Tewin Would Cost $618 Million For City Services

This is a release from the City of Ottawa:

The purpose of the memorandum is to provide an update on the financial implications in the  Infrastructure Master Plan (IMP) and next steps. The IMP, initially scheduled for a Special Joint  Planning and Housing and Environment and Climate Change Committee meeting November 23 was postponed. This postponement resulted from the Province’s announcement of the intent to  introduce Bill 150, the Official Plan Adjustments Act, 2023. 

Background 

The City’s Official Plan establishes the City’s goals, objectives and policies to guide growth and  manage physical change to the year 2046, when the population is projected to rise to 1.4 million. 

The Infrastructure Master Plan sets growth-related projects, policies, objectives, and priorities for  municipal water, wastewater, and stormwater management infrastructure, supporting the  City’s New Official Plan. The IMP identifies major capital projects needed to meet growth needs  to 2046. 

Additionally, the IMP includes project funding and financing and identifies the percentage of  project costs attributable to development charges and to City rate budgets. It also determines the  approximate timing of expenditures based on the IMP’s priorities, objectives and growth patterns. 


Given the recent introduction of Bill 150, the Official Plan Adjustments Act, 2023, and  postponement of the Special Joint Planning and Housing and Environment and Climate Change  Committee, circulating this memo ensures Council has up to date IMP financial information in  their ongoing decision making and dialogue. The memo details the present state, acknowledging  existing pressures and noting that the provincial proposal to remove expansion lands may impact  capital costs outlined in the IMP for the period 2026-2046 but are yet to be determined. 

Financial implications 

The total estimated cost of the growth-related upgrades in the IMP related to water and water  services is $1.4 billion for the period 2023-2046 (excluding Tewin). This includes: 

• 26 proposed water distribution projects estimated to cost approximately $901 million; • 37 wastewater collection projects estimated to cost approximately $742 million; and 

• Growth-related projects at ROPEC and at the Lemieux water purification plant are  expected to cost approximately $376 million. 

The $1.4 billion includes approximately $1.2 billion of development charfes and about $200 million in costs beneficial to the existing community. 

Finance staff assessed the affordability of the IMP both from a ratepayer and development  charge perspective. While projects needed to support new growth are funded from development  charges, in some projects, there is a benefit provided to the existing community. Preliminary  results indicate that the current level of funding from rate-supported budgets and development  charge revenue are insufficient to cover all of the IMP’s capital costs. 

Benefit to Existing (BTE) Ratepayers 

Revenues related to the renewal of infrastructure assets and the share of growth costs that  benefit existing ratepayers (BTE portion) are currently increased annually in line with the 2017 Long Range Financial Plan (LRFP) (ACS2017- CSD-FIN-0023). From a ratepayer perspective, to  pay for the BTE portion, it is estimated that water/wastewater revenues would need to increase  by an estimated $16 million annually (seven per cent) from the forecasted level of investment approved in the LRFP. The current funding plan cannot support the updated BTE portion of the  IMP in addition to the targets previously set. Consequently, the IMP would necessitate rate  increases beyond initial projections. 

Development Charges 

Development charges (DCs) also need to keep pace with growth needs to help keep the City  affordable. While existing DCs in Ottawa are among the lowest in Ontario compared to other  municipalities, the principle tenet of the DCs is to ensure growth needs are paid for by new  growth, not by existing ratepayers. The current level of development charge collections, taking  into consideration the mandatory transition impacts from Bill 23, cannot support the IMP’s growth related capital costs (excluding Tewin) that total $1.2 billion, in particular for water services. The  total impact of mandatory discounting for water and wastewater development charges until 2046  is $54 million and $61 million, respectively. Financial funding options to improve affordability could include a combination of increasing water services development charge revenue, issuing  debt, or deferring projects. The degree to which these funding levers would be applied, could potentially be reduced by funding from other levels of government. Consultation with the  development industry during consideration of the IMP and the upcoming DC By-law update is  critical to ensure that Ottawa remains a competitive place for housing development. 

Democracy Don’t Come Easy: WHOPPER WATCH

Tewin 

The cost to service the Tewin Community is approximately $618 million: $396 million for water  and $222 million for wastewater and in accordance with Council direction needs to be funded by  the development. These costs include costs related to oversizing Tewin’s infrastructure which will  benefit growth areas outside of Tewin’s development, the magnitude of which has prompted  further discussions about how and who will finance these project costs because the cost is  incurred in advance of development. 

For the $618 million to service Tewin, staff continue to work under the direction that Tewin will  pay for Tewin, putting no additional burden on City finances. A total of $167 million of Tewin’s water and sewer costs are required to accommodate potential growth needs beyond the 2046  planning period. Although this oversizing of the water and wastewater infrastructure is cost effective over the long term the cost must be financed in the near term. Annex 12 of the Official  Plan indicates that oversizing costs associated with Tewin infrastructure are to be front-ended and covered by Tewin. However, given the size of these costs, size of the area for future potential  growth that currently does not have an urban designation status in the Official Plan and multiple  landowners that could potentially benefit from the provision of oversizing, discussions about how  these costs will be financed remain on-going. 

Next Steps 

The IMP is anticipated to be presented for Council’s consideration in 2024. Discussions with  Tewin are also ongoing to determine how best to finance oversizing costs associated with Tewin  infrastructure. Future Development Charges By-Law will rely on the information and  recommendations provided in the IMP, ensuring that water, wastewater, and stormwater  management infrastructure needs, and funding strategies are aligned with the City’s growth goals  and policies. 

An update to the Rate Long Range Financial Plan, expected in Q2 2025, will guide the overall  rate revenue requirement, incorporating the pressures identified in the IMP and the Asset  Management Plans to be completed, which will also identify capital asset renewal requirements and operating costs. 

Additionally, staff continue to focus efforts on maximizing funding opportunities from various  levels of government. This includes submitting future applications to the newly announced  Building Faster Fund and Housing-Enabling Water Systems Fund aimed at supporting critical  water infrastructure projects that enable housing development. 

Staff are analyzing the impacts of removing the Provincially added urban expansion lands and  plan for the impacts of legislative changes and the effects on the IMP. City staff will continue to identify key initiatives, projects, and costs essential for meeting the City’s growth needs and the  goals of our provincial and federal partners. Collaborative efforts are critical to fostering a  sustainable city for all residents. 

If you have any questions, please reach out to Susan Johns, Director Asset Management,  at Susan.johns@ottawa.ca or Isabelle Jasmin, Deputy City Treasurer, Corporate Finance at  Isabelle.jasmin@ottawa.ca . We would be pleased to schedule a briefing with you.

Sincerely, 

Tammy A. M. Rose, P.Eng General Manager  

Infrastructure and Water Services

 —

RECOMMENDED FOR YOU

Intensification ‘Not At Any Cost’: Citizens Federation

Over-Budget Library Price Expected To Rise

I Tot I Taw A Deflection …

Ottawa City Hall Report Card? Failure: BENN

 

 

 

advertise.in .your .bulldog

 

Don’t miss our regular features
Everything Ottawa      Full Local     Bulldog Canadian
Opinion    Comments    Breaking News    Auto
Ontario   World    Get Cheap Gas   Big Money
Pop Gossip   Your Home    Relax …   Tech
Bulldog Weather    Full Local Sports
TV/Movies   Travel
Page 2   Page 3   Page 4   Page 5   Page 6

 

Other features:    Full Bulldog Index    Return to Bulldog Home

Leave a Reply

Your email address will not be published. Required fields are marked *

 

Paid Content

Home   Full Bulldog Index