Members of Council and Staff:  Please keep this agenda and the accompanying material until the City Council meeting dealing with these matters has ended.  The City Clerk’s Office will not provide additional copies.

Special Assistance for Members of the Public:   City staff can arrange for special assistance with some advance notice. If you need special assistance, please call 416-392-4379, TTY 416‑338-0889 or

e-mail(pwic@toronto.ca ).

Closed Meeting Requirements:  If the Public Works and Infrastructure Committee wants to meet in closed session (privately), a member of the Committee must make a motion to do so and give the reason why the Committee has to meet privately.(City of Toronto Act, 2006)

Notice to people writing or making presentations to the Public Works and Infrastructure Committee: The City of Toronto Act, 2006 and the City of Toronto Municipal Code authorize the City of Toronto to collect any personal information in your communication or presentation to City Council or its committees.

The City collects this information to enable it to make informed decisions on the relevant issue(s). If you are submitting letters, faxes, e-mails, presentations or other communications to the City, you should be aware that your name and the fact that you communicated with the City will become part of the public record and will appear on the City’s website. The City will also make your communication and any personal information in it – such as your postal address, telephone number or e-mail address – available to the public, unless you expressly request the City to remove it.

The City videotapes committee and community council meetings. If you make a presentation to a committee or community council, the City will be videotaping you and City staff may make the video tapes available to the public.

If you want to learn more about why and how the City collects your information, write to the City Clerk's Office, City Hall, 100 Queen Street West, Toronto ON M5H 2N2 or by calling 416-392-8032.

Declarations of Interest under the Municipal Conflict of Interest Act.

Confirmation of Minutes – April 20, 2010

Speakers/Presentations – A complete list will be distributed at the meeting

Communications/Reports 

The Executive Director, Technical Services, and the General Manager, Toronto Water, recommend that:

1.         City Council authorize staff to participate in the expanded Transfer of Review Program and pilot project which will include additional storm water management works as described in the report (April 30, 2010) from the Executive Director, Technical Services, and the General Manager, Toronto Water.

2.         City Council delegate authority to staff designated in writing by the Executive Director of Technical Services and the General Manager of Toronto Water to sign on behalf of the City any application forms required by the Ministry of the Environment (MOE) as part of the Transfer of Review Program under the Ontario Water Resources Act.

3.         City Council authorize staff to negotiate and enter into a revised Memorandum of Understanding ("MOU") with the Provincial government as required to implement the expanded Transfer of Review Program, as well as any additional or revised MOU required to include the pilot project works in the Program on a permanent basis, and that the Executive Director of Technical Services be authorized to execute any required MOU on behalf of the City.

4.         City Council authorize the amendment of Municipal Code Chapter 441, Fees and Charges, to include the new Transfer of Review Program fees, currently set at $2,200 for reviews of facilities designed to attenuate stormwater runoff peak flow rate or volume or for managing stormwater runoff quality, and $2,000 for reviews of storm and sanitary pump stations and forcemains and sanitary sewage detention chambers or oversized sewers, as set by the provincial government in Ontario Regulation 364/98, and further that the City Solicitor be authorized to submit bills to amend the amount of these fees at such future time(s) as the provincial government adjusts them.

The purpose of this report is to seek authority from City Council to implement the Ministry of the Environment’s ("MOE") expanded Transfer of Review Program (the "Program") under the Ontario Water Resources Act. Council authority is also sought for making the necessary revisions to Section 441 of the Toronto Municipal Code (“Fees and Charges”).

The Program will benefit the City because storm water management works applications currently reviewed directly by the MOE will be reviewed by City staff under the expanded Program, thereby saving the City the expense of application fees payable to the MOE and expediting the mandatory review process.

The Program will also benefit the City by streamlining the development review process. The construction of stormwater management infrastructure cannot be initiated until the necessary approvals have been secured. The direct submission review process to the MOE is longer than the Transfer of Review program delegated to the City, and developers will be able to secure the required approvals sooner.

If adopted, the above recommendations will provide both a cost savings in application fees and a benefit in additional review fees to the City. Staff estimate that on an annual basis, the expanded program will save $22,000 net of any associated costs to the City and also generate from private proponents $22,000 in revenue, for an estimated annual net cost benefit to the City of $44,000.00.

