The Buffalo Pound Water Treatment Corporation (BPWTC) was established as a non-profit corporation on January 1, 2016. BPWTC is responsible for the operation and maintenance of the Buffalo Pound Water Treatment Plant and provides the cities of Regina and Moose Jaw with a reliable and affordable supply of safe, high quality drinking water which meet the needs and expectations of consumers, and the water quality standards regulated by the Province of Saskatchewan. Under the terms of the Unanimous Membership Agreement (UMA), BPWTC is owned jointly by the City of Regina (74 per cent) and the City of Moose Jaw (26 per cent).
Pursuant to the UMA, the BPWTC Directors have the authority to make strategic business decisions, including approval of the operating and capital budgets. This report is presented to City Council as information.
As BPWTC is a municipal corporation of the City of Regina, its 2022 audited financial statements have been consolidated into the City’s 2022 Annual Report and Consolidated Financial Statements at the City’s ownership share of 74 per cent.
None related to this report.
The approved 2022 Annual Report will be published on the BPWTC website.
Section 7.2 of the Unanimous Members Agreement (UMA) sets out the following annual report and annual membership meeting requirements presented in this report.
1. BPWTC is required to submit to Council as an information item an annual report which includes the following information:
a. The Corporation’s Annual Report, including the audited financial statements for the period ending December 31st and the Corporation’s financial and operational performance against stated goals and objectives for the previous year, including a key performance indicators report; and an updated risk review;
b. any revisions to long-term strategic plans or capital asset plans;
c. an operating and capital budget for the next fiscal year and an operating and capital budget projection for subsequent fiscal years contemplated in the current strategic or capital assets plans;
d. pro forma audited financial statements prepared in accordance with generally accepted accounting principles;
e. accomplishments during the fiscal year along with explanations, notes and information as is required to explain and account for any variances between the actual results and the strategic and capital asset plans;
f. projected major capital expenditures in excess of $1 million;
g. matters that require the approval of the Cities; and
h. the projected five-year water demand as provided by each of the Cities.
The 2022 Annual Report and the 2023 Operating and Capital Budget are included as appendices to this report.
2022 Annual Report
Highlights from BPWTC’s 2022 Annual Report attached as Appendix A, include:
· The December 31, 2022, Audited Financial Statements which are prepared on the accrual basis of accounting reflect a $34.48 million operating surplus. The large surplus is primarily related to the timing difference between the recognition of revenue and expenses related to the Plant Renewal Project, with revenues (e.g., provincial and federal grant funding) recognized upfront as capital costs are incurred with capital costs expensed (amortized) over the estimated life of the new plant.
· The Plant Renewal Project, with a project cost of $325 million commenced in 2022 and is in progress. The project is 15 per cent completed in 2022 and is to continue through to 2025. A quarterly project update has been attached for information as Appendix B.
2023 Budget
· The 2023 Budget adopted by the BPWTC Board of Directors includes the following approved rates (these rate increased were taken into account and included in the City of Regina’s 2023 water utility rate increase of 4.5%, which was approved by Council as part of the City’s 2023 budget):
o Water Rate $380.00/ML – 5.56 per cent increase.
o Capital Water Rate $300.00/ML – 20.0 per cent increase.
o Electrical Rate $0.12931/kWh – 24.2 per cent increase.
· The 2023 Operating Budget projects a $5.4 thousand surplus with expenditures of $14.4 million funded through revenues of $14.4 million, made up of $13.1 million from water charges, $1.0 million from power charges, and approximately $300 thousand from other revenue sources.
· The Capital Budget continues investment in major infrastructure needs. Surpluses at year-end will be transferred to Operating and Capital Reserves. The Budget is provided in Appendix C.
None with respect to this report.
Respectfully Submitted, Respectfully Submitted,
Kim Krywulak Barry Lacey
Director, Financial Services Executive Director, Financial Strategy &
Sustainability
Prepared by: Abimbola Yusuf, Financial Reporting Advisor II
ATTACHMENTS
Appendix A – 2022 Buffalo Pound Annual Report
Appendix B – Plant Renewal Project Update Report
Appendix C – 2023 Budget