Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

City Council

FROM:

General Manager of Engineering Services
General Manager of Community Services
General Manager of Corporate Services

SUBJECT:

2001 Sewer BOD/TSS/Flow Charges for Permitted Industries

RECOMMENDATION

GENERAL MANAGER COMMENTS

COUNCIL POLICY

On March 9, 2000, the Standing Committee on City Services and Budgets approved the rate structure and implementation schedule for Sewer BOD/TSS/Flow charges payable by permitted industries, beginning with 50% recovery of the annual Sewer BOD/TSS/Flow amounts in 2000 and 100% recovery starting in 2001.

PURPOSE

The purpose of this report is to recommend the 2001 Sewer BOD/TSS/Flow rates to be charged to permitted industries and to recommend the necessary amendment to the Sewer and Watercourse By-Law, effective July 1, 2001.

BACKGROUND

There are currently sixty waste discharge permit users (or permitted industrial users) operating within the City of Vancouver.

The City implemented Sewer BOD/TSS/Flow direct charges to permitted industrial users on July 1, 2000. Sewer BOD/TSS/Flow charges are structured to ensure that the sanitary component of regional (GVS&DD) sewer costs are passed on directly to the permitted industrial users in proportion to the quality and quantity of effluent each user discharges into the system. In calendar year 2001, with 100% implementation, approximately four percent of the $31.5 million GVS&DD sewer costs is expected to be recovered through Sewer BOD/TSS/Flow direct charges to permitted industrial users.

In addition to these charges for GVS&DD treatment costs, permitted industrial users also pay for City sanitary sewage costs based on their flow discharge. The 2001 sanitary sewer rate for the permitted industrial users was established along with other sanitary sewer rates in November 2000.

DISCUSSION

The introduction of Sewer BOD/TSS/Flow Direct Charges has gone reasonably well. Billing of the Sewer BOD/TSS/Flow charges to the permitted industries has been carried out as planned and the year 2000 revenues are at target levels. All permittees have paid the Sewer BOD/TSS/Flow charges to date with the exception of one. Staff have taken steps to collect this outstanding receivable.

Establishment of 2001 Sewer BOD/TSS/Flow Charges

Sewer BOD/TSS/Flow charges are calculated by applying the usage-based rates and capacity utilization rates to the measurement of the applicable industrial wastewater components for each permitted industrial user (based on data and measurements from each user's operations in the prior calendar year). The recommended 2001 rates are listed in Appendix 1 beside the current 2000 rates.

Based on the GVS&DD unit rates and the industrial wastewater data collected, Staff estimate that $1.12 million will be recovered from the permitted industrial users in 2001 through Sewer BOD/TSS/Flow direct charges. This amount is about $120,000 less than the annualized 2000 Sewer BOD/TSS/Flow charges of $1.24 million.

The changes in unit rates from 2000 to 2001 are very minimal for most of the six effluent components with the exception of the flow capacity rate which has a 7.2% increase. This is because the 25th percentile volume used for capacity rate setting through the treatment plants decreased in 2000 because of less rainfall than in 1999. As most costs, such as capital debt servicing, are fixed, lower flows at the plant result in a higher cost per unit of flow.

Our review of the 2000 permitted industrial users's operations indicated that although significant efforts were made by most of the heavy wastewater dischargers throughout the year to reduce the volume and loadings of their wastewater, a number of the major industries such as Molsons Breweries and several food processing operators have seen an increase in their annual BOD, TSS and flow discharges. This is due to an increase in business production in the latter half of 2000 within these industries.

Since we rely on GVS&DD unit rates and measured 2000 flow and loadings from each industry for the 2001 Sewer BOD/TSS/Flow charges calculation, we were unable to estimate exact fee recoveries in November, 2000 when our 2001 operating budget and sewer user fees were established. Our estimated recovery of $928,800 is about $191,200 less than the Sewer BOD/TSS/Flow charges that staff now expect ($1,120,000). This projected $191,200 surplus along with any surplus or shortfall in other sewer user fees will be transferred to the Sewer Rate Stabilization Reserve at year end.

Financial Implications

In summary, BOD/TSS/Flow fee recoveries for 2001 are expected to exceed projected revenues by $190,200. This surplus will be allocated to the Sewer Rate Stabilization Reserve.

- - - - -

APPENDIX 1

2001 SEWER BOD/TSS/FLOW RATES

Description

2000 Rates

2001 Rates

Increase (decrease)

I) Usage Charges

BOD
TSS
Flow

II) Capacity Charges

BOD
TSS
Flow

$0.027 / kg
$0.235 / kg
$0.033 /m3

$3.167 / kg / day
$22.987 / kg / day
$28.435 / m3 / day

$0.027 / kg
$0.237 / kg
$0.035 /m3

$3.167 / kg / day
$22.987 / kg / day
$30.478 / m3 / day

No Change
$0.002 / kg
$0.002 /m3

No Change
No Change
$2.043 / m3 / day

* * * * *

ag010626.htm

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