Since amalgamation, internal City Divisions were not charged a fee under the current Transfer of Review Program which included standard sewer applications at the rate of $1,100 per application. The application review fee under the expanded program will be charged to City Divisions, Agencies, Boards, and Commissions as applications previously sent to the Ministry of the Environment will now be reviewed by Technical Services. The review fee for standard sewer applications at the set rate of $1,100 per application in the existing program, along with additional storm water management applications at the set rates of $2,000 and $2,200 in the expanded program will be charged by Technical Services and the proponents will accommodate these costs within their approved capital works budget.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The Executive Director, Technical Services, recommends that:

1.         City Council implement a new user fee, effective immediately, to recover the cost of administration and conducting technical reviews undertaken by the City in accordance with the Municipal Drinking Water Licensing Program, mandated by Ontario’s Safe Water Drinking Act, such fee being set at $2,300.00 per application for all applications for establishing or alteration of the City of Toronto drinking water system, and further that the current fee for such applications, which the City is no longer entitled to charge due to changes to provincial law, be repealed.

2.         City Council amend Municipal Code Chapter 441, Fees and Charges, to give effect to these fee changes, and grant authority for the introduction of the necessary bills.

The purpose of this report is to seek authority from City Council to implement a new user fee to recover the cost to the City of conducting technical reviews of drinking water works required under the new Provincial Municipal Drinking Water Licensing Program ("Licensing Program") and for administration of the Licensing Program.

The provincial government is changing the way drinking water systems are regulated in Ontario, as a result of Justice O'Connor's Report of the Walkerton Inquiry. The recommendations include the Ministry of Environment ("MOE") replacing the current Certificate of Approval Program (and the concurrent Transfer of Review Program) with a new Licensing Program under the Safe Drinking Water Act.

When the new Licensing Program came into effect (upon the issuance of the City's first Drinking Water Works Permit and Licence on February 17, 2010), the City was required to undertake reviews of proposed drinking water works, similar to the review it currently performs on behalf of the MOE under the MOE's Transfer of Review Program ("TORP"). However, because of changes to provincial legislation, the City will no longer be able to collect the fee set by the MOE for this service. It is therefore necessary for the City to implement a new user fee to replace the current fee and ensure continued cost recovery.

The proposed new service fee will generate an estimated $160,000 in fees on an annual basis to Technical Services.

Since amalgamation, Toronto Water projects were not charged a fee under the current Transfer of Review Program. However, fees were charged from the Toronto Transit Commission, the Toronto Waterfront Revitalization Corporation, the Toronto Community Housing Corporation, and the Toronto District Heating Corporation. On average, one application of this type was received per year generating fees at the set rate of $1,200 per application.

Approximately $45,000 of the $160,000 will be from private proponents. This amount compares with the average annual amount of $23,000 received under the current Transfer of Review Program resulting in a net increase of $22,000 to the City.

The remaining $115,000 in additional revenue will be generated from fees charged to other City Divisions, Agencies, Boards, and Commissions, which will accommodate these additional costs within their approved capital budgets.

The amount of the recommended new service fee is sufficient to recover the cost to the City of administering the new Licensing Program.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

This report is in response to a Councillor Notice of Motion related to mandating gas stations and auto service centres to recycle.  The report sets out why the City should take no action at this time in expanding recycling requirements to gas stations and auto service centres located in Toronto in light of the current Provincial review of the Waste Diversion Act, 2002.

There are no immediate financial impacts arising as a result of this report.

The General Manager, Toronto Water, recommends that:

1.         City Council approve the Biosolids Master Plan Update Environmental Assessment for Highland Creek Wastewater Treatment Plant and direct staff to implement the recommended biosolids management strategy contained therein.

2.         City Council authorize the General Manager of Toronto Water to make the necessary provisions in the 2011 Capital Budget to expedite the implementation of the recommended biosolids strategy by 2015 to realize operational and capital cost savings and to apply some of those savings to the addition of innovative air pollution control technologies that will achieve a higher green house gas and pollutant emissions reduction in excess of regulatory standards.

