TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

As Considered by

The Council of the City of Toronto

on July 29, 30 and 31, 1998

WORKS AND UTILITIES COMMITTEE

REPORT No. 7

1Agreement for Additional Water Supply -Region of York

2Emery Creek Stormwater Quality Ponds Project

3Corporate Voluntary Challenge and By-law to Prohibit the Burning of Used Motor Oil

4Ontario Clean Air Alliance

5Retention of Biosolids Project Manager and Consultant for Beneficial Reuse Program at the Main Treatment Plant

6Geotechnical Consulting Services -Western Beaches Storage Tunnel

7Construction of Sewers and Water Mains at Various Locations(Don River, Trinity-Niagara and North Toronto)

8Keele Valley Landfill Amendment to Consulting Agreement with Golder Associates

9Settlement of Lawsuit Against OMMRI and CSR

10Legal Claim Against the City of Toronto

11Other Items Considered by the Committee

City of Toronto

REPORT No. 7

OF THE WORKS AND UTILITIES COMMITTEE

(from its meeting on July 15, 1998,

submitted by Councillor Betty Disero, Chair)

As Considered by

The Council of the City of Toronto

on July 29, 30 and 31, 1998

1

Agreement for Additional Water Supply -

Region of York

(City Council on July 29, 30and 31, 1998, amended this Clause by adding thereto the following:

"It is further recommended that the Region of York be notified that the City of Toronto intends to develop plans for further water efficiency initiatives and to collaborate with the Region of York in the development of these plans to meet their medium- and long-term needs to the extent possible.")

The Works and Utilities Committee recommends the adoption of the report dated June3, 1998, from the Interim Functional Lead for Water and Wastewater Operations.

The Works and Utilities Committee reports, for the information of Council, having referred the following motion to the Commissioner of Works and Emergency Services and the City Solicitor for a report thereon to Council at its meeting scheduled to be held on July 29, 1998:

Moved by Councillor Layton:

"That the proposal to replace all toilets in Toronto as a means to meet the Region of York's water requirements be further investigated, and that the agreement between the City of Toronto and the Region of York for the supply of water be adjusted to permit this possibility or similar arrangements to be made as mechanisms to meet the agreement; the key feature being that Toronto would have the option to bring forward alternative techniques to meet the water demands of York, and that York's approval may not be unreasonably withheld."

The Works and Utilities Committee submits the following report (June 3, 1998) from the Interim Functional Lead for Water and Wastewater Operations:

Purpose:

To obtain authorization to execute an agreement for the supply of water to the Region of York.

Funding Sources, Financial Implications and Impact Statement:

Adoption of the report's recommendation regarding a revised agreement would impact positively on Toronto Water Supply's Operating and Capital Budgets and on revenue generated through the sale of water to York Region. Financial analysis has determined that the revised rate formula and Capital cost-share methodology on the basis of proportionate use will ensure full operating cost recovery, a fair return on investment, and continued rate and reserve stability.

Recommendation:

It is recommended that authority be granted to execute an agreement for the supply of water to the Regional Municipality of York, essentially in accordance with the draft agreement provided as an appendix to this report, and the appropriate officials give effect thereto.

Council Reference/Background/History:

The previous agreements for supply of water to York Region were executed on December 23, 1974, by the Province of Ontario and Metropolitan Toronto, and on August 1, 1975, by York Region, the Province of Ontario and Metropolitan Toronto. The tri-partite agreement specified an average day supply limit of 30 Million Imperial Gallons per day (MIGD) which has been exceeded since 1988. The average day consumption reached 40 MIGD in 1997 and continues to trend upwards. Several Capital Works projects required to supply an incremental amount of water beyond the supply limit have been cost-shared by York Region, pending execution of a new agreement.

Through Clause No. 2 of Report No. 15 of The Environment and Public Space Committee, Metropolitan Council at its meeting of September 27, 1995, was advised that Metro and York Region staff had reached agreement on a supply limit of 57 MIGD average day and cost-sharing of the additional infrastructure requirements to provide for additional supply to meet Metro and York's needs as identified by the 1995 Water Supply Joint Study, and that negotiations for a revised agreement were continuing.

Through the adoption of Clause No. 3 of Report No. 9 of The Environment and Public Space Committee, as amended, Metropolitan Council at its meetings held on July 2 and 3, 1997, authorized staff to prepare, in association with staff of the Region of York, an agreement for additional water supply to the Region of York, generally in accordance with proposed principles contained in the report. Through an amendment to the Clause, Council recommended that the detailed agreement be submitted to Council, through the Committee, prior to execution. The proposed principles are attached to this report as Appendix1.

