annual report 2008glow.blue/enwin/ius/fm/188-wuc-annual-report-08.pdf · wuc’s ability to meet...

Windsor Utilities Commission 787 Ouellette Avenue, P. O. Box 1625, Stn. "A" Windsor, ON N9A 5T7 Tel: 519.255.2727

Rhodes Drive Operating Centre 4545 Rhodes Drive, P. O. Box 1625, Stn. "A" Windsor, ON N8W 5T1 Tel: 519.251-7300

A. H. Weeks Water Treatment Plant 3665 Wyandotte St. East, Windsor, ON N8Y 1G4 Tel: 519.251.0925

For more information on the Windsor Utilities Commission, please visit www.wuc.on.ca

© 2008 Windsor Utilities Commission (WUC)

ANNUAL REPORT 2008

How we choose to live has a huge impact on our environment, and safeguarding water quality and quantity begins with how

we use water within our homes and on our properties.

Printed onrecycled paper

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ANNUAL REPORT 2008

WUC

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Ken Lewenza Jr. City Councillor, Ward 4 Chairman of Windsor Utilities Commission

Eddie Francis, LL.B. Mayor, City of Windsor Commissioner

James Drummond, P.Eng. Golder Associates Commissioner

Loretta Stoyka, B.A., LL.B. Senior Counsel, Miller, Canfield, Paddock & Stone, P.L.C. CommissionerChair of Windsor Utilities Commission Governance Committee

George Sandala Vice-President (ret'd), TD Bank Financial GroupVice-Chair of Windsor Utilities CommissionChair of Windsor Utilities Commission Audit & Finance Committee

Ron Jones City Councillor, Ward 2 Commissioner

Bill Marra City Councillor, Ward 4 Commissioner

Rocco Lucente, P.Eng. President, R. Lucente Engineering Inc. Commissioner

Karen Behune Plunkett Brand Development ConsultantCommissioner

WUC Commissioners

John WladarskiJohn Stuart

Victoria ZuberDavid Melnyk

Norbert PoggioGarry Rossi

Veronica Friesen

General Manager

Chief Operating Officer

Vice-President Finance & Chief Financial Officer

Director, Operations

Director, Engineering

Director, Water Production

Director, District Energy Windsor

Senior Management Team

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ANNUAL REPORT 2008

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. Throughout 2008, the Windsor Utilities Commission continued to allocate resources and streamline procedures to provide dependable delivery of the highest quality potable water to the residents, businesses and institutions within the City of Windsor, as well as the municipalities of Tecumseh and LaSalle.

Windsor is one of the fortunate communities to boast a top of the line treatment facility – in fact it is one of the leading edge utilities in Ontario. This is due in part to a team of dedicated professionals who monitor every process in detail, 24 hours a day, 7 days a week, but more importantly it has one of the industry leading solutions for purifying water – OZONE. As a purifier, OZONE is regarded as one of the best for water treat-ment.

Aside from ensuring the safe and reliable delivery of water, the Windsor Utilities Com-mission also provides district heating and cooling to several buildings in the downtown core of the City of Windsor.

The 2008 Windsor Utilities Commission Annual Report has been approved by our Com-missioners and reflects the progress made in meeting strategic initiatives surrounding the rehabilitation of aging infrastructure as recommended by the 2007 Water System Asset Management and Financial Plans report (prepared by Earth Tech Canada Inc. in association with Watson & Associates Economists Ltd.).

The City of Windsor has been a voluntary member of the Great Lakes and St. Law-rence Cities Initiative (GLSLCI) since 2007. The GLSLCI is a bi-national coalition of mayors and other local officials who work actively with federal, state and provincial governments to advance the protection and restoration of the Great Lakes and the St. Lawrence River. Water conservation efforts are an important part of this commitment to protect and restore the Great Lakes and St. Lawrence River. Windsor is among 30 cities who voluntarily work towards a 15% reduction in total water consumption below those water consumption levels recorded in 2000. This will take place over the coming years with re-evaluation to take place in 2015.

WUC’s ability to meet and surpass legislated requirements with respect to water qual-ity is the direct result of the outstanding dedication and commitment of all WUC staff.

Meeting Our Commitments

Water District Distribution Energy Total

Revenue $ 35,966 $ 9,475 $ 45,441

Cost of water production and services 5,186 8,326 13,512 30,780 1,149 31,929

Operating (income) expenses: Transmission and distribution maintenance 4,624 – 4,624 Other operating expenses 14,343 454 14,797 Other operating income (1,022) – (1,022) 17,945 454 18,399

Income before amortization and interest expense 12,835 695 13,530

Amortization 4,875 382 5,257Interest expense - long-term 2,438 – 2,438Interest expense - other 226 – 226Interest income - related parties (132) 198 66

Income for the year $ 5,428 $ 115 $ 5,543

Segment assets $ 148,424 $ 10,056 $ 158,480

2007

(In thousands of dollars)Year ended December 31, 2008

Notes to Financial Statements

13. Segmented information (continued):

The following table presents the results of the Commission from continuing operations by reportable segment for 2007:

14. Future accounting changes:

The CICA has issued two new standards, CICA 3862: Financial Instruments – Disclosures and CICA 3863: Financial Instruments – Presentation, which enhance the abilities of users of financial statements to evaluate the significance of financial instruments to an entity, related exposures and the management of these risks. These sections become effective January 1, 2009 and will require expanded disclosure in the notes to the financial statements.

Ken Lewenza Jr.Chairman of Windsor Utilities Commission

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The Windsor Utilities Commission’s water treatment facilities employs screening, pre-chlorination (on an as-needed basis), pH adjustment (utilizing CO2), primary disin-fection (utilizing ozone), coagulation, flocculation, sedimentation, dual-media filtration with post chlorination and fluoridation to treat raw water obtained from the Detroit River. The water treatment plant also treats sedimentation sludge and backwash water utilizing coagulation, flocculation and sedimentation followed by centrifugal dewatering, with the residuals being shipped to landfill for disposal.

Treated water from the plant is routed to an on-site reservoir and subsequently pumped into the distribution system from two pumping stations.

In 2008 Windsor Utilities Commission produced 56,870 mega litres (ML) or in other words 56,870,000 cubic metres (CM) of potable water of which:• 22% was non-revenue water (maintenance, flushing, watermain breaks, unauthorized use of water, seasonal services, fire fighting)• 63% was delivered to the citizens of the City of Windsor • 7% to the Town of LaSalle • 8% to the Town of Tecumseh.

A remote reservoir and pumping station provides a re-chlorination facility (using sodium hypochlorite) to provide system pressure and flow to the south-west portion of the City, while a centrally located water tower provides pressure and flow control to the downtown core.

The drinking water system is monitored at various locations, both at the water treat-ment plant and pumping stations as well as throughout the transmission system via an operating control system (SCADA - Supervisory Control and Data Acquisition.)

Water Treatment

2008 WINDSOR TREATED WATER BREAKDOWN


Revenue $ 43,106 $ 9,303 $ 52,409

Cost of water production and services 5,178 8,492 13,670 37,928 811 38,739

Operating (income) expenses: Transmission and distribution maintenance 4,457 – 4,457 Other operating expenses (income) 16,048 (42) 16,006 Other operating income (1,895) – (1,895) 18,610 (42) 18,568


Amortization 5,082 387 5,469Interest expense - long-term 2,383 – 2,383Interest expense - other 115 – 115Interest income - related parties (143) 102 (41)

Income before undernoted 11,881 364 12,245

Impairment of District Energy systems – (3,000) (3,000)

Income (loss) for the year $ 11,881 $ (2,636) $ 9,245

Segment assets $ 157,411 $ 6,539 $ 163,950

2008





Windsor 63%Non-RevenueWater 22%

Wholesale15%

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Under Ontario Reg. 170/03 of the Safe Drinking Water Act (SDWA), WUC met all of the requirements to ensure that approved water treatment equipment, as specified in the facility certificate of approval, was provided and in operation whenever water was being supplied for potable use throughout 2008. WUC was fully compliant with equip-ment operation procedural requirements, using only certified operators to carry out system operations.

