|
CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
September 28, 2004 | |
Author: |
Susan Clift, P. Eng. | |
Phone No.: |
604-873-7368 | |
RTS No.: |
4472 | |
CC File No.: |
3753 | |
Meeting Date: |
October 21, 2004 |
TO: |
Standing Committee on City Services and Budgets |
FROM: |
General Manager of Engineering Services |
SUBJECT: |
Drinking Water Conservation Measures and Water Metering Initiatives for the City of Vancouver |
RECOMMENDATION
A. THAT Council urge the Provincial Government to change the BC Plumbing Code to require ultra-low flow toilets, water efficient fixtures, and the elimination of non-recirculating cooling systems in new residential construction.
B. THAT Council approve a program of water loss management including system metering, pressure reduction and enhanced leak detection, subject to approval of funding in the 2005 Capital and Operating Budgets.
C. THAT Council approve funding from the Water Reserve, on a one time basis, for a $20,000 pilot project for the purchase and distribution of subsidized indoor water conservation kits, in advance of the 2005 Operating Budget.
D. THAT Council adopt, in principle, the following specific initiatives as a first step in implementing additional water metering in the City of Vancouver:
a. Subsidizing of voluntary metering of one and two family dwellings
b. Mandatory installation of in-ground meter boxes when new water services are installed for one and two family dwellings
c. Metering of Vancouver Park Board use of City of Vancouver supplied water.
E. THAT Council instruct staff to report back on the steps necessary to implement these specific water-metering initiatives.
GENERAL MANAGER'S COMMENTS
The General Manager of Engineering Services recommends A through E.
CITY MANAGER'S COMMENTS
The City Manager recommends approval of the foregoing.
COUNCIL POLICY
The City water system operates as a Utility with costs recovered through its rates and fees, and borrowing authority approved by Council. The current rates structure was adopted by Council in 1992 with annual rate increases also approved by Council. All water consumers other than single and two family dwellings and some City uses are metered using a uniform rate structure. The structure is designed such that there is no cross subsidy amongst customer classes.
In 1993, Council approved the implementation of the first City of Vancouver water conservation program and adopted the GVRD Water Shortage Response Plan (WSRP) to regulate outdoor water use during the summer months. A revised WSRP was adopted in August of 2004.
In 1994, Council approved changes to the Vancouver Plumbing By-Law that mandated the installation of ultra-low flow fixtures in all new construction.
In 1995, Council approved funding on a permanent basis for a subsidized rain barrel program.
SUMMARY
The City of Vancouver, in partnership with the Greater Vancouver Water District (GVWD), provides safe and inexpensive drinking water to 96,500 properties within the city. Vancouver's unique setting and circumstances provide a drinking water supply that is the envy of many other cities. However, even with this abundance of water, sustainable conservation practices are desirable and necessary.
The population of the Lower Mainland continues to grow at a rapid pace, and although the per capita consumption rate has been dropping over the past 12 years, the sheer increase in numbers of users is putting increased pressure on the water storage system. To meet that demand the GVWD will need to increase the storage capacity of its current reservoirs by mid century to meet peak demand in the summer months when water use is at its highest and reservoir levels are typically at their lowest.
The GVWD, in consultation with the member municipalities, is preparing a Drinking Water Management Plan (DWMP) that recommends a number of new sustainable and economically sound water conservation practices that will help to delay the need to increase supply. These practices include: revisions to the Water Shortage Response Plan, changes to the BC Plumbing Code, enhanced water loss management programs, residential irrigation audits, and commercial/industrial audits.
It is expected that the DWMP will be approved by the GVWD Board in 2005. In anticipation of moving forward on some of the ideas in the DWMP, Vancouver staff are recommending that we proceed now with some initiatives to take advantage of the timing for the 2005 Capital and Operating budget planning processes. These are: a program for water loss management including system metering and enhanced leak detection, a pilot to purchase and distribute subsidized indoor water conservation kits, and new metering initiatives.
A recent study completed by the GVWD indicates that there is no economic benefit to implementing universal residential metering. On a region wide basis, the cost to implement such a program is approximately twice the expected savings from reduced water consumption and delayed infrastructure spending. For Vancouver, the cost would be $50 million for installation alone with annual costs of $1.1 million to administer the ongoing program.
