September 22, 1998
To:Works and Utilities Committee
From:Barry H. Gutteridge, Commissioner, Works and Emergency Services
Subject:Compliance Program with Monetary Concession - Nestlé Canada Inc. (Ward 19)
Purpose:
To address a request for a Compliance Program with Monetary Concession from Nestlé
Canada Inc. to allow them to pay only 50 percent of the increase to the existing Industrial
Waste Surcharge Agreement for 1998 in return for them investing in on-site pollution control
equipment to reduce their effluent loadings to our sewers by 50 percent.
Funding Sources, Financial Implications and Impact Statement:
This Department maintains approximately 157 Industrial Waste Surcharge Agreements, which
allows for the recovery of approximately $7.5 million per year in additional treatment costs.
These charges reflect a user pay philosophy and directly offset the cost of operation of our
treatment plants. Nestlé Canada Inc.'s new annual surcharge assessment is $211,317.50, an
increase of $125,562.06 over their old surcharge of 85,755.44 per year. By allowing the
company to pay at a reduced rate of 50 percent of the increase would mean a reduction in
revenue of $62,781.03 per year.
Recommendations:
It is recommended that:
(1)a compliance Program with Monetary Concession be granted to Nestlé Canada Inc. as
described herein, to allow for payment of their re-assessed surcharge less 50 percent of the
increase for 1998, subject to the company's investment of the avoided surcharge payment in
the 1998 Phase 1 activities; and
(2)If the waste loading is not reduced by 50 percent after 1998 Phase 1 is completed, the
remaining Phase 1, plus Phase 2 and Phase 3 will be implemented to achieve this reduction
and staff be authorized to continue the monetary concession to Nestlé Canada Inc. for the
remaining Phase 1 activities in 1999, Phase 2 in 1999, and Phase 3 in 2000, if required, to
reduce the waste loading by 50 percent.
Council Reference/Background/History:
On November 9, 1989, Metropolitan Council, by adoption of Clause No. 6 of Report No. 16
of The Works Committee, authorized execution of agreements with industries, permitting
them to discharge wastewater in excess of the limits set out under By-law No. 153-89,
providing that the over-strength discharges are amenable to treatment at our treatment plants.
Industries are required to pay for the additional cost of treatment above the limit of the
By-law.
Section 6 of this By-law allows the owner of industrial premises to submit to the
Commissioner of Works, a program to prevent, or to reduce and control the discharge of
wastewater into the sewer system. The Commissioner of Works may then issue an approval
known as a "Compliance Program" to the person who submitted the program. The person to
whom a Compliance Program has been issued shall not be prosecuted under the By-law
during the period within which the Compliance Program is applicable, provided that the
person complies fully with the terms of the Compliance Program.
On August 10 and 11, 1994, Metro Council, by adoption of Clause No. 12 of Report No. 14 of
The Works Committee, authorized the Works Department to discuss modifications to
Industrial Waste Surcharge Agreements and Compliance Program policies with existing and
potential surcharge companies to promote and encourage improvements in on-site treatment
and source reduction.
The policy approved by Metro Council was to allow industries facing significantly increased
surcharge for new agreements or amendments to existing agreements to apply to be allowed to
avoid up to 50 percent of the payment of the new agreement or the increase to the existing
agreement, for up to three years if they commit under a Compliance Program to invest the
avoided surcharge payment for specific improvements to their on-site pre-treatment system.
There has been two Compliance Programs with Monetary Concessions approved by Metro
Council and one by City Council to date.
Comments and/or Discussion and/or Justification:
Recently, several companies have complained that their new surcharge assessment or
increased surcharge assessment on existing agreements are creating financial hardship and
have expressed an unwillingness to pay the surcharge. These companies would like to reduce
these costs, however, they would have to install treatment facilities which would add further
costs.
