2019-10-23 Finance Committee Agenda Packet - Open SessionCity of Saint John
Finance Committee - Open Session
AGENDA
Wednesday, October 23, 2019
5:15 pm
8th Floor Common Council Chamber (Ludlow Room), City Hall
Pages
1. Call to Order
1.1
Approval of Minutes
1.1.1 Minutes of July 18, 2019
1 -3
1.1.2 Minutes of September 18, 2019
4 - 5
1.2
Police Commission Resolution
6 - 8
1.3
Universal Metering Analysis
9-98
1.4
New Solid Waste Model Business Case
99-103
1.5
Community Awareness Emergency Response (CAER) Initiative
104-128
1.6
Industrial Hygiene - Firefighter Training Centre Initiative
129-152
rIN.
m
MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING
JULY 18, 2019 AT 5:15 PM
Stn FLOOR COMMON COUNCIL CHAMBER (LUDLOW ROOM), CITY HALL
Present: Mayor D. Darling
Councillor D. Merrithew
Councillor G. Sullivan
Councillor G. Norton
Absent: Councillor S. Casey
Councillor D. Reardon
Also
Present: City Manager J. Collin
Deputy City Manager N. Jacobsen
Commissioner of Finance and Treasurer K. Fudge
Commissioner Growth & Community Development J. Hamilton
Comptroller Finance C. Graham
City Solicitor J. Nugent
Director Corporate Performance S. Rackley -Roach
Assistant Comptroller Finance and Administrative Services C. Lavigne
Deputy Commissioner Administrative Services I. Fogan
Senior Financial Analyst J. Forgie
Administrative Fire Officer J. Hennessy
Administrative Assistant K. Tibbits
1. Meeting Called To Order
Councillor Merrithew called the Finance Committee open session meeting to order.
1.1 Approval of Minutes — May 29, 2019
Moved by Mayor Darling, seconded by Councillor Norton:
RESOLVED that the minutes of May 29, 2019 be approved.
MOTION CARRIED.
1.2 Public Consultation Budget Simulator Results
Ms. Forgie reviewed the results from the public consultation budget simulator exercise, noting
that participation from the public was very good with equal participation across all wards.
Results were validated and a number of themes identified. These themes will be used in the
creation of the long-term financial plan.
Key themes included:
from 1.5% to 19% depending on the service. Highest reductions were in economic
development, transit services, recreation programming, sports facilities, One -Stop Shop
Development/property compliance programs. Lowest reductions were in road
maintenance, snow control and sidewalks.
• Revenue Generation — common themes included non-resident user fees and taxes, tolls
on City roads, charges to neighbouring communities for services and taxation of heavy
industry.
• Community Facilities results — common themes included alternative funding models,
closure of facilities, higher contributions from users outside the City
• Comments on bringing awareness to the City's positive attributes
Moved by Mayor Darling, seconded by Councillor Sullivan:
RESOLVED that the Public Consultation Budget Simulator Results be received for information.
1.3 Proposed Phase 1— Municipal Tax Reform
Mr. Jacobsen noted that the proposal on Municipal Tax Reform was one of many sustainability
themes discussed within the mandate of the Government of New Brunswick / City of Saint John
Municipal Sustainability Working Group. The province derives significant revenue annually
from heavy industry located in the Saint John area through various taxes. The proposed
municipal heavy industrial property tax reform recommends that 100% of the property tax
collected from large industry in Saint John stays within the City of Saint John. This would be an
interim step in the much broader review of property taxation issues committed to by the
province in the recently released "Sustaining Saint John Three -Part Plan."
Mr. Jacobsen and Mr. Fudge reviewed the submitted report. Key highlights of Phase 1 —
Municipal Tax Reform include:
• alleviates the province from making any future special funding requirements with
respect to the $10.4M in 2020;
• provides an immediate sustainability solution as the City implements a series of
sustainability action items;
• redistributes $9M in property tax revenue which is supported by the fair taxation report
experts and would be transformational for the City, representing almost 6% of the
budget versus 1 tenth of a percent for the province of NB;
• can be positioned as an important first step in municipal tax reform and a
comprehensive review of municipal tax system by the province of NB;
• does not require new tax assessment capabilities or resources from the province.
Moved by Mayor Darling, seconded by Councillor Sullivan:
RESOLVED that the submitted presentation entitled Proposed Phase 1 — Municipal Tax Reform
be forwarded to the Southern Regional Caucus and the Premier's Office.
Moved by Mayor Darling, seconded by Councillor Sullivan:
RESOLVED that the submitted presentation entitled Proposed Phase 1 — Municipal Tax Reform
be received for information.
MOTION CARRIED.
Mr. Fudge stated that the proposed capital budget represents over $50M in investment over
the next two years. It leverages funding from other levels of government as much as possible.
Of the $50M two year capital budget, $29M is proposed to come from the other levels of
government for programs that are aligned with the City's strategic investment priorities.
Mr. Lavigne reviewed the 2020 and 2021 proposed Draft General Fund Capital Budget and the
proposed Draft Utility Fund Capital Budget.
Moved by Councillor Sullivan, seconded by Mayor Darling:
RESOLVED that the Finance Committee recommend that the 2020 and 2021 Proposed Draft
Utility Fund Capital Budget be presented to Common Council with a recommendation to receive
and file; and that the Finance Committee recommend that the 2020 and 2021 Proposed Draft
General Fund Capital Budget be presented to Common Council with a recommendation to
receive and file.
MOTION CARRIED.
1.5 Bi -Lateral Funding Application
Mr. Lavigne explained that in 2017 the Government of Canada announced a $33B ten year
funding agreement with the provinces/territories under four different funding streams,
including public transit, green infrastructure, community cultural and recreation infrastructure
and infrastructure needs for rural and northern communities. Projects will be cost shared
between the federal (40%), provincial (33%) and municipal (27%) levels of government.
The City of Saint John submitted Expression of Interests for the following projects:
• Fundy Quay project, total value $38M
• Green Infrastructure, total value $40M
Mr. Fudge noted that there is no commitment by the City to proceed. This is only an
application phase. The application was highly concentrated on projects that the City will have
to do regardless with respect to the capital investment plan.
Mr. Collin noted that there were constraints and strict guidelines within the various funding
envelopes.
Moved by Councillor Norton, seconded by Mayor Darling:
RESOLVED that the submitted presentation on the Bi -Lateral Funding Application be received
for information.
MOTION CARRIED.
Adjournment
Moved by Councillor Sullivan, seconded by Mayor Darling:
RESOLVED that the open session meeting of the Finance Committee be adjourned.
MOTION CARRIED.
The Finance Committee open session meeting held on July 18, 2019 was adjourned at 6:40 p.m.
rIN.
m
MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING
SEPTEMBER 18, 2019 AT 5:30 PM
Stn FLOOR COMMON COUNCIL CHAMBER (LUDLOW ROOM), CITY HALL
Present: Mayor D. Darling
Councillor D. Merrithew
Councillor S. Casey
Councillor D. Reardon
Absent: Councillor G. Norton
Councillor G. Sullivan
Also
Present: City Manager J. Collin
Commissioner of Finance and Treasurer K. Fudge
Comptroller Finance C. Graham
City Solicitor J. Nugent
Commissioner Saint John Water B. McGovern
Commissioner Transportation & Environment Services M. Hugenholtz
Deputy Commissioner Building & Inspection Services A. Poffenroth
Director Corporate Performance S. Rackley -Roach
Assistant Comptroller Finance and Administrative Services C. Lavigne
Deputy Commissioner Administrative Services I. Fogan
Senior Financial Manager J. Forgie
Senior Financial Manager C. Lavigne
Senior Financial Manager D. Arbour
Fire Chief K. Clifford
Administrative Assistant K. Tibbits
1. Meeting Called To Order
Councillor Merrithew called the Finance Committee open session meeting to order.
1.1 Approval of Minutes—July 18, 2019
Moved by Mayor Darling, seconded by Councillor Reardon:
RESOLVED that the minutes of July 18, 2019 be deferred to the next meeting.
MOTION CARRIED.
1.2 2019-2023 Gas Tax Fund Capital Investment Plan
Mr. Fudge stated that this five year agreement includes approximately $29M of capital
investment. There are provisions in the agreement that allow the City to update or modify the
capital investment plan subject to approval by the province.
Gas Tax Fund Administrative Agreement and submit to Common Council for approval; and
further that the report be received for information.
MOTION CARRIED.
1.3 Year -End Forecast
Mr. Fudge noted that year-end results should be interpreted cautiously, adding that the
assumption used is that forecasted results will trend in the same direction and are based on the
best available information to date.
Ms. Forgie reviewed the year to date forecast for the General Operating Fund. A $2.3M surplus
is being projected at year-end which means that the City will require less financial assistance
from the province.
Mr. Lavigne reviewed the Saint John Water year-end forecast. Overall, a net year-end surplus
of approximately $168K is being projected.
Moved by Councillor Reardon, seconded by Councillor Casey:
RESOLVED that the Year -End Forecast as at July 2019, be received for information.
LTA [0000114L1ilk]ilk] Iif91
1.4 2020 General Operating Budget
Mr. Fudge stated that the 2020 General Operating Budget is a status quo budget and will be
amended accordingly as the City continues its deliberations with respect to restructuring and
sustainability initiatives. The budget incorporates Sustaining Saint John Three -Part Plan
initiatives that the City feels are achievable.
Mr. Lavigne reviewed the first draft of the 2020 General Fund Operating Budget.
The budget includes several assumptions, including:
• Assumes 1.5% tax base growth;
• Assumes the unconditional grant remains the same;
• Based on the above assumptions, the budget assumes that 20% less in provincial
funding will be required than what is prescribed in the Funding Agreement. The budget
assumes $8M in provincial funding, down from a $10.4M funding commitment.
Moved by Mayor Darling, seconded by Councillor Reardon:
RESOLVED that the draft 2020 General Operating Budget, be received for information.
MOTION CARRIED.
Adjournment
Moved by Councillor Reardon, seconded by Mayor Darling:
RESOLVED that the open session meeting of the Finance Committee be adjourned.
LTA [0000114L1:k]k]11191
Saint John Police Force
2020 Budget Submission to Finance Committee
October 23, 2019
'RESOLVED, that the Saint John Board of Police Commissioners request that the
Finance Committee for the City of Saint John approve the purchase of four (4) marked
2020 Ford Explorer Police Interceptors in the amount of $297,339 out of the 2019 Saint
John Police Force budget and that this amount be put in a reserve account for the
purchase of the vehicles which will take place in 2020." (SC1910-03)
'RESOLVED, that the Saint John Board of Police Commissioners request that the
Finance Committee for the City of Saint John pre -approve $371,675 from the 2020
Saint John Police Force budget for the purchase of five (5) marked 2020 Ford Explorer
Police Interceptors." (SC1910-04)
Rationale and Justification for Purchase of Nine (9) Ford
Explorer Pursuit Vehicles
The useful life of the current fleet of Dodge Chargers and Ford Interceptors Sedans
averages about 3 years and maintenance costs are exceeding the purchase price of the
units within same time frame which is not sustainable when trying to maintain cost
control.
Police Vehicle Fleet Optimization Strategy
- Future state - requirement for less marked units in the fleet
- More diverse vehicles to better meet the many needs of a 24/7 police
environment based on Saint John roads and climate;
- Lower total operating costs (fuel, maintenance and repairs) for life of vehicle;
- Higher degree of reliability with less downtime; and
- Larger marked units (SUVs) for Patrol Services, allowing for more space,
functionality, and comfort.
C.1
RESOLUTIONS
SAINT JOHN BOARD OF POLICE COMMISSIONERS
SPECIAL MEETING —
October 15, 2019
Re: Saint John Police Force "SJPF" 2020 Operating Budget
On motion of Secretary Jones
Seconded by Secretary Costello
"RESOLVED, that the Saint John Board of Police Commissioners approve
the 2020 preliminary Operating Budget for the Saint John Police Force in the amount of
$26,058,700 and request feedback from the Finance Committee for the City of Saint John
within two (2) weeks in order for the Saint John Board of Police Commissioners and the
Saint John Police Force to finalize the 2020 budget." (SC 1910-01)
Question being taken, the motion was carried.
Re: Public Safety Communications Centre "PSCC" 2020 Operating Budget
On motion of Secretary Jones
Seconded by Secretary Costello
"RESOLVED, that the Saint John Board of Police Commissioners approve
the 2020 preliminary Operating Budget for the Public Safety Communications Centre
(PSCC) in the amount of $2,579,791and request feedback from the Finance Committee for
the City of Saint John within two (2) weeks in order for the Saint John Board of Police
Commissioners and the Saint John Police Force to finalize the 2020 budget." (SC1910-
02)
Question being taken, the motion was carried
N
Re: 2019 / 2020 Vehicle Purchase
On motion of Secretary Jones
Seconded by Vice -Chair McAloon
"RESOLVED, that the Saint John Board of Police Commissioners request
that the Finance Committee for the City of Saint John approve the purchase of four (4)
marked 2020 Ford Explorer Police Interceptors in the amount of $297,339 out of the 2019
Saint John Police Force budget and that this amount be put in a reserve account for the
purchase of the vehicles which will take place in 2020." (SC1910-03)
Question being taken, the motion was carried.
On motion of Secretary Jones
Seconded by Vice -Chair McAloon
"RESOLVED, that the Saint John Board of Police Commissioners request
that the Finance Committee for the City of Saint John pre -approve $371,675 from the
2020 Saint John Police Force budget for the purchase of five (5) marked 2020 Ford
Explorer Police Interceptors. " (SC 1910-04)
Question being taken, the motion was carried
E:3
FINANCE COMMITTEE REPORT
Report Date October 18, 2019
Meeting Date October 23, 2019
Chairman Councillor Merrithew and Members of Finance Committee
SUBJECT: Universal Metering Analysis
OPEN OR CLOSED SESSION
This matter is to be discussed in open session of Finance Committee.
AUTHORIZATION
Primary Author
Commissioner/Dept. Head
City Manager
Brent McGovern
Brent McGovern
John Collin
RECOMMENDATION
It is recommended that:
1. The Finance Committee review and consider the Universal Metering
Analysis completed by Hemson Consulting Ltd. and ask all questions.
Finance Committee recommend to Council at its next meeting that:
1. The City of Saint John revisit the concept of Universal Metering in
approximately 5 years once more investment has been made into
addressing the Utility assets in the extreme risk asset category and
2. Council receive and file the Universal Metering Analysis.
EXECUTIVE SUMMARY
N/A
PREVIOUS RESOLUTION
N/A
STRATEGIC ALIGNMENT
The Universal Metering Analysis aligns with Council's priority of fiscal
responsibility where it specifically states "Investigate options to allocate water
costs among ratepayers".
-2 -
REPORT
Current State
The City of Saint John has a unique customer base. It provides potable water to
approximately 14,000 residential accounts and 3,100 industrial commercial and
institutional (ICI) accounts. The ICI customers consist of several very large
industrial operations and small commercial businesses.
Currently, residential customers with fewer than 3 dwelling units in Saint John are
charged for water and sewer services on a flat rate basis. Under this rate structure,
the total bill remains constant regardless of the amount of water consumed in
each unit. Non-residential and multi -unit residential customers (greater than
three units) are metered and water is charged on a per cubic meter basis. In
addition to the consumption rate a fixed charge relative to the size of meter is also
levied. The City currently employs a three tier declining block structure for water
services — under this structure the unit price of water decreases relative to use.
For all (residential and non-residential) customers sewerage services are levied on
a surcharge basis, equal to 122% of the water bill.
In Eastern Canada there are seven municipalities with a population greater than
40,000 people and all municipalities are fully metered with the exception of Saint
John. Looking more broadly across Canada, for municipalities the size of Saint John
approximately 84% have residential metering.
What is Universal Metering
A universal metering program would apply to all residential uses including those
with fewer than 3 dwelling units. The installation of a water meter would only
measure water flow and would not measure wastewater generation. Common
practice amongst municipalities across the country is to bill sewer use on the
basis of water consumption as is currently done for Saint John's ICI customers.
In addition to metering consumption, the common practice by municipalities is
to combine a fixed rate structure with a volumetric component to provide a level
of revenue security while also allowing for the benefits of the end user having
control over their utility bill with consumption based charges. The fixed
component is charged independently of water use, it is designed to recover costs
that do not vary with use to provide stable revenue.
The volumetric component is based on the amount of water used by each
customer. Having this component ensures an equitable allocation of costs since
the bill is tied to the consumption. The volumetric component is intended to
strongly encourage water conservation.
Advantages of Universal Metering
ito]
-3 -
The current flat rate water pricing structure for residential units in Saint John is
inherently inequitable, where all users pay the same amount regardless of their
water usage patterns. Universal metering on the other hand is fair and equitable;
the payment structure is common amongst other utilities (electricity and gas)
where a portion of the bill is consumption based.
There are also environmental benefits that come with water conservation
practices which also can yield economic benefits to the public utility. A
universally metered system strongly encourages water conservation practices as
there is a direct correlation between consumption and charges. Lower water
consumption reduces the amount of drinking water that has to be treated and
the amount of sewage that is generated and thus treated reducing operational
costs. It also brings the ability to reduce capital costs over the long-term as the
City delayed expanding facilities due to system -wide conservation.
Hemson Consulting Ltd. (Hemson) reports that "Experiences from other
jurisdictions indicates that there is a strong link between declining consumption
patterns of households with residential water meters with a corresponding rate
structure, to those users without a water meter. Household consumption
patterns can decline anywhere from 10% to 30% with the introduction of water
meters..."' The assumption used by Hemson Saint John is that there will be a 15%
decrease from figures derived from a pilot project, which is reflective of typical
household patterns of other jurisdictions.
Disadvantages of Universal Metering
Very significant upfront capital investments of approximately $8.15 million are
needed to implement a universal metering program. Furthermore, in addition to
the capital cost, approximately $414,000 per year would need to be allocated to
reserves in order to have sufficient funds available to replace the assets at the
end of their 20 -year useful life.
Additional administration staff would be required in order to increase the level
of service and provide more frequent billings (bi-monthly) as opposed to the
current 6 -month billing. Also, staff would need to closely monitor consumption
and revenue to ensure sufficient funds are generated to fund the expenses.
The underlying assumption of metering is that those who consume more water
will generally pay more relative to use. It is important to note that moving to
universal metering may shift a greater portion of cost recovery to those families
with several people living in a household as they require a greater amount of
water than a single occupant for example. Therefore there may be a feeling by
some customers that they are being penalized with water meters.
Fixed Charge
11
-4 -
Experience has shown that the introduction of residential water meters and a
rate structure with a variable consumption component results in a decline in
overall residential water demand. Therefore, to account for the anticipated
water conservation consumption response, Hemson recommends the City
should continue to impose a fixed charge levied independently of water use to
provide the City with stable revenue for cash flow.
The City's current fixed charge is differentiated by the size of the water meter
and generally follows municipal best practices and the ratios established by the
American and Canadian Water Works Associations (AWWA and CWWA). The
fixed charge is greater for those customers with a larger meter size to reflect
either the flow arising from the size of the meter or the investment required to
install the larger meter.
For Saint John Hemson is recommending the fixed charge be set between 50% to
60% which would place it at the upper end of comparing jurisdictions similar to
Fredericton at 55% and Charlottetown at 64%. This relationship will ensure fiscal
stability for the City while still providing financial incentives to conserve water.
Consider the Introduction of a "Lifeline" Consumption Tier
In addition to the fixed charge, the City employs a three tier declining block rate
structure — under this structure the unit price of water decreases relative to use.
The existing consumption based rate structure outlined in Table 1 below (Table 8
from the Hemson report) was initially designed to meet the needs of its ICI and
multi -residential user base as all residential customers are currently charged a
flat fixed rate. However, with the introduction of residential water meters,
Hemson in their report is recommending "the City should update the existing
model to align with municipal best practices and ensure the structure is tailored
specific to Saint John and its customer base." It is also important to note that, no
water consumption has been billed to Tier 3 as shown in Table 1 below since
2008. Therefore it is recommended that the third tier be removed.
Table 1. 2019 Saint John Monthly
Consumption Charges
Consumption Blocks (in m3)
Water Consumption Charge ($/m3)
Tier 1: For the First 50
$1.6123
Tier 2: For the Next 124,950
$1.0267
Tier 3: Remaining Consumption
$0.3623
Hemson advises that "With a significant industrial base and several large volume
water users, it would be important for the City to maintain attractiveness to
industries which rely heavily on water and or sewer services to conduct business.
To continue to be competitive from an economic development perspective, the
existing declining block structure should be maintained with some
modifications."
12
-5 -
The existing block structure is designed so that only those high volume users
benefit from a declining rate and any residential consumption would still fall into
the higher priced water tier to continue to encourage conservation efforts.
However, in order to address users on fixed incomes, it is recommended the City
could consider introducing a new lower volume Tier 1, which can also be
referred to as a "lifeline rate". See below in Table 2 the new lifeline rate which
is defined as Tier 1. Hemson advises "The lifeline tier would be set equal to the
amount a typical family requires to meet basic needs, which according to the
World Health Organization, is estimated at 6 cubic meters per month for a four
person family. This rate is intended to be discounted from the unit rate in the
next tier."Table 2 (Table 9 from the Hemson report) below provides a summary
of the new rate structure.
