TAMRMS#: B06
14.1
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Project Charter WASWT-021 Northeast Servicing Projects
Notice given by: Councillor Hughes
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PROPOSED MOTION(S):
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COUNCILLOR HUGHES REVISED NOTICE OF MOTION FEBRUARY 24, 2026, TO THE FOLLOWING:
That on or before April 21, 2026, the following motion is debated: That project charter, WASWT-021 - Northeast Servicing Projects is approved and the first reading of the borrowing bylaw is brought before council by May 5, 2026.
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ADMINISTRATION’S UNDERSTANDING OF THE INTENT OF THE MOTION
The intent of the motion is understood as to present the revised project charter ENGS-089 (Formerly WASWT-021) Northeast Servicing Project with the addition of construction scope, for debate and decision by Council on or before April 21, 2026, followed by the presentation of first reading of the borrowing bylaw by May 5, 2026, for potential funding of the same.
ADMINISTRATION’S RECOMMENDATION (See Alternative 1)
1. That subject to the execution of the Federal Build Communities Strong Fund (BCSF) Grant Agreement, the following be approved:
• That Project Charter ENGS-089 (Formerly WASWT-021) - Northeast Servicing Projects is approved in the amount of $74.1 M as outlined in Attachment 1, be financed as follows:
o $3.5 M from the Off-Site Levy Water Reserve
o $28.1 M from the Federal Build Communities Strong Fund (BCSF) and,
o $42.5 M through debt financing through Debt Financing, with 93% of the annual debt servicing funded from the Off-Site Levy Recovery Fund and 7% funded through taxes
AND
That the first reading of the borrowing bylaw is brought before council by May 5, 2026
2. That Council add “Northeast Servicing Funding” as an Advocacy Priority to Council’s 2026-27 Council Advocacy Priorities, to ensure completion of a funding agreement with all orders of government to secure $28 million for this project.
PURPOSE OF REPORT
The purpose of this report is to present a motion for which Councillor Hughes gave notice on January 13, 2026, and which was revised on Feb 24, 2026.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On May 16, 2022, Council passed the following motion:
CB-22-047
That Capital Project Charter WASWT-021-Northeast Servicing Projects be added to the 10-year municipal growth plan in 2023 for future funding consideration.
That funding in the amount of $2,000,000 be approved from the Off-Site Levy Recovery Funds in 2022 to advance the design component of the project described as phase 1 in the attached project charter.
BACKGROUND AND DISCUSSION
As per AR-26-113 distributed on April 14, 2026, and the background discussion in Attachment 2 (previously distributed), the revised project charter for ENGS-089 (Formerly WASTWT-021) (Attachment 1) is presented for Council’s consideration. As discussed on April 14, 2026, the feasibility of City front ending the Northeast Servicing Project (NES) was analyzed with and without third party funding.
In April 2026, the Government of Canada approved a grant in the amount of $28,083,862 which represents approximately 40% of the eligible project costs. The receipt of this grant would offset some of the project cost with the potential to improve the financial feasibility of the project.
Northeast Servicing (NES) Project:
In 2020, following the signing of a Memorandum of Understanding (MOU) with the City, the active developers in the area took the initial lead in delivering the initial NES Project design. Following their efforts, the developers provided the City a preliminary design concept which included the use of a sanitary syphon design.
In 2022, the City took over the lead in the detailed design of the NES project due to the complexity and risk of design, and delivery of a potential sanitary syphon option. To enable this, Council approved a $2M project budget for the detailed design and land acquisition for the NES project.
In 2023, the sanitary syphon design was ruled out due to design challenges. The project delivery was set back and required restarting on a new concept utilizing a more traditional lift station and force main approach for the sanitary service.
In 2024, a 90% complete detailed design package was completed, which included sanitary, storm, and water services along with auxiliary scope as shown in Attachment 1. This was presented to both developers and Council. The 90% cost estimate provided at the time was $74.1 million for the whole project with a split of ~$71M (96%) for offsite leviable (OSL) infrastructure and ~$3M (4%) for non-leviable infrastructure.
