WATER AND WASTEWATER FINANCIAL PLAN

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WATER AND WASTEWATER

FINANCIAL PLAN

2014 - 2020

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February 15th_{, 2015}

Infrastructure Solutions (Engineering) Inc.

968 Winterton Way Mississauga, ON L5V 1M6 Telephone: (905) 232-6418 e-mail: neil@infrasol.ca Mrs. Tina Tarini Treasurer

Township of White River 102 Durham St., P.O. Box 307 White River, ON

P0M 3G0

Re: Water and Wastewater Financial Plan

Dear Mrs.Tarini:

We are pleased to submit the Township of White River’s Water and Wastewater Financial Plan. We appreciate the opportunity to be of assistance to the Township of White River with this undertaking and look forward to working again with you and your staff in the future.

Yours truly,

Neil Roberts President

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1 INTRODUCTION AND PROJECT SCOPE

1.1 OBJECTIVES

Infrastructure Solutions Inc. (ISI) was retained by the Township of White River (the Township) to prepare a Water/Wastewater Financial Plan for the communal water system. The Financial Plan has been developed and prepared with a forward looking approach at the financial position of the Township’s water and wastewater systems. The plan is not audited, and it does contain various estimates and assumptions as explained in Section 5: “Notes to the Financial Plan”.

The Water Financial Plan fulfills one of the five submission requirements for the purposes of obtaining a municipal drinking water license as per the Safe Drinking Water Act 2002 (SDWA). The Financial Plan also includes the calculations for the wastewater system, as is encouraged under the SDWA. The prescribed reporting requirements for a financial plan are defined by Ontario Regulation 453/07 (O. Reg.453/07). In general, a financial plan requires an in-depth analysis of capital and operating needs, a review of current and future demand versus supply, and consideration of available funding sources. The Financial Plan under O. Reg. 453/07 is required to cover a period of six (6) years, from 2014 to 2019 inclusive, this Financial Plan was extended to 2020.

The Township of White River is a municipality with a population of approximately 607 according to the 2011 Canada census by Statistics Canada. The water users in White River are non-metered, with 292 accounts on flat rate in 2014. The Township has undertaken this Water and Wastewater Financial Plan in order to ensure that sufficient funds will be in place to cover the short-term water and wastewater system operating costs and full water and wastewater system life-cycle asset renewal and replacement costs over a 6 year time period.

This Water and Wastewater Financial Plan consists of the following tasks:

 Compilation of the current and projected operating costs for the 2014-2020 period;

 Projections of capital renewal and replacement costs to 2020;

 Revenue projections;

 Debt requirements and projections;

 Tangible Capital Asset projections;

 Statement of Financial Position, Statement of Operations, Statement of Change in Net

Financial Assets/Debt, and Statement of Cash Flow.

The intent of the project is to develop a sustainable financing plan that will fully meet the current financial needs, as well as make full provision for renewing all water system financial assets. The cost of renewing financial assets has been identified for the 2014 to 2020 period. For each year, from 2014-2020, user fees have been set such that funds will be available when needed to meet future projected capital renewal and replacement needs.

The costs of the identified short-term capital renewal needs have been combined with projections of the operating costs to produce an overall projection of the system costs. Various methods have been utilized to supply the necessary financial resources to pay for the operations & maintenance (O&M) and the capital projects. These include loans, if any, user fees and reserves. User fees are the key component of the financial plan as they pay down any loan and build up reserves. The current rate structure as per the 2014 ISI Rate Study generates sufficient funds to fully meet

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the projected needs of the financial plan. It is recommended that the rates be monitored annually to determine if projected revenues and expenditures are in line with expectations.

1.2 STUDY AREA

The Township of White River is located midway between Thunder Bay and Sault Ste. Marie in the heartland of Northwestern Ontario. The Township is responsible for the water supply, treatment and distribution within the Township site. Municipal services, including water and wastewater are supplied to approximate 292 customers. White River’s major industry was the forest industry until 2007, when the Domtar mill was shut down.

Figure 1 - Study Area

In September 2013, Forest Products Ltd. has begun a multi-million dollar re-investment program and has restarted the saw mill with a single shift and planned to add a second shift by January 1, 2014. A private corporation owns and operates the mill under a Sustainable Forest License, and it is located in North Western Ontario at White River between Thunder Bay and Sault Ste. Marie. The corporation was created by the Township of White River and the Pic Mobert First Nation who purchased the sawmill assets from Domtar after that company closed the mill indefinitely in 2007.

1.3 WATER SYSTEM

The raw water source for The Township is Lake Tukanee located approximately 3.8 kilometers northeast of the water treatment plant. The surface water supply for the Township flows through an intake structure located in approximately 5 metres of water depth, and about 25 metres from shore within Lake Tukanee. An intake pipe conveys raw water by gravity from the intake structure to the wet well.

The pumping station is equipped with submersible pumps that start and stop in response to pressure in the raw water transmission main. An automatic valve located in the Water Treatment

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Plant (WTP) opens, based on a signal from the Blueberry Hill Reservoir, which starts the flow of raw water through the treatment process. Two of three pumps are called to start and continue to run until the Reservoir is full and a signal closes the automatic valve.

There are three valves at the entrance to the WTP. An electric actuator valve starts and stops the flow of water through the treatment process. Once the flow rate is manually set, the SCADA system monitors and records the flow into the WTP on a continuous basis.

The surface water treatment system consists of ozonation, roughing filters, slow sand filters, and granular activated carbon. Each filter train consists of two (2) roughing filters, a slow sand filter and a GAC contactor. Ozone is added to the raw water to oxidize the organic materials in the raw water, which produces a particulate matter that needs to be filtered out, and reduces taste, odour, and colour.

The standby primary disinfection system is chlorination. Sodium hypochlorite is added to maintain a chlorine residual in the distribution system. Also, a UV irradiation for disinfection of the raw water supply is used. Other processes such as de-chlorination are used on the backwash water which is necessary prior to discharge into the exfiltration trench.

The reservoir provides a supply of clean potable water to the community for public consumption during peak water demand periods, and for emergency supply purposes. The reservoir is located on the south side of the community on Blueberry Hill. The reservoir is classified as a two-celled

in-ground reservoir and has a maximum useable storage capacity of 1,350 m3_.

In the event of a power failure, a Diesel Electric Generator Set (Gen-Set) has been installed to provide a backup power supply. If the power does go out and there is a delay in starting the Gen-Set, battery operated emergency lights will come on in the building until power is restored. Under full load, the Gen-Set Uses 6.7 U.S. gallons of fuel per hour (25.5L/hr.).

The Township WTP contains two (2) high lift pumps which pump the water from the facility’s clear well through the distribution system and to the reservoir, and are controlled by a Milltronics ultrasonic level control system located in the Blueberry Hill Reservoir.

