HomeMy WebLinkAboutCouncil Agenda - 2021-11-30 SSpecial Council Meeting
Agenda
Tuesday, November 30, 2021, 2:00 p.m.
Electronic Meeting
Due to COVID-19 and recommendations by Waterloo Region Public Health to exercise physical
distancing, City Hall is open for select services. Members of the public are invited to participate in this
meeting electronically by accessing the meeting live -stream video at kitchener.ca/watchnow.
While in-person delegation requests are not feasible at this time, members of the public are invited to
submit written comments or participate electronically in the meeting by contacting
dele. atq ion(c-)kitchener.ca. Please refer to the delegations section on the agenda below for registration
deadlines. Written comments will be circulated prior to the meeting and will form part of the public
record.
*Accessible formats and communication supports are available upon request. If you require
assistance to take part in a city meeting or event, please call 519-741-2345 or TTY 1-866-969-9994*
Re: Special Council Meeting
Notice is hereby given that Mayor B. Vrbanovic has called a special meeting of City Council to be held
electronically to consider the following:
Pages
1. Commencement
The electronic meeting will begin with a Land Acknowledgement given by the
Mayor.
2. Staff Reports
2.1. FIN -2021-61 — 2022 Water Utilities User Rates 3
That the proposed rates contained in the 2022 Water Utilities Rates
schedule attached to Financial Services Department Report FIN -2021-
61 be approved.
2.2. INS -2021-13 - 2022 Gas Utilities User Rates
That the supply component of the natural gas rate be increased to 16.0
cents per cubic meter from 13.5 cents per cubic meter for system gas
customers of Kitchener Utilities effective January 1, 2022; and,
That Kitchener Utilities' natural gas variable and fixed delivery rates be
approved as proposed in report INS -2021-13 - Appendix A, for all
Kitchener delivery customers effective January 1, 2022.
3. By-laws
3.1. Three Readings
3.1.a. To confirm all actions and proceedings of the Council.
4. Adjournment
7
Page 2 of 13
J
Staff Rep ort K� R
Financial Services Department www. kitchener ca
REPORT TO: Council
DATE OF MEETING: November 30, 2021
SUBMITTED BY: Ryan Hagey, Director of Financial Planning, 519-741-2200 ext. 7353
PREPARED BY: Ryan Hagey, Director of Financial Planning, 519-741-2200 ext. 7353
WARD(S) INVOLVED: All
DATE OF REPORT: November 16, 2021
REPORT NO.: FIN -2021-61
SUBJECT: 2022 Water Utilities Rates
RECOMMENDATION:
THAT the proposed rates contained in the 2022 Water Utilities Rates schedule
attached to Financial Services Department Report FIN -2021-61 be approved.
REPORT HIGHLIGHTS:
• The total Water Utilities Rate Increase is 2.2%
• Water and Sanitary Sewer rate increases are completely related to increases in the
Regional rate for water supply and sewage processing
• Stormwater increase is required to leverage $50M of grant funding through the Disaster
Mitigation and Adaptation Fund (DMAF)
• New rates come into effect January 1St
BACKGROUND:
The rates for the City's Water Utilities (water, sanitary, and stormwater) are set annually by
Council. In 2017, a comprehensive review of the water, sanitary and stormwater
infrastructure (the Water Infrastructure Program or WIP) was conducted to evaluate
infrastructure investment needs and other factors such as affordability, growth, and
sustainability. The WIP report provided information about the infrastructure in each of the
utilities and provided Council with investment options for both capital replacement and
increased maintenance spending along with 5 -year rate options for the utilities. Council's
consensus from that discussion provided staff with direction for future investments and rate
increases which have been reflected in previous budgets.
REPORT:
The proposed rate increases for the Water Utilities are summarized in the table below,
with the more detailed schedule attached to the report. These rate changes will come into
effect on January 1St
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 3 of 13
Summary of Water Utilities Rate Changes
Water 1.4%
Sanitary 1.6%
Stormwater 6.0%
Combined 2.2%
The proposed rate increase of 2.2% (combined) is significantly lower than the forecast rate
increase (as shown in the table below).
