Capital Project Risks - The capital budget items put forth reflect the best estimate of the capital costs required to complete the various projects under the capital plan. As with all budgets these represent management's best estimates of the expected capital costs; however as with all capital projects there is always the risk that costs may increase due to unforeseen issues that could not have been reasonably predicted. The likelihood of this risk materializing is possible; the likely impact of the consequences is moderate. Therefore, this should be considered a moderate risk. Mitigation for this risk is handled through ongoing review of capital projects and is managed through the Capital Variance report and from other sewer projects in a surplus position. In addition, there is Sewer Surcharge reserve fund that can be used as a funding source, if necessary.

Risks from Possible Reduction in Capital Program – Consideration may be given to the possibility of reducing the Capital Budget component of the Sewer Surcharge. Any consideration to such options should take into account the significant negative impacts on the infrastructure and could result in an inability to further combat basement flooding. There could also be a resultant impact on the ability to maintain the existing sewers, thereby reducing the pace of eliminating combined or leaky sewers. The likelihood of this risk materializing is unlikely; the likely impact of the consequences is high. Therefore, this should be considered a moderate risk. Mitigation for this risk comes from the development of the Asset Management Plan that will, on an ongoing basis, assist with the prioritization of capital projects.

Risks from Depleting the Sewer Surcharge Reserve – Options may be considered to reduce / deplete the sewer surcharge reserve in order to maintain, or even reduce, the sewer surcharge rates. This would leave the Corporation without an adequate dedicated reserve to fund any shortfalls. This is especially risky given the historical trend of declining revenues due to decreasing water consumption. As well, this would compromise the Corporation's ability to fund the City's share of projects funded by provincial grants that are announced periodically for sewer/wastewater purposes. It is important to note that $3.5M from the Sewer Surcharge Reserve was used in 2017 to help fund the Basement Flooding Prevention Subsidy Program. This would not have been possible without an appropriate reserve fund. The likelihood of this risk materializing is possible; the likely impact of the consequences is moderate. Therefore, this should be considered a moderate risk. Mitigation for this risk comes from the development of a five year forecast to anticipate future pressures.

Climate Change Risks - Future climate change projections for Windsor predict an increase in annual rainfall, with more rain falling during most seasons with the exception of summer were a long-term decrease is predicted. The recent modelling of the region's rainfall intensity, duration and frequency (IDF) curves also indicates increases in storm intensities over the long-term. Annual precipitation has a direct impact on treatment costs. As well, the severity of the storms may also increase the risk that additional flooding may occur in our area. The likelihood of this risk materializing is possible; the likely impact of the consequences is moderate. Therefore, this should be considered a moderate risk. Mitigation for this risk comes from the establishment of a budget that is based on historical averages and trends and monitoring through the quarterly variance reporting. In addition, there is the Sewer Surcharge reserve fund, if necessary. It should also be noted that, as the City converts more of the existing combined sewers to