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HomeMy WebLinkAboutDTS-09-167 - Development Charges - Engineering Services Cash FlowREPORT REPORT TO: Councillor B. Vrbanovic, Chair, and Members of the Finance and Corporate Services Committee DATE OF MEETING: November 23, 2009 SUBMITTED BY: Jeff Willmer, General Manager, Development and Technical Services PREPARED BY: C. Hoeger, Financial Assistant, Development and Technical Services WARD(S) INVOLVED: All DATE OF REPORT: November 4, 2009 REPORT NO.: DTS-09-167 SUBJECT: Development Charges - Engineering Services Cash Flow Adjustments RECOMMENDATION: THAT the Development Charges capital project timing adjustments outlined in Table 1 to staff report DTS-09-167 be made to in the 2010-2019 capital forecast to reduce the projected 2010 Engineering Services reserve fund deficit, subject to final budget deliberations BACKGROUND: Staff has reviewed the proposed timing of Engineering Development Charge (DC) funded projects against the cash flow projections within the DC Reserve Fund. The findings of this review are attached to this report, along with recommendations to Council for consideration as part of the capital budget presentation. REPORT: Current projections within the Engineering Services portion of the DC reserve fund indicate that the fund will be in deficit in the amount of $12.8 million by the end of 2010 (contrasted with a projected 2009 ending surplus of $8.0 million). The deficit will be significantly larger if the recent declining trend in development activity persists into 2010. This is compounded by an existing deficit in the Non-Engineering portion of the reserve fund, largely resulting from the construction of Fire Station #7 and the Activa Sportsplex, the costs of which are being recovered through future development charges. Assuming that only 50% of the growth forecast materializes in 2010, the Engineering Services deficit could be as high as $16.6 million and the total deficit could reach $26.2 million. In light of the risks associated with incurring a significant deficit in the DC reserve fund, especially in a period of economic uncertainty, staff has identified the following Engineering projects for adjustment in 2010 to reduce the extent of the deficit: Table 1: Proposed Adjustments (in $000’s) PROJECT NAME 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (306) (312) (318) 306 312 318 Intensification Allowance Borden Greenway Trunk Sewer (139) 139 (2,116) 2,116 Freeport Pumping Station Upgrade (492)492 Pioneer Tower Pumping Station Upgrade (492)492 Falconridge Pumping Station Upgrade Laurel Creek Watercourse (259) Schneider Creek Channel (620) 620 City Share of Subdivisions (255) (260) (265) 780 Blockline Rd. East (5,000) 5,000 Hwy 7 Ext'n - secondary watermain (629) 629 èÍÈÛÐìÊÍÌÍÉ×ØùÔÛÎÕ×É             Forecast Engineering Services Reserve Ending Balance (12,825) (10,898) (12,217) (18,860) (25,647) (22,545) (20,582) (17,080) (11,507) (41,715) Revised Forecast Engineering Services Reserve Ending Balance, if above (2,576) (7,687) (9,286) (16,920) (23,948) (21,102) (19,081) (16,161) (10,551) (40,457) changes made Refer to Appendix “A” for detailed descriptions of each of the projects listed above. The order of the projects is not indicative of relative priority. FINANCIAL IMPLICATIONS: The proposed DC project deferrals will reduce the projected deficit in the reserve fund in 2010 and eliminate the requirement for debt financing in a period of uncertain economic growth. Appendix “A” - 2010 Development Charges Capital Project Scope Documents ACKNOWLEDGED BY: Jeff Willmer, General Manager, Development and Technical Services PROJECT SCOPE REPORT Proram Name:Intensification Allowance g Location:Identified in the DC Background Studies Nature of Work: Existing sewer, water and road infrastructure will be replaced due to additional capacity requirements due to intensification associated within the central neighborhoods area. This work will be typically integrated as part of the City's accelerated infrastructure replacement program. Justification of Work: This account is used to upgrade engineering services due to the intensification within central neighbourhood areas, as identified in the DC background studies. Notes: Due to D/C fund cashflow constraints, funds were re-allocated from 2010, 2011, and 2012 to 2013, 2014, and 2015, respectively. Proram Name:Borden Greenway Trunk Sewer g Location:South of Ottawa Street South to just north of Ottawa Street South Nature of Work: (1) An Environmental Assessment for a new trunk sanitary sewer, (2) The construction of a new trunk sanitary sewer. Justification of Work: The Borden Greenway Trunk Sanitary Sewer for a short section from 46 metres south of Ottawa Street South to a manhole just north of Ottawa Street South must be upgraded in order to accommodate the ultimate flows from areas west of Westmount Road. An Environmental Assessment Study will be required to determine the preferred method of achieving sanitary sewer upgrades. Notes: Awaiting the completion of the city-wide sanitary capacity study. This project has been deferred to 2011. PROJECT SCOPE REPORT Program Name:Freeport Pumping Station Upgrade Location: 3563 KingSt. E. across from the Freeport Hospital Nature of Work: (1) Capacity and infrastructure analysis (2) Environmental Assessment for a sanitary pumping station and force main (3) Construction of a sanitary pumping station and force main. Justification of Work: The City requires that the existing pumping station and infrastructure be evaluated