Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services

SUBJECT:

Vancouver Landfill Capital Projects Financing

 

RECOMMENDATIONS

POLICY

Expenditures from reserves require Council Authorization.

On May 3, 1994, Council agreed to support the Regional Solid Waste Management Plan, which included requirements to upgrade the Vancouver Landfill.

On January 12, 1993, Council set a minimum balance of $10,000,000 for the Solid Waste Capital Reserve to fund future Landfill expenditures.

Consultants awards exceeding $30,000 require Council authorization.

PURPOSE

The purpose of this report is to recommend the implementation of a series of capital projects at the Landfill. The report also recommends increasing the minimum balance of the Solid Waste Capital Reserve from $10,000,000 to $30,000,000 to ensure the City can meet it long term obligations with respect to closure and post-closure care at the Landfill.

SUMMARY

This reports recommends the implementation of a series of capital projects at the Vancouver Landfill in Delta. The projects are recommendations of previous engineering studies regarding the future development of the Vancouver Landfill and are necessary to meet the requirements of the Landfill's Ministry of Environment Lands and Parks Operational Certificate.

The projects recommended in this report include: extension of the Landfill's water line, upgrades to the leachate collection system and construction of the next phase of the landfill gas collection system. The total estimated cost of the projects is $3,805,000.

The expected impacts on the Solid Waste Utility of the proposed capital works is an additional cost of approximately $1 per single family household commencing in 2002.

The report recommends that Golder Associates be retained at a cost of $169,000 plus GST to provide engineering services for the leachate collection system upgrades.

The expected long-term costs for closure and post-closure care at the Landfill are estimated at approximately $40,000,000 in 2001 dollars, of which the City's share is approximately $35,000,000. The Solid Waste Capital Reserve currently has a balance of approximately $30,000,000. The report recommends that the minimum balance of the Reserve be increased from its current level of $10,000,000 (set by Council in 1993) to $30,000,000 to ensure that the City can meet future closure and post closure care costs for the Landfill. The minimum balance would be reviewed every five years.

BACKGROUND

The City of Vancouver owns and operates the Vancouver Landfill in Delta. On September 21, 1999, Vancouver and Delta reached an agreement (the Delta Agreement) on the longterm operation of the Landfill. From an engineering perspective, the most important component of the Delta Agreement was that it laid out the parameters for the future development of the Landfill. The footprint of the landfill will be restricted to the existing footprint of approximately 225 hectares, and the height of the Landfill will increase from its current height of approximately 15 metres to up to a maximum of 39 metres.

Approximately 300 hectares of land that is surplus to the City's needs for landfill purposes will be conveyed to Delta. This represents about 50% of the entire Landfill area. Transfer of the lands is subject to an agreement with the GVRD, the issuing of an Operational Certificate (OC) for the Landfill by the Ministry of Environment Lands and Parks (MELP), and approval of the Landfill's Design and Operations Plan by the MELP. On March 8, 2001, MELP issued the Landfill OC which includes approval of the Design and Operations Plan.

Finalizing the Delta Agreement allowed the City to initiate a series of studies and construction projects to plan for the future development of the Landfill. The work was also necessary to meet the requirements of the Landfill's OC. The studies and construction projects include:

Study

Council Approval

Value

Design and Operations Plan Study

March 29, 1999

$115,000

Leachate Upgrades Study

March 29, 1999

$182,000

Landfill Gas System Expansion and Beneficial Use

July 19, 1999

$5,400,000

The Design and Operations Plan developed a strategy for filling the Landfill for the site's remaining life and provided estimates for closure and post-closure costs for the Landfill. The Leachate Upgrades study developed a plan for upgrading the leachate collection system at the Landfill. The upgrades were developed based on previous work that determined that the leachate collection system is effective at preventing the release of leachate into the environment, but that in certain areas of the site improvements were possible.

The Landfill Gas System Expansion and Beneficial Use project is a two phased project. The first phase involves expanding the gas collection system onto areas of the Landfill that have been filled since 1990. The second phase involves working with a private partner to develop a beneficial use for the gas. Potential uses include direct use in either a cement kiln or greenhouse, electricity generation or alternatively scrubbing and compression of the gas for powering vehicles. Expansion of the gas collection system is now complete and the selection of a partner to develop beneficial use of the landfill gas is underway.

The Design and Operations Plan and Leachate Upgrades studies were both completed in2000. With the completion of these studies, Vancouver has now met all of the requirements imposed by the MELP with respect to the Landfill as part of their approval of the 1995 Regional Solid Waste Management Plan.

This report seeks Council authority to proceed with the construction of infrastructure recommended in the Design and Operations Plan and Leachate Upgrades studies. The report also estimates long term capital requirements, reviews the status of the Solid Waste Capital Reserve (Reserve) and projects funding requirements for the Reserve.

DISCUSSION

A series of capital expenditures were recommended by the consultants that developed the Design and Operations Plan and Leachate Upgrades studies. The complete list of items plus proposed implementation dates are provided in Table 1. An item by item description follows.