York's Council, at its meeting of July 10, 1997, adopted Clause No. 3 of Report No. 14 of its Transportation and Works Committee authorizing York to enter into an agreement with Metro based on the proposed principles.

The agreement, provided as Appendix 2 to this report, contains terms and conditions satisfactory to Toronto's Commissioner of Works and Emergency Services, the City Treasurer and the City Solicitor and to York Region staff in the Works, Finance and Legal Departments.

Comments and/or Discussion and/or Justification:

The proposed agreement provides mutual benefits in that York Region's short-term needs, as identified in their 1997 Master Plan (57 MIGD average day anticipated in 2004), would be assured and further capital investment in Toronto's system can be undertaken to ensure the capability to meet future demands within Toronto and York Region while maintaining competitive wholesale rates.

Central to the development of the new agreement to meet York's short-term requirements and Toronto's requirements to 2011 was the agreed allocation of capital costs on a proportional use basis for the required infrastructure and a revised formula for determining future water rates.

Analyses undertaken by Toronto Finance Department staff has confirmed future rate and reserve stability, full operating cost recovery and a fair return on capital investment for the City.

The following summarizes the key elements of the proposed agreement:

(1)Supply Volumes:

Toronto to provide water to York on the basis of projected requirements for maximum day and average day volumes as set out in the agreement to an upper limit of 97 MIG (440megalitres (ML)) per maximum day. By mutual agreement, Toronto may provide York in excess of average day volumes as set out in the agreement.

York to continue to purchase 57 MIG (259 ML) per average day, or other amount agreed upon, once upper limit for average day volume is reached. York not to exceed on any day the upper limit of maximum day volumes as set out.

(2)Facility Cost Sharing:

York to contribute approximately 50 percent of the estimated $206 million total capital costs of facilities required based on proportional use of the assets including water mains, plant and reservoir expansions and pumping station upgrades.

(3)Water Rate Determination:

The water rate to be determined annually includes the following components:

(a)operating costs of the Toronto system excluding the local distribution system, net of capital funding and debt charges;

(b)operating surcharge to cover additional hydro costs for pumping to York;

(c)return on investment for existing capital assets not subject to cost sharing; and

(d)replacement allowance which acknowledges asset life expectancy.

The 1998 water rate to York as determined by the proposed rate formula is 19.5 cents per cubic metre, which is unchanged relative to the 1997 rate.

(4)Premium Water Rate:

Premium rate at double the normal rate may be applied on each day that the maximum day limit as set out in the agreement is exceeded. Premium rate may be waived by Toronto's Commissioner of Works and Emergency Services if diligent actions were taken by York to reduce water consumption and if York exceedance did not reduce supply within Toronto.

(5)Water Use Efficiency:

Toronto and York to use best efforts in the implementation of their water use efficiency programs as endorsed and funded by their respective Councils.

(6)Joint Studies:

Toronto and York to share in cost of joint infrastructure studies which consider expansion of Toronto system to service Toronto and York.

(7)Further Agreement on Certain Issues:

Toronto's and York's Commissioners may agree upon amendment of specific matters as set out in the agreement, including revised average day volumes so long as the maximum of 97MIG is not exceeded.

(8)Dispute Resolution:

Any matters not resolved by direct discussion between Toronto and York staff to be referred to a three-tiered dispute resolution process:

(a)High Level Negotiation:

- Mayor and Regional Chair or designate;

(b)Mediation;

(c)Binding Arbitration.

(9)Term:

Agreement term to be twenty years with option in favour of York Region for renewal for successive twenty year terms on the same terms and conditions.

Although the agreement specifies an upper supply limit based on York Region's short-term requirements, there is a possibility that their long-term needs can be supplied by the City.

The previously referenced Master Plan by York Region was completed in July of 1997 to identify a strategy to meet future water demands.

The recommended strategy includes the following principal components:

(a)expansion of water supply from Metro (short-term supply);

(b)implementation of a regional water use efficiency program;

(c)construction of Lake Simcoe Water Treatment Facility; and

(d)implementation of a New Great Lakes Supply (long-term supply).

A supply from Lake Ontario entailing a raw water pumping station and a pipeline through the western part of Durham Region to a new water treatment plant in Durham or York Region was identified as the preferred long-term supply alternative.