Table 2. Potential New Rate Structure
Consumption Blocks (per month)
Description
Tier 1: 0-6 m3
Water for basic needs (New Lifeline Rate)
Tier 2: For the Next 44 m3
Unit price of water would increase from Tier 1
Tier 3: Remaining Consumption
Unit price of water would decrease from Tier 2
Hemson reports "The potential new rate structure would essentially follow a
"humpback rate structure" in which the unit price of water increases relative to
use to a determined rate before retreating back to a lower charge. This rate
structure would be consistent with those levied in other municipalities across the
country while specifically tailored to meet the needs of Saint John."
Fee Structure for Sewer Services
The sanitary sewer service in the City would continue to be levied on a surcharge
methodology for all metered accounts that have sewer services. While most of
the water service customers in the City receive sewer services not all do.
Using this approach, the exact amount of how much residents and businesses
pay for sewers is based on the amount billed for water usage.
Required Revenue and Sensitivity Analyses
Under a universal metering scenario the amount that must be funded through
utility rates by City of Saint John potable customers only (excluding east and
west industrial customers) based on the 2019 budget would be approximately
$22.5 million. The required sewerage user rate revenue would be approximately
$16.2 million. These are the amounts of revenue which must be collected
through the sale of potable water to fully recover the operating, capital,
rehabilitation and replacement costs of the systems. The basis for the sewer
rate is calculated as a surcharge on the water bill — that will be needed to cover
the costs of operating and maintaining the sewer infrastructure. The calculated
13
-6 -
sewer surcharge rate based on the 2019 budget would be 80% of the water bill
(which compares to the current 122%).
To test the impact of the new rate structure on City residents and businesses, a
sensitivity analysis was undertaken to quantify the range of rate impacts to both
the residential and non-residential properties. Table 3 below (Table 15 from the
Hemson Report) illustrates the impact of the calculated water and sewer rates
on a range of residential users while Table 4 (Table 16 from the Hemson Report)
illustrates the results for a sample of non-residential users.
No.
Sensitivity Test
Consumption (m3)
ComparisonTable 3.
vs. Calculated (Per Annum)
Universal Metering Rate
Change (2019)
Household Consumption
2019
2019
Change ($ and
2
Existing Structure
Metered Rates
%)
1. Low User: Annual Consumption
1,570
5/8"
($541) or
of 72m3 (all water in Tier 1)
$1,428
$887
-38%
2. Low -Med User: Annual
Consumption of 120m3
$1,428
$1,080
($342) or
6
790
3/4"
-24%
3. Typical User(1): Annual
240
5/8"
($11) or
Consumption of 200m3
$1,428
$1,417
-1.0%
4. Medium -High User: Annual
1,690
11/2"
$288 or
Consumption of 272m3
$1,428
$1,716
20/
5. High User: Annual
Consumption of 350m3
$1,428
$2,039
$610 or
12
800
2"
43%
No.
Sensitivity Test
Consumption (m3)
Table
- Sample of •
Meter Size (Inches)
Universal Metering Rate
Change (2019)
1
3,440
5/8"
16.1
2
1,970
5/8"
16.3
3
1,570
5/8"
16.4
4
297,000
8"
16.6%
5
2,030
3/4"
16.9%
6
790
3/4"
18.0%
7
240
5/8"
18.2%
8
870
ill
20.1%
9
1,690
11/2"
20.1
10
66,600
10" and over
20.6%
11
4,435
3"25.6%
12
800
2"
29.5%
13
6,860
8"
34.7%
14
1,840
4"
37.5
15
420,000
6" (Water Only)
43.5%
14
As reported by Hemson "For residential properties, the rate changes vary
depending on the type of user. Generally, as a result of the introduction of
universal metering, high volume users will see a significant increase in their bill".
"Overall, low volume water users will see significant annual savings while typical
users consuming 200m3 will see little change in the total bill. Importantly, with
universal metering, high volume water users will have the opportunity to change
their consumption patterns in an effort to reduce their bill — this would not be
possible under the current flat rate structure."
As reported by Hemson "For non-residential properties, a sample of fifteen
different properties, serviced by both water and sewer, with different usage
patterns were chosen at random looking solely at varying usage patterns.
Overall, the quantum of the rate change will be dependent on the specific
property and tied directly to the amount of water consumed. Generally, all
commercial customers, under the sample, will see an increase on their total bill."
Metering Approaches
There are different approaches to implementing a metering program with
potential benefits and drawbacks. Hemson advises on two possible next steps:
1. Universal Metering—The mandatory installation of water meters on all
properties throughout the City. This would be the most equitable
format and would yield the best results. Having all customers on the
system would make it easier for the City to forecast water consumption
patterns, set utility rates, plan for infrastructure upgrades and repairs,
monitor non -revenue water and perform detailed financial analyses of
the water system.
2. Voluntary Metering - this can be an alternative option by having users
switch from a flat rate billing model to a consumption based charge.
However some drawbacks with this approach are:
• Often times those volunteering for the service would typically be
low-volume water customers;
• High volume water user would be less likely to volunteer given they
would be most financially affected by therefore this would make for
a longer implementation period; and
• Having low volume users as a group would make it more difficult to:
assess the metering program, project revenues and promote
conservation.
A voluntary approach would increase costs as the time frame to implement and
have additional staff on hand for the implementation would be greatly extended;
it also has the ability to reduce revenues due to what would be expected to be a
quick uptake from the low volume water users. However under a voluntary
15
approach as the uptake of meters from low volume users moderates over time,
the City could increase flat rate fees to a greater degree than metered rates in
order to expedite remaining flat users to join the metered system. This would
involve significant ongoing communication and close management.
Cost of Universal Metering
Capital Cost
As part of this analysis, Hemson undertook a review of the cost of proceeding
with universal metering. A high-level overview of the costs has identified an
estimate of $485 per household. This includes meter cost, installation by a
licenced plumber and the Radio Frequency readers. Therefore; capital costs to
install approximately 14,000 water meters is estimated at $6.8 million plus a 20%
contingency of $1.4 million, bringing the total to $8.15 million. Existing radio
towers currently used for ICI meters serve the needs of the new meters so there
is no additional radio capital costs required.
Operating Cost Considerations
1. With a useful life of 20 years, the City would need to allocate $414,000 per
year from the operating budget to reserves to ensure that sufficient funds
are available when these assets reach the end of their useful life.
2. The City currently bills semi-annually for flat rate residential customers and
bi-monthly for non-residential customers. To be consistent with municipal
best practices for a metered billing system, the City would need to begin to
mail out water bills bi-monthly. It is estimated two additional staff members
would be required for the initial implementation period while one
employee would remain over the long-term. Also, additional mailing costs
would be incurred to facilitate bi-monthly billing for residential customers.
The analysis assumes $202,000 in additional expenses — 2 new staff
members, at $142,000, and $60,000 in extra mailing expenses. However,
with the implementation of a new ERP system, e -billing will be a priority and
therefore there should be a reduction of mailing expenses.
3. New additional operating costs would include additional annual software
costs to add the new 14,000 accounts to the metering system — this cost is
estimated at $25,000 annually. However there are operational costs
savings can also be realized as a result of the water conservation that
would be expected from implementation of universal metering. If
implemented today, cost savings are estimated at $175,000 which
represents a 15% decrease in 2019 potable water expenditures, the
savings being equivalent to the anticipated change in typical household
consumption patterns.
-9-
4. Additional operational cost savings can also be realized on the wastewater
operations to account for a decline in wastewater flow. These savings are
modest and if implemented today, cost savings are estimated at $38,000.
5. Borrowing the capital cost of universal metering over 20 years would result
in an additional average cost of $558,000 per year to rate payers.
Overall Operating Cost Summary
The City would incur a capital cost in the order of $8,148,000. The City of Saint
John would be responsible to fund the upfront capital costs and there are no
reserves available to help offset the initial capital cost.
The implementation of universal metering on the operating budget would result
in cost increases of between $570,000 - $641,000 annually (depending upon if 1
or 2 additional staff are needed over the long term) and cost decreases of
approximately $213,000 when considering the water and wastewater savings.
An overall net increase in operating cost of between $357,000 — $427,000 per
year plus the initial capital cost if borrowed for over 20 years equates to an
additional $558,000 annually. Total additional new annual cost to ratepayers is
in the order of $915,000 — 985,000.
As noted in the Hemson report, the universal water metering program will likely
need to be phased -in with installation occurring over a three to five year period
once the City makes the decision to proceed with universal metering.
Financial Options
Since 2017 Council has taken the approach that the Utility is no longer borrowing
to fund capital, instead capital is funded from operating (pay as you go). If Council
chose to fund the universal metering program the City could decide to borrow the
money and finance it over a period of 20 years however this would place
additional upward pressure on water and sewer rates to fund this debenture and
the associated new additional operating costs. The annual cost of borrowing
would equate to an estimated additional $20.00 per year on the annual flat rate
bill.
Alternatively the City could build sufficient reserves over time for the capital
investment through contributions made from operating. Once the City has
sufficient reserves and funding support from other levels of government the City
could then proceed with the implementation of the universal metering program
however as identified as part of the Asset Management work and as presented as
part of the State of the Infrastructure report, Saint John Water has an
infrastructure deficit of $313.6 million and sustainable annual funding presently
of approximately $5 million (Utility share) while leveraging an additional $2.5
million of funding annually from others. Of the infrastructure deficit a large
portion — approximately $70 million is in the extreme risk asset category.
17
-10 -
Moving forward with universal metering at this time would either cause the Utility
to once again begin borrowing funds - adding to the debt load or alternatively
using the capital program to fund universal metering instead of the renewal of
infrastructure in the extreme risk category. No funding or slowing the funding of
the renewal of assets would have consequences on our ability to provide reliable
service and meet regulatory requirements.
While being mindful of the benefits universal metering brings and while at the
same time balancing the infrastructure renewal needs of the community so as to
continue delivering reliable service to all customers, it is recommended that the
City of Saint John revisit the concept of universal metering in approximately 5
years once more investment has been made into addressing the assets in the
extreme risk category.
Long-term Rate Outlook
Within the Universal Metering Analysis Hemson reports "It is projected that rate
increases of about 2.5% each year will be required to support the system. The
overall rate impact, per year, is anticipated to be lower than the annual rate
adjustments employed in recent years. The Figure below indicates the projected
cumulative rate increase for customers receiving both water and sewerage
services is expected to be around 2.5% per annum, which is less than half of the
average annual rate increases experienced over the last 10 years which were
ultimately driven by the harbour clean-up and the Safe, Clean Drinking Water
Project." Figure 1 that follows provides a visual of the typical metered household
rate projection.
$2,000
$1.,.sao
$1.,600
$1.,400
$1.,2.00
$1.,000
$80
0
$00
0
$40
Figure 1: Typical Metered Household Rate
Projection (200m3 /year)
2.5%
6% Average annual
annual I
lb
y 7 5, 0,
Note: Red Bars relate to historical period and purple bars relate to forecast.
Note: Total Household charge for users receiving both water and sewerage services
SERVICE AND FINANCIAL OUTCOMES
n/a
iF:3
-11 -
INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS
The analysis for the cost of Universal Meter Program has been reviewed by staff
at Saint John Water and the Finance team.
ATTACHMENTS
Universal Metering Analyses Report
Universal Metering PowerPoint Presentation
UNIVERSAL METERING ANALYSIS
491
HEMSON consulting Ltd.
October 2019
TABLE OF CONTENTS
INTRODUCTION...............................................................................................1
II EVALUATION OF UNIVERSAL METERING........................................................3
A.
EXISTING BILLING STRUCTURE................................................................3
B.
WHAT IS UNIVERSAL METERING.............................................................4
C.
COST OF UNIVERSAL METERING.............................................................5
D.
TIMING AND FUNDING OPTIONS..........................................................7
E.
BENEFITS OF UNIVERSAL METERING.......................................................8
F.
SHORT -FALLS OF UNIVERSAL METERING.............................................10
G.
SUMMARY OF COST AND EFFICIENCIES ASSSOCIATED WITH
METERING...............................................................................................11
III BENCHMARKING ANALYSIS...........................................................................14
A.
EASTERN CANADA.................................................................................14
B.
CANADA -WIDE COMPARISON..............................................................15
IV RATE STURCTURE ANALYSIS...........................................................................18
A.
ISSUES TO CONSIDER.............................................................................19
B.
CONSIDERATIONS MOVING FORWARD..............................................20
V DEMAND ANALYSIS........................................................................................25
A. GROWTH FORECAST..............................................................................25
B. METERED CONNECTIONS......................................................................25
C. WATER CONSUMPTION FORECASTS....................................................27
D. WATER CONSUMPTION ADJUSTMENTS...............................................29
VI RATE CALCULATION AND SENSITIVITY ANALYSES.......................................30
A. LONG-TERM RATE OUTLOOK...............................................................34
VII METERING APPROACHES AND IMPLEMENTATION OPTIONS .........................37
VIII RECOMMENDATIONS AND FINDINGS..........................................................39
Appendix A Rate Structure Survey of Canadian Municipalities
HEMSON
I INTRODUCTION
The City of Saint John provides quality drinking water from the South Bay Wellfield
and Loch Lomond/Latimer Lakes. The water is then distributed through approximately
500 kilometers of distribution and transmission water pipes. The City has recently
embarked upon the construction of a 75 million litre per day water treatment plant,
the renewal and installation of 26 kilometres of water transmission/distribution mains,
the renewal of 3 dams and the development of the new South Bay Wellfield at a cost
upwards of $200 million to bring safe, clean drinking water to the citizens of Saint
John. The Loch Lomond Water Treatment Facility went into operation on August 30
2018 and it will reduce the occurrence of boil water orders and service interruptions.
The City of Saint John has regularly updated their water and sewerage rates to ensure
the fees adequately support service delivery and the funding requirements to undertake
necessary capital works. However, the City has not reviewed its rate structure for some
time. The City of Saint John has an approximate customer base of 17,000 accounts, of
which, over 80% of these users are charged on a fixed fee basis without consideration
for the amount of water consumed. The balance of the users are metered and are
generally linked to ICI ( industrial, commercial and institutional) uses or multi -
residential properties throughout the City. Many municipalities have moved to a
metered based rate structure in an effort to provide a more transparent and equitable
rate system while attempting to decrease water demand as customers pay for the water
used.
Hemson was retained by the City of Saint John to undertake a comprehensive Water
and Sewer Rate Study with a view of calculating utility rates under the City's existing
rate structure and to examine the costs and benefits of universal metering in the City
while evaluating the user rate implications under this scenario. The purpose of this
research report is to provide the City with information necessary to inform future
decisions on the costs and benefits of metering all properties in the City. An
independent report identifying the utility rates required to sustain operations under
the status quo rate structure are identified under separate cover.
It should be noted, the utility rate analysis and long-term projection of rates under the
metered rate structure scenario is provided for information purposes to illustrate the
impacts to individual users if the City were to transition to a metered rate structure in
2019. Understandably, the implementation of water meters across the City is likely an
HEMSON
I
initiative that will take several years, however to illustrate the net rate effect, a one-
year transition is assumed. Furthermore, all figures presented are for illustrative
purposes and would be subject to additional review and consideration if the City
proceeds with universal metering. This research report focuses on a few common
themes and will:
• Quantify the costs for metering all residential properties;
• Discuss the advantages and disadvantages of universal metering;
• Compare the City's existing rate structure with those employed in other
municipalities across the country;
• Review potential metered rate structures and options; and
• Sensitivity analyses for residential and non-residential customers.
HEMSON
3
II EVALUATION OF UNIVERSAL. METERING
This section of the report will evaluate the cost of universal metering and assess the
advantages and disadvantages of moving towards this system.
A. EXISTING BILLING STRUCTURE
The City of Saint John provides potable water to about 14,000 residential accounts
and about 3,100 ICI accounts though a distribution system of over 500 kilometres of
linear water piping.
Currently, residential customers with fewer than 3 dwelling units in Saint John are
charged for water and sewer services on a flat rate basis. Under this rate structure, the
total bill remains constant regardless of the amount of water consumed in each unit.
Non-residential and multi -unit residential customers (greater than three units) are
metered and water is charged on a per cubic meter basis. A fixed charge relative to the
size of water meter is also levied in addition to the consumption based charge. The
City currently employs a three tier declining block structure for water services — under
this structure the unit price of water decreases relative to use. Sewerage services is
levied on a surcharge basis, equal to 122% of the water bill.
Flat rate water bills are sent on a semi-annual basis while non-residential customers
have the water meters read every two months with subsequent bills issued accordingly.
Tables 1 and 2 below provide a summary of the existing 2019 water rates in Saint John
for customers who are charged on a flat rate basis (Table 1) and those metered
customers who are charged both a fixed and consumption based fee (Table 2).
HEMSON
IB
Existing Rates for
Meter Size
Table 2A
Metered Users in Saint John —
Water
Monthly Fees
Sewer (122%0 of water)
5/8"
$18.03
$22.00
3/4"
$22.07
$26.93
1 "
$30.14
$36.77
1 '/z"
$39.63
$48.35
2"
$79.06
$96.45
3"
$164.29
$200.43
4"
$285.71
$348.57
6"
$449.02
$ 547.80
8"
$645.20
$787.14
10" and Over
$873.83
$1,066.07
*Sewer consumption charge based on metered water use. Rate also represents 122% of the
water charge.
B. WHAT IS UNIVERSAL METERING
Universal metering measures water consumption on the volume of water consumed for
every household in the specified area through the installation of water meters that use
a meter -based billing practice. Generally, a "user pay approach" translates into higher
levels of water conservation resulting in lower water usage.
In order to achieve this equitable billing structure, the City would be required to install
a water meter on the water supply pipe where it enters the building to every residential
property. Water meters are precision devices capable of detecting minute flows of water
and come in a variety of shapes, sizes and designs, but for typical residential
applications, a 5/8" meter will meet the needs of most households.
The universal metering program would apply to all residential uses including those
with fewer than 3 dwelling units or properties with a home office. Importantly, the
installation of a water meter would only measure water flow and would not measure
wastewater generation. Common practice amongst municipalities across the county is
to bill sewer use on the basis of water consumption. The installation of individual sewer
HEMSON
meters per household is a costly exercise and an area not likely to be examined under
the scope of a universal water meter program nor is it a standard industry approach.
C. COST OF UNIVERSAL METERING
As part of this analysis, Hemson has undertaken a review of the cost associated with
metering the City's residential properties. A high-level overview of the costs associated
with installing universal meters is estimated at about $485 per household (Table 3).
This figure includes the hard costs of the meter themselves, installation costs by a
licenced plumber and the Radio Frequency readers. Using the parameters identified,
the initial capital costs to install approximately 14,000 water meters across the city is
estimated at $6.8 million. In addition, a contingency of about $1.4 million has been
allocated to the project, bringing the total closer to $8.2 million (plus HST). It is
important to note that the cost estimate was prepared for the purposes of this study
and the total cost is subject to change over time relative to the cost of materials and
providing the service at the time of contract.
Table 3
Residential Metering Cost Estimate (1)
Item Description Component Costs
Solid State No Moving Part 5/8" Water Meter
$190
AMI Radio
$175
Installation of 5/8" meter and radio by
$120
contractor (including grounding cables)
Estimated Cost per Meter
$485
Total Number of Water Meters
14,000
Sub -total Capital Cost
$6,790,000
Plus: Project Contingency (20%)
$1,358,500
Total Capital Cost (net of HST)
$8,148,000
Source: Cost estimates based on estimates provided by KTI Limited (Sensus Canada).
The installation costs identified represent a weighted average cost per install assuming
that not all residential water meter installations are equal and some will require
additional time and resources to complete. Therefore, the following considerations
were accounted for:
HEMSON
Con
• 60% of installations are classed as "routine" at a cost of $100/meter;
• 25% of installations are classed as "intermediate" at a cost of $140/meter;
• 10% of installations are classed as "complex" at a cost of $180/meter; and
• 5% of installations would be retuned to utility/homeowner for remediation. For
the purposes of this analysis, it is assumed that after remediation, these installs
would then be classified as either "routine" or "intermediate". For the cost analysis,
the higher intermediate install cost of $140 per meter is used.
It is important to note that there are different options available to the City in terms of
the type and quality of the water meter to be purchased. The solid state no moving
part water meter included in the cost analysis (Table 3) is of a preferred standard as
these meters are more accurate than traditional moving part meters or composite
residential meters. However, these alternative water meters are less costly than the no
moving part meters and the cost differences are summarized below:
• A traditional residential brass moving parts meter is approximately $115/meter.
Assuming all other costs identified in Table 3 remain constant, the total capital
cost, with contingency, is estimated at $6.9 million.
• A composite residential with moving parts meter is the least costly alternative at
$80/meter. Assuming all other costs identified in Table 3 remain constant, the
total capital cost, with contingency, is estimated at $6.3 million.
In addition to the initial capital outlay to acquire and install water meters across the
city, some further considerations should be addressed:
1. The City would be responsible for the eventual repair and replacement of this
infrastructure. With a useful life of 20 years, the City should be allocating
approximately $414,000 per year to reserves to ensure that sufficient funds are
available when these assets reach the end of their useful life. The annual
contribution would be in addition to the City's regular asset management
requirements and should be funded annually through the utility rates.