Recognizing that some industries are really facing financial hardship, we recommend that
industries facing significant increases in surcharges for new agreements or amendment to
existing agreements could apply for a surcharge reduction of 50 percent of the new agreement
or the increase to the existing agreement, for up to three years if they commit under a
Compliance Program to invest the reduced surcharge payment for specific pollution control
equipment. In this way, the discharger benefits in the long term because they permanently
reduce their surcharge costs. We also benefit in that more treatment capacity is free for
additional development.
The following conditions must be met to be considered for a Compliance Program with
monetary concessions:
(1)the applicant must commit in writing, in the form of a Compliance Program, to reduce
their waste loading by at least 50 percent by a specified date;
(2)the reduction in surcharge could be for a period of between one and three years, depending
on the time required to complete the installation of pre-treatment equipment;
(3)an applicant can only be granted one Compliance Program with monetary concession per
lifetime; and
(4)at the end of the Compliance Program period, the companies who are unsuccessful in
reducing their waste loading to within By-law limits must resume paying surcharge based on
the actual waste loading at that time.
The Region of Niagara has a similar policy of granting a discharge under a "Program
Approval" (which is similar to our Compliance Program) with monetary concessions. The
concession has been as high as 50 percent for a period of one year. The reduction is based on
the size of the surcharge compared to the amount the discharger plans to spend in effecting a
reduction in both the hydraulic and contaminant load to the municipal sewage treatment
system.
The type of waste generated by Nestlé Canada Inc. is biodegradable and amenable to
treatment at our Main Treatment Plant.
On August 13, 1998, Nestlé Canada Inc. submitted an application to have the industrial waste
surcharge amount reduced in accordance with the policy adopted by Metro Council on August
10 and 11, 1994.
The company has retained Hatch Associates in Mississauga to undertake a study to evaluate
their operations and develop an effluent loading reduction program to bring their effluent
contaminants down to 50 percent by May 6, 1999 (Phase 1), July 22, 1999 (Phase 2) and
September 14, 2000 (Phase 3). They have provided us with a detailed schedule for their
Compliance Program which is summarized as follows:
Phase 1 (1998), estimated expenditures $71,000
Phase 1 (1999), estimated expenditures $34,000
Phase 2 (1999), estimated expenditures $30,000
Phase 3 (1999 & 2000), estimated expenditures $1,030,000
Nestlé Canada Inc. is currently under a surcharge agreement with the City. The surcharge is
based on an average suspended solids (S.S.) concentration of 2,078 mg/L at an annual
discharge of 216,328 cubic metres. The average biochemical oxygen demand (B.O.D.)
concentration is 1,973 mg/L. The estimated annual S.S. and B.O.D. loading from the facility
before the proposed treatment are 449,530 kg per year and 426,815 kg per year, respectively.
With the assumption that the pre-treatment will reduce the S.S. and B.O.D. concentrations by
50 percent, the estimated loading for S.S. and B.O.D. after pre-treatment will be 224,765 kg
per year and 213,408 kg per year, respectively.
Conclusions:
In accordance with Section 6, Compliance Program, of Sewer Use By-law No. 153-89 and the
policy adopted by Metro Council on August 10 and 11, 1994, a Compliance Program with
monetary concession should be issued to Nestlé Canada Inc. to provide a mechanism by
which the over-strength effluent, which exceeds the By-law limit for S.S. and B.O.D. can be
discharged on a 50 percent reduced fee basis while the company implements further
wastewater treatment controls, under the conditions previously stated in this report.
Contact Name:
V. Lim, Chief Engineer - Environmental Services
Water Pollution Control Division
Telephone: (416) 392-2966
Fax: (416) 397-0908
E-Mail: victor_lim@metrodesk.metrotor.on.ca
Michael A. Price, P.Eng., FICE
General Manager
Water and Wastewater Services
Barry H. Gutteridge
Commissioner
Works and Emergency Services
vl:File No. 1047.20 SP
NestleW&U.doc