Water Line Extension

A water line was installed at the Landfill in the 1980s. The line extends about 800 metres from the site entrance. Now that the future footprint of the Landfill is fixed, we propose extending the line along the southern perimeter of the site. The water will be used for fire protection and for dust control. The line may be extended all of the way to the east edge of the property to provide redundancy and to improve system pressure at the east end of the site. The estimated cost of the line is $700,000.

The City currently relies on onsite water trucks for fire protection at the Landfill. With the extension of the water line, water trucks will still be relied on as they are able to provide immediate response to a fire anywhere in the Landfill. The advantage of installing a fixed water line is that in the event of a fire, in addition to on-site water trucks, we will also be able to use the Delta Fire Department to help fight the fire. Fire Department personnel are able to deliver large quantities of water to a fire, but only if they are able to hook up to a water line. The onboard storage capacity for a fire truck is as low as 1500 litres. In the event of a major landfill fire, the water supply requirements would be in the order of 10,000 litres per minute. In addition to the City's consultant recommending the extension of the site water line, Delta's Fire Department also recommends extending the water line the full length of the site.

An extension of the water line will meet the water supply requirements at the Landfill for the duration of the life of the Landfill. Based on an anticipated 40-50 year lifespan for the Landfill, the annual cost of the water supply will be approximately $50,000 per year. The cost of a single major out-of-control fire would be several million dollars without taking into account costs associated with air pollution and the negative impact on the operation of the Landfill. Installing a water line will significantly reduce the potential for a landfill fire tobecome out-of-control.

Leachate Collection System Upgrades

Various studies over the years have shown that the City's leachate collection and containment system is effective in preventing offsite migration of leachate. The system relies on parallel ditches around the Landfill. The internal ditch conveys leachate to a pump station which pumps the leachate to Annacis Island Sewage Treatment Plant. The external ditch collects clean surface water from outside of the Landfill. The internal ditch is maintained lower than the external ditch to prevent leachate from flowing outward. Recent studies have shown that particularly during summer months, it is difficult to maintain the internal ditch lower than the external ditch because the ditches tend to dry up. To rectify this problem, it is proposed that the internal ditch system be lowered by lowering the inlet to the pump station and by regrading the ditches.

Regrading the leachate collection ditches will also result in the creation of additional volume to provide contingency storage for leachate. This capacity would be required in the event of a pump station failure or alternatively if Delta restricts the amount of leachate that Vancouver can pump into Delta's forcemain during storm events. The existing storage capacity will be determined and additional capacity developed as required.

A second major proposed improvement is straightening the leachate and drainage ditches in the area south of the Landfill's composting facility. The ditches jog north around a sand drying area. The sand drying area is no longer necessary. By routing the ditches through this area, the flow path and head loss can be reduced, and future landfill space can be conserved.

The Landfill's internal drainage ditches would also be cleared and regraded to improve site drainage.

A budget estimate has been provided to install an additional pump station to pump clean water from the landfill dredge pond or alternatively from a drainage ditch east of the Landfill to prevent the clean water ditch from drying out during summer. The necessity of the pump station will be determined during the project and a pump station would only be installed if it is considered necessary to protect groundwater systems. Other options will also be investigated.

The estimated cost of these improvements is $1,350,000.

The City Engineer has received a proposal from Golder Associates to provide the engineering services to undertake the leachate collection system upgrades. The cost of retaining Golder would be $169,000 plus GST and is included in the total project budget.

Golder Associates along with two other local engineering firms submitted proposals to complete the first phase of the Leachate Collection System Upgrades project. The other two companies that submitted proposals were selected to complete the first phase of the Leachate Collection System Upgrades project and the Design and Operations Plan study. Selecting Golder Associates to complete this work would allow us to distribute the engineering work among several local companies with expertise in landfill environmental engineering. Selecting Golder also provides an opportunity to review the conclusions of the first phase of the project and build on the conclusions developed during that phase. Golder's proposed price to complete the work is within the budget estimate developed as part of first phase of the project and is considered good value.

Intermediate Landfill Gas Collection System

Previous landfill gas collection systems at the Landfill have been vertical systems that are drilled into the landfill once filling is completed in a particular area. With the increase in the future height of the Landfill it is proposed that for the eastern-most phase of the Landfill, a horizontal intermediate system be installed on top of the third refuse lift prior to installing subsequent lifts of refuse. Installing an intermediate system will allow recovery of gas in the eastern-most phase as early as possible, increasing the amount of gas available for beneficial use, minimizing the potential for off-site odours east of the Landfill, and minimizing greenhouse gas emissions. In the last two years, since we started filling the very eastern landfill cell, we have had numerous odour complaints from neighbours east of the Landfill.

Construction of the system is expected to begin in 2002. At this time it is proposed that funding be allocated for the construction of the system to allow engineering work to begin in 2001. The total estimated cost of the system is $1,750,000.

