TREASURY COUNCIL REPORT

Meeting Date: February 19, 2019

Prepared By: Ansberth Willert

LAKESHORE COLLECTION & SEWAGE PLANT

COSTS -PROJECT TIMELINE ___________________________________________________________________________________________________

RECOMMENDATION:

THAT the report entitled, “Lakeshore Collection & Sewage Plant Costs – Project Timeline” be

received by Council for information.

BACKGROUND:

This report provides a chronology of the costs incurred, direction given and the calculation of

the billings for the combined projects of the Tri-Municipal Sewer Plant and the Lakeshore

Collection System. The options notice mailed to residents January 2019 included the

following information:

“As outlined in the 2006 Master Plan, the Service Area for these projects included all of the lands along the lakeshore from Grand Bend to St. Joseph, lands along the north side of Huron Road 83 (Dashwood Road) and the north half of the hamlet of Dashwood. Project costs are distributed per property with the Dashwood Benefitting Area prorated until Council made the decision that it was not feasible to service the hamlet at that time.”

Chronology of Events: December 6, 2004 Council passed the following resolution:

THAT the Council of the Municipality of Bluewater request Lambton Shores to include Dashwood in the EA Master Plan for the Grand Bend Sewage Treatment Facility Service Area Master Plan and give us a cost estimate for an EA for up to Highway #84. CARRIED.

February 7, 2005 Council passed the following resolution: THAT the Council of the Municipality of Bluewater agree to participate in the Master Plan and Class EA with Lambton Shores for the Sewer Extension at a cost of $48,229.00 plus GST. CARRIED.

February 2006 The Master Plan was completed. The final design recommended the Grand Bend Sewage Plant include receiving sewage from Bluewater for lakeshore area up to St. Joseph’s and Dashwood.

May 2008 Council passed a resolution that the costs of the 2006 Sewer Master Plan be tracked against the Tri-Municipal Sewage Plant Project.

September 2009 The three municipalities could not come to a consensus on an

operating agreement. Starting in March 2010, the OMB oversaw the challenging mediation process. In July 2010, the governance agreement was complete.

Once funding was confirmed for the plant, Council started the process of an

Environmental Assessment (EA) for a collection system. Public consultation is a normal component of process in the completion of EA studies. While these were two separate projects, the service area was the same so costs accumulated were tracked accordingly.

February 2010 Bluewater hired Dillion Consulting to complete the Class EA for Bluewater’s Highway 21 Corridor Sanitary Sewage Collection System at a cost of $176,560 plus a 10% contingency to be used upon the approval of the project manager. It was confirmed at this meeting that two public meetings are scheduled to be held with the EA.

October 17, 2011 Council passed a resolution to remove the Dashwood area from the

Collections System Class EA and Preliminary Design report.

November 7, 2011 Council passed a resolution that due to lack of available funding programs from senior levels of government that they would not be proceeding with the Lakeshore Collection System at this time and that the Tri-Municipal Committee be informed of this decision.

November 21, 2011 The EA is finalized. The report recommended moving forward with

the lakeshore servicing once funding was received. It was not recommended to move forward with the servicing of Dashwood at that time.

December 5, 2011 Council passed a resolution to withdraw from the Grand Bend

Sewage Treatment Facility and provided official notice to the Tri-Municipal partners under date of December 7, 2011.

The Municipality continued to negotiate to preserve our future access to the plant with

the Tri-Municipal Agreement receiving final approval on April 7, 2014.

August 24, 2015 Two resolutions were passed for staff to bill out the combined project costs based on the estimated costs and estimated property count. However, staff identified at this meeting that the number of properties within the study area had not been confirmed, nor were all costs received. It was anticipated that South Huron was to construct a new section of pipe and Bluewater would be responsible for additional costs of approximately $50,000 to upsize the pipe for our anticipated capacity.

The pipe was never upsized, although the Municipality did receive an additional legal

bill in 2015.

2015 Year End Audit The amounts outstanding for these combined projects were removed from the Capital project accounts, and combined as an outstanding receivable on the Balance Sheet.

January 2016 Treasury provided a spreadsheet of potential benefitting properties to Public Works for review to confirm the denominator in the cost calculation equation, since the numerator (total costs) was finalized. Due to workload and subsequent staffing changes/shortages, calculations were not finalized.

While projects are being completed, invoices are paid and costs incurred are

accumulated in a balance sheet account. Once the project is completed, it is financed through a combination of Grant Funding (if approved), Reserves (if available) and ratepayer payments/debentures.

