Prepared by: UMA Engineering Ltd. March City of Pitt Meadows Proposed Drainage Utility

Transcription

1 Prepared by: UMA Engineering Ltd. March 2008 City of Pitt Meadows Proposed Drainage Utility

2 Executive Summary Collecting rainfall that runs off properties, roads and farms into a drainage system is a major undertaking for the City of Pitt Meadows. The geographic context of the City, low-lying rural areas surrounded by major river systems, has most areas located within or draining to a floodplain. The complex system of catch basins, pipes, culverts, ditches, sloughs, flood boxes, pump stations and dikes make up the City s drainage system each component is integral to the success of the whole. Today, most property owners pay for drainage and irrigation services as a general assessment through property taxes. Flooding is becoming more frequent, particularly in low-lying parts of the City, as the number, intensity and duration of winter storms is being affected by global climatic changes. Flooded fields Recent land use changes within all parts of the City, such as construction of residential homes/acreages, intensification of agricultural production (i.e. forage versus blueberry), greater reliance on ditch water irrigation and urban development have contributed to increased runoff, in terms of quantity and rate, coupled with the fact that these land use changes have less tolerance to flooding. Following a severe rainfall event in November 2003, District Council of Pitt Meadows engaged Klohn Crippen Berger Associates to complete a Lowland Drainage and Irrigation Study. This study provided 16 recommendations for improving lowland drainage and irrigation capacities. Coincidentally, the Canadian Institute of Chartered Accountants published a research report titled Accounting for Infrastructure in the Public Sector in September, It recommends a shift in thinking when considering the impact and use of municipal assets, such as a drainage system - it recognizes the cost of using infrastructure must incorporate the realities that infrastructure is susceptible to failures due to age. As it turns out, costs of using existing infrastructure far exceed the improvements recommended in the Klohn Crippen Berger Study. Most municipalities within BC, including Pitt Meadows, are not contributing sufficient funds through property taxes and other revenues to pay for large capital improvements, such as the replacement of an existing pump station or box culvert. The City's multi-million dollar investment in drainage infrastructure is deteriorating and it will require rehabilitation, replacement and upgrades over time. Finally, drainage and irrigation operating, maintenance and capital costs have been escalating at a rate greater than other municipal services. This is unsustainable over the longterm. Continuing to rely upon the general property tax system for drainage funding will apply greater pressure on other civic priorities. Conveyance system at capacity 1

3 Council instructed staff to review alternate funding models to address rural and urban drainage needs. This background report outlines an approach to funding drainage needs, the creation of a drainage utility, similar to the City s water and sewer utilities. A drainage utility can provide adequate funding for current and future long-term drainage needs relating to maintenance, rehabilitation, replacement, upgrades and environmental protection of the urban and rural drainage systems. Implementation of a drainage utility will eliminate financing drainage needs through property taxes and reduce reliance on attaining successful grant applications. Establishing a drainage utility, a user pay system, can promote greater public awareness of drainage issues and asset management systems (long-term thinking) necessary to avoid spikes in taxation required to support infrastructure improvements. The benefits to the City of establishing a drainage utility include: Establishes a mechanism to fund improved performance, replacement and rehabilitation of major drainage infrastructure components and opportunities to adopt environmental protection improvements; Increases in the performance of the overall drainage system (i.e. less frequent flooding over the long term); Captures the full cost of operating a drainage system, which recognizes the cost of using infrastructure and promotes long-term thinking; Eliminates future taxation spikes to fund large capital costs by establishing an ongoing, reliable revenue source; and Provides opportunity for public input and scrutiny with the operation and capital investment of drainage infrastructure by providing the right amount of service for the right price. Long Term Drainage Costs (to the year 2050) Klohn Crippen Berger upgrades, $13,100,000 Culverts, $4,500,000 Pump stations and flood boxes, $25,400,000 Operating and maintenance, $61,700,000 Miscellaneous capital, $14,400,000 In order to meet these drainage and irrigation expenditures over the next 42 years a revenue source equivalent to $1,707,000 annually is needed. 2

