOUNTED FOR GAS VOLUME DEFERRAL ACCOUNT UNION RATE ZONES 1.The purpose of the Unaccounted for Gas (UFG) Volume Deferral Account is to capture the difference between the unit cost of UFG recovered in the rates approved by the OEB and actual UFG costs incurred. The amount of the UFG volume deferral account to be cleared to customers is subject to a symmetrical dead-band of $5.0 million, with amounts within such dead-band being to Enbridge Gas’s account. 2.Union rate zones’ 2021 Board Approved rates included $10.1 million in UFG costs. Based on 2021 actual volumes, Enbridge Gas recovered $10.4 million in UFG costs for 2021. In comparison, Enbridge Gas’s actual 2021 UFG costs were $35.9 million. The difference of $25.5 million is above the $5.0 million threshold established by the OEB for the UFG Volume Variance Account. As a result, there is a debit balance of $20.5 million in the UFG Volume Deferral Account, plus interest of $0.2 million for a total debit balance of $20.7 million. See Table 1 below. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 31 of 58 Page 322 of 650 3.The methodology for determining the actual UFG expense of $35.9 million in 2021 is consistent with the methodology historically used to calculate actual UFG for the audited Financial Statements, utility rate setting and earnings calculation. 4.Table 2 and Table 3 provide historical UFG volumes and percentage of throughput for the Union rate zone from 2001 to 2021. LineNo.Particulars Variance($Millions) 1 UFG Cost Included in Rates 10.1$ 2 Net Recovery Variance 0.3$ 3 Total UFG Collected in 2021 Rates (line 1 + line 2)10.4$ 4 Total Utility UFG Actual Cost 35.9$ 5 Total Utility UFG Variance (line 3 - line 4)25.5-$ 6 $5M UFG Symmetrical Dead-band 5.0$ 7 UFG Volume Deferral (receivable)20.5-$ (1) Board Approved throughput was 32,010 106m3 versus actual throughput of 37,612 106m3 (2) Board Approved UFG % is 0.219% versus actual UFG % of 0.672% for 2021. Table 12021 UTILITY UFG VARIANCES FROM BOARD-APPROVED Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 32 of 58 Page 323 of 650 Table 2: Historical UFG Percentage of Throughput for the Union Rate Zone Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 33 of 58 Page 324 of 650 5.The 0.219% UFG percentage used in approved rates was determined in EB-2011-0210 using the weighted average of the previous three years actual UFG. At the time 2013 rates were set, the most recent three years actual UFG available was 2009 to 2011. The Board approved methodology uses a 3:2:1 weighting with the most recent year weighted most heavily. The result was a ratio for UFG in rates influenced heavily by 2011’s favourable ratio. Concern over the ability to manage UFG relative to the new ratio was a factor in the establishment of a deferral account to capture variances, as was approved in EB-2013-0202. Col.1 Col.2 Col.3 Calendar Year UFG Volumes (103 m3)UFG % 2001 184,102 0.673%2002 109,542 0.344%2003 108,819 0.356%2004 176,650 0.554%2005 169,540 0.507%2006 154,015 0.516%2007 203,713 0.609%2008 143,880 0.411%2009 201,845 0.637%2010 67,283 0.192%2011 35,668 0.105%2012 68,690 0.210%2013 113,997 0.320%2014 97,109 0.318%2015 54,408 0.174%2016 131,588 0.427%2017 108,901 0.342%2018 136,447 0.379%2019 137,652 0.376%2020 74,120 0.208%2021 252,582 0.672% Table 3 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 34 of 58 Page 325 of 650 6.Since the 2013 Board Approved percentage was determined, the average UFG percentage has been 0.356%, for the years of 2013 through 2021. Within that period of 2013 through 2021, the UFG % in 2015 was notably lower than the average, with a corresponding increase in 2016. Similarly, the UFG % in 2020 was lower than the average, with an increase in the UFG % observed in 2021. 7.As was noted in EB-2017-0091 Exhibit B.Staff.9, the increase in UFG volumes experienced in 2016 was primarily driven by a decrease in delivery volumes recorded in January 2016 relating to true-up of estimated consumption recorded in December 2015. 8.A similar decrease and offsetting increase in UFG volumes has been observed between the 2020 and 2021 calendar years. The average UFG % for 2020 and 2021 is 0.440%, which is approximately 163.5 103m3/year average for the two years. The Company has identified that the true-up of estimated consumption based on the calendarization of UFG volumes has contributed to volatility between 2020 and 2021, but has not resulted in a material increase to the historical average of UFG over the course of two years. Typical estimation true-ups are outlined below. 9.At the end of each reporting period, Enbridge Gas records an estimate of gas delivered but not yet billed. The true-up between the December 2020 estimate and the actual billed volumes resulted in a decrease to the delivery volumes recorded in January 2021. This true-up reflects that, when billings related to December 2020 were completed over the following month, it was determined there was an over- estimate of gas deliveries for December 2020. 10. A second common estimation true-up is known as a prior period adjustment (PPA). PPAs are processed when there is a variance between a billed estimate and actual volumes. The inclusion of PPAs within the annual reported consumption volumes is Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 35 of 58 Page 326 of 650 consistent with the methodology historically used to calculate actual UFG for the audited Financial Statements, utility rate setting and earnings sharing calculation. 11. The UFG volumes in 2020 were abnormally low compared to the historical average. The estimation true-up recorded in 2021 caused UFG volumes in 2021 to be elevated. As mentioned, the average of 2020 and 2021 is in line with the historical average of UFG volumes from 2013 to 2021. 12. Enbridge evaluated other factors that could have impacted UFG including, investigating meter reads between custody and check meters for inconsistencies, reviewing accounting processes associated with recording company use and line- pack changes, assessing impacts arising from the transition of Union rate zone customers to the SAP customer information system, and reviewing storage inventory adjustments. These items were deemed to have minimal impact on the elevated level of UFG in 2021. Enbridge is continuing to monitor and address potential contributors to UFG. 13. Volatility in UFG is not uncommon and is experienced across the gas utility industry. The 2019 UFG report prepared by ScottMadden filed in the 2020 Rates Application (EB-2019-0194) noted that: “….legacy Union and legacy EGD have year-to-year fluctuations in UFG levels that are generally consistent with those of other gas utilities. The fluctuations are a result of many factors, including weather, estimation variation, measurement variation, and billing and accounting adjustments. ……….all gas distribution pipeline systems have UFG as an element of operating a natural gas distribution system and that because of the numerous factors that impact UFG, the UFG percentage will fluctuate over time.1” 1 EB-2019-0194, UFG Progress Report, page 4. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 36 of 58 Page 327 of 650 14. Enbridge Gas filed the 2019 UFG Study as part of the 2020 rate application (EB-2019-0194). The report found that the primary sources of UFG include physical losses (eg. leaks, third-party damage and venting), metering variations, non-registering meters, theft, line pack and billing and accounting adjustments (such as the estimate of gas delivered but not yet billed required at the end of each reporting period to report results). Although the root causes of UFG are generally known as described above, it continues to be difficult to quantify the individual factors due to their nature. Certain sources of UFG, such as leaks and emissions, contribute to baseline UFG while other sources such as billing, and accounting adjustments contribute to UFG volatility. 15. As committed by the Company in 2020 Rates application (EB 2019-0194), Enbridge Gas will file an update in the 2024 rebasing application about the implementation of the UFG report recommendations and other activities to address UFG, and the impacts of such activities. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 37 of 58 Page 328 of 650 UNACCOUNTED FOR GAS (UFG) PRICE VARIANCE ACCOUNT UNION RATE ZONES 1.The UFG Price Variance Account captures the variance between the average monthly price of the Company’s purchases for the Union rate zones and the applicable OEB-approved reference price, applied to the Company’s actual UFG volumes for the Union rate zones. During 2021, the Company purchased 63,961 103m3 of gas supply in Union rate zones related to actual UFG volumes on behalf of ratepayers. The actual UFG purchases exclude the actual UFG collected from ratepayers who provide UFG in kind as part of customer supplied fuel (CSF). 2. The average actual cost of the UFG purchases in 2021 is $52.52/103m3 higher than the OEB-approved reference prices included in rates based on the Union South rate zone gas portfolio cost of $141.35/103m3. The result is a $3.36 million balance to be collected from ratepayers, as shown in Table 1 below. Table 2 provides the detailed calculation supporting the price variance of $52.52/103m3. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 38 of 58 Page 329 of 650 Line UFG VolumesNo.(103m3) 1 Experienced UFG (1)270,030 2 UFG Collected through CSF 206,069 3 UFG Volumes – Company Supplied (2)63,961 Deferral Calculation 4 UFG Volumes (103m3) – Company Supplied (2)63,961 5 Price Variance ($/103m3) (3)$52.52 6 Variance Account Balance ($ millions)$3.36 (1) Converted using the following heat values (39.28 Jan-Mar) (39.32 Apr – Dec). (2) UFG Volumes represent gas supply related to actual UFG volumes on behalf of ratepayers who do not provide UFG in kind as part of CSF. (3)See Table 2 for the price variance calculation. This represents weighted average actul cost relative to OEB-approved reference prices. Table 1 Calculation of 2021 UFG Price Variance Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 39 of 58 Page 330 of 650 LineNo.Union South Rate ZoneJanFebMarAprMayJunJulAugSepOctNovDecAverage Price1.0Board Approved Reference Price ($ / 103m3)131.43$ 131.43$ 131.43$ 135.62$ 135.62$ 135.62$ 129.13$ 129.13$ 129.13$ 169.23$ 169.23$ 169.23$ 141.35$ 2.0Actual Purchase ($)42,507,900$ 45,125,048$ 43,018,711$ 32,580,518$ 38,260,250$ 36,250,196$ 51,360,970$ 55,362,122$ 58,149,557$ 60,445,476$ 92,591,845$ 92,645,865$ 3.0Purchase Volumes (103m3)325,958 294,013 281,053 249,025 268,780 268,626 286,082 274,130 267,494 208,408 307,429 318,1184.0Average Purchase Cost (Union South)($ / 103m3)130.41$ 153.48$ 153.06$ 130.83$ 142.35$ 134.95$ 179.53$ 201.96$ 217.39$ 290.03$ 301.18$ 291.23$ 193.87$ 5.0Union South Price Variance ($ / 103m3) (1)1.02$ (22.05)$ (21.63)$ 4.78$ (6.73)$ 0.67$ (50.41)$ (72.83)$ (88.26)$ (120.80)$ (131.95)$ (122.00)$ (52.52)$ Notes(1) Line 1 - Line 4Table 2Calculation of 2021 Union South Price VarainceFiled: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 40 of 58 Page 331 of 650 LOBO C COMPRESSOR/HAMILTON MILTON PIPELINE PROJECT COSTS DEFERRAL ACCOUNT – UNION RATE ZONES 1.In its Dawn Parkway 2016 Expansion (EB-2014-0261) Decision, the OEB approved the establishment of the Lobo C Compressor/Hamilton-Milton Pipeline Project Costs Deferral Account to track the differences between the actual revenue requirement related to costs for the Project and the revenue requirement included in rates. 2. The balance in this deferral account is a debit from Union Rate Zone ratepayers of $0.024 million plus interest of $0.0003 million for a total debit balance of $0.024 million. The balance of $0.024 million represents the difference between the revenue requirement of $26.025 million included in 2021 rates (EB-2020-0095) and the calculation of the actual revenue requirement for 2021 of $26.049 million as shown in Table 1. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 41 of 58 Page 332 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 42 of 58 Page 333 of 650 1.Average Investment 3.The average investment decrease of $0.863 million from OEB-approved is due to the cumulative capital expenditures being $0.918 million lower than OEB-approved capital expenditures. 2.Operating Expenses 4.Operating and maintenance expenses were $0.241 million higher than the costs included in 2021 OEB-approved rates. The increase is a result of higher salaries/wages related to overtime costs not included in the original budget and pertain to the annual operations and general maintenance of the equipment and assets. 3.Property Tax 5.Property taxes were $0.154 million lower than costs included in 2021 OEB-approved rates. The decrease is a result of Provincial tax reductions for business education tax rates on commercial, industrial, and pipeline tax in 2021. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 43 of 58 Page 334 of 650 LOBO D/BRIGHT C/DAWN H COMPRESSOR PROJECT COSTS UNION RATE ZONES 1.In its EB-2015-0116 Decision, the OEB approved the establishment of the Lobo D/Bright C/Dawn H Compressor Project Costs Deferral Account to track the differences between the actual revenue requirement related to costs for the Lobo D/Bright C/Dawn H Compressor Project and the revenue requirement included in rates. 2. The balance in this deferral account is a credit to Union Rate Zone ratepayers of $0.112 million plus interest of $0.004 million, for a total credit balance of $0.116 million. The balance of $0.116 million includes a debit of $1.225 million which represents the difference between the revenue requirement of $45.154 million included in 2021 rates (EB-2020-0095) and the calculation of the actual revenue requirement for 2021 of $46.379 million as shown in Table 1. 3.A $1.337 million credit relates to the 2021 revenue generated from the sale of surplus Dawn Parkway system capacity of 30,393 GJ/day associated with the Lobo D/Bright C/Dawn H Compressor Project. In accordance with the 2018 Disposition of Deferral and Variance Account Balances and Utility Earnings proceeding (EB-2019-0105) approved Settlement Proposal, the surplus capacity is deemed to be sold long-term and the revenue credit for the 2021 year is calculated based on the M12 Dawn-Parkway rate of $3.665/GJ approved in the EB-2020-0181 Rate Order, dated May 18, 2021. A schedule supporting the 2021 revenue calculation is provided at Exhibit E, Tab 1, Schedule 7. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 44 of 58 Page 335 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 45 of 58 Page 336 of 650 1.Average Investment 4.The average investment decrease of $0.444 million from OEB-approved is due to the cumulative capital expenditures being $2.450 million lower than OEB-approved. 2.Operating Expenses 5.Operating and maintenance expenses were $0.914 million higher than the costs included in 2021 OEB-approved rates. The increase is a result of higher salaries/wages as the budget did not account for overtime costs, higher general maintenance costs than budgeted, and higher utility costs than budgeted. Salary/wages costs were not capitalized or captured in contingency costs as they were incurred for the annual operations and general maintenance of the equipment and assets. Table 2 shows the breakdown and comparison of actual 2021 operating and maintenance costs versus OEB-approved. 3.Income Taxes 6. The $0.379 million decrease in “Income Taxes – Utility Timing Difference” credit relates to a lower Capital Cost Allowance (CCA) deduction due to the lower average investment in 2021, versus OEB-approved, as well as lower CCA available on additions that were previously qualified for Bill C-97 accelerated CCA. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 46 of 58 Page 337 of 650 BURLINGTON OAKVILLE PROJECT COSTS DEFERRAL ACCOUNT UNION RATE ZONES 1.In its EB-2015-0116 Decision, the OEB approved the establishment of the Burlington Oakville Project Costs Deferral Account to track the differences between the actual revenue requirement related to costs for the Project and the revenue requirement included in rates. 2. The balance in this deferral account is a credit to Union rate zone ratepayers of $0.051 million plus interest of $0.0004 million for a total credit balance of $0.051 million. The balance of $0.051 million represents the difference between the revenue requirement of $5.707 million included in 2021 rates (EB-2020-0095) and the calculation of the actual revenue requirement for 2021 of $5.656 million as shown in Table 1. The small decline in the actual revenue requirement results from minor underages in the capital cost and operating costs of the project. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 47 of 58 Page 338 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 48 of 58 Page 339 of 650 2021 ONTARIO ENERGY BOARD COST ASSESSMENT VARIANCE ACCOUNT UNION RATE ZONES 1.The purpose of the 2021 Ontario Energy Board Cost Assessment Variance Account (OEBCAVA) was to record any variances between the OEB costs assessed to Enbridge Gas (relevant to the Union rate zones) through application of the revised Cost Assessment Model (CAM), which became effective April 1, 2016, and the OEB costs which were included in Union rate zones rates, which were determined through application of the prior CAM. The scope of the account is consistent with prior OEBCAVAs. However, in accordance with the EB-2020-0134 OEB-approved Settlement Proposal, in Enbridge Gas’s 2019 Earnings Sharing and Deferral Disposition proceeding, the base OEB costs assumed to be included in rates have been escalated to the reflect the growth in the amount recovered through rates, which results from annual price cap adjustments and customer growth. The OEBCAVA was originally approved for establishment by OEB letter dated February 9, 2016, entitled: Revisions to the Ontario Energy Board Cost Assessment Model. 2.The amount recorded within the 2021 OEBCAVA is a $0.907 million debit plus interest of $0.011 million for a total debit balance of $0.919 million. This amount reflects the variance between OEB costs assessed to Enbridge Gas (relevant to Union rate zones) in each quarter of fiscal 2021, utilizing the revised CAM, and Union’s average quarterly OEB cost assessment under the prior CAM, escalated in accordance with the EB-2020-0134 OEB-approved Settlement Proposal. 3.In order to calculate the amount to be recovered through the 2021 Union rate zones OEBCAVA, the Company first needed to apportion the actual 2021 OEB assessed costs between the legacy rate zones. Commencing with the OEB’s 2019/2020 fiscal Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 49 of 58 Page 340 of 650 first quarter assessment (for the period April 1, 2019 through June 30, 2019), and continuing since, EGI has been receiving one consolidated quarterly bill for the amalgamated utility. To apportion the quarterly assessments received in 2021 between rate zones, the assessments were prorated based on the total invoices received by each legacy utility for the OEB’s 2018/2019 fiscal year (for the period April 1, 2018 through March 31, 2019), the final year for which the OEB issued invoices to each legacy utility. Table 1 below shows the proration of the OEB’s 2018/2019 fiscal year assessments between each legacy utility/rate zone (59.76% EGD rate zone, 40.24% Union rate zones). Table 2 shows the apportionment of EGI’s 2021 assessed costs to the Union rate zones, and the calculation of the amount recorded in the 2021 Union rate zones OEBCAVA. 4.To calculate the amount for recovery through the 2021 Union rate zones OEBCAVA, the Company also needed to establish the base comparator, reflecting the OEB costs included in Union rate zones rates, determined through application of the prior Cost Assessment Model. In accordance with the EB-2020-0134 OEB approved Settlement Proposal, the amount reflected in rates is also to be increased, or escalated, to reflect the growth in the amount recovered as a result of annual price cap adjustments and customer growth. To establish the 2021 base comparator, the Company escalated the 2020 quarterly comparator of $0.718 million by the sum of the 2021 Price Cap Index (PCI) of 1.70%, and the Union rate zones ICM threshold calculation Growth Factor (g) of 1.46%, which were approved as part of EGI’s 2021 Rate Application, EB-2020-0181. The escalation resulted in a 2021 quarterly comparator of $0.741 million ($0.718 million * (1 + (1.70% + 1.46%))). As noted above, Table 2 below shows the apportionment of EGI’s actual 2021 assessed costs to the Union rate zones, and the calculation of the amount recorded in the 2021 Union rate zones OEBCAVA utilizing a base comparator of $0.741 million. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 50 of 58 Page 341 of 650 5.Within this proceeding, the Company is requesting clearance of the principal and interest balances recorded in the 2021 OEBCAVA, in the amount of $0.907 million and $0.011 million respectively, as shown in Exhibit C, Tab 1, Schedule 1. OEB 2018/2019 Cost Assessments EGD UGL Total Apr. 1 to Jun. 30, 2018 1,467,963.00 988,479.00 2,456,442.00 Jul. 1 to Sep. 30, 2018 1,356,860.00 913,873.00 2,270,733.00 Oct. 1 to Dec. 31, 2018 1,356,860.00 913,873.00 2,270,733.00 Jan. 1 to Mar. 31, 2019 1,356,860.00 913,873.00 2,270,733.00 5,538,543.00 3,730,098.00 9,268,641.00 Percentage of Total 59.76% 40.24% 100.00% Table 1 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 51 of 58 Page 342 of 650 2021 BASE SERVICE NORTH T-SERVICE TRANSCANADA CAPACITY DEFERRAL ACCOUNT – UNION RATE ZONE 1.In the EB-2015-0181 decision, the OEB approved a new optional Union North T- service Transportation from Dawn to allow T-service customers in the Union North East Zone with access to Dawn-based supply. To facilitate this service, Enbridge Gas was required to contract for 15-year transportation capacity with TransCanada from Parkway to the Union CDA, Union NCDA and Union EDA. The approved rates for the service are equal to the EGI C1 rate from Dawn to Parkway and the TransCanada Firm Transportation (FT) toll to Delivery Area. 2.The purpose of the North T-service TransCanada Capacity Deferral Account is to record the difference between the costs for the capacity from Parkway to the northern Delivery Area as part of the Base Service offering of the North T-Service Transportation from Dawn and the demand revenues collected from the North T- Service customers. 3.The total cost Enbridge Gas paid for the contracted TransCanada capacity in 2021 was $2.172 million or $180,961.81 per month. On an actual basis, the Company collected $2.088 million demand revenues from the North T-service customers. As a result, the balance of the 2021 North T-service TransCanada Capacity Deferral Account is a collection from ratepayers of $0.084 million plus interest of $0.0001 million and the balance will be cleared amongst all North T-service from Dawn customers. The variance is driven by a net reduction of 313 GJ/day of contracted capacity by North T-service customers. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 52 of 58 Page 343 of 650 PANHANDLE REINFORCEMENT PROJECT COSTS DEFERRAL ACCOUNT UNION RATE ZONES 1.In its Panhandle Reinforcement Project (EB-2016-0186) Decision, the OEB approved the establishment of the Panhandle Reinforcement Project Costs Deferral Account to track the differences between the actual net revenue requirement related to costs for the Project and the net revenue requirement included in rates. 2.The balance in this deferral account is a credit to Union rate zone ratepayers of $3.162 million plus interest of $0.021 million for a total credit balance of $3.183 million. The balance of $3.162 million represents the difference between the net revenue requirement of $10.701 million included in 2021 rates (EB-2020- 0095) and the calculation of the actual net revenue requirement for 2021 of $7.539 million as shown in Table 1. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 53 of 58 Page 344 of 650 1.Average Investment 3.The average investment decrease of $4.113 million from OEB-approved is due to the cumulative capital expenditures being $4.270 million lower than OEB-approved. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 54 of 58 Page 345 of 650 2.Property Tax 4.Property taxes were $0.222 million lower than costs included in 2021 OEB- approved rates. The decrease is a result of Provincial tax reductions for business education tax rates on commercial, industrial, and pipeline tax in 2021. 3.Required Return 5.The decrease in the required return of $0.218 million is the result of a decrease in the average rate base. 4.Incremental Project Revenue 6.The actual incremental revenue of $8.876 million reflects the continued addition of new customers and expansion by existing customers in the Panhandle market, primarily in the greenhouse sector and is $2.633 million higher than the forecast incremental revenue included in 2021 Rates. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 55 of 58 Page 346 of 650 2021 PENSION AND OPEB FORECAST ACCRUAL VS ACTUAL CASH PAYMENT DIFFERENTIAL VARIANCE ACCOUNT – UNION RATE ZONES 1.In its EB-2015-0040 report to all regulated entities, dated September 14, 2017, titled “Regulatory Treatment of Pension and Other Post-employment Benefits (OPEB) Costs”, the OEB ordered the establishment of the deferral account, effective January 1, 2018, to be used by utilities that are approved to recover their pension and OPEB costs on an accrual basis1. The Company recovers its pension and OPEB costs on an accrual basis. 2.The purpose of the Pension and OPEB Forecast Accrual vs Actual Cash Payment Differential Variance Account is to track the differences between forecast accrual pension and OPEB amounts recovered in rates, and the actual cash payments made for both pension and OPEB, on a go-forward basis from the date the account was established. 3.In 2021, the accrual pension and OPEB amount recovered in rates for the Union rate zones was $47.4 million and the actual cash payments made for both pension and OPEB were $22.6 million, resulting in an annual $24.8 million credit variance. The variance carried forward from 2020 is a $50.4 million credit variance, resulting in a cumulative $75.2 million credit variance through 2021. 4.In accordance with the OEB’s Report (EB-2015-0040), when the cumulative forecasted accrual amount recovered in rates exceeds the cumulative actual cash payments, an asymmetrical carrying charge, to be returned to ratepayers, should be accrued based on the opening monthly difference between amount recovered in 1 EB-2015-0040, Regulatory Treatment of Pension and Other Post-employment Benefits (“OPEB”) Costs, September 14, 2017, page 2. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 56 of 58 Page 347 of 650 rates and actual cash payments. The balance in the account for 2021 is an interest credit to ratepayers of $1.346 million to December 31, 20212. Table 1 sets out the detailed calculation of the forecast accrual versus actual cash payments, and associated interest. 2 Interest is as of December 31, 2021, as interest on this account is calculated on a cumulative account balance basis. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 57 of 58 Page 348 of 650 ACCOUNTS WITH A ZERO BALANCE UNION RATE ZONES 1.The following 2021 accounts for the Union rate zones have no balance, and are therefore not requested for clearance to customers: •Spot Gas Variance Account •Unbundled Services Unauthorized Storage Overrun Deferral Account •Gas Distribution Access Rule (GDAR) Costs Deferral Account •Conservation Demand Management Deferral Account •Sudbury Replacement Project Costs Deferral Account •Parkway Obligation Rate Variance Deferral Account •Unauthorized Overrun Non-Compliance Account Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Page 58 of 58 Page 349 of 650 Col. 1 Col. 2 Col. 3 Line 2013 Board 2020 Actual 2021 Actual No. Particulars Approved Total Total ($000's)($000's)($000's) 1.Base Exchange Revenue (9,118.00) (4,243.99) (7,528.52) 2.FT RAM Exchange Revenue (5,800.00) 3.Total Exchange Revenue (14,918.00) (4,243.99) (7,528.52) 4.Exchange Revenue Subject to Deferral (4,243.99) (7,528.52) 5.Ratepayer portion - 90% (13,426.20) (3,819.59) (6,775.67) 6.10% Union Incentive Payment (424.40) (752.85) 7.Less: Gas Supply Optimization Margin in Rates 13,426.00 15,943.18 15,391.98 8.2021 Deferral Account Balance receivable from Ratepayers 12,123.59 8,616.31 TRANSPORTATION OPTIMIZATION DEFERRAL ACCOUNT - UNION RATE ZONES Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 1 Page 1 of 1 Page 350 of 650 Col .1 Col. 2 Col. 3 Line Board-Approved Actual ActualNo.Particulars ($000's)2013 2020 2021 Revenue 1. C1 Off-Peak Storage 500 1,002 433 2. Supplemental Balancing Services 2,000 1,016 640 3. Gas Loans 1 1 4. LBA 0 0 5.2,500 2,019 1,075 6. C1 ST Firm Peak Storage 7,883 2,715 1,536 7.Total Revenue (1)10,383 4,735 2,610 Costs 8.O&M (2)3,810 782 1,004 9.UFG (3)316 114 266 10.Compressor Fuel (4)1,201 196 257 11. Total Costs 5,327 1,091 1,528 12. Net Revenue (line 7 - 11)5,056 3,644 1,082 13. Less Shareholder Portion (10%)505 364 108 14. Ratepayer Portion 4,551 3,279 974 15. Approved in Rates 4,551 4,551 4,551 16.Deferral balance payable to / (collectable from) ratepayers (0)(1,272)(3,577) Notes: (1) Based on short-term storage services provided (2)Revenue Requirement on 11.3 PJ's of board approved excess in-franchise storage capacity (3) Based on short-term storage volumes in proportion to total volumes (4) Based on short-term storage activity in proportion to total actual storage activity BREAKDOWN OF SHORT TERM STORAGE DEFERRAL ACCOUNT (STSDA) - UNION RATE ZONES Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 2 Page 1 of 1 Page 351 of 650 Storage Storage Line Space (2)Deliverability (2) No. Particulars (PJ)(GJ/d) (a)(b) Union North Rate Zone 1 Rate 01 12.2 212,035 2 Rate 10 2.9 60,957 3 Rate 20 2.4 35,273 4 Rate 25 - - 5 Rate 100 0.1 1,139 6 Total Union North Rate Zone 17.5 309,405 Union South Rate Zone 7 Rate M1 40.0 990,924 8 Rate M2 10.6 318,002 9 Rate M4 2.9 174,198 10 Rate M5 0.0 291 11 Rate M7 2.1 67,205 12 Rate M9 0.3 9,448 13 Rate M10 0.0 145 14 Rate T1 1.5 40,947 15 Rate T2 9.3 200,945 16 Rate T3 3.2 70,931 17 Total Union South Rate Zone 70.0 1,873,036 Ex-Franchise 18 Excess Utility Storage 3.0 (3)35,816 19 Rate C1 - - 20 Rate M12 - - 21 Rate M13 - - 22 Rate M16 - - 23 Total Ex-Franchise 3.0 35,816 24 System Integrity Space 9.5 - 25 Total Union Rate Zone 100.0 2,218,257 EGD Rate Zone 26 Rate 1 61.2 1,208,141 27 Rate 6 58.7 962,711 28 Rate 9 - - 29 Rate 100 - - 30 Rate 110 2.2 5,076 31 Rate 115 0.5 2,013 32 Rate 125 - - 33 Rate 135 - - 34 Rate 145 0.3 - 35 Rate 170 0.8 - 36 Rate 200 2.0 20,355 37 Total EGD Rate Zone 125.8 2,198,296 38 Total Enbridge Gas (line 25 + line 37)225.8 4,416,553 Notes: (1)Allocation to rate classes using OEB-approved cost allocation methodologies.(2)Union rate zone storage space based on actual W21/22 usage and storage deliverability based on forecast W21/22 requirements. EGD rate zone storage space and deliverability based on 2021 Gas Supply plan.(3)EB-2022-0110, Exhibit E, Tab 1, page 6. ENBRIDGE GAS INC. 2021 Storage Space & Deliverability 2021 (1) Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 2 Appendix A Page 1 of 1 Page 352 of 650 Date Entitlement Balance % Full Date Entitlement Balance % Full (PJ)(PJ)(%)(PJ)(PJ)(%) 1-Oct-21 127.6 118.8 93.1%1-Nov-21 127.6 121.4 95.1% 2-Oct-21 127.6 119.0 93.2%2-Nov-21 127.6 121.4 95.2% 3-Oct-21 127.6 118.9 93.2%3-Nov-21 127.6 121.2 95.0% 4-Oct-21 127.6 118.6 93.0%4-Nov-21 127.6 121.2 95.0% 5-Oct-21 127.6 118.5 92.9%5-Nov-21 127.6 121.4 95.2% 6-Oct-21 127.6 118.6 93.0%6-Nov-21 127.6 121.6 95.3% 7-Oct-21 127.6 118.7 93.0%7-Nov-21 127.6 121.8 95.4% 8-Oct-21 127.6 118.7 93.0%8-Nov-21 127.6 121.7 95.4% 9-Oct-21 127.6 118.9 93.2%9-Nov-21 127.6 122.2 95.8% 10-Oct-21 127.6 119.0 93.3%10-Nov-21 127.6 122.9 96.3% 11-Oct-21 127.6 119.2 93.4%11-Nov-21 127.6 123.8 97.0% 12-Oct-21 127.6 119.2 93.4%12-Nov-21 127.6 124.5 97.6% 13-Oct-21 127.6 119.3 93.5%13-Nov-21 127.6 125.1 98.1% 14-Oct-21 127.6 119.3 93.5%14-Nov-21 127.6 125.2 98.1% 15-Oct-21 127.6 119.4 93.6%15-Nov-21 127.6 125.2 98.1% 16-Oct-21 127.6 119.6 93.8%16-Nov-21 127.6 125.4 98.3% 17-Oct-21 127.6 119.7 93.9%17-Nov-21 127.6 125.9 98.7% 18-Oct-21 127.6 119.7 93.9%18-Nov-21 127.6 126.1 98.9% 19-Oct-21 127.6 119.7 93.8%19-Nov-21 127.6 125.9 98.7% 20-Oct-21 127.6 119.7 93.9%20-Nov-21 127.6 125.9 98.7% 21-Oct-21 127.6 119.8 93.9%21-Nov-21 127.6 125.9 98.7% 22-Oct-21 127.6 119.8 93.9%22-Nov-21 127.6 125.1 98.1% 23-Oct-21 127.6 119.9 94.0%23-Nov-21 127.6 124.3 97.4% 24-Oct-21 127.6 120.1 94.1%24-Nov-21 127.6 124.1 97.3% 25-Oct-21 127.6 120.1 94.1%25-Nov-21 127.6 124.0 97.2% 26-Oct-21 127.6 120.2 94.2%26-Nov-21 127.6 123.9 97.1% 27-Oct-21 127.6 120.3 94.3%27-Nov-21 127.6 123.5 96.8% 28-Oct-21 127.6 120.6 94.5%28-Nov-21 127.6 122.9 96.3% 29-Oct-21 127.6 120.9 94.8%29-Nov-21 127.6 122.2 95.8% 30-Oct-21 127.6 121.1 94.9%30-Nov-21 127.6 121.7 95.4% 31-Oct-21 127.6 121.3 95.1% SUMMARY OF NON-UTILITY STORAGE BALANCES - UNION RATE ZONES Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 3 Page 1 of 1 Page 353 of 650 Revenue Utility Short Term from Short Line Storage Peak Storage Term Peak No. Particulars Space Sold Storage (PJs)(PJs) ($ millions) 1 Net Revenues from Short Term Peak Storage 1.5 2 Total Short Term Peak Storage Sales 3.0 3 Storage Space reserved for Utility 100.0 4 Utility Space Requirement 97.0 5 Excess Utility Storage Space (1) 3.0 6 Total Utility Short Term Peak Storage Sales (2)3.0 7 Total Non Utility Short Term Peak Storage Sales 0.0 8 Short Term Peak Storage Net Revenues - Utility (3)1.5 9 Short Term Peak Storage Net Revenues - Non Utility (4)- Notes: (1) line 3 - line 4 (2) line 2 (3) line 6 /line 2 *line (4) line 7/ line 2* line 1 BETWEEN UTILITY AND NON UTILITY - UNION RATE ZONES ALLOCATION OF SHORT TERM PEAK STORAGE REVENUES Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 4 Page 1 of 1 Page 354 of 650 2019 2017-18 Line ESM Deferral DSM Deferral No. Particulars ($000)EB-2020-0134 EB-2020-0067 Interest (1)Total (a)(b)(c) (d) = (a) + (b) + (c) 1. Prospective Recovery/(Refund) - Delivery (2,233) (1,990) (63) (4,285) 2. Prospective Recovery/(Refund) - Gas Supply Transportation (1,447) (21) (1,469) 3. Prospective Recovery/(Refund) - Gas Supply Commodity 1,698 25 1,723 4. Sub-Total (1,982) (1,990) (59) (4,030) 5. Manual Re-bills and other one-time billing adjustments 20 6. Grand Total (4,010) (1) Interest forecasted to December 31, 2022. DEFERRAL VARIANCE CLEARING ACCOUNT - UNION RATE ZONES 2019 ESM (EB-2020-0134), 2017-2018 DSM (EB-2020-0067) DISPOSITIONS DISPOSED OF DURING 2021 2021 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 5 Page 1 of 3 Page 355 of 650 2017 DSM 2018 DSMUnit Rate for Unit Rate for Prospective Prospective Line Rate Forecast Volume Actual Volume Volume Variance Recovery/(Refund) Recovery/(Refund)Forecast Actual VarianceNo.Particulars Class (10³m³) (1)(10³m³)(10³m³)(cents/m³)(cents/m³)($000)($000)($000) (a)(b)(c) (d)(e) (f) = ((a) * (d)/100) + ((a) * (e)/100)) (g) = ((b) * (d)/100) + ((b) * (e)/100))(h) = (f) - (g) General Service for Prospective Recovery(Refund) - Delivery 1 Small Volume General Service 01 218,218 206,105 12,113 (0.9140) (0.8186) (3,781) (3,571) (210) 2 Large Volume General Service 10 97,893 82,334 15,559 (0.8698) (1.3393) (2,163) (1,819) (344) 3 Small Volume General Service M1 708,032 724,452 (16,420) 2.3352 2.5733 34,754 35,560 (806) 4 Large Volume General Service M2 373,184 322,222 50,962 (0.5157) (0.7207) (4,614) (3,984) (630) 5 Total General Service for Prospective Recovery (Refund) - Delivery 1,397,327 1,335,112 62,215 24,196 26,186 (1,990) 6 Total 24,196 26,186 (1,990) Notes: (1) Forecast volume for the period April 1, 2021 to September 30, 2021. DEFERRAL VARIANCE CLEARING ACCOUNT - UNION RATE ZONES 2017/2018 DSM DEFERRAL DISPOSITION (EB-2020-0067) DISPOSITION PERIOD - APRIL1, 2021 TO SEPTEMBER 30, 2021 2021 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 5 Page 2 of 3 Page 356 of 650 Unit Rate for Prospective Line Rate Forecast Volume Actual Volume Volume Variance Recovery/(Refund) Forecast Actual Variance No.Particulars Class (10³m³) (1) (10³m³)(10³m³)(cents/m³) (2)($000)($000)($000) (a)(b)(c) (d) (e) = (a) * (d)/100 (f) = (b) * (d)/ 100 (g) = (c) - (f) General Service for Prospective Recovery(Refund) - Delivery 1 Small Volume General Service 01 321,283 275,592 45,691 (1.0715) (3,443) (2,953) (490) 2 Large Volume General Service 10 113,056 83,501 29,555 (1.1691) (1,322) (976) (346) 3 Small Volume General Service M1 951,810 822,199 129,611 (0.6869) (6,538) (5,648) (890) 4 Large Volume General Service M2 429,887 313,806 116,081 (0.4369) (1,878) (1,371) (507) 5 Total General Service for Prospective Recovery (Refund) - Delivery 1,816,036 1,495,097 320,939 (13,180) (10,948) (2,233) General Service for Prospective Recovery(Refund) - Gas Supply Transportation 6 Small Volume General Service-NW 01 90,838 80,740 10,098 (8.0456) (7,308) (6,496) (812) 7 Small Volume General Service-NE 01 230,446 194,851 35,595 (0.4405) (1,015) (858) (157) 8 Large Volume General Service-NW 10 27,145 19,561 7,584 (5.4548) (1,481) (1,067) (414) 9 Large Volume General Service-NE 10 84,374 62,677 21,697 (0.2959) (250) (185) (64) 10 Total General Service for Prospective Recovery (Refund) - Gas Supply Transportation 432,803 357,830 74,973 (10,054) (8,607) (1,447) Prospective Recovery/(Refund) - Gas Supply Commodity 11 Small Volume General Service M1 889,983 771,375 118,608 0.7902 7,033 6,095 937 12 Large Volume General Service M2 224,466 139,468 84,998 0.7902 1,774 1,102 672 13 Firm Com/Ind Contract M4 20,550 15,982 4,568 0.7902 162 126 36 14 Interruptible Com/Ind Contract M5 2,744 625 2,119 0.7902 22 5 17 15 Special Large Volume Contract M7 7,927 7,534 393 0.7902 63 60 3 16 Large Wholesale M9 10,631 6,454 4,177 0.7902 84 51 33 17 Small Wholesale M10 125 101 24 0.7902 1 1 0 18 Total Prospective Recovery (Refund) - Gas Supply Commodity 1,156,427 941,540 214,886 9,138 7,440 1,698 19 Total (14,096) (12,115) (1,982) Notes: (1) Forecast volume for the period October 1, 2021 to December 31, 2021. (2) Unit rate for prospective recovery/refund for each rate class equal to the gas supply commodity weighted-average unit rate. DEFERRAL VARIANCE CLEARING ACCOUNT - UNION RATE ZONES 2019 DEFERRAL DISPOSITION (EB-2020-0134) DISPOSITION PERIOD - OCTOBER 1, 2021 TO DECEMBER 31, 2021 2021 Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 5 Page 3 of 3 Page 357 of 650 Line Net Account No.Particulars Rate 01 Rate 10 Rate M1 Rate M2 Balance (a)(b)(c)(d)(e) 1 2021 Target NAC: m³2,889.4 171,539.6 2,775.7 168,419.3 2 2021 Actual NAC: m³2,765.6 151,410.7 2,667.6 149,839.7 3 Actual change in NAC: m³ (line 1 - 2) 123.7 20,128.9 108.1 18,579.6 4 2021 Target NAC: m³ 2,829.8 166,842.2 2,691.8 169,476.8 5 2021 Actual NAC: m³2,765.6 151,410.7 2,667.6 149,839.7 6 Actual change in NAC: m³ (line 4 - 5) 64.2 15,431.5 24.2 19,637.1 7 2013 Board-approved number of Customers at December 323,287.0 2,064.0 1,067,757.0 6,778.0 1,399,886.0 8 Annual Volume Impact (103m3) (1) 39,588 41,294 114,193 126,241 321,316 9 2021 Net Annual Average Delivery Rate ($/m3) (2)$0.087 $0.053 $0.037 $0.034 10 2021 Net Annual Average Storage Rate ($/m3) (3)$0.047 $0.034 $0.008 $0.007 11 Delivery Rate Annual Balance Amount ($000)(4)$3,461 $2,168 $4,221 $4,255 $14,106 12 Storage Rate Annual Balance Amount ($000) (4)$1,873 $1,407 $916 $886 $5,081 13 Annual Volume Impact (103m3) (1) 20,531 31,672 25,241 133,236 210,681 14 2021 Net Annual Average Delivery Rate ($/m3) (2)$0.006 $0.009 $0.013 $0.011 15 2021 Net Annual Average Storage Rate ($/m3) (3)$0.000 $0.000 $0.000 $0.000 16 Delivery Rate Annual Balance Amount ($000)(4)$133 $276 $317 $1,523 $2,249 17 Storage Rate Annual Balance Amount ($000) (4)$0 $0 $0 $0 $0 18 Total Delivery Rate Annual Balance Amount (line 11+16)$3,594 $2,444 $4,539 $5,779 $16,355.3 19 Total Storage Rate Annual Balance Amount (line 12+17)$1,873 $1,407 $916 $886 $5,080.9 20 Storage Cost Annual Balance Amount ($000) ($201)($99)($890)($1,249)($2,438) 21 Interest ($000)(5)$64 $45 $65 $65 $239 22 Total Deferral Account Amounts ($000) (line 18+19+20+21)$5,330 $3,797 $4,629 $5,481 $19,237 Notes: (1) (2) (3) (4) (5) Y Factor Rates UNION RATE ZONES Calculation of Balances by Rate Class in the NAC Deferral Account (No. 179-133) - Base Rates and Y-Factor Base Rates Y Factor Rates Base Rates Total Annual Balance Amounts ($000) The annual volume is obtained from a monthly calculation of approved customers and the monthly usage variance. The Net Annual Average Delivery Rate is the volume-weighted average of Board-approved monthly unit rates in effect The Net Annual Average Storage Rate is the volume-weighted average of Board-approved monthly unit rates in effect The annual revenue is obtained from a monthly calculation of volumes (lines 8 and 13) and the monthly unit delivery and storage rates (lines 9, 10, 14 and 15). Interest is calculated on the monthly opening balance in the deferral account in accordance with the methodology approved by the Board in EB-2006-0117. Interest is calculated to Dec 31, 2022. Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 6 Page 1 of 1 Page 358 of 650 Particulars Volume (TJ/d) (1) Revenue ($000's) (2)Project Surplus Allocation (%) Revenue Allocation ($000's) (a)(b)(a)(d) = (b) x (c) 2021 January 30 111 100%111 February 30 111 100%111 March 30 111 100%111 April 30 111 100%111 May 30 111 100%111 June 30 111 100%111 July 30 111 100%111 August 30 111 100%111 September 30 111 100%111 October 30 111 100%111 November 30 111 100%111 December 30 111 100%111 Total 1,337 1,337 Notes UNION RATE ZONES (1)Capacity of 30,393 GJ/d assumed to be sold long term. (2)Sold at the Dawn to Parkway M12 Rate of $3.665 $/GJ CALCULATION OF 2021 TRANSPORTATION REVENUES ON THE LOBO D/BRIGHT C/DAWN H COMPRESSOR PROJECT COST DEFERRAL ACCOUNT Filed: 2022-05-31 EB-2022-0110 Exhibit E Tab 1 Schedule 7 Page 1 of 1 Page 359 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 1 Page 1 of 6 ALLOCATION AND DISPOSITION OF 2021 DEFERRAL AND VARIANCE ACCOUNT BALANCES 1. The purpose of this evidence is to address the allocation and disposition of 2021 deferral and variance account balances identified at Exhibit C, Tab 1, Schedule 1. 2. Enbridge Gas proposes to dispose of the approved 2021 deferral and variance account balances with the first QRAM application following the OEB’s approval, as early as January 1, 2023. 3. This exhibit of evidence is organized as follows: 1. Allocation of Deferral and Variance Accounts 1.1 EGI Accounts 1.2 EGD Rate Zone Accounts 1.3 Union Rate Zones’ Accounts 2. Disposition of Deferral and Variance Accounts 3. General Service Bill Impacts 1. Allocation of Deferral and Variance Accounts 4. In accordance with the OEB’s EB-2017-0306/EB-2017-0307 Decision and Order (MAADs Decision), the OEB approved new EGI deferral and variance accounts that apply to both the EGD rate zone and Union rate zones effective January 1, 2019. The applicability of other deferral and variance accounts that were approved to continue during the deferred rebasing period is for either the EGD rate zone or the Union rate zones. Page 360 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 1 Page 2 of 6 1.1. EGI Accounts 5. The OEB previously approved1 the following deferral and variance accounts for Enbridge Gas that are applicable to both the EGD and Union rate zones:  Accounting Policy Changes Deferral Account (APCDA),  Earnings Sharing Mechanism Deferral Account (ESMDA),  Tax Variance Deferral Account (TVDA),  Expansion of Natural Gas Distribution System Variance Account (ENGDSVA),  IRP Operating Costs Deferral Account,  IRP Capital Costs Deferral Account, and  Impacts Arising from the COVID-19 Emergency Deferral Account (IACEDA). 6. Enbridge Gas is proposing to dispose of the 2021 balance in the TVDA and the IRP Operating Costs Deferral Account as part of this application. The balance in the APCDA and IACEDA are not proposed for disposition as part of this application, as described at Exhibit C, Tab 1. There is no balance for the ESMDA, ENGDSVA and IRP Capital Costs Deferral Account, as shown at Exhibit C, Tab 1, Schedule 1. 7. The 2021 TVDA balance, including interest, is a credit of $19.390 million as shown at Exhibit C, Tab 1, Schedule 1. Consistent with the methodology approved by the OEB in previous years, Enbridge Gas has split the credit balance of $19.390 million between the EGD and Union rate zones in proportion to the 2018 actual rate base for each rate zone.2 Splitting the $19.390 million TVDA credit balance in proportion to 2018 actual rate base results in a credit of $10.236 million being cleared to the EGD rate zone and a credit of $9.154 million being cleared to the Union rate zones. The details of the split to rate zones is provided at Exhibit F, Tab 1, Schedule 1. 1 EB-2017-0306/EB-2017-0307 Decision and Order established the APCDA, ESMDA and TVDA. The ENGDSVA was established in accordance with Section 4 of Ontario Regulation 24/19. The IRP Operating Costs Deferral Account and the IRP Capital Costs Deferral Account were established in accordance with the EB-2020-0091 Decision and Order. 2 EB-2020-0134 Decision and Order, May 6, 2021, page 16. Page 361 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 1 Page 3 of 6 8. The 2021 IRP Operating Cost Deferral Account balance, including interest, is a debit of $0.058 million as shown at Exhibit C, Tab 1, Schedule 1. Consistent with the TVDA, Enbridge Gas has split the debit balance of $0.058 million between the EGD and Union rate zones in proportion to the 2018 actual rate base for each rate zone.3 Splitting the $0.058 million debit balance in proportion to 2018 actual rate base results in a debit of $0.031 million being cleared to the EGD rate zone and a debit of $0.027 million being cleared to the Union rate zones. The details of the split to rate zones is provided at Exhibit F, Tab 1, Schedule 1. 9. Enbridge Gas has allocated the split balance of the TVDA and IRP Operating Cost Deferral Account to rate classes in each rate zone in proportion to 2018 rate base for the EGD rate zone and 2013 rate base for the Union rate zones. The rate base allocation for each rate zone is taken from the last fully allocated cost study prepared for each rate zone. The allocation to EGD rate classes is provided at Exhibit F, Tab 2, Schedule 3. The allocation to Union rate classes is provided at Exhibit F, Tab 3, Schedule 2. 1.2 EGD Rate Zone Accounts 10. The 2021 deferral and variance account balances to be cleared to the EGD rate zone are provided at Exhibit F, Tab 2, Schedule 2, including the EGD rate zone allocation of the EGI accounts. 11. The 2021 EGD rate zone deferral and variance account balances are allocated to the customer classes using the same methodologies that the OEB approved in previous years. 12. The allocation of account balances to EGD rate classes based on cost drivers for each type of account is provided at Exhibit F, Tab 2, Schedule 3. A summary of the 3 EB-2020-0134 Decision and Order, May 6, 2021, page 16. Page 362 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 1 Page 4 of 6 allocation of account balances by rate class and type of service is provided at Exhibit F, Tab 2, Schedule 4. 1.3 Union Rate Zones’ Accounts 13. The 2021 deferral and variance account balances to be cleared to the Union rate zones are provided at Exhibit F, Tab 3, Schedule 1, including the Union rate zones allocation of the EGI accounts. 14. The 2021 Union rate zones’ deferral and variance account balances are allocated to the customer classes using the same methodologies that the OEB approved in previous years except for the Deferral Clearing Variance Account (179-132) in the Union rate zone. 15. With the harmonization of Enbridge Gas’s customer information system (CIS) in 2021, the Union rate zone is no longer able to identify and allocate DCVA balances to rate classes. Consistent with the EGD rate zone Deferred Rebate Account allocation, Enbridge Gas proposes to split the DCVA balance between general service and contract customers. The allocation of general service and contract customer balances to rate classes is based on respective volumes. Please refer to Exhibit E, Tab 1 for background on the DCVA balance, and Exhibit F, Tab 3, Schedule 3 for the proposed allocation. 16. The allocation of account balances to Union South and Union North rate classes is provided at Exhibit F, Tab 3, Schedule 2. 2. Disposition of Deferral and Variance Accounts 17. Enbridge Gas proposes to dispose of the approved 2021 deferral and variance account balances with the first QRAM application following the OEB’s approval, as early as January 1, 2023 Page 363 of 650 Updated: 2022-06-10 EB-2022-0110 Exhibit F Tab 1 Page 5 of 6 18. Enbridge Gas proposes to dispose of the 2021 deferral and variance account balances as a one-time billing adjustment. The billing adjustment will appear as a separate line item on customers’ bills, the earliest being January 2023. The one-time billing adjustment will be derived for each customer by applying the disposition unit rates to each customer’s actual consumption volume or contract demand, as applicable, for the period January 1, 2021 to December 31, 2021. 19. The unit rates for disposition by rate class and service type are provided at Exhibit F, Tab 2, Schedule 1 and Schedule 5 for the EGD rate zone. The unit rates for disposition for the Union rate zones, including a summary of the balances to be disposed of to ex-franchise rate classes are provided at Exhibit F, Tab 3, Schedule 4. 3. General Service Bill Impacts 20. For a Rate 1 sales service and western t-service customer in the EGD rate zone with annual consumption of 2,400 m3, the one-time billing adjustment charge is $5.01.4 21. For a Rate M1 sales service residential customer in Union South with annual consumption of 2,200 m3, the one-time billing adjustment charge is $9.34. For a Rate M1 bundled direct purchase (DP) residential customer, the one-time billing adjustment charge is $1.91. 22. For a Rate 01 sales service and bundled DP residential customer in Union North West with annual consumption of 2,200 m3, the one-time billing adjustment credit is $17.33. 4 In addition to the EGD rate zone 2021 Deferral bill impacts, the allocation of Union rate zone deferrals to Rate M12 results in a bill impact of approximately $1.00 to a typical Rate 1 residential customer in the EGD rate zone. /u /u /u Page 364 of 650 Updated: 2022-06-10 EB-2022-0110 Exhibit F Tab 1 Page 6 of 6 23. For a Rate 01 sales service and bundled DP residential customer in Union North East with annual consumption of 2,200 m3, the one-time billing adjustment charge is $7.78. 24. Bill impacts of the proposed disposition are provided at Exhibit F, Tab 2, Schedule 6 for the EGD rate zone and Exhibit F, Tab 3, Schedule 5 for the Union rate zones. /u Page 365 of 650 Allocator Line 2018 Actual No. Particulars ($ millions)Rate Base (1) Principal (2) Interest (2) Total (a)(b)(c)(d) = (b+c) 2021 Tax Variance Deferral Account 1 EGD rate zone 6,729 (10.116) (0.120) (10.236) 2 Union rate zones 6,018 (9.047) (0.107) (9.154) 3 Total 12,748 (19.163) (0.227) (19.390) 2021 IRP Operating Costs Deferral Account 4 EGD 6,729 0.030 0.000 0.031 5 Union 6,018 0.027 0.000 0.027 6 Total 12,748 0.058 0.000 0.058 Note: (1) (2) Allocated in proportion to column (a). ENBRIDGE GAS INC. Split of EGI Account Balances to Rate Zones Account Balance 2018 actual rate base per EB-2019-0105, Exhibit B, Tab 2, Appendix B, Schedule 1 for the EGD rate zone and EB-2019-0105, Exhibit C, Tab 2, Appendix A, Schedule 4 for the Union rate zones. Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 1 Schedule 1 Page 1 of 1 Page 366 of 650 COL.1 UNIT RATE (¢/m³) Bundled Services: RATE 1 - SYSTEM SALES 0.2086 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.2572 - DAWN T-SERVICE 0.2572 - WESTERN T-SERVICE 0.2086 RATE 6 - SYSTEM SALES 0.2527 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.3013 - DAWN T-SERVICE 0.3013 - WESTERN T-SERVICE 0.2527 RATE 9 - SYSTEM SALES 0.0151 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.0000 - DAWN T-SERVICE 0.0000 - WESTERN T-SERVICE 0.0000 RATE 100 - SYSTEM SALES 0.0675 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.1160 - DAWN T-SERVICE 0.1160 - WESTERN T-SERVICE 0.0000 RATE 110 - SYSTEM SALES 0.0209 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.0694 - DAWN T-SERVICE 0.0694 - WESTERN T-SERVICE 0.0209 RATE 115 - SYSTEM SALES 0.0127 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.0613 - DAWN T-SERVICE 0.0613 - WESTERN T-SERVICE 0.0000 RATE 135 - SYSTEM SALES 0.0123 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.0000 - DAWN T-SERVICE 0.0609 - WESTERN T-SERVICE 0.0123 RATE 145 - SYSTEM SALES 0.0000 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.0000 - DAWN T-SERVICE 0.0734 - WESTERN T-SERVICE 0.0000 RATE 170 - SYSTEM SALES 0.0200 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.0685 - DAWN T-SERVICE 0.0685 - WESTERN T-SERVICE 0.0000 RATE 200 - SYSTEM SALES 0.0607 - BUY/SELL 0.0000 - ONTARIO T-SERVICE 0.1092 - DAWN T-SERVICE 0.1092 - WESTERN T-SERVICE 0.0000 Unbundled Services (Billing based on CD): RATE 125 - All (0.3318) RATE 300 - All (1.5672) RATE 332 - All (0.3320) UNIT RATE AND TYPE OF SERVICE: CLEARING IN JANUARY 2023 ENBRIDGE GAS INC. EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 2 Schedule 1 Page 1 of 1 Page 367 of 650 COL. 1 COL. 2 COL. 3 ITEM PRINCIPAL TOTAL NO.FOR CLEARING INTEREST FOR CLEARING ($000)($000)($000)PGVA: EGD RATE ZONE 1.TRANSACTIONAL SERVICES D/A (3,904.1) (35.4) (3,939.6) 2.UNACCOUNTED FOR GAS V/A 753.9 4.5 758.4 3.STORAGE AND TRANSPORTATION D/A 7,942.5 97.0 8,039.5 4.DEFERRED REBATE ACCOUNT 4,359.4 53.5 4,412.9 5.OEB COST ASSESSMENT VARIANCE ACCOUNT 2,550.3 31.5 2,581.8 6.AVERAGE USE TRUE-UP V/A 14,934.3 135.5 15,069.8 7.TRANSITION IMPACT OF ACCT CHANGE D/A 4,435.8 - 4,435.8 8.DAWN ACCESS COSTS D/A 1,968.0 17.9 1,985.9 9.EGD RATE ZONE SUB-TOTAL 33,040.0 304.5 33,344.6 EGI ACCOUNTS 10.TAX VARIANCE - ACCELERATED CCA - EGD RATE ZONE PORTION (10,115.6) (119.9) (10,235.5) 11.IRP OPERATING COST DEFERRAL ACCOUNT - EGD RATE ZONE PORTION 30.5 0.3 30.7 12.EGI SUB-TOTAL (10,085.1) (119.7) (10,204.8) 13.TOTAL 22,954.9 184.9 23,139.8 FROM THE 2021 DEFERRAL AND VARIANCE ACCOUNTS DETERMINATION OF BALANCES TO BE CLEARED EGD RATE ZONE ENBRIDGE GAS INC. Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 2 Schedule 2 Page 1 of 1 Page 368 of 650 CLASSIFICATION AND ALLOCATION OF DEFERRAL AND VARIANCE ACCOUNT BALANCES COL.1 COL. 2 COL. 3 COL. 4 COL. 5 COL. 6 COL. 7 COL. 8 COL. 9 COL. 10 BUNDLED ITEM SALES TOTAL TOTAL DELIVE-NUMBER OF RATE ANNUAL NO.TOTAL AND WBT SALES DELIVERIES SPACE RABILITY DIRECT CUSTOMERS BASE DELIVERIES ($000)($000) ($000) ($000) ($000)($000)($000) ($000) ($000) ($000) CLASSIFICATION 1. TRANSACTIONAL SERVICES D/A (3,939.6)(3,792.2)(50.2)(97.2) 2. UNACCOUNTED FOR GAS V/A 758.4 758.4 3. STORAGE AND TRANSPORTATION D/A 8,039.5 2,736.9 5,302.60 4. DEFERRED REBATE ACCOUNT 4,412.9 4,412.9 5. OEB COST ASSESSMENT VARIANCE ACCOUNT 2,581.8 2,581.8 6. TAX VARIANCE - ACCELERATED CCA - EGI (10,235.5)(10,235.5) 7. AVERAGE USE TRUE-UP V/A 15,069.8 15,069.8 8.IRP OPERATING COST DEFERRAL ACCOUNT - EGI 30.7 30.7 9. TRANSITION IMPACT OF ACCT CHANGE D/A 4,435.8 4,435.8 10. DAWN ACCESS COSTS D/A 1,985.9 1,985.9 TOTAL 23,139.8 (3,792.2)0.0 5,171.3 2,686.7 5,205.4 15,069.8 0.0 (3,187.2) 1,985.9 ALLOCATION 1.1 RATE 1 9,940.8 (2,270.6)0.0 2,183.6 1,286.9 2,859.2 7,134.0 0.0 (2,090.8) 838.5 1.2 RATE 6 11,974.2 (1,397.3)0.0 2,040.9 1,233.1 2,263.7 7,935.8 0.0 (885.7) 783.7 1.3 RATE 9 0.0 (0.0)0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 RATE 100 33.2 (6.3)0.0 15.6 7.3 17.3 0.0 0.0 (6.8)6.0 1.5 RATE 110 718.7 (46.3)0.0 506.7 89.8 12.1 0.0 0.0 (38.3) 194.6 1.6 RATE 115 237.1 (0.5)0.0 178.3 0.0 4.8 0.0 0.0 (14.0)68.5 1.7 RATE 125 (30.7)0.0 0.0 0.0 0.0 0.0 0.0 0.0 (30.7)0.0 1.8 RATE 135 37.0 (1.4)0.0 29.0 0.0 0.0 0.0 0.0 (1.8)11.1 1.9 RATE 145 18.2 0.0 0.0 11.4 5.6 0.0 0.0 0.0 (3.1)4.4 1.10 RATE 170 172.2 (3.1)0.0 117.6 16.9 0.0 0.0 0.0 (4.4)45.2 1.11 RATE 200 142.8 (66.9)0.0 88.3 47.2 48.2 0.0 0.0 (8.0)33.9 1.12 RATE 300 (0.2)0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.2)0.0 1.13 RATE 332 (103.4)0.0 0.0 0.0 0.0 0.0 0.0 0.0 (103.4)0.0 23,139.8 (3,792.2)0.0 5,171.3 2,686.7 5,205.4 15,069.8 0.0 (3,187.2)1,985.9 ENBRIDGE GAS INC. EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 2 Schedule 3 Page 1 of 1 Page 369 of 650 COL.1 COL. 2 COL. 3 COL. 4 COL. 5 COL. 6 COL. 7 COL. 8 COL. 9 COL. 10 BUNDLED SALES TOTAL TOTAL DELIVE-NUMBER OF RATE ANNUAL TOTAL AND WBT SALES DELIVERIES SPACE RABILITY DIRECT CUSTOMERS BASE DELIVERIES ($000)($000)($000)($000) ($000)($000)($000)($000) ($000) ($000) Bundled Services: RATE 1 - SYSTEM SALES 9,734.6 (2,264.0) - 2,145.5 1,264.5 2,809.3 7,009.7 - (2,054.3) 823.9 - BUY/SELL - - - -- - - - - - - T-SERVICE EXCL WBT 0.1 - - 0.0 0.0 0.0 0.1 - (0.0) 0.0 - DAWN T-SERVICE 177.9 - - 31.8 18.7 41.6 103.9 - (30.5) 12.2 - WBT 28.2 (6.6) - 6.2 3.7 8.1 20.3 - (5.9) 2.4 RATE 6 - SYSTEM SALES 6,925.4 (1,329.6) - 1,260.0 761.2 1,397.5 4,899.2 - (546.8) 483.8 - BUY/SELL - - - -- - - - - - - T-SERVICE EXCL WBT 137.6 - - 21.0 12.7 23.3 81.7 - (9.1) 8.1 - DAWN T-SERVICE 4,558.4 - - 695.7 420.4 771.7 2,705.4 - (301.9) 267.2 - WBT 352.8 (67.7) - 64.2 38.8 71.2 249.6 - (27.9) 24.6 RATE 9 - SYSTEM SALES 0.0 (0.0) - 0.0 0.0 - - - -0.0 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT - - - - - - - - - - - DAWN T-SERVICE - - - - - - - - - - - WBT - - - - - - - - - - RATE 100 - SYSTEM SALES 8.7 (6.3) - 5.9 2.8 6.6 - - (2.6) 2.3 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT 1.9 - - 0.7 0.3 0.8 - - (0.3) 0.3 - DAWN T-SERVICE 22.6 - - 9.0 4.2 9.9 - - (3.9) 3.4 - WBT - - - - - - - - - - RATE 110 - SYSTEM SALES 17.4 (40.4) - 38.3 6.8 0.9 - - (2.9) 14.7 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT 39.5 - - 26.2 4.6 0.6 - - (2.0) 10.1 - DAWN T-SERVICE 659.2 - - 436.6 77.4 10.5 - - (33.0) 167.7 - WBT 2.5 (5.9) - 5.6 1.0 0.1 - - (0.4) 2.1 RATE 115 - SYSTEM SALES 0.1 (0.5) - 0.5 0.0 0.0 - - (0.0) 0.2 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT 81.1 - - 60.9 0.0 1.7 - - (4.8) 23.4 - DAWN T-SERVICE 155.8 - - 116.9 0.0 3.2 - - (9.2) 44.9 - WBT - - - - - - - - - - RATE 135 - SYSTEM SALES 0.3 (1.3) - 1.2 - - - - (0.1) 0.5 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT - - - - - - - - - - - DAWN T-SERVICE 36.7 - - 27.7 - - - - (1.7) 10.6 - WBT 0.0 (0.1) - 0.1 - - - - (0.0) 0.0 RATE 145 - SYSTEM SALES - - - - - - - - - - - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT - - - - - - - - - - - DAWN T-SERVICE 18.2 - - 11.4 5.6 - - - (3.1) 4.4 - WBT - - - - - - - - - - RATE 170 - SYSTEM SALES 1.3 (3.1) - 2.9 0.4 - - - (0.1) 1.1 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT 99.4 - - 66.7 9.6 - - - (2.5) 25.6 - DAWN T-SERVICE 71.5 - - 48.0 6.9 - - - (1.8) 18.4 - WBT - - - - - - - - - - RATE 200 - SYSTEM SALES 83.6 (66.9) - 63.4 33.9 34.6 - - (5.7) 24.3 - BUY/SELL - - - - - - - - - - - T-SERVICE EXCL WBT 2.0 - - 0.9 0.5 0.5 - - (0.1) 0.3 - DAWN T-SERVICE 57.2 - - 24.1 12.9 13.2 - - (2.2) 9.2 - WBT - - - - - - - - - - Unbundled Services: (Billing based on CD) RATE 125 (30.7)- - - - - - - (30.7)- RATE 300 (0.2)- - - - - - - (0.2)- RATE 332 (103.4)- - - - - - - (103.4)- 23,139.8 (3,792.2)0.0 5,171.3 2,686.7 5,205.4 15,069.8 0.0 (3,187.2) 1,985.9 ALLOCATION BY TYPE OF SERVICE ENBRIDGE GAS INC. EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 2 Schedule 4 Page 1 of 1 Page 370 of 650 COL.1 COL. 2 COL. 3 COL. 4 COL. 5 COL. 6 COL. 7 COL. 8 COL. 9 COL. 10 BUNDLED SALES TOTAL TOTAL DELIVE-NUMBER OF RATE ANNUAL TOTAL AND WBT SALES DELIVERIES SPACE RABILITY DIRECT CUSTOMERS BASE DELIVERIES (¢/m³) (¢/m³) (¢/m³) (¢/m³) (¢/m³) (¢/m³) (¢/m³) (¢/m³) (¢/m³) (¢/m³) Bundled Services: RATE 1 - SYSTEM SALES 0.2086 (0.0485)0.0000 0.0460 0.0271 0.0602 0.1502 0.0000 (0.0440)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.2572 0.0000 0.0000 0.0460 0.0271 0.0602 0.1502 0.0000 (0.0440)0.0177 - DAWN T-SERVICE 0.2572 0.0000 0.0000 0.0460 0.0271 0.0602 0.1502 0.0000 (0.0440)0.0177 - WESTERN T-SERVICE 0.2086 (0.0485)0.0000 0.0460 0.0271 0.0602 0.1502 0.0000 (0.0440)0.0177 RATE 6 - SYSTEM SALES 0.2527 (0.0485)0.0000 0.0460 0.0278 0.0510 0.1788 0.0000 (0.0200)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.3013 0.0000 0.0000 0.0460 0.0278 0.0510 0.1788 0.0000 (0.0200)0.0177 - DAWN T-SERVICE 0.3013 0.0000 0.0000 0.0460 0.0278 0.0510 0.1788 0.0000 (0.0200)0.0177 - WESTERN T-SERVICE 0.2527 (0.0485)0.0000 0.0460 0.0278 0.0510 0.1788 0.0000 (0.0200)0.0177 RATE 9 - SYSTEM SALES 0.0151 (0.0485)0.0000 0.0460 0.0000 0.0000 0.0000 0.0000 0.0000 0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - DAWN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - WESTERN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 RATE 100 - SYSTEM SALES 0.0675 (0.0485)0.0000 0.0460 0.0213 0.0510 0.0000 0.0000 (0.0200)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.1160 0.0000 0.0000 0.0460 0.0213 0.0510 0.0000 0.0000 (0.0200)0.0177 - DAWN T-SERVICE 0.1160 0.0000 0.0000 0.0460 0.0213 0.0510 0.0000 0.0000 (0.0200)0.0177 - WESTERN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 RATE 110 - SYSTEM SALES 0.0209 (0.0485)0.0000 0.0460 0.0082 0.0011 0.0000 0.0000 (0.0035)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.0694 0.0000 0.0000 0.0460 0.0082 0.0011 0.0000 0.0000 (0.0035)0.0177 - DAWN T-SERVICE 0.0694 0.0000 0.0000 0.0460 0.0082 0.0011 0.0000 0.0000 (0.0035)0.0177 - WESTERN T-SERVICE 0.0209 (0.0485)0.0000 0.0460 0.0082 0.0011 0.0000 0.0000 (0.0035)0.0177 RATE 115 - SYSTEM SALES 0.0127 (0.0485)0.0000 0.0460 0.0000 0.0012 0.0000 0.0000 (0.0036)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.0613 0.0000 0.0000 0.0460 0.0000 0.0012 0.0000 0.0000 (0.0036)0.0177 - DAWN T-SERVICE 0.0613 0.0000 0.0000 0.0460 0.0000 0.0012 0.0000 0.0000 (0.0036)0.0177 - WESTERN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 RATE 135 - SYSTEM SALES 0.0123 (0.0485)0.0000 0.0460 0.0000 0.0000 0.0000 0.0000 (0.0028)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - DAWN T-SERVICE 0.0609 0.0000 0.0000 0.0460 0.0000 0.0000 0.0000 0.0000 (0.0028)0.0177 - WESTERN T-SERVICE 0.0123 (0.0485)0.0000 0.0460 0.0000 0.0000 0.0000 0.0000 (0.0028)0.0177 RATE 145 - SYSTEM SALES 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - DAWN T-SERVICE 0.0734 0.0000 0.0000 0.0460 0.0224 0.0000 0.0000 0.0000 (0.0127)0.0177 - WESTERN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 RATE 170 - SYSTEM SALES 0.0200 (0.0485) 0.0000 0.0460 0.0066 0.0000 0.0000 0.0000 (0.0017)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.0685 0.0000 0.0000 0.0460 0.0066 0.0000 0.0000 0.0000 (0.0017)0.0177 - DAWN T-SERVICE 0.0685 0.0000 0.0000 0.0460 0.0066 0.0000 0.0000 0.0000 (0.0017)0.0177 - WESTERN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 RATE 200 - SYSTEM SALES 0.0607 (0.0485)0.0000 0.0460 0.0246 0.0251 0.0000 0.0000 (0.0042)0.0177 - BUY/SELL 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 - ONTARIO T-SERVICE 0.1092 0.0000 0.0000 0.0460 0.0246 0.0251 0.0000 0.0000 (0.0042)0.0177 - DAWN T-SERVICE 0.1092 0.0000 0.0000 0.0460 0.0246 0.0251 0.0000 0.0000 (0.0042)0.0177- WESTERN T-SERVICE 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 Unbundled Services (Billing based on CD, ¢/m3): RATE 125 - All (0.3318) 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 (0.3318)0.0000 - Customer-specific ** RATE 300 - All (1.5672) 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 (1.5672)0.0000 - Customer-specific ** RATE 332 - All (0.3320) 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 (0.3320)0.0000 Notes: * Unit Rates derived based on 2021 actual volumes UNIT RATE BY TYPE OF SERVICE* ENBRIDGE GAS INC. EGD RATE ZONE Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 2 Schedule 5 Page 1 of 1 Page 371 of 650 ITEM NO.COL. 1 COL. 2 COL. 3 COL. 4 COL. 5 COL. 6 COL. 7 COL. 8 COL. 9 COL. 10 GENERAL SERVICE ANNUAL VOLUME SALES ONTARIO TS DAWN TS WESTERN TS SALES CUSTOMERS ONTARIO TS CUSTOMERS DAWN TS CUSTOMERS WESTERN TS CUSTOMERS m3 (¢/m3)(¢/m3)(¢/m3)(¢/m3)($)($)($)($) 1.1 RATE 1 RESIDENTIAL 1.2 Heating & Water Heating 2,400 0.2086 0.2572 0.2572 0.2086 5.01 6.17 6.17 5.01 2.1 RATE 6 COMMERCIAL 2.2 Heating & Other Uses 22,606 0.2527 0.3013 0.3013 0.2527 57.14 68.10 68.10 57.14 2.3 General Use 43,285 0.2527 0.3013 0.3013 0.2527 109.40 130.40 130.40 109.40 CONTRACT SERVICE 3.1 RATE 100 3.2 Industrial - small size 339,188 0.0675 0.1160 0.1160 0.0000 228.93 393.51 393.51 - 4.1 RATE 110 4.2 Industrial - small size, 50% LF 598,568 0.0209 0.0694 0.0694 0.0209 125.09 415.53 415.53 125.09 4.3 Industrial - avg. size, 75% LF 9,976,121 0.0209 0.0694 0.0694 0.0209 2,084.82 6,925.45 6,925.45 2,084.82 5.1 RATE 115 5.2 Industrial - small size, 80% LF 4,471,609 0.0127 0.0613 0.0613 0.0000 570.01 2,739.73 2,739.73 - 6.1 RATE 135 6.2 Industrial - Seasonal Firm 598,567 0.0123 0.0000 0.0609 0.0123 73.83 - 364.26 73.83 7.1 RATE 145 7.2 Commercial - avg. size 598,568 0.0000 0.0000 0.0734 0.0000 - - 439.29 - 8.1 RATE 170 8.2 Industrial - avg. size, 75% LF 9,976,121 0.0200 0.0685 0.0685 0.0000 1,996.70 6,837.33 6,837.33 - Notes: Col. 7 = Col. 2 x Col. 3 Col. 8 = Col. 2 x Col. 4 Col. 9 = Col. 2 x Col. 5 Col. 10 = Col. 2 x Col. 6 UNIT RATE BILL ADJUSTMENT ENBRIDGE GAS INC. EGD RATE ZONE 2021 DEFERRAL AND VARIANCE ACCOUNT CLEARING BILL ADJUSTMENT IN JANUARY 2023 FOR TYPICAL CUSTOMERS Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 2 Schedule 6 Page 1 of 1 Page 372 of 650 Sales/System Gas Bundled T-Service T-Service Unit Rate for Billing Unit Rate for Billing Unit Rate for Billing Line Unit Rate Unit Rate Unit Rate No. Particulars (cents/m3)(cents/m3)(cents/m3) (a)(b)(c) Union North West 1 Rate 01 (0.7877) (0.7877) 0.4169 2 Rate 10 0.3313 0.3313 1.1667 3 Rate 20 (4.9363) (4.9363) (0.0106) 4 Rate 25 0.1585 0.1585 (0.0167) 5 Rate 100 (0.0159) (0.0159) (0.0159) Union North East 6 Rate 01 0.3537 0.3537 0.4169 7 Rate 10 1.1092 1.1092 1.1667 8 Rate 20 (0.9102) (0.9102) (0.0106) 9 Rate 25 (0.0549) (0.0549) (0.0167) 10 Rate 100 (0.0159) (0.0159) (0.0159) Union South 11 Rate M1 0.7547 0.4169 - 12 Rate M2 1.5045 1.1667 - 13 Rate M4 0.4193 0.0815 - 14 Rate M5 0.2270 (0.1108) - 15 Rate M7 0.4564 0.1186 - 16 Rate M9 0.4673 0.1295 - 17 Rate M10 0.3250 (0.0128) - 18 Rate T1 - - 0.0202 19 Rate T2 - - 0.0420 20 Rate T3 - - 0.0958 ENBRIDGE GAS INC. Union Rate Zones Unit Rate and Type of Service 2021 Deferral Account Disposition Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 1 Page 1 of 1 Page 373 of 650 Line Account No.Number Account Name ($000's)Balance Interest Total (a)(b)(c) 1 179-131 Upstream Transportation Optimization 8,616 78 8,695 2 179-107 Spot Gas Variance Account - - - 3 179-108 Unabsorbed Demand Costs Variance Account (1,666) (28) (1,694) 4 179-153 Base Service North T-Service TransCanada Capacity 84 1 84 5 179-070 Short-Term Storage and Other Balancing Services 3,577 32 3,609 6 179-133 Normalized Average Consumption 18,997 239 19,237 7 179-132 Deferral Clearing Variance Account (3,120) (45) (3,166) 8 179-151 OEB Cost Assessment Variance Account 907 11 919 9 179-103 Unbundled Services Unauthorized Storage Overrun - - - 10 179-112 Gas Distribution Access Rule Costs - - - 11 179-123 Conservation Demand Management - - - 12 179-136 Parkway West Project Costs (603) (6) (610) 13 179-137 Brantford-Kirkwall/Parkway D Project Costs (45) (0) (45) 14 179-142 Lobo C Compressor/Hamilton-Milton Pipeline Project Costs 24 0 24 15 179-144 Lobo D/Bright C/Dawn H Compressor Project Costs (112) (4) (116) 16 179-149 Burlington-Oakville Project Costs (51) (1) (52) 17 179-156 Panhandle Reinforcement Project Costs (3,162) (36) (3,198) 18 179-162 Sudbury Replacement Project - - - 19 179-138 Parkway Obligation Rate Variance - - - 20 179-143 Unauthorized Overrun Non-Compliance Account - - - 21 179-157 Pension and OPEB Forecast Accrual vs. Actual Cash Payment Differential V/A - (1,346) (1,346) 22 179-135 Unaccounted for Gas Volume Variance Account 20,501 177 20,678 23 179-141 Unaccounted for Gas Price Variance Account 3,358 32 3,390 24 Total for Union Rate Zone Specific Accounts (Lines 1 through 23)47,305 (895) 46,411 25 179-382 Earnings Sharing (Union Rate Zone Portion) - - - 26 179-383 Tax Variance - Accelerated CCA - (Union Rate Zone Portion)(9,047) (107) (9,154) 27 179-385 IRP Operating Costs Deferral Account - (Union Rate Zone Portion)27 0 27 28 179-386 IRP Capital Costs Deferral Account - - - 29 179-380 Expansion of Natural Gas Distribution Systems V/A (Union Rate Zone Portion) - - - 30 Total for EGI Accounts allocated to Union Rate Zone (9,020) (107) (9,127) 31 Total Union Rate Zone Deferral Account Balances (Line 24 + Line 30)38,286 (1,002) 37,284 ENBRIDGE GAS INC. Union Rate Zones 2021 Deferral Account Balances To Be Cleared Year Ending December 31, 2021 Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 2 Page 1 of 1 Page 374 of 650 Line Acct Excess No.Particulars ($000's)No.Rate 01 Rate 10 Rate 20 Rate 100 Rate 25 M1 M2 M4 M5A M7 M9 M10 T1 T2 T3 M12 M13 Utility C1 M16 M17 Total (a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)(m)(n)(o)(p)(q)(r)(s)(t)(u)(v)(w) Gas Supply Related Deferrals:1 Upstream Transportation Optimization 179-131 320 44 21 - 92 6,665 1,287 138 10 78 39 1 - - - - - - - - - 8,695 2 Spot Gas Variance Account 179-107 - - - - - - - - - - - - - - - - - - - - - -3 Unabsorbed Demand Cost (UDC) Variance Account 179-108 (3,908) (762) (168) - - 2,551 492 53 4 30 15 0 - - - - - - - - - (1,694) 4 Base Service North T-Service TransCanada Capacity Account 179-153 - - 57 28 - - - - - - - - - - - - - - - - - 84 5 Total Gas Supply Related Deferrals (3,588) (718) (90) 28 92 9,215 1,779 190 14 108 54 1 - - - - - - - - - 7,085 Storage Related Deferrals: 6 Short-Term Storage and Other Balancing Services 179-70 493 139 76 2 - 1,124 424 190 2 106 20 0 81 859 92 - - - - - - 3,609 Delivery Related Deferrals: 7 Normalized Average Consumption (NAC)179-133 5,330 3,797 - - - 4,629 5,481 - - - - - - - - - - - - - - 19,237 8 Deferral Clearing Variance Account - Delivery 179-132 (571) (191) 4 6 1 (1,777) (683) 4 0 5 1 0 3 31 2 - - - - - - (3,166) 9 OEB Cost Assessment Variance Account 179-151 184 16 14 12 6 464 43 16 18 5 1 0 12 33 4 86 0 3 2 0 - 919 10 Unbundled Services Unauthorized Storage Overrun 179-103 - -- - - - - - - - - - - - - - - - - - - - 11 Gas Distribution Access Rule (GDAR) Costs 179-112 - -- - - - - - - - - - - - - - - - - - - - 12 Conservation Demand Management 179-123 - -- - - - - - - - - - - - - - - - - - - - 13 Parkway West Project Costs 179-136 4 (8) (1) 2 1 103 4 3 3 0 (0) 0 4 19 (1) (748) 0 1 3 0 - (610) 14 Brantford-Kirkwall/Parkway D Project Costs 179-137 (7) (1) (1) (1) (0) (16) (3) (1) (1) (0) (0) (0) (1) (2) (0) (11) (0) (0) (0) (0) - (45) 15 Lobo C Compressor/Hamilton-Milton Pipeline Project Costs 179-142 (40) (2) (4) (4) (2) (150) (20) (7) (5) (2) (0) (0) (6) (30) (2) 298 (0) (1) (1) (0) - 24 16 Lobo D/Bright C/ Dawn H Compressor Project Costs 179-144 (108) (4) (6) (7) (3) (368) (39) (15) (13) (4) (0) (0) (15) (73) (3) 559 (0) (7) (8) (1) - (116) 17 Burlington-Oakville Project Costs 179-149 (3) (1) (0) (0) (0) (25) (8) (2) (0) (1) (0) (0) (2) (13) (2) 6 0 (0) 0 0 - (52) 18 Panhandle Reinforcement Project Costs 179-156 (31) (5) (4) (3) (1) (696) (236) (255) (6) (56) (0) (0) (169) (1,240) (1) (33) (0) (0) (381) (80) - (3,198) 19 Sudbury Replacement Project 179-162 - -- -- -- -- -- -- -- -- -- -- - 20 Parkway Obligation Rate Variance 179-138 - -- -- -- -- -- -- -- -- -- -- -21 Unauthorized Overrun Non-Compliance Account 179-143 - -- -- -- -- -- -- -- -- -- -- -22 Pension & OPEB Forecast Accrual vs Actual Cash Payment Differential Variance Account 179-157 (270) (25) (24) (20) (10) (662) (64) (27) (31) (7) (1) (0) (18) (47) (5) (127) (0) (4) (3) (0) - (1,346) 23 Unaccounted for Gas (UFG) Volume Variance Account 179-135 328 109 50 - 21 2,178 837 459 48 516 68 0 295 2,848 202 9,393 23 - 3,131 162 10 20,678 24 Unaccounted for Gas (UFG) Price Variance Account 179-141 190 63 29 - 12 1,260 484 266 28 298 39 0 - -- -13 - 687 21 - 3,390 25 Tax Variance - Accelerated CCA - EGI 179-383 (1,627) (251) (178) (137) (49) (3,553) (538) (134) (114) (47) (9) (0) (93) (410) (54) (1,888) (1) (53) (17) (2) - (9,154) 26 IRP Operating Costs Deferral Account - EGI 179-385 5 1 1 0 0 11 2 0 0 0 0 0 0 1 0 6 0 0 0 0 - 27 27 IRP Operating Costs Deferral Account - EGI 179-386 - - - - - - - - - - - - - - - - - - - - - - 28 Total Delivery-Related Deferrals 3,384 3,498 (120) (152) (24) 1,397 5,262 308 (72) 708 97 (0) 10 1,117 139 7,541 35 (61) 3,414 100 10 26,590 29 Total 2021 Storage and Delivery Disposition (Line 6 + Line 28)3,877 3,638 (45) (150) (24) 2,522 5,686 498 (70) 814 117 (0) 91 1,977 231 7,541 35 (61) 3,414 100 10 30,199 30 Total 2021 Deferral Account Disposition (Line 5 + Line 29)288 2,920 (134) (122) 68 11,737 7,465 688 (57) 922 170 1 91 1,977 231 7,541 35 (61) 3,414 100 10 37,284 31 Earnings Sharing Deferral Account - EGI 179-382 - - - - - - - - - - - - - - - - - - - - - - 32 Grand Total (Line 30 + Line 31)288 2,920 (134) (122) 68 11,737 7,465 688 (57) 922 170 1 91 1,977 231 7,541 35 (61) 3,414 100 10 37,284 ENBRIDGE GAS INC. Union Rate ZonesClassification and Allocation of Deferral and Variance Account Balances Union North Union South Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 3 Page 1 of 2 Page 375 of 650 Line Acct No.Particulars ($000's)No.Rate 01 Rate 10 Rate 20 Rate 100 Rate 25 Total (a)(b)(c)(d)(e)(f)(g) = (sum b:f) Union North West Gas Supply Related Deferrals: 1 Spot Gas Variance Account 179-107 - - - - - - 2 Unabsorbed Demand Cost (UDC) Variance Account 179-108 (3,883) (756) (167) - - (4,806) 3 Upstream Transportation Optimization 179-131 716 175 80 - 100 1,072 4 Total Gas Supply Related Deferrals (3,167) (581) (87) - 100 (3,735) Storage Related Deferrals: 5 Short-Term Storage and Other Balancing Services (1)179-70 141 35 7 - - 183 6 Total North West Deferral Account Disposition (Line 6 + Line 7)(3,026) (546) (80) - 100 (3,552) Union North East Gas Supply Related Deferrals: 7 Spot Gas Variance Account 179-107 - - - - - - 8 Unabsorbed Demand Cost (UDC) Variance Account 179-108 (25) (6) (1) - - (32) 9 Upstream Transportation Optimization 179-131 (396) (131) (59) - (8) (594) 10 Total Gas Supply Related Deferrals (421) (137) (60) - (8) (626) Storage Related Deferrals: 11 Short-Term Storage and Other Balancing Services (1)179-70 352 104 46 - - 502 12 Total North East Deferral Account Disposition (Line 14 + Line 15)(69) (33) (14) - (8) (124) Total North Gas Supply Related Deferrals: 13 Spot Gas Variance Account 179-107 - - - - - - 14 Unabsorbed Demand Cost (UDC) Variance Account 179-108 (3,908) (762) (168) - - (4,839) 15 Upstream Transportation Optimization 179-131 320 44 21 - 92 478 16 Total North Gas Supply Related Deferrals (3,588) (718) (147) - 92 (4,361) Storage Related Deferrals: 17 Short-Term Storage and Other Balancing Services (1)179-70 493 139 53 - - 685 18 Total North Deferral Account Disposition (Line 22 + Line 23)(3,095) (579) (94) - 92 (3,676) Notes: (1) Excludes allocation to Rate 20/100 bundled storage service. ENBRIDGE GAS INC. Union Rate Zones Allocation of 2021 Gas Supply Related Deferral Accounts by Union North East and Union North West Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 3 Page 2 of 2 Page 376 of 650 2021 Deferral 2021 Earnings Balance 2021 Deferral Sharing for Actual Line Rate Balances Mechanism Disposition Volume Unit Rate No. Particulars Class ($000's) ($000's) ($000's)(103m3)(cents/m3) (a)(b)(c) = (a + b)(d)(e) = (c / d) * 100 Union North 1 Small Volume General Service 01 3,877 - 3,877 929,941 0.4169 2 Large Volume General Service 10 3,638 - 3,638 311,794 1.1667 3 Medium Volume Firm Service 20 (68) - (68) 637,600 (0.0106) 4 Large Volume High Load Factor 100 (152) - (152) 958,587 (0.0159) 5 Large Volume Interruptible 25 (24) - (24) 143,898 (0.0167) Union South 6 Small Volume General Service M1 2,522 - 2,522 2,897,087 0.0870 7 Large Volume General Service M2 5,686 - 5,686 1,113,864 0.5105 8 Firm Com/Ind Contract M4 498 - 498 610,808 0.0815 9 Interruptible Com/Ind Contract M5 (70) - (70) 63,511 (0.1108) 10 Special Large Volume Contract M7 814 - 814 686,353 0.1186 11 Large Wholesale M9 117 - 117 90,096 0.1295 12 Small Wholesale M10 (0) - (0) 320 (0.0128) 13 Contract Carriage Service T1 91 - 91 453,007 0.0202 14 Contract Carriage Service T2 1,977 - 1,977 4,700,474 0.0420 15 Contract Carriage- Wholesale T3 231 - 231 241,187 0.0958 ENBRIDGE GAS INC. Union Rate Zones Unit Rates for One-Time Adjustment - Delivery 2021 Deferral Account Disposition Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 4 Page 1 of 4 Page 377 of 650 2021 Deferral 2021 Earnings Balance 2021 Deferral Sharing for Actual Line Rate Balances Mechanism Disposition Volume Unit Rate No. Particulars Class ($000's) ($000's) ($000's)(103m3) (cents/m 3) (a)(b)(c) = (a + b)(d)(e) = (c / d) * 100 1 Small Volume General Service M1 9,215 - 9,215 2,728,007 0.3378 2 Large Volume General Service M2 1,779 - 1,779 526,743 0.3378 3 Firm Com/Ind Contract M4 190 - 190 56,304 0.3378 4 Interruptible Com/Ind Contract M5 14 - 14 4,043 0.3378 5 Special Large Volume Contract M7 108 - 108 31,987 0.3378 6 Large Wholesale M9 54 - 54 15,903 0.3378 7 Small Wholesale M10 1 - 1 320 0.3378 ENBRIDGE GAS INC. Union Rate Zones Unit Rates for One-Time Adjustment - Gas Supply Commodity 2021 Deferral Account Disposition Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 4 Page 2 of 4 Page 378 of 650 2021 Deferral 2021 Earnings Balance 2021 Unit Deferral Sharing for Actual Volumetric/ Line Rate Balances Mechanism Disposition Volume/Billing Demand Rate No. Particulars Class ($000's) ($000's) ($000's) Demand Units (cents/m3) (a)(b)(c) = (a + b)(d)(e) = (c / d) * 100 Gas Supply Transportation Charges Union North West 1 Small Volume General Service 01 (3,167) - (3,167) 262,912 103m3 (1.2045) 2 Large Volume General Service 10 (581) - (581) 69,572 103m3 (0.8354) 3 Medium Volume Firm Service 20 (87) - (87) 1,764 103m3/d (4.9257) 4 Large Volume Interruptible 25 100 - 100 57,362 103m3 0.1752 Union North East 5 Small Volume General Service 01 (421) - (421) 667,029 103m3 (0.0632) 6 Large Volume General Service 10 (137) - (137) 238,396 103m3 (0.0575) 7 Medium Volume Firm Service 20 (60) - (60) 6,630 103m3/d (0.8996) 8 Large Volume Interruptible 25 (8) - (8) 21,827 103m3 (0.0382) North T-Service Transportation from Dawn 9 Base Service ($/GJ)20T/100T 84 - 84 264,264 GJ/d 0.320 Storage ($/GJ) 10 Bundled-T Storage Service 20T/100T 25 - 25 141,504 GJ/d 0.179 ENBRIDGE GAS INC. Union Rate Zones Unit Rates for One-Time Adjustment - Gas Supply Transportation and Bundled Storage 2021 Deferral Account Disposition Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 4 Page 3 of 4 Page 379 of 650 2021 Deferral 2021 Earnings Balance Line Rate Deferral Sharing for No.Particulars ($000's) (1)Class Balances Mechanism Disposition (a)(b)(c) = (a + b) 1 Transportation M12 7,541 - 7,541 2 Transportation of Locally Produced Gas M13 35 - 35 3 Cross Franchise Transportation C1 3,414 - 3,414 4 Storage and Transportation Services M16 100 - 100 5 Transporation Service M17 10 10 Notes: (1) ENBRIDGE GAS INC. Union Rate Zones Storage and Transportation Service Amounts for Disposition 2021 Deferral Account Disposition Ex-franchise customer specific amounts determined using approved deferral account allocation methodologies. Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 4 Page 4 of 4 Page 380 of 650 Deferral Line Unit Rate Volume Bill Impact No. Particulars (cents/m3) (m3) (1)($) (a)(b)(c) = (a x b) / 100 Small Volume General Service Rate M1 - Union South 1 Delivery 0.0870 2,200 1.91 2 Commodity 0.3378 2,200 7.43 3 Sales Service Impact 0.4248 9.34 4 Direct Purchase Impact 1.91 Rate 01 - Union North West 5 Delivery 0.4169 2,200 9.17 6 Commodity - 2,200 - 7 Transportation (1.2045) 2,200 (26.50) 8 Sales Service Impact (0.7877) (17.33) 9 Bundled-T (Direct Purchase) Impact (17.33) Rate 01 - Union North East 10 Delivery 0.4169 2,200 9.17 11 Commodity - 2,200 - 12 Transportation (0.0632) 2,200 (1.39) 13 Sales Service Impact 0.3537 7.78 14 Bundled-T (Direct Purchase) Impact 7.78 Large Volume General Service Rate M2 - Union South 15 Delivery 0.5105 73,000 372.65 16 Commodity 0.3378 73,000 246.60 17 Sales Service Impact 0.8483 619.25 18 Direct Purchase Impact 372.65 Rate 10 - Union North West 19 Delivery 1.1667 93,000 1,085.06 20 Commodity - 93,000 - 21 Transportation (0.8354) 93,000 (776.97) 22 Sales Service Impact 0.3313 308.09 23 Bundled-T (Direct Purchase) Impact 308.09 Rate 10 - Union North East 24 Delivery 1.1667 93,000 1,085.06 25 Commodity - 93,000 - 26 Transportation (0.0575) 93,000 (53.46) 27 Sales Service Impact 1.1092 1,031.60 28 Bundled-T (Direct Purchase) Impact 1,031.60 Notes: (1) Average consumption, per customer, for the period January 1, 2021 to December 31, 2021. ENBRIDGE GAS INC. Union Rate Zones Calculation of One-Time Adjustments for Typical General Service Customers Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 5 Page 1 of 3 Page 381 of 650 Line No.Particulars Deferral Unit Rate (cents/m3) Billing Units (m3) Bill Impact ($) (1) (a)(b)(c) Union North Small Rate 20 - Union North West 1 Delivery (0.0106) 3,000,000 (318) 2 Transportation (4.9257) 14,000 (8,275) 3 Sales Service Impact (4.9363) (8,593) 4 Bundled-T (Direct Purchase) Impact (8,593) Large Rate 20 - Union North West 5 Delivery (0.0106) 15,000,000 (1,590) 6 Transportation (4.9257) 60,000 (35,465) 7 Sales Service Impact (4.9363) (37,055) 8 Bundled-T (Direct Purchase) Impact (37,055) Small Rate 20 - Union North East 9 Delivery (0.0106) 3,000,000 (318) 10 Transportation (0.8996) 14,000 (1,511) 11 Sales Service Impact (0.9102) (1,829) 12 Bundled-T (Direct Purchase) Impact (1,829) Large Rate 20 - Union North East 13 Delivery (0.0106) 15,000,000 (1,590) 14 Transportation (0.8996) 60,000 (6,477) 15 Sales Service Impact (0.9102) (8,067) 16 Bundled-T (Direct Purchase) Impact (8,067) Average Rate 25 - Union North West 17 Delivery (0.0167) 2,275,000 (380) 18 Transportation 0.1752 2,275,000 3,985 19 Sales Service Impact 0.1585 3,605 20 Bundled-T (Direct Purchase) Impact 3,605 Average Rate 25 - Union North East 21 Delivery (0.0167) 2,275,000 (380) 22 Transportation (0.0382) 2,275,000 (869) 23 Sales Service Impact (0.0549) (1,249) 24 Bundled-T (Direct Purchase) Impact (1,249) Small Rate 100 25 T-Service (Direct Purchase) Impact (0.0159) 27,000,000 (4,286) Large Rate 100 26 T-Service (Direct Purchase) Impact (0.0159) 240,000,000 (38,094) Union South Small Rate M4 27 Delivery 0.0815 875,000 713 28 Commodity 0.3378 875,000 2,956 29 Sales Service Impact 0.4193 3,669 30 Direct Purchase Impact 713 Large Rate M4 31 Delivery 0.0815 12,000,000 9,779 32 Commodity 0.3378 12,000,000 40,536 33 Sales Service Impact 0.4193 50,315 34 Direct Purchase Impact 9,779 Notes: (1)Transportation bill impacts based on monthly demand (m3/d). ENBRIDGE GAS INC. Union Rate Zones Calculation of One-Time Adjustments for Typical Small and Large Customers Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 5 Page 2 of 3 Page 382 of 650 Line No.Particulars Deferral Unit Rate (cents/m3) Billing Units (m3) Bill Impact ($) (1) (b)(c)(d) Union South (continued) Small Rate M5 Interruptible 1 Delivery (0.1108) 825,000 (914) 2 Commodity 0.3378 825,000 2,787 3 Sales Service Impact 0.2270 1,873 4 Direct Purchase Impact (914) Large Rate M5 Interruptible 5 Delivery (0.1108) 6,500,000 (7,200) 6 Commodity 0.3378 6,500,000 21,957 7 Sales Service Impact 0.2270 14,757 8 Direct Purchase Impact (7,200) Small Rate M7 9 Delivery 0.1186 36,000,000 42,695 10 Commodity 0.3378 36,000,000 121,609 11 Sales Service Impact 0.4564 164,304 12 Direct Purchase Impact 42,695 Large Rate M7 13 Delivery 0.1186 52,000,000 61,671 14 Commodity 0.3378 52,000,000 175,658 15 Sales Service Impact 0.4564 237,329 16 Direct Purchase Impact 61,671 Small Rate M9 17 Delivery 0.1295 6,950,000 9,002 18 Commodity 0.3378 6,950,000 23,477 19 Sales Service Impact 0.4673 32,480 20 Direct Purchase Impact 9,002 Large Rate M9 21 Delivery 0.1295 20,178,000 26,136 22 Commodity 0.3378 20,178,000 68,162 23 Sales Service Impact 0.4673 94,298 24 Direct Purchase Impact 26,136 Rate M10 25 Delivery (0.0128) 94,500 (12) 26 Commodity 0.3378 94,500 319 27 Sales Service Impact 0.3250 307 28 Direct Purchase Impact (12) Small Rate T1 29 Direct Purchase Impact 0.0202 7,537,000 1,521 Average Rate T1 30 Direct Purchase Impact 0.0202 11,565,938 2,334 Large Rate T1 31 Direct Purchase Impact 0.0202 25,624,080 5,171 Small Rate T2 32 Direct Purchase Impact 0.0420 59,256,000 24,917 Average Rate T2 33 Direct Purchase Impact 0.0420 197,789,850 83,169 Large Rate T2 34 Direct Purchase Impact 0.0420 370,089,000 155,620 Large Rate T3 35 Direct Purchase Impact 0.0958 272,712,000 261,162 Notes: (1)Transportation bill impacts based on monthly demand (m3/d). Calculation of One-Time Adjustments for Typical Small and Large Customers ENBRIDGE GAS INC. Union Rate Zones Filed: 2022-05-31 EB-2022-0110 Exhibit F Tab 3 Schedule 5 Page 3 of 3 Page 383 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit G Tab 1 Page 1 of 4 2021 SCORECARD RESULTS – ENBRIDGE GAS 1. The purpose of the scorecard is to measure and monitor performance over the deferred rebasing period. The scorecard is produced annually, with 2021 being the third presentation of the scorecard for the amalgamated utility. Within EB-2021-1049, the OEB found that scorecard provides valuable information during the deferral rebasing period and accepted Enbridge Gas’s plans to improve the results of the two metrics that did not meet the performance standard in 2020. The OEB found that the 2024 rebasing proceeding is the appropriate time to review historical performance trends and consider customer implications prior to making any adjustments to the performance scorecard. 2. In 2019 and 2020 there was a positive performance trend for all but two metrics: Time to Reschedule a Missed Appointment (TRMA) and the Meter Reading Performance Metric (MRPM). In 2021 Enbridge Gas continued to demonstrate the positive performance trend for 16 out of 20 metrics. There continued to be challenges meeting the performance standard for TRMA and MRPM and in addition, Enbridge Gas did not meet the performance standard for Call Answering Service Levels (CASL) and Abandon Rate. The challenges meeting the target for two additional metrics is viewed as an anomaly as historically targets are exceeded for the metrics. Enbridge Gas continues to work to improve the results of all scorecard metrics through ongoing reporting of results, identifying the root cause for variances, and implementing initiatives targeting areas where improvement can be made. 3. Three of the four metrics that are below performance standard for 2021 were impacted by COVID-19 pandemic restrictions and the amalgamation of utility systems and processes. Enbridge Gas has developed plans and strategies to improve results and performance in each area. Page 384 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit G Tab 1 Page 2 of 4 4. The TRMA metric tracks the percentage of customers contacted to reschedule the work within two hours of the end of the original appointment time. The annual standard for TRMA is 100% and Enbridge Gas achieved 97.0% in 2021. This is consistent with prior year results which were 97.0% in 2019 and 97.3% in 2020. Efforts toward meeting the TRMA target of 100% are ongoing. A cross functional team meets regularly to review performance on this metric, to address issues, and to re-inforce training when necessary. Regional management teams meet monthly to drive performance as well. While Enbridge Gas acknowledges that promptly rescheduling missed appointments is an important part of achieving the SQR and customer service, attainment of a perfect 100% is not always possible. TRMA is the only Scorecard metric with a target of 100%; and does not allow for human error. 5. The MRPM represents the number of meters with no read for four consecutive months or more divided by the total number of active meters to be read. The target for the metric is 0.5% and Enbridge Gas achieved a level of 5.0% in 2021. The result for 2019 was 0.7% and 4.4% in 2020. Enbridge Gas has faced challenges meeting the target since 2019 for several reasons, including the decision of a key meter reading vendor to no longer provide meter reading service resulting in the need to onboard a new vendor. Since March 2020, the Covid pandemic has presented additional challenges including closed businesses, increased customer sensitivity to contact with meter readers, and access issues during periods of lockdown. In addition, extreme weather events such as freezing rain, flooding, and heavy snowfall limited the ability to travel to properties and read meters. The new vendor was also still transitioning and learning the business in addition to experiencing ongoing staffing challenges including resourcing issues and illness/absence due to Public Health isolation/quartine requirements. These challenges continued into 2021. Despite the ongoing efforts of Enbridge Gas to improve the performance standard, the MRPM target of 0.5% will be challenging due to sheer size and geographic Page 385 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit G Tab 1 Page 3 of 4 reach, especially when complicated by variables such as extreme weather. Enbridge Gas continues to work to meet the performance metric through a mitigation plan that includes various methods to attain reads including: meter reading partners increasing hiring, working additional hours and knocking on doors to obtain reads; customer outreach through social media, monthly emails and texts to customers asking them to submit a reading; requesting a reading from customers when they contact the call centre; and engaging the Enbridge Gas Quality Assurance team to review consecutive estimates. 6. The CASL metric measures the number of calls reaching the general inquiry number answered within 30 seconds divided by the number of calls received. The yearly performance standard for Call Answering Service Level is 75% with a minimum monthly standard of 40%. The 2021 result was 64.3%. The 2021 result is viewed as an anomaly and not consistent with historical performance of 79.0% in 2019 and 75.2% in 2020. In July 2021, EGI harmonized the two legacy utilities Customer Information Systems (CIS), which involved moving 1.6M customers and their associated data from one CIS system to the other. In addition, the telephony system (IVR) was changed. Several changes, both pre and post integration, resulted in an increase in call volumes. Calls ranged from questions about passwords and account numbers to complex and extended calls. Covid has also impacted the contact centres due to increased illness and absence. To improve performance on the CASL metric, Enbridge Gas has identified and implemented several initiatives including recruiting temporary employees to assist with high call volumes, a post integration review of telephony (IVR) to ensure customer experience and decrease wait times, and a review of contact centre and billing processes. Enbridge Gas is committed to providing excellent customer service to all customers and in doing so meeting the performance standard of answering 75% of calls within 30 seconds. Page 386 of 650 Filed: 2022-05-31 EB-2022-0110 Exhibit G Tab 1 Page 4 of 4 7. The measure Abandon Rate is the percentage of callers who hang up while waiting for a live operator. The annual standard is not to exceed 10%. The 2021 result was 16.0%. As with the CASL metric, the 2021 result is viewed as an anomaly with historical performance of 2.5% in 2019 and 5.4% in 2020, exceeding the performance standard. The Abandon Rate metric was also impacted by the integration of systems in 2021 and the Covid pandemic. The increase in call volumes and staffing issues due to illness resulted in an increase in wait times driving the increased abandon rate. The mitigation plans in place for CASL will assist with reducing the abandoned call metric to less than 10%. 8. The OEB has found that Enbridge Gas’s 2024 rebasing proceeding is the appropriate time to review historical performance trends and consider the customer implications before making any adjustments to the performance scorecard.1 Enbridge Gas will be proposing changes to the scorecard in that proceeding to the TRMA metric and the MRPM. 1 EB-2021-0149, OEB Decision and Order, Enbridge Gas – 2020 DVA & Earning Sharing Proceeding (January 27, 2022), page 12. Page 387 of 650 Target Actual Actual Actual 2021 2020 2019 # CUSTOMER FOCUS (Service Quality & Customer Satisfaction) 1 85.0% 96.9%98.9%98.1% 2 85.0% 94.5%98.8%98.5% 3 75.0% 64.3%75.2%79.0% 4 80.0% 100.0%100.0%100.0% 5 384,858 manual checks completed as per QAP 427,524 manual checks completed as per QAP 429,386 manual checks completed as per QAP 6 10.0% 16.0%5.4%2.5% 7 100.0% 97.0%97.3%97.0% OPERATIONAL EFFECTIVENESS (Safety, System Reliability, Asset Management & Cost Control) 8 0.5%5.0%4.4%0.7% 9 90.0% 95.2%96.7%96.7% 10 99.7%99.7%99.9% 11 1.95 2.22 1.97 12 643.9 658.2 653.6 13 16639.6 16928.5 16735.4 14 2075.9 FINANCIAL PERFORMANCE (Financial Ratios) 15 0.71 0.66 0.75 16 0.41 0.40 0.40 17 1.06 1.01 0.98 18 2.55 2.34 2.53 19 2.07%1.97%2.25% 20 5.32%4.96%5.56% Total Cost per km of Distribution Pipe ($ / km of Distribution Pipe) PUBLIC POLICY RESPONSIVENESS (Conservation & Demand Management & Connection of Renewable Generation) Damages per 1000 locate requests Compression Reliability % reliable for transmission compression Total Cost per Customer ($ / Customer) Performance Measure Reconnection Response Time (# of days to reconnect a customer) (# of reconnections completed within 2 business days/# of reconnections completed) Scheduled appointments met on time (appointments met within designated time period) (# of appointments met within 4hrs of the scheduled date/# of appointments scheduled in the month) Telephone calls answered on time (call answering service level) (# of calls answered within 30 seconds / # of calls received) Customer Complaint Written Response (# of days to provide a written response) # of complaints requiring response within 10 days / # of complaints requiring a written response Time to Reschedule Missed Appointments (% of rescheduled work within 2 hours of the end of the original appointment time) Meter Reading Performance # of meters with no read for 4 consecutive months / # of active meters to be read Billing accuracy 'The requirement states that utilities should complete manual checks of their bills to verify data when a meter read demonstrates excessively high or low usage.' % of Emergency Calls Responded within One Hour (# of emergency calls responded within 60 minutes / # of emergency calls) Abandon Rate (# of calls abandon rate) (# of calls abandoned while waiting for a live agent / # of calls requesting to speak to a live agent) Financial Statement Return on Equity (Net Income / Shareholders' Equity) Total Cumulative Cubic Meters of Natural Gas Saved (Net) (Millions) Debt Ratio (Total Debt / Total Assets) Current Ratio (Current Assets / Current Liabilities) Financial Statement Return on Assets (Net Income / Total Assets) Debt to Equity Ratio (Total Debt / Shareholders' Equity) Interest Coverage (EBIT / Interest Charges) EGI SCORECARD 2021 Filed: 2022-05-31 EB-2022-0110 Exhibit G Tab 1 Schedule 1 Page 1 of 1 Page 388 of 650 Enbridge Gas Inc. May 31, 2022 INTEGRATED RESOURCE PLANNING 2021 Annual Report Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 1 of 40Page 389 of 650 2021 IRP Annual Report 1 Table of Contents 1. Introduction: ....................................................................................................................................... 2 2. IRP Integration .................................................................................................................................... 3 3. IRP Pilot Projects ................................................................................................................................. 6 4. IRP Stakeholder and Indigenous Engagement Update ....................................................................... 7 5. IRP Plan Update .................................................................................................................................. 8 6. Asset Management Plan (AMP) Update ............................................................................................. 8 7. Integrated Resource Planning Alternatives Update ........................................................................... 9 8. Technical Working Group Summary ................................................................................................... 9 9. Interruptible Rates Update ............................................................................................................... 10 10. DCF+ Review ................................................................................................................................... 10 Appendix A: OEB IRP Direction ............................................................................................................. 12 Appendix B: Binary Screening Results .................................................................................................. 14 Appendix C: Integrated Resource Planning Alternatives ..................................................................... 15 Appendix D: Technical Working Group Report .................................................................................... 18 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 2 of 40Page 390 of 650 2021 IRP Annual Report 2 1. Introduction: This inaugural Enbridge Gas Inc. (“Enbridge Gas”) 2021 IRP Annual Report (the “Report”) encompasses the period from July 22, 2021, through December 31, 2021.1 Where appropriate, Enbridge Gas has included information on relevant IRP-related activities subsequent to the end of the 2021. This Report has been filed per the Ontario Energy Board’s (“OEB”) Integrated Resource Planning (“IRP”) Decision and Order (dated July 22, 2021) establishing an IRP Framework for Enbridge Gas (the “Framework”), where the OEB directed: “Enbridge Gas shall file an Annual IRP Report with the OEB as part of its annual Non- Commodity Deferral Account Clearance and Earnings Sharing Mechanism application, the proceeding in which it may seek disposition of balances in the IRP Costs deferral accounts. The OEB does not intend to approve the annual IRP report, but it could impact the OEB’s findings on the disposition of amounts in the IRP Costs deferral accounts or inform future proceedings. The annual IRP report and the report from the IRP Technical Working Group are to be filed for information regardless of whether Enbridge Gas is seeking approval to clear any balances in the IRP Costs deferral accounts. The annual IRP report should include the following information:  A summary of IRP stakeholdering activities from the past year  A summary of IRP engagement or consultation activities with Indigenous peoples  Updates on IRP pilot projects underway  Updates on incorporating IRP into asset management planning  Updates on status of potential IRP Plans  Updates on status of approved IRP Plans, including details of adjustments made by Enbridge Gas  Annual and cumulative summaries of actual peak demand reductions/energy savings generated by each IRP Plan to-date, including comparisons to the initial forecast reduction/energy savings and the actual amount of expenditure on each IRP Plan to-date  The most recent results of Enbridge Gas’s IRP Assessment Process for system needs, including reporting on those system needs where a negative binary screening or technical/economic evaluation resulted in no further assessment of IRPAs  A summary of best available information on demand-side IRPAs, including types of IRPAs, estimates of cost, peak demand savings, status in Ontario, potential role and relevance to Enbridge Gas’s system, and learnings from pilot projects and other jurisdictions  Efforts taken to explore the use of interruptible rates for meeting system needs, including how customers have been provided the opportunity to consider this option  Any other IRP-related matters established by the OEB.”2 1 Future IRP annual reports will include the full calendar year. 2 EB-2020-0091, Decision and Order, Appendix A, p. 22 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 3 of 40Page 391 of 650 2021 IRP Annual Report 3 2. IRP Integration The establishment of the Framework has allowed Enbridge Gas to commence formally integrating IRP into its existing planning practices. Accordingly, Enbridge Gas reviewed its distribution and transmission planning practices and implemented changes including, implementation of the OEB approved IRP assessment process, and stakeholder engagement activities. In addition, Enbridge Gas is expanding existing processes to enable the effective evaluation and implementation of IRP alternative3 (“IRPA”) pilot and non-pilot projects. In support of these integration activities Enbridge Gas is guided by the Guiding Principles established by the OEB in the IRP Decision:  “Reliability and safety – In considering IRPAs as part of system planning processes, Enbridge Gas’s system design principles cannot be compromised, and the reliable and safe delivery of firm contracted peak period natural gas volumes to Enbridge Gas’s customers must remain of paramount importance.  Cost-effectiveness – IRPAs must be cost-effective (competitive) compared to traditional Facility Alternatives4 and other IRPAs, including taking into account impacts on Enbridge Gas customers.  Public policy – IRP will be considered in a manner to ensure that it is supportive of and aligned with public policy, and in particular the OEB’s statutory objectives for the natural gas sector.  Optimized scoping – Recognizing that reviewing IRPAs for every forecast infrastructure project would be extremely time intensive, binary screening should be undertaken, to confirm which forecast need(s) should undergo evaluation of IRPAs, and to ensure a focus at the outset on efficient and effective IRPA investment.  Risk management – Economic risks associated with both Facility Alternatives and IRPAs in meeting system needs are evaluated and appropriately mitigated. Risks and rewards are allocated appropriately between Enbridge Gas and its customers.”5 More detailed discussion of the steps towards IRP integration taken by Enbridge Gas follow: Stakeholder Engagement Stakeholder engagement activities are ongoing. Following the completion and filing of the Company’s 2023-2032 Asset Management Plan (“AMP”) in the fall of 2022, Enbridge Gas will commence IRP- related regional and geo-targeted stakeholder engagement. Stakeholder feedback received through these engagement activities will be reviewed and responded to (where appropriate) and will inform the Company’s consideration and development of potential IRP projects as well as future AMPs. For 3 The types of eligible alternatives are described in EB-2020-0091, Decision and Order, Section 7 4 Per the IRP Framework (EB-2020-0091, Appendix A, p.4), Facility Alternative is “synonymous with a traditional or conventional facility project” 5 EB-2020-0091, Decision and Order, p.27-28 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 4 of 40Page 392 of 650 2021 IRP Annual Report 4 a summation of the stakeholder engagement activities undertaken in 2021 see Section 4: Stakeholder and Indigenous Engagement Update. Forecasting and Planning Enbridge Gas regularly updates its long-term peak demand forecast and AMP (both comprehensive and limited updates depending upon timing and purpose). The objective of peak demand forecasting, and planning is to amass data, input, and insights to identify potential future system needs and constraints as well as their magnitude and timing. Early identification of future system needs and constraints is critical as the Company is obligated to reliably serve the firm contracted peak period demands of its customers. A comprehensive discussion of Enbridge Gas’ forecast and planning processes and any changes that have been made as a result of the establishment and implementation of the Framework will be filed in the Company’s 2024 Rate Rebasing application in fall of 2022. Need Identification Following the completion of the forecasting process, Enbridge Gas compares the future forecast to the capacities of its existing facilities. A new system need/constraint is identified when Enbridge Gas determines that its current facilities cannot balance the new peak demand forecast with existing system facilities safely and reliably. When a constraint is initially identified, Enbridge Gas will verify its model with existing actual physical data, including pressure and temperature compensated consumption or flow, to ensure that the constraint is properly forecasted. Baseline Facility Setting Following the identification of a system need, Enbridge Gas develops the baseline facility that is required to meet the system need, absent any non-facility or IRPAs. It is necessary to understand this baseline facility as early as possible, as it provides a helpful point of comparison for other alternatives including IRPAs. Binary Screening Following the identification of a system need, Enbridge Gas will review the need relative to the Binary Screening Criteria established by the OEB in the Framework. If the system need passes Binary Screening, Enbridge Gas will then review and assess IRPAs or combinations of IRPAs that could meet the capacity requirements of the system need. Binary Screening includes:  “Emergent Safety Issues: If an identified system constraint/need is determined to require a facility project for Enbridge Gas to offer safe and reliable service or to meet an applicable law, an IRP evaluation is not required. An example of such a system constraint/need, and an emergent safety issue, would be if an existing pipeline sustained unanticipated damage and Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 5 of 40Page 393 of 650 2021 IRP Annual Report 5 needed to be replaced as quickly as possible to ensure the safety of local communities and Enbridge Gas’s broader transmission and distribution systems. Longer-term safety related system constraints/needs may be appropriate for an IRP Plan and should be considered on a case-by-case basis.  Timing: If an identified system constraint/need must be met in under three years, an IRP Plan could not likely be implemented and its ability to resolve the identified system constraint could not be verified in time. Therefore, an IRP evaluation is not required. Exceptions to this criterion could include consideration of supply-side IRPAs and bridging or market-based alternatives where such IRPAs can address a more imminent need.  Customer-Specific Builds: If an identified system need has been underpinned by a specific customer’s (or group of customers’) clear request for a facility project and either the choice to pay a Contribution in Aid of Construction or to contract for long-term firm services delivered by such facilities, then an IRP evaluation is not required.  Community Expansion and Economic Development: If a facility project has been driven by government legislation or policy with related funding explicitly aimed at delivering natural gas into communities, then an IRP evaluation is not required.  Pipeline Replacement and Relocation Projects: If a facility project is being advanced for replacement or relocation of a pipeline and the cost is less than the minimum project cost that would necessitate a Leave to Construct approval [$2 million], then an IRP evaluation is not required.”6 IRPA Technical Feasibility Assessment For all system needs that pass Binary Screening, Enbridge Gas will assess which IRPAs could technically be used to defer, avoid or reduce the need/constraint relative to facility infrastructure. In other words, Enbridge Gas will ensure that the IRPA can serve the identified need prior to evaluating the IRPA on an economic basis. Economic Evaluation Enbridge Gas will test and compare the technical feasibility of both the baseline facility and any IRPAs on an economic basis using the OEB-approved DCF+ cost test. In the Decision, the OEB determined that Enbridge Gas has “some discretion in selecting an alternative to meet a system need that does not have the highest score on phase 1 of the DCF+ test, as there may be considerations or factors that are important in phase 2 and 3 or are difficult to quantify.”7 The IRPA, or combination of IRPAs, that can technically and economically meet the system need and satisfy the Framework’s Guiding Principles, will be incorporated into the AMP for inclusion into its broader planning activities, stakeholder touchpoints and for implementation at the appropriate time. 6 EB-2020-0091, Decision and Order, p.47-49 7 IBID, p.56 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 6 of 40Page 394 of 650 2021 IRP Annual Report 6 Project Development Following the identification of IRPAs and the inclusion in the AMP, Enbridge Gas will begin work to develop and subsequently file an IRP Plan application and supporting evidence with the OEB for approval (where appropriate). Enbridge Gas will ensure that all details related to IRPAs and the underlying system needs that they are intended to address will be fully refined in this step and will continue to monitor the need as part of its planning activities until such time that the project is implemented. IRPA Project Implementation Enbridge Gas’ IRP Plan applications will:  detail anticipated savings or peak period impacts (on an hourly basis for distribution system assets and on a daily basis for transmission and storage system assets) together with the costs and ownership/operationalization arrangements proposed for IRPA investments;  seek approval to spend and subsequently recover costs associated with investing in an IRPA(s);  include additional applicable details for IRPAs such as design, administration, implementation, monitoring and reporting. As is the case with traditional applications to the OEB seeking an Order of the Board for Leave to Construct facilities LTC applications, Enbridge Gas intends to consult with impacted landowners (where applicable), municipal governments, First Nations, Indigenous groups, and other affected stakeholders prior to filing its IRP Plan application with the OEB. Monitoring and Reporting Following implementation of approved IRPAs, the Company will carefully monitor their effectiveness in meeting the identified system need to ensure system constraints are being sufficiently resolved. Enbridge Gas will provide an annual report of IRPA effectiveness to the OEB as part of either its annual Rates application or Non-Commodity Deferral Account Clearance and Earnings Sharing Mechanism application, or as otherwise directed by the OEB. If any IRPA is not meeting the identified system need for which it was implemented, Enbridge Gas will propose corrective action in its report which may include, but not be limited to, proposals to implement additional IRPAs or new facilities. 3. IRP Pilot Projects The OEB Directed Enbridge Gas to “select and deploy”8 two IRP pilot projects by the end of 2022. 8 EB-2020-0091, Decision and Order, p.94 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 7 of 40Page 395 of 650 2021 IRP Annual Report 7 The concept of developing and implementing two IRP pilots received universal support during the IRP proceeding.9 Parties recognized that these IRP pilots would be an effective approach to better understand and evaluate how IRP can be implemented to avoid, delay or reduce facility projects required to meet the identified need. The Technical Working Group was created to, among other matters, provide input and insight into the selection and development of the IRP pilots. At the time of writing this Report the specific pilot projects and associated IRPAs have not been determined. Enbridge Gas plans to file the two IRP pilot applications by December 31, 2022 for OEB review and implementation based on the following schedule: June – August 2022 Review potential IRP Pilot projects September Select two pilot projects September - December 2022 Develop IRP pilot evidence and applications January – April 2023 OEB Procedural process May 2023 IRP pilot project implementation 4. IRP Stakeholder and Indigenous Engagement Update As part of the Decision in the IRP Framework proceeding “the OEB has determined that the components of Enbridge Gas’s proposed Stakeholder Engagement Process will provide valuable input into Enbridge Gas’s IRP activities and shall be incorporated in the IRP Framework. The OEB also directs the establishment of a website by Enbridge Gas to facilitate the broad sharing of information on IRP stakeholdering efforts.”10 IRP Website In December 2021, an Enbridge Gas IRP website went live.11 This is the initial phase of the website and allows for individuals to identify which regions are of interest and to register for any stakeholder engagement that will occur within the regions(s) of interest. Individuals are welcome to register for as many regional engagement activities as they feel appropriate. By registering their emails, 9 EB-2020-0091, Decision and Order, p.90 10 IBID, p. 66 11 https://www.enbridgegas.com/sustainability/regional-planning-engagement Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 8 of 40Page 396 of 650 2021 IRP Annual Report 8 individuals give permission to receive emails from Enbridge Gas in the future thus meeting the requirements of Canada's Anti-Spam Legislation (CASL). The next phase of the website design is underway. This next phase will be available when a pilot project or IRP Plan is developed, and it will include additional regional functionality. The next phase will also allow interested individuals to sign up for webinars, in-person engagements, and to receive information about any presentations and/or responses to stakeholder feedback that is posted. It is anticipated that the second phase of the website design will be available prior to the launch of the first pilot project or IRP Plan. Enbridge Gas has also implemented an internal working group that includes representation from Enbridge Gas’ Municipal, Stakeholder and Community Engagement Group, Community and Indigenous Engagement and the IRP group to ensure that the internal resourcing and IT infrastructure developed to conduct, gather, and respond to the ongoing stakeholder engagement efforts in support of IRP will be sufficient to inform future planning efforts. This internal working group brings extensive stakeholder engagement experience and insight to the future IRP Stakeholder engagement plans. Enbridge Gas’ various stakeholder engagement groups support efficient project execution with engagement activities in the field with project-area residents, local governments, and local organizations, in support of project objectives and business goals. They also regularly engage with key partners, including local municipal officials, business leaders, key landowners, emergency responders, and non-government organizations. Enbridge Gas anticipates engagement with Indigenous groups to commence in 2022 as IRP Plans are developed. 5. IRP Plan Update Enbridge Gas has not developed or filed any IRP Plans with the OEB that can be reported at this time. Please see Appendix B for a list of projects that Enbridge Gas has completed the binary screening process following the OEB’s IRP Decision. 6. Asset Management Plan (AMP) Update The IRP Decision indicated that “for this first-generation IRP Framework, the OEB finds the process proposed by Enbridge Gas to identify system constraints or needs is acceptable. Recording potential system needs/constraints up to ten years in the future in the AMP will allow time for a detailed examination of IRPAs. The OEB agrees with Enbridge Gas’s proposal that the first version of the AMP reflecting this updated process be filed in Fall 2022.”12 12 EB-2020-0091, Decision and Order, p.42 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 9 of 40Page 397 of 650 2021 IRP Annual Report 9 Enbridge Gas will file the 2023-2032 AMP in Fall 2022 with the 2024 Rate Rebasing application. The AMP will include the binary screening results for all facility projects, greater than $2 million, as noted in the IRP Assessment process description above. In addition, the AMP will include IRP assessment information for the projects, including IRPAs, where possible. 7. Integrated Resource Planning Alternatives Update Discussion during the IRP regulatory proceeding included the request by some parties to have available a listing or menu of IRPAs being considered by Enbridge Gas. The OEB concluded that a “document on best available information for demand-side alternatives would promote more timely development of IRP Plans and directs Enbridge Gas to include a listing in its annual IRP Report.”13 Appendix C lists the preliminary IRPAs and includes information on these specific IRPAs as suggested by OEB Staff including “types of IRPAs, estimates of cost, peak demand savings, status in Ontario, potential role and relevance to Enbridge Gas’s system, and learnings from pilot projects and other jurisdictions.”14 Enbridge Gas recognizes that this IRPA information is preliminary and will become more refined over time as the Company becomes more familiar with the actual impacts of these IRPAs on system peak demands and with the inclusion of more granular meter reading through an Automated Metering Infrastructure (AMI) application. Enbridge Gas also anticipates that the IRP pilot projects will provide further information allowing for the refinement and updating of the impacts of some of the IRPAs listed. 8. Technical Working Group Summary The OEB’s July 22, 2021, Decision further instructed the OEB to establish an IRP Technical Working Group (TWG) led by OEB staff, to provide input on IRP issues that will be of value to both Enbridge Gas in implementing IRP, and to the OEB in its oversight of the IRP Framework. The inaugural meeting for the IRP TWG was held on Tuesday January 18, 2022. Any updates or summaries of IRP TWG meetings held in 2022 will be included in and reported on in the 2022 IRP Annual Report. All documents and presentations with respect to the IRP Technical working group can be found on the OEB web site under proceeding EB-2021-0246.15 The Report of the Technical Working Group is included as Appendix D. 13 EB-2020-0091, Decision and Order, p.36 14 IBID, p.34 15 https://www.oeb.ca/consultations-and-projects/policy-initiatives-and-consultations/natural-gas-integrated- resource Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 10 of 40Page 398 of 650 2021 IRP Annual Report 10 9. Interruptible Rates Update The use of interruptible rates as an IRPA was reviewed as part of the IRP Framework proceeding. The discussion centered around a few key issues: “Customers on interruptible rates pay a lower rate in exchange for the ability of Enbridge Gas to curtail delivery if capacity is not available on the system. Interruptible volumes are not included in Enbridge Gas’s design day assumptions. Therefore, increased use of interruptible rates could potentially reduce the amount of firm peak demand Enbridge Gas is obligated to serve, helping address a system need. For this reason, Enbridge Gas indicated that it does consider interruptible rates to be a type of IRPA. Enbridge Gas already offers interruptible rates to its Contract Rate customers (larger commercial, institutional and industrial customers). However, Enbridge Gas noted that customers have been moving away from interruptible rates as they value certainty of supply over cost reduction.”16 In response Enbridge Gas indicated that it would “investigate the drivers for recent declines in the use of interruptible services and could potentially file revised interruptible and firm seasonal services/rates to make them more attractive to customers as part of its 2024 rebasing application.”17 The OEB determined that “the impact of interruptible rates to meet a system need/constraint should be considered in an IRP Plan in combination with demand-side or supply-side alternatives.”18 Enbridge Gas will file an interruptible rates study as part of its Rate Rebasing application in fall of 2022. 10. DCF+ Review As part of the IRP Framework Decision the OEB found that “the OEB accepts the categories of benefits and costs proposed by Enbridge Gas for the three phases of the DCF+ test (shown in Table 2) for the use of this test in the IRP Framework. The OEB recognizes that the DCF+ test could be improved to better identify and define the costs and benefits of Facility Alternatives and IRPAs and clarify how these costs and benefits should be considered within the DCF+ test. This could include expanding the inputs to recognize increasing carbon costs, the risk that a constraint remains unresolved, and impact on gas supply costs. The OEB directs Enbridge Gas to study improvements to the DCF+ test for IRP.”19 The OEB further recognized that “this test could be improved to better list and define the costs and benefits of facility projects and IRP Alternatives and clarify how these costs and benefits should be considered within the test. Enbridge Gas is expected to study improvements to the Discounted Cash Flow-plus test for IRP, in consultation with the IRP Technical Working Group that will be established 16 EB-2020-0091, Decision and Order, p,30 17 IBID, p. 30-31 18 IBID, p.35 19 IBID, p.56-57 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 11 of 40Page 399 of 650 2021 IRP Annual Report 11 as part of the IRP Framework and using IRP pilot projects as a testing ground. Enbridge Gas shall file an enhanced Discounted Cash Flow-plus test for approval as part of the first non-pilot IRP Plan.”20 Enbridge Gas has begun the process of reviewing the DCF+ test approved by the OEB. Enbridge Gas will consult with the Technical Working Group on any proposed enhancements to the DCF+ test prior to filing this cost benefit analysis with the first IRP non-pilot application. 20 EB-2020-0091, Decision and Order, p. 5-6 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 12 of 40Page 400 of 650 2021 IRP Annual Report 12 Appendix A: OEB IRP Direction The table below provides Enbridge Gas’ progress with respect to meeting the Directions as ordered by the OEB in the IRP Decision. Direction Item Reference in the Decision Direction Status Interruptible rates Section 7 p.35 The OEB directs Enbridge Gas to study its interruptible rates to determine how they might be modified to increase customer adoption of this alternative service. In progress – will be included with Enbridge Gas Rebasing Application (2023-2032) Documentation of demand side IRPAs Section 7 p.36 The OEB concludes that a document on best available information for demand-side alternatives would promote more timely development of IRP Plans and directs Enbridge Gas to include a listing in its annual IRP Report. The OEB agrees with Enbridge Gas that supply-side alternatives require case-by-case examination and therefore are not required to be included in the listing. Completed – preliminary list Asset Management Plan Section 8 p.42 The OEB directs that the AMP include information about Enbridge Gas’ system needs. This includes providing the status of consideration of IRP Plans in regard to meeting system needs, the result of the binary screening, and details on the evaluation. In progress – will be filed with the Enbridge Gas Rebasing Application DCF+ test enhancement Section 8 p.56-57 The OEB directs Enbridge Gas to study improvements to the DCF+ test for IRP and, as applicable, file an enhanced DCF+ test for approval as part of the first non-pilot IRP Plan. In progress IRP Website Section 10 p.66 The OEB also directs the establishment of a website by Enbridge Gas to facilitate the broad sharing of information on IRP stakeholder engagement efforts. Phase 1 – Completed Phase 2 – In progress Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 13 of 40Page 401 of 650 2021 IRP Annual Report 13 Technical Working Group Section 10 p.67 Establishment of a TWG with the OEB directing that membership should include Enbridge Gas, OEB staff, independent experts, and experienced non- utility stakeholders Completed IRP Deferral accounts Section 15 p.87 The OEB directs Enbridge Gas to prepare a Draft Accounting Order for the two IRP Costs deferral accounts, consistent with the direction in this decision. Completed Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 14 of 40Page 402 of 650 2021 IRP Annual Report 14 Appendix B: Binary Screening Results Appendix B: Binary Screening Results for Projects Filed OEB Proceeding Docket Project Name Customer Specific Build Timing Pipeline Replacement >$2M Emergent Safety Issue Community Expansion & Economic Developme nt Binary Pass or Fail EB-2022- 0111 Bobcaygeon Community Expansion Project Fail Fail EB-2022- 0086 Dawn to Corunna Replacement Project Fail Fail EB-2022- 0088 Haldimand Shores Community Expansion Project Fail Fail EB-2022- 0003 NPS 20 Waterfront Relocation Project Fail Fail EB-2020- 0293 St. Laurent Ottawa North Replacement Project Fail Fail EB-2021- 0205 Greenstone Pipeline Project Fail Fail EB-2021- 0248 Coveny and Kimball- Colinville Well Drilling Project Fail Fail Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 15 of 40Page 403 of 650 2021 IRP Annual Report 15 Appendix C: Integrated Resource Planning Alternatives Integrated Resource Planning Demand-Side Alternatives – Best Available Information As per the IRP Decision, the IRP Annual Report is to include “a summary of best available information on demand-side IRPAs, including types of IRPAs, estimates of cost, peak demand savings, status in Ontario, potential role and relevance to Enbridge Gas’s system, and learnings from pilot projects and other jurisdictions”.21 Demand-side IRPAs IRPA Name Enhanced Targeted Energy Efficiency (ETEE) ETEE IRPA Overview Enhanced targeted energy efficiency (ETEE) programs focus on achieving necessary reductions in a specific geographical area to reduce peak period system demands. The mix of offerings and measures utilized in an ETEE program is dependent upon the scope of the facility investment project under consideration, customer characteristics in the specific project service area, past demand side management DSM participation etc. ETEE programs could include refining existing broad-based DSM offerings through enhanced incentives and targeted marketing or introducing new geo-targeted programs not offered through broad-based DSM. Broad-based DSM programs have been delivered throughout the Enbridge Gas service areas since 1993. The 2023-2027 DSM Plan (EB-2021-0002) is currently under consideration of the OEB to guide broad-based DSM programming over that time frame. As defined by the Ontario Energy Board in their DSM Letter, the objective of broad-based DSM is “assisting customers in making their homes and businesses more efficient in order to help better manage their energy bills”.22 Separately, Enbridge Gas proposes to undertake IRP pilots to review and understand the potential impacts of energy efficiency programs on peak period system demands within a geo-targeted area, and whether the impacts are significant enough to be considered an infrastructure alternative. Potential ETEE measures include those space heating equipment, water heating equipment and building envelope upgrades that could impact peak. 21 The IRP Alternatives do not include electricity-based alternatives per the OEB’s EB-2020-0091 Decision where it stated “The OEB has concluded that as part of this first-generation IRP Framework, it is not appropriate to provide funding to Enbridge Gas for electricity IRP Alternatives.” p.4 22 EB-2019-0003, OEB Letter Post-2020 Natural Gas Demand Side Management Framework (December 1, 2020), p. 2. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 16 of 40Page 404 of 650 2021 IRP Annual Report 16 IRPA Peak Impacts Forecast peak impacts will be estimated on a case-by-case basis depending on the ETEE program. Enbridge Gas Inc. (EGI) worked with Posterity Group to build an end-use model of its service territory with the 2019 Achievable Potential Study (APS) being the starting point for the model creation. First, a mirror model of the APS was created and then several adjustments were made to better reflect EGI’s knowledge and experience of the Ontario DSM market, EGI’s current TRM assumptions and known changes to applicable standards. Then Posterity Group worked with EGI to develop peak factors which were added to the model so that enhanced targeted energy efficiency peak hour impacts estimates could be developed for each region, sector, segment and end use. Posterity Group and EGI plan to continue to evolve this model by refining assumptions and assessment methodologies to refine and improve forecasting of peak hourly flow reduction potential. IRPA Cost Details Costs will be determined on a case-by-case basis depending on the ETEE program. The Posterity model described above also included cost assumptions for ETEE programs. Posterity Group and EGI plan to continue to evolve this model by refining assumptions and assessment methodologies so it can be used to assess project specific costs for an ETEE program. EGI Deployment Strategy Which energy efficiency measures are chosen and what ETEE deployment strategy is undertaken will be dependent upon the scope of the facility investment project under consideration, customer characteristics in the specific project service area, past DSM participation etc. An IRP ETEE pilot project would provide insights that could guide the deployment strategy of a future IRP ETEE program, including to what degree Automated Metering Infrastructure (AMI) may be required to inform the objectives of the pilot. Learnings from Pilot Projects/Other Jurisdictions Enbridge Gas has engaged Guidehouse to undertake a jurisdictional review of ETEE (Enhanced Targeted Energy Efficiency) and DR (demand response) gas pilots implemented for the objective to defer or avoid infrastructure. Findings from the review are anticipated to inform potential pilots for natural gas IRP implementation. Enbridge Gas filed a Geo-Target Demand Side Management Case Study in EB-2020-0091 at Exhibit C, Appendix A. The objectives of the case study were: Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 17 of 40Page 405 of 650 2021 IRP Annual Report 17 1.Assessment of the impacts of geo-targeted DSM programs on reducing peak hour demand. 2.Assessment of the costs of geo-targeted DSM program implementation. The results from this case study only illustrate the impacts geo-targeted DSM had on the town of Ingleside and although informative and directional, the results cannot be generally applied due to the specific nature of customer composition. IRPA Name Demand Response (DR) IRPA Overview Natural Gas Demand Response aims to reduce demand by natural gas customers during peak periods. For residential and commercial customers, this is usually in the form of heating demand reduction via thermostat control or water heater temperature settings. For contract customers, this can be done through leveraging Interruptible Rates. IRPA Peak Impacts Peak impacts will be determined on a case-by-case basis depending on the DR program. IRPA Cost Details DR IRPA costs will be determined on a case-by-case basis depending on the DR program. EGI Deployment Strategy The deployment strategy will be determined on a case-by-case basis depending on the DR program. An IRP Demand Response pilot project would provide insights that could guide the deployment strategy of a future Demand Response program, including to what degree Automated Metering Infrastructure (AMI) may be required to inform the objectives of the pilot. Learnings from Pilot Projects/Other Jurisdictions Enbridge Gas has engaged Guidehouse to undertake a jurisdictional review of ETEE (Enhanced Targeted Energy Efficiency) and DR (demand response) gas pilots implemented for the objective to defer or avoid infrastructure. Findings from the review are anticipated to inform potential pilots for natural gas IRP implementation. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 18 of 40Page 406 of 650 2021 IRP Annual Report 18 Appendix D: Technical Working Group Report Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 19 of 40Page 407 of 650 Review of Enbridge Gas Inc. 2021 Integrated Resource Planning (IRP) Annual Report and Update on IRP Working Group Activities From: Integrated Resource Planning Technical Working Group June 9, 2022 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 20 of 40Page 408 of 650 Contents 1. Introduction ......................................................................................................................... 3 2. Establishment and Initiation of Working Group .................................................................... 3 3. Review of Enbridge Gas’s Annual IRP Report and Comments on Implementation of the IRP Framework ................................................................................................................................. 6 3.1. Working Group Comments on Implementation of the IRP Framework.............................. 7 4. Description of Other Key Activities to Date .........................................................................19 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 21 of 40Page 409 of 650 1. Introduction An Integrated Resource Planning (IRP) Framework for Enbridge Gas was established by the OEB through its July 22, 2021 Decision and Order (the IRP Decision). The IRP Decision directed the OEB to establish an IRP Technical Working Group (Working Group) and required a report from the Working Group to the OEB (Working Group report) to be filed in the same proceeding in which Enbridge Gas’s annual IRP report is filed. The IRP Decision indicated that the Working Group report should include any comments on Enbridge Gas’s annual IRP report, including material concerns that remain unresolved within the Working Group, and may also describe other activities undertaken by the Working Group in the previous year. This report has been prepared by OEB staff with input from all Working Group members, and approved by all Working Group members, as an accurate summary of the Working Group’s activities.1 Where views expressed in the report do not reflect the views of all members, this is clearly indicated. 2. Establishment and Initiation of Working Group The IRP Decision instructed the OEB to establish a Working Group led by OEB staff, to provide input on IRP issues that will be of value to both Enbridge Gas in implementing IRP, and to the OEB in its oversight of the IRP Framework. The IRP Decision further required the OEB to establish a terms of reference and select the membership for the Working Group. On October 19, 2021, the OEB issued a letter seeking nominations from individuals interested in participating on the Technical Working Group as non- utility members. The OEB selected seven non-utility members from the twenty nominations received, and announced the establishment and initial membership of the Working Group in a letter issued December 6, 2021. In addition to non-utility members, the Working Group includes 1 The IRP Technical Working Group includes observers from the Independent Electricity System Operator and EPCOR Natural Gas LP. As noted in the Working Group’s Terms of Reference, any materials authored by the IRP Working Group (including this report) should not be considered to represent the views of Working Group observers, or their organizations. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 22 of 40Page 410 of 650 representatives from the OEB and Enbridge Gas, and observers from the Independent Electricity System Operator and EPCOR Natural Gas LP. The current membership of the Working Group is shown below. Table 1: IRP Working Group Membership Name Role Michael Parkes OEB staff representative (Working Group chair) Stephanie Cheng OEB staff representative Chris Ripley Enbridge Gas representative Whitney Wong (replacing Amrit Kuner) Enbridge Gas representative Amber Crawford, Association of Municipalities of Ontario Non-utility member John Dikeos, ICF Consulting Canada Inc. Non-utility member Tamara Kuiken, DNV Inc. Non-utility member Cameron Leitch, EnWave Energy Corporation Non-utility member Chris Neme, Energy Futures Group Non-utility member Dwayne Quinn, DR Quinn & Associates Ltd. Non-utility member Jay Shepherd, Shepherd Rubenstein Professional Corporation Non-utility member Kenneth Poon, EPCOR Natural Gas LP Observer Steven Norrie, Independent Electricity System Operator Observer The inaugural meeting of the Working Group was held on January 18, 2022. Meetings have subsequently been held on a monthly basis, with five meetings completed as of the date of this report. Meeting notes and meeting materials for IRP Working Group meetings are published on the OEB’s website following meetings to allow stakeholders to follow the Working Group’s Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 23 of 40Page 411 of 650 progress.2 These materials can be found at: https://www.oeb.ca/consultations-and- projects/policy-initiatives-and-consultations/natural-gas-integrated-resource. As required by the IRP Decision, a draft terms of reference for the Working Group was developed by OEB staff. Following review and input from Working Group members at the initial meeting, a final terms of reference was issued by the OEB on February 17, 2022. 2 Meeting materials are typically posted online shortly after the meeting. Meeting notes are not typically posted until after the following meeting, to allow for members to review draft notes and identify any omissions or inaccuracies. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 24 of 40Page 412 of 650 3. Review of Enbridge Gas’s Annual IRP Report and Comments on Implementation of the IRP Framework The IRP Decision notes that the Working Group is expected to review a draft of Enbridge Gas’s annual IRP report, with the review coordinated by OEB staff, and that Enbridge Gas should provide a draft of the annual IRP report to the Working Group far enough in advance of its planned filing to the OEB to allow the Working Group time to review and comment. The IRP Decision also indicates that the Working Group report should include any comments on Enbridge Gas’s annual IRP report, including material concerns that remain unresolved within the Working Group. The Working Group’s review took the following steps: STEP 2 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 25 of 40Page 413 of 650 3.1. Working Group Comments on Implementation of the IRP Framework All Working Group members (with the exception of observers) were asked the following question: Question: Having reviewed Enbridge Gas’s final annual IRP report’s description of Enbridge’s IRP activities in the previous year and having also participated on the IRP Working Group, do you have any comments or concerns with the implementation of the IRP Framework to date? To varying degrees, all non-Enbridge Gas Working Group members expressed some concerns. These concerns relate primarily to: (1) the pace of Enbridge Gas’s efforts to implement the IRP Framework since the IRP Decision in July 2021; and (2) the ability of the Working Group to make progress on its identified priorities (discussed in chapter 4 of this report) and meaningfully contribute to Enbridge Gas’s IRP implementation, due in part to Enbridge Gas’s determinations regarding the topics and level of detail that it has brought forward to the Working Group to date. More specifics are provided in the comments from individual members in Table 2, and the comments of Enbridge Gas Working Group members follow in Table 3. STEP 3 STEP 4 Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 26 of 40Page 414 of 650 Several members (including Enbridge Gas representatives) noted that more frequent meetings or focused subgroups may help advance progress on IRP implementation. The Working Group has agreed to add a second monthly meeting, with a subgroup focusing on the discounted cash flow-plus (DCF+) test, beginning in July 2022. Table 2: Individual Comments of IRP Working Group Members Working Group Member Comments (optional) Amber Crawford (non-utility member) Since the Decision and Order was published on July 22, 2021, Enbridge Gas and OEB jointly created the nomination for membership of the IRP Technical Working Group. There have been five meetings held in 2022, and the following observations can be made thus far: Little Progress Made on IRP Pilot Projects: According to the Decision and Order, “the OEB expects that the [two] IRP pilot projects will be selected and deployed by the end of 2022.” (p.24). Meetings to date have discussed pilots at a very high-level, and have not yet seen substantive materials that would help the IRP Technical Working Group provide input on. While this may be in part due to Enbridge’s Asset Management Plan being developed this year, the criteria and potential choices should be further along to meet Enbridge’s deadline. Lack of Transparency and Reliance on 2024 Rate Rebasing: When asked to see data pertaining to pilots, the DCF+ test, binary screening results, best practices in other jurisdictions, or Enbridge’s Asset Management Plan, it has often been denied or mentioned it will be part of the 2024 Rate Rebasing in the Fall. Enbridges view that these topics are better addressed through testing of the evidence within the rebasing application. If this group is to provide input and expertise, it is incumbent on Enbridge to provide those details as otherwise, the consultation will not be meaningful. Minimal Information in Annual IRP Report: As a function of the slow progress in 2021, the Annual IRP Report fails to include details on key sections that would have been helpful and set up the 2022 year better (e.g. Sections 2, 6, 9). The Working Group’s review has been quite limited and question whether input to date has had a meaningful impact on Enbridge’s annual IRP report. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 27 of 40Page 415 of 650 John Dikeos (non-utility member) I agree with many of the comments from other Working Group members that Enbridge’s progress on identifying and screening potential IRPA pilots and updating its DCF+ cost- effectiveness approach has been relatively slow. There was very limited progress on these items in advance of the first Working Group meeting in January 2022 and progress since has been slow as well. To date, this has limited the Working Group’s ability to provide more meaningful contributions to the future of IRPA planning in Ontario. I noted the following additional items based on my review of Enbridge’s final 2021 IRP Annual Report: Evolution of binary screening criteria: Enbridge has included high-level details regarding its binary screening criteria for IRPAs. Although the criteria appear to be reasonable at this stage given the current knowledge and experience with IRPAs, Enbridge should be encouraged to revisit and evolve the criteria on an ongoing basis. For example, the Timing criteria should likely be condensed as Enbridge gains additional knowledge and experience with demand-side IRPAs. Interruptible rates: Enbridge notes that it is completing a study on interruptible rates, which will be filed as part of its rebasing application in fall 2022. As part of this study, Enbridge should investigate alternative and/or enhanced approaches to interruptible rates, such as the pilot projects that are being run by some utilities in New York (e.g., ConEd). Tamara Kuiken (non-utility member) I agree with many of the comments made by other reviewers, including those related to the lack of progress made on IRP pilots, the lack of progress made on improving the DCF+ test, communication about IRP elements delayed until the rebasing application, all initial IRPAs failing the binary test, and the perfunctory IRP Report. In my opinion, Enbridge shows little urgency toward advancing the IRP process, despite their commitment to deploy pilots before the end of 2022. The initial stated reason was a desire to engage with the TWG prior to making commitments; however, the lack of progress since the TWG was initiated suggests that other barriers exist. Cameron Leitch (non-utility member) From the definitions within the IRP Framework, this process is meant to address system needs by considering alternatives to conventional facility projects. At the core of this process is clarity on the determination of system needs, and without Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 28 of 40Page 416 of 650 insight into this determination (outside of the future AMP submission), it is difficult for the Working Group to provide meaningful feedback. Comments by other members of the Working Group are insightful, and my repetition of them will not provide added value to the reader. Chris Neme (non-utility member) While there have been some good initial discussions, and the tone of those discussions has been appropriately congenial and open-minded, I have several concerns about the effectiveness of the working group (WG) thus far. The most important are as follows: 1. Input on key IRP issues related to the Company’s next Asset Management Plan (AMP) and rate- basing application has essentially been taken off the table. Among those key issues are (A) the Company’s approach to load forecasting in light of Canada’s energy transition commitment, fast- increasing carbon taxes and the potential for the Company to partially control demand growth through limitations on new connections; (B) how binary screening criteria are to be assessed/applied, including the how the timing of needs is to be determined (given the binary screening criterion that says alternatives to traditional infrastructure investments should not be considered if the system need is within three years); and (C) how risks of stranded assets are to be addressed (e.g. if load grows in the near term but then declines as electrification takes hold). Had the Company been willing to engage on these issues prior to its filing in the Fall, some progress eliminating issues – or at least surfacing key issues and ensuring that the filing provided data/info likely to be important – could have been made, saving the Board time and making the filing a better product. These kind of collaborative working groups – speaking here to a groups addressing a range of topics, not just IRP – routinely provide such construction feedback in other jurisdictions. 2. Little progress on pilots – and therefore likely failure to begin deploy IRPAs as part of pilots before the end of 2022. This is particularly concerning given that it is essentially one of just two issues that the WG has effectively prioritized for 2022. While I appreciate that the Company may not have wanted to get too far in planning for the pilots until the Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 29 of 40Page 417 of 650 WG had formed, it still could have done a lot of groundwork identifying potential projects/locations for pilots (e.g. maybe developing an initial short list of 10- 12) so that we could have jumped right into selection once the WG had talked through priorities. 3. No progress on the revisions to the DCF+ cost- effectiveness test. This also has relevance to the Company’s upcoming AMP and rate-basing application, so it would have been ideal to have worked through some issues in greater detail in the first half of 2022. 4. Enbridge’s first IRP Report is largely perfunctory, with little useful information. This seems a function of two related things: (A) no IRPAs have been identified yet for deployment; and (B) the Company has decided that all planning related to IRPA consideration will be addressed in its AMP and rate- basing application. As stated above, the Company’s decision to not bring its draft approach to applying the IRP framework to its AMP is an unfortunate missed opportunity. Hopefully next year’s IRP report will be more substantive. Note that greater progress on the items above may have been hindered by having just one meeting a month among a dozen or more people. That might suggest the need for some sub- groups focused on particular topics (e.g. cost-effectiveness test) and perhaps with fewer people involved to meet more often. Those subgroups could then report back draft recommendations for the full WG to consider. This model is being used very effectively, for example, by the Illinois Stakeholder Advisory Group (SAG) for energy efficiency. They have full working group meetings quarterly (used to be monthly) but have numerous subcommittees (also with regular meetings) and working groups (more episodically meeting to address specific topics that have more time-sensitive needs). See www.ilsag.info. Dwayne Quinn (non-utility member) As the last non-utility member to comment, instead of “piling on” regarding the lack of opportunity for the IRP WG to understand the lack of progress by the utility or even the behind the scene processes, we will simply support contributions of each of the other non-utility members. I am concerned that the Enbridge comments seem to dismiss consensus comments by the group. I believe the reality lies in the fact that Enbridge has not advanced even one single Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 30 of 40Page 418 of 650 concrete example of a potential pilot, which could have been used to allow input from the WG on process matters. The cumulative years of experience and aggregated intellectual capital of the committee is being wasted as we await something substantive to review and to initiate collaboration. Jay Shepherd (non-utility member) Very Little Has Been Done To Date. This Report demonstrates that little was done from July 22 to December 31, 2021 to advance IRP in Ontario. The Report discloses that the following steps were taken in that 5+ month period: 1. A bare bones website was created (perhaps a day’s work), in which the primary functionality is the ability of customers to indicate their interest in regional constraints and the related IRPAs. However, there are no regional constraints or IRPAs identified, and will not be until the end of 2022 at the earliest. Enbridge promises future enhancements to the website late in 2022 or early in 2023. 2. A committee of the stakeholder engagement folks at Enbridge has been created, but they will have nothing to do until late 2022, when constraints and potential IRPAs have been identified. Nothing else appears to have been done. No preliminary work was done on the pilots, or the DCF+ test, or best practices in other jurisdictions, etc. Or, if there was, none of it was brought to the attention of the IRP Working Group. Asset Management Plan – Refusal to Disclose. In parallel, Enbridge has moved forward with its 2024-2028 Asset Management Plan, but does not appear to have incorporated IRP into that process. Further, when asked to provide information to the IRP Working Group on the process of the AMP, and how it was influenced by IRP, Enbridge refused to do so. Members of the working group sought a draft of the AMP, which should be substantially finalized at this point, but that disclosure was refused. Load and Demand Forecast – Refusal to Disclose. Related to this, Enbridge has, in 2021 and 2022, been preparing its ten year load forecast for the AMP to be filed in the rebasing application, but has declined to share any information on that forecast with the IRP working group. It does not appear that Enbridge has taken any action so far to Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 31 of 40Page 419 of 650 influence that forecast downward through, for example, longer term planning for, or forecasting of, IRPAs. Posterity Group Model – Refusal to Disclose. Another refusal from Enbridge was the request from the IRP working group to see the Posterity Group model that Enbridge plans to use to assess IRPAs. Enbridge will not provide that model unless compelled to do so by the OEB. Interruptible Rates Study – No Consultation with IRPWG. At the same time, Enbridge has proceeded (in 2022, not 2021) with an interruptible rates study as it relates to IRP, but has not brought any information on that study to the IRP working group, and apparently does not intend to do so. 100% Fail Rate in Binary Screening. To date, Enbridge has used binary screening on seven projects, and all have failed, in most cases because of Enbridge’s determination that the need must be met in under three years. One of these was the St. Laurent Phase 3 and 4 project, which the OEB determined in the EB-2020-0293 LTC application would not proceed at this time. It is not known yet whether the others that failed the screening can stand up to a similar independent review. No information on that binary screening has been provided to the IRP working group. Pilot Projects – Non-Compliance with OEB Direction. Enbridge also discloses in the attached Report that they will not comply with the OEB direction to “select and deploy” two IRP pilot projects by the end of 2022. They have unilaterally determined, without input from the IRP working group, that they will complete the “select” stage by the end of the year, but will not have the pilot projects “deployed” until the winter of 2023, rather than the winter of 2022. Against this contextual background, Enbridge has been adding to rate base at an average rate of $100 million of capital additions per month since the IRP Decision, and is continuing to do so. The inescapable conclusion from this Report, and from the actions of Enbridge to date, is that their strategy is a “slow walk” of IRP, consistent with their past resistance to the concept. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 32 of 40Page 420 of 650 Mike Parkes/Stephanie Cheng (OEB staff representatives) In OEB staff’s view, Enbridge Gas is taking the initial steps (as documented in Enbridge’s annual IRP report) to implement the IRP Framework in accordance with the OEB’s direction. This includes participating in good faith on the IRP Working Group. Implementation of the IRP Framework is still at a preliminary stage. At this time, OEB staff provides additional comments on three topics: • Slow start on IRP Pilots (section 3 of Enbridge Gas annual IRP report): The IRP Framework indicated that Enbridge Gas should develop and implement two IRP pilot projects, with the expectation that the pilot projects would be selected and deployed by the end of 2022. Based on the description in the annual IRP report and the information that has been shared with the Working Group, the amount of preparatory work done by Enbridge Gas in the months following the IRP decision in July 2020 to lay the groundwork for these pilots (in advance of seeking input from the IRP Working Group) was very limited. While OEB staff recognizes that this was in part because Enbridge Gas did not want to overly constrain pilot design prior to receiving input from the Working Group, the result is that it is unlikely that pilots will be deployed (if “deployed” is interpreted to include having received an OEB approval) by the end of 2022, which was the expectation of the IRP Decision. The consequence is that there will be a related delay in transferring learnings from the pilots into Enbridge Gas’s system planning decisions. It will be important for Enbridge Gas to make use of learnings from the pilots while they are still in-flight, to inform Enbridge Gas’s consideration of IRP alternatives in system planning. • Insufficient information base to compare IRP Alternatives Versus Facility Projects (sections 2,7, appendix B of Enbridge Gas annual IRP report): Under the IRP Framework, Enbridge will use a four-step IRP Assessment Process to determine the best approach to meeting system needs. Where such system needs pass an initial binary screening, Enbridge Gas is required to assess the technical and economic feasibility of IRP Alternatives in comparison with traditional facility solutions. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 33 of 40Page 421 of 650 The level of detail in appendix B (Integrated Resource Planning Demand-Side Alternatives – Best Available Information) of Enbridge’s initial annual IRP report regarding IRP Alternatives, including their cost and peak demand reduction potential, is generally insufficient to assist Enbridge Gas in completing this step of IRP assessment, and will need to be improved in future annual IRP reports. Information on IRP Alternatives will be informed and improved by the results of Enbridge Gas pilots. However, Enbridge Gas will need to conduct IRP assessments prior to completion of the pilots (e.g. for potential system needs identified in Enbridge’s rebasing application). In OEB staff’s view, Enbridge will need to supplement the information obtained from IRP pilots with other sources of information on the expected cost and peak demand reduction potential of IRP Alternatives (including results from other jurisdictions), to assist it in completing IRP Assessments (and to assist the OEB in reviewing Enbridge Gas’s determinations). Otherwise, the risk is that no IRP Alternatives will advance past this stage of IRP Assessment for many years. • Limited information and Working Group review of IRP elements of rebasing application (sections 2, 6, 9 of Enbridge Gas annual IRP report): The OEB’s review of Enbridge Gas’s rebasing application (expected to be filed in November 2021) will have significant consequences for implementing the IRP Framework. Issues of particular importance noted briefly in the annual IRP report include: Enbridge Gas’s updated asset management plan and its approach (and conclusions) regarding screening system needs for IRP alternatives and reporting on the status of such consideration (section 6), Enbridge Gas’s approach to demand forecasting (section 2), and Enbridge Gas’s approach to studying the potential for interruptible rates (section 9). In OEB staff’s view, Enbridge Gas’s approach to demand forecasting in light of the energy transition to lower-carbon energy sources will likely have significant implications for IRP and system planning, both regarding identification of system needs and the role of IRP Alternatives as potential solutions. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 34 of 40Page 422 of 650 These issues are only mentioned briefly in the annual IRP report, and the Working Group has not to date been provided with substantive details of how these topics will be addressed in Enbridge Gas’s rebasing application, and has not commented on them. At this point in time, if any review by the Working Group occurs, it will likely be quite limited. Reasons for this include: these topics were not identified as a priority for the Working Group in the IRP Framework; Enbridge Gas’s view that these topics are better addressed through testing of the evidence within the rebasing application; and views of some Working Group members that input at this stage is unlikely to have a meaningful impact on Enbridge Gas’s application. The consequence is that these issues will be addressed in the rebasing application without significant prior input from the Working Group. Table 3: Comments of Enbridge Gas IRP Working Group Members Working Group Member Comments (optional) Chris Ripley/Whitney Wong (Enbridge Gas representatives) Enbridge Gas has structured its comments to follow the Working Group Participant comments above. For context, Enbridge notes that the Working Group’s focus, per the Terms of Reference and the OEB’s IRP Decision, are three main issues: the IRP Annual Report, the DCF+ cost/benefit test and the IRP Pilots. Enbridge Gas does not agree with the negative tone of many of the Working Group Participant comments. Enbridge Gas has been working diligently on IRP implementation and engaging responsibly with the Working Group, in a manner consistent with the OEB's directions and expectations from the IRP Framework. As described below, Enbridge Gas expects that the pace of Working Group progress and activities will increase in the coming months. Minimal Information in Annual IRP Report: As noted above, the 2021 IRP Annual Report is reporting on 2021 activities and information. While progress has been made on the three main Working Group tasks; Annual Report, DCF+ and pilots the work has been largely completed in 2022 and will appear in the 2022 IRP Annual Report. In addition, in Enbridge’s view there is a mismatch between the IRP Annual Report, which relates to 2021, before the Working Group held its first Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 35 of 40Page 423 of 650 meeting, and the comments from the Working Group members on that Report, almost all of which relate to the experience of the Working Group in 2022. Over the next few months, the Working Group will discuss potential pilot projects and review Enbridge Gas’ proposals for the DCF+ Test. Little Progress Made on IRP Pilot Projects: Enbridge does not agree with the Working Group comments suggesting Enbridge Gas made little effort on the IRP Pilots Projects. The OEB’s IRP Decision stated “the OEB expects that the [two] IRP pilot projects will be selected and deployed by the end of 2022.” (p.24). Enbridge acknowledges deployment by the end of 2022 is not possible, this is entirely due to the timing of Enbridge’s demand forecast and planning processes being completed in Q2 of 2022. The 2023-2032 Asset Management Plan (“AMP”), generated in May 2022, identifies the needs on Enbridge’s system. The pilot projects need to be, and will be, based on actual system needs that have been identified in Enbridge Gas’ AMP. Enbridge Gas has included an updated IRP pilot schedule in its Annual Report. Enbridge Gas will bring 4-5 actual system needs for each of the two proposed IRP Pilots to the Working Group, including all relevant information to the need. Enbridge Gas will discuss the system needs brought forward with the Working Group, select two IRP Pilot projects and then prepare an application for the OEB’s review and approval. In order to complete the IRP Pilot selection process quickly, Enbridge Gas proposed to increase the number of Working Group meetings from once per month to twice per month. DCF+ Test: Enbridge Gas engaged Guidehouse Consulting to conduct a review of the DCF+ test approved by the OEB in the IRP Decision. Enbridge Gas expects to receive the Guidehouse Final Report in June 2022 and will use the Guidehouse report in its review of the DCF+ test and in any proposed changes. Enbridge Gas will be communicating the Guidehouse Report and Enbridge Gas’ proposed changes in the July IRP Working Group meeting. As discussed at the Working Group, a sub-group will be established to review the Guidehouse Report and Enbridge’s associated proposed changes to the DCF+ Test. This review and discussion will happen prior to the cost test being applied to the IRP Pilot projects or an IRPA Plan. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 36 of 40Page 424 of 650 Lack of Transparency and Reliance on 2024 Rate Rebasing: Enbridge Gas is filing its 2024 Rebasing Application in Fall 2022 which will include a comprehensive review of Enbridge Gas’ planning processes, the demand forecast and the Asset Management Plan. Enbridge Gas never understood the Working Group would provide input on the demand forecast process and the asset management requirements. The appropriate time to review Enbridge Gas’ planning processes and the Asset Management Plan is in the Rebasing proceeding, not at the IRP Working Group. Enbridge Gas is holding a Rebasing Stakeholder meeting in June 2022 where Enbridge will provide information about the upcoming filing. Enbridge Gas notes there is no direction to review or provide the planning processes, demand forecast or the Asset Management Plan to the Working Group in the OEB’s IRP decision or the IRP Working Group Terms of Reference Posterity Model: The Working Group have requested Enbridge Gas to provide the model used by Posterity Group to assess energy efficiency opportunities on Enbridge Gas’ system. Enbridge Gas does not own the Posterity model and cannot provide it. Enbridge Gas will explain the model, how it is used and the inputs/outputs as it develops the IRP Pilots. Interruptible Rates: In its IRP Decision, the OEB ordered Enbridge Gas “to study its interruptible rates to determine how they might be modified to increase customer adoption of this alternative service. This initiative is expected to help reduce peak demand, and the study should be filed as part of the next rate rebasing application”. (p.35). Enbridge is completing this direction and it will be filed in the Rebasing Application. Enbridge Gas notes there is no direction to review the Interruptible Rates study with the Working Group in the OEB’s IRP decision or the IRP Working Group Terms of Reference. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 37 of 40Page 425 of 650 4. Description of Other Key Activities to Date The Working Group’s Terms of Reference confirmed the following items noted in the IRP Decision as the highest initial priorities for the Working Group (in addition to the review of Enbridge Gas’s annual IRP report): • Consideration of IRP pilot projects to better understand how IRP can be implemented to avoid, delay or reduce facility projects. • The IRP Framework indicated that Enbridge Gas is expected to develop and implement two IRP pilot projects. The pilots are expected to be an effective approach to understand and evaluate how IRP can be implemented to avoid, delay or reduce facility projects. The IRP Framework indicated that the OEB expects that the IRP pilot projects will be selected and deployed by the end of 2022. • Working Group activities: The Working Group has had several discussions to provide input to Enbridge Gas on pilot design, focusing primarily on the pilot objectives, the criteria that will be used to select and prioritize pilots, and the types of IRP Alternatives should be a priority to test in the pilots. Enbridge Gas has proposed four potential pilots built on different types of IRP Alternatives: (1) enhanced targeted energy efficiency in combination with a bridging supply-side solution; (2) a peak shaving supply-side IRP Alternative using either compressed natural gas or liquefied natural gas; (3) a demand response program focused on general service customers’ heating loads; and (4) a demand response/interruptible rates initiative focused on Enbridge Gas’s larger contract customers. Enbridge Gas is also considering a geographical IRP pilot that may address multiple needs within a specific area and include a suite of IRP alternatives, potentially including demand-side and supply-side IRP alternatives, as well as considering enhanced inspection/integrity management measures. In the coming months, it is expected that Enbridge Gas will propose specific projects that match these potential pilots to real system needs identified in its Asset Management Plan, for Working Group review, prior to Enbridge Gas’s final selection of pilots. Additional discussion and refinement of the pilot proposals will take place by the Working Group, prior to Enbridge Gas filing pilot applications to the Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 38 of 40Page 426 of 650 OEB for approval. • Enhancements or additional guidance in using the Discounted Cash Flow-plus economic evaluation methodology to assess and compare the costs and benefits of using either facility solutions or IRP alternatives to meet system needs. • The IRP Framework established a three-phase discounted cash flow-plus (DCF+) test as the economic evaluation that will be used to compare the costs and benefits of different approaches to meeting system need (IRP alternatives, facility alternatives, or a combination). The OEB concluded that the DCF+ test could be improved to better identify and define the costs and benefits of Facility Alternatives and IRP Alternatives, and clarify how these costs and benefits should be considered within the DCF+ test. This could include expanding the inputs to recognize increasing carbon costs, the risk that a constraint remains unresolved, and impact on gas supply costs. Enbridge Gas was directed to study improvements to the DCF+ test, and encouraged to consult with the Working Group, and use the IRP pilot projects as a testing ground. Enbridge Gas was directed to file an enhanced DCF+ test for approval as part of the first non-pilot IRP Plan. • Working Group activities: The Working Group has had several preliminary discussions on this topic. This included an analysis and presentation by Working Group member and cost-effectiveness expert Chris Neme, which made several proposals to improve or refine the DCF+ test, while remaining consistent with the OEB’s guidance on this topic in the IRP Decision. Enbridge Gas is also planning to propose several refinements to the DCF+ test, but these have not yet been discussed with the Working Group. In the coming months, the Working Group plans further discussion, with the goal of agreeing on a preliminary approach to cost- effectiveness that can be used for the IRP Pilot applications. Additional work will be done as needed to address issues that were not completely resolved at the time of filing the pilot applications, and may include development of a supporting guidance document regarding use of the DCF+ test. The Working Group has also discussed whether to give any consideration to the IRP-related aspects of Enbridge Gas’s rebasing application, which would likely be contingent on the degree Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 39 of 40Page 427 of 650 of information that Enbridge Gas will provide regarding its application. Enbridge Gas has recently indicated that it will bring forward information on one IRP issue that will be part of rebasing - Enbridge Gas’s approach to interpreting the IRP Framework’s criteria for screening system needs - for discussion at an upcoming Working Group meeting, and is considering whether other IRP- related aspects of the rebasing application, including the draft Asset Management Plan, can be discussed with the Working Group. Other potential areas of work for the Working Group in the future may include addressing: • Learnings from natural gas IRP in other jurisdictions • Performance metrics for IRP • Accounting treatment of IRP costs • Treatment of stranded assets in system planning • Other activities relevant to the IRP Framework, as identified by the Working Group or as directed by the OEB The Working Group has not to date discussed these topics in any depth (with the exception of some consideration of IRP in other jurisdictions with regards to pilot proposals). A draft Work Plan is maintained for the Working Group and updated on a regular basis, outlining workstreams and expected timing of key deliverables. Filed: 2022-06-10, EB-2022-0110, Exhibit H, Tab 1, Page 40 of 40Page 428 of 650 Page 1 of 7 Subject: Recommendations regarding MOUD with Tillsonburg Hydro Incorporated (THI) Report Number: CAO 22-04 Department: Office of the CAO Submitted by: Kyle Pratt, Chief Administrative Officer Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT Council receives Report CAO 22-04 Recommendations regarding MOUD with Tillsonburg Hydro Incorporated (THI); AND THAT Council endorses the recommendations contained within Report CAO 22-02 Recommendations regarding MOUD with Tillsonburg Hydro Incorporated (THI). BACKGROUND At the May 24, 2022 Town of Tillsonburg Council meeting, Council reviewed staff report CS 22-11 MOUD and THI By-law. Council noted that they had a number of questions they would like answered before they can consider the provided MOUD and amending the THI by-law and asked staff to report back to Council before the THI Annual General Meeting. Resolution # 2022-173 Moved By: Councillor Parker Seconded By: Councillor Gilvesy THAT consideration to proposed resolution #13 regarding report CS 22-11 THI Staff Report be deferred and that staff be directed to bring back a report. Carried Subsequently, at the June 16, 2022 Council meeting, Council reviewed an additional report that addressed a number of Council’s questions regarding the Memorandum of Understanding and Direction between the Corporation of the Town of Tillsonburg and Tillsonburg Hydro Inc. After reviewing the report (CS 22-19 THI MOUD), Council passed the following resolution: Page 429 of 650 CAO 22-04 Page 2 of 7 Resolution # 2022-200 Moved By: Councillor Gilvesy Seconded By: Councillor Luciani THAT the Council receives the THI MOUD report as information. THAT FURTHER directs the CAO to bring back a report with recommendations regarding the MOUD with THI, which may include the composition of the board or any other item of concern. Carried DISCUSSION MOUD After reviewing the redlined version of the Memorandum of Understanding and Direction (the “MOUD”) between the Town of Tillsonburg and Tillsonburg Hydro Inc. (“THI”), it appears that the areas of concern for discussion are section 4.0 Board Composition. In fact, the redline version provided by THI (attached) only proposes changes to this section. As such, staff confirm that they do not have any recommendations for changes to any other section of the MOUD and will solely focus responses and recommendations to Section 4.0 Board Composition. Below, staff have provided comments and/or recommendations presented in the order of the redlined changes: 4.0 BOARD COMPOSITION: The Board of Directors of THI (the BOARD); MOUD 4.0 a) – Shall be a number as permitted by current By-law(s) of THI minimum of seven (7) members. Consideration may be given to increasing the number of Directors to ensure maintenance of a desired skill set, within prudent and, cost effective parameters. Staff Comment: Council currently has the ability to appoint between five (5) to nine (9) directors, as they see fit, provided one-third rounded up are independent to comply with the mandatory requirements of the Affiliates Relationship Code under the Ontario Energy Board Act. Therefore, agreeing to a minimum of seven (7) directors is within the maximum of nine (9) allowed by THI’s Articles of Incorporation. Of the seven (7) directors, as noted above, one-third rounded up (3) would have to be independent to comply with the mandatory requirements of the Affiliates Relationship Code under the Ontario Energy Board Act. While staff have no issues with a minimum of seven (7) Directors, the status quo allows Council to keep their privilege to appoint five (5) to nine (9) Directors as they see fit for community accountability. Therefore, given the flexibility already available with the status quo, staff does not recommend accepting the language proposed in 4.0 a). Page 430 of 650 CAO 22-04 Page 3 of 7 Recommendation #1: That the Town does not accept the proposed addition (Shall be a number as permitted by current By-law(s) of THI minimum of seven (7) members. Consideration may be given to increasing the number of Directors to ensure maintenance of a desired skill set, within prudent and, cost effective parameters) outlined in section 4.0 a). MOUD 4.0b) - Shall review the number of Board Directors every three years. Staff Comment: Mandating THI’s Board to review the number of directors every three (3) years does not prevent the Town from electing directors up to the maximum of nine (9) at will, or terminating the MOUD. All comments in this memorandum are subject to the Town’s residual discretion, as THI’s sole shareholder, to terminate the MOUD through an authorizing by-law of the Town. With or without terminating the MOUD, the Town would still be authorized to remove a director under s. 122(1) of the Business Corporations Act (“OBCA”) (reproduced below), provided that another director be put in place if the removal would drop the THI board membership below the minimum number of directors required (the redlined MOUD contemplates a minimum of seven (7), otherwise the minimum number is five (5)). If that removal would drop the board membership below the requirement that one-third of the Board be independent, that director would have to be independent of the Town. Excerpts from the OBCA 119(4): Subject to clause 120 (a), shareholders of a corporation shall, by ordinary resolution, elect, at the first meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election. NOTE: section 120 does not apply to THI. 122(1): Subject to clause 120 (f), the shareholders of a corporation may by ordinary resolution at an annual or special meeting remove any director or directors from office. Given that this change does not prevent the Town from electing directors up to the maximum of nine (9) at will, or remove a director under s. 122(1) of the Business Corporations Act (“OBCA”), Staff see no issue in accepting this change. Recommendation #2: That the Town accepts the addition of section 4.0b) – “Shall review the number of Board Directors every three years.” MOUD 4.0c) a – Shall consist of; Page 431 of 650 CAO 22-04 Page 4 of 7 a. One member selected by the TOWN at large, who is to be considered an Affiliate Related Director. An Affiliate Related Director is someone that is a representative of a shareholder, a municipal council, a member of any affiliate or an employee of the Town. Staff Comment: The Town, while electing all directors, would agree to elect only one (1) which was “a representative of a shareholder, a municipal council, a member of any affiliate or an employee of the Town.” Therefore, all but one (1) director would be independent of the Town. The Town would be within its rights (unless bound by the MOUD or other agreement to do otherwise) to elect up to two-thirds (rounded down) directors as Affiliate Related Directors. The red-lined MOUD sets this number as one (1). The MOUD could set this number as high as six (6) of nine (9) directors if the Town wished to do so. Also note that appointing independent directors under the proposed MOUD revisions does not oblige the Town to accept the Board’s recommendations for new directors. The addition of the term “Affiliate Related Director” to the MOUD and/or the THI by-law would not be a substantive change, it simply tracks what the Affiliates Relationships Code already provides (and which applies to THI in any event). There is no negative connotation to being an “Affiliate Related Director”. The OBCA uses the notion of affiliation for such purposes as limiting foreign ownership, or ensuring independent directors in publicly traded companies. Ontario energy policy follows this same notion. Based on Council feedback and the current role that the Chief Administrative Officer plays at THI Board meetings (staff support/observer/Supervisor to Hydro General Manager), which has been recently requested to leave during any closed session meetings), staff recommends that “Affiliate Related Directors” be increased to three (3), assuming that Council will appoint a seven (7) member board, and be comprised of an additional member of Council and the Chief Administrative Officer to ensure continuity and corporate knowledge. Recommendation #3 – That the Town increases its stakeholder representation on the THI board by appointing two (2) additional Affiliated Related Directors – 1. An additional member of Council; 2. Member of staff (CAO). Recommendation #4: That the Town accepts the addition of the term “Affiliate Related Director” in the MOUD. MOUD 4.0c) b – A minimum of 4 (four) and a maximum of six (6) independent members, A minimum of six (6) members are to be considered as Independent Directors in accordance with the skills matrix as recommended developed by the Page 432 of 650 CAO 22-04 Page 5 of 7 Board. An Independent Director means a director that is independent from, the shareholder, the municipal council, any affiliate or employee of the Town, as required by section 2.1.2 of the Affiliates Relationship Code. Staff Comment: Contrary to the recommendation above, this provision makes clear that all but one (1) director would be independent of the Town (7 member board). Therefore, the cumulative effect of the MOUD 4.0 c) would be to prevent the Town from appointing Affiliate Related Directors as a majority of the Board. For example, absent MOUD 4.0c) six (6) of nine (9) directors could be council members, or Town employees or representatives. With that said, Council could appoint three (3) shareholder members and six (6) independent members. In this case, shareholder representation would not be increased as much as it would be in a seven (7) member board (4 independent; 3 affiliate). As noted above, while staff have no issues with a seven (7) member board, it is truly up to Council to determine the board composition. In the event that Council wishes that the Hydro Board remain at seven (7) members and accepts recommendation #1, staff suggests the following: Recommendation #5: That the Town does not accept this proposed addition (A minimum of six (6) members are to be considered as Independent Directors), which is not in line with Recommendation #1. Recommendation #6: That Council creates a selection committee to review and recommend the selection of independent board members to Council. Staff have no concerns with the references to “Independent” and “Affiliate”. MOUD 4.0d) and e) – d) Shall take into consideration Director qualifications, skills and experience, in the discharge of THI duties for oversight of; strategy, utility operations, finance, regulatory, technical resources and customer service. e) Shall protect the best interests of the electricity rate payers and shareholder, and shall ensure financial integrity. Staff Comment: This change to the MOUD would task the Board with ensuring that directors are qualified. With this said, the MOUD does not limit the directors’ discretion to adopt whatever process they wish to assess qualifications. While it is appreciated that the Board wants to ensure that Board members are qualified, it is ultimately up to the Shareholder (Council) who appoints the Board. Therefore, if Council wishes to accept this, staff recommend the inclusion “when making board recommendations to Council”. Recommendation #7: That the Town endorses the revised additions of section MOUD 4.0d) and e) “d) Shall take into consideration Director qualifications, skills Page 433 of 650 CAO 22-04 Page 6 of 7 and experience, in the discharge of THI duties for oversight of; strategy, utility operations, finance, regulatory, technical resources and customer service when making board recommendations to Council. e) Shall protect the best interests of the electricity rate payers and shareholder, and shall ensure financial integrity.” MOUD 4.0f) – Shall strive for a tenure term of nine years with possible one-year term extensions thereafter. Independent Directors shall be reappointed after each three year increment based on individual performance. An Independent Director’s tenure may be extended after nine years by one year terms when their qualifications and value are in the best interest of THI. Staff Comment: This subsection provides for 9-year term limits (with the ability to extend one year at a time). It appears to contemplate that independent directors would be appointed for three year terms (the word “increment” is used), and could serve up to a total of three such terms (with the possibility of year-by-year re-appointments thereafter). Staff are unaware of any particular term being considered standard industry practice. Although the OEB has released what it considers best practices regarding governance of entities such as THI, it does not provide guidance on tenure for directors. As a general matter, there is a challenging balance to be struck when it comes to tenure and refreshing a board – it takes time for a director to fully grasp the role and learn how the organization functions, but at some duration there is a possibility of generating complacency or group think. It is not uncommon for private sector boards to leave the subject of tenure open. In considering how best to strike this balance, Council should be mindful of ensuring that it is able to attract and retain the requisite number of independent directors. There is no perfect policy, but to the extent that what is proposed is a three-year term with the possibility of two re-appointments, staff believes that this strikes a reasonable balance between continuity and renewal. Not knowing the tenure of current board members, one alternate idea is the creation of a rotating board: at the start, elect one- third of the board for one year, one-third for two years, and one-third for three years. Each year thereafter, replace the retiring members with three-year members, with the possibility for re-appointment thereafter. Recommendation #8: That the Town accepts the addition of the language in section 4.0.f of the MOUD. CONSULTATION General Manager of Hydro Page 434 of 650 CAO 22-04 Page 7 of 7 FINANCIAL IMPACT/FUNDING SOURCE All hydro board members honorarium are charged to Hydro Account 10-145-5665-000- 5001 and they are at the same rate unless they are the Chair, Vice Chair, President, or Treasurer. The individual board honorarium is $6,602 (2022). Should the Chief Administrative Officer be appointed to the Board, it is recommended that the per diem be charged against the positions current rate of pay. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☒ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal - The Town of Tillsonburg will strive for excellence and accountability in government, providing effective and efficient services, information, and opportunities to shape municipal initiatives. Strategic Direction- Position Tillsonburg as a leader in the municipal sector. Strategic Priority – N/A ATTACHMENTS Redline Version- Tillsonburg Hydro Inc.- MOUD CS 22-19 THI MOUD CS 22-11 THI Staff Report Page 435 of 650 Page 1 of 2 Subject: MOUD and THI By-law Report Number: CS 22-11 Department: Corporate Services Department Submitted by: Laura Emery, Municipal Management Intern Meeting Type: Council Meeting Meeting Date: Tuesday, May 24, 2022 RECOMMENDATION THAT Council receive the report on a Memorandum of Understanding and Direction between the Corporation of the Town and Tillsonburg Hydro Inc. for information. And that the Memorandum of Understanding and Direction between the Corporation of the Town of Tillsonburg (Shareholder) and Tillsonburg Hydro Inc. be referred to the Annual General Meeting for consideration by the Shareholder. BACKGROUND The THI Governance?MOUD Committee has been meeting to review documentation related to Tillsonburg Hydro Inc. (THI), with a specific focus on the Memorandum of Understanding and Direction (MOUD). The draft MOUD is being presented to Council for shareholder approval. At this time, the final draft MOUD has been approved by the THI Board of Directors and is anticipating approval by Council. As well, the Board has approved updates to the amended THI By-law for submission to the Shareholder for confirmation. DISCUSSION THI is looking for approval from Council to approve an amended MOUD. A copy of the redlined version of the MOUD and the amended THI By-Law are attached to this report. CONSULTATION General Manager, Hydro Operations Page 436 of 650 CS 22-11 Page 2 of 2 FINANCIAL IMPACT/FUNDING SOURCE N/A CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation ☒ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. ATTACHMENTS 1. Redlined MOUD 2. Amended THI By-Law 3. Email from THI Secretary Page 437 of 650 Page 1 of 6 MEMORANDUM OF UNDERSTANDING AND DIRECTION BETWEEN THE CORPORATION OF THE TOWN OF TILLSONBURG ("TOWN") AND TILLSONBURG HYDRO INC. ("THI") 1.0 STATEMENT OF INTENT: This Memorandum of Understanding and Direction (MOUD) is designed to identify individual and collective responsibilities that will ultimately provide for safe, reliable and financially responsible distribution of electrical energy to identified stakeholders. The purpose of this MOUD is to confirm the working partner relationship between the TOWN and THI (The PARTIES) that reinforces and enhances their joint commitment to maintain a vibrant Electrical Energy Utility to the benefit of the community they serve. Therefore this document shall set out the general expectations of the TOWN (as Sole Shareholder) and THI. 2.0 GUIDING PRINCIPLES (GOVERNANCE): The following guiding principles will direct the deliberations of the TOWN and THI in achieving that goal. It must be further understood that the TOWN is the Sole Shareholder of THI and that THI is a distinct and separate Corporation granted the benefits of operating under the regulations of the Ontario Business Corporations Act. The Board Shall; a) Govern and provide stewardship of the business and affairs of THI. In so doing, shall adhere to all appropriate legislation and regulations that impact the electrical distribution industry in the Province of Ontario b) Provide that the focus of safe, reliable and financially responsible distribution is adhered to c) Address any conflict of interest, act honestly and in good faith with a view to the best interests of THI and shall exercise the same degree of care, diligence and skill that a reasonably prudent person would exercise in similar circumstances d) Promote operational and strategic improvement projects that will enhance the profile of THI and the TOWN The TOWN Shall; a) Encourage and support the THI Board and staff in their endeavors Page 438 of 650 Page 2 of 6 b) Receive an annual return on its' investment in the form of a cash Dividend, subject to the conditions set out in Section 7.0-Dividend Policy 3.0 BUSINESS ACTIVITIES: THI may engage in any business activities as may be permitted by the Ontario Energy Board Act, 1998 (OEB Act) and the Electricity Act, 1998 (Electricity Act), and as authorized by the Board from time to time, including; a) Distributing electricity b) Business activities, the principal purpose of which is to use more effectively the assets of the distribution system of THI c) Generating electricity from renewable energy sources d) Conservation and Demand Management activities In carrying out these business activities THI shall be guided by the following; a) Compliance with all applicable laws and regulations. b) Operate in a manner that considers community values to the extent possible, TOWN practices and policies. c) Act in a safe and environmentally responsible manner d) Employ prudent business practices e) Have regard to the fact that the TOWN is a Municipal Corporation f) Maintain and appropriately enhance THI owned infrastructure 4.0 BOARD COMPOSITION: The Board of Directors of THI (the BOARD); a) Shall be a number as permitted by current By-law(s) of THI minimum of seven (7) members. Consideration may be given to increasing the number of Directors to ensure maintenance of a desired skill set, within prudent and, cost effective parameters. a)b) Shall review the number of Board Directors every three years. b)c) Shall consist of; a. One member selected by the TOWN at large, who is to be considered an Affiliate Related Director. An Affiliate Related Director is someone that is a representative of a shareholder, a municipal council, a member of any affiliate or an employee of the Town. Page 439 of 650 Page 3 of 6 b. A minimum of 4 (four) and a maximum of six (6) independent members, A minimum of six (6) members are to be considered as Independent Directors in accordance with the skills matrix as recommended developed by the Board. An Independent Director means a director that is independent from, the shareholder, the municipal council, any affiliate or employee of the Town, as required by section 2.1.2 of the Affiliates Relationship Code. d) Shall take into consideration Director qualifications, skills and experience, in the discharge of THI duties for oversight of; strategy, utility operations, finance, regulatory, technical resources and customer service. e) Shall protect the best interests of the electricity rate payers and shareholder, and shall ensure financial integrity. b.f)Shall strive for a tenure term of nine years with possible one-year term extensions thereafter. Independent Directors shall be reappointed after each three year increment based on individual performance. An Independent Director’s tenure may be extended after nine years by one- year terms when their qualifications and value are in the best interest of THI. c)g) Shall meet the requirements as outlined by the Ontario Energy Board (OEB) through and the Affiliate Relationships Code (ARC) d)h) The Chair of the Board shall be selected by Board members e)i)No member of the Board shall receive any remuneration or compensation, other than as expressly stated in applicable By-Law 5.0 TOWN APPROVAL: The Board shall seek the approval of the TOWN in respect to each of the following matters prior to the BOARD undertaking or causing to undertake, authorizing or approving any of the following matters with respect to THI: a) Any changes or amendments to the share structure of THI b) Any changes to the business activities of THI as identified in Section 3.0 c) Entering into any discussions or negotiations regarding a potential merger, amalgamation, divestiture or acquisition of THI or another corporation. Page 440 of 650 Page 4 of 6 6.0 REPORTING: THI is required to provide the TOWN with an annual Business Plan and Budget (the "Business Plan"). THI is to carry out its affairs and carry out its business operations in accordance with the Business Plan. THI will provide the TOWN with any revision, update or amendment of a material nature to the Business Plan. The Business Plan will take the format as adopted by the Board of THI but shall include the following; a) Comprehensive financial plan with significant operational projects b) Most recent Audited Financial Statements c) A statement of any material variances in the projected ability for THI to meet or continue to meet its strategic, financial or development goals, including any material variances from current Business Plan In addition to the presentation of the annual Business Plan and Budget, THI shall provide updated Financial reports, in a format as adopted by the Board, to the TOWN on a semi-annual basis. 7.0 DIVIDEND POLICY: Subject to the provisions herein, the Board of THI shall declare and issue an Annual Dividend to the TOWN as referenced in Section 2.0. The payment of the Dividend shall be subject to the following; a) No dividend shall be declared where to do so would significantly impact THI's ability to satisfy any appropriate replacement or improvement of assets of THI b) No Dividend shall be declared if the Board can demonstrate to the TOWN that; a. After any expected payment, THI would be unable to meet its financial commitments and pay its liabilities when due b. The realizable value of THI's assets would be less than the aggregate of its liabilities and its stated capital of all classes With concurrence of the THI Board and the TOWN, the Annual Dividend Policy shall be established as in accordance with Schedule 1 (attached), subject to the conditions in 7.0, and confirmed at the Board's November board meeting, or before December 31. The approval and the declaration of the actual Annual Dividend shall take place at the conclusion of the annual audit of THI. Page 441 of 650 Page 5 of 6 A Special Dividend may be considered and approved at the discretion of the Board; a) After the review of Annual Financial Statements, and b) Consultation with the Corporation of the TOWN of Tillsonburg 8.0 COMMUNICATIONS PROTOCOL: Positive and effective communication is a cornerstone of relationship building and ultimately enhances the long-term working relationship of the TOWN and THI. In supporting the spirit of this Agreement, the communication protocol between the parties shall be identified as follows; a) As to specifically identified services or general information exchange, in writing on Corporate letterhead directed to; i. To TOWN - Clerk copied to CAO ii. To THI -Secretary copied to Chair and Vice-Chair b) Best efforts are expected to be used to identify and acknowledge when any issue of communication will be considered and responded to c) The Chair of THI will deliver at a minimum, and not counting the Annual General meeting, semi-annual status reports to the TOWN (Shareholder) 9.0 REVISIONS: This document shall be reviewed at least once every two years and may be revised from time to time as circumstances may require. A review of the MOUD can be initiated by either party subject to appropriate communication and consultation. Date: Acknowledged and Agreed to as of the date above CORPORATE OF THE TOWN OF TILLSONBURG ____________________________ Name ____________________________ Title TILLSONBURG HYDRO INC. ____________________________ Name ____________________________ Page 442 of 650 Page 6 of 6 Title Page 443 of 650 Page 1 of 39 TILLSONBURG HYDRO INC. (the “Corporation”) Last amended: April 26, 2022 Contents ARTICLE 1 DEFINITIONS AND INTERPRETATION ...................................................... 6 1.1 Definitions .............................................................................................................. 6 1.2 Interpretation.......................................................................................................... 9 1.3 Headings and Table of Contents ........................................................................... 9 1.4 Gender ................................................................................................................... 9 ARTICLE 2 GENERAL .................................................................................................... 9 2.1 Registered Office ................................................................................................... 9 2.2 Corporate Seal ....................................................................................................... 9 2.3 Financial Year ........................................................................................................ 9 2.4 Execution of Financial Documents ....................................................................... 10 2.5 Resolutions in Writing .......................................................................................... 10 2.6 Banking Arrangements ........................................................................................ 11 2.7 Divisions .............................................................................................................. 11 ARTICLE 3 DIRECTORS .............................................................................................. 12 3.1 General ................................................................................................................ 12 3.2 Qualification ......................................................................................................... 12 3.3 Election ................................................................................................................ 12 3.4 Fixing Number of Directors .................................................................................. 12 3.5 Term of Office ...................................................................................................... 13 3.6 Ceasing to Hold Office ......................................................................................... 13 3.7 Resignation of a Director ..................................................................................... 13 3.8 Removal .............................................................................................................. 13 3.9 Vacancies ............................................................................................................ 13 3.10 Remuneration .................................................................................................... 14 ARTICLE 4 COMMITTEES ........................................................................................... 14 4.1 Appointment......................................................................................................... 14 4.2 Provisions Applicable ........................................................................................... 14 Page 444 of 650 Page 2 of 39 ARTICLE 5 MEETINGS OF DIRECTORS .................................................................... 15 5.1 Place of Meetings ................................................................................................ 15 5.2 Calling of Meetings .............................................................................................. 15 5.3 Notice of Meetings ............................................................................................... 15 5.4 Regular Meetings ................................................................................................. 16 5.5 First Meeting of New Board ................................................................................. 16 5.6 Participation by Telephone .................................................................................. 16 5.7 Chair .................................................................................................................... 16 5.8 Quorum ................................................................................................................ 16 5.9 Voting .................................................................................................................. 17 5.10 Auditor ............................................................................................................... 17 ARTICLE 6 STANDARD OF CARE OF DIRECTORS AND OFFICERS ....................... 17 6.1 Standard of Care ................................................................................................. 17 6.2 Liability for Acts of Others .................................................................................... 17 ARTICLE 7 FOR THE PROTECTION OF DIRECTORS AND OFFICERS ................... 17 7.1 Indemnification by Corporation ............................................................................ 18 7.2 Insurance ........................................................................................................... 19 7.3 Directors’ Expenses ............................................................................................. 19 7.4 Performance of Services for Corporation ............................................................. 19 ARTICLE 8 INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS .............. 20 8.1 Disclosure of Interest ........................................................................................... 20 8.2 Time of Disclosure by Director ............................................................................. 20 8.3 Time of Disclosure by Officer ............................................................................... 20 8.4 Time of Disclosure in Extraordinary Cases .......................................................... 21 8.5 Voting by Interested Director ............................................................................... 21 8.6 Remaining directors deemed quorum .................................................................. 21 8.7 Shareholder approval .......................................................................................... 21 8.8 Nature of Disclosure ............................................................................................ 21 8.9 Effect of Disclosure .............................................................................................. 22 8.10 Confirmation by Shareholders ........................................................................... 22 ARTICLE 9 OFFICERS ................................................................................................. 22 Page 445 of 650 Page 3 of 39 9.1 Officers ................................................................................................................ 22 9.2 Appointment of Chair, Vice-chair, President, Treasurer and Secretary of the Board ................................................................................................................................... 23 9.3 Remuneration and Removal of Officers ............................................................... 23 9.4 Duties of Officers may be Delegated ................................................................... 23 9.5 Chair of the Board ................................................................................................ 23 9.6 Vice-Chair ............................................................................................................ 23 9.7 President ............................................................................................................. 23 9.7 General Manager ................................................................................................. 24 9.8 Secretary ............................................................................................................. 24 9.9 Treasurer ............................................................................................................. 24 9.10 Delegation of Board Powers .............................................................................. 25 9.11 Variation of Powers and Duties .......................................................................... 25 ARTICLE 10 MEETINGS OF SHAREHOLDERS .......................................................... 25 10.1 Calling of Meetings ............................................................................................ 25 10.2 Annual Meeting .................................................................................................. 25 10.3 Special Meeting ................................................................................................. 25 10.4 Place of Meetings .............................................................................................. 25 10.5 Notice ................................................................................................................ 26 10.6 Contents of Notice ............................................................................................. 26 10.7 Waiver of Notice ................................................................................................ 26 10.8 Notice of Adjourned Meetings ............................................................................ 26 10.9 Record Date for Notice ...................................................................................... 27 10.10 Omission of Notice ........................................................................................... 27 10.11 List of Shareholders ......................................................................................... 27 10.12 Shareholders Entitled to Vote .......................................................................... 27 10.13 Persons Entitled to be Present ........................................................................ 28 10.14 Proxies .......................................................................................................... 28 10.15 Revocation of Proxies ...................................................................................... 28 10.16 Deposit of Proxies ............................................................................................ 28 10.17 Joint Shareholders ........................................................................................... 29 Page 446 of 650 Page 4 of 39 10.18 Chair and Secretary ......................................................................................... 29 10.19 Scrutineers....................................................................................................... 29 10.20 Votes to Govern ............................................................................................... 29 10.21 Show of Hands ................................................................................................ 29 10.22 Ballots .............................................................................................................. 30 10.23 Votes on Ballots ............................................................................................... 30 10.24 Adjournment .................................................................................................... 30 10.25 Quorum ............................................................................................................ 