Metro Vancouver has completed the Project Definition phase and Indicative Design of the Lions Gate Secondary Wastewater Treatment Plant project, and based on current design considerations,the estimated cost of the project – including decommissioning of the old facility – is approximately $700 million.
The utility fees that residents, businesses and industries pay for the regional sewerage system and wastewater treatment will increase, but it’s too early to calculate the exact percentage increase or dollar figure.
In 2013, the average household in the Metro Vancouver paid $171 for liquid waste services provided by Metro Vancouver that year. The 2013 cost was a one per cent or $2 increase from the $169 average household cost in 2012.
The additional cost for secondary treatment on the North Shore cannot be estimated yet because many cost-related decisions haven’t yet been made. In addition, Metro Vancouver does not yet know how much money the federal and provincial governments will contribute to help pay for wastewater treatment upgrades required by the Government of Canada and provincial and federal environment ministers.
Federal wastewater effluent regulations – announced by the Federal Environment Minister in July, 2012 – make it mandatory that a secondary treatment plant is built and is operating on the North Shore by the end of 2020.
Metro Vancouver and its North Shore member municipalities will notify the public of the estimated increase in utility fees once this data is available.
Currently, all member municipalities help pay for the capital costs of upgrading regional wastewater treatment facilities, which protect the environment and human health.
Municipalities pay charges that are based on measured volumes of wastewater going into regional sewer mains which lead to wastewater treatment plants. Municipalities pass on those charges to residents, businesses and industries, in utility fees or annual property tax bills. It’s a user-pay model.
A long-standing cost allocation formula now determines what percentage of capital costs are paid by the North Shore Sewerage Area and the three other sewerage areas in the region, and what percentage of capital costs are paid by the region as a whole. (The North Shore Sewerage Area encompasses the City of North Vancouver, the District of North Vancouver and the District of West Vancouver.)
Currently, 100 per cent of the operating costs of a treatment plant are paid by communities in the sewerage area where the plant is located. The capital costs of secondary treatment will be shared, with 70 per cent paid across the region (including the North Shore) and 30 per cent paid by the North Shore Sewerage Area.
The Metro Vancouver Board is reviewing the current cost allocation formula for secondary treatment upgrades.
Metro Vancouver is actively seeking funding support from both the Province of B.C. and the Government of Canada.
The regional district needs federal and provincial funding to help pay the capital costs of secondary treatment, so local taxpayers do not have to pay the entire bill. In the past, the federal and provincial governments have made substantial funding contributions to waste treatment upgrades, in this and other regions.
The existing Canada – BC Infrastructure program is fully allocated and expires in 2014. In 2011, the federal government announced its intention to develop a new long-term infrastructure program that would be put in place when the current program expires in 2014. In the 2013 budget, the federal government announced a new $14 billion Building Canada Fund that will run from 2014-15 to 2023-24. It includes a $10 billion Provincial-Territorial Infrastructure Component to support projects of regional and local significance, including wastewater treatment.
Federal and provincial funding support will help create thousands of direct and indirect jobs and help ensure Metro Vancouver can complete the secondary treatment project before the federal regulation’s 2020 deadline.
Metro Vancouver will inform the public when federal and provincial governments make a decision regarding funding support.
Sewerage systems and wastewater treatment plants prevent the spread of waterborne diseases and protect the receiving environment so our liquid waste does not harm water quality and living things in the fresh and marine waters where treated effluent is released. Secondary treatment is an additional treatment step that takes place after primary treatment and removes about 95 per cent of the organic materials in wastewater.
Upgrading to secondary level treatment has been a federal and provincial requirement since the 1990s, when Metro Vancouver was ordered to upgrade the Annacis Island and Lulu Island treatment plants.
In 2011, the B.C. Environment Ministry approved Metro Vancouver’s Integrated Liquid Waste and Resource Management Plan. The plan confirmed the Lions Gate primary plant would be upgraded by 2020 and the Iona Island primary plant would be upgraded by 2030. These are the last two remaining primary treatment plants in the Metro Vancouver region.
The provincial policy that has been established is that projects receiving $50 million or more of provincial funding a Public Private Partnership (P3) will be considered the base case unless there is a compelling reason to do otherwise. Federal funding from the P3 Canada program is only available for projects using Public Private Partnerships.
As part of the Project Definition Phase, work will be undertaken in consultation with Partnerships BC and P3 Canada to assess the value of a P3 for the design and construction of the new plant.
Procurement options – such as whether the new plant will be designed and built using a traditional Design-Bid-Build, an alternative Design-Build approach or where a P3 option such as Design-Build-Finance-Operate-Maintain will be chosen – are policy and cost-related issues that will also be reviewed by the Board, as part of the Project Definition Phase.
The amortization approach for capital works financing based on a 15-year term has been in place since 1996. It has been re-affirmed by the Board as recently as 2010. Metro Vancouver’s long-range capital plan continues to identify significant investments required for the water, wastewater and solid waste infrastructure in the coming decade and beyond.
Given this continuous need to invest in infrastructure, the shorter amortization approach has avoided the compounding of debt, deferral of debt payment to future generations and has minimized the interest payments associated with Metro Vancouver’s debt financing. This has helped Metro Vancouver continue to benefit from an AAA credit rating through the Municipal Finance Authority of B.C.
The Metro Vancouver Board Finance Committee has the mandate to review and recommend the financial approach and strategy to the Board.
Wastewater treatment plants provide a basic service that communities need. That user-pay service is not a business which generates a net profit.
Metro Vancouver and many other leading utility providers around the world are converting liquid waste into resources to help pay for some of the financial costs of wastewater treatment. The use of liquid waste as a resource also conserves resources and can displace energy that might be generated by the combustion of non-renewable fossil fuels.
For example, a co-generation facility at the Annacis Island Wastewater Plant uses fats, oil and grease to generate energy-rich biogas in a controlled environment. The biogas is used to generate electricity, to help power the region’s largest wastewater treatment plant.
The biosolids produced in Metro Vancouver plants are rich in nutrients and organic matter. Today, they are being used to:
At North Shore’s new secondary treatment plant, the design will include: