REPORT TO THE CHIEF ADMINISTRATIVE OFFICER FROM THE DEVELOPMENT AND ENGINEERING SERVICES DEPARTMENT
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1 October 19, 2016 REPORT TO THE CHIEF ADMINISTRATIVE OFFICER FROM THE DEVELOPMENT AND ENGINEERING SERVICES DEPARTMENT ON APPLICATIONS TO THE CLEAN WATER AND WASTEWATER FUND PURPOSE To seek Council's authorization to prepare and submit two applications to the Clean Water and Wastewater Fund (CWWF) program, and to receive Council's commitment to contribute the municipal share of the eligible project costs and all of the ineligible costs. SUMMARY The Governments of Canada and British Columbia are investing up to $373.6 million under the CWWF program to support infrastructure projects in communities across the province. The federal government will contribute $225.1 million and the provincial government will contribute $148.5 million to the total program funds. Administration reviewed the program's requirements and has identified several projects that appear to fit the program's eligible project categories and criteria. Administration recommends that the following two capital projects be put forward for funding: Tranquille Road Sanitary Gravity Main (912109, , and ) - valued at $14.75 million, currently funded from sewer levies, Development Cost Charges (DCCs), and borrowing; and Juniper Creek Bank Stability (938110) - valued at $2.1 million, currently funded from general taxation. The program application process requires a Council resolution or bylaw committing the proponent to contribute its share of the eligible project costs and all of the ineligible costs. The resolution or bylaw must identify the source of the proponent's share of the project's costs. RECOMMENDATION: That Council: a) Support the Tranquille Road Sanitary Gravity Main project (Capital Project Nos , , and ) and: i) authorize Administration to submit a grant funding application for the project, funded through the Clean Water and Wastewater Fund, as the project could not proceed without program funding;
2 Page 2 ii) commit to contributing $2,507,500 (17% of $14.75 million), to be funded through general taxation, borrowing, sewer levies, and/or Development Cost Charges, which will advance the project to the next two fiscal years; b) Support the Juniper Creek Bank Stability project (Capital Project No ) and: i) authorize Administration to submit a grant funding application for the project, funded through the Clean Water and Wastewater Fund, as the project could not proceed without program funding; ii) commit to contributing $357,000 (17% of $2.1 million), to be funded through general taxation, borrowing, and/or Development Cost Charges, which will advance the project to the next two fiscal years. COUNCIL POLICY Council Goals and Objectives in the Council Strategic Plan includes: Infrastructure - Invest in the long-term financial stability of our assets and improve the overall infrastructure standards of the City DISCUSSION Inventory infrastructure and develop criteria to evaluate and identify gaps in maintenance and funding, with a particular emphasis on stormwater infrastructure. Continue to lobby higher levels of government for financial support and grants for municipal infrastructure. The Governments of Canada and British Columbia are investing up to $373.6 million under the CWWF program to support infrastructure projects in communities across the province. The federal government will contribute $225.1 million and the provincial government will contribute $148.5 million to the total program funds. The CWWF will help accelerate short-term local government investments, while supporting the rehabilitation of water, wastewater, and stormwater infrastructure and the planning and design of future facilities and upgrades to existing systems. It is expected that there will be more projects that qualify for funding than there are program funds available. Consequently, eligible projects will be ranked according to the extent to which they meet the program's objectives and the eligibility criteria.
3 Page 3 The program objectives are: Increased Capacity or Lifespan of the Asset (Economic Growth); Improved Environmental Outcomes (Clean Environment); and Enhanced Service (Building Stronger Communities). The eligibility project categories are: Drinking Water; Wastewater; and Stormwater. Municipalities may submit two applications. The applications may be for two capital projects or one capital project and one planning project. The submission deadline for the applications is November 23, Eligible costs include those incurred after April 1, 2016, and prior to March 31, This program offers funding up to a maximum of 83% of the total eligible project costs, where 50% is contributed by the Government of Canada and 33% is contributed by the Government of British Columbia. The remaining eligible project costs and all of the ineligible project costs are the responsibility of the applicant. Applications must include a Council resolution or bylaw committing the proponent to contribute its share of the eligible project costs and all of the ineligible costs. The resolution/bylaw must identify the source of the proponent's share of the project costs. Additional details on the program can be found in the Canada-British Columbia Clean Water and Wastewater Fund Program Guide ("Attachment A"). Administration reviewed the program requirements and has identified several projects that fit the program's eligible project categories and criteria. Drinking Water Project Twin Valleyview Reservoir (911327) This project is valued at $3.6 million and is currently funded from DCCs, water levies, and borrowing. Additional water reservoir storage is recommended for the Valleyview PZ 399 m water distribution zone in order to meet the demands of existing use, as well as future development. This additional storage will improve system hydraulics and fire flow for future development, particularly in the eastern half of the Valleyview zone. It will also serve to provide additional storage for attenuation/buffering during peak demand periods (such as evening irrigation). The new reservoir will be constructed approximately 2 km east of the existing reservoir, which is located immediately west of the Valleyview Arena. Predesign work was completed in Construction is proposed for 2019, but it could be accelerated to 2018 to meet CWWF program requirements.