4 The planned drainage utility model is predicated on fairness by establishing a city-wide single utility rate. The proposed fee is based upon the area of each parcel or property, plus a portion of the general tax assessment used to calculate municipal taxes. Drainage Levies Classification Single Family and Two Family Multiple Family Industrial, Commercial, Institutional Agricultural Annual User Charge $28 per lot $8 per unit $825 per hectare $82.50 per hectare Drainage Tax Assessment Mill Rates Classification Proposed Mill Rate Residential Utilities Major Industry Light Industry Business Recreation/Non Profit Farm The amount charged for the proposed drainage assessment will vary between properties, depending upon the level of improvements and the assessed value of the property. The proposed Drainage Utility could be in effect as early as January 1,

5 1.0 Introduction Collecting rainfall that runs off properties, roads and farms into a drainage system is a major undertaking for the City of Pitt Meadows. The geographic context of the City, low-lying rural areas surrounded by major river systems, has most areas located within or draining to a floodplain. The complex system of catch basins, pipes, culverts, ditches, sloughs, flood boxes, pump stations and dikes make up the City s drainage system each component is integral to the success of the whole. Today, most property owners pay for drainage and irrigation services as a general assessment though property taxes. The City is surrounded by a series of dikes, initially constructed in the 1950 s, to protect primarily rural farm areas from freshet flooding of the Fraser River system, including the Pitt and Alouette Rivers. Since that time Pitt Meadows has upgraded dikes in the late 70 s and early 80 s. Recently the Ministry of Environment has considered a hydraulic analysis of the Lower Mainland Fraser River system and endorsed recommendations to raise most existing dike elevations by varying amounts along the Fraser River and its estuaries. The dikes perform a valuable function by protecting low-lying areas from river flooding; however they also hold in rainwater and snow melt, most noticeably during the fall/winter season, as such virtually all run-off requires pumping over the dike system. Why is the City considering a Drainage Utility? Following severe rainfall events in November 2003 and January 2005 (classified as a 1:30 year storm event), Council decided to engage an engineering firm to evaluate the state of Pitt Meadows drainage and irrigation systems. Klohn Crippen Berger Associates completed a Lowland Drainage and Irrigation Study in April, 2006, which recommended: Significant capital improvements to the drainage system, ranging from $2,104,000 to $12,743,000; Technological improvements to forecast and monitor the efficiency of the system; and Improve the efficiency of the conveyance system (ditches) through regular maintenance and culvert replacements. Following receipt of the Klohn Crippen Berger Study, City Council asked staff, assisted by UMA Engineering Ltd. (UMA), to develop a funding strategy to address drainage needs. A series of Council presentations, since the fall of 2006, culminated in approval to seek public input on creating a drainage utility, similar to the water and sewer utilities used today. Flooded fields 4

6 Drainage and irrigation operating, maintenance and capital costs have been escalating at a rate greater than other municipal services. This is unsustainable over the long-term. Historic Drainage Cost Escalation $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $ The escalation in drainage and irrigation costs over the last five years (average 12% per year) is not sustainable into the future. Relying on the property tax system alone (general revenue) to fund drainage and irrigation costs, places greater pressure on funding for other civic priorities. Also, it is important to recognize the current level of expenditure does not include improvements recommended in the Klohn Crippen Berger Study, costs to sustain the current infrastructure in the long term (such as costs to replace pump stations), nor costs to improve the level of service expected by the citizens of Pitt Meadows. What is the current situation? Within the dike system there are four separate, independent drainage catchment areas within the City of Pitt Meadows: Operating & Maintenance Capital Area # 1 between the North and South Alouette River; Area # 2 adjacent to Pitt River, north of the Alouette River; Area # 3 adjacent to Fraser River, south of the Alouette River (encompassing the urban centre of the City and a portion of Maple Ridge); and Area # 4 adjacent to Pitt River, north of the Alouette River. Flooded blueberry field 5

