CITY OF VANCOUVER

ADMINISTRATIVE REPORT

 

Date:

May 21, 2004

 

Author:

Jeff Addis

 

Phone No.:

7353

 

RTS No.:

3502

 

CC File No.:

1755

 

Meeting Date:

June 10, 2004

TO:

Standing Committee on City Services and Budgets

FROM:

General Managers of Engineering Services and Community Services in Consultation with the Sustainability Program Manager

SUBJECT:

Review of Sewer BOD/TSS/Flow Charges for Permitted Industries, Other Source Control Measures, and Establishing 2004 Rates

RECOMMENDATION

A. THAT Biochemical Oxygen Demand/Total Suspended Solids/Flow (BOD/TSS/Flow) rates for permitted industries continue to be established using the same methodology as used in previous years;

B.THAT staff report back by the end of the year on alternatives to the use of food grinders, and educational initiatives to reduce solids discharges to the sewer, with funding of $25,000 to be provided from the Sewer Rate Stabilization Reserve to carry out this work;

C.THAT 2004 BOD/TSS/Flow rates payable by waste discharge permit users ("permitted industrial users") be set as per Appendix 1;

D. THAT the Director of Legal Services be instructed to bring forward for enactment and amendment to the Sewer and Watercourse By-law effective July 1, 2004, implementing Recommendation C of this report.

CITY MANAGER'S COMMENTS

The City Manager RECOMMENDS approval of the foregoing.

COUNCIL POLICY

On March 9th, 2000, the Standing Committee on City Services and Budgets approved a by-law amendment establishing a methodology for calculating Sewer Biochemical Oxygen Demand (BOD)/Total Suspended Solids (TSS)/Flow fees to be paid by permitted industries. These fees are reviewed mid year each year by Council to establish new rates for the following twelve month period.

In March 2002, Council approved the establishment of the Sustainability Support Group and funding for a staff team with the intent of developing a Strategic Action Plan on Sustainability for the City.

PURPOSE

The purpose of this report is to review the appropriateness of sewer fees charged to permitted industry in consideration of the environmental, social and economic impacts which result from these businesses and their liquid waste discharges and to recommend 2004 Sewer BOD/TSS/Flow rates. This report also reviews ways to address source control and educational initiatives for dealing with waste from industrial, commercial and residential properties in accordance with Council's commitment to move towards sustainable local government practice.

BACKGROUND

In 1991, the GVRD and City of Vancouver introduced a liquid waste permitting program to encourage industry to reduce the quantity and improve the quality of their liquid waste discharges. Because the BOD and TSS loadings at the Iona Sewage Treatment Plant (STP) were becoming a concern with regard to Provincial discharge requirements, specific sewer BOD/TSS/Flow charges were introduced in 2000 for about 60 industrial dischargers to allow full recovery of municipal and regional treatment costs and to provide direct economic incentives for these businesses to reduce the amount of their discharges and improve discharge quality.

At Council's June 10th, 2003 meeting, when the 2003 Sewer BOD/TSS/Flow fees were approved, the following motion was also passed: "that Council request a report within the next nine months, before Council considers sewer BOD/TSS/Flow Charges for permitted industries for 2004, on options that would charge the polluting industries for the full environmental, social and economic costs of the pollution they generate, not just charges based on the costs of present treatment of their effluents, and include recommendations for source control initiatives and education for both industry and residents."

With respect to the City's commitment towards sustainability, in 2002, Council also formally created the Sustainability Support Group comprised of staff from many City departments to participate in a process to pursue sustainability objectives across the organization. A Sustainability Manager, Planner and Planning Analyst were hired in early 2003 to complete this work. In March 2003, Council created the Cool Vancouver Task Force to develop Action Plans on Climate Change for the City's own operations and its community.

DISCUSSION

A. Permit Fees and Environmental, Social and Economic Implications

Currently, there are 63 BOD/TSS/Flow permitted waste discharge industries in Vancouver. These industries discharge about 18% of the BOD and 5% of the TSS that flows to the Iona STP. The majority of the BOD/TSS to Iona originates from residential properties (about 48%/70%), with the remainder (about 34%/25%) from the commercial, institutional, and other industries category.

In reviewing the existing fee structure for these 63 permitted industries and the environmental, social and economic issues associated with these businesses, staff evaluated the following factors:

Environmental Implications

Over the past two decades, the GVRD has conducted comprehensive scientific studies to develop a Liquid Waste Management Plan (LWMP) for the Vancouver region. This Plan was approved under the Provincial Waste Management Act in 2002. During the Plan development, a detailed environmental monitoring program was specifically conducted at the Iona STP outfall which showed that there were no significant environmental impacts from the discharges. As part of on-going LWMP commitments, this environmental monitoring program is continuing.

Of the 63 BOD/TSS/Flow permitted industries, 97% of the BOD and 97% of the TSS originate from food processing operations. These types of organic discharges are non-toxic and have no short or long term impact on marine life outside of the immediate vicinity of the outfall. However, BOD and TSS loadings can affect permit compliance at the STP and could potentially require the construction of secondary treatment at Iona in advance of the current 2020 target date. The vast majority of the overall BOD and TSS loading to the Iona STP come from the residential and commercial sectors. While we can not reduce human waste from these sectors, we can reduce other organic sources such as kitchen wastes through public educational initiatives.

