ADMINISTRATIVE REPORT

Date: February 9, 1999

Author/Local: Don Klimchuk

RTS No. 00520
CC File No. 1756

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services
SUBJECT:	1999 Local Government Grant Applications - Water, Sewer and Other Infrastructure

RECOMMENDATION

A. THAT the General Manager of Engineering Services submit the following projects to the Province for funding consideration under the Local Government Grants Act:

(i) $11,966,000 in water distribution main replacement projects as summarized in Appendix 1;

(ii) $15,917,000 in sewer projects as summarized in Appendix 2; and

(iii) $786,000 in other infrastructure (greenway and bicycle) projects as summarized in Appendix 3.

B. THAT the General Manager of Engineering Services submit an Infrastructure Planning Grant application under the Local Government Grants Act on behalf of British Columbia municipalities, to fund the majority of the British Columbia share of costs for establishing a National Technical Guide for Municipal Infrastructure.

COUNCIL POLICY

Council has supported the renewal of an ongoing cost-sharing program with the Province for water, sewer and road projects.

In February 1998, Council approved that the City of Vancouver support the preparation of a National Technical Guide for Urban Infrastructure, subject to reporting back and approval of suitable cost-sharing arrangements.

PURPOSE

The purpose of this report is to seek concurrence from Council to submit a list of water, sewer and street projects to the Province for funding consideration under the Local Government Grants Act. This report also updates Council on the status of the Local Government Grants program, that up until a recent announcement, had been inactive for a number of years.

In addition this report proposes requesting the Province to fund the majority of the British Columbia share of costs for establishing a National Technical Guide for Municipal Infrastructure, through the funding set aside for the Local Government Grants program.

BACKGROUND

Water, Sewer and Other Infrastructure Applications

Between 1989 and 1992, the City received funding averaging about $5 million per year from the Province for waterworks, sewers and streets infrastructure projects. In 1993, the City's awards were cut drastically, and since 1994 the City has received no awards. In 1995 new legislation was brought in under the Local Government Grants Act to cover sewer, water and street revenue sharing programs with municipalities. However, to date the Local Government Grants program has been used primarily to pay off commitments to existing projects. Both the Mayor, on behalf of City Council, and staff, have written the Province several times over the last several years, urging them to renew cost-sharing to historic levels for water, sewer and road projects.

As part of an announcement by the Minister of Municipal Affairs in December 1998 regarding the elimination of the Provincial Equalization Grant Program, it was stated that the Province would be providing funding for new water and sewer projects. In January of this year, the City received a Circular from the Ministry of Municipal Affairs, outlining the details of a new Local Government Grants Program for water, sewer and other infrastructure.

Although applications for this program must be submitted to the Province by February 26, 1999, payments will not begin until April 1, 2000. The Circular notes that the Ministry hopes to be able to make announcements of funding starting in April 1999. Total funding of $50 million annually will be provided for 3 years. The majority of this ($48.5 million) will be for sewer and water projects, with only $1.5 million allocated for "other" infrastructure projects.

National Technical Guide for Municipal Infrastructure

On February 17, 1998, Council approved a recommendation, in a report from the General Manager of Engineering Services, that the City of Vancouver support the preparation of a National Technical Guide for Urban Infrastructure through the National Research Council (NRC) of Canada. Council's support was subject to reporting back and approval of suitable cost-sharing arrangements.

Since that time, the NRC has continued its plans to implement the guide, including holding regional meetings with stakeholders in eleven cities across Canada, producing a video on the guide, meeting with various Ministers of Municipal Affairs across Canada, and holding a national workshop in Montreal. The cost to produce the guide over a three year period is estimated at $20 million. About 80% of this total is already secured with funding from the federal government, Quebec government and $5 million in in-kind contributions.

DISCUSSION

Water, Sewer and Other Infrastructure Applications

Although most program details are similar to those in past cost-sharing programs, one main difference with the new Local Government Grants Program is that supporting resource communities or regions has been added as one of the priorities for project selection. It is not clear what weight the Province will give to this criteria. If significant weighting is given to this, Vancouver would likely be at a disadvantage compared to some communities outside the lower mainland.

One other change that may have some impact on water submissions is a statement under the selection criteria that "priority will be given where universal metering with an increasing block rate is in place". This description is much more specific than water use efficiency clauses under previous programs. Since Vancouver does not apply universal metering, this could impact our water applications if significant weight is given to this criteria.

A brief description of projects being applied for through the Local Government Grants program, along with their estimated costs are attached in Appendices 1.through 3. The total estimated cost of all proposed projects is $28.7 million. In most cases the grant amount expected from an approved application would be 25% of the project's estimated cost.

Appendix 1. proposes that $11,966,000 in water distribution main replacement projects be applied for. This would contribute to the City's infrastructure replacement program which currently replaces about 1.5% of our distribution system annually. This program allows us to address our aging infrastructure and hydraulic upgrading in a planned way, avoiding the need for large infusions of capital. It also allows us to provide our customers with a reliable source of potable and fire fighting water, reduces the amount of water lost from leakage, and reduces watermain breaks and their corresponding disruption and property damage.

Appendix 2. proposes that $15,917,000 in sewer projects be applied for. The majority of funding ($14,400,000) would assist with replacing our old combined sewers with separated sewers at the rate of about 1% annually. This program allows the City to continuously reduce and eventually eliminate sewage overflows to our surrounding waterbodies.

Remaining sewer applications would help fund the following programs:

Sewer Connection and Manhole Reconstruction ($890,000)

· Focuses on replacement of connections to private properties that are in danger of failing, which helps prevent sewage backups.

Upgrading & Replacement of Pump Stations ($370,000)

· Provides for partial or complete replacement of pumps and equipment, which helps reduce sewage flooding or overflows to our local waterbodies.

Sewer Separation on Private Property ($257,000)

· Provides for installing separate storm and sanitary connections in areas where old combined sewers have been replaced, which accelerates the pollution control benefits of the separated sewer system.

In Appendix 3., $786,000 in street projects are applied for under the grant category of "Other Infrastructure". The majority of this funding ($576,000) is for two greenway projects which continue work identified in the Vancouver Greenways Plan. The Wellness Walkway Greenway enhances community accessibility for Mount Saint Joseph's Hospital and care facilities in the Mount Pleasant neighbourhood. The Ridgeway East Greenway will improve accessibility for pedestrians to community amenities such as parks, schools and community centres. Funding for bicycle improvements would install additional cyclist activated traffic signals ($200,000) to help expedite development of Vancouver's bicycle network, and install additional bicycle racks ($10,000).

National Technical Guide for Municipal Infrastructure

Over the last several months, Engineering Services staff, along with other B.C. participants from the NRC's Montreal workshop, have had informal discussions with the Ministry of Municipal Affairs on securing the British Columbia funding for the guide. Based on its population, British Columbia's contribution to the estimated $20 million cost of producing the guide, is $700,000 over three years. Ministry staff agreed the proposed guide has merit, but requested a business case for the guide, and that at least a token contribution be made from B.C. municipalities.

Regarding funding from municipalities, staff have had preliminary discussions with UBCM staff, who have expressed interest in supporting the guide, including discussing with the UBCM Board, the possibility of contributing an amount (in the order of $25,000) towards the B.C. municipalities' share of funding.

Regarding the remaining funding for B.C.'s share, staff believe there is justification for funding the majority of the B.C. share of the guide's cost through the Planning Grants portion of the Local Government Grants program. Reductions in the historical levels of provincial infrastructure grants are one of the reasons why municipalities have not been able to keep up with the demand for replacing and renewing infrastructure. The proposed National Guide for Municipal Infrastructure will provide significant assistance for municipalities to help pay off their "infrastructure debt" (see Appendix 4., Key to the Future: The National Technical Guide for Municipal Infrastructure).

In the Local Government Grants Program Guide, it is noted that an infrastructure planning grant component is available that can assist with developing water, sewer and storm drainage proposals and that "good pre-planning will ensure sound investment decisions". Although infrastructure other than water and sewer is not mentioned here, the Local Government Grants Act includes a provision for transportation infrastructure. Staff believe that the benefits of the guide are consistent with the types of benefits envisioned with the planning grants, but that the range of benefits to municipalities would be more comprehensive.