In late 2024 and early 2025, the City met with active developers to discuss a cost-sharing approach for the NES project. Coincidentally, the City was exploring a potential grant (Canada Housing Infrastructure Fund) option (40% grant, 11% others, and 49% City contribution) to help lessen the front-ending costs required for this project. In early 2025 the City and developers temporarily halted cost sharing negotiations while awaiting a decision on the grant application. In early 2026, the City was informed that the grant ran out of funding and the NES project was not selected. However, in April 2026, the Government of Canada considered the City’s grant application under the new Build Communities Strong Fund - Direct Stream and approved a grant in the amount of $28,083,862 which represents approximately 40% of the eligible project costs. An announcement occurred on April 7th, 2026, with formal grant guidelines and form of agreement being prepared by the federal government to follow.
By the end of March 2026, the NES project detailed design is substantially complete with Issue for Tender drawings (procurement readiness) being prepared. Land acquisition has been essentially completed with only the final registration of documents remaining. Franchise utility realignment notifications have begun.
Of the $74.1M cost estimate, $5.77M can be funded out of the existing Water Reserves, leaving $68.3M needing to be debt financed by the City. Of the $68.3 million, $65.4 million is offsite leviable. In accordance with C-FS-01 Financial Reserve Policy, the Off-Site Levy Recovery Fund Reserve may be used to fund the associated debt servicing costs. The remaining $2.96 million would be funded through the tax base. A formal acceptable agreement for the announced ~$28M grant is anticipated to offset a portion of the costs related to the water, sanitary, and storm scope, and reduce the necessary debt requirements proportionally.
Potential start of the construction phase will depend on the approval of the full project funding from all orders of government and construction season constraints.
NES Project Front-End Funding (Without the grant):
The Northeast Servicing Project is broken down into 4 Categories:
OSL Project 10: Water Levy Infrastructure - $5.77M
OSL Project 5: Storm Levy Infrastructure - $25.78M
OSL Project 2: Sanitary Levy Infrastructure - $39.54M
Non-Offsite Levy Infrastructure - $2.96M
Total = $74.10M
Of the $74.1M cost estimate, $5.77M can be funded out of the existing Water Reserves, leaving $68.3M needing to be debt financed by the City. Of the $68.3 million, $65.4 million is offsite leviable and will be recoverable in the future with the remaining $2.9 million (non-OSL) funded through the tax base.
Non-Offsite Levy infrastructure includes the installation of buried conduit for future City fiber and the installation of site-specific developer servicing (water and sanitary). These two scope items make use of the same alignment as NES. Adding this work to the scope of this project allows for the benefit of cost and construction efficiency. The City would be entering into a cost-recovery agreement with the developer for their benefiting scope. Due to the limited areas of disturbance from the proposed trenchless methods along Old Bellerose Drive for the pipe installation, it was determined to restore the existing gravel pathway with a 3m gravel trail in the areas of disturbance. Please refer to Attachment 3 for scope details.
The Water Levy Reserve has sufficient capital to cover the Water Levy Infrastructure Costs. The Storm and Sanitary Levy Reserves do not have sufficient capital so this will require a party to “front-end” the cost of that work. This front-end expenditure is incurred until such time as levies are collected and reimbursed to the front-ending party through the City’s annual Offsite Levy recovery process. Front-ending projects of this magnitude typically involve incurring debt. Interest expense is added onto the front-end expenditure which is then recovered through the corresponding levies.
NES Project Front-End Funding (With the grant):
With Grant funding, of the $74.1 million cost estimate, $28.1 million would be funded from the grant, $3.5 million from the existing Water Reserves, leaving $42.5 million needing to be debt financed by the City. Of the $42.5 million, $39.5 million is offsite leviable and will be recoverable in the future with the remaining $2.96 million (non-OSL) funded through the tax base.
Interim Servicing under consideration until NES project is built
While funding feasibility was being explored in 2025/2026 through grant or other potential third-party sources, during 2025, the active developers proposed the use of a pipe storage option that would create limited additional capacity in the sanitary system.
The proposal would utilize the existing 1200mm diameter deep trunk system along Everitt Drive to attenuate the flows into the Oakmont 450mm diameter sub-trunk system. The flows would be released at a controlled rate through a sluice gate which would be designed to not exceed the downstream system’s capacity. The City and developers undertook functional review of this option, and it has been accepted in principle by the City, pending developers entering into servicing agreements which will include terms and conditions to construct and pay for interim maintenance of the infrastructure. At the time of writing of this report, it is anticipated that one of the active developers in the area will undertake the construction and funding of the pipe storage option ‘Everitt Drive Sluice Gate’ in 2026. The other benefiting developer has indicated that they will not participate in the agreement or funding for the project. See Attachment 3 for details of this interim option location and schematic overview of the existing and proposed sanitary system.