Proiected Combined Utilitv Rate Increases
Rate Increase Projection from WIP 6.5% 1 6.5% 1 4.5% 4.5% 4.5%
Revised Rate Increase Projection 6.5% 6.5% 4.4% 0.9% 2.2%
This reduced level of increase is being achieved by not increasing the City's portion of the
water and sanitary rates. For these two utilities, only Region of Waterloo increased costs
for water supply and sewage processing are being passed through to customers, but nothing
else.
Regarding stormwater, a rate is required to fund the City's committed share ($75M) of
projects being significantly funded ($50M in total) by other levels of government through the
Disaster Mitigation and Adaptation Fund (DMAF). A significant portion (75%) of urban areas
in the city lack adequate stormwater management. The DMAF funding will implement
important stormwater management initiatives that will help mitigate the severity of local
flooding that can impact drinking water quality, downstream environments and public and
private properties. It is estimated that for every dollar spent by Kitchener ratepayers, they
receive a projected return of $18 in prevented damage costs.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
The total annual impact of the proposed rate changes is $26 (or 2.2%) as noted in the table
below.
Impact on Homeowner
Water
$421
$427
$6
1.4%
Sanitary
$530
$538
$8
1.6%
Stormwater
$197
$209
$12
6.0%
TOTAL
$1,148
$1,174
$26
2.2%
Assumptions:
• Water & Sanitary: water consumption of 170m3 annually
• Stormwater: Residential Single Detached Medium
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in advance of
the council / committee meeting.
Page 4 of 13
PREVIOUS REPORTS/AUTHORITIES:
• FIN -2021-58 2022 Operating Budget
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services
ATTACHMENTS:
Attachment A — 2022 Water Utilities Rates
Page 5 of 13
Attachment A - 2022 Water Utilities Rates
The minimum charge for water and sanitary sewer is calculated as 1/10 m3 per day
The flat rate sewer charge for properties not connected to the municipal water system is based on
the average annual residential consumption of 170 m3 at the current approved sanitary sewer rate
and is billed monthly
Page 6 of 13
Sanitary (per cubic metre)
$
3.1546
$
3.2051
$
0.0505
1.60%
Water (per cubic metre)
$
2.5045
$
2.5396
$
0.0351
1.40%
Stormwater (monthly charge)
Residential Single Detached Small
$
9.82
$
10.41
$
0.59
6.00%
Residential Single Detached Medium
$
16.39
$
17.37
$
0.98
6.00%
Residential Single Detached Large
$
21.54
$
22.83
$
1.29
6.00%
Residential Townhouse/Semi-Detached
$
11.70
$
12.40
$
0.70
6.00%
Residential Condominium
$
6.52
$
6.91
$
0.39
6.00%
Multi -Residential duplex
$
13.11
$
13.90
$
0.79
6.00%
Multi -Residential triplex
$
19.71
$
20.89
$
1.18
6.00%
Multi -Residential four-plex
$
26.20
$
27.77
$
1.57
6.00%
Multi -Residential five-plex
$
32.79
$
34.76
$
1.97
6.00%
Multi -Residential (>5 units)
$
3.29
$
3.49
$
0.20
6.00%
Non -Residential Smallest
$
31.34
$
33.22
$
1.88
6.00%
Non -Residential Small
$
83.81
$
88.84
$
5.03
6.00%
Non -Residential Medium -Low
$
219.60
$
232.78
$
13.18
6.00%
Non -Residential Medium -High
$
641.04
$
679.50
$
38.46
6.00%
Non -Residential Large
$ 1,553.64
$ 1,646.86
$
93.22
6.00%
Non -Residential Largest
$ 3,335.33
$ 3,535.45
$
200.12
6.00%
The minimum charge for water and sanitary sewer is calculated as 1/10 m3 per day
The flat rate sewer charge for properties not connected to the municipal water system is based on
the average annual residential consumption of 170 m3 at the current approved sanitary sewer rate
and is billed monthly
Page 6 of 13
Staff Repod
Infrastructure Services Department
Klltl1E ,,R
www kitchener ca
REPORT TO:
Special Council
DATE OF MEETING:
November 30, 2021
SUBMITTED BY:
Greg St. Louis, Director of Utilities, 519-741-2600 ext. 4538
PREPARED BY:
Greg St. Louis, Director of Utilities, 519-741-2600 ext. 4538
WARD(S) INVOLVED:
All
DATE OF REPORT:
October 15, 2021
REPORT NO.:
INS -2021-13
SUBJECT:
2022 NATURAL GAS RATES
RECOMMENDATION:
That the supply component of the natural gas rate be increased to 16.0 cents per
cubic meter from 13.5 cents per cubic meter for system gas customers of Kitchener
Utilities effective January 1, 2022; and,
That Kitchener Utilities' natural gas variable and fixed delivery rates be approved
as proposed in report INS -2021-13 - Appendix A, for all Kitchener delivery
customers effective January 1, 2022.