Below is a schematic of the overall treatment train for the A.H. Weeks treatment facility.

Ensuring Safe, Reliable Delivery of Potable Water

WUC met and surpassed water sampling and equipment checks required for chlorine residual testing, including frequency, testing and recording protocols. The regular collec-tion and analyses of samples were carried out by an appropriately certified individual in compliance with legislated regulations.

Chemical Sampling and Testing

WUC surpassed legislated requirements for annual testing of inorganics and lead through quarterly testing for both.

Testing was also conducted for trihalomethanes, nitrates and nitrites on a quarterly basis.

Reporting Adverse Test Results and Other Problems

Of the 37 adverse incidents reported in 2008, 61% were due to service line and watermain breaks - largely attributable to aging infrastructure. WUC remains commit-ted to the rehabilitation of Windsor's aging infrastructure and has committed $13M towards watermain renewal and infrastructure projects for 2009.

A. H. Weeks Water Treatment Plant(In thousands of dollars)Year ended December 31, 2008


9. Fair value of financial instruments (continued):

Financial assets held by the Commission expose it to credit risk. As at December 31, 2008, 37% of accounts receivable were made up of amounts due from two commercial customers, each of which individually represented more than 10% of total accounts receivable (2007 - 22%). The Commission is satisfied that these amounts do not represent a significant credit risk.

10. Capital management:

In managing capital, the Commission focuses on liquid resources available for operations. The organization’s objective is to have sufficient liquid resources to continue operating despite adverse financial events and to provide it with the flexibility to take advantage of opportunities that will advance its purposes. The need for sufficient liquid resources is considered in the monitoring of cash flows and actual operating results. As at December 31, 2008, the Commission has met its objective of having sufficient liquid resources to meet its current obligations.

11. Contingencies:

The Commission is periodically subject to lawsuits in which it is the defendant. In the opinion of management, the ultimate resolution of any current lawsuit would not have a material effect on the financial position of the Commission.

12. Commitments:

At year end the Commission is committed to capital projects of approximately $4,500 to be completed during fiscal 2009.

13. Segmented information:

For 2008, the Commission has two reportable business segments; water treatment and distribution and district energy. Each segment represents a strategic business unit of the Commission offering distinct products and services and requiring different technology and marketing strategies.

FROMRIVER

CONTACTTANKS

RAPIDMIX

FLOCCULATION SETTLING AND THICKENING

RAPID SAND FILTERS

CHLORINEFLUORIDE

CHLORINEFLUORIDE

CLEARWELLSTORAGE

CLEARWELLSTORAGE

BACKWASHPUMPS

AIR BLOWERS

CHLORINE CHLORINE

BACKWASH STORAGE

STORMSEWER

POLYMERPOLYMER

POLYMER

CENTRIFUGESBACKWASH TREATMENT

TO R

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VO

IR

CO2

OZONE

OZONE

CALCIUMTHIOSULFATE

CALCIUMTHIOSULFATE

POLYMER

ALVM

INLETCHANNEL

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Tecumseh Rd E

Wyandotte St E

Ouellette Ave

Walker Rd

How

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Parent Ave

Huron C

hurch Rd

Dougall Ave

Central Ave

Jefferson Blvd

EC Row Expy

Windsor

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DISTRIBUTION LINE

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A.J. Brian & A.H. WeeksWater Treatment Plant

HannaWater Tower

Consumer’s Residence

Lou Romano Plant

Ozone

BAR SCREEN

Low Lift Pump

High Lift Pumps

Rapid Mixing

CO2 for pHcontrol

BAR SCREEN

FlocculantAid (PaCl)

FlocculationSedimentation

Solids

WaterAnthracile

SandGravel

Landfill as“Clean Cap”

Filtration

Reservoir

Clearwell 1

Chlorine

Hydrofluosilicicacid(HFS)

Clarifier

Aeration TankSettling Tank

Grit Tank

Sludge Well

UV

WASTE

DISTRIBUTION LINE

WASTEWATER LINE

WASTEW

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THE CITY OF WINDSORWINDSOR UTILITIES COMMISSION

WUC’s Water Distribution SystemHow the water gets from WUC to your home.Service Territory: 307 sq. km.Population: 268,349

WUC is responsible for all pipes and infrastructure leading up to the home owner’s property line, as well as the water meter in the home.

The home owner is responsible for pipes and infrastructure that lie within their property boundaries.

1) Water drawn from the Detroit River is first screened and pumped via low lift pumps located at the A.J. Brian Pumping Station. The raw water is treated at the A.J. Weeks Treatment Facility and chlorinated prior to being pumped into the distribution system via the high lift pumps located at the A.J. Brian Pumping Station. 2) Water pumped from the A.J. Brian Pumping Station flows via the distribution piping network directly to the consumer’s residence. To ensure that adequate pressure and an uninterrupted supply of water is available at all times, water is pumped into storage tanks such as the Hanna Tower and the J.F. Cook Reservoir and re-transmission station. 3) Potable water is consumed within an individuals’ residence or business and the subsequent grey or waste water is captured by the wastewater collection system. 4) The combined grey and waste water flows by gravity or is pumped to the Lou Romano Water Reclamation Plant which provides physical treatment of the waste water prior to being returned to the Detroit River.

20072008

Decrease (increase) in current assets: Accounts receivable $ 285 $ (918) Unbilled revenue 148 (1,423) Supplies inventory 102 (176) Deposits and prepaid expenses (360) 20 175 (2,497)Increase in current liabilities: Accounts payable and accrued liabilities 1,895 138

$ 2,070 $ (2,359)



7. Change in non-cash working capital:

The change in non-cash working capital balances is as follows:

8. Pension plan:

The Commission participates in the Ontario Municipal Employees Retirement System (OMERS), a multi-employer plan, on behalf of its employees. The plan is a contributory defined benefit pension plan. The contribution rates are 6.5% for employees earnings below the year’s maximum pensionable earnings and 9.6% thereafter. During 2008, the Commission contributed $455 (2007 – $431) to the Fund.

9. Fair value of financial instruments:

The carrying values of accounts receivable, unbilled revenue, bank indebtedness, accounts payable and accrued liabilities and amounts due from (to) related parties approximate fair value due to the short maturity of these instruments.

The 1991 debentures and sinking fund, having a carrying value of $9,000 (2007 – $9,000) and $4,884 (2007 – $4,390) respectively, have an estimated fair value of $10,840 (2007 – $10,889) and $6,213 (2007 – $5,060) respectively, based on market prices for similar debt and investments.

The 1992 debentures, having a carrying value of $10,888 (2007 – $11,384) has an estimated fair value of $11,283 (2007 – $11,323) based on market prices for similar debt.

The 2002 debentures, having a carrying value of $11,419 (2007 – $11,941), has an estimated fair value of $11,897 (2007 – $11,956) based on market prices for similar debt.

The Commission earns its revenue from a broad base of customers located principally in Windsor. One commercial customer represented 10% of total reported revenues in 2008 (2007 – 12%).

ANNUAL REPORT 2008

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20072008

Components of net periodic benefit cost: Current service cost $ 485 $ 463 Interest cost 667 627 Amortization of actuarial loss 107 122

Net periodic benefit costs $ 1,259 $ 1,212



6. Employee future benefits (continued):

The significant actuarial assumptions adopted in measuring the Commission’s accrued benefit obligations are as follows:

20072008

Funded status: Unfunded benefit obligation $ (12,057) $ (13,698) Unamortized net actuarial loss (gain) (1,767) 855

Amount recognized in the balance sheet: Accrued benefit liability $ (13,824) $ (12,843)

20072008

Discount rate 5.0% 4.75%Rate of compensation increase 3.0% 3.0 %

Medical trend rate: Initial 9.0% 7.0 % Ultimate 5.0% 4.0 % Year of ultimate level 2017 2010

The following constitutes a summary of Windsor Utilities Commission capital project work for 2008:

• Maintenance of ozone system power supplies and installation of new fuses.

