COMMITTEE OF THE WHOLE MEETING OCTOBER 3, 2016

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1 REPORT #DCAO COMMITTEE OF THE WHOLE MEETING OCTOBER 3, 2016 NEW TECUMSETH - COLLINGWOOD PIPELINE WATER SUPPLY RECOMMENDATION That Report #DCAO be received; And that Staff be directed to work with the Town of Collingwood to finalize the terms and conditions of New Tecumseth s contribution towards the replacement of membranes at the Raymond A. Barker Water Filtration Plant in Collingwood and report back to Committee. OBJECTIVE The objective of this report is threefold. Firstly, this report will present to Committee correspondence received from the Town of Collingwood in response to the Town s letter dated June 16, 2016 inquiring about the supply of additional water in accordance with the Collingwood New Tecumseth Water Supply Agreement. Secondly, this report will provide to members of Committee a sensitivity analysis undertaken on the first five years of the Water Supply, Distribution, and Storage Master Plan, Final Report (the Master Plan). This is being undertaken to provide Council with a more comprehensive understanding of the challenges and opportunities within that time period. Thirdly, and in consideration of the information presented, this report is seeking direction with respect to responses to both Essa regarding their request for additional water and Collingwood in regards to their letter of August 30, BACKGROUND At the Council meeting held on June 13, 2016, Council passed the following motion: That the Committee of the Whole recommends: That Report DCAO be received; And further that the deputation of Alan Lacey be received; And further that the deputation of Nancy McBride be received; And further that Staff be directed to send a letter to the Town of Collingwood requesting their confirmation to provide to the Alliston Collingwood Pipeline 11, 400 cubic metres per day as a minimum average day demand and 16, 000 cubic metres per day as a maximum day demand commencing January 1, 2019; And further that staff be directed to request a response from Collingwood by September 1, 2016; And further that staff, in accordance with Article ( Sale of Water to Third Parties) of the Water Supply Agreement, work with CPUC ( now Collingwood) and

2 OCWA to develop a Business Plan to consider the allocation of water capacity, the manner of pricing the water and other relevant considerations; And further that conditional upon confirmation from Collingwood that additional flows shall be provided, staff be directed to develop a Water Supply Agreement with the Township of Essa for the sale of 400 cubic metres of water per day from the Alliston-Collingwood Pipeline to supply the community of Baxter Following Council direction as referenced above, staff sent correspondence to the Town of Collingwood dated June 16, 2016 requesting that they confirm whether or not additional water could be supplied to the Collingwood New Tecumseth Pipeline (the Pipeline) in accordance with current Water Supply Agreement. The Water Supply, Distribution, and Storage Master Plan, Final Report was presented to Council at the Committee of the Whole meeting on July 4, 2016 and then further discussed at a Committee of the Whole Working Session on July 20, At the Council meeting held on August 22, 2016, Council passed the following motion: That the Committee of the Whole recommends: That the presentation of Ken Campbell, of R.V. Anderson Associates Limited be received; And further that the Town of New Tecumseth Water Supply, Distribution and Storage Master Plan dated June 30, 2016, substantially in the form attached as Attachment No. 1, as detailed within Report ENG be received; And further that Staff be authorized to advertise and submit the Notice of Completion, which will commence the thirty (30) day public and agency review period. In accordance with the Master Plan provisions of the Municipal Class Environmental Assessment, the Town issued the Notice of Completion for the final Water Supply, Distribution, and Storage Master Plan dated September 8, 2016, on Monday September 12, Advertisements for the Notice of Completion were placed on the Town website and in the local papers on Thursday September 8, The issuance of the Notice of Completion will begin the 30-day Public and Agency Review period commencing on September 12, 2016, and ending on October 11, Hard copies of the Water Master Plan document are available at the Town Administration Centre and at each of the library s in Alliston, Beeton, and Tottenham starting on Monday September 12 for the public to review. The Master Plan is also available on the Town website. COMMENTS AND CONSIDERATIONS In response to the Town s letter of June 16th, Collingwood forwarded correspondence to the Town dated August 30, A copy of the letter received from the Town of Collingwood has been appended to this report as Attachment No. 2. In their letter, Page 2 of 9

