TAMRMS#: B06
9.3
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Bylaw 49/2021 Off-Site Levy Bylaw Amendment (1st, 2nd & 3rd readings)
Presented by: Tanya Hynes, Supervisor of Long Term Engineering, Engineering Services
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RECOMMENDED MOTION(S)
recommendation
1. That Bylaw 49/2021, being Amendment 9 to Off-Site Levy Bylaw 30/2013, be read a first time.
2. That Bylaw 49/2021 be read a second time.
3. That unanimous consent be given for consideration of third and final reading of Bylaw 49/2021.
4. That Bylaw 49/2021 be read a third and final time.
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PURPOSE OF REPORT
The report summarizes significant off-site levy (OSL) project changes resulting from advances in related project design work undertaken in 2021. In order to keep the OSL Bylaw current, an amendment is required to update the OSL rates for the remainder of the 2021 construction season and approve any changes to the OSL project list, estimated construction costs, and allocation of costs to benefitting parties referenced in the Bylaw.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
N/A
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
A) Infrastructure Planning
• Calculation of levies, the requests to off-set approved projects and ensuring that any work approved is consistent with best practices.
B) Off-Site Levy Program
• Updated annually in Quarter One.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
In accordance with sections 17 to 22 of Off-Site Levy Bylaw 30/2013, the City shall review the Off-Site Levy projects and the Off-Site Levy rates no less than every third year. This is to ensure that the OSL Bylaw remains up-to-date and in accordance with the master plans and policies that guide it. After the review has been completed, City Council may amend the Bylaw to update the Municipal Infrastructure Off-Site Levy rates. On or before December 31 of each calendar year, the CAO shall prepare and submit to City Council an annual report on the Off-Site Levies imposed and collected by the City in the previous year.
On March 15, 2021 Council passed the following motions on consent agenda:
(AR-21-019)
That Bylaw 13/2021, being Amendment 8 to Off-Site Levy Bylaw 30/2013, be read a first time.
That $2.5M in the current off-site levy receipts held by the City be allocated and administered as indicated in “2020 OSL Receipt Reconciliation Consistent with Approved Council Policy C-P&E-08”, provided as an attachment to the March 15, 2021 agenda report entitled “Off-Site Levies Annual Report and 2021 Bylaw Update”.
On April 7, 2021 Council passed the following motions:
(BL-21-010)
That Bylaw 13/2021 be read a second time.
That Bylaw 13/2021 be read a third and final time.
BACKGROUND AND DISCUSSION
When the Off-Site Levy Bylaw and annual report were presented to Council earlier this year, the estimated project cost for Stormwater Project 5- Northeast Storm Trunk increased by $8.6 Million, based on a pre-design report. This resulted in a significant increase of stormwater OSL to developers contributing to this project. Two of the developers in this area offered to front-end the design costs for this project, in addition to two sanitary projects required in the same area, to determine if cost estimates in the OSL model could be refined. Currently the design is only at the 30% completion stage but is expected to advance during the remainder of the year and further cost estimates may be adjusted in the 2022 OSL annual update.
The proposed design resulted in changes to five OSL projects, 3 sanitary projects and 2 stormwater projects. Some of the projects are designed to be constructed concurrently. Project cost estimates are reflective of efficiencies and synergies anticipated through common alignment and some shared components between adjacent and complementary infrastructure. These cost estimates also include 30% contingency due to the stage of design. Changes to project scope and amount of lands being serviced also resulted in estimated project cost adjustments.
OSL reference Area 4 had to be split into two areas as all of Area 4 was not a benefitting party to all of these projects. This area is now broken into reference areas 4 and 17.2. It was possible to reassign existing reference area 17.2 as it did not have any net development area assigned to it.
Summary of Project Cost Estimates
Project Project Description Current OSL Bylaw Total Proposed OSL Bylaw Total
Project Estimated Cost Project Estimated Cost
Sanitary 2 L1 - North East Lift Station & Gravity Trunk $19,500,000 $11,790,413
Sanitary 3 F1 - North East Forcemain $13,150,000 $ 7,765,863
Sanitary 14 L3 - North East Lift Station 2 $ 2,860,000 $ 6,446,404
Storm 5 NE Area Storm - Trunk Sewer & Outfall $14,320,000 $ 9,775,403
Storm 10 NE Area Storm - Lift Station and Trunk $ 7,802,022 $ 6,979,204
Between Ponds 2 & 3
Total $57,632,022 $42,757,287
Project Changes
Sanitary Project 2:
Sanitary Project 2 is to be renamed as L1 - North East Lift Station and Gravity Trunk. This project has been relocated from the site of the current Erin Ridge North temporary lift station to a site located on the planned Solar Crest development (formerly Key’s Cross) requiring the addition of 690m of 1200mm gravity trunk main. This change eliminates the need for Solar Crest to construct their own lift station and forcemain to pump sewage uphill to the previous site for Sanitary Project 2. As Solar Crest benefits substantially from the relocation of this lift station they are deemed to be benefitting from the upstream gravity trunk as well, even though they are not contributing flows to this infrastructure directly. It is assumed from preliminary discussions that Solar Crest will be providing the land for the lift station at no cost.