• Maintenance on two motor drives at the A. J. Brian Station including the installation of inverter SCR’s as well as the installation and calibration of new converter boards.

• Installation of a new 700HP US motor on high lift pump #2 at the George Avenue pumping station.

• Rebuild of George Avenue pumping station high lift pump #2 control and check valve assembly.

• Removal and replacement of east and west plate settlers at the A. H. Weeks filtration plant.

• Refurbishment of chlorine pump and piping system at Howard Avenue’s Cook Station.

• Refurbishment of the A. H. Weeks north centrifuge to factory specifications.

• Installation of a new Foxboro controller for the A. H. Weeks north centrifuge.

• Roof repairs/replacement at the A. H. Weeks Plant, George Avenue pumping station, A. J. Brian pumping station and old treatment plant.

• New SMC soft start drives for backwash pumps and air blowers at A. H. Weeks Plant.

• Installation of 33 fire hydrants and associated appurtenances.

• Installation of approximately 13.5 km of watermains <300mm and 1.5 km of watermains >300 mm.

• Structural relining of approximately 7 km of 150 mm watermain.

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WINDSOR UTILITIES COMMISSION

Windsor plus Town of LaSalle and Town of Tecumseh 307 sq. km.

Population Served (2006 Census) 268,349

Fast Facts –WUC WATERArea of Service:

2009 $ 1,5652010 1,6252011 4,3222012 18,911

$ 26,423

20072008

Accrued benefit obligation $ 13,824 $ 12,843Workers compensation obligation 303 300

$ 14,127 $ 13,143

20072008

Change in benefit obligation: Benefit obligation, beginning of year $ 12,843 $ 11,899 Current service cost 485 463 Interest cost 667 627 Amortization of actuarial loss 107 122 Benefits paid (278) (268)

Benefit obligation, end of year $ 13,824 $ 12,843



5. Debentures (continued):

The aggregate of the principal payments on the long-term debt and the sinking fund payments over the next four years are as follows:

Included in the total debt repayments of $26,423 are $1,482 in sinking fund payments which will be used to finance the 1991 debenture due in 2011.

The sinking fund is held in trust by the Corporation of the City of Windsor.

6. Employee future benefits: The Commission pays certain health, dental and life insurance benefits on behalf of its retired employees.

The Commission measures its accrued benefit obligation for accounting purposes as at December 31 each year. A valuation date of December 31, 2008 has been used. The Commission’s employee future benefit liability consists of the following:

Information about the Commission’s defined benefit plan is as follows:

Financial Data 2008 2007 2006 2005 2004Revenue from Water Distribution Fixed Meter Charges 17,241$ 13,907$ 11,086$ 11,014$ 10,872$ Consumption 9,543$ 10,493$ 10,785$ 11,631$ 11,160$ Summer Levy 1,267$ 1,678$ 1,599$ 1,973$ 1,517$ Watermain Levy (1) 12,034$ 6,747$ 2,784$ 2,886$ 2,812$ Suburban Wholesale (2) 3,021$ 3,141$ 2,228$ 1,640$ 1,376$

Total Revenue from Water Distribution(Note 13 financial statements) 43,106$ 35,966$ 28,482$ 29,144$ 27,737$

Total Expenses 31,225$ 30,538$ 28,609$ 28,573$ 27,520$

Net Income (Loss) from Water Distribution (note 13 financial statements)

11,881 5,428 (127) 571 217

Capital Expenditures (Consolidated) Watermain 11,615$ 7,518$ 8,058$ 7,279$ 7,049$ Other 3,601$ 1,306$ 2,937$ 3,222$ 3,755$

Total Capital Expenditures 15,216$ 8,824$ 10,995$ 10,501$ 10,804$

Statement of Cash Flows (Consolidated)Cash provided by operating activities 20,806 9,632 5,143 4,009 8,141Cash provided by (used) in financing activities (5,639) (2,148) 5,452 6,492 2,663Cash (used in acquiring) assets (15,167) (7,484) (10,595) (10,501) (10,804)

Simplified Net Cash Flow 0 0 0 0 0

Water System DataNumber of Windsor Customers(as at December) (3)

71,708 73,370 72,574 72,012 68,667

Treated Water Pumped (ML) 56,870 61,398 61,182 61,236 58,379

Treated Water Billed Windsor 35,906 39,750 39,803 43,617 42,343 Wholesale 8,512 6,852 6,259 3,874 3,353Total Water Billed 44,418 46,602 46,062 47,491 45,696

Length of Watermain 1,220 km 1,177 km 1,111 km 1,111 km 1,100 kmNumber of Watermain Breaks per year 235 249 231 329 211

Peak Daily Water Demand (ML) (July 17, 2002 - 280 ML)

218 ML 256 ML 252 ML 260 ML 226 ML

Average Daily Water Demand (ML) 155.3 ML 168.2 ML 167.6 ML 168 ML 160 MLTotal Daily Supply Capacity (ML) 349 ML 349 ML 349 ML 349 ML 349 MLReservoir Storage Capacity (ML) 118 ML 118 ML 118 ML 118 ML 118 MLNumber of Treatment Plants 2 2 2 2 2Number of Pumping Stations 3 3 3 3 3Footnotes:1. Water main levy increased in 2007.2. Suburban wholesale to Tecumseh began March 2006.3. Transferred Old Sandwich customers to Town of Tecumseh 2008.

in (000's)

in (000's)

in (000's)

in Megalitres (ML) [1 ML = 1,000 cubic metres]

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20072008



4. Bank indebtedness: The Commission has an agreement with a Canadian chartered bank for an operating line of credit in the amount of $6,000 (2007 – $6,000) bearing interest at prime minus 1%. The line of credit is unsecured.

5. Debentures:

Debentures were issued during 1991, 1992 and 2002 by the City of Windsor totaling $43,735, on behalf of the Commission for various water treatment facilities in the amounts of $10,500, $19,000 and $14,235 respectively.

Details of the debentures are as follows:

1991 debentures requiring annual interest payments only $ 9,000 $ 9,000to 2011 of $1,046, with a final principal payment of $9,000 due August 2011. The effective interest rate is 11.625%. The final principal payment will be financed by sinking fund contributions of $494 per year.

Less: debenture sinking fund accumulated contributions (4,884) (4,390)

1992 debentures requiring annual principal and interest 10,888 11,384payments of approximately $1,135 until 2011 and an interest payment of approximately $265 in 2012, with a final principalpayment of $9,233 in 2012. The effective interest rates range from 2.75% to 5.75%.

2002 debentures requiring annual principal and interest 11,419 941payments of approximately $1,239 until 2011, with a final principal payment of $9,678 in 2012. The effective interest rates range from 3.50% to 6.125%. 26,423 27,935

Less: Current portion 1,565 1,512 Unamortized debt issuance costs 190 252

$ 24,668 $ 26,171

ANNUAL REPORT 2008

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We have audited the balance sheet of Windsor Utilities Commission as at December 31, 2008 and the statements of contributed capital and retained earnings, income and cash flows for the year then ended. These financial statements are the responsibility of the Commission’s manage-ment. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Commission as at December 31, 2008 and the results of its operations and its cash flowsfor the year then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants, Licensed Public Accountants

Windsor, CanadaFebruary 13, 2009

KPMG LLPChartered Accountants

618 Greenwood Centre3200 Deziel DriveWindsor ON N8W 5K8

Telephone (519) 251-3500Telefax (519) 251-3530

(519) 251-3540www.kpmg.ca

AUDITORS’ REPORT

To the Commissioners, Members of Council, Inhabitants and Ratepayers of the Corporation of the City of Windsor


20072008

Watermain levy revenues $ 12,034 $ 6,747Watermain capital expenditures 11,615 7,518

Surplus (deficit) in watermain funding $ 419 $ (771)



3. Property, plant and equipment:

No amortization is taken on construction in progress assets until they are placed in use.