Notwithstanding this conclusion, a case can be made for additional water metering initiatives in the City. Water meters raise the customer's awareness of how much water they are using, and employ the principle of user-pay, where customers are charged for the amount of water they use. This would achieve greater equity among these customers. A metering program would also give the utility the ability to better monitor and manage water use on a system wide basis.
To pursue water metering, the recommended first steps are a subsidized voluntary metering program for one and two family dwellings, the mandatory installation of in-ground water meter boxes for any new water services to these dwellings, and the metering of water use by Vancouver Parks and Recreation. It is recommended that Council instruct staff to report back with implementation strategies for these additional water-metering initiatives.
PURPOSE
The purpose of this report is to provide Council with:
- The issues related to the long-term drinking water supply and demand within the Greater Vancouver Water District (GVWD)
- The results of the recently completed GVWD study on drinking water conservation measures and their implications
- Recommendations on sustainable water conservation measures
- Specific recommendations on additional water metering initiatives
BACKGROUND
Supply and Storage
The GVWD supplies the City with water from its Capilano, Seymour, and Coquitlam mountain reservoirs. These reservoirs are filled and replenished naturally from the average 144 inches per year of rain that falls within the GVWD's protected watersheds and the melting of the snow pack in hotter weather. Situated at the edge of a temperate rain forest, the watersheds receive significantly more rainfall than most other major metropolitan areas in the world.
The GVWD's three reservoirs are currently able to store only 22% of the annual precipitation that falls within its watersheds. During the majority of the year, storage of enough water to meet demand is not an issue, since the amount of rain that falls far exceeds the GVWD's ability and need to store it for use. The exception is the summer months when precipitation is low and use is at its peak. Thus the need to store adequate water for use focuses almost exclusively on the summer. This is in contrast to other cities where water scarcity year round is a critical issue and where demand outstrips supply.
The GVWD has identified a number of upgrades that will increase the amount of water that is available from its current reservoirs. They are: a pump station at Capilano (already underway), a lowered intake and increased treatment capacity at Coquitlam, a new treatment facility at Coquitlam, and finally a new pump station at Coquitlam. The following figure illustrates how each of these actions will improve the available supply capacity. The figure also shows the expected increase in regional demand for water and when that demand will exceed supply.
Although the precise timing and costs of these upgrades is uncertain, the costs will be substantial. The GVWD predicts that maximum capabilities of the current reservoirs to supply the increasing water demands of its customers during the summer period of peak demand will be reached in mid-century. After this point a major upgrade to an existing reservoir or a new water source will be required. Again, the costs will be substantial.
Water Usage
The overall demand for drinking water continues to rise within the GVWD as the population in the region continues to increase. Even with per capita consumption decreasing (Appendix A), at current growth rates, the GVWD estimates that the demand for water will grow by 60% over the next 50 years.
In 2003, Vancouver consumed 133 million cubic metres of water, or one third of the volume supplied by the GVWD. (See Appendix B for a breakdown of water use in Vancouver by sector). Vancouver's population is still increasing but at a much reduced rate in comparison to other municipalities in the region. Furthermore, unlike the rest of the region, Vancouver's number of single-family and duplex housing units is declining, with almost 61% of the residential buildings having three units or greater. This trend has implications for water consumption as per capita outdoor use declines and summer peak demands are reduced.
Although average for the region, compared to other North American cities (Appendix C), Vancouver's average residential consumption rates are relatively high and estimated to be 323 litres per person per day. This is largely due to the low cost of our water and the use habits that consumers have developed over time.
Water Pricing
The GVWD currently provides drinking water at a relatively low wholesale price. The City also enjoys relatively low costs for distribution. These two factors allow the City to charge its customers some of the lowest retail prices compared to other cities. For 2004, the retail (metered) rate for water in Vancouver is $0.49/cubic metre, while in Victoria it is $0.46, Calgary $0.82, Toronto $1.17, Seattle $1.33, and San Francisco $1.94.
The wholesale price for GVWD drinking water is going to rise over the next four years to cover the costs of building the Seymour-Capilano Filtration Project. Between 2004 and 2008, the GVWD rates are scheduled to rise 68 percent, which will result in an estimated City rate of approximately $0.60/cubic metre by 2008.