2. As the City currently bills non-residential customers on a metered system, the
radio transmitting towers and software are already in place. The existing radio
towers would be able to transmit and read the meters, therefore no significant
additional capital costs above the identified $8.2 million would be required to
operationalize the metering program. That said, the City would incur some
additional annual software costs (AMI) to add the new 14,000 accounts to the
metering system — this cost is estimated at $25,000 per annum.
HEMSON
7
3. The City currently bills semi-annually for residential customers and bi-monthly
for non-residential customers. Consistent with municipal best practices for a
metered billing system, the City would likely begin to mail out water bills on a
bi-monthly basis so customers are better informed. As a result, additional
resources will be required to accommodate the increased level of service. For the
purposes of this analysis, it is estimated that the City would require two additional
staff members for the initial implementation period of the water meters while
one employee would remain over the long-term. Furthermore, additional postage
and mailing costs would be incurred to facilitate bi-monthly billing for residential
customers. For 2019, the analysis assumes $202,000 in additional expenses — the
2 new staff members required for a three-year time -frame, at $142,000, in
addition to $60,000 in extra postage and mailing expenses.
4. Despite some of the additional costs incurred, operational cost savings can be
realized as electricity, chemical and chlorine costs are likely to be reduced as a
result of decreased system -wide water production. If implemented today, these
savings are estimated at $175,000 and represent a 15% decrease in 2019 potable
water expenditures for various budget items which would could fluctuate relative
to consumption. The 15% operational savings is set to equal the anticipated
change in typical household consumption patterns, as a result of universal
metering (see Section V for further details).
• Some additional savings could also be realized on wastewater operations to
account for a decline in consumption. These savings are more modest than
water and estimated at about $38,000 in 2019.
D. TIMING AND FUNDING OPTIONS
Capital expenditures to carry out the universal metering program are not growth -
related, and therefore ineligible to receive funding through lot levy revenues or other
developer contributions. However, newly constructed units or rebuilds, would typically
be required to emplace meters. In addition, when the assets require rehabilitation or
are due for replacement, the source of funds are essentially limited to reserves or
contributions from operating. Therefore, the City of Saint John would be responsible
to fund the upfront capital costs as well as future asset repair and replacement
requirements associated with installing water meters on all residential properties. A
few important funding consideration:
• In maintaining a user -pay approach, the cost of the water meter installation
program should be incorporated into the user rates and funded by those benefiting
from the service.
HEMSON
Hel
Existing rate reserve funds are limited and therefore the City would not be able to
draw upon reserves to help offset the initial capital cost. It is likely that the capital
costs would be debenture financed over the period of the assets life. Assuming a
20 -year debenture, the average annual payments are estimated at approximately
$558,000 (using a 3.5% interest rate).
Over the long-term, it is important for the City to build sufficient reserves for the
scheduled replacement of infrastructure through contributions from operating.
The universal water meter program will likely need to be phased -in with
installation occurring over a three to five year period. Additionally, from a long-
term asset repair and replacement perspective, water meter replacement
requirements will also then be distributed over several years as not all meters will
need to be replaced simultaneously if the installation is phased.
The City can look to exercise any existing grants programs to help offset the cost
of the universal metering program. For example, the Green Municipal Fund would
be a viable source for funding. In order to be eligible, the project must demonstrate
the potential to reduce potable water use by residents of a neighbourhood or
community by at least 20 per cent and the current volume of water delivered per
capita. If successful, funding is provided for up to 80 per cent of eligible project
costs to a loan maximum of $5 million with the grant amount equal to 15% of the
loan.
BENEFITS OF UNIVERSAL METERING
Universal water metering programs offer a number of benefits to a community. The
arguments for using universal metering are that it provides economic benefit to the
City, improves fairness and equity, enhanced utility information management and it
encourages sustainable water conservation practices.
Economic Benefits
Universal water metering accompanied by an appropriate rate structure, effectively
reduces water demand. The reduction of peak and overall water use can help extend
the useful life of existing treatment infrastructure and delay potential future expansion
needs. Lower consumption of water also translates to reduced strain on the sewage
treatment system thus extending its life and delaying any expansion requirements to
service new development. Capital cost savings are thus realized throughout the City's
budget, however it would be difficult to quantify the savings at this time as any cost
savings would be realized over the long-term.
Operational cost savings can be realized as electricity, chemical and chlorine costs are
expected to be reduced as a result of the universal metering program. It is estimated
HEMSON
N
that the City could see in -year conservative savings of approximately $212,900 if
implemented today.
2. Improved Fairness and Equity
When a flat fixed rate structure is applied in a community, users that use less water
subsidize the consumption patterns of those using a greater amount. The current flat
rate water pricing structure employed for residential units in Saint John is inherently
inequitable, where all users pay the same amount regardless of their water usage
patterns. Universal metering is a possible solution to directly measure and charge the
amount of water consumed to a specific household. This type of structure is common
amongst other utilities, such as electricity and gas, where a portion of the bill relates
to the resources consumed.
When a direct correlation between the consumption of water and the total charge paid
exists, the end user is likely to see this metering program as an incentive to conserve
water and participate in retrofitting plumbing fixtures (or appliances) within
households. In an effort to create a balanced rate structure and to not over burden
those high volume residential water users, it is recommended that a fixed charge also
be implemented alongside the consumption based charges. The fixed component is
levied independently of water use and is designed to recover costs that do not vary
with use. This component is intended to provide the City with stable revenue for cash
flow.
3. Enhanced Utility Information Management
Currently in Saint John, water utility operates under a number of engineering
assumptions due to a lack of specific consumption related information on certain
geographic areas and properties. Installing residential meters would allow for greater
detail and information on a number of issues:
• Meter readings from individual residences could provide data on peak hourly and
daily demands, average daily demands and other selected parameters.
• Cumulative water meter records could be compared with water supply records to
determine whether all water supplied is reaching the customers or if a portion is
being lost in the system through leakage.
• Consumption data is useful for developing fair, equitable and highly defensible
cost recovery mechanisms such as development cost charges for future
infrastructure upgrades that will be required as a result of new development.
4. Environmental Benefits
A user pay system strongly encourages water conservation practices as it is tied to the
benefit received by the user. Water is a limited resource and the use of consumption
HEMSON
10
based pricing typically results in conservation efforts by users to reduce costs. Lower
water consumption will also reduce the amount of sewage generated and the volume
required to be treated. Water meters will allow individual households to detect any
significant leaks within their households by realizing the total volumes consumed thus
improving the efficiency of the overall water distribution system.
F. SHORT -FALLS OF UNIVERSAL METERING
Although the benefits of universal metering are well documented, there are some
short -falls and disadvantages which should be considered.
Upfront Capital Costs and Ongoing Maintenance Needs
In addition to the City's regular capital projects required to maintain the system,
approximately $8.2 million in upfront capital cost is needed to implement the metering
program. The cost would need to be funded through the City's utility rates over the
program period. For comparison purposes, the upfront capital cost is about $3.4 million
more (or 73% higher) than the City's total 2019 water and sewer capital budget.
Furthermore, in addition to the City's regular asset management requirements,
approximately $414,000 per year should be allocated to reserves in order to have
sufficient funds on hand to replace the assets at the end of its 20 -year useful life.
2. Additional Resources and Program Implementation
With the introduction of water meters, the City may be required to initiate a wide
range of programs to implement the metering program:
• The installation of new residential water meters and accompanying rate structure
would likely require a degree of public education. Although the cost is relatively
low, it will likely require staff and council resources in order to be properly
implemented.
• The City should consider introducing various rebate programs which encourage
the installation of efficient fixtures and appliances in an effort to reduce household
water costs.
• The City will be required to allocate additional administration staff in order to
increase the level of service to provide more frequent billing than the existing
semi-annual procedure.
• While not common, water meter inaccuracy does happen from time -to -time. A
system for water bill appeals and dealing with undiscovered household leaks may
need to be in place.
HEMSON
• Other polices and procedures may be needed to complement the universal
metering program. For example a program related to freezing pipes may be needed
— this would allow residents to run the water during extreme cold events, without
penalty, to avoid water main freezing and breaks.
• The City would be required to monitor consumption trends and revenues very
closely to ensure that sufficient revenues are being generated to fund system
expenses. With the transition to a volumetric based rate structure, the City's
revenues and cost recovery are much more reliant to residential customer usage
patterns than under the existing flat rate structure basis.
3. Cost Burden Transferred to High Water Use Customers
The underlying assumption of metering is that those who consume more water will
generally pay more relative to use. It is important to note that this will shift a portion
of cost recovery to those who have little control of the amount of water used, and
therefore, would be penalized for use with water meters. For example, families with
several people living in a household would require a greater amount of water than
perhaps a house with a single occupant or elderly couple. Please refer to Table 15 for
examples that illustrate some of the rate shifts that would occur under a metering
program.
G. SUMMARY OF COST AND EFFICIENCIES ASSSOCIATED WITH METERING
The following table provides a summary of the costs the City would incur as well as
potential savings realized with universal metering over the immediate three year
period. It is assumed that these costs would be funded through the water rates.
HEMSON
12
Table 4 — Summary
of Costs
and Savings
Associated with
Universal Metering
Category
2019
2020
2021
Cost parameters
Capital cost to acquire
$0
$692,600
$678,300
For illustrative purposes the
and install 14,000
$8,148,000 is debt financed over
residential water
20 years at a 3.5% interest rate
meters
per annum (Table 3 cost
estimate). The interest rate would
be dependent on market rates at
the time of the contract and it
would be at the discretion of the
City to finance all or a portion of
the work.
Annual Asset
$0
$0
$414,000
Annual contributions to reserve to
management
replace water meters at the end of
requirements for water
its useful life
meter replacement
Additional FTE
$142,000
$144,800
$147,700
2 Staff members are required for
Requirements to
initial 3 -year implementation
facilitate
while only one remains starting in
implementation
2022.
Service Enhancement
$85,000
$86,700
$88,400
The movement to bi-monthly
(Increased Billing to a
billing would result in additional
bi-monthly basis) and
postage and mailing costs each
software upgrade
year. In addition, annual software
upgrades fees will increase to add
the 14,000 accounts to the
system.
Operational
($212,900)
($220,200)
($227,900)
It is assumed that a 15% decrease
Efficiencies/Savings
in operational expenditures
related to electricity, chlorine and
chemical costs may be achieved
through reduced water
consumption. A modest
allocation for wastewater savings
has also been incorporated
Total Net Costs
$14,100
$703,900
$1.1 million
It should be noted that additional capital cost savings may also be realized, however it
would be difficult to quantify the savings at this time. Any cost savings would be
recognized over the long-term as the City may be able to delay the oversizing and
expansion of water and sewer infrastructure projects due to system -wide conservation
efforts.
Lastly, the summary does not account for any potential government funding which
may be obtained to offset the initial capital cost of acquiring and installing the water
meters. It would be in the City's best interest to pursue all available funding
HEMSON
13
opportunities and any funds received would be applied towards the initial capital cost
and ultimately reduce the debenture requirement.
HEMSON
14
III BENCHMARKING ANALYSIS
A comprehensive benchmark analysis was undertaken to compare municipal best
practices in respect to municipal water metering. The analysis below outlines the rate
structures employed in the maritime municipalities as well as other jurisdictions across
Canada in comparable population.
A. EASTERN CANADA
Table 5 provides an overview of the rate structures employed by the various
communities in Eastern Canada. The review consisted of seven municipalities in
Eastern Canada with a population greater than 40,000 people. The table illustrates a
few important points:
• With the exception of Saint John, all municipalities with a population of over
40,000 people are fully metered (both residential and non-residential) and employ
a metered billing rate structure.
• The ICI and multi -residential properties 0 units or more) in the City of Saint
John are metered while all residential properties (less than 3 units) are charged on
a flat rate basis based on the number of units.
• With the exception of the City of Fredericton, all of the surveyed residentially
metered communities employ a fixed charge differentiated on the size of the water
meter as well as a consumption based charge. The consumption charge is levied
per cubic meter of water consumed and is typically in the form of a constant rate
per cubic meter or a declining block rate structure.
• The fixed fee in the City of Fredericton is only differentiated by property type:
residential vs. non-residential. The meter rental fee is differentiated based on
the size of service and is a fairly nominal charge relative to the total monthly
bill paid.
HEMSON
15
B. CANADA -WIDE COMPARISON
In addition to comparator municipalities in Eastern Canada, jurisdictions from across
the country were surveyed. With advancements in water metering technology, many
municipalities have transitioned to using a form of billing that relies on measuring end-
user consumption in order to determine the quantum paid. According to the Canadian
Municipal Water Priorities Report, 2014, approximately three-quarters of Canada is
now on metered systems. From 1991 to 2009, there has been an increase of 20 per -cent
in the use of water metering by municipalities in Canada according to the last national
survey.
Based on a survey of municipalities in Canada with populations ranging from 51,000
to 100,000 people, about 84 per cent, or 41 of the 49 communities surveyed have
residential metering. The figure below focuses on the rate structures employed for
residential customers as most communities surveyed have a metering system in place
for the non-residential sector. Figure 1 below provides a summary of the benchmark
findings. A detailed table comparing the rate structures applied in each community
can be found in Appendix A.
HEMSON
Table 5
Rate Structure Comparison
Municipality
Meter Status Fixed Charge
Consumption Charge
($/account)
($/m3)
Saint John
Only ICI/Multi-
Residential Fixed Rate per
Declining Block Structure
residential users are
unit
(only applied to those
metered
accounts metered —
ICI/Multi-residential: Fee
ICI/Multi-residential)
Residential customers
differentiated by meter size
are not metered
Halifax
Metered Community
Fee differentiated by meter
Constant Rate
size
Moncton
Metered Community
Fee differentiated by meter
Declining Block Structure
size
Charlottetown
Metered Community
Fee differentiated by meter
Constant Rate
size
St. John's
Metered Community
Fee differentiated by meter
Constant Rate
size
Fredericton
Metered Community
Fixed Fee for residential and
Constant Rate
non-residential properties
Meter rental fee
differentiated by meter size
Cape Breton-
Metered Community
Fee differentiated by meter
Declining Block Structure
Sydney
size
B. CANADA -WIDE COMPARISON
In addition to comparator municipalities in Eastern Canada, jurisdictions from across
the country were surveyed. With advancements in water metering technology, many
municipalities have transitioned to using a form of billing that relies on measuring end-
user consumption in order to determine the quantum paid. According to the Canadian
Municipal Water Priorities Report, 2014, approximately three-quarters of Canada is
now on metered systems. From 1991 to 2009, there has been an increase of 20 per -cent
in the use of water metering by municipalities in Canada according to the last national
survey.
Based on a survey of municipalities in Canada with populations ranging from 51,000
to 100,000 people, about 84 per cent, or 41 of the 49 communities surveyed have
residential metering. The figure below focuses on the rate structures employed for
residential customers as most communities surveyed have a metering system in place
for the non-residential sector. Figure 1 below provides a summary of the benchmark
findings. A detailed table comparing the rate structures applied in each community
can be found in Appendix A.
HEMSON
16
Figure 1:
Residential Rate Structure Comparison
30
25
20
�v
15
10
Constant Rate Fixed Rate Only Increasing Block Declining Block Humpback Rates
Rate Rate
The benchmark analysis identifies a few important factors:
• Over half, or 28 municipalities, employ a constant rate per cubic meter for the
consumption based charge. Under this structure, the user is charged a constant
rate per unit of water consumed or wastewater generated. This rate structure is
largely understood by the public and generally easy to administer.
• Eight municipalities, including Saint John, employ a fixed rate only fee for
residential users.
• The remaining municipalities employ other consumption based rate structures,
namely a declining or increasing block structure. Although both structures are
common, they are utilized to meet the specific dynamics of a community —
increasing block structure will increase water rates relative to use while the
declining block structure decreases water rates relative to use. The declining block
structure is most common in jurisdictions where there is a significant non-
residential customer base. Furthermore, the rate structure is designed so that only
those high volume users benefit from a declining rate and residential consumption
still falls into the higher priced water tier to continue to encourage conservation
efforts.
• There are a handful of municipalities which employ a humpback rate structure
which acts as a hybrid structure between an inclining and declining block
structure basis.
• When levied in conjunction with a consumption based billing structure, the fixed
charge is almost always differentiated by the size of the water meter. The factors
to which the fixed charges are differentiated vary by community. Overall, the fixed
charge is greater for those customers with a larger meter size (or service size) to
HEMSON
17
reflect either the flow arising from the size of the meter or the investment required
to install the water meter.
HEMSON
IV RATE STURCTURE ANALYSIS
Various water and sewer rate structures are in place across the country and include flat
rates, constant rates, humpback block rates, declining block rates and inclining block
rates. Rate structures may also include fixed or minimum charges. The implementation
of a particular rate structure depends on a number of administrative and financial
factors. Emphasis must be placed on identifying a rate structure that satisfies changing
water use patterns and demographic trends while being fiscally responsible and
sustainable from a service delivery standpoint. Table 6 provides a comparison of the
most common rate structures employed.
Note: All volumetric based rate structures have the inherent risk of a municipality incurring a shortfall as
revenue is directly correlated to customer behaviour.
HEMSON
Table 6
Rate Structure Comparison
Rate Structure
Brief Description Pros
Cons
Flat Fee
- each user pays the
understood by the
- does not represent
same fee regardless of
public
true cost of water
the amount of water
easy to administer
- may encourage
consumed
guaranteed funding
wasteful water use
- often combined with
- not equitable to all
consumption -based
users of the system
charge
Constant Metered Rates
-the user is charged a
understood by public
- may encourage
constant rate per unit of
easy to administer
wasteful water use
water consumed
Increasing Block Rate
- a tiered approach in
encourages
- large non-residential
which the unit price of
conservation
water users pay more
water increases relative
increased equitability
which may act as an
to water use
economic development
discouragement
Declining Block rate
- a tiered approach in
supports high water
- may encourage
which the unit price of
users (i.e. commercial
wasteful water use
water decreases relative
or industrial operations)
- shifts burden to
to water use
residential users
Humpback Rate
- a tiered approach in
- supports high water
- shifts burden to
which the unit price of
users (i.e. commercial
residential users and
water increases relative
or industrial operations)
low-volume non -
to use to a determined
residential users
rate before retreating
back to the lowest
charge
Note: All volumetric based rate structures have the inherent risk of a municipality incurring a shortfall as
revenue is directly correlated to customer behaviour.
HEMSON
19
A common practice by municipalities is to combine a flat rate structure with a
volumetric -based component to provide a level of revenue security while allowing for
the benefits of consumption based charges. The fixed component is levied
independently of water use and is designed to recover costs that do not vary with use.
This component is intended to provide the City with stable revenue for cash flow.
The volumetric component is based on the amount of water used by each customer,
and having this component ensures equitability in that it is tied to the benefit received
by the user. The volumetric component strongly encourages water conservation
practices.
A. ISSUES TO CONSIDER
Various rate structures will be evaluated as part of the research report and the key
objectives noted below will be considered when calculating rates.
1. Cost Recovery
In determining water and sewer rates, the full cost of providing services should be
recovered. The costs are to include operation and maintenance, periodic rehabilitation
and long-term sustainability of infrastructure through reserve fund contributions.
2. Equity
A user -pay approach should be considered in selecting a rate structure and calculating
water and sewer rates. An entirely equitable approach is considerably more difficult to
apply when not all connections are metered and when water and sewer systems vary
greatly in age, value and size.
3. Conservation
Considering the direction of environmental awareness, it is important when
determining a rate structure, if and when practical to do so, measures that promote
conservation be taken into account. It is also important to recognize that not all users
have the ability to change their levels of consumption and as such, should not be
penalized.
4. Administration
An important part of a rate structure is transparency to both the users and service
provider. Easing administrative requirements may reduce the overall administrative
cost, which would ultimately provide for a reduction of rates.
HEMSON
I1
5. Economic Development
While recognizing the importance of the above objectives, it is also important to
maintain the City's attractiveness to industries which may rely heavily on water and
or wastewater services to conduct business. A rate structure must allow the City to
continue to be competitive from an economic development perspective.
B. CONSIDERATIONS MOVING FORWARD
As the City reviews the possibility of a universal metering program, there are a number
of rate structure considerations to complement the program.
1. Fixed Charge Differentiated by Meter Size
The City's current fixed charge is differentiated by the size of the water meter and
generally follows municipal best practices — the fixed charge is greater for those
customers with a larger meter size (or service size) to reflect either the flow arising from
the size of the meter or the investment required to install the meter. The table below
compares the equivalent meter ratios from the City of Saint John with the meter
factors identified by the American Water Works Associations (AWWA) as well as
those by the Canadian Water Works Association (CWWA) for factors based on both
investment and flow. Generally, the scale of factors listed below is to be applied to the
base charge of the smallest meter to determine the minimum that should be charged
to larger connections.
