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Chief Administrative Officer Date: October 3 The Corporation of Delta COUNCIL REPORT Regular Meeting To: Mayor and Council From: Chief Administrative Officer Date: October 31, 2012 Tsawwassen First Nation Sewer Servicing Proposal The following report has been reviewed and endorsed by the Chief Administrative Officer. • RECOMMENDATIONS: A. THAT staff advise Tsawwassen First Nation and Metro Vancouver that the Corporation of Delta is not prepared to entertain any agreement with Tsawwassen First Nation or Metro Vancouver for transferring ownership of Delta owned infrastructure. B. THAT this report be sent to the following: i. The Honourable Christy Clark, Premier; ii. The Honourable Ida Chong, Minister of Aboriginal Relations and ReconCiliation; iii. The Honourable Steve Thomson, Minister of Forests, Lands and Natural Resource Operations; iv. The Honourable Bill Bennett, Minister of Community, Sport and Cultural Development; v. Delta's MPs and MLAs; vi. Chief Bryce Williams, Tsawwassen First Nation; vii. Doug Raines, Chief Administrative Officer, Tsawwassen First Nation; viii. Metro Vancouver Board of Directors; ix. Greater Vancouver Sewerage and Drainage District Board of Directors; and x. Carol Mason, Commissioner/Chief Administrative Officer, Metro Vancouver. Page 2 of 4 Tsawwassen First Nation Sewer Servicing Proposal October 31,2012 • PURPOSE: The purpose of this report is to provide an update regarding the Tsawwassen First Nation (TFN) sewer servicing proposal. • BACKGROUND: In 2010, Delta and TFN agreed to a sewer agreement that would provide TFN with an interim five year solution for their sewage needs, subject to TFN receiving approval from the Greater Vancouver Sewerage and Drainage District (GVS&DD) for the discharge of TFN sewage into Delta's sewer system. The GVS&DD has not granted approval. At the July 25, 2011 Regular Meeting, Council endorsed a recommendation that provision of sewer services to TFN beyond the five year term of the contemplated sewer agreement between Delta and TFN would be solely the responsibility of the GVS&DD, without Delta's involvement. See Attachment D for the staff report. A sewer capacity report by Omni Engineering, presented to Council on July 16, 2012, found that Delta's sanitary sewer system frorrrSouth Delta to the Annacis Island'­ Wastewater Treatment Plant has sufficient capacity to accommodate Delta's needs as projected in the Official Community Plan. The report also indicated that Delta's sewer system lacks reserve capacity for TFN's long term sewage requirements. • DISCUSSION: On October 22, 2012, Mayor Jackson received a letter from TFN Chief Bryce Williams describing a proposal for TFN to become a member of the GVS&DD and included transfering the ownership of the South Delta force main from Delta to the GVS&DD (Attachment A). The proposal includes compensation from TFN to Delta in the amount of $3,000,000, commitments on the part of TFN to upgrade the force main to meet their capacity needs, and a plan for Metro Vancouver through the GVS&DD to take control of the force main from Tsawwassen to the Annacis Island Wastewater Treatment Plant. See Attachment B for a map of the sanitary sewer system configuration. Staff have reviewed the proposal put forth by TFN and are deeply concerned about TFN's valuation of the force main and associated pump stations, Delta's autonomy, and specific details of the proposed agreement. Value The South Delta force main is an extensive sewer main covering over 26 kilometres. The force main represents a significant investment by Delta taxpayers with a total historical cost of over $20,000,000. Moreover, the replacement cost of the force main could easily reach $46,000,000 including land. See Attachment C for historical and replacement costs, all from Delta's audited financial statements, for the South Delta force main and pump stations as well as force main and pump station improvements undertaken between 2001 and 2012. Pump stations associated with the South Delta force main also represent a significant investment by Delta taxpayers. Conservative estimates show that this infrastructure cost more than $6,500,000 to build and carries a replacement cost of at least $13,500,000. Page 3 of 4 Tsawwassen First Nation Sewer Servicing Proposal October 31,2012 In the past five years alone, Delta has undertaken approximately $9,000,000 worth of improvements to the South Delta force main and associated pump stations. Suggesting that this extensive, well-maintained infrastructure can be bought for $3,000,000 is inconsiderate of the investment made over the years by Delta taxpayers. Autonomy By owning the South Delta force main, the Corporation of Delta maintains control over its capacity and ensures that sewage requirements for Delta residents and businesses are met. Transferring ownership of the South Delta force main to the GVS&DD would mean the loss of control and autonomy for Delta in planning for the future of South Delta, the Tilbury Industrial Area, and Boundary Bay Airport. The Corporation of Delta needs to protect the investment of Delta taxpayers by maintaining ownership of the South Delta force main. Proposal Details The proposal presented by TFN contains additional worrying details beyond the loss of autonomy for Delta and low valuation of the infrastructure. One important item is the proposed dispute resolution process that could commit Delta to the decision ohm - arbitrator without opportunity for Council to engage in a negotiated resolution. This would place Delta at the mercy of a third party that would not be focused on the best outcome for Delta residents. The proposed agreement also stipulates that TFN would be provided additional sewerage capacity should the capacity specified in the agreement be insufficient for their needs. After 2041, the costs of providing this additional capacity would be bome by the GVS&DD and therefore partially borne by Delta even though Delta would not need the additional capacity for our own sewerage requirements. Finally, the proposed agreement includes a section describing the potential for a future sewage treatment plant on TFN land (see Attachment A, page 16 of 55). A sewage treatment plant already exists on TFN land that meets their current needs. TFN should explore their options to expand the existing plant should they require additional sewage capacity irrespective of the proposed agreement. This needs be done without involving Delta's infrastructure. Implications: Financial Implications - An agreement with TFN and the GVS&DD as proposed by TFN would have extensive financial implications for Delta. Transferring ownership of Delta infrastructure would represent a substantial loss of investment. Delta is well positioned financially to continue maintaining and sustaining the operation of the South Delta force main through a well planned maintenance and capital infrastructure upgrade program. • CONCLUSION: Tsawwassen First Nation has presented a proposal for the transfer of ownership of the South Delta force main from Delta to Metro Vancouver via the Greater Vancouver Sewerage and Drainage District. Tsawwassen First Nation proposes to compensate Delta with $3,000,000 and upgrade the force main to meet their capacity needs. Staff Page 4 of 4 Tsawwassen First Nation Sewer Servicing Proposal October 31 , 2012 have reviewed the proposal and, considering Delta's historical expenditure of approximately $27,000,000 and a total replacement cost for the system of approximately $60,000,000, cannot support the proposal put forth by Tsawwassen First Nation. Tsawwassen First Nation should seek alternate solutions for their sewage requirements, independent of the Corporation of Delta's infrastructure. ~\)'-w' v. \\\..-- -- George V. Harvie Chief Administrative Officer Department submission prepared by: Michael Gomm, MPP, Senior Policy Analyst Th is report has been prepared in consultation wi th the following listed departments. Concurring Departments DepMment Name- Signature - . ...., Engineering Steven Lan ./?'/ _ r. ~ '--- Finance I. r_Karl Preuss :111:-,/ j L Human Resources &Corporate L Sean McGill Planning ~ ft~ ./ • ATTACHMENTS: A. Letter dated October 19, 2012 from Chief Bryce Williams to Mayor Lois E. Jackson, including proposed agreement B. Map of sanitary sewer system configuration C. Financial information D. Staff Report dated July 22, 2011 presented at the July 25, 2011 Regular Meeting of Council H:\Mike G\Council Reporls\TFN Sewer\20 12\TFN Sewe~ Serviclng Proposal.docx - Thu rsday, November 01 , 2012, '10:32:23 AM -y ,~F: .... .. ~{)frJ~, .... '::',F':'J~Zf3 . TSAWWASSEN FIRST NATION ATIACHMENT 'A' scawa8an masteyaxW Page 1 of 55 CAO'S OFFICE October 19, 2012 OCT ~. ~ 2012 Mayor Lois Jackson Corporation of Delta RECEIVED 4500 Clarence Taylor Crescent Delta, BC V4K 3E2 Dear Mayor Jackson, The Tsawwassen First Nation (TFN) has been working with the Corporation of Delta over the last three years with the aim to connect TFN's sewer system to the Delta system and for the effluent to be treated at the Metro Vancouver Annacis Island sewer plant. As you are aware, a portion of TFN Lands, since !f:\e 1980's (Stahaken subdivision) has been. connected to the Delta sewer system. However, it wasn't until the signing of the Treaty in April 2009, that a full fledged effort took place to see TFN connect to the Delta sewer system. This opportunity occurred when BC Ferries constructed a sewer line along Highway 17 from the Tsawwassen ferry terminal to a junction with the Delta sewer system to the east of 56th Street and Highway 17. TFN approached both the Corporation of Delta and BC Ferries about connecting TFN to this new line. TFN negotiated a tripartite agreement with the Corporation of Delta and BC Ferries to create connections to this new sewer line with the understanding that the Corporation of Delta would allow a 5 year interim agreement to be signed to allow TFN to connect to the line. Delta, as a member of the GVS&DD, had to seek the approval of Metro Vancouver before the interim agreement could be realized and the sewer could flow from TFN into the Delta system.
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