To prepare for these annual increases, the City started gradually increasing its retail price for drinking water on an annual basis in 2000 to avoid a sudden rate change for its customers. Even with the increase in the cost of supply, by the end of 2008 Vancouver will still enjoy some of the lowest retail water prices in the world.
Existing Water Conservation Programs
In addition to the policies to encourage high-density housing, the historical decrease in Vancouver's per capita consumption is due in large part to our existing water conservation program.
Typically, water conservation programs consist of an education and outreach component, regulatory practices, incentives and pricing strategies. All are designed to change social behaviours on the basis that there are long-term environmental and economic benefits derived from conserving water. In Vancouver, water conservation initiatives to date have focused on relatively low cost strategies.
The following is a brief summary of our ongoing conservation program initiatives:
· 1993: Outdoor water use regulations introduced; school play, "the A to Z of H2O" and educational materials presented in all Vancouver elementary schools every second year; and the replacement of an "inclining block" rate structure (where high volumes users get a price break) with a uniform rate for metered water customers.
· 1995: Ultra-low flow toilets, showerheads, aerating faucets, recirculating cooling systems and ornamental fountains mandated in new building construction; subsidized rain barrel program.
· 1997: Promotion of water wise gardening through City Farmer.
· 2002: Campaign on natural lawn care.
Outdoor water use regulations and education programs have been in place in the remainder of the GVWD for over a decade. The combined impact of these programs has been significant enough to delay the need for expanded supply.
However, per capita consumption in the region is declining less rapidly, indicating that the existing programs have peaked in their effectiveness and that it is an appropriate time to explore new conservation initiatives. Furthermore reducing or deferring some of the costs of expanding the supply system to meet population growth could have a significant payback. Pursuing cost effective conservation strategies that provide alternatives to increasing supply will assist in achieving the City's social, environmental and economic objectives.
DISCUSSION
The GVWD's Analysis of Water Conservation Measures
In preparation for the Drinking Water Management Plan, the GVWD developed a costing analysis that compared a number of different conservation measures with each other, and with the cost of water supply expansion on a region wide basis. Categories of measures included regulatory controls (e.g. plumbing code changes), economic incentives (e.g. retail metering, appliance rebate programs) and operational changes (e.g. increased leak reduction programs). A summary of the GVWD study can be found in Appendix D.
Based on all direct financial costs and benefits (to the GVWD, member municipalities and consumers), the study concluded that several water conservation measures were cost-effective. These include:
· Changes to the BC plumbing code to require ultra low flow toilets and water efficient fixtures
· Rebate programs for water efficient appliances and fixtures
· Industrial and commercial water audits for large water using businesses
· Enhanced water loss management programs on the GVWD and municipal water systems
Single-family residential water metering was also assessed in the study. The analysis confirmed that, on a region wide basis, the economic benefits of metering are roughly equal to one half of the costs. For Vancouver the capital cost to implement a full metering program is estimated to be $50 million with an additional annual operating cost of $1.1million. More details on this analysis as it pertains to Vancouver are contained in Appendix E.
The Implications of the Analysis for Vancouver and Proposed Actions
Plumbing Code Revisions
Proposed revisions to the BC Plumbing Code include a requirement for ultra-low flow toilets and water efficient fixtures, and the elimination of once through cooling systems. Both the CRD and the GVRD are currently making requests to the Provincial Government to change the Code. Not being subject to the BC Plumbing Code, Vancouver implemented these changes to its own Building By-Law in 1995. However, the province-wide change will benefit Vancouver because the higher volume fixtures would cease to be available on the local market, thus forcing homeowners and contractors that renovate to buy low flow fixtures and consequently reducing per capita demand within Vancouver. It is recommended that Council urge the Provincial Government to change the BC Plumbing Code.
Indoor Conservation Initiatives
As an interim measure, and anticipating that the Code changes may not be easy to achieve, water efficient appliance rebates are being considered by some municipalities. As Vancouver already requires 6 litre toilets in new construction, a toilet rebate program would be difficult to administer where both mandated toilets and rebated toilets are installed in the same jurisdiction. There is the potential for installers to take unfair advantage of such a rebate program. Therefore in spite of the apparent payback for this conservation initiative, it is not recommended that Vancouver pursue toilet rebates.