3 Collingwood explains that they are only able to provide an additional supply of 500m3/day and would be amiable to establishing an agreement with the following conditions: New Tecumseth will provide an equitable financial contribution towards the currently proposed membrane replacements in 2016 and any future membrane replacements. New Tecumseth will provide agreed upon financing prior to the commencement of providing additional capacity. New Tecumseth will continue to work with Collingwood and OCWA to establish the terms of a new agreement for the continued long term supply of water to New Tecumseth. (This will include conditions and the planning and financing of a plant expansion to meet the future needs of New Tecumseth). Based on the response from Collingwood, the additional 500m3/day could be provided immediately following the provision of agreed upon financing towards the proposed membrane replacements. In keeping with Clause 12 of the current Water Supply Agreement, New Tecumseth would be obligated to fund a percentage of the membrane replacement costs proportional to its water usage. Based upon information contained within Collingwood staff report PW C, the anticipated cost of replacing the membranes in 2016 is $1,059,440 (HST not included). In accordance with 2015 water production averages New Tecumseth would be responsible for approximately $475,000 towards the replacement of membranes. To better understand the challenges that the Town will be facing over the next 5 years staff undertook a sensitivity analysis on the findings presented in the Master Plan. The approach taken was to examine the following: Adjustments to the current well supply in Alliston, Beeton New well supply potential Sensitivity of growth projections Industrial Lands growth Supply to Honda Water supply from the pipeline Sensitivity of any other assumptions made in Master Plan Included in the Master Plan are a number of smaller improvements and upgrades that could be made to the Town s current water supply components. These would include the provision of stand-by power at Wells 1, 4 and 8, pump upgrades to the Hillcrest Booster Station and the addition of a new Chlorine Contact Chamber at Well 1. Together, these works would improve the security of the water supply by increasing the water system firm capacity by an estimated 1,000m3/day. The cost of these works has been estimated to be $1,200,000. The new program under the Clean Water & Wastewater Fund recently announced by the Federal and Provincial governments could partially fund the improvements and upgrades. The required projects will be included in the 2017 Capital Plan and brought forward and recommended for Council s consideration. It is envisioned that the work would commence in 2017 and be substantially complete by the spring of Page 3 of 9

4 A recommendation also outlined in the Master Plan is the provision of a new well. The primary reasoning in support of this recommendation is twofold. In the short term, a new well will provide additional capacity that the Town will require to address growing demands over the next five years. Following that period, and the development of a new water supply agreement with Collingwood, which will see increased capacity from the pipeline, the new well will provide additional security to the New Tecumseth water supply. Through the development of the 2017 Capital Plan, Staff will be recommending that work begin in 2017 for the provision of the new well which would be expected to come on-line in 2019 with an anticipated capacity of 3500m3/day. As part of calculating the demand requirements of the Town over the coming years the Master Plan contains projections that detail anticipated population growth across the Town. These projections contain the most accurate data currently available and therefore, no alterations were made for this analysis. In addition to residential growth projections, the Master Plan also considers development growth of industrial lands in the Town. These projections were looked at with a high level of scrutiny given the water demands associated with industrial land use. For this analysis the Industrial land development has been slowed to a level more representative of the anticipated growth rate for the period of time between now and The scenario assumes New Tecumseth will have 120 ha instead of 186 ha, which was projected by the Water Master Plan. After this point in time the development of Industrial lands jumps back to what the Water Master plan had originally projected. The supply to Honda is another significant demand considered in the Master Plan. The demands considered in the Master Plan were found to be reflective of current peak uses. In addition, the projected growth related to Honda demands were also noted to be as accurate as possible given the number of variables and therefore, no alterations were made for this analysis. The current peak supply from the pipeline is 9500m3/day and as noted previously, Collingwood had advised that they are only able to provide an additional 500m3/day. In summary, the following was considered for this analysis: Undertake improvements to existing system components which would provide an increase of 1,000m3/day. Slow the growth of Industrial Lands to reflect anticipated growth rates. Undertake the development of a new well that when on-line would generate approximately 3,500m3/day. Supply from the pipeline increased to 10,000m3/day. Honda peak demand maintained as contained in the Master Plan. Residential growth maintained as contained in the Master Plan. These items have been captured in the figure appended to this report as Attachment No. 3. Notwithstanding this figure contains data for 25 years, the focus of this analysis is only on the first 5 years. As can be seen on the graph, when the above noted items Page 4 of 9

