HomeMy WebLinkAboutFCS-16-152 - Clean Water and WasteWater Fund
REPORT TO: Finance and Corporate Services
DATE OF MEETING: October 3, 2016
SUBMITTED BY: Dan Chapman, Deputy CAO
519-741-2200 Ext 7437
PREPARED BY: Ryan Hagey, Director of Financial Planning
519-741-2200 Ext 7353
WARD(S) INVOLVED: All
DATE OF REPORT: September 23, 2016
REPORT NO.: FCS-16-152
SUBJECT: Clean Water and Wastewater Fund (CWWF) Intake 1
______________________________________________________________________
RECOMMENDATION:
That the following project applications be approved to be submitted forconsideration
under the Clean Water and Wastewater Fund (CWWF):
Alice Avenue/Karn Street Full Reconstruction
Hugo Crescent/Lorne Avenue Full Reconstruction
BACKGROUND:
On March 22 2016, the Federal Budget proposed $11.9 billion toward infrastructure over the
next five years - starting immediately. The budget also stated that the government will
implement a plan to invest more than $120 billion in infrastructure over 10 years. The budget
puts this plan into action with an immediate down payment on this plan, including:
$3.4 billion over three years to upgrade and improve public transit systems across
Canada (Public Transit Infrastructure Fund or PTIF);
$5.0 billion over five years for investments in water, wastewater and green infrastructure
projects across Canada (Clean Water and Wastewater Fund or CWWF); and
$3.4 billion over five years for social infrastructure, including affordable housing.
The Clean Water and Wastewater Fund (CWWF) is a Federal program designed to accelerate
short-term community investments, while supporting the rehabilitation and modernization of
drinking water, wastewater and stormwater infrastructure, and the planning and design of future
facilities and upgrades to existing systems.
Through the CWWF, the Federal government is providing $569.5 million dollars in Federal
infrastructure funding to cost-share:
Rehabilitation projects;
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New construction projects;
Optimization initiatives; and
Planning and design work.
For Intake 1 of the CWWF, the Federal government will fund up to 50% of the total eligible
costs, while the Province of Ontario has agreed to fund up to 25% of total eligible costs (with the
municipality funding the remaining 25% of eligible costs and any ineligible costs).
Unlike several previous funding programs, Intake 1 of CWWF is not a competitive process. On
September 14, 2016, the Federal/Provincial governments notified qualifying recipients of the
maximum funding available to them and now require recipients to nominate projects for funding
through a prescribed submission process. The deadline for project submissions and all
October 31, 2016
supporting documentation is. Applicants will be notified if the projects listed
January 2017
in the submission has been accepted for funding in early (estimated). To be
March 31, 2018
considered for funding projects must be complete by .
There is no maximum number of projects that may be submitted, but the funding available is
capped for each recipient. Eligible project costs are limited to third party costs and include
environmental assessment costs, engineering costs, feasibility studies, project management
costs, construction costs and contingency costs. Cost must be incurred between April 1, 2016
and March 31, 2018.
In addition, CWWF Intake 1 work must be incremental. Applicants are required to attest, in
conjunction with their project application, that the project would not otherwise have taken place
in 2016/17 or 2017/18; and/or the project would not have been undertaken without funding from
the CWWF. This would include projects included 2016 municipal budgets where projects require
additional funding to proceed and/or accelerate.
CWWF Intake 1 is a one-time intake with no guarantee of future funding. Although the Federal
government articulated a multi-year infrastructure investment plan, there are no details or
specific commitments regarding future intakes for CWWF.
The remainder of this report outlines the funding available to the City of Kitchener and
recommends projects for submission for CWWF Intake 1.
REPORT:
On September 14, 2016, the City of Kitchener received a letter notifying the City would receive
approximately $3.6M of funding (combined Federal and Provincial) for eligible projects under
CWWF Intake 1. This means the City could complete $4.8M of work while only investing $1.2M
of City funds as shown in the table below.
Table 1: Cost Sharing for CWWF Intake 1
Funding Source AmountShare
City of Kitchener $1.2M25%
CWWF Intake 1 – Provincial Government $1.2M25%
CWWF Intake 1 – Federal Government $2.4M50%
Maximum Eligible Project Costs $4.8M100%
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Staff have reviewed the eligibility requirements for CWWF Intake 1 and are recommending two
full road reconstruction projects. These two projects meet the incrementality requirements of
the program (they would not have otherwise taken place in 2017 without CWWF funding), and
can both be completed prior to the March 2018 deadline. Further, staff have contacted
Infrastructure Ontario (the administering agency for CWWF Intake 1) and have received oral
verification the two projects appear to qualify for CWWF funding. The projects recommended
for CWWF Intake 1 are listed in the table below.
Table 2: Projects Recommended for CWWF Intake 1
Total
ProjectProjectIncrementality
Cost
Alice Avenue/Karn
Street$2,449,551Project accelerated from 2018.
Full Reconstruction
Hugo Crescent/Lorne Higher costs than originally budgeted based on detailed
Avenue $4,408,300Engineering analysis.
Full Reconstruction Project would otherwise be deferred.
TOTAL $6,857,851
The total costs for these two projects ($6.8M) exceeds the maximum eligible project costs for
cost sharing as outlined in Table 1 ($4.8M). Staff have confirmed this is acceptable with
Infrastructure Ontario who recognize it is highly unlikely any municipality would be able to find
projects that perfectly match available funding. There is sufficient funding in the budget for
Kitchener’s portion of cost sharing as well as costs that exceed the maximum eligible project
costs.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Foundation: Efficient and Effective Government
Goal: Financial Management
Strategic Direction: Strive for competitive, rational and affordable taxation levels
FINANCIAL IMPLICATIONS:
Under a program such as CWWF, the City of Kitchener is able to leverage City funding to do
more work than if the City were required to completely finance the project on its own. The City
stands to receive up to $3.6M in funding through the program. But as the work must be
incremental, there is no expected impact to utility rates.
As noted above, the City has sufficient funding to contribute its share of CWWF eligible costs as
well as any costs in excess of the maximum eligible project costs.
COMMUNITY ENGAGEMENT:
INFORM – A copy of this report will be posted to the City’s Council agenda webpage.
ACKNOWLEDGED BY:
Dan Chapman, Deputy CAO (Finance and Corporate Services)
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