30 10.26 Only One Shareholder ..................................................................................... 30 ARTICLE 11 SHARES AND TRANSFERS ................................................................... 31 11.1 Issuance ............................................................................................................ 31 11.2 Commissions ..................................................................................................... 31 11.3 Register of Transfers ......................................................................................... 31 11.4 Lien on Shares ................................................................................................... 31 11.5 Share Certificates .............................................................................................. 31 11.6 Transfer of Shares ............................................................................................. 32 11.7 Defaced, Destroyed, Stolen or Lost Certificates ................................................ 32 11.8 Joint Shareholders ............................................................................................. 33 ARTICLE 12 DIVIDENDS .............................................................................................. 33 12.1 Declaration of Dividends .................................................................................... 33 12.2 Joint Shareholders ............................................................................................. 33 12.3 Dividends from Funds Derived from Operations ................................................ 33 ARTICLE 13 RECORD DATES ..................................................................................... 34 13.1 Fixing Record Dates .......................................................................................... 34 13.2 No Record Date Fixed ....................................................................................... 34 13.3 Notice of Record Date ....................................................................................... 34 13.4 Effect of Record Date ........................................................................................ 34 ARTICLE 14 CORPORATE RECORDS AND INFORMATION ..................................... 34 14.1 Keeping of Corporate Records .......................................................................... 34 14.2 Access to Corporate Records ............................................................................ 35 14.3 Copies of Certain Corporate Records ................................................................ 36 Page 447 of 650 Page 5 of 39 14.4 Report to Shareholders ...................................................................................... 36 14.5 No Discovery of Information............................................................................... 36 14.6 Conditions for Inspection ................................................................................... 36 ARTICLE 15 NOTICES ................................................................................................. 36 15.1 Method of Giving ................................................................................................ 36 15.2 Shares Registered in More Than One Name ..................................................... 37 15.3 Persons Becoming Entitled by Operation of Law ............................................... 37 15.4 Deceased Shareholder ...................................................................................... 37 15.5 Signature to Notice ............................................................................................ 37 15.6 Proof of Service ................................................................................................. 38 15.7 Computation of Time ......................................................................................... 38 15.8 Waiver of Notice ................................................................................................ 38 ARTICLE 16 REPEAL OF FORMER BY-LAWS ........................................................... 38 16.1 Repeal of By-law No. 1 and By-law No. 2 .......................................................... 38 Page 448 of 650 Page 6 of 39 BY-LAW NO. 1A A by-law relating generally to the transaction of the business and affairs of TILLSONBURG HYDRO INC. (herein called the “Corporation”) BE IT PASSED AND MADE as a by-law of the Corporation as follows: ARTICLE 1 DEFINITIONS AND INTERPRETATION 1.1 Definitions In this by-law, unless there is something in the subject matter or context inconsistent therewith, (a) “Act” means the Business Corporations Act (Ontario), as amended or re- enacted from time to time, and includes the regulations made pursuant thereto; (b) “affiliate” means an affiliated body corporate, and one body corporate shall be deemed to be affiliated with another body corporate if, but only if, one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; (b)(c) “affiliate related director” means a director that is a representative of a shareholder, a municipal council, a member of any affiliate or an employee of the Town. (c)(d) “Affiliates Relationship Code” means the Ontario Energy Board “Affiliate Relationships Code for Electricity Distributors and Transmitters”, dated April 1, 1999 and revised May 16, 2008, as amended from time to time; (d)(e) “articles” means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of dissolution, articles of reorganization, articles of revival, letters patent, supplementary letters patent, a special Act and any other instrument by which the Corporation is incorporated; (e)(f) “auditor” means the auditor of the Corporation; Page 449 of 650 Page 7 of 39 (f)(g) “board” means the board of directors of the Corporation; (g)(h) “by-law” means a by-law of the Corporation; (h)(i) “Chair”, “Vice-Chair”, “President”, “Secretary”, “Treasurer”, “Director”, “General Manager”, or any other officer means such officer of the Corporation; (i)(j) “code of conduct” means a set of rules outling the norms, rules and responsibilities of and or proper practices for Directors of THI. (j)(k) “committee” means a committee appointed pursuant to section 4.1 of this by- law; (k)(l) “Corporation” means Tillsonburg Hydro Inc.; (l)(m) “director” means a director of the Corporation; (m)(n) “day” means a clear day and a period of days shall be deemed to commence the day following the event that began the period and shall be deemed to terminate at midnight of the last day of the period except that if the last day of the period falls on a Sunday or holiday the period shall terminate at midnight of the day next following that is not a Sunday or holiday; (n)(o) “employee” means an employee of the Corporation; (o)(p) “Independent Director” means a director member of the board that is independent from, the shareholder, the municipal council, any affiliate or employee of the Town, as required by section 2.1.2 of the Affiliates Relationship Code; (p)(q) “instruments in writing” includes, without limitation, deeds, contracts, mortgages, hypothecs, charges, conveyances, transfers and assignments of property real or personal, immovable or movable, agreements, releases, receipts and discharges for the payment of money or other obligations, cheques, promissory notes, drafts, acceptances, bills of exchange and orders for the payment of money, conveyances, transfers and assignments of shares, instruments of proxy, powers of attorney, stocks, bonds, debentures or other securities or any paper writings; (q)(r) “number of directors” means the number of directors set out in the articles or, where a minimum and maximum number of directors is set out in the articles, the number of directors as shall be determined from time to time by special resolution or, if the special resolution empowers the directors to determine the number, by resolution of the directors; Page 450 of 650 Page 8 of 39 (r)(s) “officer” means an officer of the Corporation; (s)(t) “person” includes an individual, sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, and a natural person in his or her capacity as trustee, executor, administrator or other legal representative; (t)(u) “resident Canadian” means an individual who is, (i) a Canadian citizen ordinarily resident in Canada, (ii) a Canadian citizen not ordinarily resident in Canada who is a member of a class of persons prescribed by the Act for the purposes of the definition of “resident Canadian”, or (iii) a permanent resident within the meaning of the Immigration Act of Canada and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which he first became eligible to apply for Canadian citizenship; (u)(v) “shareholder” means a shareholder of the Corporation; (v)(w) “special resolution” means a resolution that is (i) submitted to a special meeting of the shareholders of the Corporation duly called for the purpose of considering the resolution and passed, with or without amendment, at such meeting by at least two-thirds of the votes cast, or (ii) consented to in writing by each shareholder of the Corporation entitled to vote at such a meeting or his or her attorney authorized in writing; (w)(x) “subsidiary” means in relation to another body corporate, a body corporate which (i) is controlled by (1) that other, or (2) that other and one or more bodies corporate each of which is controlled by that other, or (3) two or more bodies corporate each of which is controlled by that other; or (ii) is a subsidiary of a body corporate that is that other’s subsidiary; and (x)(y) “unanimous shareholder agreement” means (i) a written agreement among all the shareholders or among all the shareholders and one or more persons who are not shareholders that restricts in whole or in part the powers of the directors to manage or supervise the management of the business and affairs of the Corporation, or Page 451 of 650 Page 9 of 39 (ii) a written declaration made by a person who is the beneficial owner of all the issued shares of the Corporation that restricts in whole or in part the powers of the directors to manage or supervise the management of the business and affairs of the Corporation; subject to the foregoing, the words and expressions herein contained shall have the same meaning as corresponding words and expressions in the Act. 1.2 Interpretation In each by-law and resolution, unless there is something in the subject matter or context inconsistent therewith, the singular shall include the plural and the plural shall include the singular and the masculine shall include the feminine. Wherever reference is made in this or any other by-law or in any special resolution to any statute or section thereof, such reference shall be deemed to extend and refer to any amendment to or re-enactment of such statute or section, as the case may be. 1.3 Headings and Table of Contents The headings and table of contents in this by-law are inserted for convenience of reference only and shall not affect the construction or interpretation of the provisions of this by- law. 1.4 Gender Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders. ARTICLE 2 GENERAL 2.1 Registered Office The Corporation may by resolution of the directors change the location of its registered office within the municipality or geographic township specified in the articles. 2.2 Corporate Seal The Corporation may have a corporate seal which shall be adopted and may be changed by resolution of the directors. 2.3 Financial Year Page 452 of 650 Page 10 of 39 The directors may by resolution fix the financial year end of the Corporation and the directors may from time to time by resolution change the financial year end of the Corporation. 2.4 Execution of Financial Documents (a) Instruments in writing requiring execution by the Corporation may be signed on behalf of the Corporation by two of the combination of (i) the Chair or Vice-Chair or (ii) Treasurer, or President and all instruments in writing so signed shall be binding upon the Corporation without any further authorization or formality. The board may from time to time by resolution appoint any officer or officers or any other person or persons on behalf of the Corporation either to sign Instruments in writing generally or to sign specific instruments in writing. (b) The corporate seal of the Corporation (if any) may be affixed to instruments in writing signed as aforesaid by any person authorized to sign the same or at the direction of any such person. (c) Subject to the provisions of section 11.5 hereof, the signature or signatures of an officer or director, person or persons appointed as aforesaid by resolution of the directors, may, if specifically authorized by resolution of the directors, be printed, engraved, electronically reproduced upon all instruments in writing executed or issued by or on behalf of the Corporation and all instruments in writing on which the signature or signatures of any of the foregoing officers, directors or persons shall be so reproduced, by authorization and by resolution of the directors, shall be deemed to have been manually signed by such officers or persons whose signature or signatures is or are so reproduced and shall be as valid as if they had been signed manually and notwithstanding that the officers, directors or persons whose signature or signatures is or are so reproduced may have ceased to hold office at the date of the delivery or issue of such instruments in writing. 2.5 Resolutions in Writing (a) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors, is as valid as if it had been passed at a meeting of directors or such committee of directors. (b) A resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders unless a written statement with respect to the subject matter of the resolution is submitted by a director or representations in writing are submitted by the auditor in accordance with the Act. (c) Where the Corporation has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting. Page 453 of 650 Page 11 of 39 2.6 Banking Arrangements The banking business of the Corporation, or any part thereof, shall be transacted with such bank, trust company or other firm or corporation carrying on a banking business as the directors may designate, appoint or authorize from time to time by resolution and all such banking business or any part thereof shall be transacted on the Corporations behalf by such one or more officers and/or other persons/parties as the board may designate, direct or authorize from time to time by resolution and to the extent therein provided, including without restricting the generality of the foregoing, the following: (a) the operation of the Corporations accounts; (b) the making, signing, drawing, borrowing, accepting, endorsing, negotiating, allotting, depositing or transferring of any cheques, promissory notes, drafts, acceptances, bills of exchange and orders for the payment of money; (c) the giving of receipts for and orders related to any property of the Corporation; (d) the execution of any agreement related to the banking business and defining the rights and powers of the parties thereto; and (e) the authorizing of any officer of such banker to do any act or thing on the corporations behalf to facilitate such banking business. 2.7 Divisions The board may cause the business and operations of the Corporation or any part thereof to be divided into one or more divisions upon such basis, including without limitation, types of business or operations, geographical territories, product lines or goods or services, as the board may consider appropriate in each case. From time to time the board or any person authorized by the board may authorize, upon such basis as may be considered appropriate in each case: (a) the further division of the business and operations of any such division into sub- units and the consolidation of the business and operations of any such divisions or sub-units; (b) the designation of any such division or sub-unit by, and the carrying on of the business and operations of any such division or sub-unit under, a name other than the name of the Corporation; and (c) the appointment of officers for any such division or sub-unit, the determination of their powers and duties, and the removal of any such officer so appointed without prejudice to such officer’s rights under any employment contract or in law, provided that any such officer shall not, as such, be an officer of the Corporation. Page 454 of 650 Page 12 of 39 ARTICLE 3 DIRECTORS 3.1 General Subject to any unanimous shareholder agreement, The Board Shall; a) Govern and provides stewardship of the business and affairs of THI. In so doing, shall adhere to all appropriate legislation and regulations that impact the electrical distribution industry in the Province of Ontario b) Provide the focus of safe, reliable and financially responsible distribution is adhered to c) Address any conflict of interest, act honestly and in good faith with a view to the best interests of THI and shall exercise the same degree of care, diligence and skill that a reasonably prudent person would exercise in similar circumstances d) Promote operational and strategic improvement projects that will enhance the profile of THI and the SHAREHOLDER. 3.2 Qualification (a) The following persons are disqualified from being a director: (i) a person who is less than eighteen (18) years of age, (ii) a person who has been found under the Substitute Decisions Act, 1992 or under the Mental Health Act to be incapable of managing property or who has been found to be incapable by a court in Canada or elsewhere, (iii) a person who is not an individual, and (iv) a person who has the status of bankrupt. (b) Unless the articles otherwise provide, a director is not required to hold shares issued by the Corporation. (c) Unless the Corporation is a non-resident corporation, not less than 25% of the directors shall be resident Canadians, but where the Corporation has less than four directors, at least one director shall be a resident Canadian. 3.3 Election Subject to the provisions of the Act the directors shall be elected at the first meeting of shareholders and at each succeeding annual meeting of the shareholders. 3.4 Fixing Number of Directors If the articles provide for a minimum and maximum number of directors, the number of directors of the Corporation and the number of directors to be elected at the annual meeting of the shareholders shall be such number as shall be determined from time to time by special resolution or, if the special resolution empowers the directors to determine the number, by resolution of the directors. Page 455 of 650 Page 13 of 39 3.5 Term of Office Subject to the provisions of the articles, the term of office of a director not elected for an expressly stated term shall commence at the close of the meeting of shareholders at which he is elected and shall terminate at the close of the first annual meeting of shareholders following his or her election. If an election of directors is not held at the proper time the incumbent directors continue in office until their successors are elected. 3.6 Ceasing to Hold Office A director ceases to hold office when (a) he or she dies or, subject to section 3.7 of this by-law, he or she resigns; (b) he or she is removed from office in accordance with the provisions of the Act, the by-laws, or the then-current Code of Conduct governing the activities of directors. (c) he or she becomes disqualified from being a director under the Act or by-laws. 3.7 Resignation of a Director A director may resign his or her office as a director by giving to the Corporation his or her written resignation, which resignation shall become effective at the later of (a) the time at which such resignation is received by the Corporation, or (b) the time specified in the resignation. 3.8 Removal Subject to the provisions of the Act, the shareholders may by resolution at an annual or special meeting of shareholders remove any director or directors from office and may by resolution at such meeting elect any person to fill the vacancy created by the removal of such director, failing which the vacancy created by the removal of such director may be filled by the directors. For the above-referenced resolution of the shareholders to be valid, the resolution must be signed by shareholders holding more than 70% of the total shares of the Corporation. 3.9 Vacancies (a) Subject to the provisions of the Act, a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from (i) an increase in the number of directors or in the maximum number of directors, as the case may be, or (ii) a failure to elect the number of directors required to be elected at any meeting of shareholders. Page 456 of 650 Page 14 of 39 (b) A director appointed or elected to fill a vacancy holds office for the unexpired term of his or her predecessor. (c) If there is not a quorum of directors, or if there has been a failure to elect the number of directors required by the articles or by section 3.4 hereof, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder. (d) Subject to the articles or by-laws, where there is a vacancy or vacancies on the board, the remaining directors may exercise all the powers of the board so long as a quorum of the board remains in office. 3.10 Remuneration Subject to the articles, the by-laws and any unanimous shareholder agreement, the directors may fix the remuneration of the directors, officers and employees of the Corporation. ARTICLE 4 COMMITTEES 4.1 Appointment Subject to the Act, the articles or the by-laws, the directors may appoint from their number one or more committees and may by resolution delegate to any such committee any of the powers of the directors. 4.2 Provisions Applicable The following provisions shall apply to any committee appointed by the directors: (a) unless otherwise provided by resolution of the directors, each member of a committee shall continue to be a member thereof until the expiration of his or her term of office as a director; (b) the directors may from time to time by resolution specify which member of a committee shall be the chairman thereof and, subject to the provisions of section 4.1 of this by-law, may by resolution modify, dissolve or reconstitute a committee and make such regulations with respect to and impose such restrictions upon the exercise of the powers of a committee as the directors think expedient; (c) the meetings and proceedings of a committee shall be governed by the provisions of the by-laws of the Corporation for regulating the meetings and proceedings of the board so far as the same are applicable thereto and are not superseded by any regulations or restrictions made or imposed by the directors pursuant to the foregoing provisions hereof; Page 457 of 650 Page 15 of 39 (d) the members of a committee as such shall be entitled to such remuneration for their services as members of a committee, as may be fixed by resolution of the directors, who are hereby authorized to fix such remuneration; (e) unless otherwise provided by resolution of the board, the Secretary of the Corporation shall be the secretary of any committee; (f) subject to the provisions of section 4.1 of this by-law, the directors shall fill vacancies in a committee by appointment from among their number; and (g) unless otherwise provided by resolution of the board, meetings of a committee may be convened by the direction of any member thereof. ARTICLE 5 MEETINGS OF DIRECTORS 5.1 Place of Meetings Meetings of the board and of any committee may be held at any place within or outside Ontario. In any financial year of the Corporation, a majority of the meetings of the board and a majority of the meetings of any committee shall be held in the Board Room at 10 Lisgar Ave., Tillsonburg, Ontario. 5.2 Calling of Meetings A meeting of the board may be called at any time by the Chair or Vice-Chair of the board, the President (if he is a director), or any two of the directors and the Secretary shall cause notice of a meeting of directors to be given when so directed by any such person or persons. 5.3 Notice of Meetings (a) Notice of any meeting of the board specifying the time and, except where the meeting is to be held as provided for in section 5.6 of this by-law, the place for the holding of such meeting shall be given in accordance with the terms of section 15.1 hereof to every director not less than two business days before the date of the meeting. (b) Notice of an adjourned meeting of the board is not required to be given if the time and place of the adjourned meeting is announced at the original meeting. (c) Meetings of the board may be held at any time without formal notice if all the directors are present or if all the directors who are not present, in writing or by email or recorded communication, waive notice or signify their consent to the meeting being held without formal notice. Notice of any meeting or any irregularity in any meeting or in the notice thereof may be waived by any director Page 458 of 650 Page 16 of 39 either before or after such meeting. Attendance of a director at a meeting of the board is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. 5.4 Regular Meetings The board may by resolution fix a day or days in any month or months for the holding of regular meetings at a time and place specified in such resolution. A copy of any resolution of the board specifying the time and place for the holding of regular meetings of the board shall be sent to each director at least two days before the first of such regular meetings and no other notice shall be required for any of such regular meetings. 5.5 First Meeting of New Board For the first meeting of the board to be held immediately following the election of directors at an annual or other meeting of the shareholders or for a meeting of the board at which a director is appointed to fill a vacancy in the board, no notice need be given to the newly elected or appointed director or directors. 5.6 Participation by Telephone If all the directors present at or participating in the meeting consent, a meeting of the board or of a committee may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a director participating in such a meeting by such means is deemed to be present in person at that meeting for the purposes of the Act and this by-law. If a majority of the directors participating at a meeting held as herein provided are then in Canada the meeting shall be deemed to have been held in Canada. 5.7 Chair The chair of any meeting of the board shall be the first mentioned of such of the following officers as have been appointed and who is a director and who is present at the meeting: Chair or Vice-Chair of the board. If no such officer is present, the directors present shall choose one of their numbers to be chair. 5.8 Quorum (a) A majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of the board, but in no case shall a quorum be less than three-fifths of the number of directors or minimum number of directors, as the case may be. (b) Directors shall not transact business at a meeting of directors unless a quorum of the board is present. Page 459 of 650 Page 17 of 39 5.9 Voting All questions arising at any meeting of the board shall be decided by a majority of votes. 5.10 Auditor The auditor shall be entitled to attend at the expense of the Corporation and be heard at meetings of the board on matters relating to his or her duties as auditor. ARTICLE 6 STANDARD OF CARE OF DIRECTORS AND OFFICERS 6.1 Standard of Care Every director and officer in exercising his or her powers and discharging his or her duties to the Corporation shall, (a) act honestly and in good faith with a view to the best interests of the Corporation; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 6.2 Liability for Acts of Others Subject to the provisions of section 6.1 of this by-law, no director or officer shall be liable for the acts, receipts, neglects or defaults of any other director or officer or employee or for joining in any receipts or acts for conformity or for any loss, damage, or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired by order of the board for or on behalf of the Corporation or for the insufficiency or deficiency of any security in or upon which any of the moneys of or belonging to the Corporation shall be placed out or invested or for any loss or damage arising from the bankruptcy, insolvency, or tortious act of any person, firm or corporation with whom or which any moneys, securities or effects of the Corporation shall be lodged or deposited or for any loss occasioned by any error of judgment or oversight on his or her part, or for any other loss, damage or misfortune whatsoever which may happen in the execution of the duties of his or her respective office or trust or in relation thereto, unless the same are occasioned by his or her own willful neglect or default; provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof. ARTICLE 7 FOR THE PROTECTION OF DIRECTORS AND OFFICERS Page 460 of 650 Page 18 of 39 7.1 Indemnification by Corporation The Corporation shall indemnify a director or officer of the Corporation, a former director or officer of the Corporation, or another individual who acts or acted at the Corporation’s request as a director or officer, or an individual acting in a similar capacity, or another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative investigative or other proceeding in which the individual is involved because of that association with the Corporation or other entity. (a) Upon direction of the board by means of resolution, the Corporation shall advance money to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection 7.1(a) of this by-law, but the individual shall repay the money to the Corporation if the individual does not fulfil the conditions set out in subsection 7.1(c) of this by-law. (b) The Corporation shall not indemnify an individual identified in subsection 7.1(a) of this by-law unless: (i) the individual acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the Corporation’s request; and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful. (c) The Corporation shall, subject to the approval of the Ontario Superior Court of Justice, indemnify an individual referred to in subsection 7.1(a) of this by-law, or advance moneys under subsection 7.1(b) of this by-law, in respect of an action by or on behalf of the Corporation or other entity to obtain a judgment in its favour, to which the individual is made a party because of the individual’s association with the Corporation or other entity as described in subsection 7.1(a) of this by- law, against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfils the conditions set out in clauses 7.1(c)(i) and 7.1(c)(ii) of this by-law. (d) Notwithstanding anything in this Article, an individual referred to in subsection 7.1(a) of this by-law is entitled to indemnity from the Corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the individual is made a party because of the individual’s association with the Corporation or other entity as described in subsection 7.1(a) of this by-law, if the individual seeking the indemnity: Page 461 of 650 Page 19 of 39 (i) was not judged by a court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and (ii) fulfils the conditions set out in clauses 7.1(c)(i) and 7.1(c)(ii) of this by- law. (e) The Corporation shall also indemnify an individual referred to in subsection 7.1(a) of this by-law in such other circumstances as the Act or the law permits or requires. Nothing in these by-laws shall limit the right of any person entitled to claim indemnity apart from the provisions of these by-laws. (f) The Corporation may from time to time enter into agreements pursuant to which the Corporation agrees to indemnify one or more persons in accordance with the provisions of this section. 7.2 Insurance The Corporation may, from time to time as the board may determine, purchase and maintain insurance for the benefit of an individual referred to in subsection 7.1(a) of this by-law against any liability incurred by the individual, (a) in the individual’s capacity as a director or officer of the Corporation; or (b) in the individual’s his or her capacity as a director or officer, or a similar capacity, of another entity, of the individual acts or acted in that capacity at the Corporation’s request. 7.3 Directors’ Expenses The directors shall be reimbursed for their out-of-pocket expenses incurred in attending board, committee or shareholders’ meetings or otherwise in respect of the performance by them of their duties in accordance with the Board Expense Policy and no confirmation by the shareholders of any such reimbursement shall be required. 7.4 Performance of Services for Corporation Subject to Article 8 of this by-law, if any director or officer shall be employed by or shall perform services for the Corporation otherwise than as a director or officer or shall be a member of a firm or a shareholder, director or officer of a body corporate which is employed by or performs services for the Corporation, the fact of his or her being a director or officer shall not disentitle such director or officer or such firm or company, as the case may be, from receiving proper remuneration for such services. Page 462 of 650 Page 20 of 39 ARTICLE 8 INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS 8.1 Disclosure of Interest A director or officer who, (a) is a party to a material contract or transaction or proposed material contract or transaction with the Corporation; or (b) is a director or an officer of, or has a material interest in, any person who is a party to a material contract or transaction or proposed material contract or transaction with the Corporation, shall disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors the nature and extent of his or her interest. 8.2 Time of Disclosure by Director The disclosure required by section 8.1 of this by-law shall be made, in the case of a director, (a) at the meeting at which a proposed contract or transaction is first considered; (b) if the director was not then interested in a proposed contract or transaction, at the first meeting after he becomes so interested; (c) if the director becomes interested after a contract is made or a transaction is entered into, at the first meeting after he becomes so interested; or (d) if a person who is interested in a contract or transaction later becomes a director, at the first meeting after he becomes a director. 8.3 Time of Disclosure by Officer The disclosure required by section 8.1 of this by-law shall be made, in the case of an officer who is not a director, (a) forthwith after he becomes aware that the contract or transaction or proposed contract or transaction is to be considered or has been considered at a meeting of directors; (b) if the officer becomes interested after a contract is made or a transaction is entered into, forthwith after he becomes so interested; or Page 463 of 650 Page 21 of 39 (c) if a person who is interested in a contract or transaction later becomes an officer, forthwith after he becomes an officer. 8.4 Time of Disclosure in Extraordinary Cases Notwithstanding sections 8.2 and 8.3 of this by-law, where section 8.1 of this by-law applies to a director or officer in respect of a material contract or transaction or proposed material contract or transaction that, in the ordinary course of the Corporation’s business, would not require approval by the directors or shareholders, the director or officer shall disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors the nature and extent of his or her interest forthwith after the director or officer becomes aware of the contract or transaction or proposed contract or transaction. 8.5 Voting by Interested Director A director referred to in section 8.1 of this by-law shall not attend any part of a meeting of directors during which the contract or transaction is discussed and shall not vote on any resolution to approve the contract or transaction unless the contract or transaction is, (a) one relating primarily to his or her remuneration as a director of the Corporation or an affiliate; (b) one for indemnity or insurance pursuant to the provisions of the Act; or (c) one with an affiliate. 8.6 Remaining directors deemed quorum If no quorum exists for the purpose of voting on a resolution to approve a contract or transaction only because a director is not permitted to be present at the meeting by reason of subsection 8.5, the remaining directors shall be deemed to constitute a quorum for the purposes of voting on the resolution. 8.7 Shareholder approval Where all of the directors are required to make disclosure as described under section 8.1 above, the contract or transaction may be approved only by the shareholders. 8.8 Nature of Disclosure For the purposes of this Article, a general notice to the directors by a director or officer disclosing that he or she is a director or officer of or has a material interest in a person, or that there has been a material change in the director’s or officer’s interest in the person, and is to be regarded as interested in any contract made or any transaction Page 464 of 650 Page 22 of 39 entered into with that person, is a sufficient disclosure of interest in relation to any such contract or transaction. 8.9 Effect of Disclosure Where a material contract is made or a material transaction is entered into between the Corporation and a director or officer of the Corporation, or between the Corporation and another person of which a director or officer of the Corporation is a director or officer or in which he has a material interest, (a) the director or officer is not accountable to the Corporation or its shareholders for any profit or gain realized from the contract or transaction; and (b) the contract or transaction is neither void nor voidable, by reason only of that relationship or by reason only that the director is present at or is counted to determine the presence of a quorum at the meeting of directors that authorized the contract or transaction, if the director or officer disclosed his or her interest in accordance with sections 8.2, 8.3, 8.4 or 8.6 of this by-law, as the case may be, and the contract or transaction was reasonable and fair to the Corporation at the time it was so approved. 8.10 Confirmation by Shareholders Notwithstanding anything in this Article, a director or officer, acting honestly and in good faith, is not accountable to the Corporation or to its shareholders for any profit or gain realized from any such contract or transaction by reason only of his or her holding the office of director or officer, and the contract or transaction, if it was reasonable and fair to the Corporation at the time it was approved, is not by reason only of the director’s or officer’s interest therein void or voidable, where, (a) the contract or transaction is confirmed or approved by special resolution at a meeting of the shareholders duly called for that purpose; and (b) the nature and extent of the director’s or officer’s interest in the contract or transaction are disclosed in reasonable detail in the notice calling the meeting or in the information circular required pursuant to the provisions of the Act. ARTICLE 9 OFFICERS 9.1 Officers Subject to the articles, by-laws and any unanimous shareholders agreement, the board may, annually or as often as may be required, by resolution appoint a Chair, Vice Chair, President, Treasurer and a Secretary of the board. In addition, the board may from time to time by resolution appoint such other officers as the board determines to be Page 465 of 650 Page 23 of 39 necessary or advisable in the interests of the Corporation, which officers shall, subject to the Act, have such authority and perform such duties as may from time to time be prescribed by resolution of the board. None of the said officers, other than the Chairman of the board, need be a member of the board. Any two or more offices of the Corporation may be held by the same person. If the same person holds both the office of Secretary and the office of Treasurer, he may be known as Secretary-Treasurer. 9.2 Appointment of Chair, Vice-chair, President, Treasurer and Secretary of the Board At the first meeting of the board after each annual meeting of shareholders, the board may appoint a Chair, Vice Chair, President, Treasurer and Secretary. 9.3 Remuneration and Removal of Officers The remuneration of all officers shall be determined from time to time by the board. The fact that any officer is a director or shareholder shall not disqualify him or her from receiving such remuneration as may be so determined. All officers shall be subject to removal by resolution of the board at any time. 9.4 Duties of Officers may be Delegated In case of the absence or inability to act as the Chair or Vice Chair of the board or any other officer of the Corporation, or for any other reason that the board may deem sufficient, the board may delegate the powers of such officer to any other officer or to any director for the time being. 9.5 Chair of the Board The Chair of the board shall, if present, preside at all meetings of directors and shareholders. He shall sign all instruments which require his or her signature and shall perform all duties incident to his or her office, and shall have such other powers and perform such other duties as may from time to time be prescribed by resolution of the board. 9.6 Vice-Chair During the absence or inability of the Chair to perform his or her duties, his or her duties may be performed and his or her powers may be exercised by the Vice-Chair. The Vice- Chair shall also perform such duties and exercises such powers as the Chair may from time to time delegate to him or her or the board may prescribe. 9.7 President The President shall perform all duties incident to his or her office, and shall have such other powers and perform such other duties as may from time to time be prescribed by resolution of the board. The president duties and responsibilities shall be as follows: Page 466 of 650 Page 24 of 39 • Executive Member of the Board of Directors • Provide leadership: oversee compliance with the MOUD, By-Laws and OEB Regulations. • Support and Communicate the organizations mission and vision. • Meet with senior Town of Tillsonburg officials as required: Make sure that decisions are well thought out and timely. • Support the implementation of the strategic plan that guides the direction of the business • Review reporting on OEB submissions when required. • Represent the organization in civic and professional association responsibilities and activities. • Any other duties as assigned by the Board. The board may by resolution designate any one of the officers (including the Chairman of the Board, if any) as the President of the Corporation and may from time to time by resolution rescind any such designation and designate another officer as the President of the Corporation. 9.7 General Manager The General Manager shall have such authority to manage the business of the Corporation and perform such duties as may from time to time be prescribed by resolution of the board. The General Manager shall oversee the day to day operations of the company including managing all staff, designing strategies, setting goals and shall sign all instruments which require his or her signature with regard to the day to day operations of the company. The General Manager will maintain budgets, evaluate and improve operations and financial performance. 9.8 Secretary The Secretary shall give, or cause to be given, all notices required to be given to shareholders, directors, auditors and members of any committee. He shall enter or cause to be entered in the books kept for that purpose minutes of all proceedings at meetings of directors and of shareholders. He shall be the custodian of the seal (if any) of the Corporation and of all books, papers, records, documents and other instruments belonging to the Corporation. The Secretary shall have such other authority and perform such other duties as may from time to time be prescribed by resolution of the board. The Secretary may delegate some of their duties to another board member or staff assigned as directed by the board, as required from time to time. 9.9 Treasurer He shall sign or countersign such instruments as require his or her signature and shall perform all duties incident to his or her office or that are properly required of him or her by resolution of the board. The Treasurer shall also have such other authority and Page 467 of 650 Page 25 of 39 perform such other duties as may from time to time be prescribed by approved policies and resolution of the board. 9.10 Delegation of Board Powers In accordance with the by-laws and subject to the provisions of the Act, the board may from time to time by resolution delegate to any officer or officers power to manage the business and affairs of the Corporation. 9.11 Variation of Powers and Duties Notwithstanding the foregoing, the board may from time to time and subject to the provisions of the Act, add to or limit the powers and duties of an office or of an officer occupying any office. ARTICLE 10 MEETINGS OF SHAREHOLDERS 10.1 Calling of Meetings A meeting of shareholders may be called at any time by resolution of the board or by the Chair of the board or by the Vice-Chair, and the Secretary shall cause notice of a meeting of shareholders to be given when directed so to do by resolution of the board or by the Chairman of the board or by the President. 10.2 Annual Meeting Subject to the provisions of the Act, the Corporation shall hold an annual meeting of shareholders not later than eighteen (18) months after the Corporation comes into existence and subsequently not later than fifteen (15) months after holding the last preceding annual meeting for the purpose of considering the financial statements and the auditor’s report, electing directors and appointing auditors. 10.3 Special Meeting Subject to the provisions of the Act, a special meeting of shareholders may be called at any time and may be held in conjunction with an annual meeting of shareholders. 10.4 Place of Meetings Subject to the articles and any unanimous shareholder agreement, a meeting of shareholders shall be held at such place in or outside Ontario as the directors determine or, in the absence of such a determination, at the place where the registered office of the Corporation is located. Page 468 of 650 Page 26 of 39 10.5 Notice Notice of the time and place of each meeting of shareholders shall be given in the manner provided in section 15.1 in this by-law, in the case of an offering Corporation, not less than twenty-one (21) days, and in the case of any other Corporation, not less than ten (10) days, but, in either case, not more than fifty (50) days, before the date of the meeting to each director, to the auditor and to each shareholder entitled to vote at such meeting. A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the Corporation on the record date determined under subsection 10.9(a) of this by-law but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting. 10.6 Contents of Notice The notice of a meeting of shareholders shall state the day, hour and place of the meeting, and shall state or be accompanied by a statement of (a) the nature of any special business to be transacted at the meeting in sufficient detail to permit a shareholder to form a reasoned judgment thereon, and (b) the text of any special resolution or by-law to be submitted to the meeting. For the purposes of this section “special business” includes all business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the minutes of an earlier meeting, the financial statements and auditor’s report, election of directors and reappointment of the incumbent auditor. 10.7 Waiver of Notice A shareholder and any other person entitled to attend a meeting of shareholders may in any manner and at any time waive notice of a meeting of shareholders, and attendance of any such person at a meeting of shareholders is a waiver of notice of the meeting, except where he attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. 10.8 Notice of Adjourned Meetings (a) If a meeting of shareholders is adjourned for less than thirty (30) days, it is not necessary to give notice of the adjourned meeting other than by announcement at the earliest meeting that is adjourned. (b) If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty (30) days or more, notice of the adjourned meeting shall be given as for an original meeting. Page 469 of 650 Page 27 of 39 10.9 Record Date for Notice (a) The directors may by resolution fix in advance a time and date as the record date for the determination of the shareholders entitled to receive notice of a meeting of the shareholders, which record date shall not precede by more than sixty (60) days or by less than thirty (30) days the date on which the meeting is to be held. Where no such record date for the determination of the shareholders entitled to notice of a meeting of the shareholders is fixed by the directors as aforesaid, such record date shall be, (i) at the close of business on the day immediately preceding the day on which notice of such meeting is given, or (ii) if no notice is given, the day on which the meeting is held; (b) If a record date is fixed pursuant to subsection 10.9(a), unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall be given, not less than seven days before the date so fixed, in accordance with section 13.3 hereof. 10.10 Omission of Notice Subject to the provisions of the Act, the accidental omission to give notice of any meeting of shareholders to any person entitled thereto or the non-receipt of any notice by any such person shall not invalidate any resolution passed or any proceedings taken at any meeting of shareholders. 10.11 List of Shareholders (a) The Corporation shall prepare a list of shareholders entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder, which list shall be prepared, (i) if a record date is fixed under subsection 10.9(a) of this by-law not later than ten days after such record date; or (ii) if no record date is fixed, (A) at the close of business on the day immediately preceding the day on which notice is given, or (B) where no notice is given, on the day on which the meeting is held. (b) A shareholder may examine the list of shareholders, (i) during usual business hours at the registered office of the Corporation or at the place where its central securities register is maintained, and (ii) at the meeting of shareholders for which the list was prepared. 10.12 Shareholders Entitled to Vote Page 470 of 650 Page 28 of 39 Where the Corporation fixes a record date under subsection 10.9(a) of this by-law, a person named in the list prepared under section 10.11 of this by-law is entitled to vote the shares shown opposite his or her name at the meeting to which the list relates. 10.13 Persons Entitled to be Present The only persons entitled to attend a meeting of shareholders shall be those entitled to vote thereat and the President, the Secretary, the directors, the scrutineer or scrutineers and the auditor and others who, although not entitled to vote, are entitled or required under any provision of the Act or the articles or the by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with the consent of the meeting. 10.14 Proxies (a) Every shareholder entitled to vote at a meeting of shareholders may by means of a proxy appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, as his or her nominee to attend and act at the meeting in the manner, to the extent and with the authority conferred by the proxy. (b) A proxy shall be executed by the shareholder or his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized and shall conform with the requirements of the Act. 10.15 Revocation of Proxies A shareholder may revoke a proxy (a) by depositing an instrument in writing executed by him or her or by his or her attorney authorized in writing, (i) at the registered office of the Corporation at any time up to and including the last business day preceding the day of the meeting, or any adjournment thereof, at which the proxy is to be used, or (ii) with the chairman of the meeting on the day of the meeting or an adjournment thereof; or (b) in any other manner permitted by law. 10.16 Deposit of Proxies The directors may by resolution fix a time not exceeding forty-eight (48) hours, excluding Saturdays and holidays, preceding any meeting or adjourned meeting of shareholders before which time proxies to be used at that meeting must be deposited with the Corporation or an agent thereof, and any period of time so fixed shall be specified in the notice calling the meeting. Page 471 of 650 Page 29 of 39 10.17 Joint Shareholders Where two (2) or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two (2) or more of those persons are present, in person or by proxy, they shall vote as one on the shares jointly held by them. 10.18 Chair and Secretary (a) The chair of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: Chair of the board, Vice-Chair, secretary If there is no such officer or if at a meeting none of them is present within fifteen (15) minutes after the time appointed for the holding of the meeting the shareholders present shall choose a person from their number to be the chairman. (b) The Secretary shall be the secretary of any meeting of shareholders, but if the Secretary is absent, the chair shall appoint some person who need not be a shareholder to act as secretary of the meeting. 10.19 Scrutineers The chair of any meeting of shareholders may appoint one or more persons to act as scrutineer or scrutineers at such meeting and in that capacity to report to the chair such information as to attendance, representation, voting and other matters at the meeting as the chair shall direct. 10.20 Votes to Govern At all meetings of shareholders every question shall, unless otherwise required by law, the articles, the by-laws, or a unanimous shareholder agreement, be determined by the majority of the votes duly cast on the question. In case of an equality of votes, the chair presiding at the meeting shall not have a second or casting vote in addition to the vote or votes to which he may be entitled as a shareholder. 10.21 Show of Hands At all meetings of shareholders, every question submitted to the meeting shall be decided by a show of hands unless a ballot thereon is required by the chair or is demanded by a shareholder or proxyholder present and entitled to vote. Upon a show of hands every person present who is either a shareholder entitled to vote or the duly appointed proxyholder of such a shareholder shall have one vote. Before or after a vote by a show of hands has been taken upon any question, the chairman may require, or any shareholder or proxyholder present and entitled to vote may demand, a ballot thereon. Unless a ballot is demanded, an entry in the minutes of a meeting of shareholders to the effect that the chair declared a motion to be carried is admissible in Page 472 of 650 Page 30 of 39 evidence as prima facie proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the motion. 10.22 Ballots If a ballot is required by the chairman of the meeting or is duly demanded by any shareholder or proxyholder and the demand is not withdrawn, a ballot upon the question shall be taken in such manner and at such time as the chair of the meeting shall direct. 10.23 Votes on Ballots Unless the articles otherwise provide, upon a ballot each shareholder who is present in person or represented by proxy shall be entitled to one vote for each share in respect of which he is entitled to vote at the meeting and the result of the ballot shall be the decision of the meeting. 10.24 Adjournment The chair presiding at a meeting of shareholders may, with the consent of the meeting and subject to such conditions as the meeting decides, adjourn the meeting from time to time and from place to place and, subject to the provisions of the Act and subsection 10.8(b) of this by- law no notice of such adjournment or of the adjourned meeting need be given to the shareholders. Subject to the provisions of the Act, any business may be brought before or dealt with at any adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling such meeting. 10.25 Quorum At any meeting of shareholders, two (2) individuals present in person, each of whom is either a shareholder entitled to attend and vote at such meeting or the proxyholder of such a shareholder appointed by means of a valid proxy, shall be a quorum for the choice of a chair (if required) and for the adjournment of the meeting. For all other purposes a quorum for any meeting of shareholders (unless a greater number of shareholders and/or a greater number of shares are required by the Act or by the articles or the by-laws) shall be two (2) individuals present in person, each of whom is either a shareholder entitled to attend and vote at such meeting or the proxyholder of such a shareholder appointed by means of a valid proxy, holding or representing by proxy not less than 51% of the total number of the issued shares of the Corporation for the time being enjoying voting rights at such meeting. No business shall be transacted at any meeting of shareholders while the requisite quorum is not present. 10.26 Only One Shareholder Where the Corporation has only one shareholder, or only one holder of any class or series of shares, that shareholder present in person or by proxy constitutes a meeting. Page 473 of 650 Page 31 of 39 ARTICLE 11 SHARES AND TRANSFERS 11.1 Issuance Subject to the provisions of the Act, the articles and any unanimous shareholder agreement, shares of the Corporation, or options to purchase the whole or any part of the authorized and unissued shares of the Corporation, may be issued at such time and to such persons and for such consideration as the directors may by resolution determine, but no share shall be issued until it is fully paid in money or in property or past service that is not less in value than the fair equivalent of the money that the Corporation would have received if the share had been issued for money. 11.2 Commissions The directors may from time to time authorize the Corporation to pay a reasonable commission to any person in consideration of his or her purchasing or agreeing to purchase shares of the Corporation from the Corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares. 11.3 Register of Transfers Subject to the Ontario Securities Transfer Act, 2006 (“STA”), no transfer of a share shall be registered in a securities register except upon presentation of the certificate, if any, issued by the Corporation, representing the share with an endorsement which complies with the STA made on or delivered with it, duly executed by an appropriate person as provided by the STA, together with such reasonable assurance that the endorsement is genuine and effective as the board may from time to time prescribe, on payment of all applicable taxes and any reasonable fees prescribed by the board, on compliance with the restrictions on issue, transfer or ownership authorized by the Articles or any unanimous shareholder agreement and on satisfaction of any lien referred to in Section 11.4 of these by-laws. 11.4 Lien on Shares Except where it has shares listed on a stock exchange recognized by the Ontario Securities Commission, subject to the provisions of the Act, the Corporation has a lien on a share registered in the name of a shareholder or his or her legal representative for a debt of that shareholder to the Corporation. Such lien may be enforced by the Corporation in any manner permitted by law. 11.5 Share Certificates (a) Unless otherwise provided in the Articles, the board may provide by resolution that all or any classes and series of shares or other securities shall be uncertificated securities, provided that such resolution shall not apply to securities represented by a certificate until such certificate is surrendered to the Corporation. Page 474 of 650 Page 32 of 39 (b) Subject to subsection 11.5(a) of these by-laws, every holder of one or more securities of the Corporation is entitled at his or her option to a security certificate or to a non-transferable written acknowledgement of his or her right to obtain a security certificate from the Corporation, stating the number, class or series of securities held by him or her as shown in the securities register. The certificates shall be in such form as the board may from time to time approve and need not be under corporate seal. Unless otherwise ordered by the board, any such certificate shall be signed manually (c) Security certificates and acknowledgements of a shareholder’s right to a security certificate, respectively, shall (subject to compliance with the provisions of the Act) be in such form as the directors may from time to time by resolution approve and, unless otherwise provided by resolution of the board, such certificates and acknowledgements may be signed by (i) the Chair of the board, the Vice-Chair of the board, and (ii) the Secretary holding office at the time of signing, and notwithstanding any change in the persons holding such offices between the time of actual signing and the issuance of any certificate or acknowledgement and notwithstanding that the Chair of the board, the Vice chair of the board, Secretary signing may not have held office at the date of the issuance of such certificate or acknowledgment, any such certificate or acknowledgement so signed shall be valid and binding upon the Corporation. (d) Notwithstanding the provisions of section 2.4 of this by-law, the signature of the Chair of the board, the Vice-chair of the board may be printed, engraved, electronically reproduced upon certificates and acknowledgements for shares of the Corporation, and certificates and acknowledgements so signed shall be deemed to have been manually signed by the Chair of the board, the Vice-Chair of the board, whose signature is so printed, engraved, electronically reproduced thereon and shall be as valid as if they had been signed manually. 11.6 Transfer of Shares Subject to the restrictions on transfer set forth in the articles, shares of the Corporation shall be transferable on the books of the Corporation in accordance with the applicable provisions of the Act. 11.7 Defaced, Destroyed, Stolen or Lost Certificates Where the owner of a share or shares of the Corporation claims that the certificate for such share or shares has been lost, apparently destroyed or wrongfully taken, the Corporation shall issue a new share certificate in place of the original share certificate if such owner Page 475 of 650 Page 33 of 39 (a) so requests before the Corporation has notice that shares represented by the original certificate have been acquired by a bona fide purchaser; (b) files with the Corporation an indemnity bond sufficient in the Corporation’s opinion to protect the Corporation from any loss that it or any of them may suffer by complying with the request to issue a new share certificate; and (c) satisfies any other reasonable requirements imposed by the Corporation. 11.8 Joint Shareholders If two (2) or more persons are registered as joint holders of any share or shares, the Corporation is not bound to issue more than one share certificate in respect thereof and delivery of a share certificate to one of such persons is sufficient delivery to all of them. ARTICLE 12 DIVIDENDS 12.1 Declaration of Dividends Subject to the provisions of the Act and the articles, the directors may from time to time declare and the Corporation may pay dividends to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid in money or property of the Corporation. 12.2 Joint Shareholders (a) In case several persons are registered as joint holders of any share or shares of the Corporation, the cheque for any dividend payable to such joint holders shall, unless such joint holders otherwise direct, be made payable to the order of all such joint holders and if more than one address appears on the books of the Corporation in respect of such joint holding the cheque shall be mailed to the first address so appearing. (b) In case several persons are registered as the joint holders of any share or shares of the Corporation, any one of such persons may give effectual receipts for all dividends and payments on account of dividends on such shares and/or payments in respect of the redemption of such shares. 12.3 Dividends from Funds Derived from Operations Subject to the provisions of the Act, the Corporation may, declare and pay dividends out of the funds derived from its operations. Page 476 of 650 Page 34 of 39 ARTICLE 13 RECORD DATES 13.1 Fixing Record Dates For the purpose of determining shareholders (a) entitled to receive payment of a dividend; (b) entitled to participate in a liquidation or distribution; or for any other purpose except the right to receive notice of or to vote at a meeting, the directors may fix in advance a date as the record date for such determination of shareholders, but such record date shall not precede by more than fifty (50) days the particular action to be taken. 13.2 No Record Date Fixed If no record date is fixed pursuant to section 13.1 hereof, the record date for the determination of shareholders for any purpose other than to establish a shareholder’s right to receive notice of a meeting or to vote shall be at the close of business on the day on which the directors pass the resolution relating thereto. 13.3 Notice of Record Date If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice in writing thereof shall be given, not less than seven days before the date so fixed. 13.4 Effect of Record Date In every case where a record date is fixed pursuant to section 13.1 hereof in respect of the payment of a dividend, the making of a liquidation distribution or the issue of warrants or other rights to subscribe for shares or other securities, only shareholders of record at the record date shall be entitled to receive such dividend, liquidation distribution, warrants or other rights. ARTICLE 14 CORPORATE RECORDS AND INFORMATION 14.1 Keeping of Corporate Records (a) The Corporation shall prepare and maintain, at its registered office or at such other place in Ontario designated by the directors: (i) the articles and the by-laws and all amendments thereto, and a copy of any unanimous shareholder agreement known to the directors, (ii) minutes of meetings and resolutions of shareholders; Page 477 of 650 Page 35 of 39 (iii) a register of directors in which are set out the names and residence addresses, while directors, including the street and number, if any, of all persons who are or have been directors with the several dates on which each became or ceased to be a director; (iv) a securities register in which are recorded the securities issued by the Corporation in registered form, showing with respect to each class or series of securities (A) the names, alphabetically arranged, of persons who, (1) are or have been within six years registered as shareholders and the address including the street and number, if any, of every such person while a holder, and the number and class of shares registered in the name of such holder, (2) are or have been within six years registered as holders of debt obligations of the Corporation and the address including the street and number, if any, of every such person while a holder, and the class or series and principal amount of the debt obligations registered in the name of such holder, or (3) are or have been within six years registered as holders of warrants of the Corporation, other than warrants exercisable within one year from the date of issue and the address including the street and number, if any, of every such person while a registered holder, and the class or series and number of warrants registered in the name of such holder; and (B) the date and particulars of the issue of each security and warrant. (b) In addition to the records described in subsection 14.1(a), the Corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee. The records described in this subsection shall be kept at the registered office of the Corporation or at such other place in Ontario as is designated by the directors and shall be open to examination by any director during normal business hours of the Corporation. (c) The Corporation shall also cause to be kept a register of transfers in which all transfers of securities issued by the Corporation in registered form and the date and other particulars of each transfer shall be set out. 14.2 Access to Corporate Records Shareholders and creditors of the Corporation and their agents and legal representatives may examine the records referred to in subsection 14.1(a) of this by-law during the usual business hours of the Corporation and may take extracts therefrom, free of charge. If the Corporation is an offering corporation, any other person may Page 478 of 650 Page 36 of 39 examine such records during the usual business hours of the Corporation and may take extracts therefrom upon payment of a reasonable fee. 14.3 Copies of Certain Corporate Records A shareholder is entitled upon request and without charge to one copy of the articles and by-laws and of any unanimous shareholder agreement. 