5 are factored into the analysis there is sufficient supply to address the Town s peak flow demands. By way of an agreement dated May 7, 2007, between New Tecumseth and Essa, the Town currently provides 100m3/day to Essa. As previously reported to Council, Essa has requested an additional 400m3/day to supply a new residential development in the community of Baxter. Factoring the timing of this development as well as the analysis previously described, there will be sufficient supply to address Essa s request as it comes on-line in the coming years. In keeping with direction previously provided from Council, Staff will move forward with the development of a water supply agreement with Essa. Future Items Agreement with Collingwood New Agreement with Collingwood, Extension of pipeline to Tottenham. FINANCIAL CONSIDERATIONS The improvements that are being recommended to existing system components are estimated to cost $1,200,000 As part of the announcement of a new funding program under the Water and Wastewater Fund the Town has been advised that it is eligible to receive a maximum federal allocation of $1,286,141 and a maximum provincial allocation of $643,071. The Town would have to fund an amount equivalent to the provincial allocation; $643,071. The new funding program could be used to fund 75% of the work, which would be in keeping with the program guidelines. The development of a new well has been estimated to cost $8,000,000 This work includes hydrogeological studies as well as the necessary mains to connect into the existing distribution system and will be funded from Development Charges. As previously discussed, the Town s component of the membrane replacement at the Collingwood treatment plant is currently estimated to be approximately $475,000. The exact amount as well as details of the agreement between the Town and Collingwood will be quantified through further discussions with Collingwood and brought back to Council. An amending agreement with Essa for the increased supply of water will also be brought back to Council for their approval. Financial details, such as the Buy-In Fee and per cubic metre charge will be contained in the amending agreement. Respectfully submitted: Blaine Parkin, P.Eng. Deputy CAO Page 5 of 9

6 Attachments: DCAO Attachment No 1 DCAO Attachment No 2 Approved By: Department: Status: Mark Sirr, CPA, CMA Finance Approved - 29 Sep 2016 Brendan Holly CAO Approved - 29 Sep 2016 Page 6 of 9

7 TOWN OF COLLING WOOD August 30, 2016 Environmental Services Water 43 Stewart Road, Collingwood L9Y 4M7 Tel: (705) Ext Fax: (705) The Corporation of the Town of New Tecumseth Administrative Centre 10 Wellington Street East Alliston, ON L9R 1A1 Attention: Blaine G. Parkin, P. Eng., Deputy CAO Dear Mr. Parkin, We are responding to your letter of request dated June 16, Staff at the Town of Collingwood presented report "PW », Regional Pipeline: New Tecumseth Additional Water Supply Request to Committee on August 8, 2016 and Council on August 29, 2016 in response to your letter. Please see attached a copy of our report for a more comprehensive review of our evaluation of your request. Unfortunately at this time we are not able to fulfill your entire request without a major plant expansion. As you know, our municipalities along with the assistance of OCWA, are working towards a new Water Supply agreement. Through this new agreement we willset out clear and understandable objectives that will establish a new collaborative partnership. It is our hope that we can continue with this process to the mutual benefit of both municipalities. In reviewing current demands and commitments, we are able to provide additional supply of 50Om3to New Tecumseth immediately. Collingwood would be amiable in establishing an agreement with the following conditions: New Tecumseth will provide an equitable financial contribution towards the currently proposed membrane replacements in 2016 and any future membrane replacements. New Tecumseth will provide agreed upon financing prior to the commencement of providing additional capacity. New Tecumseth will continue to work with Collingwood and OCWA to establish the terms of a new agreement for the continued long term supply of water to New Tecumseth. (This will include conditions on the planning and financing of a plant expansion to meet the future needs of New Tecumseth). We can also commit to reviewing the available taking on an annual basis with New Tecumseth. This would include evaluation on secured capacity following membrane replacements, as well as reviewing our demand needs and commitments to ensure that we are providing what we can to New Tecumseth without compromising both of our needs. Page 7 of 9

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9 Maximum Day Demand (m3/day) vmo=< e Mom; Page 9 of 9