Meter Size
Table
Comparison
City of Saint John
7
AWWA Factors based
on Investment
AWWA Factors based
on Flow (and Capacity)
5/8"
1.0
1.0
1.0
3/4"
1.2
1.1
1.5
1"
1.7
1.4
2.5
1 '/2"
2.2
1.8
5.0
2"
4.4
2.9
8.0
3"
9.1
11
15.0
4"
15.9
14
25.0
6"
24.9
21
50.0
8"
35.8
29
80.0
10" and Over
48.5
-
115.0
HEMSON
21
As the equivalent factors for the City are already differentiated by meter size and
somewhat reflective of sample investment equivalent ratios by the AWWA/CWWA,
change is not warranted. It should be noted that any adjustments to these factors would
result in a shift in the total bills paid by those in the non-residential sector. Generally,
for typical residential applications, a 5/8" meter will meet the needs of most households
and therefore, non-residential users would be the only ones on a meter size greater than
5/8".
2. Align Fixed Charge Cost Recovery with Best Practices
Experience from other municipalities indicates that the introduction of residential
water meters and a rate structure with a variable consumption component results in a
decline in overall residential water demand. Therefore, to account for the anticipated
water conservation consumption response, the City should at a minimum continue to
impose a fixed charge levied independently of water use to provide the City with stable
revenue for cash flow. The fixed charge is intended to reflect costs that do not vary
with use and in general those costs can comprise upwards of 80% to 90% of system
costs. For example, in 2019, debt costs (or fiscal costs) and capital from operating
contributions associated with the water and sewer system accounted for about a third
of total rate funded expenditures, which does not include any staff costs or general
operational expenditures required to treat and distribute water regardless of use.
However, in order to provide the end-user with incentives to conserve water, the
volumetric component should still comprise a significant component of the charge.
The City should consider to set the fixed charge to recover closer to the upper -end of
the comparing jurisdictions (target range between 50% to 60%) of rate required
expenditures related to both the water and sewer services (outlined in Figure 2). This
relationship will ensure fiscal stability for the City while still providing financial
incentives to conserve water. As illustrated in Figure 2 below, municipal best practices
review identifies:
• All municipalities surveyed include both a fixed rate component and variable rate
component of the bill.
• On average, the fixed fee components of a residential bill represent about 44% of
a typical household consuming 200 m3 per annum. Despite the New Brunswick
industry standard usage of 272 m3 per household of four people, actual
consumption trends of nearby municipalities is closer to 200 m3 per annum and is
more representative of actual household usage patterns today. For the purposes of
this analysis, a more conservative total household consumption number is used to
reflect conservation when households are billed for water used.
• The relationship between the fixed vs. variable cost recovery for Maritime
Provinces is typically higher than those surveyed in Ontario. For example, both
HEMSON
22
Fredericton and Charlottetown recover a high proportionate share of costs
through the fixed rate as opposed to communities of Brantford or Newmarket.
.\\e
e\\e
0
a°k
ok
IIIIIIII Variable Rate
Ocaej�aJ ei k� of°��r
Z.
```a0 dA
Note: Based on typical water consumption of 200 m3 per year.
3. Consider the Introduction of a "Lifeline" Consumption Tier
The City of Saint John has a unique customer base that includes several large industrial
operations, small commercial businesses and a residential base of about 14,000
accounts (or 16,000 billable units).
In addition to the fixed charge, the City employs a three tier declining block rate
structure — under this structure the unit price of water decreases relative to use. The
existing consumption based rate structure outlined in Table 8 below was initially
designed to meet the needs of its ICI and multi -residential user base as all residential
customers are currently charged a flat fixed rate. However, with the introduction of
residential water meters, the City should update the existing model to align with
municipal best practices and ensure the structure is tailored specific to Saint John and
its customer base. It is also important to note that of the total consumption, no water
consumption has been billed to Tier 3 since 2008.
HEMSON
23
For administrative purposes, it may be advisable to consider adjusting the second and
third consumption tier, which is further discussed in the following sections.
With a significant industrial base and several large volume water users, it would be
important for the City to maintain attractiveness to industries which rely heavily on
water and or sewer services to conduct business. To continue to be competitive from
an economic development perspective, the existing declining block structure should
be maintained with some modifications. Some observations of the existing
consumption tiers are outlined below:
• The existing block structure is designed so that only those high volume users
benefit from a declining rate and any residential consumption would still fall into
the higher priced water tier to continue to encourage conservation efforts. Once
metered, there may only be a handful of residential customers consuming water
beyond 600 m3 per annum which would then trigger the next consumption block
with a decreased rate.
• In order to address users on fixed incomes, the City could consider introducing a
new Tier 1, which can also be referred to as a "lifeline rate". The lifeline tier would
be set equal to the amount a typical family requires to meet basic needs, which
according to the World Health Organization, is estimated at 6 cubic meters per
month for a four person family. This rate is intended to be discounted from the
unit rate in the next tier. Table 9 below provides a summary of the potential
changes.
• The potential new rate structure would essentially follow a "humpback rate
structure" in which the unit price of water increases relative to use to a determined
rate before retreating back to a lower charge. This rate structure would be
consistent with those levied in other municipalities across the country while
specifically tailored to meet the needs of Saint John.
4. Fee Structure for Sewer Services Maintained
It is anticipated that sanitary sewer service in the City will continue to be levied on a
surcharge methodology for all metered accounts. Using this approach, the exact
amount of how much residents and businesses pay for sewers is based on the amount
billed for water usage. In essence, the more water used the more wastewater the City
HEMSON
must transport and ultimately treat
environment. Under this approach,
inherently be transposed to sewer.
W
before it can be released back into the
the rate structure employed by water would
HEMSON
25
V DEMAND ANALYSIS
Future costs of the City's water and sewer system will largely be driven by demands
placed on the system by water consumers. A forecast of future consumption demands
must therefore be developed.
A. GROWTH FORECAST
The population and household projections used in this research report were based on
the City's forecast of new connections. The City's current census population of
approximately 67,600 persons is expected to remain fairly constant, increasing
modestly to 67,900 persons by 2029. Even with the relatively flat population growth,
due to declining household sizes, 175 new households over the same period are
expected and will be in the City's urban areas serviced by water and sewer. By 2029,
the City will have nearly 34,000 households. Figure 3 below illustrates the projected
population and growth in households over the planning period.
40,000
717,171717
60,000
50,000
417,171717
30,000
20,000
w,000
0
Figure 3
Population and Household Forecast
I CJ rr) 'I? U) 4D Ir". 00 U) 0
0 0 0 0 0 0 0 0 0 r1 rr-....i{ Cr....J{ tr.V...{1r....{ U) 4r..C..{ IrI"....•{ rX.0 Cr....7 0 CiJ CCJJ tr1 CJ C!JY 4CD ICI"•J CXJ U7
Ce n s G.0 s Po pz .0 l ati o ro I: Me l l i n g;s
Source: Hemson Consulting Ltd. based on City data and Census information.
B. METERED CONNECTIONS
The first step in the utility rate calculation is to project the number of new connections
anticipated to be connected to water and sewer services over the next ten -years (2020-
2029). The estimated growth in the total number of water and sewer connections over
HEMSON
we
the forecast period was informed through discussions with City staff and a review of
historical growth patterns. Further details related to the metered connection forecasts
can be found in the City's Potable Water and Sewer Rate Study.
In the City of Saint John, most residential water and sewer customers are currently
billed a flat rate water charge (with no volumetric charge), as this group does not have
water meters. Most non-residential customers are water meter equipped and billed on
a flat rate charge based on meter size, and a volumetric charge based on consumption.
Furthermore, wastewater generation is billed based on water consumption, however
not all water service customers in the City receive sewer services. As a result, there are
less billable sewer connections than billable water connections. For these reasons,
separate forecasts for billable water and sewer connections have been prepared. This
section outlines the assumptions used in the metered connection forecast.
1. Water and Sewer Service Connections
For the purposes of this universal metering scenario, the total number of metered water
connections are proposed to increase by 13,981 if the City were to proceed with
universal metering, associated to flat rate users switching to metered connections
(Table 10). All these connections are assumed to be 5/8" meters.
Similar to historical trends, only a marginal amount of growth is anticipated over the
next ten years —175 new billable connections are anticipated over the planning period
to 2029. New non-residential development is often difficult to predict and therefore
for the purposes of this study, no growth in overall metered connections is assumed
over the ten-year period. This assumption is consistent with the analysis in the City-
wide Water and Sewer Rate Study.
Meter Size
Table 10
Metered Water
2019
Connections
Connections
2019 Universal
Metering Connections
Change
5/8"
1,856
15,837
13,981
3/4"
155
155
0
1"
432
432
0
1 1/2"
284
284
0
2"
272
272
0
3"
57
57
0
4"
26
26
0
6"
13
13
0
8"
3
3
0
10" and over
6
6
0
Total Metered
Connections
3,104
17,085
13,981
Flat Rate Connections
13,981
0
-13,981
HEMSON
27
The number of sewer connections is consistent with the number of water connections
receiving a new meter. For every user that is currently on the flat rate system, it has
been assumed that they will also be billed on a consumption basis moving forward,
therefore 13,981 additional metered users are assumed to be billed based on water
consumption and a 5/8" meter.
C. WATER CONSUMPTION FORECASTS
The water demand forecast for non-residential metered users over the planning period
of 2020-2029 was developed using actual metered consumption data with
consideration of the trends observed in the most recent year-end figures and ongoing
non-residential water conservation measures. The assumptions are consistent with the
City-wide Potable Water and Sewer Rate Study which provides further details of this
forecast.
Table 11 shows that in total, 56.6 million m3 of billable consumption is associated to
existing metered customers in the City. A further 2.8 million m3 of billable
consumption has been added to account for the approximately 14,000 flat rate
residential customers switching to a metered system in 2019. Therefore, total metered
consumption under the universal metering scenario totals 59.4 million m3.
The residential billable consumption of 2.8 million m3 is based on an assumed
consumption of 200 m3 per connection per year. The figure is derived from the review
of three specific components:
1. A sample of nine municipalities of similar sizes to Saint John that employ a
metered based rate structure. Figure 4 shows that the typical household
consumption ranges from 175 m3 to just over 200 m3 per household.
2. The City of Saint John undertook a water metering pilot project in 2009 which
had water meters installed for 39 customers. The results of this project illustrated
the median consumption household average of approximately 230m3 per annum.
For the purposes of this analysis, a more conservative total household
consumption number is used to reflect conservation when households are billed
for water used. This conservation assumption represents a 15% decrease from
figures derived from the pilot project, which is reflective of typical household
consumption patterns of other jurisdictions.
3. Experiences from other jurisdictions indicates that there is a strong link between
declining consumption patterns of households with residential water meters with
a corresponding rate structure, to those users without a water meter. Household
consumption patterns can decline anywhere from 10% to 30% with the
HEMSON
!E:3
introduction of water meters and should be monitored closely by City staff during
and after full implementation.
Note 1: Total number of connections is estimated at 14,000.
HEMSON
Table 11
Billable Consumption Categories
User Type
Description
2019 Billed
Consum tion Projection
Potable Water
• Includes all non-residential potable water
5,460,000 m3
System - Non-
consumption and excludes raw water
Residential
associated with the West and East
industrial categories described below.
• Does not include any consumption
associated with residential users currently
charged a flat rate. No water meters are
presently equipped for these users.
West Industrial
• Consumption associated with raw water
39,625,600 m3
provided to specific industrial customers.
• Includes raw water suppled to Irving Pulp
and Paper and Coleson Cove.
East Industrial
• Consumption associated with raw water
11,523,000 m3
provided to specific industrial customers.
• Includes raw water to the Flume (Irving
Paper) and Irving Oil Refinery.
Sub -Total
56,608,600m3
Consumption
Potable Water
• Estimated residential billed water
2,796,200 m3
System -
consumption.
Residential
Under Metering
• 200 m3 per connection
Total
59,404,800 m3
Consumption
Note 1: Total number of connections is estimated at 14,000.
HEMSON
W
Figure 4
Typical Household Water Consumption
c
250
0
200
c
U 150
0
100
Note: Woodstock, Kawartha Lakes, Belleville, Newmarket, Thunder Bay and Brantford are
Ontario municipalities.
D. WATER CONSUMPTION ADJUSTMENTS
With the new treatment plant now online, separation of the potable and industrial
water supply has now been completed, thereby requiring an adjustment in the way the
City delivers services to both residential and non-residential customers. These changes
necessitate a review of the water rates for non-residential users, most notably large
industrial users using non -potable (or raw water), which will also have an impact on
potable user rates. These customers moving forward will be billed for the full cost of
providing raw water while historically these customers have paid either potable water
rates or special negotiated user rates in which the revenue was used to offset system-
wide expenditures.
This universal metering report accounts for the adjustments associated with the
transition to industrial raw water billing for those specific users.
HEMSON
6119]
0
=
50
ro
U
.Q
0
ti
Note: Woodstock, Kawartha Lakes, Belleville, Newmarket, Thunder Bay and Brantford are
Ontario municipalities.
D. WATER CONSUMPTION ADJUSTMENTS
With the new treatment plant now online, separation of the potable and industrial
water supply has now been completed, thereby requiring an adjustment in the way the
City delivers services to both residential and non-residential customers. These changes
necessitate a review of the water rates for non-residential users, most notably large
industrial users using non -potable (or raw water), which will also have an impact on
potable user rates. These customers moving forward will be billed for the full cost of
providing raw water while historically these customers have paid either potable water
rates or special negotiated user rates in which the revenue was used to offset system-
wide expenditures.
This universal metering report accounts for the adjustments associated with the
transition to industrial raw water billing for those specific users.
HEMSON
6119]
30
VI RATE CALCULATION AND SENSITIVITY ANALYSES
In order to test the impact of the new rate structure on City residents and businesses,
a sensitivity analysis was undertaken to quantify the range of rate impacts to both the
residential and non-residential customers.
Table 12 below provides a summary of the 2019 rate funding requirement for both the
water and sewer systems under the universal metering scenario. The net rate funding
need represents the amount that must be funded through utility rates by City of Saint
John potable customers only (excluding east and west industrial customers) based on
the 2019 budget with some modifications to reflect the net costs the City would incur
as a direct result of universal metering.
Note 1: Kepresents the additional salary, and service enhancements as a result of metering but excludes the
debt costs and asset management contributions which are included in subsequent years.
Note 2: Non -metered rate revenue includes funds received for: Stormwater levy, fire protection levy,
previous year's surplus and other minor sources.
It should be noted that debt servicing costs associated with the initial capital
acquisition of the meters would be shown in subsequent years and not included in the
total above. That being said, the annual debt management costs would be still included
in the long-term projection of rates outlined in Part D of this section. Further to this,
the annual asset management contributions are being phased -in over the short-term
to mitigate immediate rate impacts.
HEMSON
51
Table 12
Summary of the 019 Net Rate Funding Requirement
Ref #
Categories Water
Sewer
1
Operating Expenditures (including repayment of
$23,134,818
$16,168,911
debt)
2
In -year rate funded capital
$2,820,000
$1,880,000
3
Transfer toAfrom) Reserve
$0
$0
4
Cost Adjustments for Universal Metering (1)
$14,141
$0
5
Less: Non -metered Rate Revenue (z)
$3,483,472
$1,804,424
Total Net Rate Funding Need = (1+2+3+4-5)
$22,485,488
16,244,487
Note 1: Kepresents the additional salary, and service enhancements as a result of metering but excludes the
debt costs and asset management contributions which are included in subsequent years.
Note 2: Non -metered rate revenue includes funds received for: Stormwater levy, fire protection levy,
previous year's surplus and other minor sources.
It should be noted that debt servicing costs associated with the initial capital
acquisition of the meters would be shown in subsequent years and not included in the
total above. That being said, the annual debt management costs would be still included
in the long-term projection of rates outlined in Part D of this section. Further to this,
the annual asset management contributions are being phased -in over the short-term
to mitigate immediate rate impacts.
HEMSON
51
31
1. Calculated 2019 Water Rates under Universal Metering
Based on the information provided above, the required potable water user rate revenue
in 2019 is forecast to be $22.5 million. This is the amount of revenue which must be
collected through the sale of potable water to fully recover the operating, capital,
rehabilitation and replacement costs of the systems.
2019 Water Utility Rates —
All Accounts
Table 13
Current vs. Calculated
2019
Existing
under a Metered Structure
2019 Universal Difference
Metering (%)
Metered: Fixed Charge: $/Month
5/8"
$18.03
$ 34.26
90%
3/4"
$22.07
$41.93
90%
1 "
$30.14
$57.27
90%
1 1/2"
$39.63
$75.30
90%
2"
$79.06
$150.21
90%
3"
$164.29
$312.15
90%
4"
$285.71
$542.85
90%
6"
$449.02
$853.14
90%
8"
$645.20
$1,225.88
90%
10" and over
$873.83
$1,660.28
90%
Consumption Charge: $/m3
Tier 1: 0 — 50M3 /month
$1.6123
-
Tier 2: 50 — 124,950m3/month
$1.0267
-
Tier 3: > 124,950m3/month
$0.3623
-
-
New Tier 1: 0 — 6M3 /month
-
$1.1527
-
New Tier 2: 6 — 50M3 /month
$2.3053
-
New Tier 3: > 50m3/month
$1.4680
-
2. Calculated 2019 Sewerage Rates under Universal Metering
Based on Table 12, the required sewerage user rate revenue in 2019 is forecast to be
$16.2 million. This is the amount of revenue which must be collected through the
treatment of wastewater to fully recover the operating, capital, rehabilitation and
replacement costs of the system.
The basis for the sewer rate is calculated as a surcharge on the water bill — the sewer
surcharge rate is calculated as a percentage of the water charge that will be needed to
HEMSON
61
32
cover the costs of operating and maintaining the sewer infrastructure. As shown in
Table 14, the calculated rate for 2019 is outlined to be 80% of the water bill.
Table 14
2019 Sewer Utility Rates — Current vs. Calculated
All Accounts 2019 Existing
under a Metered Structure
2019 Universal
Metering
Difference
(%)
Fixed Charge: $/Month
5/8"
$22.00
$27.27
24%
3/4"
$26.93
$33.38
24%
1 "
$36.77
$45.59
24%
1 1/2"
$48.35
$59.94
24%
2"
$96.45
$119.58
24%
3"
$200.43
$248.50
24%
4"
$348.57
$432.15
24%
6"
$547.80
$679.17
24%
8"
$787.14
$975.90
24%
10" and over
$1,066.07
$1,321.71
24%
Consumption Charge: $/m3
Tier 1: 0 — 50m3/month
$1.9670
-
Tier 2: 50 — 124,950m3/month
$1.2526
Tier 3: > 124,950m3/month
$0.4420
-
-
New Tier 1: 0 — 6m3 /month
-
$0.9176
-
New Tier 2: 6 — 50M3 /month
$1.8352
-
New Tier 3: > 50m3/month
$1.1687
-
3. Rate Impact Sensitivity Analysis
In order to test the impact of the new rate structure on City residents and businesses,
a sensitivity analysis was undertaken to quantify the range of rate impacts to both the
residential and non-residential properties. Table 15 below illustrates the impact of the
calculated water and sewer rates on a range of residential users while Table 16 and
Figure 5 illustrates the results of the sensitivity analysis for a sample of non-residential
users.
HEMSON
6V
33
Table 15
Comparison
Current vs. Calculated (Per Annum)
Household Consumption 2019 2019 Change ($ and %)
Existing Structure Metered Rates
1 . Low User: Annual Consumption
$1,428
$887
($541) or
of 72m (all water in Tier 1)
-38%
2. Low -Med User: Annual
$1,428
$1086
($342) or
Consumption of 120m3
,
-24%
3. Typical User(>): Annual
$1,428
$1,417
($11) or
Consumption of 200m3
-1.0%
4. Medium -High User: Annual
$1,428
$1,716
$288 or
Consumption of 272m3
20%
5. High User: Annual
$1,428
$2 038
$610 or
Consumption of 350m3
43%
Note 1: Typical household consumption reflects the average consumption seen in municipalities of similar
size (see Figure 4).
For residential properties, the rate changes vary depending on the type of user.
Generally, as a result of the introduction of universal metering, high volume users will
see a significant increase in their bill (in the first year of implementation only).
Overall, low volume water users will see significant annual savings while typical users
consuming 200m3 will see little change in the total bill. Importantly, with universal
metering, high volume water users will have the opportunity to change their
consumption patterns in an effort to reduce their bill — this would not be possible under
the current flat rate structure.
In order to carry out the sensitivity analysis for non-residential properties, a sample of
fifteen different properties, serviced by both water and sewer, with different usage
patterns were chosen at random looking solely at varying usage patterns. Overall, the
quantum of the rate change will be dependent on the specific property and tied directly
to the amount of water consumed. Generally, all commercial customers, under the
sample, will see an increase on their total bill.
HEMSON
6'i!
34
No.
Table 16
Sensitivity Test - Sample of Non -Residential
Consumption (m3) Meter Size
(Inches)
Users
Universal
Metering Rate
Change (2019)
1
3,440
5/8"
16.1%
2
1 1,970
5/8"
16.3%
3
1,570
5/8"
16.4%
4
297,000
8"
16.6%
5
2,030
3/4"
16.9%
6
790
3/4"
18.0%
7
240
5/8"
18.2%
8
870
1 "
20.1%
9
1,690
1 1/2"
20.1%
10
66,600
10" and over
20.6%
11
4,435
3"
25.6%
12
800
2"
29.5%
13
6,860
8"
34.7%
14
1,840
4"
37.5%
15
1 420,000
6" (Water Only)
43.5%
Note: Rate adjustment for the specified users can be found in Figure 5 below.