This report summarizes the findings contained in the Biosolids Master Plan (BMP) Update for Highland Creek Treatment Plant and recommends an accelerated implementation of the preferred biosolids management option to reduce existing greenhouse gas emissions and realise certain cost savings. Some of the savings are to be applied to the implementation of emission scrubbing technologies that will allow the City to set, for this facility, voluntary emissions standards that are more stringent than the applicable regulatory standards.  

The purpose of the BMP Update is to plan for the future management of biosolids from each of the City’s four wastewater treatment plants in a manner that is sustainable, reliable, environmentally sound, cost effective and flexible.  The BMP Update was undertaken as a Class Environmental Assessment to fulfill the requirements of Phase 1 and 2 of the Municipal Engineers Association Class Environmental Assessment Master Planning process.

There are no financial implications resulting from the adoption of this report as there is funding available in the approved Toronto Water 2010 Capital Budget and 10 year forecast.

The General Manager, Toronto Water, and the Chief Administrative Officer, Toronto and Region Conservation Authority, recommend that:

1.         City Council authorize the Toronto and Region Conservation Authority (TRCA) to apply to use the funds available in the approved Toronto Water 2010 Capital Budget to complete acquisitions for properties identified in the confidential list dated May 3, 2010, included as Confidential Attachment 1 to the report (May 3, 2010) from the General Manager, Toronto Water, and the Chief Administrative Officer, Toronto and Region Conservation Authority.

2.         City Council direct that TRCA complete the acquisitions according to the criteria set out in the Policy and Finance Committee Report 7, Clause 37, as adopted by City Council on July 19, 20, 21 and 26, 2005 in a form and manner acceptable to City officials.

3.         City Council authorize the public release of the confidential information contained in Attachment 1 to the report (May 3, 2010) from the General Manager, Toronto Water, and the Chief Administrative Officer, Toronto and Region Conservation Authority, after the acquisition of the properties by the Toronto and Region Conservation Authority has been completed.

4.         City Council authorize and direct the appropriate City Officials to take the necessary action to give effect thereto.

This report has been prepared jointly with the Toronto and Region Conservation Authority (TRCA) to provide an update on land purchased in 2009 using Toronto Water Capital funding and seek approval to revise the previously approved Property Acquisition List to add additional properties.

Funding is available to support the acquisition of properties in accordance with the City’s Land Acquisition Criteria for Source Water Protection in the approved Toronto Water 2010 Capital Budget under WBS Element CWW473-01 Land Acquisition for Source Water Protection.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The General Manager, Transportation Services, recommends that:

1.         City Council direct that the median shoulder of the Don Valley Parkway between Lawrence Avenue East and a point four-hundred and fifty-eight metres north of York Mills Road, in both the northbound and southbound directions, be incorporated into the travelled portion of the roadway as traffic lanes and be reserved for the exclusive use by authorized GO Transit Vehicles.

2.         City Council grant authority for the City to enter into such agreement(s) with Metrolinx as may be necessary to implement Recommendation 1 on such terms and conditions generally as set out in Appendix 2 and Appendix 3 of the report (May 4, 2010) from the General Manager, Transportation Services, and on such other terms and conditions as may be deemed appropriate by the General Manager of Transportation Services, and in a form satisfactory to the City Solicitor, and that the General Manager of Transportation Services be authorized to execute any such agreements on behalf of the City.

3.         City Council direct the General Manager of Transportation Services to report on the costs and feasibility of implementing bus bypass lanes on the Don Valley Parkway in the sections between Pottery Road and Don Mills Road and between Don Mills Road and Eglinton Avenue East if and when Metrolinx makes a request to the City for their implementation.

4.         City Council authorize and direct the appropriate City Officials to take the necessary action to give effect thereto and grant leave for the introduction of any necessary Bills in Council to give effect thereto.

City Council, in 2007, in adopting a staff report entitled, “Sustainable Transportation Initiatives: Short Term Proposals (Item PW9.2)” endorsed the implementation of bus bypass ‘shoulder’ lanes on the Don Valley Parkway (DVP) between Lawrence Avenue East and York Mills Road for GO Transit bus service.  With this proposal, GO Transit buses would use the shoulders of the DVP to bypass any traffic congestion on this section of the highway which would result in improved efficiency of bus service without any reduction in the traffic carrying capacity of the DVP.