7 With building the dikes the City has, over the years, constructed, or assumed responsibility for, a series of pump stations, flood boxes, ditches and culverts designed to remove rainfall collected within the dike system, by discharging ditch water through the dikes. Storm water run-off within the City of Pitt Meadows, except the Pitt-Addington Marsh, passes through a pump station or flood box to the rivers within and adjacent to the City. Only one catchment area is affected by urban storm water run-off Area # 3 Kennedy. Also, a portion of the District of Maple Ridge flows through Area # 3 to pump stations located within Pitt Meadows. Clogged ditched beaver dam The last significant capital investment in drainage infrastructure took place in the early 1980's with the construction of the Fenton, Kennedy, Baynes and McKechnie Pump Stations and flood boxes with funding from the Agriculture Rural Development Subsidiary Agreement (ARDSA) program. Since the end of this program in the 80 s, the Provincial and Federal governments have not supported municipal drainage improvements within British Columbia. Generally, provincial grant structures, downloading of programs to municipal governments and slow growth in revenues have eroded municipalities ability to pay for services and facilities their citizens demand 1. Small grants are currently only available to support agricultural irrigation improvements. Flooding is becoming more frequent, particularly in low-lying parts of the City, as the number, intensity and duration of winter storms is being affected by global climatic/weather changes. Land use changes within the low-lying areas of the City, such as construction of residential homes/acreages, intensification of agricultural production (i.e. forage versus blueberry), greater reliance on ditch water irrigation, urban development, as well as worldwide climatic changes, have contributed to increased run-off, in terms of quantity and rate. These land use changes have less tolerance to flooding. Existing Pump Station 1 Implementation Plan for a New Drainage Utility, City of Edmonton, April

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9 Most municipalities within BC, including Pitt Meadows, are not contributing sufficient funds through property taxes and other revenues to pay for large capital improvements, such as the replacement of an existing pump station or box culvert. The City's multi-million dollar investment in drainage infrastructure is deteriorating and it will require rehabilitation, replacement and upgrades over time. Milfoil clogs ditches and pumps 2.0 Why Is A Drainage Utility Needed? In September 2002 the Canadian Institute of Chartered Accountants (CICA) published a research report titled Accounting for Infrastructure in the Public Sector. This report recognizes the cost of using infrastructure incorporates the realities that infrastructure has a finite life-span and it is susceptible to failures due to age. It is important to report the full costs of operating the drainage system so that the public understands what is necessary and is able to scrutinize the public management of the resource. The research report stresses the importance of regular, ongoing condition assessments and understanding the impacts of deferred maintenance. By moving drainage and irrigation costs to a utility structure, a fee for service model, the City will be in a better position to recover the full costs of owning and operating this important asset and performance can improve as tax payers have more information about costs and fees paid. A discussion paper entitled Framing a Fiscal Fix-Up: Options for Strengthening the Finances of Western Canada s Big Cities, January 2002 addresses options and alternatives available to cities to address fiscal challenges. One option that was explored is user pay systems that reflect the actual cost of providing services. The paper cites a number of advantages to a user pay approach: User pay meets the three criteria of effectiveness, efficiency and equity. User pay produces equity in that people pay for what they consume. User pay is efficient in that it provides the right amount of service for the right price. User pay is efficient and sustainable in that services are readily available; User pay bridges the growing gap between increasing demands for expenditure and limited revenue by signalling to citizens and consumers the costs of municipal services; and User pay dispels the myth that public goods are free. 2 2 Implementation Plan for a New Drainage Utility, City of Edmonton, April

10 Establishing a drainage utility, a user pay system, can promote greater public awareness of drainage issues and asset management systems (long-term thinking) necessary to avoid spikes in taxation required to support infrastructure improvements. Also, the City is pursuing a similar full cost recovery approach for the water and sewer utility systems. January 2005 Flood Golf course in January

11 Benefits of a Drainage Utility Creating a drainage utility can provide a long-term sustained revenue stream necessary to support drainage infrastructure and improvements. The City of Pitt Meadows is particularly vulnerable, sandwiched between three major river systems and surrounded by a dike system. While the dike system offers protection from freshet river flows, it also encapsulates winter storms which require storm water pumping through/over the dike system. A reliable revenue source can result in less volatility in tax rates, particularly for large capital intensive projects such as drainage pump stations. Currently replacement costs, major capacity improvements and asset management practices are not being fully addressed by the City. By adopting this new funding initiative, the City can plan for and accommodate the significant expenditures required to provide drainage services in the City by taking a progressive versus reactive approach to drainage. Urban drainage ditch Field drainage systems Farm irrigation pump 10