For non-residential properties, the rate changes vary pending on the type of user.
Overall, all non-residential users in the sample are anticipated to see a rate increase,
as most non-residential users fall in Tier 2 or above.
A. LONG-TERM RATE OUTLOOK
A number of assumptions were applied in calculating the water and sewerage rates to
2029. The water and sewerage rates are calculated to fully recover the cost of operating
the system, identified in -year capital needs (inclusive of debt servicing requirements)
and provide for contributions to asset replacement reserves. An immediate
implementation of a rate that fully funded the calculated asset replacement
contributions as identified in the City's State of Local Infrastructure Report would
result in significant impacts to all users in the City. The analysis is based on providing
for a gradual movement towards full rates. These contributions, when combined with
the City's ongoing capital works, will demonstrate a significant movement to long-
term full cost recovery rates.
HEMSON
6191
35
Over the long-term, it is expected the net rate funding requirements for both the City's
water and sewer system are to increase at an average rate of 2.5% per annum, similar
to the average increase in expenditures. The cost increases are attributed to general
operating cost increases anticipated over the period. It is projected that the water and
sewer net rate funding requirements will increase to $28.7 million and $20.8 million
respectively by 2029. Figure 6 below provides a snapshot of the annual year -over -year
change in costs. Above regular inflationary cost adjustments related to providing water
and sewer services under the existing status quo structure, the net supplementary costs
associated with metering all residential properties are incorporated into the forecast of
rate funded expenditures. The following costs have been included:
• annual debt payments, starting in 2020, would result in additional average cost of
$558,000 associated with the initial capital cost to acquire and install about
14,000 residential water meters across the City.
• the long-term asset management requirements to replace the water meters at the
end of their useful life. In this regard, $414,000 per year, on average is included in
the analysis.
• The additional operational costs, and potential savings realized with universal
metering are included. This includes additional staff requirements to facilitate
initial implementation of universal metering, costs associated to increase
frequency of billings to a bi-monthly basis for residential properties (from the
current semi-annual distribution), as well as operational efficiencies and savings
realized as a result of a decline in system -wide water production.
Figure 6: Net Rate Funding Requirement
Ten-year Projection
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Budget
IIIA Weter IIIIIIIIIII Sewer
HEMSON
67�
36
In order for the City to recover costs associated with providing these services, necessary
adjustments to the City's utility rates are required. Beyond 2019, it is projected that
rate increases of about 2.5% each year will be required to support the system. The
overall rate impact, per year, is anticipated to be lower than the annual rate
adjustments employed in recent years. Figure 7 below indicates the projected
cumulative rate increase for customers receiving both water and sewerage services is
expected to be around 2.5% per annum, which is less than half of the average annual
rate increases experienced over the last 10 years which were ultimately driven by the
harbour clean-up and the Safe, Clean Drinking Water Project.
Figure 7: Typical Metered Household Rate Projection
Historical vs. Projected Increases to 2029
2.5% annual
6% Average annual rate increase
rate increase
ryya^,•y ry�`y, ryy,11 ry.,y'Sa ry�,y�, ,�4.y ,yJ ry,11 q) Gpa ,1Cy '�, It, �y,15 �y,1t" �y.,.y<_.� �r•y-y D ry,yA •t.% ry•�P
e^�V d'�V d'�V d'�bJ d{bJ dy� dy� Pq'AT Pq'AJ Pq'AJ Pq� P Fg43 P ryOJ P ryW � .ryW � ry4.� �++1 e•�V / F•��
Note: Red Bars relate to historical period and purple bars relate to forecast.
Note: Total Household charge for users receiving both water and sewerage services.
HEMSON
61FA
37
VII METERING APPROACHES AND IMPLEMENTATION
OPTIONS
There are different approaches to implementing a metering program, many of which
require varying levels of investment with potential benefits and drawbacks. As the City
has water meters installed on all ICI and multi -residential properties and completed a
pilot project to install residential meters, there are two possible next steps:
1. Universal Metering — The mandatory installation of water meters on all
properties throughout the City. This would be the most equitable format and
would likely yield the best results from a service delivery standpoint. Having all
customers on the system would make it easier for the City to forecast water
consumption patterns, set utility rates, plan for infrastructure upgrades and
repairs, monitor non -revenue water and perform detailed financial analyses of
the water system. The general drawbacks and benefits have been widely discussed
in the previous sections of this report.
2. Voluntary Metering - this can be an alternative option by having users switch
from a flat rate billing model to a consumption based charge. However some
drawbacks with this approach are:
• Often times those volunteering for the service would typically be low-
volume water customers or those who consciously conserve water;
• High volume water user would be less likely to volunteer as they would be
most financially affected by the "user pay" approach associated with
metering. This would also likely make for a longer implementation period
to get all users on the system; and
• Having a sample size represented by a certain group (e.g. low volume users)
would make it more difficult for the City to properly assess the metering
program, projected revenues and promote water conservation.
Under this approach it is probable that the City will see a fair bit of uptake in the early
years of the program that will moderate once those interested in water meters are
connected into the system. Once this occurs, the City could increase flat rate fees to a
greater degree than metered rates in order to expedite remaining flat users to join the
metered system.
In the event that the City pursues metering on all residential properties, whether
through a mandatory or voluntary process, public consultation and a proper
HEMSON
6'1:3
communication program would need to be launched. The City would be encouraged
to create a communications plan to relay pivotal information regarding the program,
potential costs and potential savings to receive feedback. Some forms of
communication include:
• Public meetings and open houses;
• Public surveys; and
• Website infographics, webinars, and informational videos.
In addition to a communication plan, shadow bills offer another option to help
customers understand the effects of universal metering. Shadow bills allow customers
to see exactly how the metered rate structure will impact their bill, allow both the
utility and regulator to identify adverse bill impacts and to develop and explicitly target
those customers for mitigation measures which may include other efficiency options or
interim rebates.
HEMSON
6'1%]
39
VIII RECOMMENDATIONS AND FINDINGS
This research report identifies a range of options and considerations the City of Saint
John should address while contemplating universal metering in the City. A summary
of the key findings and recommendations are outlined below.
1. Quantifying the Cost of Universal Metering
The initial capital costs to acquire and install about 14,000 residential water meters
across the City is estimated at $8.2 million (plus HST). Existing rate reserve funds are
limited and therefore the City would not be able to draw upon reserves to help offset
the initial capital cost and therefore likely the costs would be debenture financed over
the period of the assets life (annual payments estimated at $558,000 on average).
Furthermore, the City should be cognizant of the long-term asset management
requirements to replace water meters at the end of their useful life. In this regard,
$414,000 per year, on average would be required, but phased -in over the short-term to
mitigate impacts on the user rates.
The following table provides a summary of the costs the City would incur as well as
potential savings realized with universal metering over the immediate three year
period. It is assumed that these costs would be funded through the water rates.
HEMSON
Ais]
M
Table 17 — Summary of Costs
and Savings
Associated with
Universal Metering
Category
2019
2020
2021
Cost parameters
Capital cost to acquire
$0
$692,600
$678,300
For illustrative purposes the
and install 14,000
$8,148,000 is debt financed over
residential water
20 years at a 4% interest rate per
meters
annum (Table 3 cost estimate).
The interest rate would be
dependent on market rates at the
time of the contract and it would
be at the discretion of the City to
finance all or a portion of the
work.
Annual Asset
$0
$0
$414,000
Annual contributions to reserve to
management
replace water meters at the end of
requirements for water
its useful life
meter replacement
Additional FTE
$142,000
$144,800
$147,700
2 Staff members are required for
Requirements to
initial 3 -year implementation
facilitate
while only one remains starting in
implementation
2022.
Service Enhancement
$85,000
$86,700
$88,400
The movement to bi-monthly
(Increased Billing to a
billing would result in additional
bi-monthly basis) and
postage and mailing costs each
software upgrade
year. In addition, annual software
upgrades fees will increase to add
the 14,000 accounts to the
system.
Operational
($212,900)
($220,200)
($227,900)
It is assumed that a 15% decrease
Efficiencies/Savings
in operational expenditures
related to electricity, chlorine and
chemical costs may be achieved
through reduced water
consumption. A modest
allocation for wastewater savings
has also been incorporated
Total Net Costs
$14,100
$703,900
$1.1 million
It is important to note that the cost summary above does not account for any potential
government funding which may be obtained to offset the initial capital cost of
acquiring and installing the water meters. It would be in the City's best interest to
pursue all available funding opportunities and any funds received would be applied
towards the initial capital cost and ultimately reduce the debenture requirement.
2. Summary of Benchmark Analysis
Based on a survey of municipalities in Canada with populations ranging from 51,000
to 100,000 people, about 84 per cent, or 41 of the 49 communities surveyed have
residential metering. Of those communities, most rate structures are based on a
constant rate volumetric basis.
HEMSON
AI
41
The remaining municipalities employ other consumption based rate structures, namely
a declining or increasing block structure. The declining block structure is most
common in jurisdictions where there is a significant non-residential customer base.
Similar to Saint John, the rate structure is designed so that only those high volume
users benefit from a declining rate and residential consumption still falls into the
higher priced water tier to continue to encourage conservation efforts. There are a
handful of municipalities which employ a humpback rate structure which acts as a
hybrid structure between an inclining and declining block structure basis.
30
25
o-20
v
15
10
c
U 5
1'
Figure 8: Residential Rate Structure Comparison
Constant Rate Fixed Rate Only Increasing Block Declining Block Humpback Rates
Rate Rate
3. Key Rate Structure Recommendations
In addition to the fixed charge, the City employs a three tier declining block rate
structure — under this structure the unit price of water decreases relative to use. With
the introduction of residential water meters, the City should update the existing model
to align with municipal best practices and ensure the structure is tailored specific to
Saint John and its customer base.
The following recommendations are put forward.
• Experience from other municipalities indicates that the introduction of residential
water meters and a rate structure with a variable consumption component results
in a decline in overall residential water demand. The City should consider to set
the fixed charge to recover costs closer to the upper -end of the comparing
jurisdictions. This relationship will ensure fiscal stability for the City while still
providing financial incentives to conserve water. As illustrated in Figure 2 of this
report, municipal best practices review identifies the fixed fee components of a
residential bill represent about 44% of a typical household consuming 200m' per
annum.
HEMSON
I'M
42
• Since 2008, no water consumption has been billed to Tier 3 which captures
consumption over 124,950 m3. Therefore, for administrative purposes, it may be
advisable to consider adjusting the second and third consumption tier from the
rate structure.
• To continue to be competitive from an economic development perspective, the
existing declining block structure should be maintained with some modifications.
The existing block structure is designed so that only those high volume users
benefit from a declining rate and any residential consumption would still fall into
the higher priced water tier to continue to encourage conservation efforts. Once
metered, there may only be a handful of residential customers consuming water
beyond 600 m3 per annum which would then trigger the next consumption block
with a decreased rate.
• In order to address users on fixed incomes, the City could consider introducing a
new Tier 1, which can also be referred to as a "lifeline rate". The lifeline tier would
be set equal to the amount a typical family requires to meet basic needs, which
according to the World Health Organization, is estimated at 6 cubic meters per
month for a four person family. This rate is intended to be discounted from the
unit rate in the next tier. Table 18 below provides a summary of the potential
changes.
18
PotentialTable
Current Structure
Universal Metering
Description of Universal
Metering Change
Tier 1: 0 — 50 m3 /month
Tier 1: 0-6 m3
First tier would reflect Water
for basic needs
Tier 2: 50— 124,950 m3 /month
Tier 2: For the Next 44 m3
Unit price of water would
increase from Tier 1 .
Tier 3: > 124,950 m3/month
Tier 3: Remaining
Unit price of water would
Consumption
decrease from Tier 2
• The potential new rate structure would essentially follow a "humpback rate
structure" in which the unit price of water increases relative to use to a determined
rate before retreating back to a lower charge. This rate structure would be
consistent with those levied in other municipalities across the country while
specifically tailored to meet the needs of Saint John.
• It is anticipated that sanitary sewer service in the City will continue to be levied
on a surcharge methodology for all metered accounts. Using this approach, the
exact amount of how much residents and businesses pay for sewers is based on the
amount billed for water usage.
HEMSON
M
43
4. Summary of Universal Metering Sensitivity Analysis and Future Rate Outlook
Using the 2019 budget as the basis, some of the immediate effects of universal metering
have been quantified in this report. For residential properties, the rate changes vary
depending on the type of user. Generally, as a result of the introduction of universal
metering, high volume users will see a significant increase in their bill (in the first year
of implementation only) while low volume water users will see significant annual
savings. Typical users consuming 200m3 will see little change in the total bill.
Importantly, with universal metering, high volume water users will have the
opportunity to change their consumption patterns in an effort to reduce their bill —
this would not be possible under the current flat rate structure.
Figure 9: Residential Rate Comparison:
$2,500.00 Status Quo vs. Universal Metering
$1,500.00
$:x.,000.00
$500.00
Household 1: Household 2: Household 3: Household 4: Household 5:
72rn annurn 120rn iron urn 200x7 iron urn 272rn iron urn 350rn iron urn
11111111111 SLaL us Quo: 20.19 11111111111 Universal Metering: 20.19
For non-residential properties, the rate changes vary pending on the type of user.
Overall, all non-residential users in the sample are anticipated to see a rate increase in
the range of 15% to 30%. Although these non-residential users have been metered,
the transition of residential customers creates a shift in revenues earned from non-
residential customers.
In order for the City to recover costs associated with providing these services, necessary
adjustments to the City's utility rates are required. Beyond the first year of
implementation, it is projected that rate increases of about 2.5% each year will be
required to support the system. The overall rate impact, per year, is anticipated to be
lower than the annual rate adjustments employed in recent years which were
ultimately driven by the harbour clean-up and the Safe, Clean Drinking Water Project.
5. Implementation Considerations and Next Steps
If the City decides to proceed with installing residential water meters, a mandatory
installation would be the most equitable format and would likely yield the best results
from a service delivery standpoint. Having all customers on the system would make it
HEMSON
easier for the City to forecast water consumption patterns, set utility rates, plan for
infrastructure upgrades and repairs, monitor non -revenue water and perform detailed
financial analyses of the water system.
In the event that the City pursues metering on all residential properties, whether
through a mandatory or voluntary process, public consultation and a proper
communication program would need to be launched. Shadow bills would be one
avenue to help customers understand the effects of universal metering and illustrate
exactly how the metered rate structure will impact their bill. Shadow bills should be
issued to customers 6-12 months in advance of billing implementation to allow
customers to quantify what the impacts would be without actually paying the bill under
the proposed rate structure.
The analysis included in this report ensures that the water and sewer rates fully fund
all of the City's anticipated annual costs including all operating costs and capital
financing needs and debt repayment requirements under the universal metering
scenario. The analysis and projections outlined in this research report are in part,
Hemson and City staff best estimates of what could transpire in the short -to -medium
term using the data available. If the City were to proceed with a universal metering
program, it is expected that a more fulsome cost analysis will be prepared to supplement
the recommendation to proceed with installing meters. A financial model was
developed to undertake the analysis and serves as a dynamic rate setting tool. Using
the model, the City is able to perform sensitivity analyses of water and sewer rates, rate
structure and also phase-in options.
HEMSON
ARI
45
APPENDIX A - RATE STRUCTURE SURVEY OF
CANADIAN MUNICIPALITIES
Major City
Red Deer
Prov
AB
Metered
(2016) (Y/N)
100,000 Y
Fixed Charge
Based on metersize.
DescriptionPopulation
ring
(Residential)
Constant rate percubic metre
Brantford
ON
97,000 Y
Based on metersize.
Constant rate percubic metre
White Rock
BC
20,000 Y
Based on metersize.
Constant rate percubic metre
Nanaimo
BC
90,000 Y
Fixed charge not differentiated by metersize
Increasing Block Rate
Sudbury
ON
88,0001y
Fixed charge not differentiated by metersize
Constant rate percubic metre
Lethbridge
AB
93,000 Y
Based on metersize.
Constant rate percubic metre
Saint -Jean -sur -Richelieu
QC
95,000 Y
Fixed charge not differentiated by metersize
Constant rate percubic metre
Peterborough
ON
81,000 Y
Based on metersize.
Humpback Rates.
Kamloops
BC
90,000 N
Based on the size of service
Constant rate per cubic metre
Saint -Jerome
QC
74,000 N
Fixed charge not differentiated by meter size
None
Chilliwack
BC
84,000 Y
Fixed charge not differentiated by meter size
Constant rate per cubic metre
Sarnia
ON
72,000 Y
Based on meter size.
Constant rate per cubic metre
Chateauguay
QC
48,000 Y
Fixed charge not differentiated by meter size
Constant rate per cubic metre
Drummondville
QC
75,0001Y
Fixed charge not differentiated by meter size
Constant rate per cubic metre
Belleville
ON
51,000Y
Based on meter size.
Declining block rate
Fort McMurray ( Wood
Buffalo)
AB
71,000 Y
Based on meter size.
Constant rate per cubic metre
Sault Ste. Marie
ON
73,000 Y
Based on meter size.
Humpback Rates.
Prince George
BC
74,000 Y
Seasonal flat rates
Constant rate per cubic metre
Medicine Hat
AB
63,000 Y
Fixed charge not differentiated by metersize
Constant rate percubic metre
Welland -Pelham
ON
62,000 Y
Based on metersize.
Constant rate percubic metre
Grande Prairie
AB
63,000 Y
Based on meter size.
Increasing Block Rate
Airdrie
AB
61,000 Y
Based on metersize.
Constant rate percubic metre
Granby
QC
66,0001Y
Fixed charge integrated into tax bill
Constant rate percubic metre
Fredericton
NB
58,000 Y
Fixed charge not differentiated by metersize
Constant rate percubic metre
Saint John
NB
67,000 N
Fixed Rate
Beloeil
QC
22,000 Y
Fixed charge not differentiated by metersize
Constant rate percubic metre
Saint -Hyacinthe
QC
56,000 Y
Fixed charge not differentiated by metersize
Constant rate percubic metre
Brandon
MN
49,000 Y
Fixed charge not differentiated by metersize
Declining block rate
Vernon
BC
40,000 Y
Based on metersize.
Humpback Rates.
Cornwall
ON
47,000 N
Fixed Charges based on the number of plumbing
fixtures present
None
Joliette
QC
20,0001Y
Fixed charge integrated into tax bill
Constant rate per cubic metre (after
60,000 gallons)
Courtenay
BC
26,000 Y
IMin rate up to 15m3
Increasing Block Rate
Charlottetown
PEI
36,000 Y
Based on meter size.
Constant rate per cubic metre
Victoriaville
QC
46,000N
Fixed charge integrated into tax bill
None
Chatham
ON
100,000Y
Based on meter size.
Declining Block Rate
Georgetown
ON
42,000 Y
Based on meter size.
Constant rate per cubic metre
St. Thomas
ON
39,000 Y
Based on meter size.
Constant rate per cubic metre
Woodstock
ON
41,0001Y
Based on meter size.
Humpback Rates.
HEMSON
7�
otl]
H
�I_w
F1
m.„^.,
F1
H
Mil -
in
O
Alu
►�
E
O
�
O
O
O
O
4�
}
O
O
O
O
�
O
►
N
A
4)
H
0
CL
i
D
CL
ma
D
N
i
D
O
i
Ike
V
0
m
0
O
w
I
me
0
�,j
Ll
4-
Ln
O
U
N
U
Q
JA
O
Ln
D
Q)
4-
LU
-
w
Ll
Ln
D
O
4-
3
O
QL
I.
D
QL
n�
7 W
L
O U O
O O
Go
o
O
Q� cn cn LO •
• — ";q- 00 > 4J
cn
Ln
Ln Ln 4) o cn C
V a�
0 0 � 0
Ll
c -I
N
lfl
c -I
c -I
O
G1
O
.-.
L
M
O
c
Q
E
o
V
U
C
i.!
r_
O
Q
•L
U
M
E
O
Ln
I
O
ri
N
*'
X
W
Z
N
on
.E
E
OAC
M
O�
coco
U
Q1
s
L
Q
O
t/?
O
t/?
.�-I
t/?
110
t/?
O
t/?
N
'T
110N
I-
Ln
O
al
�
ON
L6
�
00
M
n
�
r^
v J
L
O
N
N
N
O
j
O
Q
'i
u
\
Ln
\
M
r -I
"
rl
N
M
lG
00
fC
Q
O
N
N
CO
N bA
L �
4-J N
4 �X
� N
O
N
N N
4-J
N �
U
c: E
C6 �
� L
ClA �
� U
M
0 Q
N )
N
U
N
L
O
a-+
C6
L
N
N
O
U
L
N
C6
N
cn 4-J
N N
ClA O
U
L _
� C6
O },
U C:
C: N
W 4-
0
N 0-
Zi
u
LA
w
L�
4)
As
O
�O
EO
-oO
_-
DO°i
EOn�
E¢>EN
'E m
�,�n°
�
.y90
CL
GO
■
3a
cdi
E
-cy
310
GO
90
E�
4.3
vi
ig
W
nL
W
O
�
U
U
O
O
O
�
�
Q
�
O
4)
4�
Q
O
O
OO
O
w
O
U�
U
Q
11
LO
0��0 ��0 00 6R
U0WDO
�
�O
LEO <n — U U LE -Q L0
ai
PFJ
4°JaAa �J
y�o
ai ~'o
� 4aa
b
� �'oy
> aiia a, co
� � � 4°,J�11° IIIIIIIIIII �
X �� O
� ... ya o�J v O
O
61
,x
G %�IIIIIIIIIII :„
� y'ro •J O
u *Jobs J
A°
0 co
cn
0 co W N O
i J
N
N
. _uulll
N
N
QJ
N
III
L
:
=
:
L =
N
L
E
�
�
�
L
Q) -0
L
H
L
t/?
