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Home My WebLink AboutFCS-15-037 - Building Canada Fund Priority Projects Staff Report rTC.�r R finance and Corporate Services Department www.kitchener.ca REPORT TO: Community and Infrastructure Services Committee DATE OF MEETING: March 9, 2015 SUBMITTED BY: Ryan Hagey, Director of Financial Planning 519-741-2200 x 7353 PREPARED BY: Ryan Hagey, Director of Financial Planning 519-741-2200 x 7353 Dorothy McCabe, Chief of Staff, 519-741-2200 x 7795 WARD(S) INVOLVED: All DATE OF REPORT: February 27, 2015 REPORT NO.: FCS-15-037 SUBJECT: Building Canada Fund Priority Projects RECOMMENDATION: That staff be directed to apply to the New Building Canada Fund for projects in the following priority sequence: • Full Road Reconstruction; • Trenchless Rehabilitation; • Sewage Pumping Station Upgrade; and That the Mayor and Clerk be authorized to execute any and all agreements associated with the New Building Canada Fund, subject to the satisfaction of the City Solicitor; and further That support be given in principle to the submission or application by a third party and/or municipality relating to Two Way All Day GO Rail service. BACKGROUND: On February 13, 2014 the Government of Canada announced details of its 10-year, $53 billion New Building Canada Plan (NBCP). The NBCP is a mix of previously existing programs (e.g. Federal Gas Tax) as well as new funding programs (e.g. New Building Canada Fund). The graphic on the following page shows the various components of the NBCP. The remainder of the report will focus on the New Building Canada Fund. This report is being brought forward now as there are some indications that applications for the New Building Canada Fund may be accepted in the near future, and staff would like clear direction from Council regarding application priorities. ***This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. New Building Canada Plan Components Iu I ilul�l IIIIIIIIIIIIIIII�IIVliiiililli�l iiiill IIIIIIII I liililll�ll r ui.. IIII VIII IIIIIIIIII huuI """' a pp'Iliullilu IIII II II II IIIIIIIIII IIII 111111 111111 II III VIII 11 III IIIIIIIIII VIII IIII IIIIIIII II II II lulu li�i u�i �i i Iluii� uuu mu u i i i i li i i ill� 111 II IIIIIIII IIIIIIIIII IIIIIIIII. . II IIIIIIIIII VIII IIIIIIIIII IIIIIIIII_II I_ II� II° °,IIII°�u''�°�,�°°��I ��° � ° °°°°°-��i� ' IIIIIIII III IIIIIIIII VIII� IIII IIII IIII III VIII IIII luuuul Ililill u�u�ulilill llui iliillliiil iilii lii Illluull llilill u�u�ulilill llui iliillliiil iilii lii The New Building Canada Fund (NBCF) is a significant component of the NBCP, with a value of$14 billion over the next 10 years. The NBCF is an application based funding program that is intended to support infrastructure projects of national, regional and local significance that promote economic growth, job creation and productivity. The NBCF has been structured as follows: National Infrastructure Component (NIC) $4 billion Provincial/Territorial Infrastructure Component (PTIC) $10 billion Total $14 billion The National Infrastructure Component (NIC) supports projects of national significance, that have broad public benefits, and that contribute to Canada's long-term economic growth and prosperity. The NIC is a merit-based application-driven program, and as such there are no pre-determined provincial or territorial allocations. To apply for NIC funding, there is a soft threshold for a minimum project size of$100 million. This threshold is beyond the scope of any project at the City of Kitchener, but may be relevant to a proposal on Two Way All Day GO Rail service. The Provincial/Territorial Infrastructure Component (PTIC) is an allocation-based program that recognizes and supports the important role that provinces, territories, and municipalities play in helping to build Canada's public infrastructure. The $10 billion funding allotment for PTIC is divided into two subcomponents: • National and Regional Projects (PTIC–NRP): includes $9 billion for projects that are nationally and regionally significant, and are predominantly medium and large scale in nature; and • Small Communities Fund (PTIC—SCF): $1 billion for projects in communities with fewer than 100,000 residents through the Small Communities Fund (PTIC- SCF). The PTIC—SCF ensures that small communities can benefit from significant funding supporting The City of Kitchener may qualify for funding from PTIC-NRP and plans to pursue this funding. The first step in the process is to identify projects that may qualify for PTIC- NRP funding and submit them for Initial Review. Initial Review is an assessment of basic eligibility requirements