Due to continued staff vacancies/absences, Treasury was unable to determine the

“benefitting properties” and as such, options notices were unable to be issued.

May 2018 Treasury Department staff complement allowed for the determination of properties to be included in this billing, so that this receivable could be addressed.

November 19th, 2018 Staff took a report to Council, seeking direction regarding the

outstanding balance of project costs. This report was also attached to the staff report dated December 17, 2018, which brought forth By-law 108-2018, being the by-law authorizing the billing. This complete report is attached hereto. The following resolution was passed:

THAT Council for the Municipality of Bluewater direct staff to proceed with the billing of the Lakeshore Collection and Tri-Municipal projects as apportioned to the respective service area with an option to pay on property taxes over a three-year period. CARRIED.

Once it was confirmed that invoices were to be issued, Treasury worked with the

auditor to update the ownership on the properties included in the study area. The rationale was that since all costs were for preliminary costs and benefits, all properties were subject to a share of the costs.

Had the project succeeded, eligibility criteria would have been developed and applied to each property on the tax roll within the study area. As it is, Treasury only had the number of properties and total costs, so the calculation was made and the options offered were those approved by Council in August of 2015, and verified on November 19, 2018.

Chronology of Costs

The attached recap/spreadsheet that was used with the Municipal Auditor to

determine the final calculation of cost allocation as provided in the options notices for

the combined Lakeshore Sewer Projects.

Each project had costs tracked against it within the financial system and the total

annual costs were fed into the recap sheet. There is a breakdown of category for the

costs.

The initial calculations in August, 2015 were based on the estimates of a property

count of 1,093 and total combined costs of $667,851.

The notices were issued based on a property count of 1,028 and total combined costs

of $625,692.

Additional Information:

To aid in providing additional rationale for the Lakeshore project costs and related billings, I

have attached several excerpts from the Environmental Screening Report for the Lakeshore

Collection System that was dated November 21, 2011. Appendix C of this report contains the

slide presentations from the two public information centres (PIC) held as part of the

Environmental Assessment Process. The attached excerpts identify the reasons for

investigation of sewer service to the lakeshore population as well as how these costs were to

be funded. The last excerpt is the Notice of Completion for the project which was dated

November 15, 2011. This notice was placed in the papers and on our website and advised

that the Environmental Screening Report was available for public viewing from November 23,

2011 to December 23, 2011 both on our website and as a hardcopy in our office.

The Environmental Screening Report has been reposted to our website at

www.municipalityofbluewater.ca under Reports and Projects for anyone who may wish to

revisit this document.

Attachments:

1. Lakeshore Sewer By-Law and Background Report

2. Lakeshore Sewer Projects costs 2004-2015

3. Excerpts from Environmental Screening Report

4. Notice of Completion

Submitted By:

Ansberth Willert, Manager of Finance

519-236-4351 ext. 230, awillert@municipalityofbluewater.ca

Approved:

Kyle Pratt

CAO

TREASURY COUNCIL REPORT

Meeting Date: December 17, 2018

Prepared By: Ansberth Willert

LAKESHORE COLLECTION & SEWAGE PLANT COSTS

By-Law 108 - 2018 ____________________________________________________________________________________________________________

RECOMMENDATION: That By-Law No 108 – 2018, Being a by-law to impose a Capital Charge for the Lakeshore Sewage Works, be given first, second and third reading and finally passed this 17th day of December, 2018.

BACKGROUND:

The Municipality passed the following motion on November 19th, 2018: MOVED: Councillor Hill SECONDED: Councillor Whetstone That Council for the Municipality of Bluewater direct staff to proceed with the billing of the Lakeshore Collection and Tri-Municipal projects as apportioned to the respective service area with an option to pay on property taxes over a three-year period. CARRIED.

It was further discussed that the billing would be payable as at May 31, 2019.

Based on the direction received, staff have drafted By-Law No. 108-2018 to authorize issuance of the billings. The billings will be issued in the new year, with a due date of May 31st, to allow ample time for ratepayers to consider the options before a decision is required. As with all previous billings the notice will be a “negative confirmation”, meaning that no response is deemed to be a selection for the debenture.

FINANCIAL IMPACT:

The expenditures for these projects were incurred over the timeline of the project and the associated invoices were paid as required. Removal of this receivable from the balance sheet will impact the accumulated surplus/deficit calculation for 2018. The total combined costs for these projects are $625,692.43. Invoicing of these costs to the benefitting properties will ultimately remove this receivable from the balance sheet while replenishing the reserves expended in payment of the costs.