It has been determined, however, that the Highway Traffic Act does not currently have a provision that gives the authority to the City of Toronto to designate lanes that would serve as both a shoulder for general traffic as well as a driving lane for specific types or classes of vehicles.  Therefore, in order to implement the concept of bus shoulder lanes previously endorsed by City Council it is necessary to convert the shoulder into part of the travelled portion of the highway and reserve its use for authorized GO Transit vehicles only.  Accordingly, this report seeks City Council approval to convert the median shoulder on the DVP (i.e. to the left of the general traffic lanes) between Lawrence Avenue East and a point four-hundred and fifty-eight metres north of York Mills Road in both the northbound and southbound directions, into a lane of traffic for the exclusive use of authorized GO Transit vehicles.  The implementation of these “bus bypass lanes” would be funded entirely by Metrolinx.  

Authority is also being sought to pursue an agreement between the City and Metrolinx based on the principles included in Appendix 2 to this report which will delineate the roles and responsibilities of the parties from both a funding and operational perspective and in Appendix 3 to this report which will provide the framework for an operating protocol for the use of the bus bypass lane by authorized GO Transit vehicles.

All costs associated with the feasibility studies, environmental assessments and construction of the bus bypass lanes on the DVP, including the installation of necessary traffic signs and pavement markings, will be funded by Metrolinx.  Any subsequent maintenance (i.e., winter maintenance, lane repairs, barrier repairs, etc.) of the bus bypass lanes will be undertaken by the City and can be accommodated within Transportation Services’ operating budget.

The Executive Director, Technical Services, the Executive Director, City Planning, and the Director, Purchasing and Materials Management, recommend that:

1.         The Public Works and Infrastructure Committee grant authority to amend Purchase Order No. 6026485 for the Dufferin Street Jog Elimination Project, Dufferin Street/CN/GO Transit Underpass at Queen Street by an additional amount of $609,523.80 net of all taxes ($614,887.61 net of GST and HST Recoveries).

The City Solicitor, the General Manager, Toronto Water, and Deputy City Manager Richard Butts recommend that:

1.         City Council approve the proposed use of lands approximately as shown in the dark outline on Appendix "A" to the report (May 3, 2010) from the City Solicitor, the General Manager, Toronto Water, and Deputy City Manager Richard Butts, for a Toronto Transit Commission Light Rail Vehicle maintenance and storage facility ("LRV facility").

2.         City Council authorize and direct the appropriate City staff to take the necessary steps to give effect thereto.

The City entered into a mediation which resulted in an Agreement in relation to an Environmental Assessment (“EA”) conducted on operations at the Ashbridges Bay Treatment Plant (“ABTP”). Pursuant to the Agreement, the City completed a conceptual landscape plan (the “Plan”) for the ABTP site. The City now wishes to permit a portion of the land covered under the Plan to be used for a proposed TTC Light Rail Vehicle maintenance and storage facility. The Agreement requires that any new proposed use of ABTP lands must be raised with the Neighbourhood Liaison Committee (“NLC”), a committee created under the Agreement. If the NLC has significant concerns, such proposed use must be approved by City Council. The NLC has been consulted on the proposed TTC use, and opposes it. Council approval of the proposed use is therefore required. Toronto Water advises that the lands are not required for its operational purposes.

These recommendations will have no financial impact beyond what has already been approved in the current year’s budget.

The purpose of this report is to advise on the over expenditure of Contract No. 08TE-01RD, Tender No.164-2008, by $3,500,000.00 net of GST, which represents a 16.2% increase of the current contract value of $21,553,662.00, net of GST for a new total amount of $25,053,662.00, net of GST. This increase is a result of additional item quantities required to complete the reconstruction of TTC track allowance and watermain replacement due to the understatement of bid item quantities included in the form of tender.

The Contract increase identified in this report is $3,675,000.00 including all applicable taxes and charges. The cost to the City, net of GST is $3,500,000.00. Funding is available in the 2010 Transportation Services Capital Budget in account CTP509-01 (City Bridge Rehabilitation).  A recovery of $289,790.50 and $2,054,272.10 is anticipated from Toronto Water and TTC. 