A long-lived asset impairment review was performed during the year and an impairment of $3,000 was realized on the District Energy systems. The impairment was determined by the amount by which the carrying value of the asset exceeds its fair value. The impairment has been recorded as an increase to accumulated amortization.

A summary of watermain capital funding is as follows:

The accumulated net deficit for watermain capital funding since inception of the watermain levyin 2003 is $16,172.

Accumulated Net book Cost amortization value

Land $ 840 $ - $ 840Buildings 653 258 395Plant and equipment 70,815 25,321 45,494Transmission and distribution mains systems 124,648 40,045 84,603Tools and equipment 1,123 652 471Meter equipment 13,034 8,371 4,663District Energy systems 11,622 6,551 5,071Construction in progress 14,132 – 14,132

$ 236,867 $ 81,198 $ 155,669

2008



$ 221,726 $ 72,767 $ 148,959

2007

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ANNUAL REPORT 2008 WINDSOR UTILITIES COMMISSION

(In thousands of dollars)December 31, 2008, with comparative figures for 2007

Current assets: Accounts receivable $ 4,641 $ 4,926 Unbilled revenue 2,822 2,970 Due from related parties (note 2) - 1,082 Supplies inventory 356 458 Deposits and prepaid expenses 397 37 8,216 9,473

Property, plant and equipment (note 3) 155,669 148,959

Work in progress 65 48

$ 163,950 $ 158,480

20072008

20072008

Assets

Balance Sheet

Current liabilities: Bank indebtedness (note 4) $ 223 $ 5,442 Accounts payable and accrued liabilities 5,173 3,278 Due to related parties (note 2) 1,790 1,861 Current portion of debentures 1,565 1,512 8,751 12,093

Long-term liabilities: Debentures (note 5) 24,668 26,171 Vested sick leave 20 15 Employee future benefits (note 6) 14,127 13,143 38,815 39,329

Equity: Contributed capital 61,791 61,710 Retained earnings 54,593 45,348 116,384 107,058

Contingencies and commitments (notes 11 and 12)

$ 163,950 $ 158,480

See accompanying notes to financial statements.

Liabilities and Equity

On behalf of the Commission:

___________________________ Commissioner ___________________________ Commissioner

20072008

Due from EnWin Utilities Ltd. $ – $ 1,082

20072008

Due to EnWin Utilities Ltd. $ 403 $ –Due to the City of Windsor 1,387 1,861

$ 1,790 $ 1,861



2. Related party transactions:

a) Under a Managed Services Agreement effective January 1, 2007, EnWin Utilities Ltd. provides certain finance, administration, human resource, management and other support services to the Commission. The total amount charged to the Commission for the year ended December 31, 2008 was $9,329 (2007 – $8,614).

b) The Corporation of the City of Windsor provides labour support for capital watermain projects and road repairs to the Commission. The total amount charged to the Commission for the year ending December 31, 2008 was $3,520 (2007 – $4,068).

c) The amounts due from related parties consist of:

d) The amounts due to related parties consist of:

The amount due to/ from EnWin Utilities Ltd. bears interest at the Bank of Canada rate, while the amount due to the City of Windsor is non-interest bearing.

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(In thousands of dollars)Year ended December 31, 2008, with comparative figures for 2007

20072008

Statement of Contributed Capital and Retained Earnings

Contributed capital: Balance, beginning of year $ 61,710 $ 61,288

Contributions from developers 81 422

$ 61,791 $ 61,710

Retained earnings:

Balance, beginning of year $ 45,348 $ 39,805

Net income (loss) for the year 9,245 5,543

$ 54,593 $ 45,348




1. Significant accounting policies (continued):

k) Long-lived assets:

Long-lived assets are amortized over their useful lives. The Commission periodically reviews the useful lives and the carrying values of its long-lived assets for continued appropriateness. The Commission reviews for impairment of long-lived assets (or asset groups) to be held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows expected to result from the use and eventual disposition of an asset is less than its carrying amount, it is considered to be impaired.

An impairment loss is measured at the amount by which the carrying amount of the asset exceeds its fair value. When quoted market prices are not available, the Corporation uses the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset as an estimate of fair value.

l) Use of estimates:

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying value of capital assets, valuation allowances for accounts receivable, unbilled revenue and the valuation of employee future benefits. Actual results could differ from those estimates.

m) Adoption of new CICA Handbook sections:

Effective January 1, 2008, the Commission adopted the recommendations of CICA 1535: Capital Disclosures, which require the disclosure of qualitative and quantitative information that enables users of the financial statements to evaluate the Commission’s objectives, policies and processes for managing capital. The adoption of these recommendations only required additional disclosures, which are provided in note 10.

The Commission has elected to defer the adoption of CICA 3862: Financial Instruments – Disclosures and CICA 3863: Financial Instruments – Presentation until January 1, 2009 in accordance with the guidelines for non-profit entities. In place of these sections the Commission is continuing to apply CICA 3861: Financial Instruments – Disclosure and Presentation which was adopted effective January 1, 2007.

Balance, end of year


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20072008

Statement of Income

Revenue: Revenue from distribution of water $ 43,106 $ 35,966 District Energy 9,303 9,475 52,409 45,441

Cost of water production 5,178 5,186Cost of services - District Energy 8,492 8,326 13,670 13,512

Net revenue 38,739 31,929

Operating (income) and expenses: Transmission and distribution maintenance 4,457 4,624 Other operating expenses 16,006 14,797 Other operating income (1,895) (1,022) 18,568 18,399

Income before the undernoted items 20,171 13,530

Amortization 5,469 5,257Interest expense - long-term 2,383 2,438Interest expense - other 115 226Interest expense (income) - related parties (41) 66 7,926 7,987

Net income before undernoted 12,245 5 ,543

Impairment of District Energy (note 3) (3,000) -

$ 9,245 $ 5,543





The Commission accrues its obligations under employee benefit plans and the related costs. The cost of retirement benefits earned by employees is actuarially determined using the projected benefit method pro-rated on service and management’s best estimate of expected salary escalation, retirement ages of employees and expected health care costs.

The excess of net actuarial gains (losses) over 10% of the benefit obligation at the beginning of the year is amortized on a straight-line basis over the average remaining service period of the employees which is 9.5 years at December 31, 2008 (2007 - 8 years).

f) Pension plan:

The Commission provides a pension plan for its employees through the Ontario Municipal Employees Retirement System (“OMERS”). OMERS is a multi-employer defined benefit pension plan which operates as the Ontario Municipal Employees Retirement Fund (“the Fund”), and provides pensions for employees of Ontario municipalities, local boards, public utilities and certain school boards. Contributions are recognized as expense as they are made.

g) Vested sick leave:

Under the sick leave benefit plan, unused sick leave can accumulate and certain employees hired prior to January 1, 1977 may become entitled to a cash payment when they leave the Commission’s employment. The liability for those accumulated days, to the extent that they have vested and could be taken in cash by an employee upon termination, has been recorded.

h) Contributed capital:

Contributed capital has been recorded as a permanent component of equity and represents contributions from developers toward water work infrastructure.

i) Revenue recognition:

Revenue is recorded on the accrual basis. This includes an estimate of unbilled revenue representing water consumed by customers since the date of each customers’ last meter reading.

j) Related party transactions:

Transactions with related parties are measured at the exchange amount, which is the amount of consideration paid or received as established and agreed to by the related parties.

Related parties include EnWin Energy Ltd. and EnWin Utilities Ltd. (“the EnWin Group”), and the Corporation of the City of Windsor.