ATTACHMENTS: By-Law 108 - 2018 Lakeshore Collection_Sewage Plant Costs_20181119

Submitted By: Concurred:

Ansberth Willert, Manager of Finance Chandra Alexander, Clerk 519-236-4351 ext. 230,awillert@municipalityofbluewater.on.ca

Approved:

Kyle Pratt, CAO

Page 93 of 152

THE CORPORATION OF THE MUNICIPALITY OF BLUEWATER

BY-LAW NO. 108-2018

BEING A BY-LAW WITH RESPECT TO A CAPITAL CHARGE FOR SEWAGE WORKS UNDER SECTION 391 OF THE MUNICIPAL ACT, S.O. 2001

WHEREAS the Corporation of the Municipality of Bluewater (the “Municipality”) proposed to provide sewage works for the supplying of sewage service to part of the Municipality; specifically, the Ward of Hay Lakeshore Area and to the Bluewater portion of Dashwood as set out in Schedule “A” as the Study Area;

AND WHEREAS the Municipality has incurred costs for involvement in the Tri-Municipal and Lakeshore Collection Projects; AND WHEREAS Section 391 of the Municipal Act, S.O. 2001, authorizes the municipality to pass a by-law to impose fees or charges on any class of persons for capital costs payable by it for water services or activities which will be provided by it;

AND WHEREAS it is deemed desirable by the Council of the Municipality of Bluewater to pay for a portion of the capital costs of the sewage works by imposing a sewage works fee or charge upon persons owning land within the study area located in the ward of Hay who will or may derive a benefit from the said sewage works;

AND WHEREAS it is deemed desirable by the Council of the Municipality of Bluewater to allow two (2) repayment options of the sewage works fee or charge; NOW THEREFORE, THE COUNCIL OF THE MUNICIPALITY ENACTS AS FOLLOWS: 1. Short Title

This By-law may be cited as the “Lakeshore Sewage Capital Charge By-law” 2. Definitions In this By-law:

(1) “Act” means the Municipal Act, R.S.O. 2001, as amended; (2) “capital cost” means the cost of constructing sewage works inclusive of all

items of cost usually and properly chargeable to a capital account;

(3) “sewage works” means any public works for the supply, transmission, or treatment of sewage or any part of any such works;

(4) “capital charge” means a charge for the capital cost of sewage works.

Terms not defined in this by-law shall have the meaning ascribed to them in the Act.

3. Capital Charge

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3.1 A capital charge is hereby imposed upon persons owning land which will derive or may derive a benefit from the said sewage works, to pay for a portion of the capital cost thereof.

3.2 The persons which are deemed to derive benefits from this project are the

owners of all lands within the Ward of Hay Lakeshore Area and to the Bluewater portion of Dashwood as set out in Schedule A as the Study Area as outlined in the shaded area on the sketch attached as Schedule A to this By-law. These lands are considered to be the Study Area.

3.3 The capital charge on all lands within the area set out in Schedule A shall be

calculated as set out in the options below. (1) A full payment of Five Hundred and Forty-Seven Dollars and sixty-six cents

($547.66) per separately assessed property within the Dashwood portion of the Study Area or Six Hundred and Sixteen Dollars and fifty cents ($616.50) per separately assessed property within the Lakeshore portion of the Study Area. Such flat rate charge shall be due and payable by May 31, 2019.

(2) or a debenture for the full amount of the outstanding capital charge (total charges at the full payment value) will be paid as an annual charge over a period of three (3) years commencing on the final tax billing in the year 2019.

4. Unpaid Charges 4.1 A charge imposed under this by-law is a lien and charge upon the land, and if the

charge or any part thereof remains unpaid after the due date, the amount unpaid may be collected by distress upon the goods and chattels of the owner or occupants, or the clerk of the municipality, upon notice to the owner or occupant of the amount due, the person by whom it is due and the land upon which a lien is claimed, shall enter the same upon the collectors roll, and the collector shall proceed to collect it in the same way, as nearly as possible, as municipal taxes are collectable.

5. Validity Should any clause or provision of this by-law be declared by a court of competent jurisdiction to be invalid, the same shall not affect the validity of this By-law as a whole, or any part thereof, other than the part so declared to be invalid.

6. This By-Law shall take effect on December 17, 2018. READ A FIRST, SECOND, THIRD TIME and passed on this 17th day of December, 2018.