As an alternative initiative for Vancouver to improve upon residential indoor consumption it is proposed that subsidized "kits" be made available to residents upon request. Such a kit is composed of a low flow showerhead, aerating faucets for kitchen and bathroom use, dye tablets to detect toilet tank leaks, a roll of Teflon tape and a displacement "bladder" to reduce toilet tank water volumes. The experience of cities such as Seattle, Toronto and Calgary has revealed that the quality of the components is important to gain acceptance by the public, in particular the showerhead. It is recommended that $20,000 be made available in advance of the 2005 Waterworks Capital budget to conduct a pilot to distribute indoor conservation kits. Both Toronto and Calgary charge $15 for their kits, which are valued at approximately $20 each.
Water Losses
Water system loss reduction is proactive management of the water inputs and outputs in a distribution system. It can involve leak detection, water pressure management, and water balancing. Our current proactive leak detection program has been in place since 1999 and has resulted in significant payback in water savings and prevention of infrastructure and property damage. Under the proposed program, it is proposed to enhance leak detection, fine tune pressures in the system, and to install additional meters within the distribution system. The purpose is to get a better understanding of system losses that are due to leakage, to identify water use in Parks and other free connections and to verify GVWD meter readings. This program will be funded under future Capital and Operating programs.
Metering of Park Board Uses
The current practice for metering water uses by the Vancouver Park Board is to meter only those facilities that are revenue producing. For example, community centres, golf courses, or privately owned restaurants and facilities in parks are metered and billed at the retail rate for water. The remainder of uses, including irrigation and ornamental uses are unmeasured and are funded through the Waterworks Operating Budget. In the last several years, however, new park developments have had meters installed.
While Parks and Engineering staff have already completed a number of successful water conservation initiatives, including works at Devonian Pond, Charleson Park and VanDusen Gardens, metering sends a price signal that provides further incentive for conservation efforts. At present, Parks staff, in consultation with Engineering Services is preparing a comprehensive Parks Water Conservation Strategy document that will identify and prioritize future conservation projects. Meters will also assist in targeting and measuring conservation initiatives.
Unlike residential use, where the volume of water saved does not pay for the cost of the meter, there is significant potential for payback in metering Parks and Recreation facilities. To implement this user pay system, it is proposed to phase in the installation of meters on most of the estimated 200 "free" services currently provided and bill Parks for water use.
Implementation of this metering program will take place over two Capital Plans (a six year period) in cooperation with the Park Board and will be funded subject to approval of the Waterworks Capital Plan. Staff will report back on the issue of a fee structure for parks water use and the impact on future Waterworks and Parks operating budgets.
Residential Metering Benefits
Although pursuing universal metering as a conservation measure over expanding supply is not economically sustainable until the water rate is more than twice the current rate, other jurisdictions within the GVWD have decided nonetheless to proceed. Surrey started its voluntary program just over a year ago and Richmond's program has been underway for a number of months. These municipalities, along with North Vancouver District and West Vancouver District are also pursuing metering at the time of new construction.
Metering is generally implemented by water utilities for three main reasons:
· To enhance the water conservation efforts of individual households,
· To implement a user pay billing system and equity between users, and
· To improve system management related to: water loss due to leaks, the effectiveness of various conservation measures, and errors in billing etc.
Therefore, the City must assess whether the above benefits are sufficient to offset the costs. The following discussion examines these benefits from Vancouver's perspective.
Some residents have requested a meter to enhance their existing personal conservation efforts. A two person family with low to moderate outdoor watering needs could be rewarded with a water bill $20 to $50 per year lower than the current flat rate of $287. It is to satisfy this portion of the residential sector that subsidized voluntary programs have been implemented in some member municipalities in the GVWD.
Most residents who enquire about residential metering identify fairness as the major reason. A meter allows the user pay principle to be used for billing purposes. Vancouver has historically taken the alternative perspective of implementing a rate structure that charges the lowest overall cost to the average consumer. This approach keeps the costs lowest for the utility overall, but does not reward consumers with low water use.
Enhanced water system management, including leak detection on private property, is also cited as a benefit of residential metering. Leaking toilets or service pipes are not always detected in a timely manner without the aid of a meter. These leaks can amount to very surprisingly large water losses over time.