The projected cost estimate for Sanitary Project 2 has reduced from $19,500,000 to $11,790,413. The area contributing to the lift station for design purposes has been reduced substantially from ~3000 ha to 1082.2 ha which has decreased the capacity required for this facility. The revised location at Solar Crest has wet well requirements that are not as deep which has offset the cost for the additional trunk main gravity sewer. The cost for the gravity sewer is lower than typical due to considerable synergies between Storm Project 5 and Sanitary Project 2 (common alignment for excavation and road restoration).
Sanitary Project 3:
The cost estimate for remaining work for Sanitary Project 3 has been reduced from $13,000,000 to $7,615,863. The size of the forcemain has been reduced from a single 900mm forcemain to two 600mm forcemains. The distance has been reduced due to the relocation of the lift station for Sanitary Project 2. Costs have also reduced due to considerable synergies between Storm Project 5 and Sanitary Project 3 (common alignment). Only one of the forcemains will be active for the initial years, due to requirements for turnover and cleansing velocities.
Sanitary Project 14:
The cost estimate for Sanitary Project 14 has been increased from $2,860,000 to $6,446,404. The initial 30% design for Sanitary Project 2 received from the design consultant was for a lift station with a deep wet well and a contributing area of approximately 500 ha. This design and cost estimate matches closely to the expected requirements for Sanitary Project 14 and this cost estimate has been adjusted accordingly.
Storm Project 5:
The cost estimate for Storm Project 5 has decreased from $14,320,000 to $9,775,403 due to the 30% design. Some of these cost savings are attributed to the use of two 900mm pipes rather than a single 1200 mm pipe as well as considerable synergies between Storm Project 5 and Sanitary Projects 2 and 3 (common alignment).
Storm Project 10:
The cost estimate for remaining work for Storm Project 10 has reduced from $7,174,700 to $6,353,585 due to the 30% design.
Staging Adjustment
The OSL model contains a staging adjustment. This adjusts OSL rates by taking into account inflation, when projects will be constructed, when levies will be collected, and interest impacts on reserve accounts. The staging cost adjustment determines how much the rates have to be adjusted to deal with the impacts of staging so that at the end of the 25-year development timeline the reserve balances are at zero. Sometimes the staging adjustment will result in levies increasing in some categories and decreasing in others.
Because the OSL rates are changing in some areas where development is expected to occur later this year, the staging adjustment within the OSL model had to be rerun. If this bylaw update is adopted, in some instances less off-site levies will be collected this year than was projected with the April 2021 OSL Bylaw update due to OSL rate decreases. The resultant changes to projected reserve balances influences the staging adjustment calculation and is reflected in changes to sanitary and stormwater OSL rates for all projects within those infrastructure categories. As both the transportation and water projects have a single benefitting basin and did not have any project updates, there are no changes to the transportation and water OSL rates.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
Administration has been working with the two developers and their consultants during this initial design process. This collaboration is expected to continue throughout the design completion and estimated project costs may be further refined during the 2022 OSL Bylaw update.
All developers who participated in the February 2021 virtual information session on this year’s earlier OSL Bylaw update were emailed the proposed new rates along with an explanation on why some of the rates may be changing. Most stakeholders are not being adversely impacted by this update as the OSL rate changes to areas not within the five aforementioned projects’ benefitting areas have had minimal change
IMPLICATIONS OF RECOMMENDATION(S)
Financial:
The financial implications of the OSL Bylaw update to the City of St. Albert are complex. As the City is not currently front-ending the construction of these five projects and the City is not a contributing party to them, there is no immediate financial implications to the City.
Legal / Risk:
The master planning documents used within the OSL Bylaw underwent substantial consultation with the development industry and the public during their development.
Updating the OSL Bylaw annually ensures the required projects and estimated project costs are reflective of best available information. As the design work resulted in significant change to multiple projects, Administration agreed to present an additional OSL Bylaw update for Council consideration. This update is intended to be a singular event as most project cost estimate changes can be addressed during the annual OSL Bylaw update.
Program or Service:
None at this time.
Organizational:
None at this time.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
If Council does not wish to support the recommendation, the following alternative could be considered:
Alternative 1. That the agenda report Off-Site Levy Bylaw Amendment, be received as information.
This would not update the OSL Bylaw, OSL infrastructure projects, or rates for the remainder of 2021. These changes would be incorporated into the 2022 OSL Bylaw update.
Attachments
1. Bylaw 49/2021, being Amendment 9 to Off-Site Levy Bylaw 30/2013
2. Bylaw 30/2013, Consolidated by Bylaws 10/2019, 5/2019, 3/2020, and 13/2021
3. OSL Rate Comparison August 2021 and April 2021
4. Corvus Template showing data used to inform Bylaw 49-2021
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Report Date: August 30, 2021
Author: Tanya Hynes
Department: Engineering
Deputy Chief Administrative Officer: Kerry Hilts
Chief Administrative Officer: Kevin Scoble