The revised estimate for this contract is $25,053,662.00 net of GST.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The General Manager, Solid Waste Management Services, recommends that:

1.         City Council amend the Residual Waste Working Group Terms of Reference as described in Attachment A to the report (May 3, 2010) from the General Manager, Solid Waste Management Services.

2.         City Council authorize the General Manager, Solid Waste Management Services, to enter into amending agreements with the current Residual Waste Working Group members in a form satisfactory to the City Solicitor, to reflect changes to the Terms of Reference described in Recommendation 1.

In 2007, Council approved the creation of a Residual Waste Working Group (the "RWWG").  The RWWG consists of members of the public who provide assistance and input to Solid Waste Management Services (SWMS) and report directly to the Public Works and Infrastructure Committee on residual waste issues.  The original mandate of the RWWG was to work with SWMS until the completion of the Residual Waste Planning Study.

With the completion of the Residential Waste Planning Study (May and August 2009), the purpose of this report is to recommend that the RWWG's mandate be amended so that they can continue to provide assistance to SWMS on the mixed waste processing facility project including advice on procurement process and up until one year after the mixed waste processing facility has been commissioned.

The 2010 Capital Budget submission of Solid Waste Management Services as recommended by the City Manager and Deputy City Manager/Chief Financial Officer includes funding for the honoraria for the members of the RWWG and  totalling $25,000.00 per year under the Mixed Waste Processing Facilities project (Account Number CSW-013), which is equal to previous CEAT and current RWWG honoraria.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the Financial Impact information.

The General Manager, Solid Waste Management Services, recommends that:

1.         City Council authorize the General Manager, Solid Waste Management Services, to execute an Agreement with the Region of Peel for the Transfer of Region of Peel residual non-hazardous waste through the Disco Transfer Station on terms and conditions substantially as set out in the draft agreement in Attachment 1 to the report (May 3, 2010) from General Manager, Solid Waste Management Services, and otherwise on terms and conditions satisfactory to the General Manager, Solid Waste Management Services, and in a form satisfactory to the City Solicitor for a term from July 12, 2010 to December 31, 2015.

The current contract between the Region of Peel (Peel) and the City of Toronto to transfer Peel residual non-hazardous waste through the City of Toronto’s Disco Transfer Station will be expiring in July 2010.  Peel has requested that the current arrangement continue for approximately an additional 5 years and 6 months under the same general terms and conditions.

The purpose of this report is to obtain City Council approval to enter into a contract with Peel, for the transfer of Peel residual non-hazardous waste through the City of Toronto’s Disco Transfer Station, for a term ending on December 31, 2015 under the same general terms and conditions as the existing contract.

For the period July 12, 2010 to December 31, 2010, the expected revenue from Peel Region Waste is $230,300 excluding GST or HST.  The approved 2010 Operating Budget will accommodate the estimated cash flow for July to December in cost center SW0805-8580. Future year Operating Budget submissions will be adjusted as required.  Total revenue over the term of this Agreement is $2.674 million.

The estimated annual revenue during the term of the Agreement, based on the estimated tonnage shown below, net of GST or HST, is as follows:

¹ The current 2010 Rate is $13.16 per tonne.  The contract terms and conditions contain a rate escalator based on the year-over-year change in the Consumer Price Index.  For the table above the annual rate escalation is estimated at 2%.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The General Manager, Solid Waste Management Services, recommends that:

1.         City Council grant authority for the General Manager, Solid Waste Management Services, to enter into a Biogas Pilot Project Agreement with Enbridge Gas Distribution Inc to supply, install, own and operate a biomethane system, substantially on the terms set out in Attachment 1 to the report (May 3, 2010) from the General Manager, Solid Waste Management Services, and such other terms as may be satisfactory to the General Manager, Solid Waste Management Services, and in a form satisfactory to the City Solicitor, and that the General Manager, Solid Waste Management Services be authorized to execute the Biogas Pilot Project Agreement on behalf of the City.