Net income for the year

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20072008

Statement of Cash Flows(In thousands of dollars)Year ended December 31, 2008


Cash provided by (used in):

Operating activities: Net income (loss) for the year $ 9,245 $ 5,543 Add items not affecting cash: Amortization of property, plant and equipment 5 ,469 5,257 Gain on sale of property, plant and equipment (12) - Impairment of District energy 3 ,000 - Change in employee future benefits 984 959 Amortization of debt issuance costs 62 60 Change in non-cash working capital (note 7) 2,070 (2,359) Change in work in progress (17) 172 Change in vested sick leave 5 - 20,806 9,632

Financing: Decrease in bank indebtedness (5,219) (107) Repayment of debentures (1,512) (1,464) Due from (to) related parties, net 1,011 (999) Contributions from developers 81 422 (5,639) (2,148)

Investing: Acquisition of property, plant and equipment- watermains (11,615) (7,518) Acquisition of property, plant and equipment- other (3,601) (1,306) Proceeds from disposals of property, plant and equipment 49 - Contributions in aid of capital- other - 1,340 (15,167) (7,484)

Change in cash position for the year - -

Cash, beginning of year - -

$ - $ -


Windsor Utilities Commission (“The Commission”) provides water treatment and the distributionsystem for the Corporation of the City of Windsor. The Commission also operates District Energywhich supplies heating and cooling services to multiple buildings using a closed hot and cold water system.

1. Significant accounting policies:

a) Basis of presentation:

The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles.

b) Supplies inventory:

Supplies inventory is stated at the lower of cost and market value, with cost determined on an average cost basis and market value determined by replacement cost.

c) Capital assets:

Property, plant and equipment are recorded at cost with cost being determined based on material, purchased services and internal labour and overhead as applicable.

Amortization is calculated on a straight-line basis over the estimated service life of capital assets as follows:

d) Debt issuance costs:

Debt issuance costs comprise of expenses relating to issuing long-term borrowings. Such costs are offset against the related debt, and are amortized into income over the life of the related debt.

e) Employee future benefits:

The Commission provides post employment benefits such as compensated sick leave, and post retirement benefits such as life insurance, supplemental health and dental coverage for employees who retire from active employment.

Asset Estimated service lifeBuildings 40 yearsPlant and equipment 20 - 40 yearsTransmission and distribution mains systems 40 yearsTools and equipment 10 yearsMeter equipment 20 yearsDistrict Energy systems 30 years

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20072008

Statement of Income

Revenue: Revenue from distribution of water $ 43,106 $ 35,966 District Energy 9,303 9,475 52,409 45,441

Cost of water production 5,178 5,186Cost of services - District Energy 8,492 8,326 13,670 13,512

Net revenue 38,739 31,929

Operating (income) and expenses: Transmission and distribution maintenance 4,457 4,624 Other operating expenses 16,006 14,797 Other operating income (1,895) (1,022) 18,568 18,399

Income before the undernoted items 20,171 13,530

Amortization 5,469 5,257Interest expense - long-term 2,383 2,438Interest expense - other 115 226Interest expense (income) - related parties (41) 66 7,926 7,987

Net income before undernoted 12,245 5 ,543

Impairment of District Energy (note 3) (3,000) -

$ 9,245 $ 5,543





The Commission accrues its obligations under employee benefit plans and the related costs. The cost of retirement benefits earned by employees is actuarially determined using the projected benefit method pro-rated on service and management’s best estimate of expected salary escalation, retirement ages of employees and expected health care costs.

The excess of net actuarial gains (losses) over 10% of the benefit obligation at the beginning of the year is amortized on a straight-line basis over the average remaining service period of the employees which is 9.5 years at December 31, 2008 (2007 - 8 years).

f) Pension plan:

The Commission provides a pension plan for its employees through the Ontario Municipal Employees Retirement System (“OMERS”). OMERS is a multi-employer defined benefit pension plan which operates as the Ontario Municipal Employees Retirement Fund (“the Fund”), and provides pensions for employees of Ontario municipalities, local boards, public utilities and certain school boards. Contributions are recognized as expense as they are made.

g) Vested sick leave:

Under the sick leave benefit plan, unused sick leave can accumulate and certain employees hired prior to January 1, 1977 may become entitled to a cash payment when they leave the Commission’s employment. The liability for those accumulated days, to the extent that they have vested and could be taken in cash by an employee upon termination, has been recorded.

h) Contributed capital:

Contributed capital has been recorded as a permanent component of equity and represents contributions from developers toward water work infrastructure.

i) Revenue recognition:

Revenue is recorded on the accrual basis. This includes an estimate of unbilled revenue representing water consumed by customers since the date of each customers’ last meter reading.

j) Related party transactions:

Transactions with related parties are measured at the exchange amount, which is the amount of consideration paid or received as established and agreed to by the related parties.

Related parties include EnWin Energy Ltd. and EnWin Utilities Ltd. (“the EnWin Group”), and the Corporation of the City of Windsor.

Net income for the year

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20072008

Statement of Contributed Capital and Retained Earnings

Contributed capital: Balance, beginning of year $ 61,710 $ 61,288

Contributions from developers 81 422

$ 61,791 $ 61,710

Retained earnings:

Balance, beginning of year $ 45,348 $ 39,805

Net income (loss) for the year 9,245 5,543

$ 54,593 $ 45,348





k) Long-lived assets:

Long-lived assets are amortized over their useful lives. The Commission periodically reviews the useful lives and the carrying values of its long-lived assets for continued appropriateness. The Commission reviews for impairment of long-lived assets (or asset groups) to be held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows expected to result from the use and eventual disposition of an asset is less than its carrying amount, it is considered to be impaired.

An impairment loss is measured at the amount by which the carrying amount of the asset exceeds its fair value. When quoted market prices are not available, the Corporation uses the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset as an estimate of fair value.

l) Use of estimates:

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying value of capital assets, valuation allowances for accounts receivable, unbilled revenue and the valuation of employee future benefits. Actual results could differ from those estimates.

m) Adoption of new CICA Handbook sections:

Effective January 1, 2008, the Commission adopted the recommendations of CICA 1535: Capital Disclosures, which require the disclosure of qualitative and quantitative information that enables users of the financial statements to evaluate the Commission’s objectives, policies and processes for managing capital. The adoption of these recommendations only required additional disclosures, which are provided in note 10.

The Commission has elected to defer the adoption of CICA 3862: Financial Instruments – Disclosures and CICA 3863: Financial Instruments – Presentation until January 1, 2009 in accordance with the guidelines for non-profit entities. In place of these sections the Commission is continuing to apply CICA 3861: Financial Instruments – Disclosure and Presentation which was adopted effective January 1, 2007.



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(In thousands of dollars)December 31, 2008, with comparative figures for 2007

Current assets: Accounts receivable $ 4,641 $ 4,926 Unbilled revenue 2,822 2,970 Due from related parties (note 2) - 1,082 Supplies inventory 356 458 Deposits and prepaid expenses 397 37 8,216 9,473

Property, plant and equipment (note 3) 155,669 148,959

Work in progress 65 48

$ 163,950 $ 158,480

20072008

20072008

Assets

Balance Sheet

Current liabilities: Bank indebtedness (note 4) $ 223 $ 5,442 Accounts payable and accrued liabilities 5,173 3,278 Due to related parties (note 2) 1,790 1,861 Current portion of debentures 1,565 1,512 8,751 12,093

Long-term liabilities: Debentures (note 5) 24,668 26,171 Vested sick leave 20 15 Employee future benefits (note 6) 14,127 13,143 38,815 39,329

Equity: Contributed capital 61,791 61,710 Retained earnings 54,593 45,348 116,384 107,058

Contingencies and commitments (notes 11 and 12)

$ 163,950 $ 158,480


Liabilities and Equity

On behalf of the Commission:

___________________________ Commissioner ___________________________ Commissioner

20072008

Due from EnWin Utilities Ltd. $ – $ 1,082

20072008

Due to EnWin Utilities Ltd. $ 403 $ –Due to the City of Windsor 1,387 1,861

$ 1,790 $ 1,861



2. Related party transactions:

a) Under a Managed Services Agreement effective January 1, 2007, EnWin Utilities Ltd. provides certain finance, administration, human resource, management and other support services to the Commission. The total amount charged to the Commission for the year ended December 31, 2008 was $9,329 (2007 – $8,614).

b) The Corporation of the City of Windsor provides labour support for capital watermain projects and road repairs to the Commission. The total amount charged to the Commission for the year ending December 31, 2008 was $3,520 (2007 – $4,068).

c) The amounts due from related parties consist of:

d) The amounts due to related parties consist of:

The amount due to/ from EnWin Utilities Ltd. bears interest at the Bank of Canada rate, while the amount due to the City of Windsor is non-interest bearing.