The distribution system receives treated water from the Township Water Treatment Plan. The individual components of the water main system are described as follows:

 Main valves are located at regular intervals along the water main.

 Fire Hydrants are located throughout the community.

 Water Services are 19 mm to 50 mm diameter pipes that run from water mains to

property lines.

1.4 WASTEWATER SYSTEM

The Township Sewage Works consists of four pumping stations, a waste stabilization pond with influent and effluent works, and interconnecting structures. The waste water generated within the collection area of White River is collected into the sewer system and pumped to the 180 day retention stabilization pond by way of a 250 mm diameter force main. The waste stabilization pond is constructed in two cells totaling 12 acres, with a design capacity of 86,950 cubic meters. The cells have been designed to operate in series or in parallel, with an effluent discharge through two 250 mm diameter outflow sewers into Chain Lakes Creek, which in turn discharges to the White River upstream of the community. There are four pumping stations in the wastewater collection system. Two of the pumping stations, Stanworth and Durham, collect and pump sewage to the waste stabilization pond. The Stanworth

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pumping station collects the wastewater from the Stanworth subdivision and the arena. It consists of two A.B.S. submersible pumps and a 40 kW backup generator. This station pumps directly to the lagoons via a 150 mm diameter force main. The overflow for this station leads to the field out back. The Spadoni pumping station collects wastewater from Spadoni and Allaire streets. It has two 2.2 hp submersible Flygt pumps and no backup generator. Its overflow leads to a gravity sewer cover. This station pumps to the Dufferin St. pumping station via gravity. The Dufferin pumping station collects wastewater from Hwy. 17, Ontario St. West and the Spadoni pumping station. It consists of two 5 hp Flygt submersible pumps and a 25 kW backup generator. Its overflow leads to a gravity manhole, and its wastewater flows to the Durham St. pumping station.

2 PROVINCIAL REQUIREMENTS

The Safe Drinking Water Act (SDWA) was passed in December, 2002 in order to address some of the recommendations made by the Walkerton Inquiry Part II report. One of the main requirements of the Act is the mandatory licensing of municipal water providers. Section 31 (1) specifically states,

“No person shall,

a) establish a new municipal drinking water system or replace or carry out an alteration to a municipal drinking water system except under the authority of and in accordance with an approval under this Part or a drinking water works permit; or

b) use or operate a municipal drinking water system that was established before or after this section comes into force except under the authority of and in accordance with an approval under this Part or municipal drinking water license.”

One of the main requirements of the SDWA is the mandatory licensing of municipal water providers, as per section 31 (1). In order to become licensed, a municipality must satisfy five key requirements as per section 44 (1):

1. Obtain a drinking water works permit.

2. Acceptance of the operational plan for the system based on the Drinking Water Quality Management Standard.

3. Accreditation of the Operating Authority. 4. Prepare and provide a financial plan. 5. Obtain a permit to take water.

The preparation of a financial plan is a key requirement for licensing and as such must be undertaken by all water providers.

2.1 FINANCIAL PLAN REQUIREMENTS – GENERAL

Under the SDWA, a financial plan is mandatory for water systems and encouraged for wastewater systems. The financial plans shall be for a period of at least six years, but longer planning horizons are encouraged. The financial plan is to be completed and approved by the later of July 1, 2010 and the date that is six months after the first license is issued. Once a water system is licensed, the Township’s Water Financial Plan is required to be updated every five (5) years, in conjunction with the application for license renewal. Financial plans may be amended, and additional information beyond what is prescribed can be included if deemed necessary.

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2.2 FINANCIAL PLAN REQUIREMENTS – EXISTING SYSTEM

O. Reg. 453/07 provides details with regards to s.30 (1) part b of the SDWA for existing water systems:

 Financial plans must be approved by Council resolution (or governing body).

 Financial plans must include a statement that the financial impacts have been considered

and apply for a minimum six year period (commencing when the system first serves the public, or at renewal starting with the year in which the license expires).

 Financial plans must include detail regarding proposed or projected financial operations

itemized by total revenues, total expenses, annual surplus/deficit and accumulated surplus/deficit (i.e. the components of a “Statement of Operations” as per Public Sector Accounting Board (PSAB)) for each year in which the financial plans apply.

 Financial plans must present financial position itemized by total financial assets, total

liabilities, net debt, non-financial assets, and tangible capital assets (i.e. the components of a “Statement of Financial Position” as per PSAB) for each year in which the financial plans apply.

 Gross cash receipts/payments itemized by operating transactions, capital transactions,

investing transactions and financial transactions (i.e. the components of a “Statement of Cash Flow” as per PSAB) for each year in which the financial plans apply.

 Financial plans applicable to two or more solely-owned drinking water systems can be

prepared as if they are for one drinking water system.

 Financial plans are to be made available to the public upon request and at no charge.

 If a website is maintained, financial plans are to be made available to the public through

publication on the Internet at no charge.

 Notice of the availability of the financial plans is to be given to the public.

 Financial Plans are to be submitted to the Ministry of Municipal Affairs and Housing.

2.3 SUSTAINABLE FINANCIAL PLANNING

In general, sustainability refers to the ability to maintain a certain position over time. While the SDWA requires a declaration of the financial plan’s sustainability, it does not give a clear definition of what would be considered sustainable. Instead, the Ministry of the Environment released a guideline (“Towards Financially Sustainable Drinking-Water and Wastewater Systems”) that provides possible approaches to achieving sustainability. The Province’s Principles of Financially Sustainable Water and Wastewater Services are provided below:

Principle #1: Ongoing public engagement and transparency can build support for, and confidence in, financial plans and the system(s) to which they relate.

Principle #2: An integrated approach to planning among water, wastewater, and storm water systems is desirable given the inherent relationship among these services.

Principle #3: Revenues collected for the provision of water and wastewater services should ultimately be used to meet the needs of those services.

Principle #4: Life-cycle planning with mid-course corrections is preferable to planning over the short-term, or not planning at all.

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Principle #6: A sustainable level of revenue allows for reliable service that meets or exceeds environmental protection standards, while providing sufficient resources for future rehabilitation and replacement needs.

Principle #7: Ensuring that users pay for the services they are provided leads to equitable outcomes and can improve conservation. In general, metering and the use of rates can help ensure users pay for services received.

Principal #8: Financial plans are “living” documents that require continuous improvement. Comparing the accuracy of financial projections with actual results can lead to improved planning in the future.

Principle #9: Financial plans benefit from the close collaboration of various groups, including engineers, accountants, auditors, utility staff, and municipal council.

The principles help form the framework for a sustainable financial plan. The substance of the financial plan may be derived from SWSSA which will require, once in force, municipalities to assess the “full cost” of providing water and wastewater services. Full cost as defined in subsections 3(7) and 4(7), and includes:

“source protection, operating costs, financing costs, renewal and replacement costs and improvement costs associated with extracting, treating or distributing water to the public and collecting, treating or discharging waste water, and such other costs which may be specified by regulation.”