and alignment with the program objectives of the PTIC- NRP. Project proposals are expected to be no more than two pages or a maximum of 1,000 words. A positive Initial Review does not constitute funding approval, but simply indicates that the project is eligible to be considered. The table below outlines the 14 eligible investment categories for PTIC. Some of the categories have criteria that must be met in order to apply. For instance, to apply to the Highways and Major Roads category, certain traffic levels must be met, which are more reflective of regional roads or provincial highways. To provide additional clarity, the table has been organized to show the categories that are eligible to the City of Kitchener on the left, and the categories that are ineligible to the City of Kitchener on the right. Eligible PTIC - . . City of Kitchener Eligible Categories • Highways and Major Roads • Disaster Mitigation Infrastructure • Connectivity and Broadband • Wastewater • Green Energy • Drinking Water • Brownfield Redevelopment *The Innovation category is defined as research and development facilities at post- secondary institutions or research and development office space. REPORT: City Projects Staff have reviewed the City's 10-year capital program for projects that may qualify under each of the eligible categories. Based on staff's review, three types of projects stand out and are recommended to be submitted for PTIC Initial Review. All of these projects relate to the City's aging underground infrastructure which was identified as a main point of concern during the 2015 budget process. Summaries of these types of projects are provided below. Specific projects to submit to the Building Canada Fund will be determined after further consultation with Engineering staff. • Full Road Reconstruction projects replace water, sanitary sewer, and storm sewer infrastructure that is at the end of its useful life. These are the projects funded through the City's Accelerated Infrastructure Replacement Program (AIRP). o Projects include full road reconstruction projects that are in construction phase • Trenchless Rehabilitation projects use a less invasive construction methodology to extend the Iifespan of water and sanitary sewer infrastructure. o Projects include Sanitary Trenchless Rehabilitation and Watermain Trenchless Rehabilitation • Sewage Pumping Station Upgrade projects increase the capacity at existing pumping stations and nearby infrastructure (e.g. forcemains, trunk sewers). This allows further intensification or development, and in some cases, will lift the City's development freeze in the catchment area. o Projects include Freeport Pumping Station and Old Mill Pumping Station By approving the recommendation of this report, Council is approving staff to apply for specific projects in each of the identified categories and execute the necessary agreements if the applications are successful. Two Way All Day GO Rail In addition to the City projects mentioned above, a number of municipalities (Kitchener, Waterloo, Region of Waterloo, Guelph, and Brampton) have come together in the pursuit of Two Way All Day GO rail service to increase the connectivity of their regional economies to the GTA and to each other. This report recommends that Kitchener Council support, in principle, the submission or application by a third party and/or municipality relating to Two Way All Day GO Rail service. With Two-Way, All Day GO rail service, the regional economies along this corridor will create a globally competitive technology environment comparable to Silicon Valley. This will also create an environment that attracts business, encourages employment, helps reduce gridlock and improves both economic productivity and quality of life. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Goal: Financial Management Strategic Direction: Reduce reliance on taxes FINANCIAL IMPLICATIONS: The maximum funding provided by the federal government through the New Building Canada fund is 33.3%. At this point it is unclear if there will be matching funding by the provincial government. Funding for the City project areas noted above (full road reconstruction, sewage pumping station upgrades, and trenchless rehabilitation) is already included in the 2015 Capital Budget. Funding received through the New Building Canada Fund would: • Reduce the City's contribution to these projects, allowing the City to accelerate other infrastructure replacement projects; and/or • Increase the scope of work that could be completed (e.g. more trenchless rehabilitation) COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services)