Table 1: Vancouver Landfill Capital Requirements

     

Item

Cost

Construction Date

Water Line Extension

$700,000

2002

Leachate Collection System Upgrades

    

- Pump Station Inlet Lowering

$150,000

2001

- Ditch Regrading

$140,000

2001

- Clear and Regrade Interior Ditches

$75,000

2001

- Straighten Ditch

$200,000

2001

- Weirs and Transducers

$ 30,000

2001

- Additional Pump Station

$360,000

2002

- Engineering

$175,000

2001

- Contingency

$225,000

  

Landfill Gas System Construction

$1,750,000

2002

     

Total

$3,805,000

  

Long Term Capital Requirements/Solid Waste Capital Reserve

As part of the Design and Operations Plan study, the City's consultants predicted future capital and operating costs for landfill closure and post-closure. The majority of these costs are associated with infrastructure such as low permeability final cover and landfill gas collection infrastructure.

Future filling of the Landfill is expected to occur over approximately 40-50 years in nine distinct phases. Each phase will be filled to capacity and closed prior to proceeding to the next phase. Filling the Landfill in phases allows early installation of final cover systems and gas collection systems minimizing the environmental impact of the Landfill.

The City has developed a contingency plan in the event that the Landfill is required to close prior to reaching ultimate capacity. Under that scenario total closure and post-closure costs are anticipated to be approximately equal to the costs based on closure at capacity, but the majority of the costs would occur within the next 15 years.

The total estimated closure and post-closure care requirements of the Landfill are estimated to cost approximately $40,000,000 in 2001 dollars. Vancouver's portion of the closure and post-closure care costs is approximately 85% of the total, or approximately $35,000,000. The GVRD will be responsible for the remaining costs.

The level of certainty of the closure and post-closure care estimates is low because they are expected to occur over up to 75 years. Therefore, it is recommended that the City take a conservative approach to ensuring sufficient funding is available to fund the current liabilities. The first major expenditures for closure and post-closure are expected within the next five years. At that time, the City will be required to close the western-most 40 hectares of the Landfill. Total closure costs for that area are estimated to be up to $10,000,000.

The Solid Waste Capital Reserve was set up primarily to fund future Landfill costs. The Reserve has been accumulated through the difference between the Regional Tipping Fee (currently $65 per tonne) and the actual cost of operating the Landfill and the Vancouver South Transfer Station. Interest revenues on loans is also applied to the Reserve. By agreement, Vancouver keeps surplus revenues for commercial waste originating in Vancouver. The Solid Waste Utility is charged the actual disposal cost for residential garbage rather than the Regional Tipping Fee. In 2000, the actual cost of operating the Vancouver Landfill and Vancouver South Transfer Station was $52 per tonne (including all royalties and surcharges). The net contribution to the Reserve is currently approximately $1,000,000 per year excluding interest income.

Most of the Reserve balance was accumulated in the 1980s and early 1990s when the actual disposal cost was significantly lower than the Regional Tipping Fee and commercial garbage quantities were higher than they are currently. The cost of disposal has increased substantially in the last 10 years due to reductions in waste quantities through increased recycling and increased environmental costs for items such as leachate management.

In 1993 Council passed a resolution setting a minimum balance of $10,000,000 for the Reserve to fund future landfill capital expenditures. The Reserve currently sits at approximately $30,000,000.

The Landfill's Operational Certificate requires that the City maintain a reserve sufficient to meet the closure and post-closure care requirements for the Landfill. To meet the City's obligations with respect to financial security it is proposed that the minimum balance of the Reserve be increased from $10,000,000 to $30,000,000. The actual balance of the Reserve is expected to fluctuate in the $30,000,000 to $40,000,000 range as each of the landfill phases is closed.

The minimum Reserve balance should be reviewed every five years. In the event that the Reserve balance exceeds future Landfill requirements, surplus funds could be reallocated for non-Landfill purposes.

FINANCIAL IMPLICATIONS

This report proposes a series of expenditures to carry out the recommendations of the Design and Operations Plan and Leachate Upgrades studies. The total estimated costs of these expenditures is $3,805,000. It is proposed that these expenditures be funded with a loan from the Solid Waste Capital Reserve with repayment by Landfill users through the Burns Bog Rate. Financing for the loan will be on terms acceptable to the Director of Finance at market interest rates. It is anticipated that the loan would be repaid over approximately 10 years. The annual cost of repayment would be approximately $520,000. The additional cost to the Solid Waste Utility would be approximately $1 per household and would begin in 2002.

ENVIRONMENTAL IMPLICATIONS

The improvements proposed in this report are aimed at minimizing the environmental impacts of the Vancouver Landfill. With these and other improvements already underway such as the expansion of the landfill gas collection system and beneficial use of the landfill gas, the Vancouver Landfill will continue to meet all environmental requirements. The Landfill will therefore continue to provide cost-effective management of municipal solid waste with minimal environmental impact.

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