12 By improving drainage systems: Farmers can expect increased yields and intensification of farming uses; City can adopt sustainability principles for drainage and irrigation; Farmers can utilize undeveloped and under-developed agricultural land; Greater employment opportunities can be realized through agricultural intensification; Greater mobility during severe storm events and access to recreational amenities; Rural acreages and low-lying urban areas would experience less frequent flooding, resulting in a safer environment; Greater incentive to utilize non-potable water for irrigation and create a more sustainable system; Improved maintenance of urban storm water detention ponds, capture of storm water sediment, pollutants and debris; City can start saving for eventual major capital replacements, thereby avoiding future tax spikes; Property damage can be minimized and less inconvenience caused by flooding; Greater public scrutiny of capital investments in drainage and irrigation can be attained; and Residents can continue to enjoy local, high quality farm produce. A utility model increases the City s ability to accommodate large capital intensive projects in the future by removing reliance on future grant awards. Since the mid 80 s both senior levels of government have avoided infrastructure grant programs targeting drainage infrastructure. Creating a drainage utility will not preclude future grant applications. By structuring a drainage utility the City has a unique opportunity to create greater public input into the operation of the utility, particularly from the agricultural community. All major capital improvements should be ratified by the rural community prior to implementation, as they are the recipients of most storm water run-off in the City. It is anticipated some expectations, particularly early on, may exceed the City s ability, even with a utility model; as such a formal community liaison can be used to respond to community or individual concerns. As improvements are made to the drainage system, the conveyance system (primarily rural ditches) can become efficient at providing more, Rural residential home cleaner irrigation water at a faster rate. Approximately 50% of the farms within Area # 3 use potable water to irrigate fields by providing financial incentives and a reliable alternate water supply, farmers can migrate from using potable water to a more sustainable, environmentally friendly ditch water alternative. Further, as there is no additional capacity within the City s water network north of the Lougheed Highway, the City cannot supply farmers who require additional irrigation water, using the potable water system, without a substantive capital investment in infrastructure. Switching to irrigating crops using non-potable ditch water can result in savings to each farmer. 11

13 A reliable funding source means drainage and irrigation improvements will not compete for general tax revenue used to finance other municipal improvements, such as an ice arena. A reliable funding source can produce more redundancy within the drainage system, which leads to fewer staff call-outs resulting in more productive Operations staff during severe winter storms and fewer emergency situations. Drainage Utility Benefits Establishes a mechanism to fund improved performance, replacement and rehabilitation of major drainage infrastructure components and opportunities to adopt environmental protection improvements; Increases in the performance of the overall drainage system (i.e. less frequent flooding over the long term); Captures the full cost of operating a drainage system, which recognizes the cost of using infrastructure and promotes long-term thinking; Eliminates future taxation spikes to fund large capital costs by establishing an ongoing, reliable revenue source; and Provides opportunity for public input and scrutiny with the operation and capital investment of drainage infrastructure by providing the right amount of service for the right price. 12

14 3.0 How Are Rates Determined? Drainage costs include the following needs over the long term: Annual operating and maintenance costs; Miscellaneous annual capital costs (including urban needs not funded through DCCs); Pump station, flood box and box culvert replacement costs; Culvert replacement costs; and Capacity upgrades for culverts and pump stations identified by Klohn Crippen Berger. Long Term Drainage Costs (to the year 2050) Klohn Crippen Berger upgrades, $13,100,000 Culverts, $4,500,000 Pum p s tations and flood boxes, $25,400,000 O perating and maintenance, $61,700,000 Miscellaneous capital, $14,400,000 In order to understand the full impact of each of these categories of expenditures (some ongoing, others staggered over time) a cash flow spreadsheet was prepared to the year This time frame was chosen as it represents the life-expectancy of the City s major pump stations. To meet the drainage system requirements over the next 42 years a new revenue source equivalent to $1,707,000 annually is needed. 13