2.         City Council authorize the General Manager, Solid Waste Management Services, or his delegate, to administer and manage the Biogas Pilot Project Agreement, including the provision of any consents, approvals, notices and notices of termination, provided that the General Manager, Solid Waste Management Services may, at any time, refer consideration of such matters (including their content) to City Council for its determination and direction.

3.         City Council request the General Manager, Solid Waste Management Services, to report on the results of the Biogas Pilot Project to City Council.

4.         City Council direct that subject to the execution of an agreement between Enbridge Gas Distribution Inc., and the City as set out in Recommendation 1, the General Manager, Solid Waste Management Services, and the Deputy City Manager and Chief Financial Officer, investigate options for funding the cost of the Pilot Project through cost savings resulting from displacing natural gas with biomethane or some other means.

5.         City Council direct that in the event the Biogas Pilot Project Agreement is not executed by September 1st, 2010, the General Manager, Solid Waste Management Services, be authorized, at his sole discretion, to terminate negotiations with Enbridge.

The purpose of this staff report is to obtain City Council authority to enter into a Biogas Pilot Project Agreement with Enbridge Gas Distribution Inc. (“Enbridge”) to supply, install, own and operate a biomethane system (“BMS”) at the Dufferin Waste Management Facility.  The pilot project will determine if biogas produced at the Dufferin Organics Processing Facility ("DOPF") can be converted into a refined biogas, via the BMS, that is capable of being distributed across Enbridge's natural gas distribution system (the "Pilot Project").

At its meeting on November 30, December 1, 2, 4 and 7, 2009, City Council directed the General Manager, Solid Waste Management Services to enter into discussions with Enbridge regarding the development of biogas refining systems at the new SSO Facilities and to report back on a recommended course of action for the procurement of a contract to design, build, own and operate biogas refining systems at the SSO Facilities.

Enbridge will supply, install, own and operate the entire BMS and will incur all associated capital and operating expenses over the term of the Pilot Project Agreement. Operation of the biomethane system is expected to commence in July 2011. The term of the Pilot Project agreement will expire on December 31, 2013.

SWMS will be required to provide a concrete pad on which Enbridge will install the biogas refining system and gate station. SWMS will also be required to provide connections to the DOPF's process water and biofiltration systems to receive effluent and tail gas from biogas refining respectively. The cost of providing these facilities is not expected to exceed $101,760.00 net of HST recoveries ($100,000.00 net of taxes). Funding for the capital cost item is included in the 2010 Solid Waste Management Services Capital budget under item CSW004-6 (Dufferin – Disco SSO Processing Facilities).

Under the Biogas Pilot Project Agreement, the City will pay Enbridge for services to refine biogas supplied by the City to produce biomethane and to convey and inject the biomethane into the regulated natural gas distribution system. The biogas refining service provided by Enbridge will also include metering and providing information on the quantity of biomethane supplied to the natural gas distribution system.

Payment to Enbridge for the biogas refining service will not exceed $ 10 per gigajoule of biomethane supplied to the regulated gas distribution system. The total annual payment for biogas refining services will vary with the quantity of biogas supplied by the City which will depend on the tonnage of SSO processed at the DOPF and on the efficiency of the processing operations.

In addition to the cost of the biogas refining service, SWMS will also incur the costs of supplying electricity and water to the biomethane refining system. Annual electricity and water costs will vary with the quantity of biogas supplied by the City.

Estimated annual biogas refining service payments to Enbridge over the term of the Biogas Pilot Project Agreement and the annual costs of electricity and water supplied to the biomethane refining system are presented in Table 1.

Table 1: Biogas Pilot Project Operating Costs

[Costs are net of HST recoveries unless noted]

Funding for the operation of the Pilot Project will be included in the Operating Budget Submission of the Solid Waste Management Services Division for 2011 and subsequent years.

The biomethane produced by this Pilot Project will be used by the City to reduce its purchases of natural gas. For each cubic meter of natural gas displaced by biomethane the City will save the commodity cost of the natural gas and also the cost of transporting the natural gas from out of Province sources, typically Alberta, to the border of the Enbridge service area. Distribution costs within the Enbridge franchise area would still apply. Annual costs savings will depend on the quantity of biomethane produced and will vary with changes in natural gas commodity and transportation costs.

