Vancouver City Council |
CITY OF VANCOUVER
ADMINISTRATIVE REPORT
Date:
November 6, 2003
Author:
Christie Wong
Phone No.:
604-873-7086
RTS No.:
03677
CC File No.:
1755
Meeting Date:
December 2, 2003
TO:
Standing Committee on Transportation and Traffic
FROM:
General Manager of Engineering Services and General Manager of Corporate Services
SUBJECT:
Establishment of 2004 Sewer Rates
RECOMMENDATION
A. THAT 2004 sanitary sewer user fees be set as per Appendix 1.
B. THAT 2004 public sewer connection fees be set as per Appendix 2.
C. THAT Council approve an increase in the annual fee for utility manhole drains, contaminated site ground water, and ship wastewater disposal fees as presented in Appendix 3.
D. THAT the Director of Legal Services be instructed to bring forward for enactment such amendments to the Sewer and Watercourse By-law as are required to implement Recommendations A, B, and C of this Report.
GENERAL MANAGER'S COMMENTS
The General Manager of Engineering Services and General Manager of Corporate Services RECOMMEND approval of A, B, C and D.
COUNCIL POLICY
Sanitary sewer user fees and public sewer connection fees are reviewed annually by Council to establish the following year’s rates.
Council policy is 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 revised sanitary sewer user fees and public sewer connection fees for 2004, and to recommend approval of revisions to utility manhole drain, contaminated site groundwater, and ship wastewater disposal fees to ensure full cost recovery for these services.
BACKGROUND
The City sewer system has two main components: the sanitary system collects wastewater from homes and business, while the storm system handles surface run off from properties in the City. The system delivers sanitary liquid waste to the treatment facilities operated by the Greater Vancouver Sewerage and Drainage District (GVS&DD).
The City recovers the costs of sewer system services, including regional treatment costs, through two vehicles. Costs of the sanitary sewer system have been recovered through Sewer Utility user fees since July 1, 2000, using water consumption as the proxy for consumption. Currently, about 49% of sewer system costs are recovered on this basis, either in the form of flat fees (residential properties) or metered fees (properties with water meters). The balance of the system costs, comprising infrastructure of costs of sanitary sewer system and the entire storm sewer component are more closely related to lot size than consumption and Council currently has not extended user fees to these costs. As a result, the balance of the system costs, about 51%, are recovered through the general purposes tax levy. However, a report on moving to a full sewer utility will be coming to Council in the near future.
DISCUSSION
1. 2003 Sewer Utility Status
It is projected that the Sewer Utility will have a surplus in 2003 of $710,000, or 2.3% of total revenues. This surplus is attributed to higher than expected BOD/TSS/Flow revenues ($308,000), higher metered sewer revenues due to higher than expected water usage ($ 338,000), and an increase to the number of flat rated dwelling units due to growth ($64,000). In accordance with past practice, the surplus will be transferred to the Sewer Stabilization Reserve which currently has a balance of $3.2 million.
2. 2004 Sewer Budget and Rates
The City’s sewer costs consist of two major cost components: GVS&DD levies and City costs. The preliminary requisition from the GVS&DD indicates that their levies for Vancouver will increase by 2.1% in 2004. 2004 City operating costs are based on projected inflation and other adjustments in maintenance budgets, and projected debt service costs related to capital program. Adjustments in maintenance budgets are attributed to increase in funding for pro-active property connection maintenance to reduce basement flooding and an increase in funding for maintaining the street drainage system to minimize street flooding. Overall City costs are anticipated to increase by 3.8%.
The combined GVS&DD levy and City cost increases result in a projected 2.8% increase over 2003 budget levels.
Table 1 summarizes the 2004 operating budget projection for the sewer utility with comparative information for 2003.
Table 1 – 2004 Operating Budget Projection
Description
2003 Budget
2004 Forecast
Increase (decrease)
% Change
(I) GVS&DD Levies
City Debt Servicing Costs
City Operating costs
(II) Total City Costs
Total Sewer Costs (I) + (II)
Sewer Costs allocated to:
(a) BOD/TSS/Flow Charge
(b) Sewer Fees
(c) General Tax Levies
Total Cost Recovery
$36,004,400
$20,604,000
$5,454,600
$26,058,600
$62,063,000
$971,000
$29,597,000
$31,495,000
$62,063,000
$36,755,500
$20,911,600
$6,141,700
$27,053,300
$63,808,800
$1,240,000
$30,314,300
$32,254,500
$63,808,800
$751,100
$307,600
$687,100
$994,700
$1,745,800
$269,000
$717,300
$759,500
$1,745,800
2.1%
1.5%
12.6%
3.8%
2.8%
27.7%
2.4%
2.4%
2.8%
Based on the 2004 operating budget summarized above and on other factors that affect sewer user fees, including BOD/TSS/Flow treatment costs, overall and metered water consumption, and the projected number of residential dwelling units over which costs are allocated, key 2003 sewer fees are shown in Table 2 below. A full listing of 2003 sewer fees is detailed in Appendix 1.
