44028800
To: Finance and Intergovernment Committee
From: Rick Gallilee, Director, Shared Services and Strategic Initiatives, Liquid Waste Services
Date: March 2, 2021 Meeting Date: March 10, 2021
Subject: Alternate Models for Single Sewerage Area Allocation
RECOMMENDATION
That the Finance and Intergovernment Committee receive for information the report dated March 2, 2021, titled “Alternate Models for Single Sewerage Area Allocation”.
EXECUTIVE SUMMARY
The 2019-2022 Board Strategic Plan includes an action to evaluate the implications of moving to a single sewerage area over the long term. A single sewerage area will ensure that costs for the Liquid Waste Services are allocated across GVS&DD members following user-pay principles, improve predictability and reduce volatility of rates and enable the implementation of significant regionally beneficial environmental, climate change and resilience improvements.
While a single sewerage area provides long term benefits, there needs to be consideration of previous cost allocations for treatment plant upgrades and combined sewer elimination. These past practices will make immediate transition to a single sewerage area difficult and a long term staged approach is contemplated. Options for long term staged transition to a single sewerage area will be developed with the assistance and advice of the Regional Engineers and Regional Finance Advisory Committees.
PURPOSE
To outline Metro Vancouver’s goals, principles and areas of focus that will be used in the development and evaluation of implications of single sewerage area models.
BACKGROUND
The 2019-2022 Board Strategic Plan includes an action to “evaluate the implications of moving to a single sewerage area over the long term”. The goals of this action include:
Continue and further develop the user pay principle of cost allocation;
Recognition of the regional benefits realized by improved levels of treatment of wastewater and the allocation of these costs equitably across the GVS&DD’s member jurisdictions;
Ensure that the implementation of regionally and environmentally significant improvements in wastewater management are not restricted by the ability of communities within a single sewerage area to afford these improvements;
Provide improved predictability and reduced volatility of rates;
Improve ability to manage service, operating and capital program risks;
Enable the implementation of alternate rate structures that reflect the impact of the performance of member’s wastewater systems with respect to inflow and infiltration.
5.2
Finance and Intergovernment Committee
Alternate Models for Single Sewerage Area Allocation Finance and Intergovernment Committee Regular Meeting Date: March 10, 2021 Page 2 of 3
The Greater Vancouver Sewerage & Drainage District (GVS&DD) currently consists of four sewerage areas for the purposes of allocating costs for regional wastewater services. The sewerage areas were originally established based on catchments or sewersheds for each of the four original regional wastewater treatment plants (Lions Gate WWTP, Iona Island WWTP, Annacis Island WWTP and Lulu Island WWTP). The catchments for each plant are defined by natural geological boundaries (water bodies) and topography to minimize the long term operating costs of the regional wastewater system through the use of gravity to the greatest degree possible to convey wastewater flows to the WWTPs.
The operating and capital expenditures associated with each of the sewerage areas are allocated to the communities within the catchments associated with each sewerage area as Tier I costs (see Reference).
When secondary treatment was mandated for the WWTPs discharging to the Fraser River, the regional benefit of this was recognized and a second tier of allocation (Tier II) was established to distribute 70% of the costs of the secondary upgrades of the Annacis Island and Lulu Island WWTPs to all communities in the region, with the remaining 30% of costs retained within the applicable sewerage area. This Tier II allocation will also be applied to the secondary upgrade of the regional treatment plants servicing the North Shore and Vancouver Sewerage Areas.
When levels of treatment beyond secondary were recommended for the Northwest Langley WWTP and North Shore WWTP, a third tier of allocation (Tier III) was introduced to allocate 100% of the cost of treatment beyond secondary across all of the member jurisdictions in the GVS&DD, equivalent to a single sewerage area approach.
SINGLE SEWERAGE AREA MODEL DEVELOPMENT
Work will proceed to develop alternate models that could be adopted for a single sewerage area.
The following principles will be included in this work:
Continuity in the cost allocation practices established for the upgrade to secondary treatment for the Fraser and the Lulu Island West Sewerage Areas to be applied to the secondary upgrades for the North Shore and Vancouver Sewerage Areas;
Capital and operating expenditures associated with the elimination of storm water flows into regional sewers from municipal combined sewers will be borne by those municipalities;
Long-term staged transition to a single sewerage area that results in fair and equitable changes to household impacts (no consideration of increasing the number of sewerage areas through this transition is contemplated);
Expansion of Tier III categories of projects that allow the region to make immediate progress on strategically important initiatives including climate change mitigation and adaptation and system resiliency that benefit the whole of the region;
Further advance the adoption of user-pay principles with the addition of charges for wet- weather flows resulting from excessive inflow and infiltration and consideration of combined sewer systems.
The proposed methodology for this work includes a series of studies, guided through workshops by a joint task force made up of representatives from the Regional Engineers Advisory Committee (REAC) and the Regional Finance Advisory Committee (RFAC) to examine options and potential steps for the
Finance and Intergovernment Committee
Alternate Models for Single Sewerage Area Allocation Finance and Intergovernment Committee Regular Meeting Date: March 10, 2021 Page 3 of 3
phased transition to a single sewerage area. These studies will investigate the benefits of various areas of focus including:
Allocation of costs and credits for greenhouse gas mitigation activities and increased resource recovery from wastewater;
Alternate wet-weather cost allocation strategies for separated sewer systems;
Alternate methods for cost allocation in a single sewerage area (population, flow, other cost considerations);
Operating and maintenance cost allocation;
Growth driven infrastructure capital costs including DCC rate harmonization;
Overall strategy options for transition to a single sewerage area.
A parallel and identical report is being provided to the Liquid Waste Committee at its March 11, 2021 meeting.
ALTERNATIVES
This is an information report. No alternatives are presented.
FINANCIAL IMPLICATIONS
Financial implications of the alternate models will be developed as part of this work.
CONCLUSION
The GVS&DD will develop alternate models for Single Sewerage Area cost allocation for consideration by the Board. The existing multiple sewerage area model made sense in the context of the liquid waste management needs of the region at the time it was established. An alternate model may better support the current needs of the region. Current drivers for the region’s liquid waste utility require an approach that allows the region to meet the expected financial demands of actions to address crucial environmental, climate mitigation and adaptation and infrastructure resilience improvements.
The development of alternate sewerage area models will follow user-pay principles that will take into account the performance of municipal systems with respect to stormwater inflow and infiltration, the influence of combined sewers, and past practices to ensure equity and fairness in the allocation of costs. These past practices will make immediate transition to a single sewerage area difficult and a long term staged approach is contemplated. A plan for long-term staged transition to a single sewerage area will be developed.
A parallel and identical report is being provided to the Liquid Waste Committee at its March 11, 2021 meeting.
Reference
Cost Apportionment Bylaw 283, 2014 - Unofficial Consolidation
44028800
Finance and Intergovernment Committee