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HomeMy WebLinkAboutINS-15-069 - Cross Border Servicing Agreement - Township of Woolwich Staff Rport I r rc'.�► t .R Infrastructure Services Department wmkitchener.ca REPORT TO: Community & Infrastructure Services Committee DATE OF MEETING: October 19, 2015 SUBMITTED BY: Steve Allen, Manager, Acting Director of Engineering, 519-741- 2200 x7584 PREPARED BY: Steve Allen, Manager, Acting Director of Engineering WARD(S) INVOLVED: All DATE OF REPORT: October 8, 2015 REPORT NO.: INS-15-069 SUBJECT: Cross Border Servicing Agreement - Township of Woolwich RECOMMENDATION: THAT the Mayor and Clerk be authorized to enter into an amended Cross Border Agreement with the Township of Woolwich, satisfactory to the City Solicitor, to address allocation of additional capacity of 25% of the Shirley Drive Sewage Pumping Station capacity to the Township of Woolwich, as well as the operational, maintenance and other requirements. BACKGROUND: The City of Kitchener owns and operates the sanitary sewage pumping station (SPS) on Shirley Drive near the Grand River. The SPS was constructed in 2005 to service development lands on Shirley Drive as well as existing Kitchener properties previously on septic systems. In addition to these Kitchener areas, the station was designed to accommodate sanitary flow from Breslau in the Township of Woolwich. Through a current Cross Border Servicing Agreement (CBSA), the Township is entitled to 25% of the capacity of this station. The Township paid the City of Kitchener 25% of the capital cost of the Shirley Drive SPS at the time of construction in return for this capacity. A council approved minor amendment to the original agreement in 2013 provided the Township with more flexibility in the allocation of capacity within Woolwich Township. As a result of increasing development within Breslau, the Township is seeking additional capacity at the Shirley Drive SPS and has requested that the City of Kitchener increase their allocation to 50%. REPORT: The Township of Woolwich contributed to the original cost of the Shirley Drive SPS and in return currently receives 25% of the capacity of the station. This arrangement is governed by a CBSA. As a result of increasing development within Breslau, the ***This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. 1 - 1 Township is seeking additional capacity at the Shirley Drive SPS and has requested that the City of Kitchener increase their allocation to 50%. Staff from Engineering, Planning and Economic Development reviewed individual land parcels within the catchment area to forecast future needs and development potential. Based on this analysis, Kitchener will require approximately 43% of the ultimate capacity of the Shirley Drive SPS. A re-assignment of additional capacity to Woolwich will not negatively affect Kitchener's potential for development within the catchment area. This analysis uses fairly conservative estimates on future developments and allows for a buffer on the capacity. Financial Aspects of the CBSA Through the assignment of additional capacity to the Township of Woolwich, Woolwich is essentially purchasing a share of Kitchener's original capacity. As a result, Kitchener will be compensated accordingly. The Township originally contributed $1,187,006.40 to acquire 25% of the station's capacity. In order to acquire an additional 25% from Kitchener, the Township will pay an additional $1,505,411.13. This is 25% of the original cost (2003 dollars) adjusted for 2015 pricing. Under the CBSA Woolwich pays Kitchener for sewage processing and system maintenance based on the volume of sewage handled through the SPS. The rate charged to Woolwich includes Kitchener's costs for treatment of Woolwich sewage (rates set by the Region), and maintenance costs for the conveyance of Woolwich sewage through Kitchener's system, and station maintenance. The agreement will require Woolwich to remit a Sanitary Servicing Fee for any new connection to their sanitary system, within the SPS drainage area. This fee is equivalent to the sanitary portion of Kitchener's DC charge and will be allocated to the city-wide DC reserve. The Shirley Drive SPS is currently not built to its full design capacity of 378 I/s and upgrades will be required to meet this capacity in the future. These upgrades include a storage tank (located at the site of the Manchester Sewage Lift Station) and pump upgrades. The cost of this work will be 100% DC eligible and paid for from the city-wide DC reserve to which Woolwich will be contributing for each new connection as noted above. Conclusion The ultimate capacity of the Shirley Drive SPS (378 I/s) is currently divided between Kitchener (75%) and Woolwich (25%). Based on a review of Kitchener's catchment area Kitchener will require approximately 43% of the ultimate capacity of the station. 1 - 2 Kitchener, therefore has the ability to allocate additional sanitary capacity Woolwich's Breslau Settlement Area via the Shirley Drive Sewage Pumping Station. The transfer of an additional 25% of its allotted ultimate capacity to Woolwich will result in the capacity of the pumping station and forcemain being equally divided (50/50) between Kitchener and Woolwich. A re-assignment of additional capacity to Woolwich will not negatively affect Kitchener's potential for development within the catchment area. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: The Operational Plan relates to the Foundation Plan — Efficient and Effective Government — Asset Management, Dependable Services by permitting Woolwich to unused capacity within the Kitchener sanitary network. FINANCIAL IMPLICATIONS: In return for allocating this additional 25% capacity of the Shirley Drive SPS to the Township of Woolwich, the City of Kitchener will receive a payment from Woolwich equal to 25% of the original cost of the SPS adjusted to 2015 prices. The funding model for the station was originally 75% Sanitary Utility and 25% Development Charges, therefore the payment from Woolwich will be assigned to the Sanitary Utility Reserve Fund and the Development Charges Reserve Fund in the same ratio. The CBSA amendment will preserve payments from Woolwich to Kitchener for sewage processing, system maintenance and a DC for future upgrades to the station. 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: Dev Tyagi, Deputy CAO, Infrastructure Services 1 - 3