Furthermore, municipalities will be required to inventory and report their current infrastructure and how it will be maintained and managed going forward. Municipalities will then be required to report on the full cost of services and how these costs will be recovered and paid for. The principles of SWSSA ensure that a long-term plan for sustainable asset management is developed and that all costs for providing water and wastewater services are assessed so that there is sufficient funding for system needs.

Although SWSSA has not yet come into force, the Financial Plan has been prepared such that the Township will be both SDWA and SWSSA compliant.

3 KEY CONSIDERATIONS

This section presents the projections settled for key items over the six (6) year period and the assumptions made in order to prepare this Financial Plan. These include:

 Customer growth;

 Operations & Maintenance (O&M);

 Capital budget forecasts;

 Revenue requirements;

 Debt requirements and repayment;

 Capital Reserves and operating reserve projections;

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The recommendations from the Township’s 2014 Water/Wastewater Rate Study were used for the financial projections. The rate study projects future rates and provides other relevant information.

3.1 CUSTOMER GROWTH & CONSUMPTION

The Township does not currently measure water consumption as all customers are charged a flat rate. Therefore, no data on consumption volume were available for consideration.

The number of customers declined from 294 in 2009 to 288 in 2012. By 2013, the number went back up to 292. For the purposes of this Water and Wastewater Financial Plan it is assumed that there is no growth over the next years and that the number of customers will remain steady at 292, as shown in Table 3-1.

Table 3-1: Customer Growth

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 No. Accounts per software 294 294 289 288 292 292 292 292 292 292 292 292 % Increase in Accounts 0.0% -1.7% -0.3% 1.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

3.2 OPERATING AND MAINTENANCE (O&M) COST PROJECTIONS

Water System

The Township’s annual operating budget for water includes costs related to the following:

 Water Treatment Plant operations and maintenance;

 Transfers to the water capital reserve;

 Transfers to capital to undertake the annual capital program. The Township mostly follows

a pay-as-you-go approach to capital financing, as capital programs are funded from the user rate revenues each year.

 Repayment of funds from the general reserve used in the past for completing water

projects.

The following assumptions were made for projecting the gross costs and revenues over the period from 2014 to 2020, using 2014 as the base budget year:

 The annual operating costs for water treatment and distribution would increase by 2.0%

per year;

 There is debt financing. The capital projects are on the capital budget;

 The revenue was determined by adding the user fees, water penalties, miscellaneous

water and tipping fees, gas tax offset, OSWAP, capital reserves, interest on revenues, and revenue from a lawsuit;

 2014 capital projects for the water system are shown in Appendix F.

Table 3.2 condenses the gross operating costs and net costs to be recovered from the annual flat user rate.

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Table 3-2: Water System - Financial Statement Projections 2014-2020

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Revenues

User Fees Water Revenue 94,110 115,781 132,227 162,879 162,879 175,095 188,227 202,344 217,520 233,834 251,371 Water Penalties 11,250 11,446 6,207 7,328 7,200 7,200 7,200 7,200 7,200 7,200 7,200

Tipping Fees 98 156 117 1,015 150 150 150 150 150 150 150

OSWAP Grant -Revenue from Lawsuit 469,581 Reserves 96,643 51,590 Interest from Reserves Other Water Connection Gas Tax Offset 6,664 36,000 Miscellaneous Others Total Revenues Expenditures Salaries 94,721 Benefits 21,769 Temporary Operators -Training 1,156 Office Supplies Supplies 9,187 Computer Software Telephone 3,394 Postage 53 -Courier 696 Heat/Hydro 40,639 Travel/Conferences -Building Maintenance Outdoor Maintenance Equipment 4,625 Janitorial Service/Supplies Memberships/Subscriptions Uniforms 195 Consultants Contractors 17,171 Fuel 2,644 3,614 Operating Overruns 199,122 Equipment Repairs Equipment Maintenance -Internet 498 Water Samples Water Debenture Payment LUP 565 19,909 19,909 19,909 - - - 3,866 7,554 7,638 8,289 9,382 9,690 11,789 156 331 299 96 150 150 150 150 150 150 150 132,186 147,623 158,758 171,318 776,469 190,149 203,365 218,133 234,402 251,023 322,250 69,133 70,264 71,123 71,400 72,828 74,285 75,770 77,286 78,831 80,408 17,564 18,294 18,000 18,000 18,360 18,727 19,102 19,484 19,873 20,271 8,261 3,682 - - - - 2,609 676 233 1,200 1,224 1,248 1,273 1,299 1,325 1,351 190 118 54 126 150 153 156 159 162 166 169 6,804 12,613 8,543 7,200 7,344 7,491 7,641 7,794 7,949 8,108 518 69 890 1,883 1,200 1,224 1,248 1,273 1,299 1,325 1,351 3,304 3,782 2,923 3,300 3,366 3,433 3,502 3,572 3,643 3,716 36 77 - - - 578 529 785 471 481 490 500 510 520 531 38,962 33,713 31,893 39,000 39,780 40,576 41,387 42,215 43,059 43,920 107 37 - - - 484 107 37 285 600 612 624 637 649 662 676 66 164 4,102 650 663 676 690 703 717 732 746 85 202 190 600 612 624 637 649 662 676 94 535 77 33 34 34 35 36 36 37 38 1,002 310 324 408 416 424 433 442 450 459 469 310 218 206 211 215 219 223 228 232 237 1,085 - 2,708 3,300 3,366 3,433 3,502 3,572 3,643 3,716 5,521 5,265 6,000 6,120 6,242 6,367 6,495 6,624 6,757 2,612 2,558 2,610 2,662 2,715 2,769 2,825 2,881 2,939 5,265 3,806 1,963 15,766 12,000 12,240 12,485 12,734 12,989 13,249 13,514 65 3,338 1,736 3,000 - - - 506 560 698 720 734 749 764 779 795 811 8,815 7,120 5,423 6,000 6,000 6,120 6,242 6,367 6,495 6,624 6,757 17,371 61,706 81,291 79,313 77,782 264 264 576 600 612 624 637 649 662 676

Water Billing 208 288 284 327 285 291 297 302 308 315 321

Operating Cost Subtotal 223,675 242,219 245,505 253,494 452,863 179,478 183,068 186,729 190,464 194,273 198,158 Long Range Capital Renewal Plan 231,409 8,567 4,018 4,068 36,259 4,266 124,092 Subtotal Capital Expenditures - - - 231,409 8,567 4,018 4,068 36,259 4,266 124,092 Subtotal Expenditures 223,675 242,219 245,505 253,494 684,272 188,046 187,086 190,797 226,722 198,539 322,250 Reserves Contributions 92,197 2,103 16,279 27,336 7,680 52,485 Total - Expenditures 223,675 242,219 245,505 253,494 776,469 190,149 203,365 218,133 234,402 251,024 322,250 Revenues Less Expenses (91,489) (94,596) (86,746) (82,176) 0 (0) 0 (0) (0) (0) 0

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Wastewater System

The Township’s annual operating budget for wastewater includes costs related to the following:

 Sewer cover maintenance;

 Sewage pumping stations and equipment;

 Repayment of funds from the general reserve used in the past for completing wastewater

projects.

