AMABEL WATER OPTION EVALUATION Thursday July 26, 2018

Transcription

1 AMABEL WATER OPTION EVALUATION Thursday July 26, 2018

2 Principles: Water systems such as the Amabel System must be financial neutral (i.e. no deficit or surplus); Revenues Expenses = Surplus (Deficit) Revenues are water fees Expenses include operating cost plus future capital need contributions Any deficit must be funded by increased water rates; Surpluses can be used to offset future water rates but typically needed to fund future capital and are transferred to capital reserves; All funds are accounted as a separate cost centre Cannot be funded or subsidized by municipal taxes; Revenues from water rates do not go to general revenue of the municipality

3 Challenges of Amabel System: Huge capital investment due to Clean Water Act Limited number of users approximately 400; Operation of four separate treatment systems as opposed to one larger treatment system; Seasonal impacts (large fluctuations in demand) Poor source water quality at Oliphant system Community limited growth due to: Lack of servicing for water and wastewater

4 Strengths/Opportunities of Amabel System: Treatment systems are relatively new May be some surplus capacity (under investigation); Capital replacement costs are further in the future as compared to Wiarton which are more immediate

5 The volume of treated water that: Meets all applicable Ontario drinking water quality regulations including the aesthetic water quality objectives Is available for delivery to the drinking water distribution system in any 24 hour period (usually provided as a rate in m³/d). Typically, is equal to the design flow.

6 Reduce water rates while continuing to ensure a supply of safe and clean drinking water to community

7 Watson & Associates long standing expertise in financial analysis for municipalities including: Capital and asset management planning Water rate studies Development charge studies B.M. Ross & Associates Expertise in municipal infrastructure design and construction Ontario Clean Water Agency (OCWA) Water and wastewater operators for the Town for the past decade Very familiar with the Amabel operations

8 Expansion of the water system network Expand Amabel-Sauble to service Sauble business district between Lakeshore Road and Lakeland Drive Expand Huron-Woods to service potential new development Expand Foreman System to service existing or potential new development Add Water Tower to provide storage capacity for broad water servicing to new development Find economical solutions to Oliphant System Extension of Wiarton system to Oliphant Extension of Amabel-Sauble System to Oliphant Continue trucking water Trial of Treatment system Fragmenting of system Merge Wiarton and Amabel Water Rates

9 Extend watermain to service business district between Lakeshore Road and Lakeland Drive Opportunities Provide service to additional customers improves level of service in area Increase customer base Utilize treatment reserve capacity Challenges Lack of system looping challenging at dead-end system extremities maintaining chlorine residual and prevent freezing Seasonal variation in customer base creates operational challenges Capital cost for system expansion Preliminary estimates at $1.5- $2.0 M Spare Capacity currently 444 m 3 /day = approximately 91 homes less allowance for the 40 vacant lots already on the system

10 The Amabel-Saubel DWS consists of: Three groundwater wells Water Treatment Plant: chlorination equipment and facilities packaged filtration treatment system for iron and manganese cartridge filter and UV disinfection high lift pumps, process piping and valves instrumentation and control systems one underground storage reservoir Approximately 15.6 km of distribution watermains Rated capacity: 687 m 3 /day

11

12 Since 2012, 99% of the treated water flows (99 PCTL) were below 243 m 3 /day. Higher flows experienced above the 99 PCTL are most likely attributed to unique events (i.e. watermain flushing, leaks) Rated capacity 687 m 3 /day Potential available capacity m 3 /day 65% of rated capacity As plant is operating at 35% of rated capacity, achieving the rated capacity may require modifications/improvements ($)

13 Based on industry standards (2008 s MOECC Design Guidelines for Drinking-Water Systems) Potential available capacity of 444 m 3 /day looks like: Scenario 1: 91 houses Scenario 2: 1 hospital (100 beds) + 54 houses Scenario 3: 1 mobile home park (100 trailers) + 71 houses Scenario 4: 1 store (50 m 2 ) + 40 houses The scenarios above were estimated using the standards included in the 2008 s MOECC Design Guidelines for Drinking-Water Systems thus can only be used for illustration/comparative purposes. To determined water demand needs and community growth projections, additional engineering is required.