The City’s purchases of natural gas are managed by the Facilities Management Division (FM). Enbridge will identify the quantity of biomethane supplied under this Pilot Project to FM. FM will work with Finance Division to implement such administrative procedures as are necessary to assign the cost savings resulting from the displacement of natural gas to SWMS to partially offset the cost of the biogas refining services.

Biomethane production and the estimated cost savings resulting from the displacement of natural gas are presented in Table 2.

Table 2: Summary of Estimated Biomethane Production, Pilot Project Costs and Cost Savings [all costs and savings are net of HST recoveries]

Notes:

1. Assumes operation of biomethane system begins in July 2011.
2. Biogas is typically 60 percent by volume methane.
3. Assumes that the biomethane system recovers 79 percent of the biogas methane supplied.
4. 1 cubic metre of biomethane typically contains 34.6 gigajoules of energy.
5. Refining services cost of $10.18 per GJ biomethane produced. Assumes electricity consumption of 11 kWh per GJ of biomethane produced. Assumed 2010 electricity cost of $0.095 per kWh and increasing at 3 percent annually thereafter.
6. Based on natural gas price forecasts recommended by FM.

If Enbridge is not in default and upon the expiry of the Biogas Pilot Project Agreement, the City shall have the following options which may have a future financial impact:

1.         The option to continue production of  biomethane by entering into a new agreement with Enbridge whereby Enbridge would continue to own, operate and maintain the BMS on the basis of a new unit cost to be negotiated by Enbridge and the City.

2.         The option to continue production of biomethane by purchasing the biogas refining system component of the BMS and contracting for the continued operation of the biogas refining system through a competitive procurement process. Enbridge would continue to own and operate the other components of the BMS, specifically the gate station, on-site biomethane pipeline, off-site biomethane pipeline and injection point, in order to protect the natural gas distribution system.  The purchase cost would be based on the remaining undepreciated value of the entire BMS and determined by negotiations between Enbridge and the City.

3.         The option to discontinue production of biomethane by decommissioning and removing the BMS, including removal of the biogas refining system, the gate station and the on-site biomethane pipeline and restoring the affected areas and facilities to the satisfaction of the City. The cost of this option would be based on the remaining undepreciated value of the entire BMS less the resale value of the biogas refining system and negotiations between Enbridge and the City.

SWMS will report back to Council on the recommended option prior to the expiration of the Pilot Project and set out what the financial implications of that recommended option are at that time.

Although the City will incur a net cost for the Pilot Project, if the Pilot Project is successful, future operation of the biomethane system beyond the term of the Pilot Project has the potential to generate significant cost savings for the City. Currently natural gas prices are depressed however future price increases in excess of inflation are forecasted. Biomethane production costs in the first years following the Pilot Project are expected to be lower than costs during the term of the Pilot Project due to operational efficiencies and increases in the quantity of biogas available. Thereafter biomethane production costs will increase at or below the inflation rate. The City’s savings will increase over time as the difference between the natural gas purchase cost and biomethane production cost increases. Forecasted City savings for a 10-year period beyond the term of the Pilot Project are presented in Attachment 2.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The Executive Director, Technical Services, and the Director, Purchasing and Materials Management, recommend that:

1.         City Council grant authority to amend Purchase Order No. 6025412 issued for Contract 08TE-16RD to Four Seasons Site Development Ltd., by an additional amount of $4,448,000.00 net of all taxes, ($4,689,236.55 net of GST and HST Recoveries).

The purpose of this report is to request authority to amend Purchase Order No. 6025412, issued to Four Seasons Site Development Ltd., for the reconstruction of pavement, curb and sidewalk and construction of traffic signals, street lighting, landscaping, irrigation system and soil cell system on Bloor Street from 45 metres west of Avenue Road to St. Paul's Square. The total amount requested is $4,448,000.00 net of all taxes ($4,689,236.55 net of GST and HST Recoveries), revising the current contract value from $19,718,592.20 net of GST to $24,166,592.20 net of all taxes ($24,407,828.75 net of GST and HST Recoveries). This increase is a result of unforeseen site issues during construction.