14.4 Report to Shareholders A copy of the financial statements of the Corporation, a copy of the auditor’s report, if any, to the shareholders and a copy of any further information respecting the financial position of the Corporation and the results of its operations required by the articles, the by-laws or any unanimous shareholder agreement which are to be placed before an annual meeting of shareholders pursuant to the Act shall be sent to each shareholder not less than ten (10) days before such annual meeting of shareholders (or, if the Corporation is an offering Corporation, not less than twenty-one (21) days) or before the signing of a resolution in accordance with the Act in lieu of such annual meeting, except to a shareholder who has informed the Corporation in writing that he does not wish to receive a copy of those documents. 14.5 No Discovery of Information Except as specifically provided for in this Article, and subject to all applicable law, no shareholder shall be entitled to or to require discovery of any information respecting any details or conduct of the Corporation’s business which in the opinion of the directors would be inexpedient or inadvisable in the interests of the Corporation to communicate to the public. 14.6 Conditions for Inspection The board may from time to time by resolution determine whether and to what extent and at what times and place and under what conditions or regulations the accounts and books of the Corporation or any of them shall be open to the inspection of shareholders, and no shareholder shall have any right to inspect any account or book or document of the Corporation, except as specifically provided for in this Article or as otherwise provided for by statute or as authorized by resolution of the board. ARTICLE 15 NOTICES 15.1 Method of Giving Any notice, communication or other document to be sent or given by the Corporation to a shareholder, director, officer, or auditor of the Corporation under any provision of the Act, the articles or by-laws shall be sufficiently sent and given if delivered personally to the person to whom it is to be given or if delivered to his or her last address as shown in Page 479 of 650 Page 37 of 39 the records of the Corporation or if mailed by prepaid ordinary mail or air mail in a sealed envelope addressed to him or her at his or her last address as shown on the records of the Corporation or if sent by any means of electronic mail/email. The Secretary may change the address on the records of the Corporation of any shareholder in accordance with any information believed by him or her to be reliable. A notice, communication or document so delivered shall be deemed to have been sent and given when it is delivered personally or delivered at the address aforesaid. A notice, communication or document so mailed/emailed shall be deemed to have been sent and given on the day it is deposited in a post office or public letter box and shall be deemed to be received by the addressee on the fifth day after such mailing. A notice sent by any means of electronic communication shall be deemed to have been given when delivered to the appropriate email address. 15.2 Shares Registered in More Than One Name All notices or other documents with respect to any shares of the Corporation registered in the names of two or more persons as joint shareholders shall be addressed to all of such persons and sent to the address or addresses for such persons as shown in the records of the Corporation but notice to one of such persons shall be sufficient notice to all of them. 15.3 Persons Becoming Entitled by Operation of Law Subject to the provisions of the Act, every person who by operation of law, transfer or by any other means whatsoever shall become entitled to any share or shares of the Corporation shall be bound by every notice or other document in respect of such share or shares which previous to his or her name and address being entered on the records of the Corporation shall be duly given to the person or persons from whom he derives his or her title to such share or shares. 15.4 Deceased Shareholder Any notice or document delivered or sent by mail or left at the address of any shareholder as such address appears on the records of the Corporation shall, notwithstanding that such shareholder is then deceased and whether or not the Corporation has notice of his or her death, be deemed to have been duly given or served in respect of the shares whether held solely or jointly with other persons by such shareholder until some other person is entered in his or her stead on the records of the Corporation as the holder or one of the joint holders thereof and such service of such notice shall for all purposes be deemed a sufficient service of such notice or document on his or her heirs, executors or administrators and on all persons, if any, interested with him or her in such shares. 15.5 Signature to Notice The signature, if any, to any notice to be given by the Corporation may be written, stamped, typewritten, printed or otherwise mechanically reproduced in whole or in part. Page 480 of 650 Page 38 of 39 15.6 Proof of Service A certificate of the Chair of the board, the Vice Chair of the board, the Secretary or the Treasurer or of any other officer in office at the time of the making of the certificate as to facts in relation to the delivery or mailing or service of any notice or other document to any shareholder, director, officer or auditor or publication of any notice or other document shall, in the absence of evidence to the contrary, be proof thereof. 15.7 Computation of Time Where a given number of days’ notice or notice extending over any period is required to be given, the number of days or period shall be computed in accordance with the definition of “day” contained in section 1.1 of this by-law. 15.8 Waiver of Notice Any shareholder (or his or her duly appointed proxyholder), director, officer, auditor or member of a committee may at any time waive any notice, or waive or abridge the time for any notice, required to be given to him or her under any provisions of the Act, the articles, the by- laws or otherwise and such waiver or abridgement shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of shareholders or of the board which may be given in any manner. ARTICLE 16 REPEAL OF FORMER BY-LAWS 16.1 Repeal of By-law No. 1 and By-law No. 2 By-law No. 1 and By-law No. 2 of the Corporation are hereby repealed as of the coming into force of this By-law 1A. The repeal shall not affect the previous operation of any by-law so repealed or affect the validity of any act done or right, privilege, obligation or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to, or the validity of any articles (as defined in the Act) or predecessor charter documents of the Corporation obtained pursuant to, any such by-law before its repeal. All officers and persons acting under any by-law so repealed shall continue to act as if appointed under the provisions of this by-law and all resolutions of the shareholders or the board or a committee of the board with continuing effect passed under any repealed by-law shall continue to be good and valid except to the extent inconsistent with this by-law and until amended or repealed. PASSED AND MADE as of the 17th day of January, 2020. Page 481 of 650 Page 39 of 39 __________________ _____________________ Chair – Dan Rasokas Treasurer – Ernie Vidovic Page 482 of 650 From:Amelia Jaggard To:Michelle Smibert Subject:THI Board of Directors - MOUD and THI By-Law Date:Friday, April 29, 2022 8:52:16 AM Attachments:MOUD THI and Town 2022 Redlined.pdf THI By-Law Tracked Changes.pdf Good morning Michelle, The THI Board of Directors approved the attached draft amended MOUD with the Town for submission to the Shareholders for review and/or approval. I have attached a redlined version. The Board also amended the THI By-Law to define affiliate related director and to expand the definition of independent director. The Board approved the attached amended THI By-Law for submission to the Shareholder for confirmation. I have attached a redlined version. The Business Corporations Act indicates that any new, amended or repealed by-laws are to be submitted to the next meeting of the shareholders for confirmation. I will plan to add this to the AGM agenda in June. Please let me know if you have any questions regarding these documents. Have a nice day, Amelia Jaggard, GDPA, CMM II Deputy Clerk Page 483 of 650 Page 1 of 3 Subject: THI MOUD Report Number: CS 22-19 Department: Corporate Services Department Submitted by: Director of Corporate Services Meeting Type: Council Meeting Meeting Date: Thursday, June 16, 2022 RECOMMENDATION That the Council receives the THI MOUD report as information. BACKGROUND At the May 24, 2022 Council meeting, staff was asked to review a number of concerns and questions raised as part of the MOUD as proposed to be revised by the THI Board. DISCUSSION The following is a summary of the concerns/questions raised at the previous meeting along with answers provided by staff: • What is the standard practice for tenure of Hydro Board members? Is it 9 years as proposed in the MOUD? Answer: Typical industry practice is 3 years’ term with 2 optional renewals for a total of 9 years. With that being said it is at the sole discretion of the shareholder to decide on the renewal. If the shareholder is happy with the board they renew the term, if not they reject the renewal and then recruit new board member/members. Page 484 of 650 CS 22-19 Page 2 of 3 • What is the maximum number of Board Members? Answer: The current Articles of THI requires a minimum of 5 directors and permit a maximum of 9 members. Section 2.1.2 of the OEB Affiliate Relationships Code states: A utility shall ensure that at least one-third of its Board of Directors is independent from any affiliate. • Who is involved in the evaluation process of the Board members? Answer: The Board’s intention is for members to complete an individual board member evaluation tool as approved by the Board that would be reviewed by the Board’s Governance Committee. • What members are on the Governance Committee? Answer: The MOUD was referred to the Governance Committee for review which consists of the Chair Dan Rasokas, Vice Chair Ann Loker, Board member Alex Urbanowicz and Amelia Jaggard as Board Secretary. • Current shareholder would now be an affiliate member – why and what does this mean? Answer: although there is no definition of what an “affiliate related director is”, the following is found in the proposed MOUD: an affiliate related director is someone that is a representative of a shareholder, a municipal council, a member of any affiliate or an employee of the Town. Recently, shareholder representatives have been asked to leave any closed session meetings by the rest of the Board. At one point the Board was proposing a Closed Session Policy that excluded all shareholder members (included ‘Affiliated Director’) and only included Independent Directors. • Why isn’t there a cap on the Board members per diem? Answer: Currently there isn’t a remuneration by-law similar to what guides the salaries for Council. Each year, the cost of living adjustment is applied to the per diem rates. There were some questions raised by Council concerning the addition of shareholder representation as well as the removal of Board members. Additional information regarding this matter will be provided by the Town’s solicitor in a future closed session meeting. Page 485 of 650 CS 22-19 Page 3 of 3 CONSULTATION CAO and THI General Manager FINANCIAL IMPACT/FUNDING SOURCE N/A CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation ☒ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. ATTACHMENTS Appendix A – redlined MOUD Page 486 of 650 Page 1 of 6 MEMORANDUM OF UNDERSTANDING AND DIRECTION BETWEEN THE CORPORATION OF THE TOWN OF TILLSONBURG ("TOWN") AND TILLSONBURG HYDRO INC. ("THI") 1.0 STATEMENT OF INTENT: This Memorandum of Understanding and Direction (MOUD) is designed to identify individual and collective responsibilities that will ultimately provide for safe, reliable and financially responsible distribution of electrical energy to identified stakeholders. The purpose of this MOUD is to confirm the working partner relationship between the TOWN and THI (The PARTIES) that reinforces and enhances their joint commitment to maintain a vibrant Electrical Energy Utility to the benefit of the community they serve. Therefore this document shall set out the general expectations of the TOWN (as Sole Shareholder) and THI. 2.0 GUIDING PRINCIPLES (GOVERNANCE): The following guiding principles will direct the deliberations of the TOWN and THI in achieving that goal. It must be further understood that the TOWN is the Sole Shareholder of THI and that THI is a distinct and separate Corporation granted the benefits of operating under the regulations of the Ontario Business Corporations Act. The Board Shall; a) Govern and provide stewardship of the business and affairs of THI. In so doing, shall adhere to all appropriate legislation and regulations that impact the electrical distribution industry in the Province of Ontario b) Provide that the focus of safe, reliable and financially responsible distribution is adhered to c) Address any conflict of interest, act honestly and in good faith with a view to the best interests of THI and shall exercise the same degree of care, diligence and skill that a reasonably prudent person would exercise in similar circumstances d) Promote operational and strategic improvement projects that will enhance the profile of THI and the TOWN The TOWN Shall; a) Encourage and support the THI Board and staff in their endeavors Page 487 of 650 Page 2 of 6 b) Receive an annual return on its' investment in the form of a cash Dividend, subject to the conditions set out in Section 7.0-Dividend Policy 3.0 BUSINESS ACTIVITIES: THI may engage in any business activities as may be permitted by the Ontario Energy Board Act, 1998 (OEB Act) and the Electricity Act, 1998 (Electricity Act), and as authorized by the Board from time to time, including; a) Distributing electricity b) Business activities, the principal purpose of which is to use more effectively the assets of the distribution system of THI c) Generating electricity from renewable energy sources d) Conservation and Demand Management activities In carrying out these business activities THI shall be guided by the following; a) Compliance with all applicable laws and regulations. b) Operate in a manner that considers community values to the extent possible, TOWN practices and policies. c) Act in a safe and environmentally responsible manner d) Employ prudent business practices e) Have regard to the fact that the TOWN is a Municipal Corporation f) Maintain and appropriately enhance THI owned infrastructure 4.0 BOARD COMPOSITION: The Board of Directors of THI (the BOARD); a) Shall be a number as permitted by current By-law(s) of THI minimum of seven (7) members. Consideration may be given to increasing the number of Directors to ensure maintenance of a desired skill set, within prudent and, cost effective parameters. a)b) Shall review the number of Board Directors every three years. b)c) Shall consist of; a. One member selected by the TOWN at large, who is to be considered an Affiliate Related Director. An Affiliate Related Director is someone that is a representative of a shareholder, a municipal council, a member of any affiliate or an employee of the Town. Page 488 of 650 Page 3 of 6 b. A minimum of 4 (four) and a maximum of six (6) independent members, A minimum of six (6) members are to be considered as Independent Directors in accordance with the skills matrix as recommended developed by the Board. An Independent Director means a director that is independent from, the shareholder, the municipal council, any affiliate or employee of the Town, as required by section 2.1.2 of the Affiliates Relationship Code. d) Shall take into consideration Director qualifications, skills and experience, in the discharge of THI duties for oversight of; strategy, utility operations, finance, regulatory, technical resources and customer service. e) Shall protect the best interests of the electricity rate payers and shareholder, and shall ensure financial integrity. b.f)Shall strive for a tenure term of nine years with possible one-year term extensions thereafter. Independent Directors shall be reappointed after each three year increment based on individual performance. An Independent Director’s tenure may be extended after nine years by one- year terms when their qualifications and value are in the best interest of THI. c)g) Shall meet the requirements as outlined by the Ontario Energy Board (OEB) through and the Affiliate Relationships Code (ARC) d)h) The Chair of the Board shall be selected by Board members e)i)No member of the Board shall receive any remuneration or compensation, other than as expressly stated in applicable By-Law 5.0 TOWN APPROVAL: The Board shall seek the approval of the TOWN in respect to each of the following matters prior to the BOARD undertaking or causing to undertake, authorizing or approving any of the following matters with respect to THI: a) Any changes or amendments to the share structure of THI b) Any changes to the business activities of THI as identified in Section 3.0 c) Entering into any discussions or negotiations regarding a potential merger, amalgamation, divestiture or acquisition of THI or another corporation. Page 489 of 650 Page 4 of 6 6.0 REPORTING: THI is required to provide the TOWN with an annual Business Plan and Budget (the "Business Plan"). THI is to carry out its affairs and carry out its business operations in accordance with the Business Plan. THI will provide the TOWN with any revision, update or amendment of a material nature to the Business Plan. The Business Plan will take the format as adopted by the Board of THI but shall include the following; a) Comprehensive financial plan with significant operational projects b) Most recent Audited Financial Statements c) A statement of any material variances in the projected ability for THI to meet or continue to meet its strategic, financial or development goals, including any material variances from current Business Plan In addition to the presentation of the annual Business Plan and Budget, THI shall provide updated Financial reports, in a format as adopted by the Board, to the TOWN on a semi-annual basis. 7.0 DIVIDEND POLICY: Subject to the provisions herein, the Board of THI shall declare and issue an Annual Dividend to the TOWN as referenced in Section 2.0. The payment of the Dividend shall be subject to the following; a) No dividend shall be declared where to do so would significantly impact THI's ability to satisfy any appropriate replacement or improvement of assets of THI b) No Dividend shall be declared if the Board can demonstrate to the TOWN that; a. After any expected payment, THI would be unable to meet its financial commitments and pay its liabilities when due b. The realizable value of THI's assets would be less than the aggregate of its liabilities and its stated capital of all classes With concurrence of the THI Board and the TOWN, the Annual Dividend Policy shall be established as in accordance with Schedule 1 (attached), subject to the conditions in 7.0, and confirmed at the Board's November board meeting, or before December 31. The approval and the declaration of the actual Annual Dividend shall take place at the conclusion of the annual audit of THI. Page 490 of 650 Page 5 of 6 A Special Dividend may be considered and approved at the discretion of the Board; a) After the review of Annual Financial Statements, and b) Consultation with the Corporation of the TOWN of Tillsonburg 8.0 COMMUNICATIONS PROTOCOL: Positive and effective communication is a cornerstone of relationship building and ultimately enhances the long-term working relationship of the TOWN and THI. In supporting the spirit of this Agreement, the communication protocol between the parties shall be identified as follows; a) As to specifically identified services or general information exchange, in writing on Corporate letterhead directed to; i. To TOWN - Clerk copied to CAO ii. To THI -Secretary copied to Chair and Vice-Chair b) Best efforts are expected to be used to identify and acknowledge when any issue of communication will be considered and responded to c) The Chair of THI will deliver at a minimum, and not counting the Annual General meeting, semi-annual status reports to the TOWN (Shareholder) 9.0 REVISIONS: This document shall be reviewed at least once every two years and may be revised from time to time as circumstances may require. A review of the MOUD can be initiated by either party subject to appropriate communication and consultation. Date: Acknowledged and Agreed to as of the date above CORPORATE OF THE TOWN OF TILLSONBURG ____________________________ Name ____________________________ Title TILLSONBURG HYDRO INC. ____________________________ Name ____________________________ Page 491 of 650 Page 6 of 6 Title Page 492 of 650 Page 1 of 5 Subject: EDAC Resolution Regarding Zoning Bylaw Height Restrictions Report Number: EDM 22-17 Department: Economic Development Department Submitted by: Cephas Panschow Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION That the resolution from the Economic Development Advisory Committee regarding the existing maximum height restrictions for residential buildings within the Town of Tillsonburg be referred to Oxford County Planning for review. BACKGROUND The Economic Development Advisory Committee received an update regarding the activity of the Town’s Affordable/Attainable Housing Committee at their May 10, 2022 meeting. The Economic Development Advisory Committee (EDAC) discussed the current shortage of available multi-residential development sites in the community and the challenge this is creating with respect to potential housing projects to meet market demand. It was identified that the Town’s current zoning permits a maximum height of 22 metres (72 feet) for multi-residential buildings and the question was raised as to how this maximum height was determined. Based on concerns about meeting local demand for housing, including social housing, the Committee then passed a resolution as follows: THAT the Economic Development Advisory Committee recommend Council reassess the height limits imposed on multi family high rise buildings within Town boundaries. Staff is bringing this advice to Council for their consideration and direction. Page 493 of 650 EDM 22-17 Page 2 of 5 DISCUSSION Section 8.2.6 of the County of Oxford’s Official Plan policies for the Town of Tillsonburg provide the following information on High Density Residential development: The height and density limitations applicable to the various forms of development allowed in the High Density Residential area shall be determined on the basis of the nature, character and scale of adjacent land uses. Height and density limitations will be specified in the Zoning By-law and may vary from location to location. Unless there are specific site or area characteristics which favour higher limits, net residential densities will normally not exceed 111 units per hectare (45 units per acre). Under no circumstance will development within a High Density Residential area be less than 63 units per hectare (26 units per acre) net residential density without amendment to this Plan. Lower height and/or density limits than permitted by this Plan may be warranted for specific areas on the basis of the following criteria:  Sanitary sewage, water or storm drainage constraints;  The limitations related to municipal fire protection;  Development constraints related to topographic features;  Protection of significant or scenic views or vistas;  To minimize the effect of development and required parking on significant natural features;  Where adjacent low profile residential land uses may be adversely affected in terms of sunlight, traffic or privacy;  The development results in a gradual transition from low profile residential buildings to higher profile residential buildings and vice versa. Section 8.2.7 (Site Design Policies for Multiple Unit Residential Development) of the Official Plan further elaborates on how to accommodate higher density developments within the Town: Multiple unit dwellings and amenity areas will be sufficiently separated from each other and from parking areas to ensure privacy and to avoid prolonged periods of shadowing especially during winter months. Where a multiple unit residential dwelling abuts lower density residential development, where feasible, the building will be sited to minimize visual intrusion onto neighbouring properties. Page 494 of 650 EDM 22-17 Page 3 of 5 The maximum height standards for various zoning categories throughout the Town are:  22 metres/72 feet - Central Commercial (CC) and High Density Residential  15 metres/49 feet – Medium Density Residential  11 metres/36 feet – Entrepreneurial (EC) and Low Density (R1, R2, & R3) Residential Based on current market demand and the need for lower cost, and hence, higher density residential developments within the Town of Tillsonburg, as well as initial feedback from Oxford County Planning, the Development Commissioner is recommending that the resolution be forwarded to Oxford County Planning for additional review and direction with respect to both appropriate height restrictions and residential densities permitted within the Town. Of note, Oxford County has initiated a review of the Official Plan (see May 25, 2022 County Council Report CP 2022-48 Official Plan Review – Update on Next Phases) and work is anticipated to begin in mid 2022, with a consultation draft of policies being presented to County Council early to mid 2023, depending on the ultimate scope of the policy revisions and nature and extent of community engagement. The timing of the Official Plan review appears to be an appropriate time to review the current height and density provisions for the Town. CONSULTATION EDAC’s resolution has been reviewed with the County Planner who has advised that the Official Plan density limits are likely more of an issue than the maximum building height standard contained in the Town’s Zoning By-law. Planning also indicated that they have not received any formal applications for increased residential densities although there have been one or two inquiries with respect to the maximum height permitted in recent years. In the past, it was thought that the residential building height restriction in the Zoning Bylaw was related solely to the technical capabilities of the Fire Department, but that is not the case. That being said, increased residential building heights would introduce a number of additional considerations (e.g. additional training and pre-planning specific to high rise buildings) and pressures (e.g. increased Fire Fighter response requirements to handle larger fire/number of occupants) for the Town. While the length of ladders or aerial apparatus devices should not be the determining factor in the permitted building height, these can be a definite asset and provide Page 495 of 650 EDM 22-17 Page 4 of 5 alternatives to interior firefighting operations as well as aiding significantly in alterative approaches to “attack” the fire or provide rescue options from the exterior of the building. The Fire Chief has indicated that these increases risks can be reduced, managed or mitigated by ensuring Ontario Building Code compliance when approving new buildings (through consultation with the Fire Department through the process), regular inspection and pre-planning programs, increased high-rise training programs, and adequate staffing resources. When authoring this report, the Chief Building Official (CBO) was not available to provide comment. The Economic Development Commissioner will connect with the CBO, and provide any comments at the Council meeting. FINANCIAL IMPACT/FUNDING SOURCE At this time, there is no anticipate financial impact related to this report and recommendation. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☒ Community growth ☐ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – The Town of Tillsonburg will accommodate and support sustainable growth. Strategic Direction – Work with Oxford County and the development community to proactively plan for a variety of housing options that are affordable and attainable for current and prospective residents Page 496 of 650 EDM 22-17 Page 5 of 5 Priority Project – Identify opportunities for infill development ATTACHMENTS None Page 497 of 650 Page 1 of 3 Subject: Contract Award – RFP 2022-001 Real Estate Services Report Number: EDM 22-18 Department: Economic Development Department Submitted by: Cephas Panschow Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION That the RFP 2022-001 Real Estate Services contract be awarded to Avison Young for a period until December 31, 2023 with the option to extend the contract by two 1 year periods subject to the Town entering into listing agreements for specific properties at the Town’s sole and absolute discretion. BACKGROUND The purpose of this report is to seek Council approval to award the contract for RFP 2022-01 Real Estate Services. Council authorized the release of this Request for Proposals at their January 10, 2022 meeting as per staff report EDM 2022-01. The RFP was released on January 17 with a submission deadline of February 7, 2022. Five proposals were received with three companies being shortlisted for interviews and Avison Young being recommended for Council’s consideration. DISCUSSION A summary of the proposal submitted by the three shortlisted is: Company Name Proposed Commission Fee Real Estate Consulting Fee (Hourly) Opinion of Value Overall Scoring Avison Young 5% (4% if direct) $200/hour $1,500/report 83 Century21 Titans 5 – 6% $250/hour Not provided 38 Page 498 of 650 EDM 22-18 Page 2 of 3 Colliers International 5% up to $1 M, 4% > $1M Not provided $1,500/report 70 GovDeals 5% on top of sale price charged to buyer Not provided Not provided 65 Royal Lepage RE Wood Realty 5% $250/hour $300 68 Based on Avison Young’s experience working with municipalities, extensive experience in the region, project management/marketing strategy expertise, and references provided, the Development Commissioner is recommending that the Town enter into a contract with Avison Young for the period ending December 31, 2023. However, should the Town desire to extend that contract, it will have the option to do so for an additional two 1 year periods. In addition to this, listing agreements for specific properties would be entered into, based on staff’s discretion in terms of suitability and desirability in the marketplace. Typically, lands that are smaller in size, have limited marketability (e.g. alleyways, etc) and are being handled through the Town’s Land Disposition Bylaw would not be listed through the commercial real estate brokerage. Any offers to purchase that the Town is currently negotiating would be excluded from the listing contract. The main intent of listing real estate on the MLS service (realtor.ca) is to increase exposure for industrial lands; however, the RFP does allow for additional engagement of real estate broker services for either acquisitions or sales as desired by the Town. With the first phase of the Van Norman Innovation Park close to being sold out, this includes advice and potential listing of future phases of land in the Park. CONSULTATION The recommendation to move forward with a Real Estate Services Request for Proposal came from the private sector and Economic Development Advisory Committee and was supported by the results of the Town’s Real Estate and Construction Sector Survey, which was released to over 200 real estate and construction sector contacts as well as the members of the Tillsonburg District Real Estate Board. The Director of Recreation, Culture and Parks, the Deputy Treasurer and the Development Commissioner reviewed the proposals received and interviewed the short listed companies. Page 499 of 650 EDM 22-18 Page 3 of 3 FINANCIAL IMPACT/FUNDING SOURCE The financial impact related to this report would be the payment of up to a 5% commission to the Real Estate Brokerage upon the successful completion of a transaction. In addition to this, they would be paid $200/hour for strategy consultation and $1,500 per Opinion of Value on an “as-needed” basis. A broker Opinion of Value, sometimes referred to as a broker's price opinion, is an assessment of a commercial property's value by a commercial real estate broker. The consulting costs would be covered within the Economic Development & Marketing budget (Consulting) and Opinion of Value costs would also be covered by revenues obtained upon the sale of lands. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☒ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – Through community and regional partnerships, Tillsonburg will attract and retain a diverse range of businesses, creating employment opportunities for residents and a balanced tax base. Strategic Direction – N/A Priority Project – Ongoing Projects - Marketing and build out of Van Norman Innovation Park ATTACHMENTS 1. Proposed Contract 2. Listing Agreement – Commercial Page 500 of 650 Page 501 of 650 Page 502 of 650 Page 503 of 650 Page 504 of 650 Page 505 of 650 Page 506 of 650 Page 507 of 650 Page 1 of 5 Subject: Offer to Purchase – Part of Lot 4, Van Norman Innovation Park Report Number: EDM 22-19 Department: Economic Development Department Submitted by: Cephas Panschow Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT a by-law be brought forward to authorize the Mayor and Clerk to enter into an agreement of purchase and sale with Schep’s Bakeries Ltd for property described as part of Block 1, Plan 41M-381 (part of lot 4) in the Van Norman Innovation Park. BACKGROUND The purpose of this report is to seek direction to move forward with an offer to purchase received for approximately 12.61 Acres of land in the Van Norman Innovation Park (VIP) to enable a 142,000 square foot expansion of a food processing company and the creation of 100 jobs in the Town of Tillsonburg. DISCUSSION The 12.61 Acre parcel of land and the 3.67 Acre Right of First Refusal (snow storage) lands are shown in Figure 1. Page 508 of 650 EDM 22-19 Page 2 of 5 Figure 1 – Subject Property (12.61 Acres) Page 509 of 650 EDM 22-19 Page 3 of 5 The Offer to Purchase summary is: Offer Summary Price $694,100 Acreage 12.61 Acres Price/Acre $55,044/Acre Proposed Uses Expansion of existing food processing use. Proposed Building Size(s) 26% lot coverage or 142,000 SF Anticipated Employment Projecting 100 employees within 2 years of start-up and potentially up to 200 employees in the future Purchaser Conditions Viability of project based off a pre- consultation meeting with the Town of Tillsonburg, including the Service providers, (Hydro, Water Supply & Disposal) The Town will receive, review site plan, site servicing and building permit applications prior to closing, upon completion of successfully waiving conditions Note: Purchaser has submitted a Community Improvement Plan application for a 50% rebate of the Building Permit fee. Timelines for Development Start of construction within 1 year of closing and completion within 2 years As noted in the above table, the purchaser has also submitted a Community Improvement Plan application for a 50% Building Permit Fee rebate. This application will be brought forward for consideration should Council move forward with this offer to purchase. Based on the proposed construction of a 142,000 SF food processing building, estimated creation of 100 to 200 jobs, and the company being in the town’s targeted sector of Food Processing, the Development Commissioner is recommending that Town Council move forward with the Offer to Purchase received. Page 510 of 650 EDM 22-19 Page 4 of 5 CONSULTATION The Van Norman Innovation Park has been well advertised including on the Town’s website, an on-site sign that has been present since 2009 and many different marketing opportunities and advertisements. The offer to purchase has been reviewed by Duncan, Linton LLP. The proposal was reviewed with the Economic Development Advisory Committee at their May 10, 2022 meeting and the following resolution was approved: THAT the Economic Development Advisory Committee recommends to keep the lot as one 12.6 acres and preference would be to sell it to the food processing company. With respect to the Right of First Refusal for the Town’s current Snow Storage/Melt area, this has been reviewed with the Director of Operations who has indicated that it is their recommendation that the Town not sell these lands at this time. Should the Town not require these lands within three years of the proposed transfer taking place, the purchaser would have the right to purchase these lands. FINANCIAL IMPACT/FUNDING SOURCE The offer to purchase has been submitted at $55,044 per acre, which is above the Town’s asking price of $50,000 per Acre. The land sale revenue from this transaction will be used to pay the Town’s legal and closing costs with the net amount being contributed to the Economic Development Reserve. If the legal and closing costs total $10,000, the net reserve contribution would be $684,100. The funds in the Economic Development Reserve will be used to offset all expenditures related to the development of the Van Norman Innovation Park including servicing costs required to enable the development to proceed. Based on BMA 2021 data of $1.03 per square foot in tax revenue for a standard industrial building, the tax revenue for the proposed 142,000 square foot building would be $146,260. It is important to note that, due to the significant increases in assessed values being experienced across the Province, a new industrial building could have a significantly higher assessed value (although the assessed value would still have to be in line with the existing industrial assessments in the area). Hence, the potential tax revenue might be higher. Page 511 of 650 EDM 22-19 Page 5 of 5 CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☒ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – Through community and regional partnerships, Tillsonburg will attract and retain a diverse range of businesses, creating employment opportunities for residents and a balanced tax base. Strategic Direction – Ensure adequate supply of “shovel ready” land for business attraction and expansion. Priority Project – Ongoing Projects - Marketing and build out of Van Norman Innovation Park and Increase diversity in manufacturing and other key sectors ATTACHMENTS Appendix A – Offer to Purchase Page 512 of 650 Page | i Buyer’s Initials______ Seller’s Initials______ AGREEMENT OF PURCHASE AND SALE (the “Agreement” or “APS”) BETWEEN THE CORPORATION OF THE TOWN OF TILLSONBURG (the “Vendor”) -and- Schep’s Bakeries Ltd. (the “Purchaser”) WHEREAS the Vendor is the owner, in fee simple, of the lands and premises described in Schedule “A” (the “Property”); NOW THEREFORE IN CONSIDERATION of the mutual covenants and premises in this Agreement, the parties agree as follows: SECTION I - GENERAL 1. The Purchaser agrees to purchase the Property and the Vendor agrees to sell the Property according to the terms of this Agreement. 2. In consideration of the agreement referred to in the preceding paragraph, the Purchaser shall pay to the Vendor a Price of Six Hundred Ninety Four Thousand & One Hundred Dollars ($694,100.00). 3. The Purchase Price shall be paid as follows: (a) Forty Thousand, ($40,000) deposit is payable by the Purchaser by certified cheque upon Acceptance of this Agreement, to be held on an interest free basis by the Vendor as a deposit pending completion of this transaction on account of the Purchase Price on completion, or if this Agreement is not completed through no fault of the Purchaser, the deposit shall be returned to the Purchaser; and (b) the balance of the Purchase Price, subject to adjustments, shall be paid to the Vendor on the Completion Date, by certified cheque or bank draft. SECTION II - PURCHASE OF PROPERTY 4. Irrevocable Date (a) The parties agree and acknowledge that negotiation of this APS is not a valid and binding agreement until accepted by the Council of The Corporation of the Town of Tillsonburg. The Chief Administrative Officer of the Town of Tillsonburg, or his or her designate, shall negotiate the terms of this APS in good faith. However, the negotiation of the terms of this APS by the Chief Administrative Officer of the Town of Tillsonburg, or his or her designate, in no ways binds The Corporation of the Town of Tillsonburg until such time as this APS is authorized and approved by the Council of The Corporation of the Town of Tillsonburg. (b) Acceptance shall mean the date upon which the Mayor and Clerk of the Town of Tillsonburg, or such other persons as the Vendor may authorize from time to time, sign and execute this APS subsequent to the requirement that the Council of The Corporation of the Town of Tillsonburg has passed a resolution or by-law authorizing and approving the sale of the Property to the Purchaser pursuant to the terms of this APS. Page 513 of 650 Buyer’s Initials______ Seller’s Initials______ (c) This APS shall be irrevocable and open for acceptance by the Vendor until 6:00 p.m. on the 29th of July, 2022 (“Acceptance”), and when accepted shall constitute a binding contract of purchase and sale, otherwise the APS shall be null and void and all deposit monies paid shall be returned to the Purchaser without deduction. 5. Council Approval (a) This transaction is subject to compliance with Section 270 of the Municipal Act, 2001, S.O. 2001, c. 25 as amended and the approval of the Council of The Corporation of the Town of Tillsonburg in its sole and absolute discretion by resolution or by-law. If Council approval is not obtained on or before the Completion Date, then this Agreement shall be null and void and any deposits paid by the Purchaser shall be returned to the Purchaser without interest or deduction. 6. Deed/Transfer (a) The Vendor agrees to deed or transfer the Property to the Purchaser subject to the terms of this Agreement. 7. Completion Date (a) The closing of this transaction shall take place on the 1st day of February, 2023 or such other date as mutually agreed upon (the “Completion Date”) at which time possession of the Property in "as is, where is" condition shall be given to the Purchaser other than as provided in this APS. The Vendor acknowledges that it has the right and authority to sell the Property. 8. Documents, Reports and Information (a) The Vendor will produce and deliver to the Purchaser within twenty-eight (28) days of Acceptance of the APS any documents, reports or information in its possession in respect to the Property. The Purchaser agrees to return all of the above documentation to the Vendor if this transaction is not completed. SECTION III - CONDITIONS, REPRESENTATIONS AND WARRANTIES 9. Property Not for Resale (a) The Purchaser covenants that it is purchasing the Property for the construction of a building and not for the purpose of resale of vacant land. 10. Development Covenants and Restrictions (a) The Property shall be subject to the development covenants and restrictions more particularly set out in Schedule “D” attached to this APS, which shall survive the completion of this transaction and run with the Property. The development covenants and restrictions shall be registered on title by the Vendor. In the event that the said covenants and restrictions are not registered on title to the Property on or before closing, the Purchaser covenants and agrees to consent to the registration of the covenants and restrictions after closing. 11. Investigation by the Purchaser (a) The Purchaser acknowledges having inspected the Property prior to executing the APS and understands that upon Acceptance by the Vendor, and subject to any conditions herein, there shall be a binding agreement of purchase and sale between the Purchaser and the Vendor. It shall be the Purchaser's responsibility to provide, at its own expense, any soil bearing capacity tests or environmental inspection, as may be required or desired, and the Vendor shall grant the Purchaser access for such testing or inspection at all reasonable times, on reasonable notice, for the purpose of conducting reasonable inspections. Page 514 of 650 Buyer’s Initials______ Seller’s Initials______ 12. Future Use (a) The Vendor and the Purchaser agree that there is no condition, express or implied, representation or warranty of any kind that the future intended use of the Property by the Purchaser is or will be lawful except as may be specifically stipulated elsewhere in this Agreement. 13. Reasonable Assistance (a) The Vendor agrees to provide reasonable assistance and co-operation to the Purchaser in obtaining the necessary approvals for the development of the Property subject to the Purchaser’s compliance with all relevant building codes, by-laws, land use controls, any other statutory requirements and payment of the fees provided for in the Town of Tillsonburg’s current fees by-law. 14. “As Is” Condition (a) The Purchaser acknowledges that it is acquiring the Property in an “as is” condition and that it must satisfy itself by Nov 1st 2022 regarding the condition of the Property including, but not limited to, all existing physical conditions of this Property, environmental conditions, fitness for any purpose, suitability for construction, soil bearing capacity for any building proposed, and the availability of municipal services and utilities necessary for the Purchaser’s proposed use of the Property. The Purchaser acknowledges that the Vendor shall not be responsible for any physical deficiencies of the Property or for any past, present or future environmental liabilities and hereby waives any claims against the Vendor in respect of any environmental liabilities on the Property. The Purchaser agrees to sign a release and indemnity in favour of the Vendor on or before closing with respect to matters set out in the preceding sentence. If the Purchaser is for any reason whatsoever dissatisfied with the Property, it shall deliver written notice to that effect to the Vendor by no later than the time specified herein, and this Agreement shall be terminated and the deposit shall be returned to the Purchaser without interest or deduction. If the Vendor is notified that the condition of the Property is not satisfactory, then the Purchaser shall, prior to receiving its deposit monies back and prior to being entitled to a full release from the Vendor with respect to this Agreement, restore the Property to its original condition as it existed prior to such testing or inspection by the Purchaser, at the Purchaser’s sole expense. If the Purchaser fails to deliver written notice to the Vendor within the time specified herein regarding this condition, this condition shall be deemed to have been waived by the Purchaser. SECTION IV - PRIOR TO COMPLETION DATE 15. Purchaser May Inspect the Property (a) The Purchaser, its agents and contractors shall be permitted to inspect the Property and any buildings as frequently as is reasonably necessary between the date of Acceptance and the Completion Date at reasonable times and upon reasonable notice to the Vendor. 16. Insurance (a) Pending closing, the Vendor shall hold all insurance policies and the proceeds thereof in trust for the parties as their interest may appear and in the event of damage to the Property, unless such damage is caused by the Purchaser. The Purchaser may elect to either receive the proceeds of the insurance and complete the purchase or to cancel the APS and have all the deposit monies paid to the Vendor returned together with all interest earned thereon without deduction. SECTION V - COMPLETING THE TRANSACTION 17. Examination of Title (a) Title to the Property shall be good and marketable and free from all encumbrances except for any service easements or rights-of-way to be reserved in favour of the Vendor and for any easements or rights-of-way registered on title and any minor encroachments shown on the survey or Reference Plan delivered to the Purchaser. Any required easement shall be in the form set out in Schedule “C”. Page 515 of 650 Buyer’s Initials______ Seller’s Initials______ (b) The Purchaser is allowed until one week prior to closing to examine the title to the Property. If on or before this date the Purchaser furnishes the Vendor in writing with any valid objections: to the title; to any undisclosed outstanding work orders; to undisclosed non-compliance with the municipal by-laws or covenants and restrictions which run with the land and cannot be resolved before the Completion Date; as to any objection of which the Vendor shall be unable to remedy or correct by the Completion Date and which the Purchaser will not waive, then this APS shall, notwithstanding any intermediate acts or negotiations, be terminated and the deposit shall be returned to the Purchaser without deduction and the Vendor and the Purchaser shall not be liable for any costs, damages, compensation or expenses. 18. Survey or Reference Plan (a) The parties acknowledge that a survey may be required and a Reference Plan may be registered on title and may be used to provide a registrable description of the Property and any easements. 19. Vendor to Discharge all Encumbrances (a) The Vendor agrees to obtain and register at its own expense, on or before the Completion Date, a discharge of all liens, encumbrances, agreements and mortgages now registered against the Property and not assumed by the Purchaser. The Vendor further covenants and agrees to discharge, on or before the Completion Date, any and all liens, chattel mortgages, assignments or any other security interest given by the Vendor against its personal Property. 20. Harmonized Sales Tax (a) If the sale of the Property is subject to Harmonized Sales Tax (HST) under the Excise Tax Act, R.S.C., 1985, c. E-15 (the “Act”), then such tax shall be in addition to Purchase Price. The Vendor shall provide the Purchaser with its HST Business Number. The Purchaser shall pay to the Vendor any HST imposed under the Act payable in connection with the transfer of the Property to the Purchaser, or as it may direct, unless the Purchaser or its nominee, or its assignee, provides: (i) a certificate on or before the Completion Date containing a representation and warranty to the Vendor that: (1) it is registered for the purpose of the HST on the Completion Date and specifying the HST registration number; (2) it will self-assess the HST on its GST/HST return or file the prescribed form pursuant to subsection 228(4) of the Act in connection with the purchase of the Property; (3) the Property transferred pursuant to this APS is being purchased by the Purchaser, or its nominee or assignee, as principal for its own account and is not being purchased by the Purchaser as agent, trustee or otherwise on behalf of or for another person, and does not constitute a supply of residential complex made to an individual for the purpose of paragraph 221 (2)(b) of the Act; (4) an indemnity, indemnifying and saving harmless the Vendor from any HST payable on this transaction and penalty and interest relating to HST; and (5) a notarial true copy of its HST registration confirmation. (b) If the Property is not subject to HST, the Vendor agrees to certify on or before the Completion Date that the transaction is not subject to HST. 21. Adjustments (a) The Vendor agrees that all deposits, if any, held by the Vendor not including interest thereon shall be credited to the Purchaser in the Statement of Adjustments prepared for the Completion Date. (b) Any rents, mortgage, interest, taxes, local improvements, water and assessment rates shall be apportioned and allowed to the Completion Date, the day itself to be apportioned to the Purchaser. Page 516 of 650 Buyer’s Initials______ Seller’s Initials______ 22. Deliveries by the Vendor To The Purchaser on Closing (a) The Vendor covenants and agrees to deliver to the Purchaser on the Completion Date, all such deliveries to be a condition of the Purchaser’s obligation to close this transaction, the following: (i) a deed/transfer of the Property; (ii) any survey or reference plan of the Property in the possession of the Vendor; (iii) a Statutory Declaration by an authorized officer of the Vendor stating that accurateness and truthfulness of all of the representations and warranties; (iv) a Statutory Declaration by an authorized officer of the Vendor as to possession of the Property in a form acceptable to the solicitors for the Purchaser; (v) a Statutory Declaration by an authorized officer of the Vendor that it is not now, and upon completion will not be, a “non-resident person” within the meaning and for the purpose of Section 116 of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) as amended; (vi) certified copies of all appropriate certificates, by-laws and other documents of Vendor authorizing the transaction herein; and (vii) such further documentation and assurances as the Purchaser may reasonably require to complete the transaction contemplated by the APS. 23. Deed/Transfer (a) The Deed or Transfer of the Property will be prepared at the expense of the Vendor in a form acceptable to the solicitors for the Purchaser and the Purchaser will pay all Land Transfer Tax, Harmonized Sales Tax and other costs in connection with the registration of it. 24. Electronic Registration (a) The parties agree that the transaction shall be completed by electronic registration pursuant to Part III of the Land Registration Reform Act, R.S.O. 1990, c.L.4 as amended. The parties acknowledge and agree that the delivery and release of documents may, at the discretion of the lawyer: a) not occur contemporaneously with the registration of the transfer/deed and other registrable documentation, and b) be subject to conditions whereby the lawyer receiving documents and/or money will be required to hold them in trust and not release them except in accordance with the terms of a written agreement between the lawyers entered into in the form of the Document Registration Agreement adopted by the Joint LSUC-OBOA Committee on Elective Registration of Title Documents. SECTION VI - MISCELLANEOUS 25. Entire Agreement (a) There is no representation, warranty, collateral agreement or condition affecting this Agreement of the Property other than expressed herein. 26. Acceptance by Fax or Email (a) The Purchaser and Vendor acknowledge and agree that the communication of this Agreement of Purchase and Sale may be transmitted by way of facsimile or electronic mail, and that they agree to accept such signatures and documents to be legal and binding upon them. 27. Counterparts (a) This Agreement may be signed in any number of counterparts, each of which is considered to be an original, and all of which are considered to be the same documents. Page 517 of 650 Buyer’s Initials______ Seller’s Initials______ 28. Tender (a) Any tender of documents or moneys hereunder may be made upon the solicitor acting for the party upon whom tender is desired, and it shall be sufficient that a negotiable, certified cheque or bank draft may be tendered instead of cash. 29. Time of Essence (a) Time shall be of the essence of this Agreement. 30. Planning Act (a) This Agreement shall be effective only if the provisions of Section 50 of the Planning Act, R.S.O. 1990, c.P.13, as amended are complied with. 31. Notices (a) All notices in this Agreement shall be in writing and shall be deemed to have been given if delivered by hand or mailed by ordinary mail, postage prepaid, addressed to the solicitor for the person to whom such notice is intended to be given at the following addressed: Solicitors for the Vendor: Duncan, Linton LLP ATTENTION: Adrian Rosu 45 Erb Street West Waterloo, ON N2J 4B5 Fax: (519) 886-8651 with a copy delivered to: The Corporation of the Town of Tillsonburg ATTENTION: Development Commissioner 204-200 Broadway Tillsonburg, ON N4G 5A7 Fax: 519-842-9431 Solicitors for the Purchaser: Jo-Ann Hanson Law Office ATTENTION: Jo-Ann Hanson 1 Main St W, Norwich, ON N0J 1P0 519-863-2529 If mailed, such notices must also be given by facsimile transmission on the date it was so mailed. If so given, such notices shall be deemed to have been received on the first business day following the date it was delivered or marked mailed out. 32. Schedules (a) The following Schedules shall form an integral part of this Agreement: (i) Schedule “A” Description of the Property; (ii) Schedule “B” Purchaser Conditions; (iii) Schedule C” Easement; and, (iv) Schedule “D” Development Covenants. Page 518 of 650 Buyer’s Initials______ Seller’s Initials______ 33. Successors and Assigns (a) The Purchaser shall not assign its rights, title, or interest in and to this APS. Notwithstanding the foregoing, and subject to Section 10 of this APS, the Purchaser may assign its rights, title, or interest in and to this APS to a related person (as that term is defined in Section 251(2) of the Income Tax Act, R.S.C., 1985, c. 1) upon the Vendor’s written consent, which consent may be granted or withheld at the Vendor’s sole option. Subject to the foregoing restrictions, the Vendor agrees to engross the Transfer/Deed of Land as directed by the Purchaser on the completion Date as the Purchaser may elect, and the Vendor agrees to complete the transaction contemplated by this APS on the Completion Date with such assignee or nominee. The Purchaser is released from all liability hereunder, if it assigns its interest in this APS. This Agreement shall be binding upon the parties hereto and their respective successors and assigns. 34. Severability (a) If any provision of this Agreement, or the application thereof to any circumstances, shall be held to be invalid or unenforceable, then the remaining provisions of this Agreement, or the application thereof to other circumstances, shall not be affected, and shall be valid and enforceable. IN WITNESS WHEREOF the Purchaser has executed this Agreement: Dated at ___________________, Ontario this _______ day of ______________, 2022. ** Per: _________________________________ Name: Title: _________________________________ Name: Title: I/We have authority to bind the Corporation. The Vendor hereby accepts this Agreement according to its terms. Dated at Tillsonburg, Ontario this _______ day of ______________, 2022. IN WITNESS WHEREOF the Vendor has executed this Agreement: The Corporation of the Town of Tillsonburg _________________________________ Stephen Molnar Mayor _________________________________ Michelle Smibert Clerk We have authority to bind The Corporation of the Town of Tillsonburg. Jacco Schep Owner Norwich 30th June Page 519 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “A” - LEGAL DESCRIPTION OF THE PROPERTY ALL AND SINGULAR that certain parcel or tract of land and premises situated, lying and being in the Town of Tillsonburg in the County of Oxford, being compromised of part of Lots 1 and 2, Concession 5, North of Talbot Road, Town of Tillsonburg, part of Block 1, Plan 41M-381 (the entire parcel shown in black) The estimated area of the Property is 12.61 acres, more or less. S Page 520 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “B” – PURCHASER CONDITIONS 1. The transaction of purchase and sale contemplated herein shall be subject to the fulfillment of the following terms and conditions on or before Sept 15th, 2022, which terms and conditions are for the exclusive benefit of the Purchaser and may be waived in whole or in part by the Purchaser. If the conditions are not fulfilled or waived then the deposit shall be returned and Agreement arising from the offer shall be at an end and all parties released from their obligations: (a) On Viability of project based off a pre-consultation meeting with the Town of Tillsoburg, including the Service providers, (Hydro, Water Supply & Disposal) (b) The Town will receive and review, site plan, site servicing and building permit applications prior to closing, upon completion of successfully waiving conditions. (c) Grant of Right of First Refusal (i) The vendor hereby grants the Purchaser a right of first refusal on 3.67 Acres of adjacent lands currently used by the Vendor for snow storage/melt purposes (the “adjacent lands”) or any portion thereof in accordance with the terms herein below (the “right of first refusal”). (ii) Term (1) If, within three (3 years from the date of the property being transferred, the Vendor (a) determines that it no longer requires the Adjacent Lands or receives either (b) a bona fide written offer by a willing third party to purchase all or a portion of the Adjacent lands with the Vendor intends to accept, or (c) an agreement of purchase and sale which the Vendor intends to enter into (individual and collectively, an “offer”),then the Vendor shall give written notice to the Purchaser at the address provided herein below accompanied by a true copy of such Offer as soon as reasonably possible. (iii) Exercise of Right of First Refusal (1) Within 10 days after receipt of the written notice, the Purchaser shall have the right to give written notice to the Vendor at the address herein that it is exercising the Right of First Refusal and will purchase the Adjacent Lands pursuant to an agreement of the purchase and sale which incorporates the terms of the Offer. (iv) Expiry (1) If the purchaser fails to exercise the Right of First Refusal within the stated time above, the Right of First Refusal shall cease to have any force or effect. Page 521 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “C” - EASEMENT TERMS AND PROVISIONS OF THE EASEMENT: l. The Owner hereby grants, conveys and confirms to The Corporation of the Town of Tillsonburg (the “Town”), its successors and assigns, in perpetuity, the free, uninterrupted and undisturbed right and easement to enter upon the lands herein described at any time for the purposes of constructing, installing and maintaining all municipal services of any kind (including water distribution pipes and sanitary and storm sewers) in, under, over and upon the said lands, and with the further and continuing right to the Town, its successors and assigns, and its servants, agents and workers to enter upon the lands at any time to construct, repair, correct, operate, replace and maintain at all times in good condition and repair the municipal services and for every such purpose the Town shall have access to the said lands at all times by its agents, servants, employees and workers. 2. The Town covenants and agrees that, upon completion of any work undertaken hereunder, the Town will restore the areas of land upon which it has performed work to the same condition as that in which the lands were found prior to the commencement of the work. 3. The Owner covenants with the Town to keep the lands herein described free and clear of any trees, buildings, structures or other obstructions which may limit the use, operation, repair, replacement or maintenance of the easement and to use the lands herein described only in a manner and for purposes not inconsistent with the exercise of the rights created by this indenture and without limiting the generality of the foregoing, only as a yard, lawn, garden, flowerbed, roadway, driveway or parking area and the Owner agrees not to do or suffer to be done anything which might injure any of the works of the Town hereon. The term “building” as set out herein shall specifically include any window sills, chimney breasts, cornices, eaves or other architectural features projecting from the first floor of the building but shall not include window sills, chimney breasts, cornices, eaves or other architectural features projecting from the second floor of the building by less than two (2) feet and such second floor projections shall be specifically authorized and allowed to encroach upon the lands herein described. 4. The Town, by the acceptance and registration of the within easement, agrees to be bound by the terms and provisions contained herein. 5. The burden and benefit of this easement shall run with the lands herein described and shall extend to and be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. 6. This is an easement in gross. Page 522 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “D” DEVELOPMENT COVENANTS 1. Title Control (a) The owner or owners of the property (the “Owner”) upon which these development covenants attach (the “Property”) covenants and agrees that it may not use the Property for its intended use and may not retain ownership of the Property unless the Owner has constructed a building for such use including obtaining a building permit for a permanent building with a minimum building coverage of twenty percent (20%) of the total area of the Property. The Owner further covenants and agrees to commence construction of a permanent building on the Property which complies with the permitted uses of the Property’s zoning within one (1) year of the date the Owner took title to the Property being the date of registration of transfer (the “Completion Date”) and to substantially complete the construction of the said building in conformity with an approved site plan within two (2) years from the Completion Date of this transaction. (b) In the event that the Owner has not obtained a building permit in accordance with the provisions of subclause 1.a) above, the Owner may request from The Corporation of the Town of Tillsonburg (the “Town of Tillsonburg”), in writing, an extension of the time specified in subclause 1.a) above up to a maximum extension period of six (6) months, (such extension, the “Extended Time”) upon payment by the Owner to the Town of Tillsonburg of a performance deposit equal to ten (10%) percent of the purchase price of the Property (the “Performance Deposit”). The Performance Deposit shall be refunded to the Owner, without interest, upon the Owner’s compliance with and completion of the provisions of subclause 1.a) above within the Extended Time. In the event that the Owner fails to complete construction within the Extended Time, then the Town of Tillsonburg shall, in addition to its other rights and remedies as set out herein or otherwise, be entitled to retain the Performance Deposit as liquidated damages and not as a penalty, in partial or full satisfaction of the Town of Tillsonburg’s damages. (c) If the Owner does not comply with the provisions of subclause 1.a) above within the periods therein specifically set out or within the Extended Time, the Owner, will, at the option of the Town of Tillsonburg by notice in writing to the Owner, re-convey good title to the Property to the Town of Tillsonburg, free and clear of all encumbrances, in consideration for payment by the Town of Tillsonburg to the Owner of 90% of the purchase price paid by the Owner to the Town of Tillsonburg for the conveyance of the Property in the first instance (the “Discounted Consideration”). The re-conveyance shall be completed within sixty (60) days of the notice set out in this subclause. The Town of Tillsonburg shall be allowed to deduct from the Discounted Consideration all of its reasonable costs, realty commission and legal fees incurred with respect to the original conveyance of the Property by the Town of Tillsonburg to the Owner, as well as the costs of the Town of Tillsonburg in re-acquiring the Property, including without limitation, realty commission, registration costs, land transfer tax, legal fees and such other costs as reasonably incurred by the Town of Tillsonburg. The Town of Tillsonburg shall not be required to pay for any improvements that may have been made, constructed, installed or performed by the Owner on the Property. (d) Subject to subclause 1.c) above, the Owner covenants that it will not sell the Property or any part thereof to any person, firm or corporation without first offering, in writing, to sell the Property to the Town of Tillsonburg for consideration equal to or less than the consideration paid by the Owner to the Town of Tillsonburg in the original conveyance of the Property less the costs of the Town of Tillsonburg incurred in re-acquiring the Property, including without limitation, real estate commission, land transfer tax, registration costs, legal fees and such other costs as reasonably incurred by the Town of Tillsonburg, provided however that the Owner may sell or transfer the Property to a subsidiary or affiliate corporation as defined in the Business Corporations Act, R.S.O. 1990, c.B.16 as amended, provided such subsidiary assumes and confirms its acceptance of the within covenants and restrictions and expressly undertakes in writing to comply with them in such form as the Town of Tillsonburg may require. The Town of Tillsonburg shall have ninety (90) days from the receipt of an offer made by the Owner under this subclause, to accept such offer which acceptance shall be in writing. If the Town of Tillsonburg does not accept an offer to sell made by the Owner under the provisions of this subclause, the Town of Tillsonburg’s right to repurchase the Property so offered shall terminate. However, the remaining provisions of this clause 1 as well as other provisions herein shall continue in full force and effect. The limitation contained in this subclause, will expire upon the Owner fulfilling all of the building requirements as set out in subclause 1.a) and 1.b) above. Page 523 of 650 Buyer’s Initials______ Seller’s Initials______ 2. Town of Tillsonburg Option on Vacant Portion of Land (a) The Town of Tillsonburg shall have the option to repurchase such vacant portion of the Property not used by the Owner for the construction building(s) thereon provided such land is not reasonably ancillary to the Owner’s use and occupation of the said building. (b) This option shall only be exercisable if the Owner has not constructed permanent buildings with a minimum building coverage of thirty percent (30%) of the total area of the Property. (c) The option shall be exercisable by the Town of Tillsonburg for consideration equal to the per square foot consideration paid by the Owner to the Town of Tillsonburg in the original conveyance of the Property. Any costs incurred by the Town of Tillsonburg in re-acquiring the subject portion of the Property, including without limitation, real estate commission, land transfer tax, registration costs, legal fees and such other costs shall be at the cost of the Town of Tillsonburg. (d) This option expires ten (10) years from the Completion Date. 3. Development Standards (a) The Owner shall not construct and maintain a building unless the exterior of the wall or walls of any building or structure facing any municipal street is constructed of a minimum sixty (60) percent brick, precast stone, glass, pre-cast concrete or alternative non-steel materials and subject to approval by the Town of Tillsonburg, in their sole and absolute discretion, acting reasonably, through the Town’s Site Plan Approval process. (b) The Owner shall not use the Property unless any portion of any area of the Property to be used for open storage shall not be left so that any area is unenclosed, and any such areas shall be enclosed and designed so that the storage area is not visible from any municipal street. No storage shall be permitted within any set back area as set out in the Town of Tillsonburg Zoning By-Law, nor in front of any building or structure facing any municipal roadway. (c) The Owner hereby acknowledges that it is aware that the Property is designated as within a site plan control area. The Owner shall not commence any construction or use the Property until site plan approval has been obtained. The external building materials used on any building to be constructed on the Property must be approved in writing in advance by the Town of Tillsonburg as part of such site plan control approval process. 