Table 2 – 2004 Sewer Rates
Description
2003 Rates
2004 Rates
Inc (Dec)
% Change
Metered rate per unit:
Non metered (flat) rate:
Single Family Dwelling
Extra Unit
Duplex (each unit)
Vacant Lot
$0.946
$152
$53
$102
$86
$0.955
$157
$55
$106
$89
$0.009
$5
$2
$4
$3
1.0%
3.3%
3.8%
3.9%
3.5%
The higher percentage increase in the non metered (flat) rates compared to the metered rate is mainly due to the rounding of flat rates up to the nearest dollar.
3. Public Sewer Connection Rates for 2004
Connections to the City’s sewer system (public sewer connections) are provided by the City through a cost-recovery program. Under the City Building By-law, new developments are required to pay for the renewal of the sewer and water connections servicing their property. Fees for this program are adjusted annually to reflect costs required to provide the services. Staff estimate that an increase of 4% will be required in 2004 to cover general inflation of items such as wages, materials and equipment rental costs.
4. Adjustment of Miscellaneous Sewer Fees
Fees for various services are reviewed on a regular basis and reported to Council as required. This is to ensure that inflationary increases are properly reflected in the fees and that full cost recovery is achieved.
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, in many cases the utility companies have constructed drains to the City sewer system. Where these drains are connected to a City sanitary or combined sanitary/storm sewer, the City charges an annual fee of $156 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. 2003 revenue from these fees is expected to be about $295,000.
The manhole drain fee was last reviewed in 2002 and since then the overall program cost to maintain these services has increased by about 12%. This increase is mainly driven by GVS&DD treatment costs, which account for 90% of the program. Staff therefore recommends an increase in the manhole drain fee from $156 to $175 to reflect this inflation. This increase is expected to add annual revenue of approximately $24,400.
b. Contaminated Site Groundwater Drainage and Ship Wastewater Disposal Fee
Several contaminated sites in Vancouver, typically gas stations or industrial lands, are remediated each year. As part of this work, ground water is often captured, treated and discharged into the City sewer. The City also accepts cruise ship wastewater into the sewer. Currently, these dischargers pay a fee of 60 cents per cubic metre. Projected revenue from these sources is about $35,000 annually.
This fee was last reviewed in 2002 and since then sewer treatment costs have increased by more than 12%. This increase is mainly due to the increase in GVS&DD treatment costs which account for 90% of the program. A unit rate increase of this fee from 60 cents to 67 cents is therefore recommended to offset the increase in treatment costs. This fee increase is anticipated to add annual revenue of approximately $4,000.
* * * * *
APPENDIX 1
2004 SEWER RATES
Description
2003 Rates
Recommended Rates - 2004
Metered Rates:
a. Waste Discharge Permit User Rate
b. Metered Property Rate
Non Metered (flat rate):
Single Family Dwelling
Single Family with suite
Duplex (per dwelling unit)
2 Services, 1 Lot
3 Services, 1 Lot
4 Services, 1 Lot
Parking Lot/ Garden
Vacant lot
Turned Off, 1 Service
Turned Off, 2 Services
Turned Off, 3 Services
$0.07287 / unit
$0.946 / unit
$152
$205
$102
$304
$456
$608
$86
$86
$86
$86
$86
$0.08464 / unit
$0.955 / unit
$157
$212
$106
$314
$471
$628
$89
$89
$89
$89
$89
APPENDIX 2
2004 SEWER CONNECTION RATES
Description
2003 Fee
Recommended
Fee – 2004
Public Sewer Connection for One and Two Family Dwellings
$5,258
$5,468
Public Sewer Connection for other than One and Two Family Dwellings:
4 inch/100 mm diameter
6 inch/150 mm diameter
8 inch/200 mm diameter
10 inch/250 mm diameter
12 inch/300 mm diameter
15 inch/375 mm diameter
$6,869
$8,290
$9,378
$10,820
$12,294
$13,747
$7,144
$8,622
$9,753
$11,253
$12,786
$14,297
Connections greater than 15 inch/375 mm diameter plus variable costs pursuant to Section 2.7(2) of Sewer and watercourse By-law
$13,347
$14,297
New Fittings - Twin Sewer
New Fittings - Single Sewer
$2,562
$1,129
$2,664
$1,174
Inspection Fee for Connection to a Public Sewer
$178
$185
APPENDIX 3
ADJUSTMENT OF MISCELLANEOUS SEWER FEES
Description
Current Rates
Recommended Rates - 2004
a) Discharges by Utilities per manhole connected
b) Discharge of contaminated groundwater
c) Disposal of ship waste water
$156/year
$0.60/m3
$0.60/m3
$175/year
$0.67/m3
$0.67/m3
* * * * *