Applying for a planning grant for B.C.'s share of the guide would mean a grant request in the order of $225,000 for 1999 (and the same amount for the next two years). Per municipality, this works out to less than $2000 per year, which is well within the ceiling of $5000 for 100% cost sharing of municipal planning grants that is contained in the Local Government Grants Act legislation.

To satisfy the concerns noted by Ministry of Municipal Affairs staff, approval from the Province could be made conditional on receiving the following on behalf of B.C. municipalities:

1) A completed business case
2) A "good faith" contribution in the order of $25,000

FINANCIAL IMPLICATIONS

The grant amount expected for any approved sewer, water and other infrastructure applications is 25%. The remaining 75% of project costs would be funded by the City through the current year's Capital Budget. For this program, applications must be submitted by February 26, 1999, which is before the 1999 Capital Budget is approved. However, the submission of these projects to the Province does not commit Council to fund the City share. Firm funding and schedule commitments are made only after a project award is received.
If funding for the British Columbia share of the National Technical Guide for Municipal Infrastructure is approved, it is expected that some Engineering Services staff will participate on the national committees that develop the details of the guide. Any out-of-pocket expenses would be funded by the NRC, and staff time would be accommodated within existing budgets.

* * * * *

APPENDIX 1

1999 LOCAL GOVERNMENT GRANT APPLICATIONS

WATER DISTRIBUTION MAIN PROJECTS

Project Estimate

1. Blanca-Courtney-2nd-12th $1,600,000
2. Dunbar, 17th to 36th $1,944,000
3. Cassier, Oxford to Adanac $ 600,000
4. Shaughnessy (Nanton, Arbutus , Maple) $ 568,000
5. 33rd, Larch to Pine $ 770,000
6. 33rd, Connaught to Hudson $ 405,000
7. Slocan, Charles to Adanac $ 312,000
8. Gore, Alexander to Prior $ 538,000
9. Jackson, Hastings to Prior $ 312,000
10. Terminal, Thorton to Begg $ 528,000
11. Windsor, 13th to 18th $ 279,000
12. 16th, Kingsway to Knight $ 551,000
13. Ash, 65th to 71st $ 275,000
14. 69th, Ash to Laurel $ 216,000
15. 10th, Arbutus to Burrard $ 290,000
16. 11th, Fir to Oak $ 462,000
17. 12th, Granville to Oak $ 606,000
18. 11th, Carnarvon to Trafalgar $ 275,000
19. 72nd, French to Oak $ 341,000
20. Osler, 71st to 73rd $ 158,000
21. 27th, Hudson to Oak $ 263,000
22. Commercial, Venebles to Powell $ 673,000

TOTAL $11,966,000

APPENDIX 2

1999 LOCAL GOVERNMENT GRANT APPLICATIONS

SEWER PROJECTS

Project Estimate

1. Fraser River Basin Main Sewer Reconstruction $1,900,000
2. West Point Grey Main Sewer Reconstruction $1,000,000
3. Balaclava Main Sewer Reconstruction $1,600,000
4. Kitsilano/South Granville Main Sewer Reconstruction $1,300,000
5. Cambie/Heather Main Sewer Reconstruction $ 900,000
6. Terminal Flats Main Sewer Reconstruction $1,000,000
7. Downtown Peninsula Main Sewer Reconstruction $ 600,000
8. Grandview/Woodlands Main Sewer Reconstruction $2,000,000
9. Hastings-Sunrise Main Sewer Reconstruction $1,000,000
10. China Creek Trunk Main Sewer Reconstruction $2,700,000
11. Still Creek Main Sewer Reconstruction $ 400,000
12. Connection And Manhole Reconstruction $ 890,000
13. Upgrading and Replacement of Pump Stations $ 370,000
14. Sewer Separation on Private Property $ 257,000

TOTAL $15,917,000

APPENDIX 3

1999 LOCAL GOVERNMENT GRANT APPLICATIONS

OTHER INFRASTRUCTURE (GREENWAY & BICYCLE) PROJECTS

Project Estimate

1. Wellness Walkway Greenway $ 76,000
2. Ridgeway East Greenway $500,000
3. Cyclist Activated Signals $200,000
4. Bicycle Racks $ 10,000

TOTAL $786,000

(c) 1998 City of Vancouver