14 Next Steps Concept level cost estimate What is the impact to water rates What is the financial contribution of property owners along serviced route Available capacity vs. proposed service area demand Condition Assessments Understanding of current equipment conditions Comprehensive Performance Evaluation Identification of bottlenecks to reaching rated capacity Prediction of future flows due to community growth, development, amalgamation 10-year Capital Plan Identification of capital needs to reach rated capacity and maintain current levels of service

15 Expand system to service potential new development (developer would pay) Opportunities Provide service to additional customers improves level of service in area Increase customer base Allows for community growth Challenges Seasonal variation in customer base creates operational challenges Capital cost for system expansion (too much for developers?) Spare Capacity m 3 /day = approximately 139 homes less allowance for the 45 vacant lots already on the system

16 The Huron Woods DWS consists of: Four groundwater wells Water Treatment Plant: chlorination equipment and facilities packaged filtration treatment system for iron and manganese high lift pumps process piping and valves instrumentation and control systems one underground storage reservoir distribution watermains Rated capacity: 743 m 3 /day

17

18 Since 2012, 99% of the treated water flows (99 PCTL) were below 68 m 3 /day. Higher flows experienced above the 99 PCTL are most likely attributed to unique events (i.e. watermain flushing, leaks) Rated capacity 743 m 3 /day Potential available capacity m 3 /day 91% of rated capacity As plant is operating at 9% of rated capacity, achieving the rated capacity may require modifications/improvements ($)

19 Based on industry standards (2008 s MOECC Design Guidelines for Drinking-Water Systems) Potential available capacity of 675 m 3 /day looks like: Scenario 1: 139 houses Scenario 2: 1 hospital (100 beds) houses Scenario 3: 1 mobile home park (100 trailers) houses Scenario 4: 1 store (100 m 2 ) + 36 houses The scenarios above were estimated using the standards included in the 2008 s MOECC Design Guidelines for Drinking-Water Systems thus can only be used for illustration/comparative purposes. To determined water demand needs and community growth projections, additional engineering is required. Note: Clause 10 of 1998 Agreement with Bolton Mills Estate Limited references supply of water to 125 lot phase development.

20 Next Steps What is required to provide additional uncommitted capacity Cost Equipment Impact mitigation What is the impact to water rates Available capacity vs. proposed service area demand Condition Assessments Understanding of current equipment conditions Comprehensive Performance Evaluation Identification of bottlenecks to reaching rated capacity Prediction of future flows due to community growth, development, amalgamation 10-year Capital Plan Identification of capital needs to reach rated capacity and maintain current levels of service

21 Expand system to service existing or new development Opportunities Provide service to additional customers improves level of service in area Increase customer base Utilize existing treatment capacity Challenges Seasonal variation in customer base creates operational challenges Capital cost for system expansion Ability for lake to support further development

22 The Foreman DWS consists of: One groundwater well Water Treatment Plant: chlorination equipment and facilities packaged filtration treatment system for iron and manganese cartridge filters and UV high lift pumps and process piping and valves instrumentation and control systems one underground storage reservoir distribution watermains Rated capacity: 165 m 3 /day

23

24 Since 2012, 99% of the treated water flows (99 PCTL) were below 23 m 3 /day. Higher flows experienced above the 99 PCTL are most likely attributed to unique events (i.e. watermain flushing, leaks) Rated capacity 165 m 3 /day Potential available capacity m 3 /day 86% of rated capacity As plant is operating at 14% of rated capacity, achieving the rated capacity may require modifications/improvements ($)

25 Based on industry standards (2008 s MOECC Design Guidelines for Drinking-Water Systems) Potential available capacity of 142 m 3 /day looks like: Scenario 1: 29 houses Scenario 2: 1 hospital (50 beds) + 11 houses Scenario 3: 1 mobile home park (100 trailers) + 9 houses The scenarios above were estimated using the standards included in the 2008 s MOECC Design Guidelines for Drinking-Water Systems thus can only be used for illustration/comparative purposes. To determined water demand needs and community growth projections, additional engineering is required.

26 Not recommended to carry forward as it will always remain a stand alone system that can be expanded on a case by case basis as proposed development comes forward

27 Construct a water tower to provide storage capacity for potential new development (developer would pay) Opportunities Provide storage capacity for broad new development around Sauble Increase customer base Allows for community growth Challenges Will require an EA Will require financial commitments up front by developers Capital cost for system expansion (too much for developers?) Although storage capacity issue can be resolved the issue may be the capacity of the well systems to support the development Impacts of source water protection areas (greater well volume used my increase well head protection areas)

28 Next Steps What is required to provide capacity: Plant upgrades; Well upgrades Network connections (i.e. tower supply and distribution) Maximum potential capacity Cost Level of committed interest by developers Condition Assessments Understanding of current equipment conditions Comprehensive Performance Evaluation Identification of bottlenecks to reaching rated capacity Prediction of future flows due to community growth, development, amalgamation 10-year Capital Plan Identification of capital needs to reach rated capacity and maintain current levels of service

29 Extend a watermain from Wiarton to Oliphant Opportunities Eliminate trucking of water to Oliphant Fully decommission existing unused Oliphant treatment works Challenges 10+ km of watermain plus boosting pumps several $millions Significant water crossing

30 Recommended to eliminate this option as it will be too expensive considering other alternatives

31 Extend watermain from A-S to Oliphant Opportunities Eliminate trucking of water to Oliphant Fully decommission existing unused Oliphant treatment works Challenges 8+ km of watermain plus boosting pumps - Preliminary $1.5 to $2.0 M