The following assumptions were made for projecting the gross costs and rate revenues over the period from 2014 to 2020, using 2014 as the base budget year:

 The annual operating costs for water treatment and distribution would increase by 2.00%

per year;

 Revenues are composed of user fees, miscellaneous sewer fees and sewer penalties,

capital reserves, and interest on reserves;

 Capital projects for wastewater are shown in Appendix F. Sewer cover and sewer line

replacement costs are shown for the period 2014-2020.

Table 3.3 condenses the gross operating costs and net costs to be recovered from the annual flat user wastewater rate.

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Table 3-3: Wastewater System - Financial Statement Projections 2014-2020

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Revenues Budget

User Fees Sewer Revenue 66,758 81,811 93,248 108,194 108,194 117,931 128,545 140,114 152,724 166,469 181,451 Sewer Penalties 7,500 7,631 4,138 4,886 4,800 4,800 4,800 4,800 4,800 4,800 4,800 Miscelaneous Sewer 104 221 199 64 100 100 100 100 100 100 100 OSWAP 13,272 13,272 13,272

Gas Tax Offset 4,442 24,000

Other Interest Charges 7,500

Revenue from the Lawsuit 305,165

Reserves - - - - 146,784 113,542

Interest on Reserves - 2,385 2,542 3,033 (2,838) (1,795) (6,337) Loan

Total Revenues 92,077 110,435 110,858 113,144 442,259 125,216 135,987 294,831 154,786 283,116 180,015 Expenditures

Operating & General Expenses 137,536 115,528 105,096 111,476 118,906 121,284 123,710 126,184 128,708 131,282 133,907

Unfinanced Lagoon Studies 130,986

Operating Overruns 132,748

Operating Cost Subtotal 137,536 115,528 105,096 111,476 382,640 121,284 123,710 126,184 128,708 131,282 133,907 Long Range Capital Renewal Plan - - - 168,647 - 151,834 -Subtotal Capital Expenditures - - - - - 168,647 - 151,834 -Subtotal Expenditures 137,536 115,528 105,096 111,476 382,640 121,284 123,710 294,831 128,708 283,116 133,907 Reserves Contributions 59,619 3,932 12,277 26,078 46,107 Total - Expenditures 137,536 115,528 105,096 111,476 442,259 125,216 135,987 294,831 154,786 283,116 180,014 Revenues Less Expenses (45,459) (5,093) 5,762 1,668 (0) (0) (0) (0) 0 (0) 0

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3.3 CAPITAL FORECAST

The capital program includes amounts required for life cycle asset replacement or renewal. For the 2014-2020 period the TCA projects have been incorporated into the capital improvement plan. The capital needs have been inflated using the MCI of 2.40% (Appendix E).

3.4 REVENUE PROJECTIONS

For this report, the figures from operating revenue were taken from the Water/Sewer Account calculation software of the Township for the period of 2010-2013. Only the Water/Sewer Account calculations for 2013 are shown (see Appendix G). A percentage was used to find the water portion as a percent of total water/sewer account calculation. This percentage is calculated as follows:

𝑊𝑎𝑡𝑒𝑟 𝑝𝑜𝑟𝑡𝑖𝑜𝑛 𝑎𝑠 % 𝑜𝑓 𝑡𝑜𝑡𝑎𝑙 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑠 = (𝑊𝑎𝑡𝑒𝑟 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟) (𝑊𝑎𝑡𝑒𝑟 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑐𝑎𝑙𝑐. +𝑆𝑒𝑤𝑒𝑟 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑐𝑎𝑙𝑐. )

A 60/40 split of water/sewer penalties and miscellaneous water/sewer charges was computed. Therefore, 60% of the revenues were applied to the water financial forecast, while 40% of the revenues were used for the wastewater financial forecast. This percentage was applied to splitting all revenue components of the water and wastewater systems.

The rates for 2014 to 2020 were developed by applying the required percentage increase to each year, as compared to the previous year. The projected rate increases start in 2015, and continue to 2020. As of 2013, the total number of accounts per software in the Township is 292. However, the calculations of water/wastewater revenues are based on ‘residential units’. In addition to these ‘residential units’ there are WRFR and Canadian Pacific water accounts that have the same percentage increases applied (See Appendix G). As for water revenue, in 2013 the number of residential water by-law units is 499. The 2014-2020 projected user rates for water are set out in Table 3-4.

Table 3-4 Flat Rates Fees in $ Projected (2014-2020)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Flat User Rate 206.21 237.14 272.71 272.71 293.16 315.15 338.80 364.20 391.51 420.87

% Increase in Rate 15% 15% 0% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%

Breakdown of Proposed Water Rates (2014-2020) for WRFP, Canadian Pacific, Ed’s Bait and 2 Plex

2013 2014 2015 2016 2017 2018 2019 2020

WRFP 10,000 10,000 10,750 11,556 12,423 13,354 14,356 15,433 CP 16,524 16,524 17,763 19,095 20,528 22,067 23,722 25,501

Ed’s Bait 545 545 586 630 677 728 782 841

+ 2 Plex 545 545 586 630 677 728 782 841

The current annual fee at the end of December 2013 is $272.71 per account. The Table 4-4 shows that the flat user rate is being raised by 7.5% compared to previous year, each year from 2014 to 2020. The 7.5% rate increase per year is due to the higher level of capital expenditures to be funded from the rates such as ozonation generator, activated carbon granular coconut shell, among others.

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As for wastewater, in 2013 the number of residential wastewater by-law units is 411. The Table 4-5 shows that the flat user rate is being raised by 9% compared to previous year, each year from 2014 to 2020. The 2014-2020 wastewater rates are set out in Table 3-5.

Table 3-5 Flat Wastewater Rates Fees in $ Projected (2014-2020)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Flat User Rate 181.53 208.76 240.07 240.07 261.67 285.23 310.90 338.88 369.38 402.62

% Increase in Rate 15% 15% 0% 9% 9% 9% 9% 9% 9%

Breakdown of Proposed Wastewater Rates (2014-2020) for Canadian Pacific, Ed’s Bait and 2 Plex

2013 2014 2015 2016 2017 2018 2019 2020

CP 9,525 9,525 10,382 11,316 12,335 13,445 14,655 15,974

Ed’s Bait 240 240 262 285 311 339 369 402

+ 2 Plex 480 480 523 570 621 678 739 805

The projected annual revenue for water is summarized in Table 3-6.