____________________________________ Paul Klopp, Mayor

____________________________________ Chandra Alexander, Clerk

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Schedule A – Lakeshore Sewage Capital Charge Area

Page 96 of 152

TREASURY COUNCIL REPORT

Meeting Date: November 19, 2018

Prepared By: Ansberth Willert

LAKESHORE COLLECTION & SEWAGE PLANT COSTS ____________________________________________________________________________________________________________

RECOMMENDATION(S): Staff request direction from Council by approving one of the following recommendations:

(1) That Council for the Municipality of Bluewater direct staff to remove the receivable for the Lakeshore Collection and Tri-Municipal projects from the Balance sheet and absorb it into the annual surplus/deficit calculation

(2) That Council for the Municipality of Bluewater direct staff to proceed with the billing of these projects apportioned to the respective service area with an option to pay on property taxes over a three-year period.

BACKGROUND:

The Municipality began looking at servicing the lakeshore area (Hay Ward) for sewers in 2004 by hiring consultants to draft a Sewer Master Plan. As outlined in the 2006 Master Plan, the Service Area for these projects included all of the lands along the lakeshore from Grand Bend to St. Joseph, lands along the north side of Huron Road 83 (Dashwood Road) and the north half of the hamlet of Dashwood. Project costs were to be distributed per property with the Dashwood Benefitting Area prorated until Council made the decision that it was not feasible to service the hamlet at that time. (November 2011 � all 2011 costs were prior to this decision.) Initially, Council funded the 2006 Sewer Master Plan from the Hay Water Reserve Fund. In May of 2008, Council passed a resolution that the Hay Water Reserve Fund was to be repaid, and the costs tracked against the cost of the Tri-Municipal Project. Lambton Shores, South Huron and Bluewater received joint funding for this project through the Build Canada Fund with Lambton Shores taking the administrative lead. Once funding was confirmed for the plant, Bluewater Council started the process of an Environmental Assessment (EA) for a collection system. While these were two separate projects, the service area was the same so costs accumulated were tracked accordingly. Costs/charges to both these projects were paid from our general bank account (which holds our working funds and reserves) as received. At yearend the costs were moved to a balance sheet account for unfinanced capital project (later renamed Work In Progress). Tracking of these costs in this manner was historical so Treasury maintained consistency in the tracking. The costs were incurred over a period from 2004 to 2015. The 2014 and 2015 costs were all legal bills to protect our interests/negotiate agreement for a term whereby Bluewater could �Opt back in�. At the end of 2016, when no further costs were being incurred on these projects, the balance from the WIP accounts was set up as a receivable as per Generally Accepted Accounting Principles. Tri-Municipal Costs funded by the BCF Funding were incurred by the �Committee� starting in January, 2009. Bluewater Opted out following the 2014 Municipal Elections. Costs incurred by Bluewater include the Preliminary designs and EA�s for both projects, as well as participation in the Tri-Municipal Project costs up until the end of 2014. Staff were given direction on what options to present on the invoices, once it could be determined the total cost of the projects and the associated benefitting properties. Treasury made use of a co-op student this summer, to review tax roll and information gathered from the EA consultants to determine the number of properties to be invoiced. In recent discussions with municipal colleagues and Ministry staff it was identified that passage of the required by-law under the Fees & Charges section of the Municipal Act requires that there be an ongoing benefit. The EA for the collection system was dated

115

Page 97 of 152

November, 2011 and the EA for the plant was amended to exclude Bluewater with the final appeals resolved in September 2013. The benefits of these projects are the existing EAs and the negotiated participation agreement. Downsides include the date of the EAs and additional costs resulting from the downsized plant. One can argue the major strength/benefit of these costs is the protected interest of Bluewater to participate in the plant. Collection of these costs over three years will replenish the reserves expended for these projects while the benefits of same are still in effect.

FINANCIAL IMPACT:

The expenditures for these projects were incurred over the timeline of the project and the associated invoices were paid as required. Removal of this receivable from the balance sheet will impact the accumulated surplus/deficit calculation for 2018. The total combined costs for these projects are $625,692.43. Invoicing of these costs to the benefitting properties will ultimately remove this receivable from the balance sheet while replenishing the reserves expended in payment of the costs.

RELATIONSHIP TO STRATEGIC PLAN:

This report relates to the Infrastructure Pillar of our Strategic Plan as it demonstrates our commitment to meet current and

anticipated provincial environmental standards.

Strategic Pillar: Infrastructure

Strategic Priority: Meeting current and anticipated provincial environmental standards.

