Report
to/Rapport au :
Environment
Committee /
Comité de
l’environnement
and Council /
et au Conseil
April 25, 2012 / Le 25 avril 2012
Submitted
by/Soumis par :
Steve Kanellakos, Deputy City Manager / Directeur municipal adjoint
City Operations / Opérations municipales
Contact
Person/Personne ressource :
Dixon Weir,
General Manager / Directeur général
Environmental
Services / Services environnementaux
(613)
580-2424 x22002, dixon.weir@ottawa.ca
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Ref N°:
ACS2012-COS-ESD-0005 |
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SUBJECT: |
Proposed cost recovery Program for the use of the wastewater system |
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OBJET : |
programme de recouvrement des frais proposé pour l’utilisation du
réseau des eaux usées |
That the Environment Committee recommend Council:
1.
Approve the proposed cost recovery program
for the use of the wastewater system.
2. Approve an amendment to Schedule “B” to
By-law No. 2003-514, regulating the control of discharges to sewers and sewage
works, to replace the existing fee for ‘Water from a source other than the
municipal distribution system” with a conveyance fee of $1.01 per cubic metre
and a treatment fee of $0.63 per cubic metre as calculated in accordance with
Document 1 and subject to review and revision on an annual basis upon approval
by Council of the water and wastewater rate budget.
Que le Comité de
l’environnement recommande au Conseil :
1. d’approuver le programme de recouvrement des frais
proposé pour l’utilisation du réseau des eaux usées;
2. d'approuver
une modification de l'annexe B du Règlement 2003-514, qui régit le contrôle les
déversements vers les égouts et le réseau d'assainissement, afin de remplacer
les droits actuels pour « l'eau en provenance d'une source distincte du
réseau municipal de distribution d'eau » par des frais de transport de
1,01 $ par mètre cube et des frais de traitement de 0,63 $ par mètre
cube, frais calculés conformément au document 1 et assujettis annuellement à un
examen et à une révision après approbation par le Conseil du budget des
redevances des services d'eau et d'égouts.
Background
At its meeting of February 22, 2012, as part of its consideration of the 2012 Water and Wastewater
Rate-supported budget, Council approved the following:
That staff report back to Committee and Council in May with any
recommended changes to the current program needed to ensure consistency in fee
calculations and that all costs associated with conveying and processing these
wastes are recovered through fees.
DISCUSSION
Current
Cost Recovery Program
The scope of this report is to review
the current cost recovery program for wastewater services and discharges to the
City’s wastewater collection system that do not come from the City’s drinking
water system. This report will not review the fees outlined in Schedule B of
the Sewer Use By-law No. 2003-514. The
only fee being reviewed in Schedule B of the Sewer Use By-Law as part of this
report is the “Water from a source other than a municipal distribution system”
Fee.
The review of the cost recovery
mechanism for services has revealed inconsistencies in application and charges
for services rendered. The current cost
recovery program, outside the usual water/sewer rate, does not accurately
reflect the full cost of using the wastewater system. The fees and charges have in the past been
determined through service agreements between the users and the City. Some
agreements currently only reflect the cost of conveyance, others only a partial
treatment cost, and some reflect both costs. The current cost recovery program
is inconsistent.
Proposed Cost Recovery Program
The
proposed program will move the cost recovery approach from an agreement-based
approach to a consistent service-based system.
The service-based cost structure will include separate fees for the two
services provided: conveyance and treatment. The conveyance fee is the cost to
transport the wastewater through the linear system, including contribution to
capital. Similarly, the treatment fee is the cost for the wastewater to be
treated at ROPEC, including an allowance for capital costs. The amount of these fees is to be determined
as a percentage of the Wastewater fund expenditures allocated to the collection
and treatment systems, as calculated in Document 1.
There
are many benefits to the new fee structure.
It is simpler, transparent and ensures consistency and fairness. The users pay only for the service(s) that
they use. This new program will more
accurately reflect the actual costs of conveyance and treatment in the system.
Similarly to other corporate programs, every customer will be treated equally,
including internal City customers like Drinking Water Services.
Outlined
below are the five (5) categories for the new service-based cost recovery program.
The new program covers every possible way of using the system:
1.
No Fee – Water that is of ground water quality and
is hauled to ROPEC for disposal would not be charged a fee for treatment since
no treatment of this water would be required. This scenario is not expected to
happen, but conceptually it could.
2.
Conveyance Fee Only – Water that
is of ground water quality does not require treatment, hence the user would
only be required to pay a fee for conveyance through the sewage works. There would be no treatment costs incurred
for this water. Billed only if fee is
>$50. If it is not a one-time
discharge, a running total will be tracked.
3.
Conveyance and Treatment Fee – Water that
is equivalent to domestic wastewater quality (residential, most Industrial, Commercial
and Institutional facilities) would be charged the usual sewer surcharge
rate. This includes water introduced in
the system that does not originate from the municipal distribution system. This rate is designed to capture the
conveyance fee as well as the associated treatment costs. Domestic wastewater is waste that meets the
Sewer Use by-law limits for the parameters treatable at the Robert O. Pickard
Environmental Centre (ROPEC). This scenario is currently utilized for
residential customers and most industrial commercial and institutional
facilities.
4.
Conveyance and Treatment and Over-strength
Fee –
Over-strength is defined as water that has one or more treatable parameter that
exceeds the by-law limits. The sewer
surcharge rate would capture the conveyance fee and treatment fee up to by-law
limits. Any concentration of treatable parameter
above by-law limit is considered over-strength and is subject to an over-strength
charge. The over-strength charge is calculated as a function of the concentration
above by-law limits and the volume treated.
Each treatable parameter above by-law limit will incur a separate fee.