O
O
O
O
N
�
p
O
i1
"Tum
cB
N
(nL
N
(n
�I
tilLi
v
i--+ •(n
O
N O
N
41
u
NL
Ln
(10Q)
CL
M
CL
M
����II
V
V
Lm
E
U
E
V
Vuuu mm
�••� U
N
.Q
U .Q
U
a..�IIII
N
0
a +
a
i
V ,
ilk
all
�
O
HHH
Ill�lllu,
O
uumm' ^
Q
IIIIIIIIII�
i
a+
Q
uuuw
0m
M
�
Illlllllllu
°'Illllllu"
0
E
=3
L
0
L:
V
SII
L
X
O
U
Q
N
C
'�
��
�
..I
Q
z
C_
0
•ca
Ilu
r
Y!
•U
I
Q
Z
��/
Li
emu
�'
A
Y! O
•U
L
O
LL
N
rl
N
M
.--I
N
M
0
` '
(�
w
0
O0
(1)C14 3
�
U
� Q
�•—O
vi
�
UE0
NO
NO
`1--D
�U
-
30
o�
N
cn
O
L_ N
a-0
4-
03
�
'Z7i
00
—0
�U
D
z�
�UU
!
m0
O 0
0 � 0
O 0 �
�.� E
•-U 00 �
0•Q � � 0
0 ,N L
0-0
Oma•`'" 0 � 0
:�00 OU
-10 O
O O O O•- •-
O 0-0 O
0 0
Q O E ��� J
Q
L_
Q
• -
�
O
...............
.....................................
Q
}
�
N
Ln
L
Q
L
0
70
3
L
W
U
3
•�
•�
U
i
}
O
vim,
O
U
N
•x
}
O
j
7�
v
U
(D0
o
0
N�
(D�
N
Q
0
Ul
O0
Q
U
Ln
U
++
i
i
�%
o
a
O
++
C
U0
u
O
_0
fa
0
L
fa
N
41
fa
u
7
NN
41
fa
N
U_
Q
C
X
G1
z
fa
U
7
41
fa
0
N
U_
Q
C
CL
Ul
a
dA
N
U.................................V...............~...............~...............~.........
0)N
N
•x
v
O
_L
3
a
n
0
N
N
N
O
(Y)c
o
C
M
o
4
�°
N
0)
o
M
z
U
Q
�
�
U
N
Hyl
V
4�
CL
H
MilV
0
CL
E
i
H
0
�� N �0N�0Q �O
Eco
p Q 0 z N N E N
DU �Q NDNN �p
N0�0 ��„ �00 70 u
N Q��
p �� 0�� 0 0-00
0U00���� �•U�0 NU3
E U�O� �3�0�
�UUv,D 0(n=) N L_D pp -0
0 c C(n 3 c (D c f)_ 0
'0NC0C N0�0p2 >�=—
V) 0U0 �UOU Jm�,00 Lu E15
Illlllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllp
O
4A
43°�ai7
ly
AyJ
O y
CL hyo
d�
L
4-3
GI
3 40�Jt
13 yda
r. s
O v
t y
Ul
r.
.o
O
td
a
A�
�J° A3A�
'�S
\°O
Irl O Irl O Irl
ru ru ri ri
uotgdwnsuoD pjoyasnoH jeDidAl
�3
0
0
cry
D
4) �
r
N
M1
CV -j
� � o
� o 0
•o Q,
o Q, Q,
L •0 0
� (n C)L
Q,
o Q,
•� L
O
1-
(3)
0
04
co
QJ
00
O
leJ)
r
L
00
o
l
3 a �
00
00
N
� u ,�
O
O
V-
tC
L O
Qj �
S-
00
oo
00
V p
00
O
ti
co
Qj
I�i
O
-
$ 3
V-
04
00
�
V L
(Yj
00
-
Csj
O O O
O
Qj QjQ
Q1 4 H
o
u
aI
Qj u
E
le
(n V ��
coM
a
o
aJ
+�-
C%4
Qj
3Qj
aa
co
r
V) Qja
U
v
o
o� m
E
a
`L
Q
Q,
0
1
m :3
f
O
QJ (n
co
co
Qj fu
O�
U
H
�,
�
,n a a,
o
L Q,Qj
N
C7
Nl'
LO
Q
Qj
h L
�a
� Iry r
Qj 'ti L Qj
4.1 11 f0 J.)
Q Qj Q Qj
QJ �kN = ti
E
3g11
v� o.
7
C
a,
0
E
o
cm
r,4
�
�a
a,
0
E
O O O O O
Lr O Lr O Ln
N N r -I r -I IA-
IA- IA- IA- IA-
o
cm
r,4
O O O O O
Lr O Lr O Ln
N N r -I r -I IA-
IA- IA- IA- IA-
L
7
4J
U
7
L
4-3y
O
41
10
a
a
L
di
41
di
E
L
w
13
C
di
0
C
10
t
V
G1
41
10
R'
10
J..1
C
O
13
w
GI
w
C
O
Z
0"
O
fU
0
v
v
co
0
to
M
N
a
s
N
C
—
L
N
O
�
4J
N
%
L
N
O
ate+
co
O
a0+
CV
ci3
00
00
00
00
rI
O'
M
M
i—I
00
;t
l0
Ln
Ln
Ln
Ln
rl
m
N
ry1
0
0
0
0
0
0
0
0
0
0
V1
O
O
O
O
lzt
r-
r-
O
m
mlzt
r-
m
O
m
0
k.0
lzt
O
E
z
Ql
V1
O
O
I,
N
W
l0
l0
zt
W
W
W
O
m
ri
r i
I�
N
r i
e
O
0 0
0
0
rlj
O
0
0
Nk.0
0 0
Ln
Ln
-1
M Ln
a-4
M
N Ln
-4-4
N
Ln
0
Zt
O_
E
7
C
O
U
rl
W
Ql
O
O
1-11,11,011
Z
0
v
v
co
0
to
M
Ln
a -I
M
a-4
N
O
a -I
01
00
f\
tD
to
M
N
N
N
N
co
co
0 0
0
0
0
0
0
0
0
0 0
Ln
Ln
-1
M Ln
a-4
M
N Ln
-4-4
N
Ln
0
to 0
Ln
a -I
M
a-4
N
O
a -I
01
00
f\
tD
to
M
N
00
GO
GO
GO
o
O
'—
O
O
�
IIIIIII�IIIIIIIIII IIIIIIIIII�IIIIIIIIII�IIIIIIIIII�IIIIIIIIIII
�
�
.�
a
N
O
O�
O
N
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII�IIIIIIIIIIII�IIIIIIIIII�IIIIIIIIII�IIIIIIIIII�IIIIIIIIIII
o
�
i
�
U
�O
4Z-O
N
�
M
Q
0 cl oopo oN v}
�
N tn
zzz
*11
rl''!
H
i
O
�00�
O 3 OU 03 E>
vi O� O� U
O O O -u O O
0 �� �0 E'O
O E
O 04) X0'0 30
O
0 .� "' O •U •O O
00
pct �0 00 0`~O "''Q)�
Op �E3�E �00
O
00
.iO •�3 >� 030 >�0
0 E
0- 0?��� 00E
=_ O
E O 0 � ? O
O•— �� �> ��� •LUQ
�0
0-9 = E _� O
'=0 OD'x I I I
U > U O
L�
A
N N
O
— N V
Op•O
N� 5,—
O rI
0 N O O� 0 0
0 N��
U _O •-
O�� NE 04- �� �070
00(TE OD--�� 0
, �� `~'�� o OE Qpm
N O
NO O "' "' U
N�� p•- —�„E O
NOEO cn��O
00 0 �� LO
�� •• 0
0D �CT 0 co0�0000
QQ Ute° O�04 m�0
�
L
G
L
O.
H
O
m
E
H
W
4-0
H
O
V
c9
.Q
m
V
ci
a-0
O
3
0
0
0
0
0
oo
Lr)
o
Ln
rll
N
00
0
N
�
m
41*
to
oo
i/l.
r -I
-C�
"L�
L
G
L
O.
H
O
m
E
H
W
4-0
H
O
V
c9
.Q
m
V
ci
a-0
O
3
r-I
O
�
O
N
O
O
O
O
O
�
N
r-I
00
N
i�
ih
ih
ih
ih
O
N
N
O
O
00
O
NM
L.0
00
O
I�
O
^
Nen
cn
O
�O
O
.�—I
co
jN
01
r-I
N
_
O
O
O
O
O
O
O
_0
N
�
O
C: 4-)
O
O
.�—�
00
v
r�-I
o `6
ih
ih
ih
ih
i/�
>,
� 4-34-)
.�
C: ra V
c I
al L.
�^
-O J--) al �c
V1
c c L L
W O J--1 C
H
0
W
ai V
I
-O w O a
H
'j
L S
O
i
H
+0.+
++
H
ai -W c
-0 O
E
O
._.
vhf
D w L c
i
�'
Q)
O e V c
+Q)
'�
a••+
•U
3
OA
m
++
t
a i •�
>
O
O
E
O
•c�
ro� `
c�
++
O
O
GC
O
O
-0
LV
� R
O
CL
'cd
H
Q
i
�W
}'
m� L
ra
++
cd
r
LL
Q
C
c
L�
H
H
•�
H
Q%
Q%
-
V
-W -W -
Q
E
E
•O
W
c ra rt
E
r
O
i
O
•1 L. _0
O
O
`-
i
O
C
++
O
++
++
Z
-, a
OA
O
�'
c�
+_+
+_+
V
i
� o c
•+�.+
ami
i
i
N
H
0
H
e�
V
V
rrl
Q
Q
m
a `�
v
q'n urh
CD 0 C� 0 c C) 0 10
Ul 0 Lr� 0 Ul U
vIll-
Ull 0) Vtr^,.,rM Vl�
SUIO?flflVq
IBMEM
plpij
0
F
joi
Te
ul
V
t
I
�
�
�
El
FINANCE COMMITTEE REPORT
Report Date October 18, 2019
Meeting Date October 23, 2019
Chairman Councillor Merrithew and Members of Finance Committee
SUBJECT: New Solid Waste Model Business Case
OPEN OR CLOSED SESSION
This matter is to be discussed in open session of the Finance Committee.
AUTHORIZATION
Primary Author Commissioner/Dept. Head City Manager
Michael Hugenholtz John Collin
RECOMMENDATION
It is recommended that Finance Committee approve the addition of the cart
purchase to the 2020 General Fund Capital Budget and submit to Common
Council for the November 4t" meeting for approval.
EXECUTIVE SUMMARY
Staff presented to Common Council an outline of the proposed new model of
solid waste collection at the October 7t" meeting for receive and file. This report
to Finance Committee is intended to present the business case in more detail
and receive approval to add the required investment to the approved 2020
General Fund Capital Budget.
PREVIOUS RESOLUTION
October 7, 2019 — Common Council - It is recommended that Common Council
receive and file this report.
STRATEGIC ALIGNMENT
The recommendations in this report align with Council's priorities to support
investment in creating a Vibrant, Safe City, offering Valued Service Delivery,
Growth and Prosperity and being Fiscally Responsible.
06%]
-2 -
REPORT
Current Cost for Solid Waste Collection
Our existing model for service delivery includes curbside pickup of both garbage
and compost for the City's eligible households. This totals $3,779,398 proposed
for 2020, of which $1,280,000 is budgeted for tipping fees at the Fundy Region
Solid Waste facility.
Approximately 85% of our household customers receive bi-weekly pickup, with
the remaining 15% receiving weekly pickup. Weekly pickup was put in place a
number of years ago for our more dense areas to reflect the challenges of
storing waste and compost for a longer period of time.
Material Handling Challenge
Based on current collection practices City of Saint John solid waste employees
typically lift approximately 5 tonnes of refuse on a daily basis. This is well in
excess of the 3.6 tonnes/day that industry experts feel is safe without causing
undue risk to the health and well-being of employees. This limitation of safe
lifting not only puts our employees in jeopardy based on current amounts
handled, but it leads to inefficiencies in scheduling and maximize the use of
resources.
Over the last five years employees in the Solid Waste service have lost 276
working days due to injury on duty. This represents over $70,000 in WorkSafe
NB claim costs. The five year severity average for Transportation & Environment
Services employees as a whole is 272. By comparison Solid Waste employees
have experienced a severity of 1005, which is significantly higher. Our Safety
Officer estimates a potential savings of over $10,000 on an annual basis if the
claims for this work unit were to decrease down to the average for the rest of
the department. There are multiple factors that influence our Workers
Compensation rates however, so it is hard to predict this impact with any
amount of certainty.
This material handling challenge was the driving force behind recent efforts to
implement a more automated system of waste collection. For the sake of
comparison, staff undertook an analysis to look at the costs of alternate means
of addressing this challenge. The most feasible of these options is to hire
additional staff to collect waste overnight, thereby utilizing our existing
equipment. The additional cost of this approach would be just under
$400,000/yr.
The Opportunity
-3 -
Immediately as staff began to explore the option of cart collection, it was
recognized that there was an opportunity to achieve additional savings. By
imposing a 'cap' on solid waste pickup to what can fit in the cart, and by adding
in charges for additional bags the City can strongly incentivize recycling and
other waste diversion. The resulting savings and additional revenue can allow
the City to start to offer curbside recycling pickup.
Our financial analysis on the program has been updated based on discussions
with the Finance team which can be viewed in Appendix A (attached). At worst,
it estimates that the change to a cart system of collection with curbside
collection could be done at no extra cost to citizens. Staff suggest that the bag
tag revenue be discounted as it is expected to decrease as more citizens divert
more of their waste.
Additional analysis are provided in Appendix B to demonstrate the implications
of various assumptions on savings & revenue, including a bigger or smaller cart
size, and more or less waste diversion. These amounts represent the annual net
cost (i.e. tipping fee savings + bag tag revenue — amortized cost of carts &
equip.). Note that there has not been any discounting of the revenue or tipping
fee savings.
Note that the entire business case could vanish if there were no charge for bag
tags. The extra charge is the incentive to drive further waste diversion. Without
that there is no revenue, less savings from reduced tipping fees, and
inefficiencies in our collection service as operators will have to dump carts and
throw bags for many stops.
Pilot Program
At this stage there remain too many assumptions with the proposed model. As
such we are seeking approval to fund the pilot program only. Staff will gather
data on such factors as cost, productivity, bag tag useage, changes to waste
diversion etc... Upon the completion of the pilot program staff will present the
data to Council and Committee for a decision on the larger roll-out of this
program.
Two replacement solid waste packers are expected to be delivered before the
end of 2019. These trucks have been ordered with the helping hand technology
to enable cart collection. The replacement of this equipment was funded by the
Fleet Reserve. To facilitate the rest of the pilot program an investment in carts
will be required. The estimated cost of the 1,000 carts and recycling totes is
approximately $80,000 which is proposed to be funded out of the current
Operating Budget surplus for Transportation & Environment Services. At the end
of August, staff were projecting a net surplus of $105,000.
SERVICE AND FINANCIAL OUTCOMES
`to]I
-4 -
The City of Saint John is an outlier amongst municipalities our size by not having
curbside recycling collection. Despite the City's current financial challenges, we
have an opportunity to add curbside recycling pickup as part of the re -vamped
solid waste collection model. The cost to citizens is manageable only if there are
strong incentives for increased waste diversion.
It is recommended that Finance Committee endorse the proposed changes to
the 2020 General Fund Capital Budget to support the investment required to
proceed with the pilot program.
INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS
Input has been received from the Finance Department and the Human Resources
Department .
ATTACHMENTS
Appendix A — Summary of Annual Costs, Savings and Revenues
Appendix B — View of Cumulative Savings/Revenue for Various Diversion Rates
and Cart Sizes
`[oya
-5 -
Appendix A — Summary of Annual Cost, Savings & Revenues
Annual Cost
Initial Investment in Carts, Totes and Vehicle Attachments * $ 265,000.00
Replacement of Missing/Damaged Carts (2% per year) $ 22,000.00
Tipping Fee Savings from Increased Diversion $ 355,000.00
(30% contingency) $ (106,500.00)
Revenue from Bag Tag Sales ** $ 445,000.00
(30% contingency) $ (133,500.00)
Total: $ 273,000.00
Assumes financing full investment cost through borrowing (worst case)
** Anticipate that bag tag revenue will decrease rapidly as citizens divert more
waste
Appendix B — View of Annual Net Cost for Various Diversion Rates and Cart
Sizes
`WQ
�ro
r
V
O
LL
N
4 -J
N
-a
>
ca
E
U
�
O
O
Oi..�+-0w
N
U
Lr
7a
O
4-J
m
ca
0
0
C:
O
}'
+j
>
LL
p
+-+
w
O
>
U
O
+,
O
LO
+,_+
cV
C:O
=3+j
U
O
E
U
O(D
U
>
C
C:
.0
N
r
U
C6
�
+-;
;
Ln
�
Q
N
}'
W
W
•—
U
,�
N
cn
Q
U
C6
cn
N
a-'
c
0
Q
C6
U
u
a--+
N
—
.�
U
E
.�
O
c�i�
N
Q
O
i
•O
O>
o
c
E
U
. N
0
W
.�
N
Q
+-+
N
N
CUO�.,
�
tU0
}'
�
�
p
N
•
m
U
LL
0
W
tZ0
•0
3:
I
u
0
U
fu
Q
c
Q
=_
N
—
:-'
E
N
OO
•
N
i
U
E
f6
_0
-p
fu
C6
L.L
+1
i
O0
f—
O
a-
0
N
N
NN
o
o
a)
�
m
�
�
a�
to
LL
oc
m
N
fa
• �
'
O
O
E
ca
a--+
_0
m
ca
CL
O
.O
Q
u
U
+-+
Q
aA
N
N
•�
ca
N
O
Q
Q.
Q
i
LL
w
Q
U
E
O
-0
co
a..+
N
O o
CL
L
U
Mfu
i`
_0
C6
Q1
• fu
+-0
(nU
00
N
+J
4-J
�'
4J
U
4J
'v
4J
CL
Q
Q
Q
W
i
N
Q
V
N
r
N
�
�
N
CSA
•
�
W
N
Q
'�
U
Q
N
U
+
u
0
Ov
O
v
N
ateJ
E
�
N
o0
o
H
N
w
'N
4�
a
M
Q
N
3
pE+�+
0
U
-
•v
4-'U
O
'�
U
.�
X
p
N
+5
0
�
V
L -L
m
Q
Ln
CIER
o
tw
w
E
N
m
i
W
N
aA
O
H
Q
0
+j
cii
cn
>
U_
'>
V
•—
E
w
o
�
N
o4-0
�,
'U
O
o
tZ0
a)
O
O
(1)C�
�
U
�
z
Nv
O
Q
O
U
U
O
rn
O
0
V•�
LL
a�i0M
Q
>
}'
N
O
_O
a)
m
UO
O
V
o
ON
++
LijQ
},
w
m
m
i2
0
Ln
u
i
E
N
Q
O
m
H
V
aAILE
o
i
i
+-+
a)
_0
U
—
m
Q
N
0
N
O
�
U
U
Q
ca
tZ0
w
O
-I--N
a -J
—
�
C:
O
Q
C:v
N
E
C:
0
M
O
+-+
�
U
�
O
'
LU
ate-+
-
N
E
Q
r -A
N
�
O
+j
N
aA
�
_
Q
N
N
N
N
N
N
J
0
U
U
E
O
.�
wN
-
U
U
I
N
LL
I
w
_u
ca
U
I
m
U
I
N
C6
Q
I
•E
E
E
V
i�
N
U
N
N
Q
E
0
N
N
O
Q
i
ate-+
aA
C6
C6
N
a�
ca
Q
O
U
N
N
C6
U
i
N
C6
U
ca
O
a-+
ca
LL
i
U
Q
N Q
O
_0 N
o n -
b
N �
U
m
a
C6
U
Qa-
A
w
u
c
O
+
O
v�
O
O
ca
^
O
N
N
jj-�
N
N
cn
Lr)
+�
ca
01
�
U
�
O
u
Q)
U
V)
ERR
LOU
Q)
H
4-J
U
CU
�O
L-
CL CL
c
O
m
U
O
DC
O
L
L_
LL
cz
ac
LU
WU
Rt
r -I
FINANCE COMMITTEE REPORT
M&C No.
,a fbund on Shaau°xpokat.