4. Assignment of Covenants (a) The Owner acknowledges and agrees that the covenants and restrictions herein shall run with the title to the Property. The Owner, for itself, its successors, heirs, and assigns in title from time to time of all or any part or parts of the Property will observe and comply with the stipulations, restrictions, and provisions herein set forth (the “Restrictions”), and covenants that nothing shall be erected, fixed, placed or done upon the Property or any part thereof in breach or in violation or contrary to the Restrictions or the provisions of the agreement of purchase and sale between the Owner and the Town of Tillsonburg and that the Owner will require every subsequent purchaser or every successor in title to assume and acknowledge the binding effect of this document, as well as, covenant to observe and comply with the Restrictions and other covenants herein, and the surviving provisions of this Agreement of Purchase and Sale. 5. Force Majeure (a) If the Owner shall be unable to fulfill, or shall be delayed or restricted in fulfilling any of the obligations set out herein due to any act or neglect of the Town of Tillsonburg or any of its employees, or due to strikes, walkouts, lockouts, fire, unusual delay by common carriers, or by any other cause beyond the Owner’s reasonable control, then the time for fulfilling any such obligations shall be extended for such reasonable time as may be required by the Owner to fulfill such obligation. 6. Right to Waive (a) Notwithstanding anything herein contained, the Town of Tillsonburg and its successors shall have the power by instrument or instruments in writing from time to time to waive, alter or modify the herein covenants and restrictions with respect to their application to any part of the Property without notice to or approval from the Owner or notice to or approval from the owners of any other adjacent or nearby lands. Page 524 of 650 Page 1 of 3 SUBJECT: Council Expense Policy Amendments Report Number: FIN 22-17 Department: Finance Department Submitted by: Renato Pullia, Interim Director of Finance/Treasurer Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT the amendments to the Council Expense Policy 2-008 be approved, effective July 1, 2022. BACKGROUND Council Expense Policy 2-008, approved June 25, 2018, governs the reimbursement of expenses incurred by Members of Council and Members of the Property Standards Appeal Committee in performing the responsibilities and duties of their office. Expense policies are not just a matter of an administrative process to reimburse for out of pocket costs. There are tax considerations that are determined by the Income Tax Act, and Income Tax Regulations.1 While the policy was reviewed in 2021, revisions are being proposed now to provide clarification, to align with Canada Revenue Agency (CRA) administrative positions, and to align with revisions to the staff expense reimbursement policy. DISCUSSION A summary of the amendments is as follows: 1. In Sec. 5.4 d), mileage reimbursement rate is currently a static amount, therefore would require a policy amendment each time the rate is to be changed. The 1 https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits- allowances/municipal-officer-s-expense-allowance.html Page 525 of 650 FIN 22-17, Council Expense Policy Amendments Page 2 of 3 recommended amendment is to benchmark the rate to CRA’s ‘reasonable per- kilometre allowance’2 for the given year, which for 2022 is 61 cents per kilometre. 2. In Sec. 5.6 a) and b), changing the word ‘allowance’ to ‘reimbursement’, to be in line with CRA’s definitions3: a. “An allowance or an advance is any periodic or lump-sum amount that you pay to your employee on top of salary or wages, to help the employee pay for certain anticipated expenses without having them support the expenses.” b. “A reimbursement is an amount you pay to your employee to repay expenses they incurred while carrying out the duties of employment. The employee has to keep proper records (detailed receipts) to support the expenses and give them to you.” As well, currently there are daily maximums for either breakfast ($20/day), lunch ($25/day) or dinner ($50/day), which altogether total $95 per day. The recommendation is to change the rate to a consolidated maximum of up to $100 per day, with receipts, that can be apportioned between the three meals. This is to reflect the differences in costs for such meals between various locations across the Province. 3. In Sec. 5.7, language is added to encourage Purchasing Card usage or a personal credit card for expenses in foreign currency, as the credit card company handles the currency conversion. 4. In Sec. 5.8, clarity is provided on the list of eligible expenses to include Internet service at home for the members to perform the responsibilities and duties of their office. According to CRA, if the Town pays for, or reimburses the cost of a member's cell phone service plan or Internet service at home to help carry out their employment duties, the portion used for employment purposes is not a taxable benefit.4 a. When a member submits an expense form for Internet service costs, supported by a receipt, the member should only submit the business portion only. Unless there is a portion identified as being for personal use, the full amount submitted would be deemed as used for employment purposes (see Policy Sec. 3.4 b) iv). 2 https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits- allowances/automobile/automobile-motor-vehicle-allowances/reasonable-kilometre-allowance.html 3 https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits- allowances.html 4 https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits- allowances/provided/cellular-phone-internet-services.html Page 526 of 650 FIN 22-17, Council Expense Policy Amendments Page 3 of 3 b. Similarly, home office expenses used to carry out the duties of the member’s office, would be reimbursed when supported by a receipt. 5. In Sec. 5.9, a recommendation for clarity that ‘land lines’ is the same as a fixed phone line, to distinguish from Internet service. 6. Sec 5.11 is recommended to be deleted, as the current Sec. 5.12 requires that expenses be submitted on a monthly basis. This could be at the end of the month of when expenses are incurred or at the beginning of the following month. Feb. 1st should be the latest submission date for any prior month expenses. FINANCIAL IMPACT Impact to the budget would be minimal, but dependent on usage of reimbursable costs. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☒ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal - The Town of Tillsonburg will strive for excellence and accountability in government, providing effective and efficient services, information, and opportunities to shape municipal initiatives. Strategic Direction – N/A Priority Projects – N/A ATTACHMENTS 1. Appendix A – Policy 2-008, Council Expense Policy, Redline version Page 527 of 650 2-008 Page 1 of 6 COUNCIL AND BY-LAW Policy 2-008: Council Expense Policy Approval Date: June 25, 2018 Approval Authority: Council, By-Law 4206 Effective Date: June 25, 2018 Next Scheduled Review Year: 2025 Department: Office of the Clerk Last reviewed: 2021 Revision Date/s: Schedules: 1. Policy Statement The Council/Local Board Expense Policy governs the reimbursement of expenses incurred by Members of Council and Members of Local Boards during activities related to the Business of the Town of Tillsonburg. Members of the Tillsonburg Town Council and Members of Local Boards will be provided with fair and reasonable expense reimbursement for performing the responsibilities and duties of their office. 2. Definitions “Council” means the council of the Town of Tillsonburg. "Local Board" shall mean one of the following boards and committees established by the Council:  Property Standards Appeal Committee "Member of Council" or "Member" means any person duly elected or appointed to serve on the Council of the Town of Tillsonburg or Local Board. Page 528 of 650 Page 2 of 6 “Town” means The Corporation of the Town of Tillsonburg. 3. Purpose 3.1. The objective of this policy is to provide consistent rules and guidelines to Members with respect to Eligible Expenses incurred in performing their duties. 3.2. The policy provides specific and clear direction regarding diverse expenses, and clarifies what are Eligible Expenses and Ineligible Expenses. 3.3. The policy establishes the provision of public access to expense information of Members. 3.4. The policy captures the following principles: a) Maintain Integrity of the Member i. The integrity of a Member as a whole and the offices of the Members must be protected; and ii. The interest of a Member as a whole takes precedence over the personal interest of individual Members. b) Maintain Accountability i. Members are the stewards of resources and are ultimately accountable to the public for the type and level of expenses they incur; ii. Since members use public funds when they perform their duties, the public expects public funds to be used solely for fulfillment of their public duties; iii. Members’ expenses should be reasonable and reflect what the public expects of members; and iv. Members’ personal expenses must be kept separate from expenses related to Town Business. c) Maintain Transparency i. The public has a right to know how public funds allocated to Members are spent; and ii. The public’s right to Members’ expense information must be balanced against the need to protect personal information, and the need to allow time for proper account and reconciliation of expenses. 4. Scope Page 529 of 650 Page 3 of 6 This policy applies to all Members and establishes the basis upon which the Members will be reimbursed or have payment coverage for Eligible Expenses incurred while undertaking activities related to Town Business while acting in their role as a member. 5. Roles and Responsibilities 5.1 All expenses submitted for reimbursement must be accompanied by supporting documentation and itemized receipts, except for mileage. A purchase (P) card should be used whenever possible for eligible expenses. 5.2. Members may attend conferences, conventions, meetings and other events using allocated funds in the current budget for registration fees and Eligible Expenses. 5.3 Members attending conferences, conventions, meetings and other events shall be compensated a per diem allowance of $185.00/day and $90.00/1/2 day. The daily per diem allowance is to be calculated on a 24-hour basis and not on a working day basis. It shall be calculated from the time of leaving for the function until the time of arrival home, to the nearest 1/2 day. 5.4. Transportation a) Members shall make every attempt to use the most economical and efficient mode of transportation including: i. economy airfare, rail fare including taxi fares to and from terminals or parking where required, or ii. mileage rate for personal automobile usage and parking, or iii. rented automobile and actual fuel cost. b) Members shall make efforts to share travel costs when travelling to the same destination. c) If a more expensive means of transportation is chosen by a member, only the most economical equivalent charges will be allowed. For example, if a Member chooses to drive to a destination where it is more economical to use air transportation, only the equivalent air transportation charge will be permitted. Page 530 of 650 Page 4 of 6 d) Calculation of Mileage will be for out of town destinations at the rate of $.58 per kilometerreimbursed at the Canada Revenue Agency’s automobile per- kilometre allowance rate posted for the year. 5.5. Accommodation a) Where overnight accommodation is required, the single room rate will be paid and must be accompanied by appropriate receipts. 5.6. Meals Allowance a) Members may claim up to the daily maximum meal allowance reimbursement amount when attending a conference, convention, or other event when an overnight stay is required and receipts are provided. Daily Maximum Reimbursement Rate Breakfast Up to $10020.00/day Lunch $25.00/day Dinner $50.00/day b) Where meals are included in registration fees, the allowance reimbursement amount is not applicable. c) All expenditures must be reasonable in the circumstances based on the explanation provided by the Member which must accompany the receipt. d) Members may be reimbursed for meal expenses incurred during the course of Town Business and shall include the following: i. Meals while travelling on behalf of the Town of Tillsonburg; or, ii. Meals required where circumstances warrant. 5.7 Monetary exchange costs will be allowed at the prevailing rates in order to convert Canadian dollars to other currencies (primarily to U.S. dollars). Payment will be made to Members in Canadian dollars. Members are strongly urged to utilize their P-cards for such expenses, which provide automatic electronic currency conversions. 5.8. Eligible Expenses The following is a list, though not exhaustive, of Eligible Expenses: a) Promotional material related to Town Business Page 531 of 650 Page 5 of 6 b) Subscriptions related to Town Business or the municipalities in general c) A maximum of one ticket for a Member when representing the Town at an event of a public nature (e.g. community dinners, events with proceeds going to charity, etc.). d) Parking related expenses save and except parking fines. e) Internet service at home for Council duties. f) Home office expenses, such as pens, paper, toner, etc. for Council duties 5.9 The following is a list, though not exhaustive, of Ineligible Expenses a) Additional accommodation for days outside a formal Conference. b) Alcohol and alcoholic beverages. c) Mobile devices other than the Town provided device for Mayor and Acting Deputy Mayor. d) Land Lines/fixed phone line for personal residence. e) Companion registration fees and expenses at Conferences. f) Personal entertainment (e.g. sight-seeing, concerts, sporting events, etc.) g) Personal services (e.g. shoe shine, valet service, spa treatments, etc.) h) Personal vehicle costs beyond mileage (e.g. maintenance, repair, etc.) i) Traffic and parking fines 5.10 Legal Expenses a) Legal costs arising from or in any way related to complaints under the Code of Conduct are Eligible Expenses. b) Legal costs related to personal conflict of interest opinions are Ineligible Expenses. c) Costs involving certain legal proceedings against Members shall be reimbursed in accordance with the current indemnification policy and are subject to review by the Chief Administrative Officer for recommendation to Council. d) Requests for reimbursement of legal costs outside this policy or the indemnification policy shall be submitted to the Chief Administrative Officer for recommendation to Council. 5.11 Timelines Page 532 of 650 Page 6 of 6 a) Members shall submit expense reports with itemized receipts attached within 30 days after the each event; and b) Expense report information will be provided through a finance report each year prior to March 1st. 5.121 Members of Council Shall a) Adhere to this policy; b) Submit expenses on a regular monthly timeline, with itemized receipts attached; c) Sign-off on all expenses submitted to or paid by the Town; d) Meet all financial, legal and tax obligations; and, e) Consult with Town Administrative staff for guidance with respect to the eligibility of an expense and/or any interpretation on the application of this policy. 5.132 Town Administrative Staff Shall a) Ensure consistent application of this policy; b) Process expenses in accordance with this policy; c) Ensure the supporting documentation is in place and that expenditures conform to this policy; d) Advise Members if any submitted or proposed expenditure is an Ineligible Expense or a breach of this policy; e) Track actual expenses against approved budget; and f) Each year, incorporate budget dollars in the annual budget for Council to consider for funding or reimbursing Members’ Eligible Expenses g) Complete the yearly Councillor Remuneration Report as required by the Municipal Act. 6. Policy Administration & Review This policy shall be administered by the Director of Finance or his/her designate. This policy shall be reviewed at least once during the four- year term of Council to coincide with the review of Council remuneration or as required based on revisions to Corporate practices or Provincial/Federal legislation. Formatted: Default, Indent: Left: 0.59", Hanging: 0.3",Space After: 12 pt, Adjust space between Latin and Asian text, Adjust space between Asian text and numbers, Tabstops: 0.39", Left + 0.89", Left Page 533 of 650 Page 1 of 3 SUBJECT: 2021 Summary of Reserves and Trusts Report Number: FIN 22-18 Department: Finance Department Submitted by: Renato Pullia, Interim Director of Finance/Treasurer Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT Council receives report FIN 22-18, 2021 Summary of Reserves and Trusts, as information. BACKGROUND The Town of Tillsonburg maintains several reserves and trusts. The attached summary defines each reserve and trust accounts purpose, sources of revenues and expenditures, and information on year-end balances. DISCUSSION In 2009 several trusts were merged together to create a single reserve account, and in 2017 they were respectively separated. These accounts, presented within the attached Appendix A, summarizes in detail the various Town reserves and trusts. Some of these are Discretionary Reserves and operate according to the reserve policy established by Council in 2017. Others are Obligatory Reserves and are restricted by rules set up through other levels of government. Trust Funds are monies which have been donated to the Trusts with accountability on the Town to hold and manage the funds including the designation of Trustees to manage the Trusts. The Town Clerk and Treasurer are part of each set of Trustees for each Fund. In 2019, Council appointed new Trustees for most Trusts. Periodically throughout the year, as required, Trustees may be amended by Council resolution due to vacancies. These Trust funds support a variety of needs in the Town of Tillsonburg. The use of Page 534 of 650 FIN 22-18, 2021 Summary of Reserves and Trusts Page 2 of 3 these funds can be for both Town capital and operating requirements in addition to supporting several community groups and individuals. Reserves are collected until they are needed to be used for the purpose for which they were collected; this is the reason why there is an estimated minimum and maximum target. When the maximum is reached, no further funding is necessarily required. Alternatively, if the value drops below the minimum, new contributions are generally required. The Town’s Reserve Policy was updated and approved by Council in 2020 (Bylaw 2020-008), attached as Appendix B. It is anticipated that this be again subsequently reviewed by Finance in consultation with the Senior Leadership Team and brought forward to Council at a later date for adoption with any necessary amendments. It is important to note that year-end balances as provided in Appendix A reflect a snapshot in time as held at December 31, 2021. CONSULTATION The Director of Finance in consultation with the CAO have determined that the min/max values as contained in the current Reserve Policy require review with recommendations brought forward to Council to revise the Policy at a future meeting for approval. FINANCIAL IMPACT To inform Council and the public of the details on monies which are outlined in the annual financial statements presented by the Town of Tillsonburg. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☒ Community growth ☐ Connectivity and transportation Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal - The Town of Tillsonburg will accommodate and support sustainable growth. Page 535 of 650 FIN 22-18, 2021 Summary of Reserves and Trusts Page 3 of 3 Strategic Direction – Plan and develop a long-term financing strategy for new services and infrastructure to support growth. Priority Projects – Ongoing Projects – Replenish and grow municipal reserves. ATTACHMENTS 1. Appendix A – 2021 Summary of Reserves and Trusts 2. Appendix B – Town’s Reserve Policy, 2020 Page 536 of 650 FIN 22-18 - Appendix A TOWN OF TILLSONBURG 2021 Summary of Reserves & Trusts Contents AIRPORT RESERVE ................................................................................................................ 1 ASSET MANAGEMENT FUNDING RESERVE ........................................................................ 2 FACILITY INFRASTRUCTURE RESERVE .............................................................................. 3 CEMETERY RESERVE ............................................................................................................ 4 COUNCIL RESERVE ................................................................................................................ 5 DEVELOPMENT REMEDIATION RESERVE ........................................................................... 6 DOWNTOWN PARKING RESERVE ......................................................................................... 7 ECONOMIC DEVELOPMENT RESERVE ................................................................................ 8 ELECTION RESERVE .............................................................................................................. 9 ENGINEERING RESERVE ..................................................................................................... 10 FIRE DEPARTMENT EQUIPMENT RESERVE ...................................................................... 11 FIRE DEPARTMENT LABOUR RESERVE ............................................................................ 12 FLEET AND EQUIPMENT RESERVE .................................................................................... 13 INSURANCE RESERVE ......................................................................................................... 14 IT EQUIPMENT RESERVE ..................................................................................................... 15 LINEAR INFRASTRUCTURE RESERVE ............................................................................... 16 PHYSICIAN RECRUITMENT RESERVE ................................................................................ 17 POLICE RESERVE ................................................................................................................. 18 POLICE SERVICES BOARD RESERVE ................................................................................ 19 RECREATION, CULTURE AND PARKS RESERVE .............................................................. 20 TAX RATE STABILIZATION RESERVE ................................................................................. 21 TRANSIT RESERVE ............................................................................................................... 22 WASTE MANAGEMENT RESERVE ....................................................................................... 23 WINTER MAINTENANCE RESERVE ..................................................................................... 24 OBLIGATORY RESERVES ....................................................................................................... 25 BUILDING PERMIT COST STABILIZATION RESERVE ........................................................ 25 DEVELOPMENT CHARGE RESERVE .................................................................................. 26 FEDERAL GAS TAX REBATE RESERVE .............................................................................. 27 Page 537 of 650 TRUST FUNDS ........................................................................................................................... 28 THE ANNANDALE HOUSE TRUST ....................................................................................... 28 CEMETERY MAINTENANCE TRUST .................................................................................... 29 CEMETERY PERPETUAL CARE TRUST .............................................................................. 30 CEMETERY PRE-PAID TRUST ............................................................................................. 31 COMMUNITY TRUST ............................................................................................................. 32 LAKE LISGAR REVITALIZATION TRUST .............................................................................. 33 PARKLAND TRUST RESERVE .............................................................................................. 34 SCHOLARSHIP TRUST .......................................................................................................... 35 J.L. SCOTT MCLEAN OUTDOOR RINK TRUST ................................................................... 36 Page 538 of 650 2021 Summary of Reserves & Trusts 1 AIRPORT RESERVE The Airport Reserve provides a contingency for unforeseen events that might put pressure on the tax rate, provides for expenditures associated with the rehabilitation or replacement of existing Airport infrastructure as well as a source of funding for external airport consulting services. Revenues The Airport Reserve shall generally receive revenues from annual operating budget allocations or any surplus generated from the Airport business, after allowing for operating and capital expenses, on an annual basis. This Reserve also consists of funds set aside from Airport projects not completed in the previous financial year. These funds will be used to complete those Airport projects in a future financial year. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Airport Reserve may be used to fund the rehabilitation or replacement of existing airport capital infrastructure, assist in meeting the funding requirements of matching airport funding programs developed by senior levels of government, or support airport consulting services for various types of studies, plans or strategic development of the Airport. Recommended Target Levels The recommended minimum target would be about to 50% of the annual Airport General Operating Budget, which for 2021 is equivalent to $34,000. The recommended maximum target would be about to 100% of the annual Airport General Operating Budget, which for 2021 is equivalent to $68,000. COMMENTS: The 2021 ending balance is $31,427.65 The 2020 ending balance is $31,238.21 Page 539 of 650 2021 Summary of Reserves & Trusts 2 ASSET MANAGEMENT FUNDING RESERVE The Asset Management Plan Funding Reserve is a long term source of financing to overcome the deficiency in replacement or purchases of capital assets. Revenues The Asset Management Plan Funding Reserve revenues are from the growth portion of the Current Market Assessment. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Asset Management Plan Funding Reserve expenditures will be used to assist with the financing of assets in the approved Capital Budget. Recommended Target Levels The recommended minimum target shall be $nil The recommended maximum target would be $508,512, 3% of the 2021 annual budget. COMMENTS: The 2021 ending balance is $937,898.93 The 2020 ending balance is $972,386.09 Page 540 of 650 2021 Summary of Reserves & Trusts 3 FACILITY INFRASTRUCTURE RESERVE The Capital Infrastructure Reserve provides for expenditures associated with the rehabilitation, replacement or construction of buildings and other related facilities. Revenues The Capital Infrastructure Reserve revenues are from taxation. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures This Capital Infrastructure Reserve will be spent on costs related to design and implementation of the rehabilitation, replacement or construction of buildings and other related facilities. . Recommended Target Levels The recommended minimum target shall be reviewed based on specific facility projects and needs The recommended maximum target would be the total costs of all foreseen projects. COMMENTS: The 2021 ending balance is $1,061,919.96 The 2020 ending balance is $1,110,545.38 Page 541 of 650 2021 Summary of Reserves & Trusts 4 CEMETERY RESERVE The Cemetery Reserve provides a source of funds for Cemetery projects and equipment. Within the Cemetery Reserve is a separate Memorials component that will fund replacements and maintenance of memorial benches, special memorials and trees in the Cemetery. Revenues The Cemetery Reserve revenues are from year-end surpluses in the Cemetery operations and surpluses in cemetery-related capital projects and from donations. The Memorials Component will receive 10% of each memorial bench & tree fee, and a 25% perpetual care levy on special memorials (defined as any memorial not considered a burial markers). The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Cemetery Reserve is to be used for Cemetery planning and plan implementation, surveys, landscaping projects, and other special Cemetery projects. Funds in the Memorials component will be used to replace, repair or maintain memorial benches and trees, and special memorials in the Cemetery including the flagpoles, the memorials near the Cemetery Building, and the St. Mary’s Cemetery cross. Recommended Target Levels The recommended target minimum is $50,000 plus the cumulative total of contributions to the Memorials component. COMMENTS: The 2021 ending balance is $92,877.88 The 2020 ending balance is $67,468.70 Page 542 of 650 2021 Summary of Reserves & Trusts 5 COUNCIL RESERVE The Council Reserve provides for funding special projects identified by Council that may arise from time to time. Revenues The Council Reserve revenues are derived from taxation. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Council Reserve is spent on special projects as determined by Council from time to time. Recommended Target Levels The recommended minimum target shall $0 COMMENTS: The 2021 ending balance is $3,609.04 The 2020 ending balance is $3,587.29 Page 543 of 650 2021 Summary of Reserves & Trusts 6 DEVELOPMENT REMEDIATION RESERVE The Development Remediation Reserve provides a source of funding for the installation, repair or replacement of outstanding development related municipal infrastructure deficiencies Revenues The Development Remediation Reserve shall generally receive revenues, after the appropriate notice by the Town has been provided, from outstanding construction holdbacks for which the Contractor has not remedied, any outstanding or expired municipal infrastructure deposits provided at the time of building permit application that the Builder has not rectified, and any outstanding Subdivision or Site Plan Agreement securities as a result of Developer default. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Development Remediation Reserve may be used for the installation, repair or replacement of outstanding development related municipal infrastructure deficiencies. Recommended Target Levels The balance of the Development Remediation Reserve should not drop below $0 and should be monitored regularly to ensure outstanding municipal infrastructure deficiencies are appropriately rectified. COMMENTS: The 2021 ending balance is $23,002.04 The 2020 ending balance is $18,488.55 Page 544 of 650 2021 Summary of Reserves & Trusts 7 DOWNTOWN PARKING RESERVE The Parking Reserve provides a source of funding to properly maintain the Downtown Municipal parking lots including capital investment in new or existing Downtown parking infrastructure. This Reserve can be used for operating or capital expense purposes, but can only be used for Municipal parking located in the Downtown. Revenues The Parking Reserve revenues are generated from surplus funds left over from the parking levy charged to Downtown property owners, payments in lieu of parking paid on development not spent in the current year, and any net proceeds from the sale of Town owned parking lot property. This reserve also consists of funds set aside from Downtown Municipal parking infrastructure capital projects not completed in a previous financial year. These funds will be used to complete those Downtown Municipal parking infrastructure capital projects in a future financial year. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Parking Reserve may be used for the rehabilitation or replacement of existing Downtown Municipal parking lots, the purchase and capital maintenance of any Downtown Municipal parking infrastructure and related components, including parking-related technology, the design and construction of new Downtown Municipal parking infrastructure and the purchase of associated land, including financing, the cost associated with parking- related studies, analysis, policy or strategy development, and any annual operating deficit if incurred by the Town. Recommended Target Levels The balance of the Downtown Parking Reserve should not drop below $0 and should be monitored regularly to ensure appropriate investment in Downtown Municipal parking infrastructure. COMMENTS: The 2021 ending balance is $352,108.37 The 2020 ending balance is $275,859.29 Page 545 of 650 2021 Summary of Reserves & Trusts 8 ECONOMIC DEVELOPMENT RESERVE The purpose of this reserve is to fund strategic economic development initiatives including:  Industrial land acquisition and development  Commercial land acquisition and development (high priority projects only)  Preparation and implementation of Economic Development strategies and studies that support the growth and development of the Tillsonburg economy Revenues The Reserve revenues are typically generated by industrial and commercial land sales and special projects. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures This Reserve is used to fund land acquisition and development, studies that support growth and related costs. Recommended Target Levels The recommended minimum target shall be $500,000 The recommended maximum target would be $5,000,000 COMMENTS: The 2021 ending balance is $1,514,104.02 The 2020 ending balance is $ 135,045.85 Page 546 of 650 2021 Summary of Reserves & Trusts 9 ELECTION RESERVE The Election Reserve provides funding for the municipal election held every 4 years. The purpose of the fund is to spread the costs over each of the four years. Revenues The Election Reserve revenues are from planned amounts budgeted through the Council operating budget. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Election Reserve is to be used for election purposes and all associated costs therein. Recommended Target Levels The recommended target minimum is $13,500. A preferred amount to support elections would be $54,000. COMMENTS: The 2021 ending balance is $38,962.67 The 2020 ending balance is $28,760.08 Page 547 of 650 2021 Summary of Reserves & Trusts 10 ENGINEERING RESERVE The Engineering Reserve provides a source of funding for external engineering services to smooth budgetary impacts associated with Regulated obligations, to support consulting services for various engineering related studies, plans, assessments, policy or strategic development, analysis, inspections, or investigations as they arise, and to support the implementation of engineering related capital projects. Revenues The Engineering Reserve shall generally receive revenues from annual operating budget allocations or any surplus generated from the engineering business, after allowing for operating and capital expenses, on an annual basis. This Reserve also consists of funds set aside from engineering related projects not completed in the previous financial year. These funds will be used to complete those engineering related projects in a future financial year. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Engineering Reserve may be used for consulting services of various engineering related studies, plans, assessments, policy or strategic development, analysis, inspections, or investigations as they arise and the implementation of engineering related capital projects. Recommended Target Levels The recommended minimum target shall be sufficient to cover all Regulated engineering related obligations. For 2021, this is equivalent to $40,000. A preferred amount would be about 25% of the annual operating budget, which for 2021 is equivalent to $70,650. The recommended maximum target would be equivalent to 50% of the annual operating budget which is $141,250 for 2021 representing about three iterations of Regulated engineering obligations. COMMENTS: The 2021 ending balance is $298,120.77 The 2020 ending balance is $242,974.62 Page 548 of 650 2021 Summary of Reserves & Trusts 11 FIRE DEPARTMENT EQUIPMENT RESERVE The Fire Department Equipment Reserve provides a fund for capital equipment purchases. Revenues The Fire Department Equipment Reserve revenues are from planned amounts budgeted through the fire department operating budget. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Fire Department Equipment Reserve is to be used for capital projects. Recommended Target Levels The recommended target minimum is $75,000. A preferred amount to support capital purchases would be $225,000. COMMENTS: The 2021 ending balance is $102,237.24 The 2020 ending balance is $74,167.70 Page 549 of 650 2021 Summary of Reserves & Trusts 12 FIRE DEPARTMENT LABOUR RESERVE The Fire Department Labour Reserve provides a fund for part time suppression labour costs. Revenues The Fire Department Labour Reserve revenues are from surplus amounts, if any, of the fire department suppression labour budget. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Fire Department Labour Reserve is to be used for occasions where, suppression, training and public education labour costs exceed the budgeted amount in a year. Recommended Target Levels The recommended target minimum is $15,000. COMMENTS: The 2021ending balance is $0 The 2020 ending balance is $0 Page 550 of 650 2021 Summary of Reserves & Trusts 13 FLEET AND EQUIPMENT RESERVE The Fleet and Equipment Reserve shall provide a source of funding for the replacement of corporate vehicles and equipment. Where expansion is necessary and where Development Charge funding cannot be applied, this Reserve is to provide a source of funding for the purchase of such fleet/equipment. Each request for expansion funded from this Reserve must be made clear during the capital budget process and in the purchase award report to Council. Revenues The Fleet and Equipment Reserve revenues shall be generated through the application of an annual Capital Cost Recovery charge to user departments. Fleet units shall repay this Reserve over the useful life of the unit. Additionally any surplus generated from the fleet business, after allowing for operating and capital expenses as well as any revenue generated from the disposal of replaced fleet assets shall also be contributed to this Reserve. This reserve also consists of funds set aside from fleet capital projects not completed in a previous financial year. These funds will be used to complete those fleet capital projects in a future financial year. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Fleet and Equipment Reserve shall be used for the replacement of corporate vehicles and equipment. Recommended Target Levels The Reserve balance shall be adequate to sustain the replace of existing vehicles and equipment on a replacement scheduled based on the estimated service life of the vehicle and/or piece of equipment. The recommended minimum target shall be equivalent to the sustainable annual capital investment forecast identified in the Town Asset Management Plan as $830,000 for fleet and equipment. A preferred amount would be equivalent to 15% of the Fleet replacement value identified in the Town Asset Management Plan, which for 2021 would be equivalent to $1,567,500. The recommended maximum target would be about 20% of the Fleet replacement value identified in the Town Asset Management Plan. For 2021, this would be equivalent to $2,090,000. COMMENTS: The 2021 ending balance is $585,648.14 The 2020 ending balance is $437,167.20 Page 551 of 650 2021 Summary of Reserves & Trusts 14 INSURANCE RESERVE The Insurance Reserve shall provide a source of funding to stabilize annual insurance premium increases or in-year insurance claims increases exceeding budgeted figures. Revenues The Insurance Reserve revenues shall be generated from surplus amounts, if any, within the insurance claims account. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Insurance Reserve shall be used instances when the number of insurance claims and value exceed the amount planned in the budget process. It may also be used to stabilize annual insurance premium increases. Recommended Target Levels The Reserve balance shall be adequate to mitigate any unanticipated increases to annual insurance premiums or in-year excessive claims. The recommended minimum target shall be equivalent to the Town’s annual deductible as $50,000 (2021). COMMENTS: The 2021 ending balance is $27,095.99 The 2020 ending balance is $1,298.32. Page 552 of 650 2021 Summary of Reserves & Trusts 15 IT EQUIPMENT RESERVE The IT Equipment Reserve shall provide a source of funding for the replacement of corporate software, computer and communications equipment. Revenues The IT Equipment Reserve revenues shall be generated through the application of an annual Capital Cost Recovery charge to user departments. IT related charges shall repay this Reserve over the useful life of the units. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The IT Equipment Reserve shall be used for the replacement of corporate software, computing and tele-communications equipment. Recommended Target Levels The Reserve balance shall be adequate to sustain the replacement of existing equipment on a replacement schedule based on the estimated service life of the piece of equipment. The recommended minimum target shall be equivalent to the sustainable annual capital investment forecast identified in the Town Asset Management Plan as $75,000. A preferred amount would $225,000. COMMENTS: The 2021 ending balance is $115,817.86 The 2020 ending balance is $137,823.22 Page 553 of 650 2021 Summary of Reserves & Trusts 16 LINEAR INFRASTRUCTURE RESERVE The Linear Infrastructure Reserve provides for expenditures associated with the rehabilitation or replacement of existing capital infrastructure such as roads sidewalks, streetlights and signalized intersections, bridges, culverts and retaining walls, storm sewers and stormwater management facilities and their respective related infrastructure. Revenues The Linear Infrastructure Reserve shall generally receive revenues from annual operating budget allocations, any surplus generated from existing linear infrastructure business after allowing for operating and capital expenses, any new linear infrastructure program funding from senior levels of government, not including Gas Tax Funding, and an equitable share of the Assessment Growth allocated towards the Towns Asset Management Plan. Additionally, an annual allocation of surplus shall be contributed to this Reserve, as outlined in the Surplus Allocation Policy. This reserve also consists of funds set aside from linear infrastructure capital projects not completed in a previous financial year. These funds will be used to complete those linear infrastructure capital projects in a future financial year. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Linear Infrastructure Reserve may be used to fund the rehabilitation or replacement of existing capital infrastructure or assist in meeting the funding requirements of matching linear infrastructure programs developed by senior levels of government. Recommended Target Levels The recommended minimum target shall be equivalent to 1% of the linear infrastructure replacement value identified in the Town Asset Management Plan, which for 2021 would be $2,076,000. The preferred amount would be equivalent to the sustainable annual capital investment forecast identified in the Town Asset Management Plan as $3,890,000 for linear infrastructure. The recommended maximum would be about 8% of the linear infrastructure replacement value identified in the Town Asset Management Plan. For 2021, this would be equivalent to $16,608,000 representing approximately the support for a 5-year capital plan. COMMENTS: The 2021 ending balance is $1,485,341.42 The 2020 ending balance is $214,386.38 Page 554 of 650 2021 Summary of Reserves & Trusts 17 PHYSICIAN RECRUITMENT RESERVE The Physician Recruitment Reserve is to establish funding in partnership with Tillsonburg District Memorial Hospital for the attraction of Physicians. Revenues The Physician Recruitment Reserve revenues are supported through taxation and donations from individuals and corporation. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Physician Recruitment Reserve has two main areas of expenditures. The first is related to the attraction of Physicians and the marketing related cost and the second is for costs to secure Physicians. A Shared Physician Recruitment Incentive Support Model for new physicians has been agreed to with the Tillsonburg District Memorial Hospital. Recommended Target Levels The recommended minimum target shall $35,000 The recommended maximum target would be $100,000 COMMENTS: The 2021 ending balance is $114,345.73 The 2020 ending balance is $124,646.66 Page 555 of 650 2021 Summary of Reserves & Trusts 18 POLICE RESERVE The Police Reserve purpose is to offset the annual cost of the Town’s police service contract. Revenues The Police Reserve shall generally receive revenues from any surplus generated from a decrease in the budgeted service contract or unbudgeted funds received under the Ministry of Community Safety and Correctional Services which include, but are not limited to, the Community Policing Partnerships, Safer Communities - 1,000 Officers Partnership and RIDE grant programs. The Reserve will also retain interest earned by the funds in the Reserve. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Police Reserve funds are to be used solely to offset the annual cost of the Town’s police service costs and must be made clear during the annual budget process. Recommended Target Levels N/A COMMENTS: The 2021 ending balance is $79,827.17 The 2020 ending balance is $79,354.40 Page 556 of 650 2021 Summary of Reserves & Trusts 19 POLICE SERVICES BOARD RESERVE The Police Services Board Reserve a fund to support special projects taken on by the Board to support policing efforts in the Town of Tillsonburg. Revenues The Police Services Board Reserve revenues are from the annual year end surplus of the special project funds, as outlined in the Surplus Allocation Policy as well as any revenue made from donations, auctions and unclaimed funds that may be collected by the Board. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Police Services Board Reserve is to be used for augmentation of the annual special projects allocation. Recommended Target Levels The recommended target minimum is $1,000. The recommended target maximum is $20,000 COMMENTS: The 2021 ending balance is $32,867.70 The 2020 ending balance is $32,669.56 Page 557 of 650 2021 Summary of Reserves & Trusts 20 RECREATION, CULTURE AND PARKS RESERVE The Recreation, Culture and Parks Reserve generates funds for projects, equipment, planning exercises, grant-matching, and other strategic initiatives of the Recreation, Culture & Parks Department. Within the Reserve is a separate Memorials component that will fund replacements and maintenance of memorial benches and trees in Town Parks. Other separate components may be established from time to time to track reserves targeted for specific projects or facilities. Revenues The Recreation Culture and Parks Reserve revenues are from year-end surpluses in RCP capital projects or from capital projects not completed at year-end. Revenue may also be sourced from donations, bequests, fundraising revenue, advertising sales, special user levies or fees, fines, court awards, insurance claims. The Memorials Component will receive 10% of each memorial bench & tree fee. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Recreation Culture and Parks Reserve is to be used for planning, plan implementation, grant matching, community events, equipment purchases, capital repairs and improvements, fee subsidies, youth leadership initiatives, public art, cultural initiatives or other expenditures as designated by the source of the revenue. Funds in the Memorials component will be used to replace, repair or maintain memorial benches and trees in Town Parks. Recommended Target Levels The recommended target minimum is $500,000 plus the cumulative total of Memorial contributions. COMMENTS: The 2021 ending balance is $545,156.90 The 2020 ending balance is $536,177.89 Page 558 of 650 2021 Summary of Reserves & Trusts 21 TAX RATE STABILIZATION RESERVE The Tax Rate Stabilization Reserve provides a contingency for unforeseen events that might put pressure on the tax rate. It is also used as a source of working capital. Revenues The Tax Rate Stabilization Reserve revenues are from the annual year end surplus, as outlined in the Surplus Allocation Policy. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Tax Rate Stabilization Reserve is to be used for unforeseen expenditures of a one- time nature. Recommended Target Levels The recommended target minimum is 3% of the annual tax supported budget. For 2021, this would be $446,955 based on an operating budget of $14,898,500 A preferred amount to support working capital would be about 15% of the budget which is $2,542,560 representing about 2 month’s cash flow. COMMENTS: The 2021 ending balance is $767,588.91 The 2020 ending balance is $630,980.97 Page 559 of 650 2021 Summary of Reserves & Trusts 22 TRANSIT RESERVE The Transit Reserve was established to support provide funding for a Community Transportation Program in cooperation with other community agencies. A Community Transportation Program meets the Community Strategic Plan’s action items of exploring alternative transportation options and implement and market a transportation program. Revenues The Transit Reserve revenues are from taxation. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures This Transit Reserve is to co-fund the requirements of community transit system. The annual limit is established through the budget process. Recommended Target Levels The recommended minimum target shall be $22,500. The recommended maximum target would be $75,000. COMMENTS: The 2021 ending balance is $0. The 2020 ending balance is $0 Page 560 of 650 2021 Summary of Reserves & Trusts 23 WASTE MANAGEMENT RESERVE The Waste Management Reserve consists of funds set aside for the future rehabilitation or replacement of waste related assets and to provide financial assurance for the future decommissioning, clean-up or remediation of the Transfer Station facility. Revenues The Waste Management Reserve shall generally receive revenues from any surplus generated from the waste business, after allowing for operating and capital expenses, on an annual basis. This Reserve also consists of funds set aside from waste management projects not completed in the previous financial year. These funds will be used to complete those waste management projects in a future financial year. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Waste Management Reserve could be used for operating or capital expense purposes related to waste management. Recommended Target Levels The balance of the Waste Management Reserve shall be equivalent to the financial assurance to clean-up the maximum allowable amount of waste at the Transfer Station facility at any one time, which for 2021 is equivalent to $83,600, and increase annually at the rate of inflation. COMMENTS: The 2021 ending balance is $1,915.25 The 2020 ending balance is $1,903.72 Page 561 of 650 2021 Summary of Reserves & Trusts 24 WINTER MAINTENANCE RESERVE The Winter Maintenance Reserve is to fund winter maintenance activities in the event of a shortfall in the Winter Maintenance Operating Budget. This Reserve is to assist in minimizing the financial implications resulting from extreme winter weather conditions. Revenues The Winter Maintenance Reserve revenues are from surplus funds from the annual Operating Budget for winter maintenance, if any. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures This Reserve provides additional funding for winter maintenance expenditures in the event of a deficiency in the Operating Budget amount for winter maintenance. Recommended Target Levels The recommended minimum target shall be equal to 10% of the 5-year average winter maintenance costs or a minimum of $50,000. The recommended maximum target would be about 25% of the 5-year average winter maintenance costs which for 2021 would be approximately $151,800. COMMENTS: The 2021 ending balance is $0. The 2020 ending balance is $0 Page 562 of 650 2021 Summary of Reserves & Trusts 25 OBLIGATORY RESERVES BUILDING PERMIT COST STABILIZATION RESERVE The Building Permit Cost Stabilization Reserve Fund was created to support Section 7(2) of the Ontario Building Code Act which states “The total amount of the fees authorized under clause (1) (c) must not exceed the anticipated reasonable costs of the principal authority to administer and enforce this Act in its area of jurisdiction” meaning fees collected are to be used to administer the Act; surpluses cannot be used to fund general Town expenditures, and deficits should be funded from a Reserve Fund. Revenues Revenues to the Cost Stabilization Reserve Fund are an annual budgeted allocation from Building Permit revenues, as well as additional revenues added from Building Permit surplus as it occurs. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures Expenditures from the CSRF are to stabilize the building permit revenue line in the Operating Budget and to fund Building department capital expenditures. Recommended Target Levels The minimum target amount should be $183,900 about 25% of the annual operating cost and the maximum should be $735,800. COMMENTS: The 2021 ending balance is $1,543,929.3 The 2020 ending balance is $861,065.31 Page 563 of 650 2021 Summary of Reserves & Trusts 26 DEVELOPMENT CHARGE RESERVE The Development Charge (DC) Reserve Funds provide financing for growth related projects undertaken by the Town as detailed in the DC Background Study and By-Law. The DC legislation took effect in 1991. Revenues The Development Charge Reserve revenues are from charges imposed and collected prior to the issuance of a building permit on new development and redevelopment that will result in the demand for hard and soft services. Expenditures This Development Charge Reserve contributes to projects identified in the DC study and included in the rate. Recommended Target Levels The recommended target would be to have adequate funding to meet the growth of the Town. COMMENTS: The 2021 ending balance is $4,377,342.18 The 2020 ending balance is $2,573,367.38 Page 564 of 650 2021 Summary of Reserves & Trusts 27 FEDERAL GAS TAX REBATE RESERVE The Gas Tax Rebate Reserve provides funding for investments in Environmentally Sustainable Municipal Infrastructure (ESMI) Projects and Capacity Building Projects as per the Agreement for the Transfer of Federal Gasoline Tax Revenues. Revenues The Town of Tillsonburg receives a semi-annual allocation of funds from the Association of Municipalities Ontario (AMO) on behalf of the Federal Government per the Agreement for the Transfer of Federal Gasoline Tax Revenues. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures Expenditures from the Gas Tax Rebate Reserve are to be used to support environmentally sustainable municipal infrastructure projects to help ensure cleaner air, cleaner water, and reduced greenhouse gas emissions. The Transfer of Federal Gasoline Tax Revenues Agreement sets out Eligible projects/categories as well as terms & conditions in further detail. Recommended Target Levels The balance of the Gas Tax Rebate Reserve should not drop below $0 and should be monitored regularly to make best use of the opportunity available to the Town of Tillsonburg. COMMENTS: The 2021 ending balance is $1,206,473.03 The 2020 ending balance is $602,473.03 Page 565 of 650 2021 Summary of Reserves & Trusts 28 TRUST FUNDS THE ANNANDALE HOUSE TRUST The Annandale House Trust is established for purpose of generating funds for the restoration, refurbish, development, and promotion of the Annandale House and the Museum’s collection was established through By-Law 2259. The Trust was defined and Trustees appointed through By-Law 4322 on the 24th day of June, 2019. Revenues The Annandale House Trust revenues are from donations, bequests, fundraising activities and any revenue from the divestment of de-accessioned items in the Museum’s collection or the sale of items donated for the collection but which do not meet the criteria to be added to the collection. Interest earned on funds in the Trust will be retained within the Trust. Expenditures The Annandale House Trust is to be used for capital repairs and enhancements to the Annandale House, outbuilding and grounds that are consistent with maintaining and/or restoring the National Historic Site. Trust funds may also be used for acquisition of items for the Museum collection or for expenses related to the preservation, storage or display of the items in the collection. Grant matching is an eligible expense. Fundraising expenses and donor recognition are not eligible expenses. Recommended Target Levels The recommended target minimum is $400,000. COMMENTS: The 2021 ending balance is $151,075. Page 566 of 650 2021 Summary of Reserves & Trusts 29 CEMETERY MAINTENANCE TRUST The Cemetery Maintenance Trust was established to receive, maintain, control and use donations for the general maintenance and upkeep of Tillsonburg Cemeteries. The Trust was defined and Trustees appointed through By-Law 4322 on the 24th day of June, 2019. Revenues The Cemetery Maintenance Trust revenues are from donations received. They shall be deposited into this trust account and may be invested in such securities as the trustees may invest in under the Trustee Act, and the earnings derived from the investment of such monies form part of the trust fund. Expenditures This Cemetery Maintenance Trust Trustees will determine the disbursement of the funds, to focus on the general maintenance and care of the grounds of the Tillsonburg Cemetery. Recommended Target Levels The recommended minimum target shall $10,000 The recommended maximum target would be $100,000 COMMENTS: The 2021 ending balance is $37,437. CONSOLIDATED ACCOUNTS: PURPOSE: Cemetery Maintenance $25,446 Cemetery maintenance TASC $1,857 Cemetery Trees $3,376 Plant trees in cemeteries Cemetery Capital $6,758 Fund capital purchases for cemeteries Page 567 of 650 2021 Summary of Reserves & Trusts 30 CEMETERY PERPETUAL CARE TRUST The Perpetual Care Trust holds funds in trust as per of the Funeral, Burial and Cremation Services Act, 2002, Section 51 and Ontario Regulation 30/11, Division G, which requires a cemetery operator to have a trust account for the purpose of generating funds for the care and maintenance of the cemetery. The Trust was defined and Trustees appointed through By-Law 4322 on the 24th day of June, 2019. Revenues The Perpetual Care Trust revenues are from the contributions required by the Act and set by regulation that are collected from every sale of interment rights within the cemetery and in respect of markers installed in the cemetery. As per the Act, income from the investment and reinvestment of those contributions must be must only be used for the prescribed purposes and in accordance with the prescribed rules. If this income is retained by the Trust it may only be made available for distribution to the cemetery operator. Expenditures The capital accumulated within the Trust cannot be used for any purpose except as required or permitted by the Act or the regulations. Distributed interest earned from the investment and reinvestment of contributions from markers can be used to stabilize, maintain, secure and preserve markers in the cemetery. Interest earned from the investment and reinvestment of money paid into the trust for purposes other than for markers can be used to maintain, secure and preserve the cemetery, including its grounds, buildings, structures and markers, and for the equipment used to maintain, secure and preserve the cemetery. Regulation permits the operator to use income from the fund or account to pay a worker wages and benefits for engaging in, or supervising, the stabilization, maintenance, securing or preservation of markers, the cemetery or any of its grounds, buildings, structures or markers; or the equipment used to maintain, secure or preserve the cemetery. Recommended Target Levels N/A COMMENTS: The 2021 ending balance is $982,475. Page 568 of 650 2021 Summary of Reserves & Trusts 31 CEMETERY PRE-PAID TRUST The Cemetery Pre-Paid Trust holds funds in trust for pre-paid cemetery services and has been established under Part VI of the Funeral, Burial and Cremation Services Act, 2002, Section 52 and Ontario Regulation 30/11, Section 77-81. Revenues The Cemetery Pre-Paid revenues were collected from Cemetery customers for pre-paid services up until 2014. They are no longer being collected as pre-paid services are not being offered by the Tillsonburg Cemetery. Interest earned from the Trust is retained within the Trust. Expenditures The funds in the Trust must be used for the purpose for which they were collected. When one of the clients who has pre-paid for cemetery services has need of those services, the funds held in trust plus the interest earned on those funds are used to pay for the services. If the fee for the services is less than the funds plus interest, any leftover must be returned to the estate of the client. If the fee is greater than the accumulated funds, the difference is waived by the Town. Recommended Target Levels The target level is $0. As the pre-paid services are performed, the balance in the Trust will decrease to zero. COMMENTS: There are Provincial regulations and annual reporting requirements associated with pre-paid trusts that must be complied with as long as there are funds in the Trust. The 2021 ending balance is $29,392 representing 63 prepayments. Page 569 of 650 2021 Summary of Reserves & Trusts 32 COMMUNITY TRUST The Community Trust was established to receive, maintain, control and use donations for community designated purposes. The Trust was defined and Trustees appointed By-Law 4322 on the 24th day of June, 2019. Revenues The Community Trust revenues are from Donations and Bequeaths received and deposited into this trust account. Funds in the Community Trust may be invested in such securities as the trustees may invest in under the Trustee Act, and the earnings derived from the investment of such monies form part of the trust fund. Expenditures This Community Trust shall be disbursed by the Trustees. These funds will be disbursed to focus on community purposes such as heritage designations, disaster relief, fire safety, parades, festivals, theatre and so on. Recommended Target Levels The recommended minimum target shall be $50,000. COMMENTS: The 2021 ending balance is $79,290. CONSOLIDATED ACCOUNTS: PURPOSE: John Scott $5,592 Poor of Tillsonburg John McIntyre $3,173 Sick children John Law $33,260 Bands, concerts, & musical entertainment Emergency $2,877 Citizens affected by a fire or other disaster LACAC $8,379 Public awareness of heritage conservation Fire Safety House $1,368 Fire safety Rowing $57 Sponsorship of rowing athletes Youth Request $17,961 Special project grants and bursaries for youth Christmasfest $6,623 Page 570 of 650 2021 Summary of Reserves & Trusts 33 LAKE LISGAR REVITALIZATION TRUST The Lake Lisgar Revitalization Trust is to be used for generating funds for the care and maintenance of the water quality of Lake Lisgar and the shorelines in and around Lake Lisgar. Revenues The Lake Lisgar Revitalization Trust revenues are from donations, bequests, grants and fundraising activities. If the balance in the Trust is less than the targeted minimum, there may be contributions from the Town’s operating budget. Interest earned on the funds in the Trust will be retained in the Trust. Expenditures Eligible expenditures include projects upstream of the Lake like sediment ponds and erosion mitigation. Eligible expenses also include equipment, project expenses, scientific research, water quality monitoring, grant matching, and activities or projects that inform people about the importance of water quality and how they can assist with keeping Lake Lisgar clean. Recommended Target Levels The recommended target minimum is $50,000. COMMENTS: The 2021 ending balance is $36,848. CONSOLIDATED ACCOUNTS: PURPOSE: Lake Lisgar Trust $24,390 Purchase parkland and equipment Fountain Trust $12,458 Maintain the Lake Lisgar fountain Lake Lisgar Water Quality Trust* $0 Maintaining and protecting of the overall health of Lake Lisgar *New for 2021. Page 571 of 650 2021 Summary of Reserves & Trusts 34 PARKLAND TRUST RESERVE The Parkland Trust Reserve provides a source of funds for Parkland acquisition, projects and equipment. Within the Parkland Reserve is a separate Memorials component that will fund replacements and maintenance of memorial benches and trees in Town Parks. The Trust was defined and Trustees appointed through By-Law 4322 on the 24th day of June, 2019. Revenues The Parkland Trust Reserve revenues are from contributions from land developers and severances remitted under Section 51.1 (3) of the Planning Act R.S.O. (1990), from the sale of land previously designated for parkland purposes, and from donations. The Memorials Component will receive 10% of each memorial bench & tree fee. The Reserve will also retain interest earned by the funds in the Reserve. Expenditures The Parkland Reserve is to be used for Parks planning and plan implementation, surveys, landscaping projects, park amenities and other special Parks projects. Funds in the Memorials component will be used to replace, repair or maintain memorial benches and trees in Town Parks. Recommended Target Levels The recommended target minimum is $10,000. COMMENTS: The 2021 ending balance is $90,114. CONSOLIDATED ACCOUNTS: PURPOSE: Parkland Trust $88,400 Purchase parkland and equipment Arbour Day $1,714 Plant trees Page 572 of 650 2021 Summary of Reserves & Trusts 35 SCHOLARSHIP TRUST The Scholarship Trust was established to receive, maintain, control and use donations for scholarship awards. The Trust was defined and Trustees appointed through By-Law 4322 on the 24th day of June, 2019. Revenues The Scholarship Trust revenues are from donations and bequeaths for the Town which are deposited to the trust account. The trust funds may be invested in such securities as the trustees determine under the Trustee Act and the earnings derived from the investment of such monies form part of the trust fund. Expenditures The Scholarship Trust funds shall be disbursed by the trustees on choosing a suitable recipient of a scholarship. The request for funds shall be provided from Tillsonburg High Schools and/or from neighboring Public or Private Schools to which Tillsonburg residents attend. Recommended Target Levels The recommended minimum target shall be $20,000. COMMENTS: The 2021 ending balance is $35,963. CONSOLIDATED ACCOUNTS: PURPOSE: Police Services Board Trust (PSB) $30,529 Police (Foundations) Studies M.L. Covey Trust $5,434 Modern Language Studies Page 573 of 650 2021 Summary of Reserves & Trusts 36 J.L. SCOTT MCLEAN OUTDOOR RINK TRUST The J.L. Scott McLean Fund is to be used for capital expenses and ongoing facility improvements related to the construction of the outdoor refrigerated ice pad/basketball court facility behind the Tillsonburg Community Centre. The Trust was defined and Trustees appointed through By-Law 4126, Schedule A, on the 21st day of August, 2017. Revenues The J.L. Scott McLean Fund revenues are from donations received by the Town. Donations received herein shall be deposited into this trust account and may be invested in such securities as the trustees may invest in under the Trustee Act, and the earnings derived from the investment of such monies form part of the trust fund. Expenditures The J.L. Scott McLean Fund shall be disbursed by the trustees. Trustees are to determine the disbursement of the funds to focus on the construction of a new outdoor refrigerated ice pad/ basketball court facility in Memorial Park, the refrigeration of the facility and improvements to the facility. COMMENTS: The 2021 ending balance is $74,752. Page 574 of 650 By-Law 2020-008 Schedule A 5-005 Page 1 of 5 FINANCE Policy 5-005: Reserve Policy Approval Date: January 13, 2020 Approval Authority: Council, By-Law 2020-008 Effective Date: January 13, 2020 Next Scheduled Review Year: Department: Finance Last reviewed: January 13, 2020 Revision Date/s: May 8, 2017 (By-Law 4107) Schedules: Schedule A: List of Reserves Schedule B: List of Obligatory Reserves Schedule C: Trust Fund Policy Policy Statement: A Policy governing the management and administration of reserves and reserve funds. Purpose: The purpose of this policy is to establish consistent principles, standards and guidelines for the maintenance, management and accounting of reserves and reserve funds. The primary purpose for reserves and reserve funds is: • Adherence to statutory requirements; • Promotion of financial stability and flexibility; • Provision for major capital expenditures; • Smooth expenditures which would otherwise cause fluctuation in the operating budget; and • To take advantage of financial opportunities that may arise. Scope: The Municipal Act, 2001, section 290 provides that a municipality’s budget shall set out amounts to be paid into and out of reserves. A municipality may establish reserve funds for any purpose for which it has authority to spend money. Definitions: “Reserves" are a provision or amount that is designated for a future purpose and are established by approval of Council and are not restricted by legislation. They can be related to projects that are of a nature prescribed and managed by approval of Council. Examples include the Airport Reserve or IT Reserve. Reserves receive an annual interest allocation. "Reserve Funds" are restricted by municipal by- laws or agreements and receive an Page 575 of 650 By-Law 2020-008 Schedule A 5-005 Page 2 of 5 annual interest allocation based on the average annual balance. The Town has two classifications of Reserve Funds, Obligatory Reserve Funds and Discretionary Reserve Funds. “Obligatory Reserve Funds” are restricted by legislation, by- laws or agreements. Some of the Obligatory Reserve Funds are the Development Charge Fund, the Gas Tax Fund and the Building Permit Reserve Fund. “Discretionary Reserve Funds” have been created for a specific purpose by Council. Examples include Capital Infrastructure Reserve, Parking Reserve and Lake Lisgar Revitalization. Implementation Procedure: 1. Objectives 1.1. To establish reserves as approved by Council for: i. Future capital expenditures ii. Operating projects and surpluses iii. Sale of fixed assets or land iv. Unexpected or unplanned events v. The reduction of debt financing vi. Or any other purpose that Council designates that would otherwise cause fluctuations in the operating or capital budgets. 