Outcome: N/A Initiative (Short-Term): N/A

ATTACHMENTS: None. Submitted By:

Ansberth Willert, Manager of Finance

519-236-4351 ext. 230,

awillert@municipalityofbluewater.on.ca

Approved:

Kyle Pratt, CAO

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Page 98 of 152

Utilities Capital Project Costs Summary

Project: Grand Bend Area Sewage Treatment Plant

Account: 01-0810-402-9770

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Master Plan $44,229 $14,321 $5,013

Class EA & Prelim Design $28,278 $44,956

Final Design $35,334 $18,950 $25,483

Preconstruction $433

Dillon Meeting Fees $6,635 $8,334 $5,904

Legal $87,046 $16,903 $4,798 $6,820 $35,855 $7,842

Advertising $250 $15 $1,649 $2,309

Postage $608 $16

Capital Work

Staff Costs $5,000

Other Professional Fees

Annual Subtotal $44,229 $14,321 $5,013 $28,278 $93,216 $114,361 $49,939 $4,798 $9,128 $35,855 $7,842

Project Total

Costs to 2011: $349,357 Cost 2012 - 2015: $57,622

Project: Dashwood/Lakeshore Sanitary Sewage Collection System

Account: 01-0810-402-9772

2005 2006 2007 2008 2009 2010 2011 2012

Class EA & Prelim Design $93,232 $38,166

Legal $33,887 $17,544 $5,085

Advertising $28,342 $1,774

Postage $682

Misc Costs

Annual Subtotal $0 $0 $0 $0 $0 $155,461 $58,167 $5,085

Project Total

Costs to 2011: $213,628 Cost 2012 - 2015: $5,085

Total $625,692 Matches to balance in A/R Account AW-Oct 11/18

Total costs up to Total costs from Total costs of

2011 2012-2015 Project to invoice

$562,985 $62,707 $625,692

Total number of benefitting properties: 1,028 911

Total number of benefitting properties in Dashwood Area: 117

Dashwood Amount: 547.66 68.84 616.50 Full Amount

Quarterly Amount: 45.64 51.38 Quarterly Amount

Year

$218,712

Year

$406,980

Activity

Activity

E:\Lakeshore Sewer Billings\GBA project costs 2004-2015.xlsx

HIGHWAY 21 CORRIDOR SANITARY SEWAGE COLLECTION SYSTEM

CLASS ENVIRONMENTAL ASSESSMENT (EA) & PRELIMINARY DESIGN

Notice of Completion

On November 3, 2011, the Municipality of Bluewater Council adopted the Environmental Screening Report prepared for

the proposed Highway 21 Corridor Sanitary Sewage Collection System. The Service Area for the collection system is

shown on the map. The collection system consists of the following components:

a forcemain located in an easement along the east side of Highway 21

a low pressure sewage collection system servicing all of the subdivisions in the lakeshore Service Area. The

system will be constructed in four phases from the south to the north.

Since the preliminary municipal and per lot cost estimates prepared for the proposed collection system are high, the

Environmental Screening Report recommends that the system not be constructed until Provincial Government funding is

available. The Municipality intends to use the report as the basis for seeking funding.

The Class EA completed for this project followed the requirements of the Municipal Class EA (2000, as amended) for a

Schedule “B” project, as documented in the Environmental Screening Report. A copy of the report is available for a 30-

day review period from November 23 to December 23, 2011 at:

Municipality of Bluewater

14 Mill Avenue, P.O. Box 250

Zurich, Ontario. N0M 2T0

519-236-4351

Hours: Monday to Friday, 8:30 a.m. to 4:30 p.m.

The report is also available on the Municipality’s website at www.town.bluewater.on.ca.

The Municipal Class EA entitles any person who has significant concerns about the project to request the Minister of the

Environment to issue a Part II Order to change the status of the project from a Class EA to an individual environmental

assessment. The procedure for requesting a Part II Order is:

first, the person with concerns discusses them with the Municipality of Bluewater

if the concerns cannot be resolved, the person may submit a written request for a Part II Order to the Minister of

the Environment at 135 St. Clair Avenue West, 12th Floor, Toronto, Ontario, M4V 1P5 by December 23, 2011,

copied to Brent Kittmer, Utilities Superintendent, Municipality of Bluewater, 14 Mill Avenue, P.O. Box 250,

Zurich, Ontario, N0M 2T0.

The Freedom of Information and Protection of Privacy Act applies to information gathered for this project. With the exception of

personal information, all comments will become part of the public record.