Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services

SUBJECT:

Adjustment of Fees

 

RECOMMENDATION

GENERAL MANAGER COMMENTS

COUNCIL POLICY

Council established that fees for services are to be set at cost recovery level or at market level in circumstances where City Services compete with the private sector.

PURPOSE

The purpose of this report is to recommend approval of revisions to utility manhole drain, contaminated site groundwater and ship wastewater disposal fees, and sewer and water connection fees to ensure full cost recovery for these services.

BACKGROUND

Engineering charges for various services are reviewed on a regular basis and reported on to Council as required. This is to ensure that inflationary increases are properly reflected in the fees and that full cost recovery is achieved.

PROPOSED ADJUSTMENT OF FEES

As part of the 2002 corporate budget building exercise, Engineering staff reviewed opportunities to lower the department's operating budget funding requirements. Increases in revenues through service fee adjustments were identified as one of the options for improving the current budget position. This report describes the recommended adjustments and the financial implications on the operating budget.

This report also reviews the impact recent fringe benefit cost increases will have on sewer and water public connection cost recovery programs and proposes necessary increases in fees to alleviate the impact.

A. Utility Manhole Drain Fee

Utility companies typically have manholes that allow them access to their underground infrastructure. As infiltrating groundwater may impede access to these manholes, the utility companies construct drains to the City sewer system that keep these manholes continually dry. Where these drains are connected to a City sanitary or combined sanitary/storm sewer, the City charges an annual fee of $100 per manhole drain to recover the cost of conveying, pumping and treating this groundwater. The City does not charge for drains connected to a storm only sewer.

The manhole drain fee has remained at $100 since 1996 while the overall program cost to maintain these services has increased by about 56%. This increase is mainly driven by the major cost component, GVS&DD treatment costs, which account for 90% of the program. This component has increased by about 60% from $20.6 million in 1996 to $32.9 million in 2002. Staff therefore recommend an increase of the manhole drain fee from $100 to $156

to reflect inflationary levels. This increase is expected to add an annual revenue of approximately $103,000 and increase the annual budget of this program from $184,000 to $287,000.

B. Contaminated Site Groundwater Drainage and Ship Wastewater Disposal Fee

Several sites in Vancouver, typically gas stations or industrial lands, are required to pump up and treat contaminated groundwater. Once treated, the water is discharged into a sewer. Groundwater flow volume is measured and billed separately as it is not reflected by City water meter readings. Also, the City accepts disposal of wastewater from the cruise ships into the City's sewer system. Currently, groundwater and cruise ships are charged a volume fee of 50 cents per cubic metre.

This fee was last reviewed in 1999 and since then GVS&DD sewer treatment costs have increased by more than 17%. An unit rate increase of this fee from 50 cents to 60 cents is recommended to offset the increase in treatment costs and better reflect inflationary levels. This fee increase is anticipated to add annual revenue of approximately $18,000 and increase the annual budget of this program from $91,000 to $109,000.

C. Sewer and Water Connection Fees

Sewer and water connection fees are required for all new development in order to provide funding to renew the piping on the City street between the sewer and water mains and building plumbing systems. These fees are reviewed on an annual basis and necessary rate adjustments recommended to Council when sewer and water utility rates are set each fall.

In late February of this year, Finance announced new fringe benefit rates for the 2002 budget year. A 10.3% increase (from 48.5% to 53.5%) was noted in the City's CUPE 1004 fringe benefit rate. This rate increase has a significant impact on connection recovery as labour accounts for about 45% of the total cost to provide the service. This translates into 1.5% of additional cost for each connection job. This increase was unknown to staff at the time the 2002 connection fees were set in November 2001.

In preparation of the November 2001 report to Council which established the 2002 fees, staff undertook a detailed review of the cost recovery status of this program. This review found that this program had not been fully recovering all costs, especially for provision of connections to properties on arterial streets. Unfortunately, at this time the connection program is not in a position to absorb the unexpected fringe benefit increase and achieve full

cost recovery. Therefore, staff recommend that sewer and water connection fees be increased by 1.5% effective immediately. The recommended new sewer and water connection fees are listed in Appendix 1 and Appendix 2 respectively.

FINANCIAL IMPLICATIONS

The utility manhole drain fee and contaminated site groundwater and ship wastewater disposal fee adjustments recommended in this report will add an annual revenue of $103,000 and $18,000 respectively to the operating budget.

The adjustment of connection fees recommended in this report will allow the sewer and water cost recovery programs to absorb the impact of the recent fringe benefit rate increase.

- - - - -

APPENDIX 1

SEWER CONNECTION RATES

Description

Current Fee

Recommended
New Fee

Public Sewer Connection for One and Two Family Dwellings

$5,030

$5,105

Public Sewer Connection for other than One and Two Family Dwellings:

100 mm diameter
150 mm diameter
200 mm diameter
250 mm diameter
300 mm diameter
375 mm diameter

$6,570
$7,930
$8,970
$10,350
$11,760
$13,150

$6,669
$8,049
$9,105
$10,505
$11,936
$13,347

Connections greater than 375 mm diameter plus variable costs pursuant to Section 2.7(2) of Sewer and watercourse By-law

$13,150

$13,347

New Fittings - Twin Sewer
New Fittings - Single Sewer

$2,450
$1,080

$2,487
$1,096

Inspection Fee for Connection to a Public Sewer

$170

$173

APPENDIX 2
WATER CONNECTION AND SERVICE RATES

Description

Current Fee

Recommended
New Fee

Single Family and Duplex Dwellings
20 mm
25 mm
40 mm & 50 mm

Commercial/Industrial/Multi-Family/all others
20 mm
25 mm
40 mm & 50 mm
100 mm
150 mm
200 mm
300 mm

Water Connection Removal Fees
20 mm to 50 mm inclusive
100 mm to 300 mm inclusive

Water Meter Installation Fees (on City Property)
20 mm
25 mm
40 mm & 50 mm
75 mm & 100 mm
150 mm & 200 mm
250 mm & 300 mm

Water Meter Installation Fees (on Private Property)
20 mm
25 mm
40 mm
50 mm
75 mm
100 mm
150 mm
200 mm
250 mm
300 mm

$2,324
$2,418
$2,721

$4,650
$4,840
$5,450
$8,072
$9,984
$10,903
$15,345

$585
$1,754

$1,900
$1,954
$2,020
$7,196
$24,834
$29,793

$239
$253
$253
$361
$558
$558
$623
$721
$939
$939

$2,359
$2,454
$2,762

$4,720
$4,913
$5,532
$8,193
$10,134
$11,067
$15,575

$594
$1,780

$1,929
$1,983
$2,050
$7,304
$25,207
$30,240

$243
$257
$257
$366
$566
$566
$632
$732
$953
$953

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ag020409.htm

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