Overview

2017 Toronto Water Budget

2017 Operating Budget Overview

Toronto Water delivers water treatment and distribution, and wastewater collection and treatment services on demand to 3.6 million residents and businesses in Toronto, and portions of York and Peel.

Toronto Water Program Map

View the PDF version of the program map in greater detail.

2017 Operating Budget Highlights

The total cost to deliver these services to Toronto residents is $443.206 million.

Through operational efficiencies, Toronto Water was able to not only offset initial gross expenditure pressures of $15.838 million, but was also able to achieve efficiencies and other base budget reductions, reflecting a 1.6% net expenditure decrease prior to additional sale of water revenues arising from the 5% water rate increase effective January 1, 2017.

Fast Facts

  • Treatment, transmission, storage, and distribution of over 1 billion litres of potable water daily is delivered to all industrial, commercial, institutional, and household water users in the City of Toronto, amounting to over 511,000 connections.
  • Over 1.5 billion litres of wastewater is collected and treated per day, from residents and businesses in Toronto and a portion of Peel Region.
  • City-wide stormwater management in order to protect private property and the environment.

Trends

  • Base water consumption (October to April) has declined by 1.7% annually on average over the last 10 years.  The 2016 projected consumption of 325 million cubic meters is significantly lower than the 374 million cubic meters consumed in 2005.
  • Lower water consumption despite increasing population, combined with aging infrastructure and need for operational resilience during extreme weather events, has placed particular demand on Toronto Water's infrastructure services.
  • In response to that demand, water rates are recommended to increase by 5%, with all the increased revenue generated going to fund capital infrastructure that supports service delivery.

Key Service Deliverables for 2017

Toronto Water manages one of the largest water and wastewater systems in North America, providing services 24 hours a day, seven days a week.

The 2017 Operating Budget will enable Toronto Water to:

  • Ensure delivery of water and wastewater services for 3.6 million residents and business in Toronto.
  • Provide treatment and supply of 433 billion litres of water (includes York Region).
  • Continue collection and treatment of 400 billion litres of wastewater.
  • Continue maintenance and repair of 6,100 km of watermains, 4,100 km of sanitary sewers, 5,000 km of storm sewers, and 1,400 km of combined sewers.
  • Replace 5,000 sub-standard water services.
  • Repair 1,600 broken watermains.
  • Provide Environmental Monitoring and Protection including on-going public consultations and awareness programs.

Our Key Issues & Priority Actions

  • Declining water consumption resulting in lower revenues from water rates needed to support capital requirements.
    • The 2017 Operating Budget includes a water rate increase of 5% effective January 1, 2017.
    • To aid in developing a financing strategy to support Toronto Water's stormwater management projects, a report outlining implementation plan for a dedicated storm water charge is anticipated spring of 2017.
  • Maintaining stable operating costs arising from legislative requirements and the need to comply with Provincial and Federal regulations, as well as inflationary factors and operating impacts of completed capital projects.
    • A combination of efficiencies found through ongoing optimization at treatment plants and pumping stations to minimize energy and other costs, while meeting required legislative standards, has enabled Toronto Water to offset all of the 2017 operating budget pressures.


2017 Operating Budget Highlights

  • The 2017 Operating Budget for Toronto Water of $443.206 million in gross expenditures provides funding to:
    • Continue to maintain and repair 6,000 km of watermains, 4,100 km of sanitary sewers, 5,000 km of storm sewers, and 1,400 km of combined sewers;
    • Repair 1,600 broken watermains;
    • Enhance its operational resilience by implementing a new Customer Care Initiative strategy.
  • In addition to offsetting all of its 2017 operating budget pressures, Toronto Water has achieved further savings of $6.308 million resulting in a 1.6% net operating budget decrease:
    • Water and wasterwater electricity efficiencies ($5.832 million).
    • Reduced water treatment material consumption and other base expenditure savings ($1.188 million).
    • Higher non-sale of water revenues due to increase in service demand from new developments and industrial wastewater treatment agreements ($7.156 million).


2017 – 2026 Capital Budget and Plan Overview

Toronto Water is responsible for water treatment and supply; wastewater collection and treatment; and stormwater management across the City. It services 3.6 million residents and businesses in Toronto and portions of York and Peel Region.