ANNUAL REPORT 2008

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We have audited the balance sheet of Windsor Utilities Commission as at December 31, 2008 and the statements of contributed capital and retained earnings, income and cash flows for the year then ended. These financial statements are the responsibility of the Commission’s manage-ment. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Commission as at December 31, 2008 and the results of its operations and its cash flowsfor the year then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants, Licensed Public Accountants

Windsor, CanadaFebruary 13, 2009

KPMG LLPChartered Accountants

618 Greenwood Centre3200 Deziel DriveWindsor ON N8W 5K8

Telephone (519) 251-3500Telefax (519) 251-3530

(519) 251-3540www.kpmg.ca

AUDITORS’ REPORT

To the Commissioners, Members of Council, Inhabitants and Ratepayers of the Corporation of the City of Windsor


20072008

Watermain levy revenues $ 12,034 $ 6,747Watermain capital expenditures 11,615 7,518

Surplus (deficit) in watermain funding $ 419 $ (771)



3. Property, plant and equipment:

No amortization is taken on construction in progress assets until they are placed in use.

A long-lived asset impairment review was performed during the year and an impairment of $3,000 was realized on the District Energy systems. The impairment was determined by the amount by which the carrying value of the asset exceeds its fair value. The impairment has been recorded as an increase to accumulated amortization.

A summary of watermain capital funding is as follows:

The accumulated net deficit for watermain capital funding since inception of the watermain levyin 2003 is $16,172.



$ 236,867 $ 81,198 $ 155,669

2008



$ 221,726 $ 72,767 $ 148,959

2007

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ANNUAL REPORT 2008

20072008



4. Bank indebtedness: The Commission has an agreement with a Canadian chartered bank for an operating line of credit in the amount of $6,000 (2007 – $6,000) bearing interest at prime minus 1%. The line of credit is unsecured.

5. Debentures:

Debentures were issued during 1991, 1992 and 2002 by the City of Windsor totaling $43,735, on behalf of the Commission for various water treatment facilities in the amounts of $10,500, $19,000 and $14,235 respectively.

Details of the debentures are as follows:

1991 debentures requiring annual interest payments only $ 9,000 $ 9,000to 2011 of $1,046, with a final principal payment of $9,000 due August 2011. The effective interest rate is 11.625%. The final principal payment will be financed by sinking fund contributions of $494 per year.

Less: debenture sinking fund accumulated contributions (4,884) (4,390)

1992 debentures requiring annual principal and interest 10,888 11,384payments of approximately $1,135 until 2011 and an interest payment of approximately $265 in 2012, with a final principalpayment of $9,233 in 2012. The effective interest rates range from 2.75% to 5.75%.

2002 debentures requiring annual principal and interest 11,419 941payments of approximately $1,239 until 2011, with a final principal payment of $9,678 in 2012. The effective interest rates range from 3.50% to 6.125%. 26,423 27,935

Less: Current portion 1,565 1,512 Unamortized debt issuance costs 190 252

$ 24,668 $ 26,171

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Windsor plus Town of LaSalle and Town of Tecumseh 307 sq. km.

Population Served (2006 Census) 268,349

Fast Facts –WUC WATERArea of Service:

2009 $ 1,5652010 1,6252011 4,3222012 18,911

$ 26,423

20072008

Accrued benefit obligation $ 13,824 $ 12,843Workers compensation obligation 303 300

$ 14,127 $ 13,143

20072008

Change in benefit obligation: Benefit obligation, beginning of year $ 12,843 $ 11,899 Current service cost 485 463 Interest cost 667 627 Amortization of actuarial loss 107 122 Benefits paid (278) (268)

Benefit obligation, end of year $ 13,824 $ 12,843



5. Debentures (continued):

The aggregate of the principal payments on the long-term debt and the sinking fund payments over the next four years are as follows:

Included in the total debt repayments of $26,423 are $1,482 in sinking fund payments which will be used to finance the 1991 debenture due in 2011.

The sinking fund is held in trust by the Corporation of the City of Windsor.

6. Employee future benefits: The Commission pays certain health, dental and life insurance benefits on behalf of its retired employees.

The Commission measures its accrued benefit obligation for accounting purposes as at December 31 each year. A valuation date of December 31, 2008 has been used. The Commission’s employee future benefit liability consists of the following:

Information about the Commission’s defined benefit plan is as follows:

Financial Data 2008 2007 2006 2005 2004Revenue from Water Distribution Fixed Meter Charges 17,241$ 13,907$ 11,086$ 11,014$ 10,872$ Consumption 9,543$ 10,493$ 10,785$ 11,631$ 11,160$ Summer Levy 1,267$ 1,678$ 1,599$ 1,973$ 1,517$ Watermain Levy (1) 12,034$ 6,747$ 2,784$ 2,886$ 2,812$ Suburban Wholesale (2) 3,021$ 3,141$ 2,228$ 1,640$ 1,376$

Total Revenue from Water Distribution(Note 13 financial statements) 43,106$ 35,966$ 28,482$ 29,144$ 27,737$

Total Expenses 31,225$ 30,538$ 28,609$ 28,573$ 27,520$

Net Income (Loss) from Water Distribution (note 13 financial statements)

11,881 5,428 (127) 571 217

Capital Expenditures (Consolidated) Watermain 11,615$ 7,518$ 8,058$ 7,279$ 7,049$ Other 3,601$ 1,306$ 2,937$ 3,222$ 3,755$

Total Capital Expenditures 15,216$ 8,824$ 10,995$ 10,501$ 10,804$

Statement of Cash Flows (Consolidated)Cash provided by operating activities 20,806 9,632 5,143 4,009 8,141Cash provided by (used) in financing activities (5,639) (2,148) 5,452 6,492 2,663Cash (used in acquiring) assets (15,167) (7,484) (10,595) (10,501) (10,804)

Simplified Net Cash Flow 0 0 0 0 0

Water System DataNumber of Windsor Customers(as at December) (3)

71,708 73,370 72,574 72,012 68,667

Treated Water Pumped (ML) 56,870 61,398 61,182 61,236 58,379

Treated Water Billed Windsor 35,906 39,750 39,803 43,617 42,343 Wholesale 8,512 6,852 6,259 3,874 3,353Total Water Billed 44,418 46,602 46,062 47,491 45,696

Length of Watermain 1,220 km 1,177 km 1,111 km 1,111 km 1,100 kmNumber of Watermain Breaks per year 235 249 231 329 211

Peak Daily Water Demand (ML) (July 17, 2002 - 280 ML)

218 ML 256 ML 252 ML 260 ML 226 ML

Average Daily Water Demand (ML) 155.3 ML 168.2 ML 167.6 ML 168 ML 160 MLTotal Daily Supply Capacity (ML) 349 ML 349 ML 349 ML 349 ML 349 MLReservoir Storage Capacity (ML) 118 ML 118 ML 118 ML 118 ML 118 MLNumber of Treatment Plants 2 2 2 2 2Number of Pumping Stations 3 3 3 3 3Footnotes:1. Water main levy increased in 2007.2. Suburban wholesale to Tecumseh began March 2006.3. Transferred Old Sandwich customers to Town of Tecumseh 2008.

in (000's)

in (000's)

in (000's)

in Megalitres (ML) [1 ML = 1,000 cubic metres]

ANNUAL REPORT 2008

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20072008

Components of net periodic benefit cost: Current service cost $ 485 $ 463 Interest cost 667 627 Amortization of actuarial loss 107 122

Net periodic benefit costs $ 1,259 $ 1,212



6. Employee future benefits (continued):

The significant actuarial assumptions adopted in measuring the Commission’s accrued benefit obligations are as follows:

20072008

Funded status: Unfunded benefit obligation $ (12,057) $ (13,698) Unamortized net actuarial loss (gain) (1,767) 855

Amount recognized in the balance sheet: Accrued benefit liability $ (13,824) $ (12,843)

20072008

Discount rate 5.0% 4.75%Rate of compensation increase 3.0% 3.0 %

Medical trend rate: Initial 9.0% 7.0 % Ultimate 5.0% 4.0 % Year of ultimate level 2017 2010

The following constitutes a summary of Windsor Utilities Commission capital project work for 2008:

• Maintenance of ozone system power supplies and installation of new fuses.