Table 3-6 Revenue Projections Water (2014-2020)

2014 2015 2016 2017 2018 2019 2020

Net Operating Cost to be

Recovered from Rates $ 162,879 175,095 188,227 202,344 217,520 233,834 251,371 Total Revenue from Rates $ 162,879 175,095 188,227 202,344 217,520 233,834 251,371

Surplus (Deficit) (0) (0) (0) (0) (0) (0) (0)

These show annual water revenues increasing from roughly $162,000 in 2014 to approximately $251,000 in 2020.

The projected annual revenue for wastewater is summarized in Table 3-7.

Table 3-7 Revenue Projections Wastewater (2014-2020)

2014 2015 2016 2017 2018 2019 2020

Net Operating Cost to be

Recovered from Rates $ 108,194 117,931 128,545 140,114 152,724 166,469 181,451 Total Revenue from Rates $ 108,194 117,931 128,545 140,114 152,724 166,469 181,451

Surplus (Deficit) (0) (0) (0) (0) (0) (0) (0)

Likewise, these show annual wastewater revenues increasing from roughly $108,000 in 2014 to approximately $181,000 in 2020.

3.5 DEBT REPAYMENT

The Township has two existing debentures (See Tables 3-8 and 3-9) related to water and wastewater systems. The Township wants to keep a no-debt policy agenda in place, but the existing debentures are required to fund major capital projects in the up-coming years.

The first existing debenture in the amount of $1,300,000 was acquired in 2010, with a loan term of 25 years, an interest rate of 2.64%, and a semi-annual payment frequency.

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Table 3-8 Debt Repayment on Serial Debenture 1 Schedule for the Period (2014-2020)

Note: Debenture 1 has a principal amount of $1,300,000

The second debenture in the amount of $1,000,000 was acquired in 2011, with a loan term of 25 years, an interest rate of 4.58%, and a semi-annual payment frequency.

Table 3-9 Debt Repayment on Serial Debenture 2 Schedule for the Period (2014-2020)

Note: Debenture 2 has a principal amount of $1,000,000

In summary there is $2,300,000 in debentures. Based on the information provided by the Township, in 2015, a secondary billing will be created for water and sewer, separate from the user rate billing, to collect the amounts required to service the debentures. The revenues from this second billing are not included in the financial statements, however the expenditures associated with the debentures are included.

3.6 WATER AND WASTEWATER RESERVES

As noted, the forecasted revenue increases over the period will create an annual surplus that would be transferred to the water operating reserve at year-end, and would be returned to the operating budget as revenue in the following year as needed. The 2014 opening balance of the water reserves will be the ending balance in 2012 in the amount of $96,643. For the purposes of this study, this reserve is carried over to 2014 because of the unavailability of the FIR 2013. These

Payment Date Total Payment Principal Amount Interest Amount Principal Balance

03-03-2014 40,636.30 26,000.00 14,636.30 1,092,000.00 09-02-2014 40,453.89 26,000.00 14,453.89 1,066,000.00 03-02-2015 39,955.55 26,000.00 13,955.55 1,040,000.00 09-01-2015 39,765.81 26,000.00 13,765.81 1,014,000.00 03-01-2016 39,348.13 26,000.00 13,348.13 988,000.00 09-01-2016 39,148.79 26,000.00 13,148.79 962,000.00 03-01-2017 38,594.03 26,000.00 12,594.03 936,000.00 09-01-2017 38,456.75 26,000.00 12,456.75 910,000.00 03-01-2018 37,913.27 26,000.00 11,913.27 884,000.00 09-04-2018 37,956.52 26,000.00 11,956.52 858,000.00 03-01-2019 37,046.34 26,000.00 11,046.34 832,000.00 09-03-2019 37,193.02 26,000.00 11,193.02 806,000.00 03-02-2020 36,551.75 26,000.00 10,551.75 780,000.00 09-01-2020 37,193.02 26,000.00 10,324.21 754,000.00

Payment Date Total Payment Principal Amount Interest Amount Principal Balance

06-01-2014 40,438.33 20,000.00 20,438.33 880,000.00 12-01-2014 39,965.13 20,000.00 19,965.13 860,000.00 06-01-2015 39,511.55 20,000.00 19,511.55 840,000.00 12-01-2015 39,765.81 20,000.00 19,765.81 820,000.00 06-01-2016 38,708.11 20,000.00 18,708.11 800,000.00 12-01-2016 38,249.86 20,000.00 18,249.86 780,000.00 06-01-2017 37,696.36 20,000.00 17,696.36 760,000.00 12-01-2017 37,337.37 20,000.00 17,337.37 740,000.00 06-01-2018 36,789.88 20,000.00 16,789.88 720,000.00 12-03-2018 36,604.38 20,000.00 16,604.38 700,000.00 06-03-2019 35,581.37 20,000.00 15,581.37 680,000.00 12-02-2019 35,427.82 20,000.00 15,427.82 660,000.00 06-01-2020 34,973.88 20,000.00 14,973.88 640,000.00 12-01-2020 34,599.89 20,000.00 14,599.89 620,000.00

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reserves will be used to fund non growth-related future water capital renewal projects. Depending on the capital project at that time, a portion of the balance could be transferred to the water reserve to fund water projects. The projected transfers to and from the water and wastewater reserves are shown in Tables 3-10 and 3-11. The interest earned on the water reserves is assumed to be 4.0% per annum.

Table 3-10 Water Projected Reserves (2014-2020)

2014 2015 2016 2017 2018 2019 2020 Opening Value 96,643 188,840 190,943 207,222 234,558 242,238 294,723 User Fee 92,197 2,103 16,279 27,336 7,680 52,485 - Capital Investment - - - 51,590 Close Inflated 188,840 190,943 207,222 234,558 242,238 294,723 243,133 Close in 2014 $ 188,840 186,468 197,622 218,449 220,314 261,767 210,884

Likewise, the opening balance of the wastewater capital reserves will be the ending balance in 2012, and it is for $0. It is assumed that the interest earned on the wastewater reserve is 4% per annum.

Table 3-11 Wastewater Projected Reserves (2014-2020)

2014 2015 2016 2017 2018 2019 2020 Opening Value - 59,619 63,551 75,828 (70,956) (44,878) (158,420) User Fee 59,619 3,932 12,277 - 26,078 - 46,107 Capital Investment - - - 146,784 - 113,542 - Close Inflated 59,619 63,551 75,828 (70,956) (44,878) (158,420) (112,313) Close in 2014 $ 59,619 62,062 72,315 (66,083) (40,816) (140,705) (97,416)

3.7 TANGIBLE CAPITAL ASSET (TCA) ANALYSIS

The Township’s PSAB 3150 TCA data was used to develop the financial material related to the water assets which includes the following:

 Treatment plant assets including the land, buildings and equipment. In terms of the

equipment, a breakdown of the water treatment plant is necessary to determine the depreciation expense of every component instead of taking one historical cost. For example, in the TCA policy, a pumphouse for the water category has a useful life of 20 years. Therefore, it is not correct to depreciate this asset over its useful life when there are components that have less remaining useful years.

