Page: PAGE 110

Authority's Rate Stabilization Reserve will be required. This reserve is used to smooth out any large increases to the municipal Total Waste Management Fee.

The year over year budgeted deficit increase of ($1,461,140) is primarily due to the budgeted loss of revenue from the sale of recyclable material. The Authority, as well as all other Ontario municipalities, began experiencing a loss of revenue in early 2019 due to falling commodity prices. The loss of recycling revenue to the Authority in 2019 was offset by the receipt of contaminated soil material, and associated tipping fee revenue, delivered to the Regional Landfill for disposal.

Recycling commodity prices are not forecasted to recover in the short term and the 2020 budget estimates the full impact of the low commodity prices. Authority Administration has revised the 15 Year Planning Forecast to include lower recycling revenue. Additionally, the forecast includes a conservative estimate of the financial impact of the Province of Ontario's plan to implement Extended Producer Responsibility (EPR) whereby the full cost of the Blue Box Program is transitioned from Ontario municipalities to producers during the period 2023-2025. Currently, municipalities and producers are each responsible for 50% of the net cost of recycling programs.

Further, Authority Administration has advised the Board that any possible changes to the 2023-2025 EPR time frame could result in potential changes to the proposed 4.1% increases in order to achieve a balanced budget for the 2027 budget year.

The following table presents the 2020 budget categorized by program:

Operating Expenditures