4 Page 4 Wastewater Projects North Primary Sewer Gravity Main Upgrade ( Oversizing and ) This project is valued at $4.3 million and is currently funded from sewer levies, DCCs, and borrowing. The 2014 CCTV and sonar survey indicated that the existing gravity main on Tranquille Road requires immediate attention due to poor pipe condition. Council approved a project to replace the sanitary gravity main from the North Primary Sewer Lift Station (near the Kamloops Airport) to Crestline Street and Tranquille Road. The best long-term value can be obtained if the work includes upsizing the new gravity main from a 900 mm main to a 1,050 mm main and abandoning the old main, which would remove the need to reline the main in the future. This option incorporates capacity increases. The Class A estimate for the work (installing a larger pipe and not relining the existing pipe) is $4.3 million, which includes a 10% contingency. Detailed design is complete, and the project is ready for tender and construction. Although work on this project has already begun, eligible costs include those dating back to April 1, Tranquille Road Sanitary Main Upgrade - Phase 2 (912346) This project is valued at $10.45 million and is currently funded from sewer levies, DCCs, and borrowing. The 2014 CCTV and sonar survey indicated that the existing gravity main on Tranquille Road between Ridgeview Terrace and 12th Street requires immediate attention due to poor pipe condition. Upgrading the pipe would also add extra capacity and redundancy to the existing system to accommodate future growth. The project includes an upgrade of 1,720 m of 675 mm diameter pipe to a 900 mm diameter pipe. Construction is proposed for 2020 due to funding constraints, but it could be accelerated to 2018 to meet CWWF program requirements. Stormwater Projects Juniper Creek Bank Stability (938110) This project is valued at $2.1 million and is currently funded from general taxation. Juniper Creek is adjacent to Barnhartvale Road and suffers from erosion and bank stability concerns. Due to the creek's proximity to Barnhartvale Road, the stability of the roadway is also affected. The active erosion adds to the silt loading in the Thompson River. Designs have been completed. Construction is proposed for 2021 due to funding constraints, but it could be accelerated to 2018 to meet CWWF program requirements. Springhill Creek Projects (938602, , and ) This project is valued at $2.33 million and is currently funded from DCCs and general taxation. Springhill Creek serves as the major drainage corridor for Upper Sahali and a significant portion of Aberdeen. Historically, development of those neighbourhoods utilized a peak conveyance strategy to manage stormwater, which has manifested in downstream erosion issues with the natural corridor. The 2014 rain event induced massive erosion with the Springhill Creek corridor in which spot repairs of the major erosion sites were completed. There are remaining sections of the channel requiring erosion protection works to support adequate conveyance of existing flows and those resulting from future development. Construction is proposed for 2018, 2019, and 2025 due to funding constraints, but it could all be accelerated to 2018 to meet CWWF program requirements.
5 Page 5 Peterson Creek Downtown Upgrade (938612, planning only) This project is valued at $100,000 and is currently funded from DCCs and general taxation. As it goes through downtown Kamloops, Peterson Creek is contained within an aging system of concrete channels that are immediately adjacent to residential dwellings. The channel is not uniform, but is highly variable, and it does not have sufficient depth in many locations to contain the peak flows that occur. As a result, many of the dwellings along the channel will be prone to flooding when peak flows overtop the channel. Improvements to this corridor are supported in the City Centre Plan. The total project costs could easily exceed $10 million; however, initial options analysis, feasibility, and predesign are required first and would fit within the CWWF program as a planning project. Administration recommends that the following two capital projects be put forward for funding: Tranquille Road Sanitary Gravity Main (912109, , and ) - combines the projects listed above into one application with a net value at $14.75 million, currently funded from sewer levies, DCCs, and borrowing; and Juniper Creek Bank Stability - valued at $2.1 million, currently funded from general taxation. These projects are recommended because they are important City infrastructure priorities and they best meet the CWWF program's requirements, thus maximizing the potential for success. During the process of preparing the application, staff may adjust the project scope slightly to better fit within the program objectives. For instance, the large sanitary project will likely be split into phases or may be scaled back to better fit with the program construction deadline of March 31, ALTERNATIVES/OPTIONS Council may choose to put forth a funding application for any of the projects discussed in this report; however, the program requirements dictate that only two applications are allowed per proponent. A resolution for the alternate project is required if Council chooses another project. The resolution should authorize Administration to prepare and submit an application, commit the City to its share of the project value, and identify how grant funding would benefit the project. FINANCIAL IMPLICATIONS This program offers funding up to a maximum of 83% of the total eligible project costs, where 50% is contributed by the Government of Canada and 33% is contributed by the Government of British Columbia. The remaining eligible project costs and all of the ineligible project costs are the responsibility of the applicant. The total potential grant funding if both proposed projects are successful is just under $14 million. The grant funding would accelerate completion of the projects and offset impacts to general taxation, borrowing, sewer levies, and/or DCCs. PERSONNEL IMPLICATIONS
6 Page 6 Staff within the Development and Engineering Services Department will be responsible for preparing the application packages and submitting them to the CWWF program by November 23, M. Kwiatkowski, P.Eng. Development and Engineering Services Director Approved for Council Consideration: Concurrence: J. Fretz, P.Eng., Public Works and Utilities Director K. Humphrey, CPA, CA, Finance Director Author: D. Matkowski, P.Eng., Engineering Manager DM/lm/ts Attachment
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