 Also, linear assets such as watermains, valves, hydrants and service connections were

taken into consideration. Likewise, for wastewater, sewer covers, sewer linear assets, pumping stations were considered as well.

 The useful life of the assets was taken from the TCA policy and corroborated with

engineering experience.

 TCA policy was followed for the amortization of new assets, and straight line depreciation

was used at the beginning of the year of acquisition.

 Fully depreciated assets are being used with no asset removals.

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Table 3-12 TCA (Water Only) TCA 2013 2014 2015 2016 2017 2018 2019 2020 Historical Cost 8,415,398 8,646,807 8,655,374 8,659,392 8,663,460 8,699,719 8,703,985 8,828,077 Accumulated Depreciation (Beginning) 6,699,399 6,859,1258 7,018,857 7,199,183 7,383,843 7,572,038 7,771,247 7,980,781 Depreciation Expense 159,729 159,729 180,326 184,660 188,195 199,209 209,533 213,222 Accumulated Depreciation (Ending) 6,859,128 7,018,857 7,199,183 7,383,843 7,572,038 7,771,247 7,980,781 8,194,002 Net Book Value 1,556,270 1,627,950 1,456,191 1,275,549 1,091,422 928,472 723,204 634,075

The current net book value of the water assets is about $1,627,950 decreasing to approximately $634,000 by 2020. The water system would be 93% depreciated by 2020. This suggests the assets are approaching their useful life expectancies.

Likewise, the current book value of the wastewater assets is $3,344,286 decreasing to $2,187,298 by 2020. The water system would be 75% depreciated by 2020. This suggests the assets have reached the three-quarter mark of their useful life expectancies. Capital expenditures for the pump stations are needed in 2017 and 2019 (See Appendix F).

Table 3-13 TCA (Wastewater Only)

TCA 2013 2014 2015 2016 2017 2018 2019 2020 Historical Cost 8,253,867 8,253,867 8,253,867 8,253,867 8,422,514 8,422,514 8,574,348 8,574,348 Accumulated Depreciation (Beginning) 4,446,729 4,683,155 4,919,581 5,156,007 5,392,433 5,637,291 5,882,150 6,134,600 Depreciation Expense 236,426 236,426 236,426 236,426 244,858 244,858 252,450 252,450 Accumulated Depreciation (Ending) 4,683,155 4,919,581 5,156,007 5,392,433 5,637,291 5,882,150 6,134,600 6,387,050 Net Book Value 3,570,712 3,344,286 3,097,860 2,861,434 2,785,223 2,540,364 2,439,748 2,187,298

3.8 LEAD PIPE REPLACEMENT

The Township water supply system has no lead pipes. The water system is constantly tested for lead and other impurities, and tests results show no lead contamination exists in the system. However, if test results indicate lead levels in a customer’s water, water service connections will be replaced at the earliest convenience with other water related repairs. Therefore, there are no noteworthy financial costs linked to lead pipe replacement.

4 WATER / WASTEWATER FINANCIAL PLAN

The financial plan guidelines were used to select the method for preparing the Township of White River Drinking Water/Wastewater System Financial Plan. These steps include the determination of the current period expenses and forecasting the future period expenses; the determination and forecasting of capital expenditure needs; the identification of all current revenue sources and forecasting revenues; and the preparation of the financial statements.

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For the current expenses, three categories were included for the purpose of this financial plan: operating costs, interest, and amortization. The current period operating expenses were determined from the Township’s 2014 unofficial budget, which also included expense details for the years 2010, 2011, 2012, and 2013. Further information relating to the assumed rates of increase for future operating expenses can be found in the Notes to the Financial Plan.

In the event that the Township should determine that there is a need to incur new debt, then the forecasted interest expense will require revision. The annual amortization expenses were calculated using the straight-line method and were based on PSAB information provided by the Municipality, as well as the estimated useful lives and historic costs of the assets. Last but not least, the capital expenditures and the useful lives of all the assets included in the projections were provided by the Township.

4.1 STATEMENT OF FINANCIAL POSITION

The Statement of Financial Position shows the assets, liabilities, and the accumulated surplus of the Township’s water and wastewater systems. The net financial assets/debt is defined as the difference between financial assets and liabilities; this amount provides an indication of the system’s future revenue requirements. Appendix A shows that from 2014 to 2020, the net financial debt position of the Township’s water system is expected to increase from $1,040,738 in 2014 to a net financial debt position of $1,368,263 in 2020. In addition to this, the total change in net financial asset has a debt position of $443,056. A net financial debt position means that the financial assets are less than liabilities, and it implies that not enough resources exist in the system to finance future operations.

The tangible capital asset balance is another important indicator. Generally, an increase in the tangible capital asset balance indicates the acquisition of assets either through purchase by the municipality or contribution/donation by a third party. A decrease in the tangible capital asset balance can indicate a disposal, write down, or use of assets. A use of assets usually results in an increase in accumulated amortization where annual amortization expenses arise as a result of allocating the cost of the asset to operations over the asset’s useful life. As shown in Appendix A,

tangible capital assets are expected to decrease by $1,071,848over the 6-year forecast period.

Also, as shown in Appendix A, from 2014 to 2020, the net financial debt position of the Township’s wastewater system is expected to increase from $779,640 in 2014 to a net financial debt position of $1,306,029 in 2020. In addition to this, the total change in net financial asset has a debt position of $537,201. Finally, Appendix A shows that tangible capital assets are expected to decrease by $1,451,445 over the 6-year forecasted period.

4.2 STATEMENT OF OPERATIONS

The Statement of Operations is a summary of the revenues and expenses generated by the water/wastewater systems for a given period. The annual surplus/deficit determines whether the revenues generated were enough to meet the expenses incurred and in turn, whether net financial assets have been maintained or depleted. The Statement of Operations (Appendix B) shows an annual deficit in 2014 of $188,819 growing to an annual deficit of $234,098 in 2020. Similarly, an accumulated end of year surplus is projected from 2014 to 2016. For the 2017-2020 period an accumulated end of year deficit is expected, with an accumulated deficit of $45,238 in 2017 to a deficit of $734,188 in 2020. An annual deficit does not provide sufficient funding to manage non-expense costs such as tangible capital asset acquisitions, reserve/reserve fund transfers and debt principal payments.