Toronto Water has stewardship of an inventory of capital assets valued at $28.415 billion. Toronto Water maintains two categories of capital assets, linear infrastructure, such as distribution (5,551 km) and transmission (550 km) watermains, sanitary (3,730 km), combined (1,411 km) and storm (4,981 km) sewers; and facilities/plant assets such as water filtration (4) and waste water treatment plants (4), water (18) and wastewater pumping stations (87), reservoirs, storage and detention tanks.

State of Good Repair (SOGR) projects remain a priority given the significant backlog in infrastructure renewal, with considerable funding also included in the 2017-2026 Capital Budget and Plan for investments in Basement Flooding Protection and Wet Weather Flow Master Plan projects.

Where does the money go?

The 2017–2026 Recommended Capital Budget and Plan totalling $12.080 billion provides funding for:

  • Health and Safety, Legislated and State of Good Repair (SOGR) projects are the primary focus of the 10-Year Capital Plan. Approximately $7.210 billion or 60% of the total funding is allocated for on-going state of good repair projects (including health and safety and legislated projects) for linear infrastructure and treatment facilities.    
  • Service Improvement projects account for $3.762 billion or 31% of the total funding, and include the Basement Flooding Protection Program to reduce the risk of future flooding from extreme storm events ($1.527 billion) and Wet Weather Flow Master Plan to improve water quality and city's environments ($1.316 billion).
  • Growth related projects at $1.109 billion or 9% of the total funding will provide the necessary servicing capacity for projected population growth. The largest projects are the Trunk Watermain Expansion and Upgrade projects ($0.224 billion) and New Service Connections ($0.358 billion).
  • Toronto Water's Capital Financing Reserves which account for approximately 93% of financing sources or $11.284 billion are the main source of funding for the 10-Year Capital Plan.
  • Development charges for growth related projects, capital cost sharing with York Region, and Provincial/Federal grants represent the remaining 7% or $0.796 billion of the total capital financing.

Where does the money come from?

  • Toronto Water's Capital Financing Reserves which account for approximately 93% of financing sources or $11.284 billion are the main source of funding for the 10-Year Capital Plan.
  • Development charges for growth related projects, capital cost sharing with York Region, and Provincial/Federal grants represent the remaining 7% or $0.796 billion of the total capital financing.

State of Good Repair Backlog

The 10-Year Capital Plan includes cash flow funding of $5.959 billion for State of Good Repair to address the backlog. The SOGR backlog of $1.552 billion or 5.5% of asset replacement value in 2016 will be effectively eliminated by the end of 2026.

Key Issues & Priority Actions

Stormwater Management and Resiliency - Considerable investment is required to manage basement flooding and other stormwater issues across the Citywhich arecaused by more frequent severe storms.  Funding for stormwater management is projected to grow from 18% of the total capital program in 2016 to 40% in 2026.

  • The 10-Year Capital Plan includes an added $393.274 million for Wet Weather Flow projects that will improve the City's resiliency to extreme weather events.

Strict Regulatory Control and Oversight – The water and wastewater industry continues to experience increased legislative and regulatory reform.

  • The 10-Year Capital Plan includes funding of $596.360 million for the design and construction of a new effluent disinfection system at the Ashbridges Bay Water Treatment Plant to meet the most recent federal regulations.

Aging Infrastructure– Aging infrastructure that has an accumulated state of good repair backlog estimated at $1.552 billion that, particularly for linear infrastructure, can result in service interruption. 

The 10-Year Capital Plan funding of $5.959 billion for SOGR will effectively eliminate backlog by 2026.

Long-term Financial Sustainability - The 10-Year Capital Plan relies primarily on successive water rate increases of 5% in years 2017 and 2018 and 3% thereafter.

  • In addition to recommended water rate increases, a report will be submitted to Executive Committee in the spring of 2017 formulating a revenue neutral stormwater management funding model premised on a dedicated stormwater charge to support Toronto Water's financial sustainability for stormwater management projects. 

2017 Capital Budget Highlights

The 2017 Recommended Capital Budget for Toronto Water of $729.565 million, excluding carry forward funding, will:

  • Deliver continued state of good repair projects to address infrastructure renewal such as Watermain Replacement and Rehabilitation ($171.021 million), Sewer System Replacement and Rehabilitation ($77.347 million) and Trunk Sewer and Pumping Station projects ($24.883 million).
  • Implement Basement Flooding Protection projects ($56.817 million), implementation of the Wet Weather Flow Master Plan ($16.621 million), and Erosion Control projects ($5.811 million).
  • Continue to provide funding for the TRCA erosion control projects including critical erosion sites ($12.775 million).  

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