32 Next Steps Concept level cost Preliminary $1.5 to $2.0 M Present worth value comparison of cost vs. trucking Condition Assessments Understanding of current equipment conditions Comprehensive Performance Evaluation Identification of bottlenecks to reaching rated capacity Prediction of future flows due to community growth, development, amalgamation 10-year Capital Plan Identification of capital needs to reach rated capacity and maintain current levels of service

33 Continue trucking water Is trucking the most economical long-term solution? Consider opportunity to truck from A-S system to reduce water charges Opportunities Low capital cost Challenges Higher operating cost Average $55K per year

34 Next Steps Baseline present worth value Preliminary using $1.5M (Option 2b) with inflation = interest it would take 27 years to reach $1.5M watermain will far longer than 27 years operational costs and more detailed costing required to firm up this PW value comparison How does this compare to other options

35 Shallow Lake water system had similar source water quality issues and a treatment process was tested and implemented The system has been successful for Shallow Lake system Proposed to consider an off-line trial on the equipment subject to estimated capital and operating cost information Need significant confidence before investing

36 Next Steps: Detailed comparison of source water quality Cost for full scale implementation if preferred Cost to undertake an off-line trial Detailed review of Shallow Lake operation including source water quality and operational effectiveness Present worth value comparison of cost vs. trucking

37 Complex Potentially very expensive Assuming $15K to install new well $15,000 x 54 serviced lots = $810,000 EA cost $200,000 Who pays? Spend $1M to remove 54 customers = increased rates for everyone else how does this compare to other alternatives? MOECC approval? User buy in? Initial step conduct survey of fragmentation options to garner interest and support Financial value of this option may have passed. May have been a cheaper alternative at the time the water systems need upgrading, however, Province was not willing to even consider fragmenting municipal water systems at that time and it was not an option

38 Next Steps Survey of Oliphant users Continued discussion with regulatory officials Assessment of cost and how funded Present worth value comparison of cost vs. trucking Impact to water rates

39 The Town is implementing the water service fee recommendations of the 2014 Drinking Water and Wastewater System Rate Report The following table summarizes the average annual water bill forecast to 2025 for the Wiarton and Amabel Water Systems Wiarton Water Customer $ 522 $ 698 Amabel Water Customer $ 1,645 $ 2,188 Based on 80m3 annually and 5/8" meter

40 The Municipal Act provides municipalities with powers to impose fees and charges for services provided Fees and charges for water services may be imposed on an area-specific or system-specific basis, or uniform service-wide basis Utilizing uniform service-wide fees for water services provide municipalities with broader funding sources to address lifecycle costs of service and to mitigate affordability and service impacts

41 Based on the 2014 Rate Study, a 2 scenarios for a uniform service-wide rate sensitivity analysis were prepared Scenario 1 - Harmonizing the monthly fixed water rates at Wiarton projections (i.e. $32.05/month increasing to $43.87/month by 2025, for a 5/8 water meter), would require a consumptive rate of $3.20/m 3, increasing to 4.18/m 3 by 2025

42 Scenario 2 - Harmonizing the monthly fixed water rates at Wiarton projections (i.e. $32.05/month increasing to $43.87/month by 2025, for a 5/8 water meter), and maintaining monthly reserve charge for Amabel customers (i.e. $28.14/month increasing to $32.61/month by 2025), would require a consumptive rate of $2.45/m 3, increasing to 3.24/m 3 by 2025

43 Scenario 1 - Wiarton customers bills increase by approx. $11.50/month, Amabel decrease by approx. $95.70/month Scenario 2 - Wiarton customers bills increase by approx. $6.00/month, Amabel decrease by approx. $70.30/month Annual Water Bills at Current Rates Wiarton Water Customer $ 522 $ 698 Amabel Water Customer $ 1,645 $ 2,188 Scenario 1 Uniform Water Rate (both Wiarton and Amabel) $ 640 $ 861 Scenario 2 Wiarton Water Customer $ 581 $ 785 Amabel Water Customer $ 918 $ 1,201 Based on 80m3 annually and 5/8" meter

44 While some would view this as Wiarton subsidizing Amabel, when future capital requirements for both systems, timing of capital requirements, and reserve contributions are considered, merging the financials of both harmonize the Town service provisions and establish a fair and equitable system for all users regardless of location Next Steps Continue to evaluate merging of water rates based upon all options to measure impact

45 Stage 1 Preliminary Review July 2018 Stage 2 Detailed Review of Selected Options August 2018 to March 2019 Stage 3 Recommendations Spring 2019 Stage 4 Design/Study/Report/Approvals 2019 to 2020 depending on option Stage 5 Construction/Implementation 2020 to 2021 depending on option

46 Public/User consultation will be part of each Stage Some stages may require more than one consultation process depending on complexity

47