1.2. To establish reserve funds through the adoption of a by- law for specific purposes as approved by Council. 1.3. All reserves held in cash will be held in a separate bank account. 2. Accountability 2.1. 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 and the allocation of interest. 2.2. Staff provides recommendations on the transfer of funds. 3. Prescribed Council Authority 3.1. Establish new reserves; 3.2. Close existing reserves; 3.3. Amalgamate reserves; 3.4. Transfer funds to and from reserves via the approved annual budget; 3.5. Transfer funds to and from reserves through Council resolution not addressed through the budget process. 4. Reporting 4.1. Annually, as part of the budget process, staff will prepare an update on all of the reserve and reserve funds. Each fund will have a policy statement, source of revenue an expenses, recommended target levels, the year- end balance and any other pertinent data. The budget will provide any balances and show a summary of Page 576 of 650 By-Law 2020-008 Schedule A 5-005 Page 3 of 5 revenues and expenses. In addition, the balances of the reserve and reserve funds are provided in the Town' s audited financial statements. 5. Approved Reserves and Trust Funds 5.1. Schedule A attached lists all of the Reserve Funds, Schedule B the Obligatory Reserve Funds and Schedule C the list of Trust Funds. These schedules will be reviewed annually and the schedules modified with new, amalgamated or closed reserves. Page 577 of 650 By-Law 2020-008 Schedule A 5-005 Page 4 of 5 Schedule A: List of Reserves Airport Reserve Asset Management Funding Reserve Cemetery Reserve Council Reserve Development Remediation Reserve Downtown Parking Reserve Economic Development Reserve Election Reserve Engineering Reserve Facility Infrastructure Reserve Fire Department Equipment Reserve Fire Department Labour Reserve Fleet and Equipment Reserve Insurance Reserve IT Equipment Reserve Linear Infrastructure Reserve Physician Recruitment Reserve Police Reserve Police Services Board Reserve Recreation Culture and Parks Reserve Tax Rate Stabilization Reserve Transit Reserve Waste Management Reserve Winter Maintenance Reserve Page 578 of 650 By-Law 2020-008 Schedule A 5-005 Page 5 of 5 Schedule B: List of Obligatory Reserves Building Fee Reserve Development Charge Reserves Gas Tax Rebate Reserve Schedule C: Trust Fund Policy Annandale House Trust Cemetery Maintenance Trust Cemetery Perpetual Care Trust Cemetery Prepaid Trust Community Trust Lake Lisgar Revitalization Trust Parkland Trust Scholarship Trust J.L. Scott McLean Trust Page 579 of 650 Page 1 of 4 SUBJECT: 2021 Surplus Allocation Report Number: FIN 22-19 Department: Finance Department Submitted by: Renato Pullia, Interim Director of Finance/Treasurer Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT the 2021 surplus of $1,006,934 be allocated to the following reserves: 1. $244,352 be transferred to the Fleet and Equipment Reserve 2. $21,770 be transferred to the Airport Reserve 3. $77,958 be transferred to the Asset Management Reserve 4. $24,000 be transferred to the Economic Development Reserve 5. $307,328 be transferred to the Facility Infrastructure Reserve, to cover the $254,000 budgeted in 2022 capital budget for design work for a new Town Hall, and $53,328 to cover the Town’s portion of a 2021 capital project for a Facilities Assessment 6. $22,904 be transferred to the Insurance Reserve 7. The balance of the surplus of $308,622 be transferred to the Tax Rate Stabilization reserve BACKGROUND The Annual Surplus/Deficit Allocation Policy, approved on June 12, 2017 and attached as Appendix A, and the Town’s Reserve Policy, a policy governing the management and administration of reserves and reserve funds, approved on January 13, 2020, govern the allocation of surplus funds and transfer of funds to and from reserves. Given the finalization of the 2021 financial statements and related year-end audit, a surplus of $1,006,934 is reported, comprised of $77,958 in Capital and $928,976 in Operating surplus, attached as Appendix B (the difference of $66 from the $929,042 is Page 580 of 650 FIN 22-19, 2021 Surplus Allocation Page 2 of 4 due to rounding). This report provides a staff recommendation on the allocation of that surplus, in line with the noted policies. DISCUSSION The surplus allocation policy provides a priority allocation of Operating budget surpluses, as follows: 1. Fund the Fleet and Equipment Reserve to the upper limit or to a lesser amount required to fund capital projects; 2. Fund reserves deemed appropriate by the CAO and Director of Finance, in collaboration with Senior Leadership Team (SLT); 3. Fund the Tax Rate Stabilization Reserve to its upper limit; 4. If funds remain, to be carried forward to subsequent year’s budget The Town’s Reserve Policy, approved by By-law 2020-008, identifies the list of discretionary vs obligatory reserves, along with a list of trust funds. It also prescribes Council authority over the establishment of new reserves, closing existing reserves, amalgamating reserves, and transferring funds to and from reserves not addressed through the budget process. While the Surplus Allocation policy authorizes the Director of Finance to create any new necessary reserves, Council’s authority through the By- law supersedes this, and thus Council approval is required to create new reserves. In keeping with the surplus allocation policy priorities, a listing of reserves and their respective allocations are shown in Appendix C, as attached, with a summary of recommendations as follows: - An amount of $244,352 be transferred to the Fleet and Equipment Reserve to meet the minimum target of $830,000. - The surplus of $21,770 in the Airport budget be transferred to the Airport Reserve. - The capital surplus of $77,958 be transferred to the Asset Management Reserve to be available for future capital projects. - Commissioner Panschow requests that the 2021 budget amount of $20,000 for the cancelled Asia Mission and the trade mission related rebate amount of $4,000 from the Southwestern Ontario Marketing Alliance be transferred to the Economic Development Reserve to be used for future trade mission expenses. - An amount of $307,328 be transferred to the Facility Infrastructure Reserve. This is to cover the $254,000 budgeted in 2022 capital for design work for a new Town Hall, and $53,328 to cover the Town’s portion of a capital budget in 2021 for a Facility Assessment ($50,000 is funded from FCM to cover the $103,328 project expenditures). Both of these projects were budgeted to be debentured, Page 581 of 650 FIN 22-19, 2021 Surplus Allocation Page 3 of 4 but have since determined that debentures are not eligible on studies, but only eligible on projects that include a tangible capital asset. Studies such as for the Town Hall require internal financing until such time as they can be capitalized with the cost of a tangible capital asset. - An amount of $22,904 be transferred to the Insurance Reserve to meet its minimum target of $50,000. - CAO Pratt requests $100,000 be transferred to a reserve to fund a market salary review and implementation in 2023. It is recommended that the Tax Rate Stabilization reserve be used to hold such funds, and a future report be brought forward to recommend an amendment to Schedule A of By-law 2020-008 to create a specific reserve where these funds can be transferred into. Thus, the balance of the surplus of $308,622, which includes the $100,000 to be transferred out at a future date, be transferred to the Tax Rate Stabilization reserve. CONSULTATION The Senior Leadership Team was provided an opportunity for recommendations of transferring any respective surplus funds, which have been incorporated into the report. Both the Surplus Allocation policy and the Reserve policy require review with recommendations brought forward to Council at a future meeting for approval. FINANCIAL IMPACT Positive impact to the Town’s reserves, which will be utilized in future budgets to mitigate levy increases. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☒ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☒ Community growth ☐ Connectivity and transportation Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Page 582 of 650 FIN 22-19, 2021 Surplus Allocation Page 4 of 4 Goal - The Town of Tillsonburg will strive for excellence and accountability in government, providing effective and efficient services, information, and opportunities to shape municipal initiatives. Goal - The Town of Tillsonburg will accommodate and support sustainable growth. Strategic Direction – Plan and develop a long-term financing strategy for new services and infrastructure to support growth. Priority Projects – Ongoing Projects – Replenish and grow municipal reserves. ATTACHMENTS 1. Appendix A – Annual Surplus/Deficit Allocation Policy 2. Appendix B – 2021 Capital and Operating Surplus summary 3. Appendix C – 2021 Surplus Allocations Page 583 of 650 ANNUAL SURPLUS/DEFICIT ALLOCATION POLICY Annual Surplus / Deficit Allocation Policy Policy Statement The purposes of this policy are:  To ensure that operating surpluses are returned to the taxpayers;  To establish a priority framework for the allocation of any operating surpluses and eliminate any operating deficits through the use of the same priority framework. Scope This policy applies to all Town of Tillsonburg departments, excluding Building, which contributes surpluses and allocates deficits from the Obligatory Building Permit Cost Stabilization Reserve. This policy does not apply to revenues generated from Development Charges. These funds are to be allocated to the appropriate Development Charge Reserve. This policy does not apply to proceeds received through the Federal Gas Tax program. Unspent Gas Tax funds are to be allocated to the Gas Tax Rebate Reserve. Policy Guiding Principles Surpluses which are not required to fund reserve balance thresholds, as set out in the Town's Reserve Fund Policy, shall be distributed as outlined in the "Priority Allocation for Operating Surpluses" section below. A deficit shall be funded as outlined in the "Priority Application for Operating Deficits" below. Department staff will respect the nature of and manage a global budget by first offsetting higher than expected spending in one area through savings in another. Priority Allocation for Operating Surpluses Certain Reserve Funds have been established with the primary source of funding as an allocation from operating surpluses. Each of these Reserve Funds have targeted upper limits. An operating surplus is to be allocated as follows 1. Fleet and Equipment reserve, until the upper limit of the fund as defined in By-law 4107 Reserve Policy is met; However, the Director of Finance and CAO may approve a lesser amount a. The Minimum contribution shall be equal to the lesser of: i. The amount required to fund capital projects funded from Reserves as approved in the subsequent budget year; or ii. The entirety of the operating surplus Page 584 of 650 ANNUAL SURPLUS/DEFICIT ALLOCATION POLICY Priority Allocation for Operating Surpluses (continued) 2. The remaining of any operating surplus shall be allocated to reserves by the CAO and Director of Finance in collaboration with the Senior Leadership Team, until the upper limit of the funds as defined in By-law 4107 Reserve Policy is met. a. Where no reserve has been previously established, the Director of Finance is authorized to create the necessary reserves. The creation of reserves shall be contingent on a review of budget obligations, which in the opinion of the CAO and the Director of Finance are material; 3. Tax Rate Stabilization Reserve until the upper limit of the fund as defined in By-law 4107 Reserve Policy is met; 4. If surplus funds still remain, the amount shall be carried forward to the subsequent years' budget in accordance with the provisions of the Municipal Act. Priority Application for Operating Deficits An operating deficit is to be allocated as follows: 1. Transfer the necessary funds from the Tax Rate Stabilization Reserve unless these funds have been included in the subsequent years' budget funding estimates; 2. Review the status of discretionary reserves and, in collaboration with Senior Leadership Team, transfer any available funds from these reserves to the operating deficit; 3. Transfer the necessary funds from the Asset Management Funding Reserve, unless these funds have been included in the subsequent year's budget funding estimates; 4. If a deficit still remains, the amount shall be carried forward to the subsequent years' budget in accordance with the provisions of the Municipal Act and staff shall be directed to review their budgets to find savings equal to the unfunded deficit amount. Approval Process In addition to any information requested by Council, or that the Director of Finance consider appropriate, Council shall be presented with a report for their approval detailing the following no later than the date at which the Audited Financial Statements are presented: 1. The recommended distribution of the operating surplus or deficit funding 2. A list of any reserves created under Paragraph 2.a. of “Priority Allocation for Operating Surpluses” which will include their revenue source, use of funds (expenses) and minimum/maximum fund limits. This policy will be reviewed annually after the year end surplus or deficit figures have been verified. Page 585 of 650 Appendix B ‐ 2021 Capital and Operating Surplus Page 586 of 650 Appendix C - Reserves and Surplus Allocations2021 2020 Capital Operating TotalOperating surplus1,006,934195,418 77,958$ 928,976$ 1,006,934$ 20212021Reserve Policy Reserve Policy UpdatedReserves2021 2020 Min Max AllocationAllocation method Targets BalanceAirport31,428 31,238 34,000 68,000 21,770 YE surplus 50% to 100% of Airport Operating Bdgt 53,198 Asset management funding937,899 972,386 - 508,512 77,958 Growth portion of Assessment 3% of annual budget 1,015,857 Cemetery92,878 67,469 50,000 - - YE surplus 92,878 Council3,609 3,587 - - - from taxation 3,609 Development remediation23,002 18,489 - - - o/s holdbacks, deposits and securities 23,002 Downtown parking352,108 275,859 - - - YE surplus 352,108 Economic development1,514,104 135,046 500,000 5,000,000 24,000 Industrial and commercial land sales 1,538,104 Election38,963 28,760 13,500 54,000 - from taxation 38,963 Engineering298,121 242,975 70,650 141,250 - YE surplus 25% and 50% of Operating Budget 298,121 Facility infrastructure1,061,920 1,110,545 - - 307,328 from taxation specific project needs 1,369,248 Fire department equipment102,237 74,168 75,000 225,000 - from taxation 102,237 Fire department labour- - 15,000 - - Fire Dept. suppression labour budget PT Fire Suppression Labour Costs - Fleet and equipment585,648 437,167 830,000 2,090,000 244,352 YE surplus 15% - 20% annual capital forecast 830,000 Insurance27,096 1,298 50,000 - 22,904 equivalent to annual deductible 50,000 IT equipment115,818 137,823 75,000 225,000 - Capital cost recovery charge annual capital investment forecast 115,818 Linear infrastructure1,485,341 214,386 2,076,000 16,608,000 - YE surplus 1%-8% of asset replacement values 1,485,341 Physician recruitment114,346 124,647 35,000 100,000 - from taxation 114,346 Police79,827 79,354 - - - YE surplus 79,827 Police services board32,868 32,670 1,000 20,000 - YE surplus /special project 32,868 Recreation, culture and parks545,157 536,178 500,000 - - YE surplus - Capital 545,157 Tax rate stabilization767,589 630,981 447,000 2,542,000 308,622 YE surplus 3% to 15% of Operating Budget 1,076,211 Transit- - 22,500 75,000 - from taxation - Waste management1,915 1,904 83,600 - - YE surplus 1,915 Winter Maintenance- - 50,000 152,000 - YE surplus 10% to 25% of 5-yr average costs - Total Reserves 8,211,874 5,156,930 1,006,934 9,218,808 TargetYear-End BalancesPage 587 of 650 Page 1 of 3 Subject: RFT 2022-003 – Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line Results Report Number: OPD 22-28 Department: Operations and Development Department Submitted by: Shayne Reitsma, Manager of Engineering Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT Council not award Tender RFT 2022 – 003 – Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line as the lowest bid received exceeds the total budget by $355,487.98 (net HST included); AND THAT Council directs staff to find cost savings within the project design and re- tender for 2023 construction. BACKGROUND A tender was issued on June 2022 for the Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line with twenty-three (23) plan takers and a total of two (2) bids received by the closing date of June 24th 2022 with the lowest bid from Eyeco Inc. of North York, ON at a cost of $1,424,639.99 (net HST included). DISCUSSION The tender was advertised on the Bids and Tender. Results of the tender are summarized below: Bidder Location Bid Amount Eyeco Inc. North York, Ontario $1,424,639.99 Enson Ltd. North York, Ontario $1,615,373.00 Page 588 of 650 OPD 22-28 RFT 2022-003 – Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line Results Page 2 of 3 The above bids include net HST of 1.76%. The bids also include a $25,000 contingency allowance for material testing and any unforeseen expenses encountered during construction. In 2021, the Ontario Structure Inspections dictated that replacement is urgent with a 1-5 year timeline. While we note the urgency of this project and the risks associated, a review of the current design and re-tender would allow for more competitive pricing potentially resulting in nearing the budget submitted in 2021. Not all costs can be associated with a small bid size as utility relocation originally were accounted for at approx. $40,000 and are now estimated from hydro and communication utilities at $145,000. Note these cost were not in the tender amounts as seen above. Staff will revisit construction design and methods in order to find cost savings. CONSULTATION The Director of Operations and Development, Director of Finance and Manager of Engineering were consulted during this report. FINANCIAL IMPACT/FUNDING SOURCE The total budget for this project is $1,176,000 which consists of the following budget allocation funded by $294,000 gas tax and $882,000 debenture: ITEM TENDER COST 2022 BUDGET ALLOCATION Town of Tillsonburg Capital - Roads $1,424,639.99 $1,136,000 Hydro Relocation $135,000 $35,000 Rogers Relocation $10,000 $5,000 TOTAL $1,569,639.99 $1,176,000 Note that 2022 tender budget pricing was calculated from an average of three (3) past years. The Gas Tax revenues will remain in the reserve and used in future years. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? Page 589 of 650 OPD 22-28 RFT 2022-003 – Retaining Walls Reconstruction at Beech Blvd and Quarter Town Line Results Page 3 of 3 ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☒ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal - Tillsonburg residents and businesses will be connected to each other, regional networks, and the world through effective traditional and digital infrastructure. Strategic Direction - Develop a robust, long-term asset management plan to inform evidence-based decisions on the maintenance, rehabilitation and replacement of municipal infrastructure. Priority Project - Asset Management Plan ATTACHMENTS None Page 590 of 650 Page 1 of 15 Subject: 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Report Number: OPD 22-30 Department: Operations and Development Department Submitted by: Carlos Reyes, Director of Operations and Development Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT report OPD 22-30 2021 2021 Tillsonburg Regional Airport Master Plan – Implementation Update be received as information. BACKGROUND The Tillsonburg Regional Airport is a registered aerodrome with no certificate in force. Registered aerodromes are responsible for fewer regulatory requirements in comparison to certified airports and are not required to be operated as per all the requirements of TP312, Transport Canada’s Aerodrome Standards and Recommended Practices. The Airport is governed by Town Council and advised by the Tillsonburg Airport Advisory Committee (TAAC). The TAAC’s mandate is to advise and make recommendations to Council on matters related to the Tillsonburg Regional Airport; provide a forum for receiving input and advice from aviation stakeholder groups and the community with respect to the Airport Master Plan and strategic initiatives; and provide a forum for dialogue and communication. Airport operations are overseen by an Airport Manager who reports to the Manager of Public Works, who in turn reports to the Town’s Director of Operations and Development. Day-to-day operations of the airport are the responsibility of The Airport Manager. The airport property totals approximately 630 acres. The property is situated within the Township of South-West Oxford, is zoned MA-1 Airfield Industrial. Page 591 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 2 of 15 A large portion of the airport property (410 acres) is currently leased to three (3) individual farmers. The property is split into three (3) segments that measure 347.3 acres, 48.7 acres and 8 acres. The agricultural land leases at the Airport undergo a competitive tendering process. Two (2) of the farmers who lease the 48.7- and 8-acres segments have a lifetime lease in place, and they pay the same rate as the farmer who leases through the tendering process. There are no other leases other than hangar land leases at the airport. Currently, Tillsonburg Regional Airport (YTB) is home to three (3) commercial hangars, one (1) ten bay T-hangar, 18 single hangars and one (1) hangar with four (4) owners and four (4) doors. In the past five (5) years, a total of six (6) new GA or commercial hangars were developed at Tillsonburg Regional Airport. One (1) hangar was constructed in 2016, two (2) were developed in 2019, and as of December 2021, three (3) new hangars were built this year. Two other hangars are slated to be built in 2022. According to the Canadian Aircraft Registry, 74 Canadian registered aircraft list YTB as their base of operation. Among the 74 aircraft, 53 aircraft are airworthy, with 41 have a Certificate of Airworthiness, and 12 have a Special Certificate of Airworthiness. Three (3) of 53 airworthy aircraft are registered for commercial usage, while the remaining 50 aircraft are for private use. Most of the 74 registered aircraft have a piston engine. The Tillsonburg Regional Airport is not required to have any airport manuals by Transport Canada regulations; however, the current management has multiple manuals that are quite comprehensive regarding the Airport and its operations. Municipal Property Taxes collected from all onsite tenants amounted to $30,684 (2020 data). This amount is directed to the Township of South-West Oxford. DISCUSSION In 2021, Town Council endorsed the 2021 Tillsonburg Regional Airport Master Plan. This plan considers short-term (1-5 years), medium-term (6-10 years) and long-term (11-20 years) planning horizons. 2021 Master Plan Recommendations/Goals: The following recommendations/notes are included in the approved Master Plan: Recommendations/Notes Comments Runway - The main runway is in fair to good condition and the expected life is over 10 years with annual maintenance. Annual maintenance will continue on this asset. Staff will include this inspection as part of the Road condition assessment. Fuel Farm - The Fuel Farm is becoming dated. To avoid environmental risk and associated liability, we recommend the Airport should replace its fuel farm in Phase 1 of the capital investment plan. Staff have retained a contractor to complete an annual inspection this year and service the following: Avgas Cabinet: New filter cartridge, bonding cable, and hand Page 592 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 3 of 15 pump to sump the underground tanks. Jet-A Cabinet: New coalesce / separator cartridge, differential pressure gauge, 100’ hose, new bonding cable with reel, and a hand pump to sump the underground tanks. Replacement of the fuel farm will be planned for 2027 Drainage - Drainage is a recurrent concern at YTB due to the type of soil that impede surface water absorption, and poor run-off conditions in groundside areas. The site is drained by a series of roadside ditches, catch basins and storm sewers. Staff completed drainage improvements works as part of the general aviation site extensions. Staff is investigating drainage concerns next to runways. Terminal Building - The Terminal is nearing its capacity mainly due to the growth of the restaurant and overall activities. To meet demand, we are suggesting a 35% expansion in area on both floors. This expansion will be considered for years 10-15. Land Lease Fees - We recommend the Airport should include the lands between the hangar and the taxiway as part of the leasable lands and a buffer zone of one (1) or two (2) metres (5 feet) around the building. For tenants installing a septic bed or other amenities, these lands should also be considered as leasable lands. New land lease agreements or amendments will include a buffer zone of 5ft around the building and the lands between the hangar and the taxiway as part of the total leased area. Development Fund - A long standing topic at YTB is the lack of participation from Southwest Oxford Township and Oxford County in the airport ownership and recurrent funding. To unlock part of this situation, we recommend the creation of a jointly managed Airport Development Fund. This fund would be created by capturing a portion of newly generated (2022 and beyond) taxes from future airport developments. Staff presented a delegation to SWOX on November 2, 2021 requesting a commitment from SWOX to transfer to the Airport Development Fund 75% of any new taxes levied from the construction of new buildings on airport lands. Staff also presented a delegation to Oxford County Council on October 13, 2021 requesting an annual grant of $100,000 to support the airport asset maintenance and rehabilitation. These requests were received as information without support. ESA - Based on the findings of this Phase One ESA, a Phase Two ESA is recommended to investigate the potential for contamination This investigation will be included in the 2023 budget. Page 593 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 4 of 15 related to the above-noted APECs. The cost of a Phase 2 ESA is $13,800. Hangar Numbering - The main purpose of numbering is for airport safety, emergency responses and administrative purposes. We recommend a two-digit strategy where the first digit represents the taxiway the hangar is located on and a second digit identifying the hangar always starting with the lowest number being the hangar furthest to the north for taxiways running north to south. Staff will use new numbering system for any new agreements, transfer, or amendments of existing agreements as shown on Appendix A - Figure 9. Staff will order new hangar number signs by the end of this month. Airside Access - Security Gate - As highlighted, many times during this mandate, open airside accessibility is a major concern of the Airport/Town but also of tenants and users. Up to now, the Airport had to allow such an access to enable tenants to reach their hangars, but it did not permit airport users to access the movement areas and created a serious liability condition for the Airport/Town. The first step should be the installation of automated card gates to block free airside access. This activity will be completed this year as part of the RATI funded project. Promotion - Airport Development and Investment Attraction - There is presently no investment attraction and airport marketing strategy in place to promote YTB to potential investors. Such a strategy would be helpful to drive more business to YTB. Staff met with Meredith Maywood, Oxford County Tourism on November 17, 2021 to discuss any opportunities for airport promotion/marketing. Staff is investigating the implementation of fly-in packages. This work will be coordinated with Economic Development (Town and County). Electrical Service - Existing Airport site is supplied with electricity from a single 167 kVA single-phase feeder to the site. The report suggested a limit of potentially 19 additional services on the general aviation side, and a potential of 22 additional services on the commercial side before additional capacity is required. In addition, To determine the exact demand requirements of the larger development, the Town should consider undertaking a comprehensive electrical master plan including a capacity study. The Town has retained ERTH Holdings to complete an investigation of the existing hydro capacity and provide plans for the location of new service connections Page 594 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 5 of 15 Terminal Generator - A generator with an automatic transfer switch should be budgeted as an early investment. It is required to render the airport’s essential Town-operated components as operable to enhance essential emergency services for the Town and nearby communities. This project will be included in the 2023 budget Trees - It is noted that the operational runway length is restricted by the presence of trees on the approach to runway 26 and a 1,000-foot displaced threshold is in effect. This situation is well known and documented. Staff is investigating the removal of trees within out property limits. LPRCA, Town arborist, Manager of Engineering and Contractor. Estimated Completion: August 2022 (Pending Contractor availability) Grassed Runways - Two secondary grassed runways (02-20, 14-32) also exist and are not maintained during winter months. Runway 02-20 would need heighten maintenance for a few years. Runway 14-32 is in good condition. Both grass taxiway should be rolled a few times every year and sowed annually. Grassed runways were rolled earlier this year. A second rolling is planned for July 2022. Marketing Campaign - We recommend YTB orchestrate a small marketing campaign using the airport slogan “Big Sky, Big Runway, Big History” to promote the expansion and availability of hangars today and the development plans for the future. The campaign can be web-based and present the various types of hangars that are available and/or planned with supporting airport data and services. The outreach should be to all pilots and aircraft owners in southern Ontario including using based tenants and hangars owners in support of disseminating the information. Social medias, handouts to transient aircraft, emailing campaign and advertisement in the COPA newsletter are other avenues to reach the targeted clienteles. The Town has been advertising the airport on the TGO bus since October 2021 (Appendix A - Figure 6). Staff is also working on an Airport Development Map that will be available on the website by Q3 2022 (Appendix A - Figure 7). https://arcg.is/0SKTzm Staff is investigating an amendment to the official plan and zoning change application for a portion of the airport lands to satisfy the recommendations for development included in the Master Plan (To be completed by December 2022). Parking Fees - The monthly parking fee rate at YTB is $60. We recommend YTB raise its monthly parking fee to a minimum of $80 per month. Such an increase could be tied to the main apron expansion and new aircraft parking facility. It could also apply to transient aircraft only or have local and transient rates. Presently some aircraft are parked on grass or broken patio stones. A solid concrete or asphalt base would be a minimum. This update will be included in the 2023 Tariffs and Fees by-law. Page 595 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 6 of 15 Airport Monitoring - To support the associated accounting and monitoring of the daily aircraft movements including the capture of tail numbers, a camera can be mounted on the Terminal to capture arrivals after daily operating hours. A security camera will be installed later this year to support the associated accounting and monitoring of the daily aircraft movements including the capture of tail numbers. Landing Fees - The following schedule of fees is an extract from the Wiarton Airport (YVV) schedule of fees and one that could implement at YTB. Max Takeoff Weight (MTOW) • 1999-2999 kg $15 • 3000-4999 kg $25 • 5000-8999 kg $50 • 9000-12,499 kg $100 • 12,500-19,999 kg $150 • 20,000-39,999 kg $250 • 40,000 kg or greater $10 per 1000kg This update will be included in the 2023 tariffs and Fees by-law. Other fees - The listing below presents a benchmarking of other potential fees: Medevac/Cargo Aircraft: $50/flight Enplaning Passenger: $8/passenger After Hour Snow Removal: 150/hour/equipment Car Parking: $20/week, $50/month Airside Escort & Vehicle: $60/hour/vehicle After Hour Airport Operations/Fuel Service: $150/first hour +$50/additional hour These proposed fees will be included in the 2023 tariffs and Fees by-law. Communication A new email account for the Airport Manager was created earlier this year to facilitate any communication between tenants, stakeholders and Airport administration Airportmanager@tillsonburg.ca (Appendix A - Figure 8). Capital Projects: The following capitals projects are included in the approved Master Plan: YTB Master Plan Implementation Planning Cost Estimate Proposed year / Status Phase 1 - Year 1 to 5 Extending Ramp, adding tie-down and a run-up area $ 185,000 2025 Widening Alpha to allow aircraft to cross $ 225,000 2026 Extension of G2 $ 70,000 Completed Electrical Upgrade plus generator $ 285,000 2024 Page 596 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 7 of 15 Extending G3 (as required) $ 60,000 Completed Extension of Taxiway Charlie southward (as required) $ 40,000 2023 Widening G1 and extending south and to Delta $ 420,000 Partially Completed Moving Sideway Hangar (Private Hangar) $ 50,000 Unknown Relocating Fuel Farm or extending ramp toward the west $1,000,000 2027 Phase 2 - Year 6 to 10 Extending Delta to G3 and G4 $ 340,000 2028 Construction of G4 (as required) $ 500,000 2028 Repavement of main ramp $ 396,000 2030 Terminal Expansion $ 450,000 2032 Phase 3 - Year 11 to 15 Extending G2 or G3 to runway $ 275,000 2035 Runway and Taxiway Alpha overlay $3,200,000 2037 Phase 4 - Year 16 to 20 Airport Entrance Rehabilitation/Relocation $ 325,000 2042 Proposed Development Strategy: The following Development Strategy for the airport lands is included in the approved Master Plan: General Aviation Site Project/Goal Year Status Two new hangars Year 1 Completed Development of an eight (8) T- Hangar by the Airport/Town (1,500sqft per bay) Year 2 Staff will include this project in the 2023 budget for Council Approval. Two hangars every year (one private and one Airport/Town- owned) Year 3-10 Currently, 6 hangar spaces are available for development. Commercial Site Project/Goal Year Status One new hangar – estimated size 5,000 sq. ft. Year 1-5 A new 60x90 (5,400 sq.ft) hangar application may be filed this year. One new hangar – estimated size 5,000 sq. ft. Year 6-10 Extension of taxiway C1 will be included in the 2025 budget to create more hangar spaces. One new hangar – estimated size 5,000 sq. ft. Year 11-15 Continue promotion of the airport. Light Agri-Industrial Park (A2) Project/Goal Year Status Page 597 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 8 of 15 Marketing campaign to secure a land lease with a developer for either a light agri-industrial development. Year 1-2 Staff is investigating an amendment to the official plan and zoning change application for a portion of the airport lands (To be completed by December 2022). First land lease secured Year 3 Staff will work with the Loomex group and Economic Development Officer to promote these lands. Promotion to be launched Q3 2023 Marketing campaign to secure next land lease. Year 3-4 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Second land lease secured. Year 5 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Agri-tourism/agri-retail development (B1) Project/Goal Year Status Marketing campaign to secure a developer for the first agri- tourism/agri-retail development. Year 1-2 Staff is investigating an amendment to the official plan and zoning change application for a portion of the airport lands (To be completed by December 2022). Lease secured, and infrastructure requirements confirmed and site preparation completed. Year 3 Staff will work with the Loomex group and Economic Development Officer to promote these lands. Promotion to be launched Q3 2023 Marketing campaign to secure a developer for the second agri-tourism/agri-retail development. Year 3-4 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Construction of the first agri- tourism/agri-retail development completed Year 4 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Occupancy of first agri- tourism/agri-retail development. Lease secured and construction of the second agri-tourism/agri-retail development completed. Year 5 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Occupancy of second agri- tourism/agri-retail development completed. Year 6 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Agri-Industrial Park and Warehousing development (D1-D2) Project/Goal Year Status Page 598 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 9 of 15 Marketing campaign to secure a tenant for the Agri-Industrial Park and Warehousing development. Parcel D1 Year 1-2 Staff is investigating an amendment to the official plan and zoning change application for a portion of the airport lands (To be completed by December 2022). Infrastructure requirements confirmed and site preparation completed. Year 3 Staff will work with the Loomex group and Economic Development Officer to promote these lands. Promotion to be launched Q3 2023 Construction completed. Year 4 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Occupancy of Parcel D1 Year 5 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Occupancy of first agri- tourism/agri-retail development. Lease secured and construction of the second agri-tourism/agri-retail development completed. Year 5 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Occupancy of second agri- tourism/agri-retail development completed. Year 6 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Land E1 Project/Goal Year Status Sell land E1 Year 1-2 Staff will work with the Economic Development Officer to investigate the existing life lease and promote this land. Tree-Top Adventure Park (B2) Project/Goal Year Status Marketing campaign to secure a tenant for the Agri-Industrial Park and Warehousing development. Parcel D1 Year 1-2 Staff is investigating an amendment to the official plan and zoning change application for a portion of the airport lands (To be completed by December 2022). Infrastructure requirements confirmed and site preparation completed. Year 3 Staff will work with the Loomex group and Economic Development Officer to promote these lands. Promotion to be launched Q3 2023 Construction completed. Year 4 Staff will continue to work with the Loomex group and Economic Development Officer to promote these lands Page 599 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 10 of 15 Hangar Application Process: A new revision of the Airport Development Manual is available to the public. This manual provides detailed information for the hangar development application process including requirements and expectations for each stage of the application. CONSULTATION The following staff and resources have been consulted in preparing this report:  Director of Operations and Development FINANCIAL IMPACT/FUNDING SOURCE No impact to the 2022 budget. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☒ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – Tillsonburg residents and businesses will be connected to each other, regional networks, and the world through effective traditional and digital infrastructure. Strategic Direction – Leverage the municipal airport more effectively to increase access, visibility and business activity in Tillsonburg. Priority Project – Immediate Term - Airport Master Plan and implementation ATTACHMENTS: Appendix A – Figures and Tables Page 600 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 11 of 15 APPENDIX A – Figures and Tables Figure 1. Airport Development Map Figure 2. Years 1-5 - Proposed Airport Works. Page 601 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 12 of 15 Figure 3. Years 1-20 - Proposed Airport Works. Figure 4. Delegation to Oxford County (Slide 10 of Presentation) – November 2, 2021 Page 602 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 13 of 15 Figure 5. Delegation to Southwest Oxford (Slide 9 of Presentation) – October 16, 2021 Figure 6. TGO Airport Promotion – October 2021 Page 603 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 14 of 15 Figure 7. Airport Development Map (Website concept) – Q3 2022 Figure 8. Airport Announcement – Communication process (April 22, 2022) Page 604 of 650 OPD 22-30 2021 Tillsonburg Regional Airport Master Plan – Implementation Update Page 15 of 15 Figure 9. Proposed Numbering System Table 1. Airport Budget (5-year Actuals) Aiport Budget 2017 Actuals 2018 Actuals 2019 Actuals 2020 Actuals 2021 Actuals Grants&s-Oth (5,000)$ (5,000)$ (5,000)$ (30,000)$ (50,000)$ Misc Rev (2,656)$ (3,319)$ (10,303)$ (2,682)$ (681)$ Rent Rev (Hangar Lease)(27,470)$ (27,553)$ (26,834)$ (34,108)$ (37,065)$ Merch Rev (Fuel sales)(254,797)$ (233,907)$ (232,886)$ (193,735)$ (272,751)$ Land Rentals (Farming Lease)(141,934)$ (94,463)$ (90,047)$ (90,437)$ (93,074)$ Total Revenue (431,857)$ (364,241)$ (365,071)$ (350,963)$ (453,572)$ Salaries 175,142$ 113,994$ 114,743$ 113,748$ 111,817$ Fleet 9,183$ 5,421$ 13,892$ 15,672$ 14,993$ Materials/Supplies/Equip/Fuel 194,952$ 200,769$ 197,300$ 165,173$ 227,455$ Insurance 4,968$ 4,977$ 4,979$ 5,555$ 5,054$ Phone, F&M, IT 9,400$ 9,662$ 11,224$ 10,428$ 10,670$ Safety/Meetings/Promotion 3,196$ 2,519$ 1,898$ 1,234$ 857$ Memberships and Training 1,683$ 2,131$ 783$ 638$ 818$ Sp Proj Exp/Legal/Aud 2,790$ 2,998$ 2,500$ -$ -$ Subcontractor Expenses 53,304$ 42,153$ 28,004$ 22,738$ 31,696$ Debt - Interest and Principal 38,840$ 37,511$ 35,568$ 20,124$ 5,486$ Contrib to Reserves 6,000$ -$ -$ 25,000$ -$ Building Maintenance 16,208$ 1,845$ 12,742$ 12,123$ 18,824$ Total Expenditures 515,665$ 423,979$ 423,635$ 392,433$ 427,671$ (Revenue - Expenditures)83,808$ 59,738$ 58,564$ 41,470$ (25,901)$ Highlights of 2021 Actuals: 41% Increase of revenue from Fuels sales compared to 2020 38% Increase of revenue from hangar leases compared to 2019 Revenue Expenditures Page 605 of 650 Page 1 of 4 Subject: Bagged Leaf and Yard Waste Collection Program Report Number: OPD 22-31 Department: Operations and Development Department Submitted by: Richard Sparham, Manager of Public Works Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT Council authorizes staff to explore the change in the former Loose Leaf Collection Program to Curbside Bagged Leaf and Yard Waste Collection Program; AND THAT Council directs staff to proceed with submitting a Request for Tender to retain a qualified waste collection contractor to provide a Curbside Bagged Leaf and Yard Waste Collection Service in 2022. BACKGROUND Since approximately 2007, the Town of Tillsonburg has provided a leaf collection service to residents where leaves are loosely set at the roadside each year and staff collects the leaves with the use of staff and various equipment. Leaf collection is scheduled over a four-week period with staff collecting the leaves in four distinct zones where each zone is scheduled for collection on a specific week. The loose leaf collection presents challenges to both staff and residents. Staff is challenged as the process requires all Roads staffing compliment to complete the leaf collection activities during November/December period. Although the service is generally welcomed by the residents of Tillsonburg, challenges are presented as the collection for each resident occurs on their one scheduled collection day. If their leaves have not fallen from the trees, or they neglect to rake them to the road side, they are tasked with transporting the leaves to the transfer station. The leaf collection program conflicts with the part of the season when staff would normally prepare for the upcoming winter operations season. Winter operations preparations includes refresher training, route planning, materials acquisition, safety checks as well as equipment maintenance and preparation activities. Because of this conflict, staff begins the winter operations preparations during late September to Page 606 of 650 OPD 22-31 Bagged Leaf and Yard Waste Collection Page 2 of 4 October, which significantly decreases time to perform regular activities and tasks normally scheduled for late summer into autumn. DISCUSSION Council for the Town of Tillsonburg passed a resolution at their regular Council meeting on January 27, 2022 directing staff to report on alternatives to the current Leaf Collection process. Staff, in conjunction with AET, following the recommendations of the Waste Management Service Delivery Review and direction from Council, asked AET to provide analytical insights into the possibilities, potential challenges and financial impacts of implementing a Curbside Lead and Yard Waste Collection Program. After reviewing the recommendations from the Curbside Leaf and Yard Waste Collection Memorandum prepared by the AET group, Staff is recommending to retain a qualified waste collection contractor to perform residential leaf and yard waste collection services (similar to garbage collection). The advantages of this method includes: 1. Increased Level of Service to Residents i. Collection will take place over multiple weeks which gives more opportunities for leaves to fall and still be collected ii. Residents can now bag all leaf and yard waste, as opposed to front yard leaves only iii. No leaves from neighbouring homes blowing onto their yards iv. Fewer trips to the Transfer Station required 2. Staff Time is Better Utilized i. No staff time required to collect yard waste ii. Staff can utilize the time to make all necessary preparations for winter operations iii. Staff can further utilize the September/October period to complete late summer/early fall activities which staff could not previously allocate the time to complete 3. Environmental Benefits i. Blowing leaves from yards can often end up in storm sewers, other yards and in ditches, etc. Bag-based Leaf and Yard Waste Collection As the Curbside Leaf and Yard Waste Collection Memorandum states, implementing a curbside bag-based leaf and yard waste roadside collection program can have distinct challenges and may experience some increases in budget, there would be significant decreases in traffic accessing the transfer station as well as number of Leaf and Yard Waste loads shipped to the County’s Waste Management Facility. Town Staff realizes there may be the possibility of increased expenditures realized with Page 607 of 650 OPD 22-31 Bagged Leaf and Yard Waste Collection Page 3 of 4 implementing the Curbside Bagged Leaf and Yard Waste Collection Program, but also feels the significant advantages to both Town operations as well as the residents of the Town of Tillsonburg make it worthwhile to recommend to proceed with a Request for Tender for the Implementation of a Curbside Bagged Leaf and Yard Waste Collection Program to better determine the overall financial impacts at various service levels. Once the bids have been analyzed, Staff will report the findings and recommendations to Council for final determination on the best course of action with which to proceed. CONSULTATION The following staff and resources have been consulted in preparing this report:  Director of Operations and Development FINANCIAL IMPACT/FUNDING SOURCE At this time, there is no financial impact as staff time will be used to prepare and advertise the Request for Tender. Should Council elect to proceed with a program, the program can be funded through the reallocation of Labour and Equipment costs of the account used to fund the program through internal resources; further, some of the Grant Funding for improvements to the operations at the Transfer Station can be used to fund any shortfalls in the first year. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☒ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – The Town of Tillsonburg will strive for excellence and accountability in government, providing effective and efficient services, information, and opportunities to shape municipal initiatives. Strategic Direction – Explore opportunities for service efficiencies in partnership with adjacent municipalities. Page 608 of 650 OPD 22-31 Bagged Leaf and Yard Waste Collection Page 4 of 4 Priority Project – Short Term - Municipal service review. ATTACHMENTS: Curbside Leaf and Yard Waste Collection Memorandum, AET Group Page 609 of 650 MEMORANDUM To: AET File No: From: Date: Subject: Curbside Leaf and Yard Waste Collection Introduction: In 2021, The Town of Tillsonburg (Town) contracted with AET Group Inc. to perform a Solid Waste Management Service Delivery Review (Review) to determine appropriate, and cost-effective ways, to operate, and maintain, the Town’s waste management services. The Review focused on several core aspects of interest to the Town. These included: 1. The regulatory framework within the Province dealing with service delivery. 2. The Town’s current Transfer Station operation. 3. The Town’s Agreement with the County for shared service delivery. 4. Operational improvements that would benefit Town residents. The Review was presented to Town Council on January 27, 2022, and Council Resolution #2022-032 (as it relates to the purpose of memorandum) was to maintain the status quo for annual curbside loose-leaf collection and report on alternatives to the current program. Subsequently, Town staff requested AET to prepare a comparison of the current loose-leaf collection program to that of a curbside “bag based” Leaf and Yard Waste program (only) with the Leaf and Yard Waste services provided by a private sector company under contract to the Town. This is the purpose of this memorandum. Unlike the other typical curbside collected materials (e.g., garbage, recyclables, and food waste) which are, generally speaking, uniform in their generation rates throughout the year, Leaf and Yard Waste generation is highly seasonal and very much weather dependent. For example, depending on the amount of rain during the growing season, Leaf and Yard Waste quantities requiring collection and processing can vary greatly; similarly, seasonal temperature directly impacts the rate, and when, leaves fall. These factors are uncontrollable but must be considered when contemplating the operational and financial performance of a Leaf and Yard Waste program. Due to this unpredictability, the analysis and conclusion presented is intended to provide a high-level comparison only of the two (2) service delivery types under ideal conditions. According to the Municipal Property Assessment Corporation (MPAC) data for 2020, there are 7,790 households in the Town. Richard Sparham, C.Tech., CRS Manager of Public Works TIL_2122_010 April 5, 2022 Shaun Spalding, C.E.T., EP(Waste) Page 610 of 650 Background: Each municipality within the province of Ontario has broad authority under the Municipal Act, 2001 (Act), to govern its affairs related municipal issues; waste management service delivery is one such issue. Within Oxford County (County), the Town is considered the “lower-tier” and the County the “upper-tier” and each, under the Act, may provide the services necessary to serve the public subject to the rules of the Act and within their respective Spheres of Jurisdiction. As it relates to curbside waste collection services, the County is identified in the Act as having the exclusive assignment (e.g., they have the Sphere of Jurisdiction for curbside collection) and thus provide, and pay for, curbside collection services via a private sector contractor. Leaf and Yard Waste, however, is not included in the County’s curbside collection contract. Rather, residents (including those in the Town) are instructed to deliver their material to any of the eleven (11) depots located across the County. Supplementing the County’s instruction to utilize depots for Leaf and Yard Waste, the Town, using its own physical and financial resources, provides its residents with annual loose-leaf curbside collection. For this, the Town divides households into four (4) collection zones where each is collected once in the Autumn. After collection, Town staff deliver the collected loose-leaf material to the County’s Waste Management Facility in Salford for composting. The Town and County have in place an agreement for shared waste management service delivery which assigns some waste collection responsibilities to the Town, and the County compensates the Town for this effort. The compensation, however, only includes services provided by the Town at the Town’s Transfer Station which includes the receipt, loading, transfer, and processing of Leaf and Yard Waste. For context to this memorandum, AET’s Review included several items related to yard waste management, namely:  Page 14 of 67: “The Town should consider consulting with its legal council and Oxford to jointly review, prior to passing future by-laws and/or resolutions that may impact both parties such as if the Town wanted to provide curbside leaf collection.”  Page 27 of 67: “Conduct further analysis as to whether residents desire, and the Town can allocate sufficient human and financial resources, to offering additional week(s) of loose-leaf curbside collection.”  Page 27 of 67: “Engage with the County to determine if curbside leaf and yard waste collection can be added to the County’s current, or next, curbside collection contract.”  Page 27 of 67: “Maintain the status quo but if politically acceptable, eliminate the service given that residents have free year-round access to the transfer station and the County does not reimburse the Town for [curbside loose-leaf collection] service.” This memorandum is not intended, nor should it be received, as providing policy or legal direction. The analysis and conclusion presented are based on AET’s Ontario specific industry Page 611 of 650 knowledge of Leaf and Yard Waste collection programs and intended to provide the Town with unbiased data. Analysis: Across Ontario, curbside collection services for Leaf and Yard Waste vary from none, to weekly, bi-weekly, and monthly and some combination / variation of frequencies between seasons. Moreover, some municipalities offer both curbside Leaf and Yard Waste collection and loose-leaf collection, such as the City of Woodstock and Waterloo Region. The utilization of a private sector contractor and municipal staff to provide the various services also varies by municipality. Current Loose-Leaf Program The Town currently provides, and pays for, an annual curbside collection of loose leaves (only) using its own staff and mobile equipment. The collected material is delivered by Town staff to the County’s Waste Management Facility in Salford for which the material is tipped at no charge. Residents are required to rake their leaves onto their boulevard or to the edge of their lawn by the Monday of their designated collection week where collections by the Town will be made by the Friday of that same week. For this service, the Town divides residences into four (4) collection areas where each area receives the service during one (1) week only. In delivering this service, Town resources can be planned, deployed, and budgeted according to the collection schedule established and residents are informed of the dates in advance. The downside, however, is the collection schedule is subjective and may, or may not, coincide with when leaves fall in a collection area and in the worst-case scenarios, little to no collections are made or the quantity is greater than anticipated. As well, if leaves fall earlier than the scheduled collection week in a given area, and if residents rake their leaves and set them out for collection in advance of their scheduled collection week, the possibility exists for these leaves to be blown away resulting in ineffectual program management. Further, if leaves fall before, or after, the collection week for a given area, homeowners are likely to personally deliver the material to the Town’s Transfer Station as it is free of charge and open six-days-per week. Meaning, if the timing of when leaves fall does not exactly coincide with the Town’s schedule loose-leaf collection program, the Town’s cost per tonne for curbside loose-leaf collection could be significantly higher than budgeted due to operational costs being fixed and collected tonnage being low. The Town’s Transfer Station accepts a broader suite of material types compared to the Town’s curbside loose-leaf program. Town specific audit data is not available on what is / has been set out at curbside, what is / has been delivered to the Transfer Station, nor is audit data available on curbside and Transfer Station participation rates. However, it is reasonable to assume that residents who have more than just leaves opt to use the Transfer Station rather than the curbside loose-leaf program. According to the Town’s budget, $90,000 has been approved in 2022 for four (4) weeks of loose- leaf collection comprised of $33,000 in staffing costs and $57,000 in equipment costs. This amount is the same as for the year 2021 and marginally higher than the budget for 2020. Page 612 of 650 According to the 2020 Datacall1, the County reported diverting 19,052 tonnes of Yard Waste. According to the Town’s 2020 Transfer Station Annual Report, the Town managed 2,310 tonnes of Leaf and Yard Waste which represents 12% of the County’s Yard Waste tonnes. According to the County’s Community Profile and Statistics2, the Town represents 17% of all County households. Assuming all things being equal, and for the basis for the analysis below, if the Town’s Leaf and Yard Waste tonnes represented 17% of the County’s tonnes (to align with the household percentage statistics), the Town’s curbside loose-leaf collected tonnes (for the year 2020) would be approximately 953 tonnes. This assumption, however, appears to be on the extremely high side given that curbside loose-leaf collected material is managed via Town collection vehicles having a capacity of approximately 20-cubic yards each, and each likely capable of carrying a maximum of 10 tonnes per load. Assuming two (2) Town collection vehicles are used per collection day, this equates to a maximum of 20 tonnes per loose-leaf collection week. As the Town’s actual Loose-leaf collected tonnes are unknown, but assuming 20 tonnes is collected in each of the four (4) loose-leaf collection days, 80 tonnes of loose-leaf material is assumed to be collected annually. Using this assumption, the Town’s cost to provide the loose-leaf collection program is approximately $1,125 per tonne ($90,000 divided by 80 tonnes) or $11.55 per household ($90,000 divided by 7,790 households). If the Town has actual curbside loose-leaf tonnage data, as tipped at the County’s Waste Management Facility, this quantity would be used in the financial analysis. In the absence of actual curbside loose-leaf tonnage, 80 tonnes has been used in the financial analysis below. “Bag-based” Leaf and Yard Waste Program Ontario municipalities that provide curbside collection of Leaf and Yard Waste typically provide educational materials and instructions to residents describing the acceptable materials and set-out requirements. The material types that are permitted in a curbside Leaf and Yard Waste program is generally uniform across the province and generally aligns with that which the Town currently permits as acceptable at its Transfer Station for drop-off. Items that are typically accepted in a curbside Leaf and Yard Waste program but are not currently listed as acceptable at the Town’s Transfer Station include: pumpkins and brush tied or bundled (e.g., not physically contained in a rigid reusable container or in a Kraft paper bag). Often, municipalities that provide curbside Leaf and Yard Waste collection services do so utilizing a service contract with a private sector company as opposed to internal staff. Generally speaking, private sector companies can provide services at a lower cost than if municipal forces are employed although the municipality does incur costs related to promotion, education, contract management and customer service. An advantage of using a private sector company in the provision of curbside collection service is that municipal staff, and associated equipment, could be deployed / tasked on non-solid waste management activities which, taken on the whole, could serve to lower municipal costs for other departments. 1 https://rpra.ca/programs/about-the-datacall/ 2 http://oxfordcounty.ca/Business-in-Oxford/Planning-and-Development/Demographics Page 613 of 650 Prior to procuring, or launching, a curbside Leaf and Yard Waste program, the Town should engage in discussions with the County to determine if either: this material stream could be added to the County’s current (or future) curbside collection contract and if not, if the County has any objection to the Town procuring this service. For the purposes of complying with the rules set out in the Act, the Town should receive confirmation from the County that this specific waste collection effort can be assigned by the County to the Town. A possible Town downside risk is the County agreeing that the Town can procure and provide curbside Leaf and Yard Waste collection but if this program’s costs are higher than the current loose-leaf collection program, the Town would be fully responsible for the burden. If the Town were to implement a “bag-based” Leaf and Yard Waste program, an initial task, well in advance of the launch, would be to promote the service and to educate residents of the program requirements. Items such as: designing, printing, and distributing a ‘yard waste sticker’ for residents to use on rigid reusable containers, informing residents of the requirement to use Kraft paper bags, (if desired) providing specific instructions for items that can / could be set out loose such as pumpkins or tied branches, updating the Town’s website, renting road-side signs to advertise the program, managing social media channels, ensuring the Town’s call-centre / administrative staff can effectively address public questions and concerns will all be keys to success. As well, and again in advance of the launch, the Town would need to engage with the County to ensure that the contractor’s collection vehicles are registered within the County’s Waste Management Facility’s weigh scale program and that accurate reports of the tipped material can be provided to the Town. Once launched, the Town’s project manager would need to ensure the contractor is performing the services according to the Town’s required standards (which would be articulated in a procurement document and contract). A “bag-based” curbside Leaf and Yard Waste program would have several advantages over a curbside loose-leaf collection program including fewer leaves in the roadway / better containment environmentally, storm sewers remain clearer, greater safety for pedestrians in the event of icy / frozen material, etc. Additionally, Town staff currently involved with loose-leaf collection, and their equipment, would be freed up to attend to other Town functions. There are, however, downsides to implementing a Leaf and Yard Waste program as a change, such as this, requires residents to modify their behaviours for which some may have concerns with. For example, possible disadvantages include residents having to purchase Kraft paper bags (e.g., a cost they are not used to), possible contamination within the set out possibly resulting in tip fee charges by the County, Town staff contract management training and addressing issues with the contractor, County and/or residents. Overall, operationally from the Town’s perspective, having a private sector contractor perform the collection would likely be beneficial provided the related contract and administrative issues can be addressed effectively. Operational Assessment In considering the operational comparison of the current loose-leaf collection program to that of a “bag-based” Leaf and Yard Waste collection program, several key elements need to be Page 614 of 650 considered; namely the quantity of material to be collected, the collection frequency, social dynamics, contract administration components, and contingencies for the unknown or unforeseeable. A few elements that have been taken into consideration:  A typical rigid reusable container, or Kraft paper bag of Leaf and Yard Waste, set out by a household weighs 9kg (20lbs). Acknowledging that Leaf and Yard Waste set out quantities vary by household based on a variety of factors, for the purposes of this analysis, it has been assumed that Town households would set out an average of two (2) containers / bags per collection week. This equates to 18kg of Leaf and Yard Waste per household per week.  According to the MPAC data for 2020, there are 7,790 households in the Town.  