It should also be noted that liquid waste permit fees are based on BOD, TSS and flow volume, not on other contaminant loadings such as heavy metals, hydrocarbons, etc. These other contaminants are regulated in permits under by-law sections which state the maximum concentrations that can be discharged to the City's sewer system. The residential sector is a large source of these other contaminants as are other industries and commercial activities that do not pay BOD, TSS and Flow fees. An increased public educational focus on these other sources could be of value in reducing liquid waste discharge impacts.

Social and Economic Implications

Prior to implementing specific BOD/TSS/Flow fees, industries paid the same effective sewer rates as all other industrial, commercial and residential customers. That method in effect provided a subsidy for these businesses. In 2000, the City implemented the current BOD/TSS/Flow fee structure to fully allocate treatment costs to this group of customers. Staff have reviewed a breakdown of treatment costs for BOD, TSS and flow at Iona Treatment Plant and can confirm that the rates have been set to fully recover the direct costs associated with treating the sewage discharged by these businesses.

With respect to the incentives provided by the fees, the GVRD compared industrial loadings in 1995 and 2002. The study found that permitted industry achieved reductions of about 47% in BOD, 64% in TSS and 33% in flow discharges. Much of the loading improvements from the permitted industries stems from the fees implemented in 2000. In response to the new fees and increasing environmental awareness, many industries have implemented best management practices and some have invested capital to upgrade their processes and install on-site treatment systems.

In 1995, City Council adopted City Plan as a broad vision for the City. City Plan concluded that industries support and enhance the vision that Vancouver will be a city with a diverse economy, a variety of employment opportunities, and jobs close to home. To work towards this direction, the Plan also concluded that Vancouver should encourage continued job growth at a rate that helps balance the number of jobs in the City with the number of workers who live here. Vancouver's economy has become more service-oriented over the years while at the same time employment in the industrial sector has gradually decreased. The following are some facts related to jobs:

On June 24, 2003 Council confirmed its unequivocal support for the Industrial Lands Strategy and the goal of preserving industrial lands in the City. Council also agreed to not further reduce industrial land without a comprehensive review of the needs of industry, transportation and servicing of the downtown and other businesses in the City. Retention of these primary industries is an important element when considering the social aspect of the City. Any major shift in costs could cause industry to move away resulting in job losses. Also, should these businesses relocate to other municipalities within the region, there will be no net environmental benefit.

In addition to permit fees, property taxation rates also have an impact on where businesses choose to locate. Finance is currently undertaking a comprehensive review of the distribution of property taxes in the City. This review will provide a better understanding of the equity issues around taxation on properties and the economic sustainability of industry in Vancouver. A report regarding this review is expected to be brought to Council in July.

Based on the above review of environmental, social and economic issues, it is recommended that BOD/TSS/Flow rates for permitted industries continue to be established using the same methodology as used in previous years.

B. Other Source Control and Educational Initiatives

Council also requested that staff explore opportunities for other source control initiatives including public and business educational initiatives. As identified in the environmental section, opportunities that the City can consider are:

As noted earlier, the City has a Sustainability Support Group in place that is developing a Strategic Action Plan on Sustainability for the City. It is recommended that the sustainability group take the lead to analyse food grinder and public education opportunities and report back on alternatives and initiatives by the end of the year. A budget of $25,000
to supplement existing sustainability program funding should be sufficient to cover the scope of this work.

C. 2004 Sewer BOD/TSS/Flow Charges

Based on projected treatment costs for BOD, TSS and flow at the Iona Treatment Plant, GVS&DD staff have calculated Sewer BOD/TSS/Flow unit rates for 2004. The rates paid by permitted industries in 2004 will be on average 2% higher than those paid in 2003. Based on the proposed unit rates and the industrial discharges and loadings, staff estimated that $1.33 million will be recovered from permitted industrial users in 2004.

FINANCIAL IMPLICATIONS

City staff rely on GVS&DD unit rates and measured 2003 flow and loadings from each industry to project the 2004 Sewer BOD/TSS/Flow charges. Since this data was not available when the operating budget and sewer user fees were established in December, 2003, an estimate of $1.24 million was made for budgeting purposes. Staff now calculate the City will receive about $90,000 more than the recovery estimated in December. This projected surplus will be allocated to the Sewer Rate Stabilization Reserve. In addition, the $25,000 funding for the sustainability group to analyse food grinder and public education opportunities can be provided from the Sewers Rate Stabilization Reserve.

* * * * * *

 

APPENDIX 1

2004 SEWER BOD/TSS/FLOW RATES

Description

2003 Rates

2004 Rates

Increase (decrease)

I) Usage Charges

BOD
TSS
Flow

II) Capacity Charges

BOD
TSS
Flow

$0.032 / kg
$0.311 / kg
$0.038 /m3

$3.091 / kg / day
$22.432 / kg / day
$32.362 / m3 / day

$0.033 / kg
$0.338 / kg
$0.036 /m3

$3.368 / kg / day
$24.443 / kg / day
$31.187 / m3 / day

$0.001 / kg
$0.027 / kg
($0.002) /m3

$0.277 / kg / day
$2.011 / kg / day
($1.175) / m3 / day

 

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