Residential Metering Options for Vancouver
As an alternative to the concept of universal metering, staff recommend that smaller and more targeted metering programs be pursued. Eventually the relative cost of water will be high enough to warrant the cost of metering all homes. In the meantime, starting to install meters now, either at the time of new construction, or through a volunteer program will have longer implementation time frames but will improve customer benefits and lower demand for water. Even if this economic condition is as far away as the mid century when major water supply infrastructure upgrades will be required, many of the benefits will be realized sooner.
Subsidized Voluntary Program
All flat rate users currently have the option to install meters but choose not to due to the high installation cost and the low potential for payback. However, voluntary metering programs typically finance all or a portion of the installation costs ($600 to $800 per household), thereby improving the financial outcome for the consumer. Typically volunteers are a two person or fewer household with low to moderate outdoor water use. Based on the experience in Surrey, Vancouver might expect at least 2000 customers per year to request a meter, with a total 15-20 year time frame for implementation.
The capital cost to the City of a voluntary metering program would be $1.2 million per year for installation with an operating cost of $27,000 to $35,000 per year for every 2000 houses that volunteer to be metered. The operating costs would be recovered through the billing fees, but the capital costs would be subsidized by the utility.
Staff recommend that this option be pursued as a first step in implementing a residential metering program. If directed, staff can provide more detailed implementation implications including costing, type and level of subsidy, fee recovery strategy and the use of City forces or private sector companies to implement such a program.
Mandatory Program for New Construction
The lowest cost opportunity for the City to start a residential metering program is to require a meter to be installed at the cost of the property owner at the time of new construction or renovation. There are up to 1200 new residential water services installed per year. At this rate it would take approximately 50 years to meter the entire one and two family residential sector.
However, there is a potential conflict that arises from the City of Vancouver's requirement for new homes to have fire sprinklers and the need to install a water meter. The National Fire Protection Association (NFPA) requires that meters on fire sprinkled services be NFPA approved. The purpose of the regulation is to ensure that a meter cannot fail in the closed position in the event of a fire. Currently, no manufacturer produces meters in sizes smaller than 4 inch that are NFPA approved. The largest single-family residential service in use is a 2-inch diameter.
Some cities have partially resolved this conflict by installing the meter on City property where NFPA regulations are not applicable. However, in order to meet the intent of the regulation, others have looked to more innovative solutions. Due to the unresolved technical conflicts between the fire sprinkler requirements and metering, it is recommended that staff conduct further research into seeking a satisfactory solution. It should be noted that homes with fire sprinklers (approximately 12,000 to date) will not be able to participate in the voluntary metering program until this technical issue is resolved. The cost of a new meter for these customers is estimated to be $850, increasing the cost of a new water service from $2960 to $3810, or an increase in 28% over the current fees.
Staff recommend that for the time being, and in anticipation of a suitable meter being found, that only the meter pits be installed at this time. This initiative is expected to increase the cost of a service installation by approximately $100 or by 3.5%. If approved, this fee increase can be reflected in the proposed 2005 service fee schedules that will be before Council in December.
FINANCIAL IMPLICATIONS
Detailed financial implications for a residential meter program will be reported back.
PERSONNEL IMPLICATIONS
The decision to implement a metering program may require additional staffing and will be reported back.
CONCLUSION
In making appropriate decisions regarding drinking water conservation policy, the City of Vancouver must consider the ability of the current water supply situation to meet the needs of its users. Although there are abundant potential sources of water in the region, new supplies cannot be developed treated and delivered without significant financial, social and environmental cost. Similarly, water conservation programs have their own costs, which in some cases can be as significant as increasing supply. To meet future needs we will need to balance conservation initiatives with supply increases.
The GVWD Drinking Water Management Plan is a long term vision for the management of our common water resource. For Vancouver, that vision includes adding to our current suite of conservation strategies. These are: a program for water loss management including system metering, pressure management and enhanced leak detection, a pilot to purchase and distribute subsidized indoor water conservation kits, and expanding our metering program to include Parks uses and volunteer residents.
* * * * *
Appendix A. Water Consumption
Consumption includes water use by all sectors (residential, commercial, industrial, etc.) Per capita water use had been steadily declining since 1987 until the unusually hot summers of 2002 and 2003.