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The accumulated surplus/deficit is a significant indicator of whether the available net resources are sufficient to finance future water services. An accumulated deficit means that resources are insufficient to provide for such services. As a result, borrowing or rate increases are needed to finance annual deficits. From Appendix B, it can be seen that the water financial plan projects to add an accumulated deficit of $1,276,121 during the forecasting period from 2014 through 2020, to a 2013 beginning surplus of $776,031. This accumulated surplus, as indicated in Appendix B, primarily comprises reserve and reserve fund balances as well as historic investments in tangible capital assets.

Likewise, from Appendix B, it can be seen that the wastewater financial plan projects to add an accumulated deficit of $1,668,165 for the forecasting period to a 2013 beginning surplus of $2.8 million.

4.3 STATEMENT OF CHANGE IN NET FINANCIAL ASSETS/DEBT

The Statement of Change in Net Financial Assets/Debt indicates whether the revenue generated was sufficient to provide for operating and non-financial asset costs such as prepaid expenses, inventory supplies, tangible capital assets, etc. This Statement explains the variance between the annual surplus/deficit and the change in net financial assets/debt for the period. The Statement of Change in Net Financial Position (Appendix C) indicates that forecasted capital expenditures exceed forecasted net revenues for 2014 through 2020, resulting in a decrease in the net financial assets. As noted in the Statement of Financial Position, the total change in net financial asset has a debt position of $780,239. Therefore, the financial assets will be less than the liabilities in 2020. This implies that not enough resources exist in the system to finance future operations through an accumulated surplus such as revenues or reserve funds.

Equally, in Appendix C for the wastewater system, it indicates that forecasted capital expenditures exceed forecasted net revenues for 2014 through 2020, resulting in a decrease in the net financial assets. This implies that not enough resources exist in the system to finance future operations in that year.

4.4 STATEMENT OF CASH FLOW

The Statement of Cash Flow is a summary of the way in which the water system is projected to generate and use cash resources during the planning period. The transactions that provide/use cash are categorized as operating, capital, investing and financing activities, as shown in Appendix D. Since this statement focuses on the cash aspect of these transactions, it is the linkage between cash and accrual based reporting. Appendix E illustrates that cash from operations will not fund capital transactions (i.e. tangible capital asset acquisitions), pay down any debt, and build enough reserve funds over the period 2014-2020. The financial plan projects the cash position of the Township’s water system to decrease from a surplus balance of approximately $96,643 at the beginning of 2014, to a deficit of just under $808,000 by the end of 2020.

Similarly, in Appendix E for the wastewater system, the Statement of Cash Flow illustrates that cash from operations will not fund capital transactions (i.e. tangible capital asset acquisitions), pay down any debt, and build enough reserve funds over the 2014-2020 period. The financial plan, projects the cash position of the Township’s wastewater system to decrease from a balance of $0 at the beginning of 2014 to a deficit of approximately $815,000 in 2020.

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5 NOTES TO FINANCIAL PLAN

The financial plan format above approximates the full accrual format, however the financial plan is not an audited document and contains various estimates. In order to show a balanced financial plan in full accrual format for the Township of White River, some items have been estimated. The assumptions used have been documented below.

5.1 CASH, RECEIVABLES AND PAYABLES

It is assumed that the opening cash balances required to complete the financial plan are equal to: Ending Reserve / Reserve Fund Balance

Plus: Ending Accounts Payable Balance Less: Ending Accounts Receivable Balance Equals: Approximate Ending Cash Balance

The ending reserve/reserve fund balance for the water system of $96,643 was recognized as the cash and cash equivalents balance for the end of the year 2013. Historical water account receivables and payables were identified by the Township’s staff, which were used to project system cash, receivable and payable balances throughout the forecast period. The trend of ending Accounts Receivable balances for the period 2011-2013 was used to project the percentage in each year of the forecast period to determine annual Accounts Receivable balances for water and wastewater systems. The account receivable balances at the end of 2011, 2012, and 2013 were $208,641, $235,208, and $280,985, respectively. These account receivables were split in 60% for water and 40% for wastewater.

5.2 DEBT

The outstanding water and wastewater related debt at the end of 2013, in terms of accounts payable and accrued liabilities was determined to be $1,066,000 and $860,000, respectively. The scheduled principal repayments for existing debt over the forecasting period can be seen in Tables 4.8 and 4.9, respectively.

5.3 DEFERRED REVENUE

Deferred revenue is made up of gas tax reserve and water development charge reserve fund balances which are considered to be a liabilities for financial reporting purposes until the funds are used on the projects for which they have been collected. For this report, gas tax revenue allocated in 2014 was used in the same year for capital projects in the water system. Therefore, there are no liabilities for financial reporting purposes in the statement of financial position.

5.4 TANGIBLE CAPITAL ASSETS (TCA)

The amortization of existing assets is a non-cash annual cost that mirrors the annual use of assets until the end of their respective useful lives. It should be noted that depreciation is based on the historical cost at the time the asset was placed in service, and therefore it does not account for inflation since the year of installation. Therefore replacement cost estimates based on indexing historical costs to the replacement year are used for projecting future asset replacement costs. The Township’s PSAB 3150 TCA data was used to develop the financial information and asset replacement forecasts related to the water system. The TCA projections are based on the following:

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 Amortization is calculated based on using the straight-line approach with no amortization in the year of acquisition or construction.

 The Township staff provided the useful life on acquisitions.

 Write-offs are assumed to equal $0 for each year in the forecast period.

 Tangible capital assets are shown on a net basis. It is assumed that disposal occurs when

the asset is being replaced.

 Gains/losses on disposal are assumed to be $0.

 Residual value is assumed to be $0 for all assets contained within the forecast period.

 Contributed Assets are deemed to be insignificant or unknown during the forecast period

and are therefore assumed to be $0.

 The summary of the balance of tangible capital assets is presented in Table 4-11.

5.5 INTEREST EARNED

Interest earned represents the interest earned on the Township’s bank account.

5.6 OPERATING EXPENSES

Capital expenditures not meeting the definition of tangible capital assets are classified as operating expenses and are expensed in the year in which they occur.

6 PROCESS FOR APPROVAL AND SUBMISSION

The requirement to prepare the Financial Plan is provided in Section32 (5) 2 ii of the SDWA. Proof of the preparation of a financial plan is one of the submission requirements for municipal drinking water licensing, and upon completion must be submitted to the Ministry of the Environment. As part of O. Reg. 453/07. The process established for approval of the plan, public circulation, and filing is provided as follows:

1. The financial plan must be approved by resolution of the municipality who owns the drinking water system, or the governing body of the owner (O. Reg. 453/07, Section 3 (1) 1). 2. The owner of the drinking water system must provide a notice advertising the availability

of the financial plan. The plan must be made available to the public upon request and free of charge. The plan must also be made available to the public on the municipality’s website (O. Reg. 453/07, Section 3 (1) 5).