and upgrades determined. An EA will be required to determine the improvements. Notes: The City has completed its capacity and infrastructure analysis, and currently undertaking an Environmental Assessment. Design work is to be completed in 2010 and construction will begin in 2011. Program Name:Pioneer Tower Sanitary Pumping Station Upgrade Location:Pioneer Tower Road Nature of Work: (1) An Environmental Assessment for an upgraded sanitary pumping station, (2) The construction of a sanitary pumping station. Justification of Work: The City requires that the existing pumping station be upgraded to accommodate planned future development. Notes: Due to D/C fund cashflow constraints and no imminent development requirements in the area this project has been deferred from 2010 to 2012. PROJECT SCOPE REPORT Program Name:Falconridge Sanitary Pumping Station Upgrade Location: Falconridge Drive Nature of Work: (1) An Environmental Assessment for an upgraded sanitary pumping station, (2) The construction of a sanitary pumping station. Justification of Work: The Falconridge Sanitary Pumping Station requires upgrades to service future development within the catchment. An Environmental Assessment will be required. Notes: Due to cashflow constraints and no imminent development requirements in the area this project has been deferred from 2010 to 2012. Program Name:Laurel Creek Watercourse Location:Lower Laurel Creek from Bridge Street to City Of Kitchener limits Nature of Work: (1) A revision of an Environmental Assessment for the improvement of the Laurel Creek watercourse, (2) Watercourse improvement. Justification of Work: In 1995, the Grand River Conservation Authority finalized the Slope Stabilization and Erosion Control Class Environmental Assessment for the Lower Laurel Creek between the Grand River and City of Kitchener Municipal boundary. A portion of this creek was upgraded in accordance with this plan. The cost of the remaining areas from just east of Bridge Street to the City Boundary have been estimated so that 90% is applicable to capital costs and 10% is applicable to development charges. Notes: Due to D/C and C/C fund cashflow constraints this project has been deferred from 2019 to 2020. PROJECT SCOPE REPORT Program Name:Schneider Creek Channel Location: Manitou Drive to Hayward Avenue, Balzer Road, Homer Watson Blvd Nature of Work: (1) Environmental Assessment (2) Watercourse work between Manitou and Hayward (3) Watercourse work from Homer Watson to the Grand River. Justification of Work: In 1995 Paragon Engineering Limited finalized the Schneider Creek Remediation Class Environmental Assessment, Environmental Study Report for Schneider Creek between Manitou Drive and Hayward Avenue under the direction of the Grand River Conservation Authority. This Environmental Assessment will have to be updated to reflect current practice for rehabilitating this stream. An estimate for a preferred alternative has been provided, including the installation of new culverts at Balzer Road and the railroad line. It is also proposed to undertake remedial work on the creek from Homer Watson Boulevard to the Grand River due to extensive erosion problems. Notes: EA amendment and detail design to being in 2010. Consturction commencing in 2011. Program Name:City Share of Subdivision Works Location:Various Nature of Work: Possible projects include road widening and the installation of new sidewalks on backlotted arterials. Justification of Work: It has been the practice of the City to set aside monies from the Development Charge Fund for the City's share of works to be done in subdivisions or adjacent thereto. Notes: Due to D/C fund cashflow constraints, funds will be re-allocated from 2009, 2010, and 2011 to 2012, 2013, and 2014, respectively. PROJECT SCOPE REPORT Program Name:Block Line Road East Location: Block Line Road from Homer Watson Boulevard to Courtland Ave Nature of Work: (1) Road extension (2) New bridge construction Justification of Work: It is proposed that Block Line Road be extended from Homer Watson Boulevard to Courtland Avenue. An Environmental Assessment was completed by the City in May 2001 and the first section of road from Homer Watson Boulevard to Hanover Street has been completed. The remaining stretch of road from Hanover Street to Courtland Avenue across Schneider Creek and the Railway Yards requires a bridge. The detailed design of the portion of the road from Hanover to the Hanson Avenue extension has been completed. Notes: The Region is currently working on the design for the LRT, which has delayed design work for Block Line Rd. The construction for Block Line Rd will begin at the end of 2010 with completion scheduled in 2011. Program Name:Highway 7 Extension - Secondary Watermain Location:From Shirley Ave to Bridge Street Nature of Work: The construction of a 300mm diameter watermain, valvues and hydrants, 450mm crossing of Grand River, connections and commissioning. Justification of Work: For security of water supply into the Bridgeport Area a secondary watermain connection is necessary. An additional benefit of this connection will be an increase in water circulation and therefore water quality can easily be maintained. This main is to be installed at the time of the construction of a new Highway 7 Grand River crossing. The main is approximately 1900 metres in length and 300 millimeters in diameter, and it is anticipated that six valves will be needed. Notes: There is no imminent development potential at this time. This has been deferred from 2010 to 2017.