Appendix B. Consumption by Sector
In the pie chart below, the metered customers (on the left side) consume 53% of the water by volume, while the un-metered customers (on the right side) consume 47%.
The un-metered consumers include single and two family dwellings (the largest group at 32%) and City users such as the Park Board, Engineering Services and Fire and Rescue Services (estimated to be 5%). System leakage is assumed to be 10%.
The residential sector (single, two and multi-family) comprises 54% of the total volume. Of the residential water use in the City, 41% percent is metered and 59% is un-metered.
Appendix C. Comparison of Residential Consumption Rates
The residential sectors for Toronto, Langley, Victoria and Seattle are fully metered. Calgary is partially metered. The statistic for Victoria is the average consumption rate for the Capital Regional District. Vancouver's residential consumption rate is 323 litres/person/day. This includes single family and multi family uses.
Appendix D. GVRD Analysis of Levelized Unit Costs
The following is a brief description of the results of a study undertaken by the GVWD as part of the Drinking Water Management Plan, "Water Conservation in the GVRD: An Analysis of Levelized Unit Costs" (January 2004 Draft). It includes a discussion on how the analysis was conducted, the assumptions made and some of the study results.
The levelized unit cost (LUC) analysis is a commonly used economic methodology to compare the costs and benefits of growth related water infrastructure expansion projects with those of conservation measures. The analysis is a rudimentary triple bottom line approach, which uses a 50-year time horizon and a real interest rate of 5%. Included in the analysis is an assumed 15% cost premium to account for social and environmental costs (on the supply side only). The analysis then compares the costs to implement various conservation measures.
The conservation measures considered in the report are listed in the table below and are presented with benefit-cost ratios from the utility perspective. The public perspective costs are greater, but are not calculated due to the unpredictable nature of the public response to a measure. For example, whether a consumer buys low flow fixtures or efficient irrigation systems, it is difficult to predict how much money they will spend.
The table indicates the benefit-cost ratio for each of the conservation measures. When a measure has a ratio of 1.00 or more, it has a payback over its design life. Where the measure is less than 1.00, the measure does not have a payback within the conditions set in the analysis. The other measures should be considered further to determine whether the social and environmental costs and benefits are sufficient to warrant pursing the measure. For these measures each municipality will make decisions as to the suitability of the measure in their particular circumstance.
Sector and Measure |
Utility Perspective
|
Water System Loss Reduction, GVWD |
1.19 |
Water System Loss Reduction, Municipal |
1.80 |
Residential Indoor:
|
No cost
|
Residential, Outdoor:
|
0.47
|
Industrial, Commercial and Institutional Water Audits |
0.95 |
Residential Water Metering |
0.43* |
* Assuming a 20% savings in water consumption Appendix E. Single Family Residential Metering Costs for Vancouver
Based on the results of the GVWD analysis, and adapting the figures to apply in Vancouver, the following tables indicate the capital and annual operating costs for universal residential water metering.
Capital Costs |
$ |
Installation of Residential Water Metering |
$50,000,000 |
Total Capital Cost of Program |
$50,000,000 |
Annual Costs |
$/yr |
Administration |
$100,000 |
Quarterly Meter Reading |
$365,200 |
Quarterly Billing |
$664,000 |
Total Annual Cost |
$1,129,200 |
The capital cost per household to retrofit a residential water meter at the property line in an in-ground box is estimated to be approximately $600. For new houses that require fire sprinklers, this cost may increase to $850 per household, but this has not been incorporated into the above figure. Assuming that water metering would encourage average water savings of 20%, the cost of water saved would be approximately $21 per household per year, in 2003 dollars. The life expectancy of a meter is 15 to 20 years and there would be at least one replacement at a cost of $30 million before additional reservoir storage capacity would be required. These figures assume that the meter installations would take place over five years.
Stated another way, this is equivalent to a permanent annual cost increase of $3.9 million per year to the Waterworks Utility. This figure includes the above costs as well as the savings from delayed infrastructure spending for new storage and reduced water purchases by users. Distributed to the flat rate users, this would amount to an increase of approximately $67.00 per household per year.
The wholesale water rate would need to be nearly three times the current rate to justify the implementation of universal metering on an economic basis.