Financial Analysis:
Administration undertook a financial review of various project start dates for NES, including scenarios with the announced BCSF grant applied. The financial scenarios were presented at SCOW on April 14th, 2026, with the Agenda Report for reference attached as Attachment 2.
IMPACTS OF MOTION
Financial:
Approval of the motion will result in a new project with total approved funding in the amount of $74,054,000. Of this amount, $5,767,700 will be funded from the Water Levy Reserve with the remaining $68,286,300 financed through debt, which will require a new Borrowing Bylaw to be developed at a value of $85,357,900 (budget of $68,286,300 + 25% contingency).
Debt servicing costs for the $65,329,700 will be funded through the Off-Site Levy Recovery Fund (OLRF) Reserve, and $2,956,600 will be funded through taxes. Funds allocated from the OLRF will be committed for the full term of the loan and will not be available for other purposes during the period
If the project is approved to begin in 2026 the City will be out of compliance with Council Policy C-FS-20 Offsite Levy Recovery Fund Utilization. Given this, there is a financial risk that should the OLRF reserve be fully depleted, future debt servicing requirements would need to be funded through the tax base until reserve balances are restored.
Compliance & Legal: If the project is approved to begin in 2026 the City will be out of compliance with Council Policy C-FS-20 Offsite Levy Recovery Fund Utilization.
Program or Service:
City’s Utility Operations will start incurring additional operational cost of approximately $50k per year for the new Lift Station a year after it is built.
Six months following the start of construction of NES, Administration is anticipating allowing development applications in the northeast to proceed, to allow development completion to align with NES project completion. With the NES ultimate servicing project moving forward, there would be reduced reliance on interim and non-standard servicing solutions.
Organizational:
The project will be added to the Capital Projects Office’s portfolio pending all approvals for the project.
This project is expected to bring more development in the Northeast which would likely impact Planning and Development including Development Engineering resource capacity to process development applications within the service levels. This will continue to be evaluated and brought forward during Operating Budget deliberations in the future.
Risks
Strategic - NES project will be required to be added to the Council’s Strategic Plan and Corporate Business Plan as it is currently not identified as a Council priority.
Assets and Asset Management - New assets will be added to the City’s asset management portfolio which would then be recognized for its lifecycle management and would impact City’s Repair, Maintenance, and Replacement (RMR) capital program in future years.
Government and Partner Engagement - Benefitting Developers will be making business decisions in anticipation of the completion of this project. Any change in approved plans will have an impact on reputation.
The City is currently working to complete a grant agreement with the Federal Government for $28 million to support this project. A condition of receipt of funding is to complete Indigenous consultation prior to construction commencing. Indigenous consultation was initiated by the City in 2023, but further conversation and engagement is required at this time as the project transitions from Design to Construction. The extent of consultation required is unknown at this time.
Since this agreement is more than $5 M in value, it will require Provincial Cabinet approval, per the Provincial Priorities Act. The timing for Provincial approval is unknown at this time, and a separate federal grant agreement has been under review by the Province for more than six months.
Approving the project contingent upon receipt of the grant will assist in ongoing negotiations will all orders of government. Start of the project prior to these requirements being met threatens receipt of the grant.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Item aligned to Strategic Plan:
Not Applicable
Initiative aligned with Strategic Plan:
None at this time.
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
D. Land Use and Development
D.2 Infrastructure Planning
D.2.1 Off-Site Levy Program
Support growth and development by administering City's off-site levy program for essential infrastructure needed.
ALTERNATIVES
If Council does not wish to support the proposed motion, Administration presents the following alternatives for Council’s consideration.