BACKGROUND:
Kitchener Utilities is committed to delivering natural gas rate stability for the citizens of
Kitchener. We follow the Council endorsed Gas Purchase Policy for the procurement of
natural gas supply. It outlines how much of our natural gas portfolio can be purchased in
advance and on the market. The policy provides the ability to blend our natural gas rate
with fixed and market price natural gas. The blending of fixed and market price natural
gas is used to reduce volatility in prices to keep rates stable for customers.
Other natural gas utilities regulated by the Ontario Energy Board purchase natural gas on
the market and adjust rates quarterly, due to the volatility of natural gas. This strategy
provides rates that are more reflective of market prices, but also includes more frequent
rate fluctuations.
Kitchener Utilities customers have indicated a preference for rate stability. Kitchener
Utilities delivers rates which soften spikes in market and provides longer range rate
stability. This offers customers easier and more reliable annual budgeting for energy
costs.
The global pandemic has also impacted the natural gas market. As the world began to
shut down with the onset of the pandemic, less natural gas was needed globally. This
created a market with excessive supply and declining demand. As a result, prices quickly
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 7 of 13
began to drop. Due to these market conditions, and along with increasing policies
promoting low -carbon energy, the refinement of new natural gas supply decreased. Now
as the economy is reopening, demand for natural gas is increasing but supply has not
kept up with demand. This and other factors are creating a rising natural gas market.
Kitchener Utilities is in a very good storage position of natural gas entering the heating
season. Knowing that natural gas prices are rising, we have purchased natural gas and
have delayed changing rates this fall, to hold lower rates for customers.
REPORT:
Kitchener Utilities natural gas rates have two components: gas supply, and gas delivery.
The gas supply program is responsible for the purchase of the gas commodity and
transportation of natural gas to Kitchener and is a pass-through cost program. The
delivery program is responsible for delivery of natural gas to customers. This includes
billing, meter reading, capital, maintenance and operating costs of the distribution system.
The following are key highlights of this natural gas rate change report:
• Natural gas supply rate increase for system gas customers;
• Variable and fixed delivery rate increase as proposed in Appendix A;
• An average residential customer will see an overall rate increase of approx.
$74 or 10%, for the period January 1 st, 2022 to December 31 st, 2022 with the
proposed rate change.
Gas Supply:
The gas supply rates are impacted by natural gas supply, demand, and the weather.
During the 2021 budget process the purchase price of gas was forecasted to increase in
the fall of 2021. The market prices have risen sharply which is necessitating an increase
to 16 cents per cubic metre into 2022. This rate increase is required to bring the program's
projected stabilization reserve to an appropriate position.
Gas Delivery:
There are two components to the delivery charges: a daily fixed charge, and a variable
rate. There are four Delivery Rate Groups: M1, M2, M4 and M5. These rates service
customers of different volumetric requirements.
• The delivery components of the proposed natural gas rates are shown in Appendix
A.
The key drivers of delivery rate changes are the following:
• Natural gas delivery system capacity upgrades required to ensure critical minimum
supply volumes are available to customers
• Natural gas meter purchases to meet regulatory requirements of Measurements
Canada
• Inflationary increases to operating and capital expenditures
Page 8 of 13
Inflationary increases within the 2022 budget have been limited to salaries/wages and
internal charges, in order to offset the impacts of the increase in natural gas costs and to
limit the increase in gas rates required.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The recommendation of this report supports the achievement of the city's strategic vision
through the delivery of core service.