15 Establishing a new Drainage Utility will transfer the operating, maintenance and capital requirements of the drainage and irrigation program to a Utility Reserve, similar to the water and sewer utility. Annual sources of funding a drainage utility include: Funding Source Amount Drainage Utility Levy (similar to water and sewer utility charge) $855,000 Drainage Tax Assessment $366,000 Contribution from Development Cost Charges $154,000 Contribution from Maple Ridge $332,000 Total required funding $1,707,000 The drainage utility levy ($855,000) is divided by the total number and area of properties within the drainage system, while recognizing urban residential properties generate five times the amount of run-off and urban industrial, commercial and institutional properties generate ten times the run-off on a proportional basis. A separate levy is then calculated for each type of property. The drainage tax assessment ($366,000) uses the total assessed value for each property class to create drainage mill rates on the same basis as the general municipal tax rate structure. All property, whether directly connected to a municipal storm sewer system or not, generates storm water run-off. It is not possible for a land owner to disconnect the service as all storm water run-off requires the municipal system at some point in time. Also, urban properties typically produce greater volumes of run-off at faster rates of discharge. As a result it is reasonable to surcharge urban land uses for the additional run-off generated. Rural and farm properties contribute run-off as well, albeit in a less obvious way as typically no storm sewer connection exists. All properties benefit from the drainage/irrigation system within Pitt Meadows and Maple Ridge and therefore should contribute towards a drainage utility. Drainage charges would appear as a drainage utility charge added to the current water/sewer utility levies and a drainage assessment shown on the tax assessment. The revised utility notice would show the area of each property, drainage levy and the amount charged under the drainage utility. Properties currently not connected to the City water and sewer systems would receive a utility notice for drainage only. The area of each property would be obtained from MapGuide, the City s online mapping system. The tax assessment notice, based on the property s assessed value determined by the British Columbia Assessment Authority, would contain a new charge for drainage. Each year s drainage mill rates would be determined at the same time as the general taxation mill rates. 14

16 What is the affect and when? Proposed Drainage Utility Levy Classification Single Family and Two Family Multiple Family Industrial, Commercial, Institutional Agricultural Annual User Charge $28 per lot $8 per unit $825 per hectare $82.50 per hectare Proposed Drainage Tax Assessment Mill Rates Classification Proposed Mill Rate Residential Utilities Major Industry Light Industry Business Recreation/Non Profit Farm The amount charged for the proposed drainage assessment will vary between properties, depending upon the level of improvements and the assessed value of the property. The proposed Drainage Utility could be in effect as early as January 1,

17 Land use changes to large impervious area 4.0 Cost Comparisons A number of properties were researched to determine specific charges resulting from a Drainage Utility. Cost Comparisons Type of Property Parcel Size (ha) Drainage Assessment Drainage Levy Total Drainage Charge Single family home one lot $50 $28 $78 Mobile home one pad $50 $28 $78 Townhouse unit - Ford Road one unit $12 $8 $20 Hardware store - Harris Road 0.3 $360 $272 $632 Fast food restaurant - Harris Road 0.4 $598 $355 $953 Shopping centre - Harris Road 5.0 $9,020 $4,100 $13,120 Car dealership - Lougheed Highway 2.4 $2,811 $1,979 $4,791 Hotel - Lougheed Highway 0.9 $3,040 $740 $3,780 Acreage - Harris Road 2.0 $49 $165 $214 Acreage - McQuarrie Road 4.0 $55 $330 $385 Acreage - Sheridan Drive 0.4 $68 $33 $101 Small farm - Reichenbach Road 8.0 $47 $660 $706 Large farm - Old Dewdney Trunk Road 41.2 $424 $3,398 $3,822 Large farm - Ford Road 61.4 $290 $5,060 $5,350 Properties which contribute greater amounts of storm water run-off will generally pay a higher portion towards the Drainage Utility. 16

18 5.0 What Improvements are Planned? During the first fifteen years of operation it is anticipated major improvements can be achieved with the adoption of a Drainage Utility. In the first five years, the City could install a new flood box at the McKechnie Pump Station, which would take advantage of low tidal river flows during extreme events; construct a new pump station in Area # 1; replace the aging Pitt Polder Pump Station; and replace undersized culverts, which hinder water from getting to the pump stations. Residents should start to see tangible benefits of an improved drainage system within the first five years of operation, particularly in Areas # 1, # 3 and # 4. In the second five years, the City could construct two new pump stations at Charlier Road and Reichenbach Road, which would increase the capacity to discharge storm water over the dike system; undersized culverts would continue to be replaced; and the City could start replacing old concrete box culverts where roads cross over the major sloughs. Storm construction project The third five years could see upgrades to the McKechnie and Baynes Pump Stations to increase the capacity of storm water discharge; replace undersized culverts and aging box culverts. 17