Report Date
October 11, 2019
Meeting Date
October 23, 2019
Service Area
Public Safety Services
SUBJECT: CAER & Fire Prevention Relocation Project
Pease Choose an item firo m the dropu oNN n menu.
AUTHORIZATION
Primary Author I Commissioner/Dept. Head
Division Chief Dan LeBlanc I Fire Chief Kevin Clifford
i sei t Repot Recommendation; if it exceeds 150 words I) ease add as ail attachment.
RECOMMENDATION
Given the projected 2019 operating budget surplus of $326,000 within the fire
service
It is recommended that the Finance Committee recommends to Common
Council that Council:
• Approves the transfer of $195,244 from the Fire Department's 2019
Operating Budget surplus to a Capital Budget reserve account for the
purpose of advancing the Community Awareness Emergency Response
(CAER) Level 1 initiative, and further support the associated relocation of
Fire Prevention and Investigaiton division.
EXECUTIVE SUMMARY
The September 30th 2019 budget analysis projects that the Saint John Fire
Department will be in a surplus position of at least $326,000. The majority of the
surplus is attributed to salaries being covered through LTD, Maternity, and
Workers Compensation provisions. The projection has been validated by the
Finance Department for the City of Saint John.
To this end, and in the light of the ongoing sustainability challenges; the fire
service is looking for the Finance Committee's endorsement on the following
initiative related to safety of the community and the employees who serve its
citizens.
• Community Awareness Emergency Response (CAER) & Fire Prevention
Relocation Project - $195,244
Community Awareness Emergency Response (CAER) Fire Prevention Relocation Project
The CAER model offers the framework for collaboration with industrial partners
on building emergency planning, preparation and response competence. The
`§F:3
collaboration begins with facility risk assessment, a process designed to fully
understand the potential for emergency incidents at each of our community
hazard sites. The objective on conducting the risk assessment is to develop
emergency response plans or playbooks from which first responders and the
industry can implement predetermined action plans to whatever crisis has
occurred at the industrial site. The hazard profile of this community demands a
much greater focus on preparedness and this CAER Level 1 project will ensure
that our preparation capability enables our response competence to a level the
community can trust and be proud.
The goal of this particular project utilizes simulation technology to enable first
responder and industry collaboration in a pressurized environment to test the
effectiveness of emergency response plans as well as the competence of the
emergency responder in making decisions under stress. It is proposed that the
ideal location for CAER simulation theatre is the office space adjacent to the
Emergency Operation Centre (EOC) in Fire Station 1 on Leinster Street; space
currently occupied by the Fire Prevention and Investigation Division.
Repurposing this work space provides mutlple opportunities (beyond the
simulation theatre) for SJEMO; including breakout location for Command and
General staff (Planning / Logistics ETC.) as well as the City Manager during actual
EOC activations.
To support the simulation theatre proposal the Fire Prevention and Investigation
Division would need to be relocated to Fire Station 4 on Courtenay Avenue. The
cost to accommodate the relocation of Fire Prevention Division is $195,244. This
cost is based on both an Architect's estimate as well as actual bid results for the
plumbing, electoral and mechanical work.
PREVIOUS RESOLUTION
The of City Saint John Work Plan received by Council February 20th 2017 - the
Fire Department's immediate objective is to more fully engage key stakeholders,
particularly industry and businesses, to introduce CAER, a community based
initiative to enhance public safety through more effective emergency response
planning and preparation.
In April of 2017 Common Council resolved to authorize the Saint John Fire
Department to approach the community's industrial stakeholders to determine
their interest in becoming a Saint John Fire Department CAER Partner.
REPORT
CAER
The City of Saint John has an industrial hazard risk profile unlike any other city in
Atlantic Canada and in fact a greater industrial hazard risk profile than many
Mel
other larger urban Centre's across Canada. Accessibility to tidal waters and the
natural proximity to the North American East Coast market provided much of the
incentive for the industrial investment that represents much of our community's
diverse hazard risk profile. The 1967 amalgamation of three separate urban
planning Centres along with the unabridged urban encroachment near
established industrial centres has helped create the hazard / risk lansdscape that
exist within the Saint John Community.
Further to the above, Saint John is home to Canada's largest oil refinery;
Canada's only Liquefied Natural Gas (LNG) terminal; two international natural
gas pipelines; integrated pulp, paper and tissue manufacturing facilities; two
large-scale thermal generation plants; Canada's third most active marine port by
tonnage, and two main rail lines hauling a broad assortment of cargos. The City
fire service also provides support to the Point Lepreau Nuclear Power Generating
Station. The hazard / risk profile is not only diverse but further complicated in
that the hazard / risk facilities are integrated within the urban setting. This
reality presents numerous challenges with respect to emergency planning,
preparation and response competence at the strategic and tactical level. Our
current emergency planning and preparation efforts (as it relates to the
industrial hazard / risk profile) need to be advanced using modern process and
technology such that a more strategic, methodical, and integrated approach to
the emergency planning, preparation and response meets the expectations of
our community.
I he Executive Suniniary shouG d be limited to the 11IUM)OSE of the report and the IKEY HfVlUNGS.
Recommendation and Executive Suniniary shouG d fit on the first page of report.
STRATEGIC ALIGNMENT
"Ensures that the delivery of efficient public safety services addresses the
evolving needs of a growing community".
"Creating opportunities to generate alternative revenue sources" through the
potential enhancements of the suite of programs offered through the Saint John
Fire Training Academy.
SJ Fire is currently evaluating vendor proposals to deliver technologies to better
facilitate CAER and to advance the revenue generation objectives of the fire
training academy
Relocation of Fire Prevention and Investigation Division
The proposed relocation of the Fire Prevention Division is to the vacant ground
level space at Fire Station 4 on Courtenay Avenue. Being located within a Fire
Station helps accommodate the multiple functions facilitated by Fire Prevention.
Besides Fire Code inspections, Fire Prevention also facilitates hundreds of public
education sessions, as well as 54 fire investigation each year (on average).
When conducting fire investigations, and similar to Fire Operations, Fire
Prevention staff are exposed to carcinogens. In keeping with the Department
`plzi7
Industrial Hygiene Initiative, Fire Prevention staff must employ the same or
similar decontamination procedures as Fire Operations after leaving a Fire or
emergency scene (e.g. bunker gear decontamination, change clothes, shower,
etc.), services which are already available at a Fire Station.
When not in use, the Fire Investigation vehicle must to be parked inside, to both
secure and temperature protect tools and equipment. Again, space which is
already available in Fire Station 4. For ease of deployment during peak public
education seasons, the parking lot at Fire Station 4 can accommodate the Fire
Safety House (Trailer).
To understand the feasibility of relocating Fire Prevention, an architect's design
was undertaken and renovation estimates obtained. The vacant space can
accommodate Fire Prevention while providing a public facing/ customer service
component of the Fire Prevention Division (that has not existed for decades); a
small break room, washroom, and a meeting room (open to City use). The
architect's estimate for the renovation work was $225,000 +/-.
To reduce the cost of the renovations and based upon the priority of utilizing
internal resources, staff proposed to facilitate the project management as well
as to utilize the Carpenter Shop in so much as possible.
To get a truer understanding of project cost, staff issued quotes for the
remaining renovation work (plumbing, electrical and mechanical). Based up the
architects estimate for the general renovation (to be facilitated by the Carpenter
Shop) along with the acceptable low bids for the electrical, plumbing and
mechanical work, the project estimate has been revised to $195,244. A project
cost breakdown is as follows:
Item Accepted Bid Arch. Estimate
Electrical
$28,525.10
$62,043.48
Mechanical
$24,995.00
$25,043.38
Plumbing
$27,170.00
$11,869.57
Sub -total $80,690.10 $98,956.43
Budget Budget
Carpenter
$68,475
$68,475
All other
$42,690
$42,690
Sub -total $111,165.00 $111,165.00
Sub -total
$191,855.10
$210,121.43
HST (only on bids)
$12,103.52
$14,843.46
Sub -total $203,958.62 $224,964.89
Less HST Rebate 1 $3,388.98 1 $4,156.17
TOTAL ESTIMATE $195,244.08 $214,277.60
121
With the "All other" line covering any unforeseen contingency costs (i.e. noted
presence of asbestos fire separation panels in sections of the Fire Station).
SERVICE AND FINANCIAL OUTCOMES
CAER & FIRE PREVENTION DIVISION RELOCATION PROJECT
The Fire Department is projecting an operating budget surplus due to a number
of factors. The projected surplus of $326,000 was validated as real by Finance.
The opportunity to pursue the proposed CAER & Fire Prevention Division
Relocation Project arose after the 2019 budget was submitted. Permission to
proceed with the project is required as per paragraph 4.2 of the Operating
Budget Policy which states that "Operating Budgets, at the Service Area level,
cannot by reallocate without Council approval."
Where the project will carry over to 2020 and operating budgets do not,
permission to convert the operating fund to capital reserve is required.
Paragraph 2(b) Capital Budget Policy dated July 9, 2018 gives a level of priority to
projects that are "required to mitigate liability associated with health and safety,
mitigate liability or to mitigate sudden asset failure" and paragraph 2(d) of that
same section, provides discretionary transfer of operating funds to capital for
new assets aimed to increase or enhance service levels.
The business case for supporting this initiative is based on the record of recent
and historical emergency incidents. This community does not have to rely on
extreme probabilities as a motivation to host a better planning and preparation
environment for emergency incidents; this community simply needs to look at
recent history to understand the urgency in having our first responders properly
prepared for the hazard/risk profile that exist within the Saint John landscape.
As part of the evolution of CAER and in particular the future enhancement to the
simulation theatre location, the fire service is currently in the process of
renegotiating the long standing response agreement with NB Power (Pt LePreau
Nuclear Generating Station). Council has been recently advised that the current
value of the agreement is negligible and without an increase in value and an
improved ability to properly expose our response personnel to the PLNGS risk,
that the current response relationship / contract will cease in December of 2019.
The Finance Committee and Common Council should be aware that staff hopes
to bring forth a lease agreement on an enhancement to the simulation theatre,
fully funded from the proceeds of an improved agreement with NB Power. Any
further advancements on the CAER concept (CAER level 1-3) will be sought
through third party support.
`SOA
As we fully develop our risk assessment competence as well as a process for
building and testing emergency response plans; the opportunity for revenue
generation through the city's internal expertise becomes very real.
INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS
• Finance has reviewed the 2019 YTD Fire Department Operating Budget
surplus and support the $195,244 request with respect to budget surplus;
and that a Finance Committee endorsement is required to transfer the
funds from 2019 operating budget surplus to a capital reserve account in
order to proceed.
• Permission to proceed with the project is required as per paragraph 4.2
of the Operating Budget Policy which states that "Operating Budgets, at
the Service Area level, cannot by reallocate without Council approval."
• Where the project will carry over to 2020, permission to convert the
surplus operating budget funds to capital reserve account is required.
Paragraph 2(b) Capital Budget Policy dated July 9, 2018 gives a level of
priority to projects that are "required to mitigate liability associated with
health and safety, mitigate liability or to mitigate sudden asset failure"
and paragraph 2(d) of that same section, provides discretionary transfer
of operating funds to capital reserve for new assets aimed to increase or
enhance service levels.
Fire Prevention and Investigation Division
From an annual operating cost perspective, the impact of Fire Prevention's
relocation to Fire Station 4 is estimated at $2,200 +/- per year (electricity, water,
property taxes, etc.). Costs which will be absorbed within existing budgets
and/or offset by other savings.
It must be noted that whether Fire Prevention relocates to Fire Station 4 or not,
approximately $40,000 must be spent to:
• Structurally remediate sections of the exterior cider block wall which
crumbled during the initial asbestos removal. It is the cider block wall
which secures the exterior brick veneer to the building.
• Fix gaps in the fire stopping between the vacant space and the apparatus
bay, which was damaged, missing or removed during the asbestos
removal process.
• Install basic heat in the vacant space to negate pipes from freezing.
In keeping with the corporate directive to utilize in-house services, the proposed
renovation project will be managed by both Facility Management and Fire
Service Staff. The Carpenter Shop will undertake the bulk of the renovation
work, with the applicable electrical, mechanical and plumbing work addressed by
contractors.
`1P491
Quotes have already been issued and bids received. Both Materials
Management and Facility Management have reviewed the quotes and support
the selection of the low bids.
ATTACHMENTS
Attachment A- Floor Plan for Fire Prevention Relocation to No. 4 Fire Station
Attachment B- Bid Results
`fOzl
,*rE
rTd FF
EMRANCE
II
II
ED -H
ED
SMjW,E L E%7ho"OE
r7ll
, )"%,, CO"'CflTIONFI�
Al MAU � 51,
125
WT
111111. H
WEEnm',
CORPHYM
FFT,E
PEl�,
�T'IEJJ "N
ANCOW
AIum
CHEF',
FFXT
=1
LEGEN""':
HOF,
'NAU TWES
WTJINHMnl"[�S,
FLav uiit+q
EZEMEME=
XN �A4LLE
BID SUMMARY
2019-082301Q
Building Renovations — Fire Station No. 4 - Electrical
Closing on Friday, July 12th, 2019
DESCRIPTION
Total Electrical
Fused
leading Edge
Gardner
New Wave
Solutions Inc.
Electric Inc.
Electrical Inc.
Electric
Electric
Building Renovations — Fire
$ 28,525.10
$ 58,700.00
$ 59,869.65
$ 58,277.00
$ 46,300.00
Station No. 4 - Electrical
Note: The above amounts are recorded as opened. The amounts have not been checked or verified
and may contain errors. The City may waive minor non-compliance with mandatory requirements as
set out in Section 120 of New Brunswick Regulation 2014-93 under the Procurement Act.
`101
BID SUMMARY
��•
Building Renovations — Fire Station No. 4 - Plumbing
Closing on Friday, July 19`h, 2019
DESCRIPTION
George Freeze
D. E. Maritime
Select Mechanical
Plumbing and
Plumbing and
Inc.
Heating
Mechanical ltd.
Building Renovations — Fire
$ 43,850.00
$ 52,900.00
$ 27,170.00
Station No. 4 - Plumbing
Note: The above amounts are recorded as opened. The amounts have not been checked or verified
and may contain errors. The City may waive minor non-compliance with mandatory requirements as
set out in Section 120 of New Brunswick Regulation 2014-93 under the Procurement Act.
MAN
BID SUMMARY
2019-085302Q
Building Renovations — Fire Station No. 4 - Mechanical
Closing on Friday, July 12th, 2019
DESCRIPTION
Controls & Equipment
Ltd.
Building Renovations — Fire Station No. 4 -
$ 24,995.00
Mechanical
Note: The above amounts are recorded as opened. The amounts have not been checked or verified
and may contain errors. The City may waive minor non-compliance with mandatory requirements as
set out in Section 120 of New Brunswick Regulation 2014-93 under the Procurement Act.
W-13
I
I
i
H
i
O
ca
U
J
N
cn
a -J
>
U
i
.tUO
m
_
a,
M
Ln
U
ED
O
N
M
�
L/)
V
N
�
a�
m
O
C6
-
O
m
Q
0
CL
0
N
N
U
CL
fV
0
.>
0
U
.0
C
O
O
`�
0
U
=3
E
�'
o
-•
O
U
i
O
U
V
• -
V
M
C6
CL
Q
-0
i
N
N
-
O
fB
H
0
+-+
U
H
+-+
U
�
U
•
N
r
� II
C:
aD (D
>
c:
U 0 v
Lo
i N
O
i
U
+-+ 0m
�
z i Ln a3
c = i >=
m o O a a✓
0 Rt
r
O
>
bn
N
O
O
U
'CU
C:
O
00
•�
C
N
ca
�
ca
4-'
c
L7
Ov
cn
O
N
`�
0
O
'C:
}+
w
.
X
O
Q
N
N
O
U
�,
U
m
bn
i
Q
'—
-0�'
'v
N
O
C:
Ln
LO
Q
a--+
�
O
.-
�
a✓
Lna�
M
(D
o
w
(D
Ln
a--+
Q
=
cn
"
U—
-
U
ca
M
i/i
>
i
I
I
w
r
E
O '� .— •
O cr i
Zi o +5 Zi
— Zi
C:
0
o C: C :E C: E
E � _ C
+, � +� O O O
Q0'� U .0 U
M Q0c~ v U
},
C � = ca � ca � ca
i C: C:
ca N p i.i Oi.i co
Q O Q Q O N
C: m
O
N� LA
0
I
r -I
r -I
FINANCE COMMITTEE REPORT
Report Date October 11, 2019
Meeting Date October 23, 2019
Service Area Public Safety Services
SUBJECT. Finance Committee Report - Industrial Hygiene - Firefighter Training
Centre Initiative. docx
AUTHORIZATION
Primary Author Commissioner/Dept. Head
Division Chief Dan LeBlanc Fire Chief Kevin Clifford
Fire Manager Josh Hennessy
RECOMMENDATION
Given the projected 2019 operating budget surplus of $326,000 within the fire
service
It is recommended that the Finance Committee recommends to Common
Council that Council:
• Approves the transfer of $95,500 from the Fire Department's 2019
Operating Budget surplus to a Capital Budget reserve account for the
purpose of supporting the Industrial Hygiene Firefighter Training Centre
Initiative and
• Support the City entering into an agreement with CanLease for the lease -
to -own of a custom built Alantra Unit, on terms and conditions
acceptable to the City Solicitor or his designate.
EXECUTIVE SUMMARY
The September 30th 2019 operating budget analysis projects that the Saint John
John Fire Department will be in a surplus position of at least $326,000. The
majority of the surplus is attributed to salaries being covered through LTD,
Maternity, and Workers Compensation provisions. The projection has been
validated by the finance department for the City of Saint John.
To this end and in the light of the ongoing sustainability challenges the fire
service is looking for the Finance Committee's endorsement on the following
intiative related to safety of the employees who serve its citizens.
• Industrial Hygiene: Firefighter Training Centre Project—$95,500
-2 -
Industrial Hygiene — Firefighter Training Centre Pro iect
With cancer being the number one killer of firefighters, The City of Saint John
Fire Department implemented an industrial hygiene initiative to reduce the risk
of exposures to its employees. Several of the projects were low cost and easily
implemented (i.e. proper medical waste disposal); however some of the key
projects are not easy or inexpensive.
One of the outstanding hygiene initiatives is the implementation of a hygiene
set-up at the fire department's training centre on Grandview Avenue. To
accomplish this, an addition to the current Alantra trailer setup at the new
training academy is required. More specifically, a custom built unit to
accommodate a dirty room, showers, a clean briefing room and access to the
existing Training Centre. Common Council is respectfully asked to support two
components to the Industrial Hygiene — Firefighter Training Centre Initiative:
✓ That a portion($95,500) of the projected fire department operating
budget surplus ($326,000) be directed to a capital reserve account to
support: The design, site preparation, site servicing and consulting fees to
accommodate the Alantra trailer units.
✓ That the City enter into an agreement with CanLease for the lease -to -
own of a custom built Alantra Unit, on terms and conditions acceptable
to the City Solicitor or his designate.
Saint John Fire can secure a lease to own agreement that is more competive
than borrowing along its own capital purchase policy. The monthly lease
payments would be supported by those funds that currently exist within the fire
departments training budget.
Once in place, the additional trailer (see attached schmatics) will facilitate the
proper work flow (from dirty to clean) to minimize employee exposure to
potential carcinogens; similar to processes previously in place when the Training
Centre was in Millidgeville.
PREVIOUS RESOLUTION
Common Council authorized the sale of the City's Firefighter Training Centre and
Grounds (corner of University and Millidge Avenue) to Plazacorp for $750,000.
(The business placed on the former fire training site now generates in excess of
$100,000 in property tax annually)
As a related resolution, Common Council authorized an agreement with Irving Oil
Refining G.P. and Irving Oil Operations GP to accommodate the City's new
Firefighter Training Centre at 690 Grandview Avenue.
MMI
-3 -
REPORT
In 2016 the US Centers for Disease Control and Prevention, and National
Institute for Occupational Safety and Health undertook a study on what kills
firefighters. Surprisingly, the number one killer of firefighters is not "on scene
accidents", or heart attack, or suicide, but job related cancers. Over 73% of
firefighter deaths are cancer related from exposures that cannot be eliminated
but can be reduced through proper post -fire scene hygiene practices.
In 2018, the City of Saint John Fire Department established an industrial hygiene
committee. The primary goal of the Industrial Hygiene committee was to
recommend ways to minimize the harm the workplace does to the employee.
After an environmental scan of work place (hygiene) risks, the committee
identified approximately 20 projects, ranging from easy to implement with high
impacts, to hard to implement with low impacts. A few of the hygiene projects
implemented to date are:
• medical glove disposal (just cannot leave used gloves on the floor of the
truck);
• restricting bunker gear in facilities (no bunker gear allowed in office area
/ living quarters);
• post emergency decontamination of all personal protective equipment
(PPE); and
• Enhanced bunker gear cleaning.
One of the major outstanding initiatives is the implementation of an industrial
hygiene set-up at the City's Firefighter Training Centre on Grandview Avenue.
