Executive Summary This Committee was initiated by Lambton Shores - PDF document

Executive Summary This Committee was initiated by Lambton Shores’ Council on February 22, 2011 to review issues pertaining to the extension of wastewater services to the residents of Zones 3 and 4. Using the terms of reference in the ‘2006 Sanitary Sewage Servicing Master Plan ’, the Committee was to make recommendations to Council on the need for a municipal sanitary sewer collection system and if need is established a preferred option on how to best service these areas. Furthermore, the mandate was expanded to allow a review of taxpayer issues and concerns relating to the proposed mechanical sewage treatment facility (STF) for the greater Grand Bend area. The Ad hoc Sewage Advisory Committee was appointed in May, 2011 and consisted of ten members: four members of Council and six citizens chosen from an applicant pool representing Zones 3 and 4. The Committee was divided into task teams with designated members and a leader who would research and report back on the following target areas: I – Review Need for Improved Sewage Treatment II – Cost/benefit Analysis of proposed STF and Collection Systems III – Future Options of Sewage Treatment IV – Taxation and User Fee Issues V – Communication with Taxpayers In 2006, Dillon Consulting produced a report, entitled ‘Grand Bend and Area Sanitary Servicing Master Plan’ (the Plan), which proposed a centralized wastewater treatment model to handle sewage from all shoreline areas of north Lambton Shores, Bluewater and South Huron from the Pinery to St. Joseph and along Highway 83 to Dashwood. The Plan anticipated the addition of about 3,000 residences requiring sewage services over the next 20 years and proposed the construction of a new mechanical treatment plant at the lagoon site which would handle a projected increase in daily flow capacity from the current 1,891 m 3 /day to 4,960 m 3 /day. The greater Grand Bend area has developed into two distinct regions: an urban village with cottages on small lots geared to seasonal use and rural subdivisions with all season homes on larger lots. Though both types of settings were developed with onsite septic systems, an urban style gravity sewer collection system was constructed in 1979 in Grand Bend to address concerns that septic system usage on small lots could have an adverse impact on groundwater. Thus the region was split into two approaches to wastewater management: a centralized model which serves the ‘urban’ village of Grand Bend, and a decentralized model that encompasses the ‘rural’ communities to the south of Gr and Bend. For both models, future consideration will have to be based upon financial viability and ecological sustainability. 18

The current centralized sewage treatment facility (STF) consists of a four cell lagoon that accepts raw sewage from the village of Grand Bend, Grand Cove Estates and seasonal commercial enterprises located in South Huron. Recently, sewage from a low pressure collection system installed in the Pinery has been directed to the lagoon. Today, about half the capacity of the lagoon is being used, while a substantial portion of the rest has been allocated to future development, predominantly residential. With regards to Lambton Shores, the Plan called for the undertaking of three distinct projects to meet its objectives, each one requiring the completion of a separate Municipal Class Environmental Assessment (EA). Project 1 proposed the construction of a low pressure sewer pipeline along Goosemarsh Line to transport wastewater from the Pinery to the lagoon. This pipeline was completed in 2009. Project 1 also included the construction of a low pressure grinder pump collection system in the residential and commercial areas around the Pinery referred to as Zone 4. This work has yet to start. Project 2 called for the expansion and upgrade of the lagoon to a mechanical STF using an Orbal � oxidation ditch design. The Plan estimated the cost of building the plant in 2006 to be about $12.4 million. Today, the cost has been verified by tenders to be about $26.9 million. With Federal and Provincial grants included, the capital cost for the 1,100 current sewer users, and an anticipated 3,500 additional users from future development, would be about $5,100 per household with an annual operating cost of about $305 per household. Although only 29% of Lambton Shores’ flow capacity is currently being used, about 69% of the remaining capacity has been committed to new development. Lambton Shores has approved lagoon sewage allocations for the following developments – some are fully operational while others are pending: � Pinery Provincial Park (fully operating) � Rice Developments (starting first phase) � Southbend Estates (pending) � Plus 8 others that are pending The total allocation currently approved for these developments is 874 m 3 /day with a long term range of 1,693 m 3 /day when all phases are completed. These developments would contribute about $5.05 million or 18.8% towards the cost of a full size plant costing $26.9 million (the preferred design). A mediated agreement between the Municipalities of Lambton Shores, Bluewater and South Huron for the proposed Grand Bend & Area STF as handed down in July 2010, distributed the costs of the proposed plant as follows: Lambton Shores = 48.4%, South Huron = 30.2% and Bluewater = 21.4%. As of Jan 31 2012, this mediated agreement ceased to exist with Bluewater invoking a (opt out/opt in) clause that allowed them up to ten years to decide whether or not they wished to participate in the project. At the same time, South Huron maintained a firm position of only contributing their share of the costs towards a half-size plant, something that was not part of the mediated agreement. 19

Should Lambton Shores wish to proceed with building the preferred, full sized plant, its share of the capital and ownership costs would be in excess of $21.5 million. Lambton Shores is currently paying on $21 million of debt incurred for infrastructure and facilities projects. About $18 million or 86% of this debt has a term of over 10 years for repayment. Municipalities cannot incur debt in excess of 25% of their net revenues. This means that the principle and interest debt payments must not exceed 25% of the municipality’s revenues. Lambton Shores’ debt ceiling is $3.9 million annually. The Municipality currently has an annual debt repayment load of just over $2 million. On Jan 30, 2012, Lambton Shores Council resolved to search for more cost effective solutions to the proposed Orbal � full size plant. It should be noted that, regardless of outcomes, South Huron and Lambton Shores are jointly responsible for operating the current lagoon sewage treatment system located in South Huron. Project 3 involved the development of a sewer collection system for the neighborhoods between the Pinery and village of Grand Bend known as Zone 3. Although gravity systems are often the desired means for transporting waste to a treatment site, terrain and physical layout of the homes within Zone 3 create a challenge. As a result, the EA for Zone 3 recommended the use of a low pressure grinder pump collection system, much like the one approved for Zone 4. The Ad hoc Committee found that low pressure systems have serious ongoing electrical, mechanical and potential flow problems not experienced with gravity systems. Ontario municipal utilities managers, who have low pressure systems in their control, suggest that they only be used for ‘infilling’ of remote or difficult to service areas particularly where the house is lower than the main sewage system lines and it would be uneconomical to install lift stations. The grinder pumps are used to transport waste to a gravity system. On average, about 1 in 5 pumps are repaired, replaced or rebuilt each year. The potential cost of installing a sewer collection system to homeowners in Zones 3 and 4 was estimated by Dillon Consulting, in 2009, to be about $12,300/lot for a low pressure, grinder pump system and about $23,600/lot for a gravity system. However, the lesser figure for the low pressure system did not include road resurfacing. Cost estimates obtained from a similar study in Oakwood Park that included road resurfacing for both types of systems were between $23,000 and $27,000/lot. In addition, with installation of either type of sewer lines come monthly sewer fees. According to the BMA Management Consulting Municipal Study 2010, which considered the financial data of 83 of Ontario’s 444 municipalities, Lambton Shores ranked the second highest in residential water/wastewater charges. The municipality was the third highest in burden ranking of water/wastewater costs as a percentage of household income at 1.8% of household income. BMA considers this to be a high burden ranking, however, it should be noted that Lambton Shores has integrated lifecycle replacement costs for water and wastewater infrastructure in its rates, unlike other municipalities. 20