• Maintenance on two motor drives at the A. J. Brian Station including the installation of inverter SCR’s as well as the installation and calibration of new converter boards.

• Installation of a new 700HP US motor on high lift pump #2 at the George Avenue pumping station.

• Rebuild of George Avenue pumping station high lift pump #2 control and check valve assembly.

• Removal and replacement of east and west plate settlers at the A. H. Weeks filtration plant.

• Refurbishment of chlorine pump and piping system at Howard Avenue’s Cook Station.

• Refurbishment of the A. H. Weeks north centrifuge to factory specifications.

• Installation of a new Foxboro controller for the A. H. Weeks north centrifuge.

• Roof repairs/replacement at the A. H. Weeks Plant, George Avenue pumping station, A. J. Brian pumping station and old treatment plant.

• New SMC soft start drives for backwash pumps and air blowers at A. H. Weeks Plant.

• Installation of 33 fire hydrants and associated appurtenances.

• Installation of approximately 13.5 km of watermains <300mm and 1.5 km of watermains >300 mm.

• Structural relining of approximately 7 km of 150 mm watermain.

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Tecumseh Rd E

Wyandotte St E

Ouellette Ave

Walker Rd

How

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Parent Ave

Huron C

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Dougall Ave

Central Ave

Jefferson Blvd

EC Row Expy

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A.J. Brian & A.H. WeeksWater Treatment Plant

HannaWater Tower

Consumer’s Residence

Lou Romano Plant

Ozone

BAR SCREEN

Low Lift Pump

High Lift Pumps

Rapid Mixing

CO2 for pHcontrol

BAR SCREEN

FlocculantAid (PaCl)

FlocculationSedimentation

Solids

WaterAnthracile

SandGravel

Landfill as“Clean Cap”

Filtration

Reservoir

Clearwell 1

Chlorine

Hydrofluosilicicacid(HFS)

Clarifier

Aeration TankSettling Tank

Grit Tank

Sludge Well

UV

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DISTRIBUTION LINE

WASTEWATER LINE

WASTEW

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THE CITY OF WINDSORWINDSOR UTILITIES COMMISSION

WUC’s Water Distribution SystemHow the water gets from WUC to your home.Service Territory: 307 sq. km.Population: 268,349

WUC is responsible for all pipes and infrastructure leading up to the home owner’s property line, as well as the water meter in the home.

The home owner is responsible for pipes and infrastructure that lie within their property boundaries.

1) Water drawn from the Detroit River is first screened and pumped via low lift pumps located at the A.J. Brian Pumping Station. The raw water is treated at the A.J. Weeks Treatment Facility and chlorinated prior to being pumped into the distribution system via the high lift pumps located at the A.J. Brian Pumping Station. 2) Water pumped from the A.J. Brian Pumping Station flows via the distribution piping network directly to the consumer’s residence. To ensure that adequate pressure and an uninterrupted supply of water is available at all times, water is pumped into storage tanks such as the Hanna Tower and the J.F. Cook Reservoir and re-transmission station. 3) Potable water is consumed within an individuals’ residence or business and the subsequent grey or waste water is captured by the wastewater collection system. 4) The combined grey and waste water flows by gravity or is pumped to the Lou Romano Water Reclamation Plant which provides physical treatment of the waste water prior to being returned to the Detroit River.

20072008

Decrease (increase) in current assets: Accounts receivable $ 285 $ (918) Unbilled revenue 148 (1,423) Supplies inventory 102 (176) Deposits and prepaid expenses (360) 20 175 (2,497)Increase in current liabilities: Accounts payable and accrued liabilities 1,895 138

$ 2,070 $ (2,359)



7. Change in non-cash working capital:

The change in non-cash working capital balances is as follows:

8. Pension plan:

The Commission participates in the Ontario Municipal Employees Retirement System (OMERS), a multi-employer plan, on behalf of its employees. The plan is a contributory defined benefit pension plan. The contribution rates are 6.5% for employees earnings below the year’s maximum pensionable earnings and 9.6% thereafter. During 2008, the Commission contributed $455 (2007 – $431) to the Fund.

9. Fair value of financial instruments:

The carrying values of accounts receivable, unbilled revenue, bank indebtedness, accounts payable and accrued liabilities and amounts due from (to) related parties approximate fair value due to the short maturity of these instruments.

The 1991 debentures and sinking fund, having a carrying value of $9,000 (2007 – $9,000) and $4,884 (2007 – $4,390) respectively, have an estimated fair value of $10,840 (2007 – $10,889) and $6,213 (2007 – $5,060) respectively, based on market prices for similar debt and investments.

The 1992 debentures, having a carrying value of $10,888 (2007 – $11,384) has an estimated fair value of $11,283 (2007 – $11,323) based on market prices for similar debt.

The 2002 debentures, having a carrying value of $11,419 (2007 – $11,941), has an estimated fair value of $11,897 (2007 – $11,956) based on market prices for similar debt.

The Commission earns its revenue from a broad base of customers located principally in Windsor. One commercial customer represented 10% of total reported revenues in 2008 (2007 – 12%).

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Under Ontario Reg. 170/03 of the Safe Drinking Water Act (SDWA), WUC met all of the requirements to ensure that approved water treatment equipment, as specified in the facility certificate of approval, was provided and in operation whenever water was being supplied for potable use throughout 2008. WUC was fully compliant with equip-ment operation procedural requirements, using only certified operators to carry out system operations.

Below is a schematic of the overall treatment train for the A.H. Weeks treatment facility.

Ensuring Safe, Reliable Delivery of Potable Water

WUC met and surpassed water sampling and equipment checks required for chlorine residual testing, including frequency, testing and recording protocols. The regular collec-tion and analyses of samples were carried out by an appropriately certified individual in compliance with legislated regulations.

Chemical Sampling and Testing

WUC surpassed legislated requirements for annual testing of inorganics and lead through quarterly testing for both.

Testing was also conducted for trihalomethanes, nitrates and nitrites on a quarterly basis.

Reporting Adverse Test Results and Other Problems

Of the 37 adverse incidents reported in 2008, 61% were due to service line and watermain breaks - largely attributable to aging infrastructure. WUC remains commit-ted to the rehabilitation of Windsor's aging infrastructure and has committed $13M towards watermain renewal and infrastructure projects for 2009.

A. H. Weeks Water Treatment Plant(In thousands of dollars)Year ended December 31, 2008


9. Fair value of financial instruments (continued):

Financial assets held by the Commission expose it to credit risk. As at December 31, 2008, 37% of accounts receivable were made up of amounts due from two commercial customers, each of which individually represented more than 10% of total accounts receivable (2007 - 22%). The Commission is satisfied that these amounts do not represent a significant credit risk.

10. Capital management:

In managing capital, the Commission focuses on liquid resources available for operations. The organization’s objective is to have sufficient liquid resources to continue operating despite adverse financial events and to provide it with the flexibility to take advantage of opportunities that will advance its purposes. The need for sufficient liquid resources is considered in the monitoring of cash flows and actual operating results. As at December 31, 2008, the Commission has met its objective of having sufficient liquid resources to meet its current obligations.

11. Contingencies:

The Commission is periodically subject to lawsuits in which it is the defendant. In the opinion of management, the ultimate resolution of any current lawsuit would not have a material effect on the financial position of the Commission.

12. Commitments:

At year end the Commission is committed to capital projects of approximately $4,500 to be completed during fiscal 2009.

13. Segmented information:

For 2008, the Commission has two reportable business segments; water treatment and distribution and district energy. Each segment represents a strategic business unit of the Commission offering distinct products and services and requiring different technology and marketing strategies.