FINANCIAL IMPLICATIONS:
For an average system gas residential (M1) customer consuming 2,100 cubic meters
annually, the proposed natural gas rates result in an increase to the overall annual bill by
approx. $74 for the period January 1, 2022 to December 31, 2022. This excludes the
Federal Carbon Charge.
Kitchener Utilities supports the Waterloo Region Energy Assistance Program. This
program offers support to customers facing challenges paying their utility bills. The
program is administered by the Region of Waterloo and offers support for both electricity
and natural gas bills.
COMMUNITY ENGAGEMENT:
Kitchener Utilities will work with the Corporate Communications and Marketing Division
to ensure that media outlets are provided with a press release to inform customers. An
insert will be distributed with utility bills along with information will be posted on the
Kitchener Utilities' and City website. An on -bill message will also appear on January
natural gas bills.
INFORM — This report has been posted to the City's website with the agenda in advance
of the council meeting.
ACKNOWLEDGED BY: Denise McGoldrick, General Manager,
Infrastructure Services
Page 9 of 13
APPENDIX A
CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
GENERAL SERVICE RATE Ml
Applicability
To residential and non -contract commercial and industrial customers that consume less than 50,000 m3 per year.
Rate
Daily Fixed Charge
And
$ .7600
SUPPLY COMMODITY VARIABLE DE LIVERY NET RATE
0/m3 0/113 0/m3
16.0000 8.0871 24.0871
Meter Readings
Gas consumption by each customer under this rate schedule shall be determined by periodic meter readings, provided that in
circumstances beyond the control of the Corporation, such as strikes or non -access to a meter, The Corporation may estimate
the monthly consumption between the meter readings and render a monthly bill to the customer.
Effective
January 1, 2022
Policv Relating to Terms of Service
1) Gas purchased under this rate schedule shall not be resold, directly or indirectly by the customer, unless resold as "motor
vehicle fuel gas", as that term is defined in Ontario Regulation 805/82.
2) Customers who temporarily discontinue service during any twelve consecutive months without payment of the monthly
fixed charge for the months in which the gas is temporarily disconnected shall pay for disconnection and reconnection.
Page 10 of 13
CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
GENERAL SERVICE RATE — M2
Applicability
To residential and non -contract commercial and industrial customers that consume 50,000 m3 and more per year.
Rate
Daily Fixed Charge
And
$2.4500
SUPPLY COMMODITY VARIABLE DELIVERY NET RATE
RATE
¢/m3 o/m3 o/m3
16.0000 6.8523 22.8523
Meter Readings
Gas consumption by each customer under this rate schedule shall be determined by periodic meter readings, provided that in
circumstances beyond the control of the Corporation, such as strikes or non -access to a meter, The Corporation may estimate
the monthly consumption between the meter readings and render a monthly bill to the customer.
Effective
January 1, 2022
Policv Relating to Terms of Service
2) Gas purchased under this rate schedule shall not be resold, directly or indirectly by the customer, unless resold as "motor
vehicle fuel gas", as that term is defined in Ontario Regulation 805/82.
3) Customers who temporarily discontinue service during any twelve consecutive months without payment of the monthly
fixed charge for the months in which the gas is temporarily disconnected shall pay for discomiection and reconnection.
Page 11 of 13
CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
FIRM INDUSTRIAL AND COMMERCIAL CONTRACT RATE — M4
Applicability
To a customer who enters into a contract for a minimum terin of one year, that specifies a daily contracted demand (CD) as follows:
Between 2,400 m3 and 140,870 m3.