3. The owner of the drinking water system must provide a copy of the financial plan to the Director of Policy Branch, Ministry of Municipal Affairs and Housing (O. Reg. 453/07, Section 3 (1) 6).

4. The Council Resolution approving the financial plan shall be submitted to the Ministry of the Environment as part of the application for a municipal drinking water license (SDWA,

Section 32 (5) 2 ii).

All of which is respectfully submitted, Infrastructure Solutions Inc. Per:

Neil Roberts President

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APPENDIX A: STATEMENT OF FINANCIAL POSITION

Township of White River Statement of Financial Position (Water) Unaudited: For Financial Planning Purposes Only

2014-2020

Water System Notes Forecast

2014 2015 2016 2017 2018 2019 2020

Financial Assets

Cash (146,701) (238,428) (324,451) (409,148) (524,927) (607,156) (807,921) Accounts Receivable 171,963 175,402 178,910 182,488 186,138 189,861 193,658 Due from Federal Government - GST - - - - - Due from Township - - - - - Investments - - - - - Inventory for resale - - - - - Total Financial Assets 25,262 (63,026) (145,541) (226,660) (338,789) (417,295) (614,263)

Liabilities

Accounts Payable - - - - - Long-Term Liabilities (principal only) 6.2 1,066,000 1,014,000 962,000 910,000 858,000 806,000 754,000 Deferred revenue - obligatory reserves - - - - - Deferred revenue - other - - - - - Other (Development Charge Reserves-Deferred Revenue) - - - - - Total Financial Liabilities 1,066,000 1,014,000 962,000 910,000 858,000 806,000 754,000 Net Financial Assets/(Net Debt) (1,040,738) (1,077,026) (1,107,541) (1,136,660) (1,196,789) (1,223,295) (1,368,263)

Non-Financial Assets

Tangible Capital Assets 8,646,807 8,655,374 8,659,392 8,663,460 8,699,719 8,703,985 8,828,077 Accumulated Amortization (7,018,857) (7,199,183) (7,383,843) (7,572,038) (7,771,247) (7,980,781) (8,194,002)

Total Non-Financial Assets 1,627,950 1,456,191 1,275,549 1,091,422 928,472 723,204 634,075

Accumulated Surplus / (Deficit) 587,212 379,164 168,008 (45,238) (268,317) (500,090) (734,188)

Financial Indicators Total Change 2014 2015 2016 2017 2018 2019 2020

1) Increase/(Decrease) in Net Financial Assets (443,056) (260,499) (36,288) (30,515) (29,119) (60,129) (26,506) (144,968) 2) Increase/(Decrease) in Tangible Capital Assets (1,071,848) (159,729) (159,729) (180,326) (184,660) (188,195) (199,209) (209,533) 3) Increase/(Decrease) in Accumulated Surplus (1,514,904) (420,228) (196,017) (210,841) (213,779) (248,324) (225,715) (354,501)

Accounts Receivable, ending 2013 168,591

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Township of White River

Statement of Financial Position (Wastewater) Unaudited: For Financial Planning Purposes Only

2014-2020

Wastewater System Notes Forecast

2014 2015 2016 2017 2018 2019 2020

Financial Assets

Cash (34,282) (115,248) (194,543) (440,609) (516,436) (743,030) (815,135) Accounts Receivable 114,642 116,935 119,273 121,659 124,092 126,574 129,105 Due from Federal Government - GST - - - - Due from Township - - - - Investments - - - - Inventory for resale - - - - Total Financial Assets 80,360 1,686 (75,270) (318,950) (392,344) (616,456) (686,029)

Liabilities

Accounts Payable - - - - Long-Term Liabilities (principal only) 6.2 860,000 820,000 780,000 740,000 700,000 660,000 620,000 Deferred revenue - obligatory reserves - - - - Deferred revenue - other - - - - Other (Development Charge Reserves-Deferred Revenue) - - - - Total Financial Liabilities 860,000 820,000 780,000 740,000 700,000 660,000 620,000 Net Financial Assets/(Net Debt) (779,640) (818,314) (855,270) (1,058,950) (1,092,344) (1,276,456) (1,306,029)

Non-Financial Assets

Tangible Capital Assets 8,253,867 8,253,867 8,253,867 8,422,514 8,422,514 8,574,348 8,574,348 Accumulated Amortization (4,919,581) (5,156,007) (5,392,433) (5,637,291) (5,882,150) (6,134,600) (6,387,050)

Total Non-Financial Assets 3,334,286 3,097,860 2,861,434 2,785,223 2,540,364 2,439,748 2,187,298

Accumulated Surplus / (Deficit) 2,554,646 2,279,546 2,006,164 1,726,272 1,448,021 1,163,292 881,269

Financial Indicators Total Change 2014 2015 2016 2017 2018 2019 2020

1) Increase/(Decrease) in Net Financial Assets (537,201) (40,385) (38,674) (36,956) (203,681) (33,393) (184,113) (29,573) 2) Increase/(Decrease) in Tangible Capital Assets (1,451,445) (236,426) (236,426) (236,426) (244,858) (244,858) (252,450) (252,450) 3) Increase/(Decrease) in Accumulated Surplus (1,988,646) (276,811) (275,100) (273,382) (448,539) (278,251) (436,563) (282,023)

Accounts Receivable, ending 2013 112,394

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APPENDIX B: STATEMENT OF OPERATIONS

Township of White River Statement of Operations (Water)

Unaudited: For Financial Planning Purposes Only 2014-2020 Water System Notes Forecast 2014 2015 2016 2017 2018 2019 2020 Revenue

Base Charge Revenue 162,879 175,095 188,227 202,344 217,520 233,834 251,371

Rate Base Revenue - - - -

Earned Deferred Revenue - - - -

Other Revenue 613,590 15,054 15,138 15,789 16,882 17,190 70,879

Total Revenues 776,469 190,149 203,365 218,133 234,402 251,023 322,250

Expenses

Operating Expenses See Table 4-2 (O&M) 776,469 190,148 203,365 218,133 234,403 251,024 322,250

Interest on Debt 29,090 27,721 26,497 25,051 23,870 22,239 20,876

Amortization 159,729 180,326 184,660 188,195 199,209 209,533 213,222

Loss on Sale of Tangible Capital Assets - - - -

Other - - - -

Total Expenses 965,288 398,196 414,521 431,379 457,481 482,797 556,348

Annual Surplus / (Deficit) (188,819) (208,047) (211,157) (213,246) (223,079) (231,773) (234,098) Accumulated Surplus / (Deficit), beginning of year 776,031 587,212 379,164 168,008 (45,238) (268,317) (500,090) Accumulated Surplus / (Deficit), end of year 587,212 379,164 168,008 (45,238) (268,317) (500,090) (734,188)

Financial Indicator Total Change 2014 2015 2016 2017 2018 2019 2020

WATER AND WASTEWATER FINANCIAL PLAN