Examples under this scenario include landfill waste discharged to the sanitary
sewer system and water from excavation dewatering with high suspended solid
content.
5.
Hauled Waste Fee – This
scenario has no conveyance fee as this material is hauled directly to ROPEC for
treatment. The treatment fee is
calculated based on the concentrations of contaminants, and the volume
discharged. The Hauled Waste Fee is already in place in Schedule B and will not
be affected by this change in the structure. Examples of waste covered by this
scenario include septic and holding tank waste hauled to ROPEC.
The
treatment fee for the over-strength parameters is based on the cost of
treatment for the specific pollutant concentrations in the waste. These fees
are already identified in the Schedule B of the Sewer Use By-Law and changes to
Schedule B are out of scope for this report.
In 2011, there were approximately 40
agreements that would have been impacted by this new fee structure. The majority of these agreements were for
short-term construction projects and the remaining agreements are for permanent
or long-term discharges. Only four agreements
will see significant increases in annual discharge fees (greater than
$100K). The remainder will see annual
increases less than $16K.
Implementation
New service agreements will be drafted
with the new program. Some existing agreements will need to be terminated,
with the required 30 days notice, and re-issued to reflect the program
changes. Environmental Services will implement and communicate to system users
affected by the change. A
detailed letter outlining the new fee program as well as the implementation
date will be issued to all affected agreement holders. Other City departments and the construction
industry (likely through the National Capital Heavy Construction Association)
will receive a similar notification.
It will take approximately 75 days to
communicate the changes to the affected system users and update and reissue the
existing agreements. The new cost
recovery program should be implemented in early Q4 2012.
This new program will
not affect rural residents. The disposal
fees for holding tanks and septic tanks remains the same as identified in the
Sewer Use by-law. They will be subject to annual increases, as directed by
Council in the Water and Wastewater Rate-Supported budget.
No consultation was
undertaken as part of the development of this report. Affected system
users have been provided a link to the report and advised of the date that it
will be considered by the Environment Committee.
Comments by
the Ward Councillor(s)
This is a City-wide initiative.
LEGAL IMPLICATIONS
There are no legal implications to implementing any of the recommendations in the report.
RISK MANAGEMENT IMPLICATIONS
There are no risk management implications associated
with this report.
This report has no Tax or net 2012 budget implications.
However, a 2012 budget adjustment will be required to reflect the part year
increase in costs to Drinking Water Services and the offsetting increase in
recoveries for Wastewater Services. The impact of these adjustments on the
water rate and sewer surcharge is minimal and will be reflected in the proposed
fees to be included in the 2013 Draft Rate Budget to be tabled later in 2012.
ACCESSIBILITY IMPACTS
There are no accessibility
impacts to implementing any of the recommendations in the report.
Environmental Implications
There are no environmental implications to implementing any of the recommendations
in the report.
Technology
Implications
There
are no technology implications to implementing any of the recommendations in the report.
city strategic plan
This report is linked
to Financial Responsibility priority FS2, to Maintain and enhance the City’s financial position by ensuring
consistency in fee calculations and that all costs associated with conveyance
and processing of these wastes are recovered through the fees by users of the
wastewater system.
Document 1 - Calculation of 2012 Conveyance and
Treatment Fees.
City Clerk and Solicitor Department, in
consultation with Wastewater Services Branch, will prepare and forward approved
by-law amendment to Schedule "B" of the Sewer Use By-law 2003-514 for
enactment by Council.
The
Finance Department will adjust the Drinking Water Services and Wastewater Services
2012 operating budgets for the part-year implications, and the 2013
annualization will be included and reflected in the 2013 Draft Rate Operating
Budget.
Document 1
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CALCULATION OF 2012 CONVEYANCE AND TREATMENT FEES |
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2012 Water Rate per m3 (a) |
$ 1.40 |
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2012 Sewer Surcharge (b) |
117% |
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Equivalent per m3 Sewer Surcharge Rate (a*b=c) |
$ 1.638 |
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CONVEYANCE FEE |
TREATMENT FEE |
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WASTEWATER EXPENDITURES (2012 Budget) |
in millions |
% of Total 2012 Budget |
Portion of Rate |
Allocation of 2012 Budget to Fee |
Portion of
Rate Included in Fee |
Allocation of 2012 Budget to Fee |
Portion of
Rate Included in Fee |
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Wastewater Treatment |
$ 21.41 |
14.9% |
$ 0.244 |
0% |
$ - |
100% |
$ 0.244 |
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Wastewater and Stormwater Collection |
$ 22.90 |
16.0% |
$ 0.261 |
100% |
$ 0.261 |
0% |
$ - |
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Customer Service and Billing |
$ 6.89 |
4.8% |
$ 0.079 |
100% |
$ 0.079 |
0% |
$ - |
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Stormwater Treatment and Drainage |
$ 5.30 |
3.7% |
$ 0.061 |
0% |
$ - |
100% |
$ 0.061 |
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Property Taxes |
$ 1.24 |
0.9% |
$ 0.014 |
0% |
$ -
|
100% |
$ 0.014 |
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Capital and Rehabilitation |
$ 66.10 |
46.1% |
$ 0.755 |
74% |
$ 0.556 |
26% |
$ 0.199 |
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Corporate Services |
$ 15.22 |
10.6% |
$ 0.174 |
50% |
$ 0.087 |
50% |
$ 0.087 |
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Planning and Engineering |
$ 4.42 |
3.1% |
$ 0.050 |
50% |
$ 0.025 |
50% |
$ 0.025 |
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TOTAL WASTEWATER EXPENDITURES (2012 Budget) |
$ 143.48 |
100% |
$ 1.638 |
Total Fee per m3 |
$ 1.01 |
Total Fee per m3 |
$ 0.63 |
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