Rate
1. Bills will be rendered monthly and shall be the total of:
i) A Fixed Demanc
ii) A Variable
Charge:
First 8,450 m3 of the daily contracted demand, 61.9000 ¢/m3
Next 19,700 m3 of the daily contracted demand, 22.8000 ¢/m3
All m3 over 28,150m3 of the daily contracted demand, 16.8000 ¢/m3
First 422,250 m3 delivered per month 1.5000 ¢/M, -
Next volume equal to 15 days use of CD 1.5000 /m3
Remainder of volumes delivered in the month 1.5000 C/m3
iii) A Monthly Gas Supply Char e:
Supply Commodity 16.0000 0/m3
2. Over -run Charge
Authorized overrun gas is available provided that it is authorized by the Corporation in advance. The Corporation will not
unreasonably withhold authorization. Overrun means gas taken on any day in excess of 103% of contracted daily demand.
Authorized overrun will be available April 1 through October 31, and will be paid for at the rate of 3.271 ¢/m3 for the delivery
and, if applicable, total gas supply rate of 16.0 ¢/m3.
Unauthorized overrun in any month shall be paid for at the rate of 8.0871 ¢/m3 for the delivery and total gas supply charge for
system -supplied volumes at the rate of 16.0 ¢/m3.
3. Minimum Annual Charge
In each contract year, the customer shall purchase from the Corporation or pay for a minimum volume of gas equivalent to
150 days use of contracted demand. Overrun gas volumes will not contribute to the minimum volume. In the event that the
customer shall not take such minimum volume, the customer shall pay an amount equal to the deficiency from the minimum
volume times a rate of 2.00 ¢/m3, and if applicable, a total gas supply charge of 16.0 ¢/m3.
In the event that the contract period exceeds one year, the annual minimum volume will be pro -rated for any part year.
Effective
January 1, 2022
Policv Relating to Terms of Service
Gas purchased under this rate shall not be resold, directly or indirectly by the customer.
Page 12 of 13
CORPORATION OF THE CITY OF KITCHENER
NATURAL GAS
INTERRUPTIBLE INDUSTRIAL AND COMMERCIAL CONTRACT RATE — M5
Applicability
To a Customer who:
A) Enters into a contract for a minimum term of one year that specifies a daily contracted demand between 2,400 m3 and 140,870
m3 inclusive and,
B) Has an alternate fuel supply and combustion system available.
Rate
The price of all gas delivered shall be determined on the basis of the following schedules:
i) Monthly Fixed Charge $680.00
a. and
ii) Delivery Charge (incl. storage):
Daily Contracted Demand Level (CD)
2,400 m3
< CD <
17,000 m3
3.1539 ¢/m'
17,000 m'
< CD <
30,000 m'
2.7611 ¢/m'
30,000 in'
< CD <
50,000 m'
2.6859 ¢/m3
50,000 m'
< CD <
70,000 m3
2.6332 ¢/m3
70,000 m'
< CD <
100,000 m3
2.5955 ¢lm3
100,000 m3
< CD <
140,870 m3
2.5584 ¢/m3
iii) A Monthly Gas Supply Charge:
Supply Commodity 16.00000
2. Over -run Charge
Overrun gas is available provided that it is authorized by the Corporation in advance. The Corporation will not unreasonably
withhold authorization. Overrun means gas taken on any day in excess of 105% of contracted daily demand.
Unauthorized overrun gas taken in any month shall be paid for at the rate of 8.0871 ¢/m' for the delivery and total gas supply
charge for system -supplied volumes at the rate of 16.0 ¢/m3.
Unauthorized Overrun Non -Compliance Rate:
Unauthorized overrun gas taken any month during a period when a notice of interruption is in effect shall be paid for at the
rate of 235.68 ¢/m3 ($60 per G1) for the delivery.
Minimum Annual Charge
In each contract year, the customer shall purchase from the Corporation or pay for a minimum volume of gas equivalent to
150 days use of contracted demand. Overrun volumes will not contribute to the minimum volume. In the event that the
customer shall not take such minimum volume, the customer shall pay an amount equal to the deficiency from the minimum
vola ne multiplied by 3.654¢/m3 for the delivery charge and if applicable, a gas supply charge of 16.0 ¢/m').
Effective
January 1, 2022
Policy Relating to Terms of Reference
Gas purchased under this rate shall not be resold, directly or indirectly by the customer.
Page 13 of 13