The Town desires that every household be collected weekly (as opposed to the current loose-leaf program where each household is serviced once only) under a variety of collection weeks spanning Spring, Summer, and Autumn.  When using a contracted service provider for curbside collection, vehicle types and sizes vary by contractor but assuming that Leaf and Yard Waste curbside collections are performed using a rear loader packer, the Ontario legal roadway gross vehicle weight (GVW) limit is 18 tonnes, and the average rear loader packer weighs 9 tonnes, a maximum of 9 tonnes could be collected per vehicle per collection route. According to the Town’s Transfer Station 2020 Annual Report (the most recent data available), 2,310 tonnes of Leaf and Yard Waste were transferred from the Town’s Transfer Station and, as described earlier in this memorandum, an estimated 80 tonnes of loose leaves were collected curbside (during November). This information is summarized in the table below. Month (2020) Transfer Station, Leaf and Yard Waste Tonnes Curbside, Loose- Leaf Tonnes Percent of Tonnes Percent of Tonnes by Quarter January 32 0 1.3% 3.6% February 0 0 0.0% March 54 0 2.3% April 174 0 7.3% 24.9% May 243 0 10.2% June 176 0 7.4% July 133 0 5.6% 24.4% August 191 0 8.0% September 258 0 10.8% October 318 0 13.3% 47.3% November 322 80* 16.8% December 410 0 17.2% Total 2,310 80* 100% 100% * Assumed Page 615 of 650 As can be seen in the table, almost half of the Leaf and Yard Waste is managed between October and December with the spring and summer contributing almost a quarter of all tonnes. However, as the Transfer Station is permitted, and does, receive Leaf and Yard Waste from all County residents – not just Town residents – and the Transfer Station is not staffed Monday through Friday and there is no tracking of inbound Leaf and Yard Waste by source (e.g., the Municipality from which residents are delivering from), the 2,310 tonnes managed at the Transfer Station is clearly not all from Town sources exclusively. Based on the municipal boundaries (within the County), the location of the Town’s Transfer Station, the location of the County’s Waste Management Facility, the locations of the other County’s approved Yard Waste depots, and assuming that no Leaf and Yard Waste material was delivered from out-of-County residents, for the purposes of this analysis, it has been assumed that 75% of the Town’s Transfer Station Leaf and Yard Waste tonnes have been delivered by Town residents (1,733 tonnes). In order to perform a financial analysis of a curbside Leaf and Yard Waste program, the Town’s potential generation rate of Leaf and Yard Waste is required, as is an assumption of household participation rates and the collection dates. Assuming, as has been done, Town residents delivered 1,733 tonnes of Leaf and Yard Waste to the Transfer Station and assuming a 50% household participation rate using a “bag-based” curbside Leaf and Yard Waste program, 866 tonnes could be collected curbside. This quantity increases to 946 tonnes when the 80 tonnes of currently collected loose leaf material is included. What this means is, operationally, if a curbside Leaf and Yard Waste program were implemented, potentially 866 tonnes less would be delivered to the Town’s Transfer Station which would mean:  The traffic flow / traffic management at the Transfer Station would be reduced (e.g., Transfer Station operations positively impacted).  The number of Leaf and Yard Waste loads – and quantity – shipped to the County’s Waste Management Facility would decrease by approximately 37%. This operational service demand reduction at the Transfer Station could likely result in a equal amount of Transfer Station operational cost savings, some of which can be calculated and are included in the following section. Financial Assessment According to the Town’s 2022 budget, $90,000 has been allocated to curbside loose-leaf collection. This amount is the basis from which the curbside “bag-based” Leaf and Yard Waste scenarios presented below will be compared against. The Town has asked for four (4) curbside “bag-based” Leaf and Yard Waste scenarios to be evaluated where every household in the Town is serviced weekly; these scenarios are: Scenario 1: Four (4) collection days in the Autumn Scenario 2: Five (5) collection days in the Autumn Scenario 3: Scenario 1 plus two (2) additional collection days in the Spring Scenario 4: Scenarios 1 and 3 plus two (2) additional collection days in the Summer Page 616 of 650 Assuming the average Town household sets out two (2) rigid reusable containers / Kraft paper bags of Leaf and Yard Waste each weighing, on average, 9kg (total weight of 18kg per household per week), this equates to 140 tonnes of material required to be collected weekly. Assuming a rear load packer collection vehicle can collect up to 9 tonnes before becoming full, and each vehicle performs two (2) routes (tips to County’s Facility) per day, collecting this quantity of Leaf and Yard Waste would require approximately eight (8) contractor vehicles every week. Based on recent municipal contract information, provided confidentially, Leaf and Yard Waste collection costs range between $4 and $6 per stop. Assuming that every household in the Town (count = 7,790) receives weekly Leaf and Yard Waste collection, the following table outlines the probable collection cost range using a private sector contractor. As can be seen in the table above, the cost to provide weekly collection to all Town households for each scenario is higher than the Town’s current cost to provide curbside loose-leaf collection (range 38% to 315% higher). These costs should be considered planning level estimates as actual program costs would need to be obtained via a public procurement process. The cost ranges presented above do not include up-front and on-going costs for promotion and education (P&E) also do not take into account Town internal contract management or administrative costs. As an example, and as planning level estimates:  P&E costs should be approximately $2 per household per year which equates to $15,600 annually.  Contact Management and administrative efforts for this type and scale of program could be upwards of 10% of a full-time employee’s responsibilities. Assuming a fully burdened Town staff earns $100,000, a contract management / administration budget of $10,000 should be allocated annually. The cost ranges presented above also do not take into account savings the Town could have by diverting traffic and Leaf and Yard Waste tonnage from the Transfer Station. According to the Town’s approved budget, $48,600 is allocated for “Brush, Grass and Leaves” management at the Transfer Station. According to the operational assessment, 37% of the Leaf and Yard Waste tonnes delivered to the Transfer Station could potentially be diverted via a curbside “bag-based” Leaf and Yard Waste program. If a 37% reduction in Leaf and Yard Waste tonnes at the Transfer Station equaled a 37% reduction in operational costs, approximately $18,000 could be saved. Scenario # Collection Weeks per HH Total # of Stops $4 per Stop, Low $6 per Stop, High 1 4 31,160 $124,640 $186,960 2 5 38,950 $155,800 $233,700 3 6 46,740 $186,960 $280,440 4 8 62,320 $249,280 $373,920 Page 617 of 650 In order for the Town to provide curbside Leaf and Yard Waste collection services that more closely aligns with its current budget (for curbside loose-leaf collection), the collection frequency for each household would have to be reduced by 50% and bid prices for the service would have to be closer to the low end of the range (e.g., $4 per stop). The following table outlines the planning level cost for these modified scenarios including additional program costs and other program cost savings. Conclusion: As can be seen by the analysis, only a modified scenario 1 – with each household receiving two (2) curbside “bag-based” Leaf and Yard Waste collection days is comparable to the Town’s current cost of providing curbside loose-leaf collection. Given the level of effort required to change the curbside program to a “bag-based” Leaf and Yard Waste system, it is difficult to justify given this operational and financial assessment. While it would be correct that utilizing a private sector contractor to perform Leaf and Yard Waste collections would allow Town staff, who current perform this work, to undertake other tasks, this reallocation of human and equipment resources would not “save” the Town money. Rather, the reallocation of Town resources would merely migrate the program cost from the Waste Management budget to another group or department and remain an expense on the Town’s overall budget. That said, the Town should consider preparing a public procurement document, either a Request for Quotation (RFQ) or Request for Proposal (RFP), to clearly gauge the marketplace and receive firm prices for curbside Leaf and Yard Waste collection services. Scenario # Collection Weeks per HH Total # of Stops $4 per Stop, Low P&E Cost Annual Admin Annual TS Operation Savings Net Scenario Cost 1 2 15,580 $62,320 $15,600 $10,000 $18,000 $69,920 2 3 23,370 $93,480 $15,600 $10,000 $18,000 $119,060 3 3 23,370 $93,480 $15,600 $10,000 $18,000 $119,090 4 4 31,160 $124,640 $15,600 $10,000 $18,000 $132,240 Page 618 of 650 Page 1 of 3 Subject: RFP 2022-010 Supply and Delivery of a 4-Wheel Drive Articulating Sidewalk Tractor Results Report Number: OPD 22-29 Department: Operations and Development Department Submitted by: Richard Sparham, Manager of Public Works Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT Council awards RFP 2022-010 Supply and Delivery of a 4-Wheel Drive Articulating Sidewalk Tractor to Work Equipment Ltd. of Courtland, Ontario at a cost of $176,400.96 (net HST included); AND THAT Council authorizes funding of the purchase as $135,828.74 from Development Charges (Residential Share) and $40,572.22 from Taxation. BACKGROUND The approved 2022 budget highlighted the need for a new 4-Wheel Drive Articulating Sidewalk Tractor. In accordance with the Purchasing Policy a Request for Proposal (RFP) that also incorporated performance based specifications was issued for the supply and delivery of the new sidewalk machine complete with enhanced safety features for increased operator protection, an automatic greasing system to protect the investment, and an environmentally compliant (Tier 4 Final emissions standards) off- road engine. DISCUSSION The RFP was released on May 9th 2022 and closed on May 24th 2022. The RFP was advertised on the Tillsonburg website and on the Bids and Tenders website. Town staff received two (2) proposals from Work Equipment Ltd. and from CUBEX Ltd. Town staff reviewed and scored the two (2) proposals based on the scoring tool that was included in the RFP. The bids were evaluated by the Manager of Public Works, Page 619 of 650 OPD 22-29 RFP 2022-010 Supply and Delivery of a 4-Wheel Drive Articulating Sidewalk Tractor Results Page 2 of 3 Roads Operations Supervisor and a Fleet Mechanic according to the matrix included in the RFP. The pricing and scoring results are as follow: Company Bid Price (net HST included) Evaluation Scoring Work Equipment Ltd. $176,400.96 95.5 CUBEX Ltd. $189,397.63 64.5 As indicated, the results of the scoring shows that bid from Work Equipment Ltd. was the highest scoring of the two bids as well as the lowest bid price. The manufacturer is also common amongst our existing unit and the unit is also fully compatible with all other existing sidewalk machine attachments (i.e. wing mower, boom flail, concrete planner, etc.), Staff is therefore recommending to award this RFP to Work Equipment Ltd. in the amount of $176,400.96 (net HST included). CONSULTATION  Director of Operations and Development  Director of Finance FINANCIAL IMPACT/FUNDING SOURCE The 2022 approved budget is $165,000 with 100% of the overall cost funded through Development Charges (DC), which is allocated through a Residential and non- residential share. The non-residential share is recovered from taxation. The financial allocations are as follows: 4-Wheel Drive Articulating Sidewalk Tractor Development Charges Residential Share Non-residential Share Budget Approved $165,000.00 $ 127,000.00 $ 38,000.00 Lowest Bid Received $176,400.96 $ 135,828.74 $ 40,572.22 Difference $ (8,828.74) $ (2,572.22) Due to the pricing increases since the amount was recommended in the 2022 budget forecast, the bid price received exceeded the approved amount by $11,400.96 (net HST included) which is allocated to $8,828.74 residential share and $2,572.22 non- residential share (or taxation). CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☐ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion Page 620 of 650 OPD 22-29 RFP 2022-010 Supply and Delivery of a 4-Wheel Drive Articulating Sidewalk Tractor Results Page 3 of 3 ☒ Community growth ☐ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – The Town of Tillsonburg will accommodate and support sustainable growth. Strategic Direction – N/A Priority Project – N/A ATTACHMENTS NONE Page 621 of 650 Page 1 of 2 Subject: Tillsonburg Fair - Request to Waive Fee Report Number: RCP RCP 22-14 Department: Recreation, Culture and Parks Department Submitted by: Julie Columbus Meeting Type: Council Meeting Meeting Date: Monday, July 11, 2022 RECOMMENDATION THAT Council receives Staff Report RCP 22-14 as information; and THAT Council approves the request from the Tillsonburg Tri-County Agricultural Society to waive the facility rental fee for the use of Lion’s Auditorium on Aug 20, 2022 from 9 am to noon to host the Fair’s Baby Show. BACKGROUND The Tillsonburg Fair runs from Friday August 19 - Sunday August 21, 2022. The Tillsonburg Fair is one of the Town’s showcase annual events, providing residents and visitors with a long-standing (168th year) place to gather and partake in all the things that fairs traditionally offer. The event draws visitors both locally and regionally, showcasing all that the Town has to offer. DISCUSSION The Agricultural Society is a not-for-profit group made up largely of community volunteers, and this request will alleviate the Society of a small part of the expense of hosting the Fair. The Town of Tillsonburg and the Tillsonburg Tri-County Agricultural Society have a Memorandum of Understanding which was last updated in 2012. The MOU does not cover the current request for in-kind use of the Auditorium so the Tillsonburg Fair Board is formally requesting Council support. The Town has a history of waiving facility rental fees in order to support the Tillsonburg Fair. Page 622 of 650 Choose an item. Click or tap here to enter text. Page 2 of 2 CONSULTATION Manager of Parks and Facilities Manager of Recreation Programs & Services FINANCIAL IMPACT/FUNDING SOURCE The cost to rent the Auditorium is $63.55 plus HST per hour. The total cost of the in-kind request would be $143.62 to support the Tillsonburg Fair. There are not currently any other requests for the space on the date requested. The use of the facility would essentially result in a $143.62 opportunity cost as the space would not be available to rent for other users. The Town does not track donations provided to external organizations. CORPORATE GOALS How does this report support the corporate goals identified in the Community Strategic Plan? ☒ Lifestyle and amenities ☐ Customer service, communication and engagement ☐ Business attraction, retention and expansion ☐ Community growth ☐ Connectivity and transportation ☐ Not Applicable Does this report relate to a specific strategic direction or project identified in the Community Strategic Plan? Please indicate section number and/or any priority projects identified in the plan. Goal – Within the community, Tillsonburg will strive to offer residents the amenities, services and attractions they require to enjoy balanced lifestyles. Strategic Direction – Increase opportunities to enjoy culture, events and leisure activities in Tillsonburg Priority Project – Not Applicable. ATTACHMENTS Email Correspondence - Tillsonburg Fair request, August 20,2022 Page 623 of 650 From: Rosemary Dean <rosemary.dean.9@gmail.com> Sent: Tuesday, June 21, 2022 1:01 PM To: Rebecca Turrill <RTurrill@tillsonburg.ca> Subject: Re: Lion's Auditorium-August 20 Tillsonburg Tri-County Agricultural Society P.O. Box 43 (47 Hardy Ave.) Tillsonburg, ON N4G 4H3 June 21, 2022 Rebecca Turrill, Program & Facility Registrar Tillsonburg Recreational, Culture and Parks 45 Hardy Ave. Tillsonburg, ON N4G 3X2 Attention: Ms. Rebecca Turrill The Tillsonburg Tri-County Agricultural Society is requesting an in-kind use of the Lions’ Auditorium on August 20, 2022, from 9 a.m. to noon to host the Fair’s Baby Show, as the larger space will allow for social distancing of the mothers and their babies. It is also easily accessible for anyone with mobility issues. Thank you in advance! Respectfully, Rosemary Dean, President of the Tillsonburg Tri-County Agricultural Society Page 624 of 650 Economic Development Advisory Committee Minutes June 14, 2022 Page 1 of 6 The Corporation of the Town of Tillsonburg Economic Development Advisory Committee June 14, 2022 7:30 a.m. Council Chambers MINUTES Present: Chair- Jesse Goossens, Vice Chair-Andrew Burns, Kirby Heckford, Dane Willson, Deb Gilvesy, Cedric Tomico, Suzanne Renken, Lisa Gilvesy, Randy Thornton Absent with Regrets: Mayor Stephen Molnar; Steve Spanjers Staff Present: Cephas Panschow, Development Commissioner Gina Armand- Records & Legislative Coordinator 1. Call to Order The meeting was called to order at 7:33am by Chair Jesse Goossens 2. Adoption of Agenda Resolution #1 Moved by: Cedric Tomico Seconded by: Dane Willson Page 625 of 650 Economic Development Advisory Committee Minutes June 14, 2022 Page 2 of 6 THAT the Agenda as prepared for the Economic Development Advisory Committee meeting of June 14, 2022 be adopted. Carried 3. Minutes of the Previous Meeting Meeting Minutes May 10, 2022- No errors or omissions 4. Disclosures of Pecuniary Interest and the General Nature Thereof No disclosures of pecuniary interest were declared 5. Closed Session Resolution #2 Moved by: Dane Willson Seconded by: Deb Gilvesy THAT the Economical Development Advisory Committee move into Closed Session to consider a personal matter about identifiable individuals, including municipal or local board employees; under Section 239 (2)(b) of the Municipal Act. 5.1. Adoption of the Closed Session Agenda 5.2. Disclosures of Pecuniary Interest and the General Nature Thereof 5.3. Closed Session Items 5.3.1. Section 239 (2) (b) personal matters about identifiable individuals, including municipal or local board employees; Carried 6. General Business and Reports. 6.1. Monthly Activity Update Development Commissioner provided an overview of the Monthly Activity report with highlights as follows. Page 626 of 650 Economic Development Advisory Committee Minutes June 14, 2022 Page 3 of 6 A staff report regarding the Real Estate Services RFP is being prepared for Council’s review. There have been 40 lead opportunities thus far. Working on enhancing Career Study courses to support high school and local business engagement via various different hired Speakers. The Town Hall Project Staff Report is currently being prepared for Council’s consideration. The property transfer for Van Norman Park is being scheduled for completion. The Wayfinding Signage installation nearing completion. Final “entrance” signs scheduled to be installed week of June 13, 2022. Council approved additional Wayfinding Signage with the entrance driveway to the Soccer Club being renamed Attawandaran Way in recognition of the Attawandaran people who are believed to have settled the area in the 1400s – 1500s. A commemorative ceremony is scheduled for National Indigenous Day on June 21. Members discussed property conditions regarding 2 Simcoe St. There have been many complaints regarding the state of the property. Owners not wanting to remediate the lands due to costs. Resolution #3 Moved by: Deb Gilvesy Seconded by: Lisa Gilvesy THAT the Economic Development Staff investigate the property located at 2 Simcoe St. regarding Property Standards By-Law Carried Page 627 of 650 Economic Development Advisory Committee Minutes June 14, 2022 Page 4 of 6 6.2. Oxford Familiarization Tour Video Members were provided the link and will watch the video on their own time. 6.3. City of St. Thomas Acquiring 800 Acres of land for Economic Development As announced, the City of St Thomas has acquired 800 acres of industrial land, which is a Mega-site in the Province and will help them attract a large user (or two). The goal appears to be to land Electric Vehicle or related investments. 7. Planning Items Circulation 7.1.1. Applications for Official Plan Amendment & Zone Change OP 22-06-7, ZN 7-22-06- 133 North Street East Committee Members reviewed the information provided. 7.2. Site Plan Application TSPC 7-219 (1444 Bell Mill Side Rd) Committee Members reviewed the information provided. 8. Community Strategic Plan 8.1. Town Hall Task Force No changes or updates were provided 8.2. Affordable and Attainable Housing Committee Staff and Planning will look at a Motion regarding height restrictions in the Town. Currently the Town has a limit of 6 stories. Chair recommended that this item be a main Item on next Agenda. Discussion regarding the First Time Home Buyer’s rebate staying the same despite the huge increase in the housing market. Main challenge is to find developers who would like to take on the project. 8.3. Boundary Adjustment Committee Page 628 of 650 Economic Development Advisory Committee Minutes June 14, 2022 Page 5 of 6 A Report from the County undertaking comprehensive inventory for Boundary Adjustment suggests that there cannot be any decisions made to land annexation during election year. “County Boundary Adjustment” item should be added to next Agenda. 8.4. Physician Recruitment & Retention Committee Discussion regarding the lack of doctors in the community. It has been noted on Social Media that the main complaint of people moving to the community is the lack of having a Family Practitioner in Town. Special recruitment strategies were recommended by Members and will be discussed in more detail at next meeting. 9. Community Organization Updates 9.1. Downtown Business Improvement association The BIA has been focusing on beautification and pop up patios. Extra funding has been secured to hire additional students for summer projects. Randy Thornton left the meeting at 8:58am. 9.2. Tillsonburg District Chamber of Commerce The Award of Excellence is underway and should be ready by September. Recommendations are being followed up regarding the two awards to be issued. Updated information is needed. County Review of Waste and wastewater management went for consideration last week but registration information needs to be completed. In person meetings have been well attended. Committee will not be meeting in June or August. 9.3. Tillsonburg District Real Estate Board Page 629 of 650 Economic Development Advisory Committee Minutes June 14, 2022 Page 6 of 6 There has been a slow decrease in sales/prices of homes. The Tillsonburg Board will be merging with the Woodstock and Ingersoll Boards. Completion of this merge should be near the fall. 10. Round Table Committee Members were advised that the Splash pad will be ready by the end of June, it is near completion. 11. Next Meeting Tuesday, July 12, at 7:30 AM 12. Adjournment Resolution #4 Moved by: Kirby Heckford Seconded by: Andrew Burns THAT the Economic Development Advisory Committee Meeting of June 14, 2022 be adjourned at 9:09 am. Carried Page 630 of 650 Page 1 of 3 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW 2022-___ A by-law to establish the Rate of Remuneration for Members of the Council of the Corporation of the Town of Tillsonburg for the 2022 - 2026 term of Council and to Repeal By-Law 4207. WHEREAS section 283 of The Municipal Act, S.O. 2001, c.25, provides that the council of a municipality may pay remuneration and expenses to members of Council and members of any local board of the municipality; AND WHEREAS section 5(3) of the Municipal Act, 2001, S.O. 2001, c.25, as amended, provides that a municipal power shall be exercised by by-law; AND WHEREAS section 9 of the Municipal Act, 2001, S.O. 2001, c.25, as amended, provides that a municipality has the capacity, rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act; AND WHEREAS section 10 of the Municipal Act, 2001, S.O. 2001, c.25, as amended, provides that a municipality may pass by-laws respecting any service or thing that the municipality considers necessary or desirable for the public; AND WHEREAS a review of Council remuneration has been conducted in 2022 for the upcoming 2022-2026 Council term; NOW THEREFORE Council of the Corporation of the Town of Tillsonburg does enact as follows: 1. Council Remuneration That remuneration paid to Members of Council of the Town of Tillsonburg shall include the following, subject to the provisions contained within this By-law: a) Annual Remuneration paid to members of Council; b) Benefit Coverage including Life Insurance, Accidental Death & Dismemberment and optional Extended Health and/or Dental; 2. Annual Remuneration 2.1 That Annual Remuneration paid to Members of Council shall be as follows: Mayor $40,354.59 Deputy Mayor $20,159.68 Councillor $18,792.41 2.2 That the Annual Remuneration paid to Members of Council in Section 2.1 shall be increased each year for cost of living based on the percentage increase for employees commencing in the year 2023. 2.3 That the Annual Remuneration paid to Members of Council shall be paid in equal bi-weekly instalments by way of direct deposit through the Town's payroll system. 2.4 That no Member of Council shall be entitled to any form of severance pay upon ceasing to be a Member of Council prior to the completion of their elected term. 2.5 That the Annual Remuneration shall be deemed to include attendance at all Regular and Special Council, Advisory Committee, Ad Hoc Committee and Local Board meetings, except where an additional stipend is provided for such attendance, and conducted in accordance with the Town or Local Boards Page 631 of 650 Page 2 of 3 Procedural By-law as well as the attendance of Members of Council at meetings of Committees and Working Groups as a representative of Council. 2.6 That the Annual Remuneration shall further be deemed to include all voluntary attendance at any Town, Local Board or other meetings for which a Member of Council has not been appointed and for attendance at all Town, Local Board or other events. 3. Benefit Coverage 3.1 That all Members of Council shall be entitled to enrolment in the following group benefit plans: a) Canada Pension Plan (CPP), in accordance with the Federal legislation and regulations thereof, with the Town and the Member contributing equally to the cost of the premiums; b) Employer Health Tax (EHT), in accordance with the Provincial legislation and regulations thereof, with the Town contributing one hundred percent (100%) to the cost of the premiums; c) Life Insurance, in accordance with the contract thereof as Council may approve from time to time, with the Town contributing one hundred percent (100%) of the cost of the premiums; d) Accidental Death and Dismemberment (AD&D), in accordance with the contract thereof as Council may approve from time to time, with the Town contributing one hundred percent (100%) of the cost of the premiums; e) Dental and Extended Health coverage for Council, in accordance with the contract thereof as Council may approve from time to time, with the Town contributing one hundred percent (100%) of the cost of the premiums; 4. Expenses 4.1 That Members of Council, shall be issued a computer/tablet for use of Town business. The laptop computer/tablet and related equipment shall remain property of the Town and shall be returned upon completion of the elected term, or upon request of the Town. 4.2 That any and all additional equipment provided by the Town to Members of Council during the Council term shall remain property of the Town and shall be returned upon completion of the elected term, or upon request of the Town. 4.3 That any and all claims/disbursements for expenses shall be in accordance with the Council/Local Board Expense Policy. 5. Review of Council Remuneration 5.1 That Council Remuneration shall be reviewed each Council term during the last 24 months of the term. 5.2 That the report and recommendations as a result of the review shall be presented to Council at a meeting open to the public. 5.3 That any changes as a result of the Council remuneration review shall take effect on the 1st day of the new Council term and shall remain in effect for the Council term. 6. THAT By-Law 4207 hereby repealed. Page 632 of 650 Page 3 of 3 READ A FIRST AND SECOND TIME THIS 11TH DAY OF JULY, 2022. READ A THIRD AND FINAL TIME AND PASSED THIS 11TH DAY OF JULY, 2022. _______________________________ MAYOR – Stephen Molnar _______________________________ CLERK – Michelle Smibert Page 633 of 650 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW 2022-____ A By-Law to amend Zoning By-Law Number 3295, as amended. (ZN 7-22-03) WHEREAS the Municipal Council of the Corporation of the Town of Tillsonburg deems it advisable to amend By-Law Number 3295, as amended. THEREFORE, the Municipal Council of the Corporation of the Town of Tillsonburg, enacts as follows: 1. That Schedule "A" to By-Law Number 3295, as amended, is hereby amended by changing to “R2-32” the zone symbol of the lands so designated “R2-32” on Schedule “A” attached hereto. 2. That Section 7.5 to By-Law Number 3295, as amended, is hereby further amended by adding the following subsection at the end thereof: “7.5.32 LOCATION: LOTS 44, 45, 90, 91, & 92, PLAN 41M-144 - R2-32 (KEY MAP 12) 7.5.32.1 Notwithstanding any provisions of this By-Law to the contrary, no person shall within any R2-32 zone use any lot, or erect, alter, or use any building or structure for any purpose except the following: All uses permitted in Table 7.1. 7.5.32.2 Notwithstanding any provisions of this By-Law to the contrary, no person shall within any R2-32 Zone use any lot, or erect, alter, or use any building or structure for any purpose except in accordance with the following provisions: 7.5.32.2.1 SPECIAL PROVISIONS FOR SEMI-DETACHED DWELLINGS 7.5.32.2.1.1 LOT AREA Minimum 260 m2 (2,798 ft2) 7.5.32.2.1.2 LOT FRONTAGE Minimum 7.7 m (25.2 ft) 7.5.32.2.1.3 FRONT YARD DEPTH Minimum 6 m (19.6 ft) 7.5.32.2.1.4 INTERIOR SIDE YARD WIDTH Minimum 1.2 m (3.9 ft) Page 634 of 650 The Corporation of the Town of Tillsonburg By-law Number 2022- Page 2 7.5.32.3 That all of the provisions of the R2 Zone in Section 7.2 of this By-Law, as amended, shall apply and further, that all other provisions of this By-Law, as amended, that are consistent with the provisions herein shall continue to apply mutatis mutandis.” 3. This By-Law comes into force in accordance with Sections 34(21) and (30) of the Planning Act, R.S.O. 1990, as amended. READ A FIRST AND SECOND TIME THIS 11TH DAY OF JULY, 2022. READ A THIRD AND FINAL TIME AND PASSED THIS 11TH DAY OF JULY, 2022. _______________________________ MAYOR – Stephen Molnar _______________________________ CLERK – Michelle Smibert Page 635 of 650 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW 2022-____ A By-Law to amend Zoning By-Law Number 3295, as amended. (ZN 7-22-04) WHEREAS the Municipal Council of the Corporation of the Town of Tillsonburg deems it advisable to amend By-Law Number 3295, as amended. THEREFORE, the Municipal Council of the Corporation of the Town of Tillsonburg, enacts as follows: 1. That Schedule "A" to By-Law Number 3295, as amended, is hereby amended by changing to “R2-32” the zone symbol of the lands so designated “R2-32” on Schedule “A” attached hereto. 2. This By-Law comes into force in accordance with Sections 34(21) and (30) of the Planning Act, R.S.O. 1990, as amended. READ A FIRST AND SECOND TIME THIS 11TH DAY OF JULY, 2022. READ A THIRD AND FINAL TIME AND PASSED THIS 11TH DAY OF JULY, 2022. _______________________________ MAYOR – Stephen Molnar _______________________________ CLERK – Michelle Smibert Page 636 of 650 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 2022-____ A by-law to authorize the execution of an agreement of Purchase and sale with Schep’s Bakeries Ltd. for property described as part of Block 1, Plan 41M-381 (part of lot 4) in the Van Norman Innovation Park. WHERAS the Corporation of the Town of Tillsonburg deems it necessary and expedient to enter into an agreement of purchase and sale with Schep’s Bakeries Ltd. for property described as part of Block 1, Plan 41M-381 (part of lot 4) in the Van Norman Innovation Park. WHEREAS pursuant to Section 8 of the Municipal Act, 2001, C. 25, a municipality has the capacity, rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act; THEREFORE the Council of the Town of Tillsonburg enacts as follows: 1. THAT the Agreement of Purchase and Sale attached hereto as Schedule A forms part of this by-law; 2. THAT the Mayor and Clerk be hereby authorized to execute the Agreement of Purchase and Sale on behalf of the Corporation of the Town of Tillsonburg; and 3. AND THAT this By-Law shall come into full force and effect on the day of passing. READ A FIRST AND SECOND TIME THIS 11TH DAY OF JULY, 2022. READ A THIRD AND FINAL TIME AND PASSED THIS 11TH DAY OF JULY, 2022. _______________________________ MAYOR – Stephen Molnar _______________________________ CLERK – Michelle Smibert Page 637 of 650 Page | i Buyer’s Initials______ Seller’s Initials______ AGREEMENT OF PURCHASE AND SALE (the “Agreement” or “APS”) BETWEEN THE CORPORATION OF THE TOWN OF TILLSONBURG (the “Vendor”) -and- Schep’s Bakeries Ltd. (the “Purchaser”) WHEREAS the Vendor is the owner, in fee simple, of the lands and premises described in Schedule “A” (the “Property”); NOW THEREFORE IN CONSIDERATION of the mutual covenants and premises in this Agreement, the parties agree as follows: SECTION I - GENERAL 1. The Purchaser agrees to purchase the Property and the Vendor agrees to sell the Property according to the terms of this Agreement. 2. In consideration of the agreement referred to in the preceding paragraph, the Purchaser shall pay to the Vendor a Price of Six Hundred Ninety Four Thousand & One Hundred Dollars ($694,100.00). 3. The Purchase Price shall be paid as follows: (a) Forty Thousand, ($40,000) deposit is payable by the Purchaser by certified cheque upon Acceptance of this Agreement, to be held on an interest free basis by the Vendor as a deposit pending completion of this transaction on account of the Purchase Price on completion, or if this Agreement is not completed through no fault of the Purchaser, the deposit shall be returned to the Purchaser; and (b) the balance of the Purchase Price, subject to adjustments, shall be paid to the Vendor on the Completion Date, by certified cheque or bank draft. SECTION II - PURCHASE OF PROPERTY 4. Irrevocable Date (a) The parties agree and acknowledge that negotiation of this APS is not a valid and binding agreement until accepted by the Council of The Corporation of the Town of Tillsonburg. The Chief Administrative Officer of the Town of Tillsonburg, or his or her designate, shall negotiate the terms of this APS in good faith. However, the negotiation of the terms of this APS by the Chief Administrative Officer of the Town of Tillsonburg, or his or her designate, in no ways binds The Corporation of the Town of Tillsonburg until such time as this APS is authorized and approved by the Council of The Corporation of the Town of Tillsonburg. (b) Acceptance shall mean the date upon which the Mayor and Clerk of the Town of Tillsonburg, or such other persons as the Vendor may authorize from time to time, sign and execute this APS subsequent to the requirement that the Council of The Corporation of the Town of Tillsonburg has passed a resolution or by-law authorizing and approving the sale of the Property to the Purchaser pursuant to the terms of this APS. Page 638 of 650 Buyer’s Initials______ Seller’s Initials______ (c) This APS shall be irrevocable and open for acceptance by the Vendor until 6:00 p.m. on the 29th of July, 2022 (“Acceptance”), and when accepted shall constitute a binding contract of purchase and sale, otherwise the APS shall be null and void and all deposit monies paid shall be returned to the Purchaser without deduction. 5. Council Approval (a) This transaction is subject to compliance with Section 270 of the Municipal Act, 2001, S.O. 2001, c. 25 as amended and the approval of the Council of The Corporation of the Town of Tillsonburg in its sole and absolute discretion by resolution or by-law. If Council approval is not obtained on or before the Completion Date, then this Agreement shall be null and void and any deposits paid by the Purchaser shall be returned to the Purchaser without interest or deduction. 6. Deed/Transfer (a) The Vendor agrees to deed or transfer the Property to the Purchaser subject to the terms of this Agreement. 7. Completion Date (a) The closing of this transaction shall take place on the 1st day of February, 2023 or such other date as mutually agreed upon (the “Completion Date”) at which time possession of the Property in "as is, where is" condition shall be given to the Purchaser other than as provided in this APS. The Vendor acknowledges that it has the right and authority to sell the Property. 8. Documents, Reports and Information (a) The Vendor will produce and deliver to the Purchaser within twenty-eight (28) days of Acceptance of the APS any documents, reports or information in its possession in respect to the Property. The Purchaser agrees to return all of the above documentation to the Vendor if this transaction is not completed. SECTION III - CONDITIONS, REPRESENTATIONS AND WARRANTIES 9. Property Not for Resale (a) The Purchaser covenants that it is purchasing the Property for the construction of a building and not for the purpose of resale of vacant land. 10. Development Covenants and Restrictions (a) The Property shall be subject to the development covenants and restrictions more particularly set out in Schedule “D” attached to this APS, which shall survive the completion of this transaction and run with the Property. The development covenants and restrictions shall be registered on title by the Vendor. In the event that the said covenants and restrictions are not registered on title to the Property on or before closing, the Purchaser covenants and agrees to consent to the registration of the covenants and restrictions after closing. 11. Investigation by the Purchaser (a) The Purchaser acknowledges having inspected the Property prior to executing the APS and understands that upon Acceptance by the Vendor, and subject to any conditions herein, there shall be a binding agreement of purchase and sale between the Purchaser and the Vendor. It shall be the Purchaser's responsibility to provide, at its own expense, any soil bearing capacity tests or environmental inspection, as may be required or desired, and the Vendor shall grant the Purchaser access for such testing or inspection at all reasonable times, on reasonable notice, for the purpose of conducting reasonable inspections. Page 639 of 650 Buyer’s Initials______ Seller’s Initials______ 12. Future Use (a) The Vendor and the Purchaser agree that there is no condition, express or implied, representation or warranty of any kind that the future intended use of the Property by the Purchaser is or will be lawful except as may be specifically stipulated elsewhere in this Agreement. 13. Reasonable Assistance (a) The Vendor agrees to provide reasonable assistance and co-operation to the Purchaser in obtaining the necessary approvals for the development of the Property subject to the Purchaser’s compliance with all relevant building codes, by-laws, land use controls, any other statutory requirements and payment of the fees provided for in the Town of Tillsonburg’s current fees by-law. 14. “As Is” Condition (a) The Purchaser acknowledges that it is acquiring the Property in an “as is” condition and that it must satisfy itself by Nov 1st 2022 regarding the condition of the Property including, but not limited to, all existing physical conditions of this Property, environmental conditions, fitness for any purpose, suitability for construction, soil bearing capacity for any building proposed, and the availability of municipal services and utilities necessary for the Purchaser’s proposed use of the Property. The Purchaser acknowledges that the Vendor shall not be responsible for any physical deficiencies of the Property or for any past, present or future environmental liabilities and hereby waives any claims against the Vendor in respect of any environmental liabilities on the Property. The Purchaser agrees to sign a release and indemnity in favour of the Vendor on or before closing with respect to matters set out in the preceding sentence. If the Purchaser is for any reason whatsoever dissatisfied with the Property, it shall deliver written notice to that effect to the Vendor by no later than the time specified herein, and this Agreement shall be terminated and the deposit shall be returned to the Purchaser without interest or deduction. If the Vendor is notified that the condition of the Property is not satisfactory, then the Purchaser shall, prior to receiving its deposit monies back and prior to being entitled to a full release from the Vendor with respect to this Agreement, restore the Property to its original condition as it existed prior to such testing or inspection by the Purchaser, at the Purchaser’s sole expense. If the Purchaser fails to deliver written notice to the Vendor within the time specified herein regarding this condition, this condition shall be deemed to have been waived by the Purchaser. SECTION IV - PRIOR TO COMPLETION DATE 15. Purchaser May Inspect the Property (a) The Purchaser, its agents and contractors shall be permitted to inspect the Property and any buildings as frequently as is reasonably necessary between the date of Acceptance and the Completion Date at reasonable times and upon reasonable notice to the Vendor. 16. Insurance (a) Pending closing, the Vendor shall hold all insurance policies and the proceeds thereof in trust for the parties as their interest may appear and in the event of damage to the Property, unless such damage is caused by the Purchaser. The Purchaser may elect to either receive the proceeds of the insurance and complete the purchase or to cancel the APS and have all the deposit monies paid to the Vendor returned together with all interest earned thereon without deduction. SECTION V - COMPLETING THE TRANSACTION 17. Examination of Title (a) Title to the Property shall be good and marketable and free from all encumbrances except for any service easements or rights-of-way to be reserved in favour of the Vendor and for any easements or rights-of-way registered on title and any minor encroachments shown on the survey or Reference Plan delivered to the Purchaser. Any required easement shall be in the form set out in Schedule “C”. Page 640 of 650 Buyer’s Initials______ Seller’s Initials______ (b) The Purchaser is allowed until one week prior to closing to examine the title to the Property. If on or before this date the Purchaser furnishes the Vendor in writing with any valid objections: to the title; to any undisclosed outstanding work orders; to undisclosed non-compliance with the municipal by-laws or covenants and restrictions which run with the land and cannot be resolved before the Completion Date; as to any objection of which the Vendor shall be unable to remedy or correct by the Completion Date and which the Purchaser will not waive, then this APS shall, notwithstanding any intermediate acts or negotiations, be terminated and the deposit shall be returned to the Purchaser without deduction and the Vendor and the Purchaser shall not be liable for any costs, damages, compensation or expenses. 18. Survey or Reference Plan (a) The parties acknowledge that a survey may be required and a Reference Plan may be registered on title and may be used to provide a registrable description of the Property and any easements. 19. Vendor to Discharge all Encumbrances (a) The Vendor agrees to obtain and register at its own expense, on or before the Completion Date, a discharge of all liens, encumbrances, agreements and mortgages now registered against the Property and not assumed by the Purchaser. The Vendor further covenants and agrees to discharge, on or before the Completion Date, any and all liens, chattel mortgages, assignments or any other security interest given by the Vendor against its personal Property. 20. Harmonized Sales Tax (a) If the sale of the Property is subject to Harmonized Sales Tax (HST) under the Excise Tax Act, R.S.C., 1985, c. E-15 (the “Act”), then such tax shall be in addition to Purchase Price. The Vendor shall provide the Purchaser with its HST Business Number. The Purchaser shall pay to the Vendor any HST imposed under the Act payable in connection with the transfer of the Property to the Purchaser, or as it may direct, unless the Purchaser or its nominee, or its assignee, provides: (i) a certificate on or before the Completion Date containing a representation and warranty to the Vendor that: (1) it is registered for the purpose of the HST on the Completion Date and specifying the HST registration number; (2) it will self-assess the HST on its GST/HST return or file the prescribed form pursuant to subsection 228(4) of the Act in connection with the purchase of the Property; (3) the Property transferred pursuant to this APS is being purchased by the Purchaser, or its nominee or assignee, as principal for its own account and is not being purchased by the Purchaser as agent, trustee or otherwise on behalf of or for another person, and does not constitute a supply of residential complex made to an individual for the purpose of paragraph 221 (2)(b) of the Act; (4) an indemnity, indemnifying and saving harmless the Vendor from any HST payable on this transaction and penalty and interest relating to HST; and (5) a notarial true copy of its HST registration confirmation. (b) If the Property is not subject to HST, the Vendor agrees to certify on or before the Completion Date that the transaction is not subject to HST. 21. Adjustments (a) The Vendor agrees that all deposits, if any, held by the Vendor not including interest thereon shall be credited to the Purchaser in the Statement of Adjustments prepared for the Completion Date. (b) Any rents, mortgage, interest, taxes, local improvements, water and assessment rates shall be apportioned and allowed to the Completion Date, the day itself to be apportioned to the Purchaser. Page 641 of 650 Buyer’s Initials______ Seller’s Initials______ 22. Deliveries by the Vendor To The Purchaser on Closing (a) The Vendor covenants and agrees to deliver to the Purchaser on the Completion Date, all such deliveries to be a condition of the Purchaser’s obligation to close this transaction, the following: (i) a deed/transfer of the Property; (ii) any survey or reference plan of the Property in the possession of the Vendor; (iii) a Statutory Declaration by an authorized officer of the Vendor stating that accurateness and truthfulness of all of the representations and warranties; (iv) a Statutory Declaration by an authorized officer of the Vendor as to possession of the Property in a form acceptable to the solicitors for the Purchaser; (v) a Statutory Declaration by an authorized officer of the Vendor that it is not now, and upon completion will not be, a “non-resident person” within the meaning and for the purpose of Section 116 of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) as amended; (vi) certified copies of all appropriate certificates, by-laws and other documents of Vendor authorizing the transaction herein; and (vii) such further documentation and assurances as the Purchaser may reasonably require to complete the transaction contemplated by the APS. 23. Deed/Transfer (a) The Deed or Transfer of the Property will be prepared at the expense of the Vendor in a form acceptable to the solicitors for the Purchaser and the Purchaser will pay all Land Transfer Tax, Harmonized Sales Tax and other costs in connection with the registration of it. 24. Electronic Registration (a) The parties agree that the transaction shall be completed by electronic registration pursuant to Part III of the Land Registration Reform Act, R.S.O. 1990, c.L.4 as amended. The parties acknowledge and agree that the delivery and release of documents may, at the discretion of the lawyer: a) not occur contemporaneously with the registration of the transfer/deed and other registrable documentation, and b) be subject to conditions whereby the lawyer receiving documents and/or money will be required to hold them in trust and not release them except in accordance with the terms of a written agreement between the lawyers entered into in the form of the Document Registration Agreement adopted by the Joint LSUC-OBOA Committee on Elective Registration of Title Documents. SECTION VI - MISCELLANEOUS 25. Entire Agreement (a) There is no representation, warranty, collateral agreement or condition affecting this Agreement of the Property other than expressed herein. 26. Acceptance by Fax or Email (a) The Purchaser and Vendor acknowledge and agree that the communication of this Agreement of Purchase and Sale may be transmitted by way of facsimile or electronic mail, and that they agree to accept such signatures and documents to be legal and binding upon them. 27. Counterparts (a) This Agreement may be signed in any number of counterparts, each of which is considered to be an original, and all of which are considered to be the same documents. Page 642 of 650 Buyer’s Initials______ Seller’s Initials______ 28. Tender (a) Any tender of documents or moneys hereunder may be made upon the solicitor acting for the party upon whom tender is desired, and it shall be sufficient that a negotiable, certified cheque or bank draft may be tendered instead of cash. 29. Time of Essence (a) Time shall be of the essence of this Agreement. 30. Planning Act (a) This Agreement shall be effective only if the provisions of Section 50 of the Planning Act, R.S.O. 1990, c.P.13, as amended are complied with. 31. Notices (a) All notices in this Agreement shall be in writing and shall be deemed to have been given if delivered by hand or mailed by ordinary mail, postage prepaid, addressed to the solicitor for the person to whom such notice is intended to be given at the following addressed: Solicitors for the Vendor: Duncan, Linton LLP ATTENTION: Adrian Rosu 45 Erb Street West Waterloo, ON N2J 4B5 Fax: (519) 886-8651 with a copy delivered to: The Corporation of the Town of Tillsonburg ATTENTION: Development Commissioner 204-200 Broadway Tillsonburg, ON N4G 5A7 Fax: 519-842-9431 Solicitors for the Purchaser: Jo-Ann Hanson Law Office ATTENTION: Jo-Ann Hanson 1 Main St W, Norwich, ON N0J 1P0 519-863-2529 If mailed, such notices must also be given by facsimile transmission on the date it was so mailed. If so given, such notices shall be deemed to have been received on the first business day following the date it was delivered or marked mailed out. 32. Schedules (a) The following Schedules shall form an integral part of this Agreement: (i) Schedule “A” Description of the Property; (ii) Schedule “B” Purchaser Conditions; (iii) Schedule C” Easement; and, (iv) Schedule “D” Development Covenants. Page 643 of 650 Buyer’s Initials______ Seller’s Initials______ 33. Successors and Assigns (a) The Purchaser shall not assign its rights, title, or interest in and to this APS. Notwithstanding the foregoing, and subject to Section 10 of this APS, the Purchaser may assign its rights, title, or interest in and to this APS to a related person (as that term is defined in Section 251(2) of the Income Tax Act, R.S.C., 1985, c. 1) upon the Vendor’s written consent, which consent may be granted or withheld at the Vendor’s sole option. Subject to the foregoing restrictions, the Vendor agrees to engross the Transfer/Deed of Land as directed by the Purchaser on the completion Date as the Purchaser may elect, and the Vendor agrees to complete the transaction contemplated by this APS on the Completion Date with such assignee or nominee. The Purchaser is released from all liability hereunder, if it assigns its interest in this APS. This Agreement shall be binding upon the parties hereto and their respective successors and assigns. 34. Severability (a) If any provision of this Agreement, or the application thereof to any circumstances, shall be held to be invalid or unenforceable, then the remaining provisions of this Agreement, or the application thereof to other circumstances, shall not be affected, and shall be valid and enforceable. IN WITNESS WHEREOF the Purchaser has executed this Agreement: Dated at ___________________, Ontario this _______ day of ______________, 2022. ** Per: _________________________________ Name: Title: _________________________________ Name: Title: I/We have authority to bind the Corporation. The Vendor hereby accepts this Agreement according to its terms. Dated at Tillsonburg, Ontario this _______ day of ______________, 2022. IN WITNESS WHEREOF the Vendor has executed this Agreement: The Corporation of the Town of Tillsonburg _________________________________ Stephen Molnar Mayor _________________________________ Michelle Smibert Clerk We have authority to bind The Corporation of the Town of Tillsonburg. Jacco Schep Owner Norwich 30th June Page 644 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “A” - LEGAL DESCRIPTION OF THE PROPERTY ALL AND SINGULAR that certain parcel or tract of land and premises situated, lying and being in the Town of Tillsonburg in the County of Oxford, being compromised of part of Lots 1 and 2, Concession 5, North of Talbot Road, Town of Tillsonburg, part of Block 1, Plan 41M-381 (the entire parcel shown in black) The estimated area of the Property is 12.61 acres, more or less. S Page 645 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “B” – PURCHASER CONDITIONS 1. The transaction of purchase and sale contemplated herein shall be subject to the fulfillment of the following terms and conditions on or before Sept 15th, 2022, which terms and conditions are for the exclusive benefit of the Purchaser and may be waived in whole or in part by the Purchaser. If the conditions are not fulfilled or waived then the deposit shall be returned and Agreement arising from the offer shall be at an end and all parties released from their obligations: (a) On Viability of project based off a pre-consultation meeting with the Town of Tillsoburg, including the Service providers, (Hydro, Water Supply & Disposal) (b) The Town will receive and review, site plan, site servicing and building permit applications prior to closing, upon completion of successfully waiving conditions. (c) Grant of Right of First Refusal (i) The vendor hereby grants the Purchaser a right of first refusal on 3.67 Acres of adjacent lands currently used by the Vendor for snow storage/melt purposes (the “adjacent lands”) or any portion thereof in accordance with the terms herein below (the “right of first refusal”). (ii) Term (1) If, within three (3 years from the date of the property being transferred, the Vendor (a) determines that it no longer requires the Adjacent Lands or receives either (b) a bona fide written offer by a willing third party to purchase all or a portion of the Adjacent lands with the Vendor intends to accept, or (c) an agreement of purchase and sale which the Vendor intends to enter into (individual and collectively, an “offer”),then the Vendor shall give written notice to the Purchaser at the address provided herein below accompanied by a true copy of such Offer as soon as reasonably possible. (iii) Exercise of Right of First Refusal (1) Within 10 days after receipt of the written notice, the Purchaser shall have the right to give written notice to the Vendor at the address herein that it is exercising the Right of First Refusal and will purchase the Adjacent Lands pursuant to an agreement of the purchase and sale which incorporates the terms of the Offer. (iv) Expiry (1) If the purchaser fails to exercise the Right of First Refusal within the stated time above, the Right of First Refusal shall cease to have any force or effect. Page 646 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “C” - EASEMENT TERMS AND PROVISIONS OF THE EASEMENT: l. The Owner hereby grants, conveys and confirms to The Corporation of the Town of Tillsonburg (the “Town”), its successors and assigns, in perpetuity, the free, uninterrupted and undisturbed right and easement to enter upon the lands herein described at any time for the purposes of constructing, installing and maintaining all municipal services of any kind (including water distribution pipes and sanitary and storm sewers) in, under, over and upon the said lands, and with the further and continuing right to the Town, its successors and assigns, and its servants, agents and workers to enter upon the lands at any time to construct, repair, correct, operate, replace and maintain at all times in good condition and repair the municipal services and for every such purpose the Town shall have access to the said lands at all times by its agents, servants, employees and workers. 2. The Town covenants and agrees that, upon completion of any work undertaken hereunder, the Town will restore the areas of land upon which it has performed work to the same condition as that in which the lands were found prior to the commencement of the work. 3. The Owner covenants with the Town to keep the lands herein described free and clear of any trees, buildings, structures or other obstructions which may limit the use, operation, repair, replacement or maintenance of the easement and to use the lands herein described only in a manner and for purposes not inconsistent with the exercise of the rights created by this indenture and without limiting the generality of the foregoing, only as a yard, lawn, garden, flowerbed, roadway, driveway or parking area and the Owner agrees not to do or suffer to be done anything which might injure any of the works of the Town hereon. The term “building” as set out herein shall specifically include any window sills, chimney breasts, cornices, eaves or other architectural features projecting from the first floor of the building but shall not include window sills, chimney breasts, cornices, eaves or other architectural features projecting from the second floor of the building by less than two (2) feet and such second floor projections shall be specifically authorized and allowed to encroach upon the lands herein described. 4. The Town, by the acceptance and registration of the within easement, agrees to be bound by the terms and provisions contained herein. 5. The burden and benefit of this easement shall run with the lands herein described and shall extend to and be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. 6. This is an easement in gross. Page 647 of 650 Buyer’s Initials______ Seller’s Initials______ SCHEDULE “D” DEVELOPMENT COVENANTS 1. Title Control (a) The owner or owners of the property (the “Owner”) upon which these development covenants attach (the “Property”) covenants and agrees that it may not use the Property for its intended use and may not retain ownership of the Property unless the Owner has constructed a building for such use including obtaining a building permit for a permanent building with a minimum building coverage of twenty percent (20%) of the total area of the Property. The Owner further covenants and agrees to commence construction of a permanent building on the Property which complies with the permitted uses of the Property’s zoning within one (1) year of the date the Owner took title to the Property being the date of registration of transfer (the “Completion Date”) and to substantially complete the construction of the said building in conformity with an approved site plan within two (2) years from the Completion Date of this transaction. (b) In the event that the Owner has not obtained a building permit in accordance with the provisions of subclause 1.a) above, the Owner may request from The Corporation of the Town of Tillsonburg (the “Town of Tillsonburg”), in writing, an extension of the time specified in subclause 1.a) above up to a maximum extension period of six (6) months, (such extension, the “Extended Time”) upon payment by the Owner to the Town of Tillsonburg of a performance deposit equal to ten (10%) percent of the purchase price of the Property (the “Performance Deposit”). The Performance Deposit shall be refunded to the Owner, without interest, upon the Owner’s compliance with and completion of the provisions of subclause 1.a) above within the Extended Time. In the event that the Owner fails to complete construction within the Extended Time, then the Town of Tillsonburg shall, in addition to its other rights and remedies as set out herein or otherwise, be entitled to retain the Performance Deposit as liquidated damages and not as a penalty, in partial or full satisfaction of the Town of Tillsonburg’s damages. (c) If the Owner does not comply with the provisions of subclause 1.a) above within the periods therein specifically set out or within the Extended Time, the Owner, will, at the option of the Town of Tillsonburg by notice in writing to the Owner, re-convey good title to the Property to the Town of Tillsonburg, free and clear of all encumbrances, in consideration for payment by the Town of Tillsonburg to the Owner of 90% of the purchase price paid by the Owner to the Town of Tillsonburg for the conveyance of the Property in the first instance (the “Discounted Consideration”). The re-conveyance shall be completed within sixty (60) days of the notice set out in this subclause. The Town of Tillsonburg shall be allowed to deduct from the Discounted Consideration all of its reasonable costs, realty commission and legal fees incurred with respect to the original conveyance of the Property by the Town of Tillsonburg to the Owner, as well as the costs of the Town of Tillsonburg in re-acquiring the Property, including without limitation, realty commission, registration costs, land transfer tax, legal fees and such other costs as reasonably incurred by the Town of Tillsonburg. The Town of Tillsonburg shall not be required to pay for any improvements that may have been made, constructed, installed or performed by the Owner on the Property. (d) Subject to subclause 1.c) above, the Owner covenants that it will not sell the Property or any part thereof to any person, firm or corporation without first offering, in writing, to sell the Property to the Town of Tillsonburg for consideration equal to or less than the consideration paid by the Owner to the Town of Tillsonburg in the original conveyance of the Property less the costs of the Town of Tillsonburg incurred in re-acquiring the Property, including without limitation, real estate commission, land transfer tax, registration costs, legal fees and such other costs as reasonably incurred by the Town of Tillsonburg, provided however that the Owner may sell or transfer the Property to a subsidiary or affiliate corporation as defined in the Business Corporations Act, R.S.O. 1990, c.B.16 as amended, provided such subsidiary assumes and confirms its acceptance of the within covenants and restrictions and expressly undertakes in writing to comply with them in such form as the Town of Tillsonburg may require. The Town of Tillsonburg shall have ninety (90) days from the receipt of an offer made by the Owner under this subclause, to accept such offer which acceptance shall be in writing. If the Town of Tillsonburg does not accept an offer to sell made by the Owner under the provisions of this subclause, the Town of Tillsonburg’s right to repurchase the Property so offered shall terminate. However, the remaining provisions of this clause 1 as well as other provisions herein shall continue in full force and effect. The limitation contained in this subclause, will expire upon the Owner fulfilling all of the building requirements as set out in subclause 1.a) and 1.b) above. Page 648 of 650 Buyer’s Initials______ Seller’s Initials______ 2. Town of Tillsonburg Option on Vacant Portion of Land (a) The Town of Tillsonburg shall have the option to repurchase such vacant portion of the Property not used by the Owner for the construction building(s) thereon provided such land is not reasonably ancillary to the Owner’s use and occupation of the said building. (b) This option shall only be exercisable if the Owner has not constructed permanent buildings with a minimum building coverage of thirty percent (30%) of the total area of the Property. (c) The option shall be exercisable by the Town of Tillsonburg for consideration equal to the per square foot consideration paid by the Owner to the Town of Tillsonburg in the original conveyance of the Property. Any costs incurred by the Town of Tillsonburg in re-acquiring the subject portion of the Property, including without limitation, real estate commission, land transfer tax, registration costs, legal fees and such other costs shall be at the cost of the Town of Tillsonburg. (d) This option expires ten (10) years from the Completion Date. 3. Development Standards (a) The Owner shall not construct and maintain a building unless the exterior of the wall or walls of any building or structure facing any municipal street is constructed of a minimum sixty (60) percent brick, precast stone, glass, pre-cast concrete or alternative non-steel materials and subject to approval by the Town of Tillsonburg, in their sole and absolute discretion, acting reasonably, through the Town’s Site Plan Approval process. (b) The Owner shall not use the Property unless any portion of any area of the Property to be used for open storage shall not be left so that any area is unenclosed, and any such areas shall be enclosed and designed so that the storage area is not visible from any municipal street. No storage shall be permitted within any set back area as set out in the Town of Tillsonburg Zoning By-Law, nor in front of any building or structure facing any municipal roadway. (c) The Owner hereby acknowledges that it is aware that the Property is designated as within a site plan control area. The Owner shall not commence any construction or use the Property until site plan approval has been obtained. The external building materials used on any building to be constructed on the Property must be approved in writing in advance by the Town of Tillsonburg as part of such site plan control approval process. 4. Assignment of Covenants (a) The Owner acknowledges and agrees that the covenants and restrictions herein shall run with the title to the Property. The Owner, for itself, its successors, heirs, and assigns in title from time to time of all or any part or parts of the Property will observe and comply with the stipulations, restrictions, and provisions herein set forth (the “Restrictions”), and covenants that nothing shall be erected, fixed, placed or done upon the Property or any part thereof in breach or in violation or contrary to the Restrictions or the provisions of the agreement of purchase and sale between the Owner and the Town of Tillsonburg and that the Owner will require every subsequent purchaser or every successor in title to assume and acknowledge the binding effect of this document, as well as, covenant to observe and comply with the Restrictions and other covenants herein, and the surviving provisions of this Agreement of Purchase and Sale. 5. Force Majeure (a) If the Owner shall be unable to fulfill, or shall be delayed or restricted in fulfilling any of the obligations set out herein due to any act or neglect of the Town of Tillsonburg or any of its employees, or due to strikes, walkouts, lockouts, fire, unusual delay by common carriers, or by any other cause beyond the Owner’s reasonable control, then the time for fulfilling any such obligations shall be extended for such reasonable time as may be required by the Owner to fulfill such obligation. 6. Right to Waive (a) Notwithstanding anything herein contained, the Town of Tillsonburg and its successors shall have the power by instrument or instruments in writing from time to time to waive, alter or modify the herein covenants and restrictions with respect to their application to any part of the Property without notice to or approval from the Owner or notice to or approval from the owners of any other adjacent or nearby lands. Page 649 of 650 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW 2022-050 A by-law to confirm the proceedings of Council at its meeting held on July 11, 2022. 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; BE IT THEREFORE ENACTED by the Council of the Corporation of the Town of Tillsonburg as follows: 1. All actions of the Council of The Corporation of the Town of Tillsonburg at its meeting held on July 11, 2022, 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 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. That this By-Law shall come into force and take effect on the date it is passed. READ A FIRST AND SECOND TIME THIS 11TH DAY OF JULY, 2022. READ A THIRD AND FINAL TIME AND PASSED THIS 11TH DAY OF JULY, 2022. _______________________________ MAYOR – Stephen Molnar _______________________________ CLERK – Michelle Smibert Page 650 of 650