Alternative 1:
3. That subject to the execution of the Federal Build Communities Strong Fund (BCSF) Grant Agreement, the following be approved:
• That Project Charter ENGS-089 (Formerly WASWT-021) - Northeast Servicing Projects is approved in the amount of $74.1 M as outlined in Attachment 1, be financed as follows:
o $3.5 M from the Off-Site Levy Water Reserve
o $28.1 M from the Federal Build Communities Strong Fund (BCSF) and,
o $42.5 M through debt financing through Debt Financing, with 93% of the annual debt servicing funded from the Off-Site Levy Recovery Fund and 7% funded through taxes
AND
That the first reading of the borrowing bylaw is brought before council by May 5, 2026
1. That Council add “Northeast Servicing Funding” as an Advocacy Priority to Council’s 2026-27 Council Advocacy Priorities, to ensure completion of a funding agreement with all orders of government to secure $28.1 million for this project.
Financial:
Approval of the alternative motion will result in a new project with total approved funding in the amount of $74,054,000. Of this amount $3,480,400 will be funded through the Water Levy Reserve, $28,083,900 funded through the Federal Build Communities Strong Fund (BCSF), and $42,480,700 will be financed through debt, which will require a new Borrowing Bylaw to be developed at value of $53,100,900 (budget of $42,480,700 + 25% contingency).
Debt service costs for the $39,524,100 will be funded through the Off-Site Levy Recovery Fund (OLRF) Reserve, and $2,956,600 will be funded through taxes. Funds allocated from the OSLF will be committed for the full term of the loan and will not be available for other purposes during the period.
Compliance & Legal: None at this time.
Program or Service:
City’s Utility Operations will start incurring additional operational cost of approximately $50k per year for the new Lift Station a year after it is built.
Six months following the start of construction of NES, Administration is anticipating allowing development applications in the northeast to proceed, to allow development completion to align with NES project completion. With the NES ultimate servicing project moving forward, there would be reduced reliance on interim and non-standard servicing solutions.
Organizational:
The project will be added to the Capital Projects Office’s portfolio pending all approvals for the project.
This project is expected to bring more development in the Northeast which would likely impact Planning and Development including Development Engineering resource capacity to process development applications within the service levels. This will continue to be evaluated and brought forward during Operating Budget deliberations in the future.
Risks
Strategic - NES project will be required to be added to the Council’s Strategic Plan and Corporate Business Plan as it is currently not identified as a Council priority.
Assets and Asset Management - New assets will be added to the City’s asset management portfolio which would then be recognized for its lifecycle management and would impact City’s Repair, Maintenance, and Replacement (RMR) capital program in future years.
Financial - There is a risk to City’s Financials, if the grant funding is not received in full. The project charter feasibility is to be revisited if this occurs.
Government and Partner Engagement - Benefitting Developers will be making business decisions in anticipation of the completion of this project. Any change in approved plans will have an impact on reputation.
The City is currently working to complete a grant agreement with the Federal Government for $28 million to support this project. A condition of receipt of funding is to complete Indigenous consultation prior to construction commencing. Indigenous consultation was initiated by the City in 2023, but further conversation and engagement is required at this time as the project transitions from Design to Construction. The extent of consultation required is unknown at this time.
Since this agreement is more than $5 M in value, it will require Provincial Cabinet approval, per the Provincial Priorities Act. The timing for Provincial approval is unknown at this time, and a separate federal grant agreement has been under review by the Province for more than six months.
Approving the project contingent upon receipt of the grant will assist in ongoing negotiations will all orders of government. Start of the project prior to these requirements being met threatens receipt of the grant.
Alternative 2: Do Nothing
Financial:
If Council does not support the project charter as presented, there is a risk of losing the potential grant receipt.
NES timing would be re-evaluated with the potential to plan the project charter to move forward with an associated funding request in future years.
Compliance & Legal:
None at this time.
Program or Service:
The Northeast area would continue to rely on interim and/or non-standard options to provide limited servicing for development.
Organizational:
None at this time.
Risks:
Financial - There is potential to lose the grant without the project charter approval and subsequent borrowing bylaw approval.
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Report Date: April 21, 2026
Author: Regan Lefebvre, Meredith Willacy, Jordan Betteridge, Maggie Wang, Suzanne Findlay, Trevor Duley
Department: Public Operations, Engineering Services, Financial and Strategic Services, Government/Indigenous Relations and Environment
Department Director: Timothy Saunders, Dawny George, Anne Victoor
Managing Director: Diane McMordie / Adryan Slaght / Dinu Alex
Chief Administrative Officer: William Fletcher