19 In addition to these capital improvements staff has undertaken a number of actions to improve the operation and management of drainage issues within the City, namely: Installed ditch water level gauges and improvements to the SCADA system to allow better forecasting of rising water levels; Re-opened the existing flood box within Area # 1; Reviewing ways of addressing weeds which are choking the ditch conveyance systems; Replacing undersized and deteriorated culverts; and Reviewing ways to address run-off from large impermeable areas, such as greenhouses. Flood Box Area #1 - to be re-opened Water level gauge 18

20 6.0 What Happens If We Do Nothing? Pump Station Area #1 Under the current taxation model, the City will continue to partially fund drainage needs, which will lead to large spikes in taxation when significant capital improvements, such as replacing a pump station, are required. One pump station alone requires approximately $1,500,000 to replace this is equivalent to a 15% municipal tax increase. Our future remains the same the City will have to pay for asset replacement with or without a utility. By establishing a utility residents start saving for those eventual costs. With global climatic changes, it has been forecast the frequency and intensity of winter storms will increase in the future, resulting in more flooding of low-lying rural and urban properties. This will result in an unsafe situation leading to inconvenience, loss of mobility, greater property and crop damage and impact on the environment. Vegetation management, in particular for invasive species (milfoil and parrot feather), is necessary to keep the ditches clean and free-flowing recent escalation of weed growth requires the City to spend greater amounts on drainage services, which could impact other civic priorities, such as maintaining roads and buildings, funding special events and constructing recreation facilities. Old pump - Area #1 A Drainage Utility provides an opportunity to start saving for the future eventual replacement and rehabilitation of major drainage infrastructure, while maintaining stable tax increases over the long term. Business affected by flooding 19

21 7.0 Conclusion Collecting rainfall that runs off properties, roads and farms into a drainage system is a major undertaking for the City of Pitt Meadows, as most areas are located within or drain to a floodplain. All rainwater run-off in the low-lying rural areas must be pumped to discharge over the dike system. Flooding is becoming more frequent, particularly in low-lying parts of the City, as the number, intensity and duration of winter storms is being affected by global climatic changes, coupled with the fact there is generally less tolerance to flooding within the community. Today, most property owners pay for drainage and irrigation services as a general assessment through property taxes. This method of funding does not meet the City s needs to provide a long-term plan for a sustainable drainage system - the City is not currently saving enough funding for future infrastructure requirements. Continuing to rely upon the general property tax system for drainage funding will apply greater pressure on other civic priorities. The City's multi-million dollar investment in drainage infrastructure is deteriorating and it will require rehabilitation, replacement and upgrades. Drainage and irrigation operating, maintenance and capital costs have been escalating at a rate greater than other municipal services. In order to meet these drainage and irrigation expenditures a revenue source equivalent to $1,707,000 annually is needed. The benefits to the City of establishing a drainage utility include: Establishes a mechanism to fund improved performance, replacement and rehabilitation of major drainage infrastructure components and opportunities to adopt environmental protection improvements; Increases in the performance of the overall drainage system (i.e. less frequent flooding over the long term); Captures the full cost of operating a drainage system, which recognizes the cost of using infrastructure and promotes long-term thinking; Eliminates future taxation spikes to fund large capital costs by establishing an ongoing, reliable revenue source; and Provides opportunity for public input and scrutiny with the operation and capital investment of drainage infrastructure by providing the right amount of service for the right price. 20

22 Contact information: City of Pitt Meadows Harris Road Pitt Meadows, BC V3Y 2B5 T: UMA Engineering Ltd. All Rights Reserved. This document is protected by copyright law and may not be reproduced in any manner, or for any purpose, except by written permission of UMA Engineering Ltd.