FROMRIVER

CONTACTTANKS

RAPIDMIX

FLOCCULATION SETTLING AND THICKENING

RAPID SAND FILTERS

CHLORINEFLUORIDE

CHLORINEFLUORIDE

CLEARWELLSTORAGE

CLEARWELLSTORAGE

BACKWASHPUMPS

AIR BLOWERS

CHLORINE CHLORINE

BACKWASH STORAGE

STORMSEWER

POLYMERPOLYMER

POLYMER

CENTRIFUGESBACKWASH TREATMENT

TO R

ES

ER

VO

IR

CO2

OZONE

OZONE

CALCIUMTHIOSULFATE

CALCIUMTHIOSULFATE

POLYMER

ALVM

INLETCHANNEL

3

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The Windsor Utilities Commission’s water treatment facilities employs screening, pre-chlorination (on an as-needed basis), pH adjustment (utilizing CO2), primary disin-fection (utilizing ozone), coagulation, flocculation, sedimentation, dual-media filtration with post chlorination and fluoridation to treat raw water obtained from the Detroit River. The water treatment plant also treats sedimentation sludge and backwash water utilizing coagulation, flocculation and sedimentation followed by centrifugal dewatering, with the residuals being shipped to landfill for disposal.

Treated water from the plant is routed to an on-site reservoir and subsequently pumped into the distribution system from two pumping stations.

In 2008 Windsor Utilities Commission produced 56,870 mega litres (ML) or in other words 56,870,000 cubic metres (CM) of potable water of which:• 22% was non-revenue water (maintenance, flushing, watermain breaks, unauthorized use of water, seasonal services, fire fighting)• 63% was delivered to the citizens of the City of Windsor • 7% to the Town of LaSalle • 8% to the Town of Tecumseh.

A remote reservoir and pumping station provides a re-chlorination facility (using sodium hypochlorite) to provide system pressure and flow to the south-west portion of the City, while a centrally located water tower provides pressure and flow control to the downtown core.

The drinking water system is monitored at various locations, both at the water treat-ment plant and pumping stations as well as throughout the transmission system via an operating control system (SCADA - Supervisory Control and Data Acquisition.)

Water Treatment

2008 WINDSOR TREATED WATER BREAKDOWN


Revenue $ 43,106 $ 9,303 $ 52,409

Cost of water production and services 5,178 8,492 13,670 37,928 811 38,739

Operating (income) expenses: Transmission and distribution maintenance 4,457 – 4,457 Other operating expenses (income) 16,048 (42) 16,006 Other operating income (1,895) – (1,895) 18,610 (42) 18,568


Amortization 5,082 387 5,469Interest expense - long-term 2,383 – 2,383Interest expense - other 115 – 115Interest income - related parties (143) 102 (41)

Income before undernoted 11,881 364 12,245

Impairment of District Energy systems – (3,000) (3,000)

Income (loss) for the year $ 11,881 $ (2,636) $ 9,245

Segment assets $ 157,411 $ 6,539 $ 163,950

2008





Windsor 63%Non-RevenueWater 22%

Wholesale15%

2

ANNUAL REPORT 2008

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. Throughout 2008, the Windsor Utilities Commission continued to allocate resources and streamline procedures to provide dependable delivery of the highest quality potable water to the residents, businesses and institutions within the City of Windsor, as well as the municipalities of Tecumseh and LaSalle.

Windsor is one of the fortunate communities to boast a top of the line treatment facility – in fact it is one of the leading edge utilities in Ontario. This is due in part to a team of dedicated professionals who monitor every process in detail, 24 hours a day, 7 days a week, but more importantly it has one of the industry leading solutions for purifying water – OZONE. As a purifier, OZONE is regarded as one of the best for water treat-ment.

Aside from ensuring the safe and reliable delivery of water, the Windsor Utilities Com-mission also provides district heating and cooling to several buildings in the downtown core of the City of Windsor.

The 2008 Windsor Utilities Commission Annual Report has been approved by our Com-missioners and reflects the progress made in meeting strategic initiatives surrounding the rehabilitation of aging infrastructure as recommended by the 2007 Water System Asset Management and Financial Plans report (prepared by Earth Tech Canada Inc. in association with Watson & Associates Economists Ltd.).

The City of Windsor has been a voluntary member of the Great Lakes and St. Law-rence Cities Initiative (GLSLCI) since 2007. The GLSLCI is a bi-national coalition of mayors and other local officials who work actively with federal, state and provincial governments to advance the protection and restoration of the Great Lakes and the St. Lawrence River. Water conservation efforts are an important part of this commitment to protect and restore the Great Lakes and St. Lawrence River. Windsor is among 30 cities who voluntarily work towards a 15% reduction in total water consumption below those water consumption levels recorded in 2000. This will take place over the coming years with re-evaluation to take place in 2015.

WUC’s ability to meet and surpass legislated requirements with respect to water qual-ity is the direct result of the outstanding dedication and commitment of all WUC staff.

Meeting Our Commitments


Revenue $ 35,966 $ 9,475 $ 45,441

Cost of water production and services 5,186 8,326 13,512 30,780 1,149 31,929

Operating (income) expenses: Transmission and distribution maintenance 4,624 – 4,624 Other operating expenses 14,343 454 14,797 Other operating income (1,022) – (1,022) 17,945 454 18,399


Amortization 4,875 382 5,257Interest expense - long-term 2,438 – 2,438Interest expense - other 226 – 226Interest income - related parties (132) 198 66

Income for the year $ 5,428 $ 115 $ 5,543

Segment assets $ 148,424 $ 10,056 $ 158,480

2007





14. Future accounting changes:

The CICA has issued two new standards, CICA 3862: Financial Instruments – Disclosures and CICA 3863: Financial Instruments – Presentation, which enhance the abilities of users of financial statements to evaluate the significance of financial instruments to an entity, related exposures and the management of these risks. These sections become effective January 1, 2009 and will require expanded disclosure in the notes to the financial statements.

Ken Lewenza Jr.Chairman of Windsor Utilities Commission

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ANNUAL REPORT 2008

WUC

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Ken Lewenza Jr. City Councillor, Ward 4 Chairman of Windsor Utilities Commission

Eddie Francis, LL.B. Mayor, City of Windsor Commissioner

James Drummond, P.Eng. Golder Associates Commissioner

Loretta Stoyka, B.A., LL.B. Senior Counsel, Miller, Canfield, Paddock & Stone, P.L.C. CommissionerChair of Windsor Utilities Commission Governance Committee

George Sandala Vice-President (ret'd), TD Bank Financial GroupVice-Chair of Windsor Utilities CommissionChair of Windsor Utilities Commission Audit & Finance Committee

Ron Jones City Councillor, Ward 2 Commissioner

Bill Marra City Councillor, Ward 4 Commissioner

Rocco Lucente, P.Eng. President, R. Lucente Engineering Inc. Commissioner

Karen Behune Plunkett Brand Development ConsultantCommissioner

WUC Commissioners

John WladarskiJohn Stuart

Victoria ZuberDavid Melnyk

Norbert PoggioGarry Rossi

Veronica Friesen

General Manager

Chief Operating Officer

Vice-President Finance & Chief Financial Officer

Director, Operations

Director, Engineering

Director, Water Production

Director, District Energy Windsor

Senior Management Team

Windsor Utilities Commission 787 Ouellette Avenue, P. O. Box 1625, Stn. "A" Windsor, ON N9A 5T7 Tel: 519.255.2727

Rhodes Drive Operating Centre 4545 Rhodes Drive, P. O. Box 1625, Stn. "A" Windsor, ON N8W 5T1 Tel: 519.251-7300

A. H. Weeks Water Treatment Plant 3665 Wyandotte St. East, Windsor, ON N8Y 1G4 Tel: 519.251.0925

For more information on the Windsor Utilities Commission, please visit www.wuc.on.ca

© 2008 Windsor Utilities Commission (WUC)

ANNUAL REPORT 2008

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