The Grandview Avenue Training Centre is not set up to facilitate the separation
of potentially contaminated PPE from the classroom or office areas. The Training
staff and firefighters who participate in live burn training, followed by class
instruction, or debriefings are potentially being exposed to carcinogens. This
feature was lost when the Fire Training Centre moved from Millidgeville to
Grandview Avenue (i.e. firefighter decontamination and gear storage was
facilitated through infrastructure at Fire Station 8).
The Hygiene Committee, along with the Training Centre staff examined work
flows and hygiene processes at the Grandview Avenue Training Centre with the
objective of creating a facility design which provides better hygiene practices for
the available space.
To accomplish better hygiene practices, the committee sought a proposal from
the provider of the original Training Centre classroom amd administration
building. More specifically, a custom built Alantra (trailer) unit is recommended
to accommodate a dirty PPE room, showers, a clean briefing room and access to
the existing Training Centre. (See attachment 1) The acquisition of this trailor is
`%
-4 -
proposed through a lease to own agreement with Alantra presented below while
the design, site preparation and site servicing cost to accommodate the Alantra
unit (trailers) is estimated at $95,500 (including HST, net of rebate) and is the
focus of the operating surplus being transfer to a capital reserve account.
With respect to the purchase of the Alantra trailer, the preferred option is to
lease the unit on a 60/66 month term with full ownership at the end of the term.
The lease to own arrangement can be provided by CanLease at 4.5% interest
rate. The monthly payments will be $2,375 per month plus HST, which is
reasonable to what the City would pay if borrowing the funds. In addition these
lease payments will be made through the existing operating budget.
As a result of the projected operating budget surplus staff respectfully request
that the Finance Committee approve the transfer of the site preparation funds
($95,500) from 2019 Operating to a 2020 Capital reserve account in order to
support the completion of the project and to accommodate a completion date in
2020.
STRATEGIC ALIGNMENT
This project is in line with corporate Health and Safety initiatives aimed at
supporting safe work places as well as fiscal due diligence by fitting this
opportunity into operating.
SERVICE AND FINANCIAL OUTCOMES
The Fire Department is projecting an operating budget surplus due to a number
of factors. The projected surplus of $326,000 was validated as real by Finance.
The proposed Industrial Hygiene initiative arose after the 2019 budget was
submitted. Permission to proceed with the project is required as per paragraph
4.2 of the Operating Budget Policy which states that "Operating Budgets, at the
Service Area level, cannot by reallocate without Council approval."
Where the project will carry over to 2020 and operating budgets do not,
permission to convert the operating fund to capital is required. Paragraph 2(b)
Capital Budget Policy dated July 9, 2018 gives a level of priority to projects that
are "required to mitigate liability associated with health and safety, mitigate
liability or to mitigate sudden asset failure" and paragraph 2(d) of that same
section, provides discretionary transfer of operating funds to capital for new
assets aimed to increase or enhance service levels.
Where the saving generated by the Industrial Hygiene Initiative lies well into the
future in the form of less lost time, less disability and death benefit payouts; the
business case supporting the initiative is difficult to translate into current dollars,
M91
-5 -
however todays fire services do pay for presumptive cancer and LTD premiums
based on actual experience.
This project helps reinstate the hygiene processes lost when the Training Centre
relocated from University Avenue to Grandview Avenue (i.e. to facilitate the Jean
Coutu Pharmacy development), and will compliment Saint John Fire Department
objective to increase fire training income levels for 2021.
Other than lease payments, the Fire Department will incur minimal additional
costs assoiated with general maintenance and cleaning of the new units. The
landowner will pay the re -occurring utility costs (power, water, and sewer) as
well as property taxes, in line with what the landowner is already doing for the
City at the Firefighter Training Centre.
INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS
• Finance has reviewed the 2019 YTD Fire Department Operating Budget
surplus and support the 95,500 request with respect to budget surplus;
and that a Finance Committee endorsement is required to transfer the
funds from 2019 Operating to Capital reserve in order to proceed.
• Permission to proceed with the project is required as per paragraph 4.2
of the Operating Budget Policy which states that "Operating Budgets, at
the Service Area level, cannot by reallocate without Council approval."
• Where the project will carry over to 2020, permission to convert the
surplus operating fund to capital reserver is required. Paragraph 2(b)
Capital Budget Policy dated July 9, 2018 gives a level of priority to
projects that are "required to mitigate liability associated with health and
safety, mitigate liability or to mitigate sudden asset failure" and
paragraph 2(d) of that same section, provides discretionary transfer of
operating funds to capital reserve for new assets aimed to increase or
enhance service levels.
The owner of the land on which the Training Centre is situated is supportive of
the project.
ATTACHMENTS
Attachment A- Floor Plan
Attachment B- Alantra Quote
Attachment C- Engineers Estimate
`[E1I
C CD
0
O
O
F --
Fl -1
D
o
m
m
V1
Fl -1
" VANITY
Z
z
C0
o
Q T
X
o
=
T
1
_
cn
Fl -1
D
n
�mCD
cn
O =
O
O
CD
N
^,
ia+
z
m
CD
�'
O
CD
C"
I�
.0
a
cn
F--
o
-
O
�N
CD
O
o
Fl-1
z
CD
—
D
Cn
D
o
G�
C_
CD
O
-1
Fl
�F
O
z
'
cn
c�
D
Z7
D
0
z
cn
D
O
C7
O
C
Z7
C CD
W
�Z7
O m
-� 0 z
G7
145
_ �a
9il�fel
�o
O
2
O W
o
m
m
m�
" VANITY
Z
0o O
o
Q T
3
C-)
o
T
(D
C �
o
n
�mCD
---T
42.
O
O �
v o
A��9pFQ SpANH
30" VANITY o
9-)
��UFs
�
.0
a
00r
m
O
cn
o
T
F,
N
o
Q0
W
�Z7
O m
-� 0 z
G7
145
_ �a
9il�fel
�o
O
o
" VANITY
Z
.Z7
�m42)O
-
oP r n
O
42.
O
v o
A��9pFQ SpANH
30" VANITY o
o�
��UFs
W
�Z7
O m
-� 0 z
G7
145
_ �a
9il�fel
RMIMIMMIS
41x42 112 ITS
IM
O �o
=n
vq-F; F_4
�o
m
o
" VANITY
Z
�m42)O
-
oP r n
42.
Ep (5
v o
A��9pFQ SpANH
30" VANITY o
��UFs
RMIMIMMIS
41x42 112 ITS
IM
O �o
=n
vq-F; F_4
AkANT:RA PURCHASE QUOTE
a
rvice
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII
Created Date 26/06/2019 Expiration Date 26/07/2019
Quote Number 00008310
Prepared By Kim Benson
Phone (506) 433-9343
Email kim@alantraleasing.com
Fax (506) 432-9076
Bill To Name City of Saint ,John
Blocking & Labour (Included)
Custom Built Unit
Delivery Charge (Lump Sum Charge)
(Included)
Jackstands (Included)
Set up & Site Finish for Complex (Included)
Skirting ($/If) (Included)
Steps Purchase (Included)
QUOTE IS VALID FOR 30 DAYS.
Contact Name
Email
Site Address
Blocking & Labour (Included)
Custom Built Unit
Fuel Surcharge will apply.
Jackstands (Included)
Set up & Site Finish for Complex (Included)
Skirting (Included)
Steps Purchase (Included)
Anthony Black
anthony.black@saintjohn.ca
1.00 $0.00
40x24 Custom
1.00
$126,628.00
Complex
1.00
$0.00
1.00
$0.00
1.00
$0.00
1.00
$0.00
1.00
$0.00
IFUEIL. SURCHARGE MAY APPLY
Pentall payments wiii riot be applied toward purchases.
Deposit is required prior to construction.
Payment is required prior or upon deVivery. Accepted methods of payment are certified cheque, barik draft or direct deposit.
Lease to own option by others, CAC
Customer to ensure that site is accessible, Vevey and properly prepared on solid gravel, as per supplied drawing. Deiays in excess of 1 hour as
a result of additiionall biockiing due to riot Vevey sites or waiting for site access wiii be charged out at a rate of $130 per hour for truck and driver
& $60.00 per hour for escort. Overtime wiii be charged at 1.5 x rate when appiicabie.
Purchase quotation is subject to the terms & conditions outlined in our Purchase and Sales Agreement.
IMot Incuuded (unless otherwuse noted).
* Site access and site preparation
• Ori -site eiectricall & piumbing connections between modules and to services
* Connection to site services (power, internet, phone, water & sewer)
• Ellectricall transformer
• IMain data rack & Data cable connections between modules
• Sprinkler system/fire extinguishers, 'Fre alarm system
• Crane, man Vuft, scaffolding or fork Vift
• Dumpster
• Buiiidirig, eiectricall and/or plumbing permit or appiicatiior7 fee
• Archiitecturall, eiectricall or mechaniicall engineer stamped drawings
Security System
Skirting, biockiing, ,jackstands, steps, decks, or wheel chair ramp
Furniture and appliances
* IMechaniicall, eiectricall, structurall and archiitecturall site inspection if required.
Eavestrough
146
Buiiit to Allantra Leasing specifications (attached).
CSA Certification, Structurall Engineer Stamp (Excluding Quebec)
AkANT:RA PURCHASE QUOT E
,
QUOTE IS VAILVD FOR 30 DAYS.
Subtotal $126,628.00
IFUEwIL SURCHARGE MAY APPLY
Rentall payments wVVV riot be appVVed toward purchases.
Deposit is required prior to construction.
Payment is required prior or upon deVivery. Accepted methods of payment are certified cheque, barilk draft or direct deposit.
Lease to own option by others, CMAC
Customer to ensure that site is accessubVe, Vevey and properVy prepared on soVid graveV, as per suppVVed drawing. DeVays in excess of 1 hour as
a result of addutCionall bVocking due to riot Vevey sites or waiting for site access wVVV be charged out at a rate of `.6130 per hour for truck and driver
& $60.00 per hour for escort. Overtime wVVV be charged at 1.5 x rate when appVicabVe.
Purchase quotation is subject to the terms iS" conditions outlined in our purchase and Sales Agreement.
IMot Included (unless otherwIse note#
* Site access and site preparation
• Carr -site eVectrucall & pVumbing connections between modules and to services
* Connection to site services (power, internet, phone, water & sewer)
• F_Ilectrucall transformer
• IMain data rack & Data cabVe connections between modules
• Sprinkler system/fire extinguishers, 'Fre alarm system
• Crane, man Vuft, scaffoVding or fork fift
• Dumpster
• I3uViding, eVectrucall and/or pVumbing permit or appVicatVor7 fee
• ArchCitecturall, eVectrucall or mechaniicall engineer stamped drawings
Security System
Skirting, bVoclkCing, ,jackstands, steps, decks, or wheeV chair ramp
Furniture and appVVances
* IMechaniicall, eVectrucall, structurall and archCitecturall site inspection if required.
F_avestrough
147
I3uiit to Allantra Leasing specifications (attached).
CSA Certification, Structurall Engineer Stamp (F_xciuding Quebec)
City of Saint John Fire Department
688 Grandview Avenue
Saint John, NB
ATTENTION: Mr. Anthony Black - Captain of Training
Anthony,
City of Saint John Fire Department
Crandall File: 1900310-00-C
March 15, 2019
Page 1 of 2
Letter Proposal
Site Design Services for New Trailers
CITY OF SAINT JOHN FIRE DEPARTMENT
In 2013 Crandall Engineering Ltd. was engaged to provide engineering design services to
support the construction of the shared Emergency Services Training Centre between Irving
Oil and the City of Saint John, located at 668 Grandview Avenue.
The Saint John Fire Department now wishes to add two (2) new trailers to this site and have
them connected to the existing municipal services and power. This will require engineered
drawings and a design brief to be submitted to the City of Saint John Engineering
Department and Irving Oil for approval in order to proceed with this work.
Crandall generally expects the scope of work to be as follows for this design:
Site Investigation, Surveys, and Data Collection
$2, 710.00+HST
• Kick off Meeting with the Fire Department to review scope of work and key concerns,
• Review of Existing Data and Drawings
• Site Visit - Electrical
• Topographic Survey and Intrusive Investigation
• Preparation base plan drawings (preliminary site plan showing connection to services)
Design Services
$7,005.00+HST
• Municipal Service Connections, Piping Design, and Drawings
• Stormwater Management Design
• Electrical Design and Drawings
• Cost Estimates
• Design brief for municipal services and storm water management to accompany design
drawings for approval.
Crandall Engineering lid., a riMsion of EngWbe Corp,
400, 10977 St. Cam ge F3 vd, 703-1;33 r rh)ce Wnflaaun St. 101 - 564 FbK"cs^»pest SL 97 Troop Ave, 39 Sapnaa Ave,
Moncton, N,B, E1E 4 9 Saint uJohn, P7.L. 1.21. 2F33 i"uedericlon, NJB, E3#3 9M3 Da tmouth, N,S. W3,"3N5 2A7 P7abaant Sva„wl, NA, AIN 4P9
"t'a'il: (5069 857-1777 TeL (506) 693.5893 Irrel: (506) 451.4400 l,.el: (902) 468-6486 1r,>, (709) 576.8148
Fax: (06) 857-2753 Fax: (5U6) 693-3250 F'ax: (506) 85T2753 Fax: @WZ) 468 4919 Fax. (70 9) 576-3713
CRANDALLENGINEERING.CA
Nit
Vc.randall
• Issue drawings for tender / construction.
Construction Services
• On site inspection for pipe work
• Coordination with SJ Energy
City of Saint John Fire Department
Crandall File: 1900310-00-C
March 15, 2019
Page 2 of 2
$2,175.00+HST
The total proposal fees for the scope of work as defined above is $11,890.00+ HST.
Exclusions
• Legal Survey
• Environmental Permitting
• Tender period services
• Construction management or inspection services
• More than one (1) iteration of drawings for approval.
We thank you for this opportunity, and should you have any questions, concerns or require
any additional information, please do not hesitate to contact us. We would be pleased to
set up a meeting to discuss the information stated herein if required.
Yours very truly,
CRANDALL ENGINEERING LTD.
Mike Rogers, P. En .
Team Leader £t Project Engineer
Cc: Andrew Melanson, P.Eng. - Crandall Engineering Ltd.
J:\2019\1900310 -00-C Site Design Trailers\Admin\Proposal\Letter Proposal March 15, 2019 - MJR.docx
Crandall Engin srrnLtd, a division of fnglobe C ur m
400 -1077 3t, Ceor€„e E.3ivd. 703-'13:3 Prince ^ iWam St, W1-'1564 Flros4,re d: 5t97'"4"'rr,o o1 Ave, 39 Sagona Ave,
Moncton, N.B. E1 E': 40'.1 .�n
e Saint John, €3.k3. ER2B5 Ffeedeeir on, N.B, E38 9M3 Dartmouth, N.3. E�E313 2A7 f4RtrUnt 4�eark, N.L. AlN 4E�9
TeL (" 06) 8 57-2777 Tet: (506) 693.5893 P"eU (E06S 351 4400 FeL (902) 468-6486 Tel'o (709) 576.8148
Faxo (506) 857-:775.3 Fax. (506) 693-3250 Fax«'3E36) 857-2753 Fm (a02) 468,4919 Fax: (709) 576371:3
CRANDALLENCSINEERENCS,CA
vc%.randall
City of Saint John Fire Department
688 Grandview Avenue
Saint John, NB
ATTENTION: Mr. Anthony Black — Captain
Anthony,
City of Saint John Fire Department
Crandall File: 1900310-00-C
April 11, 2019
Page 1 of 3
Estimated Construction Costs
Site Design Services for New Trailers
CITY OF SAINT JOHN FIRE DEPARTMENT
Crandall Engineering Ltd. submitted a proposal on March 16, 2019 to the City of Saint John Fire Dept
to provide engineering design services for the connection of municipal water and sanitary sewer
services as well as electrical power to their proposed new site trailers at 688 Grandview Avenue.
The City of Saint John Fire Department hosted a project kick off meeting on site on Wednesday April
3, 2019 to discuss the anticipated scope of work, coordination, and potential costs. Crandall was
tasked with the further review of the record information available on the as built drawings for the
existing electrical and sewage pumping station in order to provide anticipated project construction
costs and an updated scope of work based on our discussions that morning.
Crandall has completed these tasks and has identified the following for the scope of work for the civil
and electrical work as well as anticipated construction costs.
The scope of work for connecting electrical power to these new trailers has been identified as follows:
There are both existing single phase and three phase pole -top transformers adjacent to the
Emergency Response Services Building. A contractor cash allowance has been carried to
engage Saint John Energy's (SJE) resources. This allowance is to cover potential changes to the
existing transformer necessary to provide power to the new office trailer. (Awaiting
confirmation from client RE single/three phase panelboard being provided with the trailer).
It will then be the responsibility of the electrical contractor to provide routing of secondary
conductors from this transformer to the new mobile office trailer 200 A panelboard. The
mobile office trailer comes complete with all convenience receptacles, lighting, air
conditioning and heat so the scope is limited to providing the main incoming power feed.
Crandall Engineeiing Ltd., a &Won of Englobe Corp. .�
400-1077 St, (Mor?e Btvd, 703-133 POnce Witham St. 101.564 Prospect St, 97 Troop Ave, 39 S€a on a Ave.
Moncton, AN.N3. El 4C9 Saint John, NL8, E2t.21 5 Frec€e detron, N,E3. E"38 9M3 Dart€math, 6N.S, B38 ZA7 Mount PeaO, N.L. AlN^N 4P9
Tat: )506) 857.2777 T`eL )506) 693.5693 "6& )506) 451-4400 Tel; )902) 466.6486 TeL )709) 576-8148
Fox; (506) 857-2753 Fax)506) 593-32.50 Fax: (506) 857-2753 Fax: Q902) 468-4919 F°ax. (709) 576-37133
CRANDALLENNCa1NEER[NG.CA
`N191
Vc ra i"i dirl I I
City of Saint John Fire Department
Crandall File: 1900310-00-C
April 11, 2019
Page 2 of 3
In speaking with the client, there is no need for telephone/data service to this new trailer so,
as such, no incoming telecommunication lines form part of the scope of work.
Estimated Construction Costs are approximately $30,000.00 + HST (excluding engineering).
The scope of work for the connection of sanitary sewer and municipal water services has been
identified as follows:
Crandall reviewed the information in the as built package to find that the existing sewage pumping
station had been sized to meet the conditions discussed at the kick off meeting. It has capacity to
handle the peak flows from the existing regular staff of four (4) plus a training/recruit class of twelve
(12).
This being the case we would recommend that a new underground sewer service line be run from the
location of the centre of the new trailer area to connect into the existing sanitary sewer piping just
before the connection to the existing pumping station. We would recommend that this piping be
insulated where cover is less than 1.5 m (5 ft). This line can be installed behind the existing building
where the existing drainage ditch is located.
Our calculations show that the new water service can be connected from the existing 25mm service
line, however the water main is only approximately 5 m further and therefore we are recommending
a separate connection to the main line to ensure plenty of water volume for the 4 showers, 3 sinks
and 3 toilets present in the new trailers.
Estimated Construction Costs are approximately $31,000 + HST (excluding engineering).
We thank you for this opportunity, and should you have any questions, concerns or require any
additional information, please do not hesitate to contact us. We would be pleased to set up a meeting
to discuss the information stated herein if required.
Crap aH lngIneering Ltd,, a division of Englobe Corp,
400-1077 St. Catrs 7e Blvd, 7433-133 Prince WRUara SE.. 101 , 564 Prospect St, 97 Troop Ave, 39 Sagor a Ave,
Moncton, N,B. E1E 40 Saint John, ht.B. ER, 2G5 Fredericton, N,B, E3B W3 Dartmouth, N.S. B3B 2A7 Mount Peart, NA- AIN V9
eU (506 857-7771 TeL (500) 693.5893 TPU (506) 451.4400 T& (902) 468-6486 jrL (709) 576,8148
Fm (506) 857-2753 Fax: 1506) 693,3250 `ax: (506) 857-2753 t=ax: (902) 468.4999 Fm ('109) 576-3713
CRAND Alt_ENGINEERENG.CA«
151
Vc; ra n d a I I
Yours very truly,
CRANDALL ENGINEERING LTD.
Mike Rogers, P. g.
Team Leader Et Project Engineer
Cc: Eric Nicholson, P.Eng. - Crandall Engineering Ltd.
City of Saint John Fire Department
Crandall File: 1900310-00-C
April 11, 2019
Page 3 of 3
J:\2019\1900310 -00-C Site Design Traiters\Admin\Letters\Cost estimate letter April 10, 2019 - MJR.docx
Crandall Engineering Ltd., a division of Englobe Corp,
400-1077 St. George Env& '103-'133 Plrince Witham St. 101.564 ProspNft St, 97 Troop Ave. 39 Sagona Ave,
Moncton, N,B. El E 4E9 Saint John, N.B, E:26..2B5 Frededuon, NX. E38 9M3 Dartrwuth, N.S. B3B 2987 Mount Peart, N .L. Al 14 09
TeL (506) 857-2777 1& (506) 693-5893 TeU (506) 451-4400 T(4r (902) 468 (A86 let: ('709) 576 8148
Fax(506) 857-2753 Fax: (506) 693-3250 Fax: (506) 857-2753 Fix: (902) 468-4919 Faxo (709) 576 3713
CRANDALLENGINEERING.CA
`W