Subsequent to completion of the 1995 Water Supply Joint Study, employment populations within Toronto have declined and York Region's long-term demand projections (to 2031) have been reduced. Consequently, there is a potential for York's long-term needs to be fully supplied through further expansion of Toronto's system, above and beyond what was identified in the 1995 Water Supply Joint Study, precluding the West Durham alternative. The feasibility of long-term supply from Toronto will be reviewed as part of the scope of work for a joint optimization study to be undertaken by Toronto and York Region to update the 1995 study.

The scope of work of the proposed study will also include a review of long-term water supply strategies for the Regions of Peel, Durham and Halton in order to identify opportunities for efficiencies in water servicing across the Greater Toronto Area.

York Region staff have expressed their eagerness to explore the viability and effectiveness of Toronto's ability to supply water beyond the agreement's limit of 57 MIGD.

Any future amendments to the maximum day supply limits as specified in the agreement would require approval from Toronto and York Region Councils.

It should be noted that the additional water supplied to York Region would not impact sewage flows to Toronto's sewage treatment plants as York's sewage is not connected to Toronto's system except through emergency outlets. York Region has recently executed an agreement with Durham Region to enable treatment of the sewage flows generated from the areas of York using Toronto's water at Durham's Duffin Creek Sewage Treatment Plant.

Given that the Capital Works identified in the proposed agreement will address Toronto's long-term needs and York Region's needs to the year 2004, execution of the agreement is now required to enable priority projects in Toronto Water Supply's approved 1998 Capital Works Program to proceed and to enable York Region to secure its short-term water supply.

Conclusion:

Authorization is recommended for execution of the agreement for additional water supply to the Region of York.

Contact Name and Telephone Number:

Mr. H.A. Taniguchi, P. Eng., Director of Water Supply Division

Phone: (416) 392-8220; Fax: (416) 392-3639

E-mail: htaniguchi@metrodesk.metrotor.on.ca.

Appendix 1

Revised Agreement for Supply of Water to Region of York

Proposed Principles

General Terms:

-Agreement between Metro and Region of York - no provincial involvement.

-Agreement in perpetuity subject to review at mutually agreed intervals (say ten years).

-Agreement to consider Metro and Region of York systems together as one system for future infrastructure studies.

-Terms under which agreement can be modified, as mutually agreed at any time, include:

-volumes supplied;

-basis for cost-share of additional Capital Works required in event projected demands are exceeded; and

-interest rates used in water rate determination.

-Non-agreement of issues which arise following execution of agreement referred to third party dispute resolution.

Metro's Obligation:

-To supply Region of York with upper limit of 57 MIGD (259 ML/d) average day and 97MIGD (441 ML/d) maximum day as limited by available capacity in Metro system.

-To supply Region of York at projected rates of annual increase to 57 MIGD (259 ML/d) subject to completion of necessary facilities.

-To supply water at specific delivery points within volume ranges mutually agreed upon.

-To ensure accurate metering of water being delivered and provide Region of York with metering and billing records.

Region of York Obligation:

-When upper limit is reached, to continue to take 57 MIGD (259 ML/d) average day from Metro as part of long-term requirements unless a lower amount is mutually agreeable.

-Not to exceed upper limit of 57 MIGD (259 ML/d) average day and 97 MIGD (441ML/d) maximum day unless by mutual consent.

-To take water at specific delivery points within volume ranges mutually agreed upon.

Joint Responsibilities:

-Mutual understanding that Metro and York Region build their portions of the system as agreed.

-Facility owner assumes responsibility for construction, operation and maintenance of own system.

-Consultation on design and operation of facilities which may affect respective systems.

-Maintain water quality in accordance with Ontario Drinking Water Objectives.

-Ensure no mixing of water from different sources to minimize the potential for water quality impacts unless mutually agreed upon.

-Maintain distribution network in good working order to minimize stresses on system.

-Maintain storage systems to a common standard to provide for operational fluctuations, fire protection and emergency use.

-Optimize operations and infrastructure expansions through joint analyses.

Financial:

-Metro and York facilities:

-identification of all Metro facilities located in Region of York; and

-identification of ownership of all cost-shared facilities.

-Basis for Capital cost-share:

-schedule of Capital Works required for upper supply limit of 259 ML/d;

-identification of Metro facilities to be cost-shared;

-proportional use methodology for cost-share; and

-inclusion of design and contract administration costs.

-Water rate determination:

-annual revision to rate based on formula; and

-rate formula (rationale is detailed on attachment) to capture:

-return on investment and replacement allowance on built infrastructure which was not cost-shared;

-operating costs proportional to consumption;

-hydro premium to cover additional cost of pumping to Region of York; and

-peaking premium for exceeding maximum and average day upper consumption limits.

Legal:

-Closure of existing agreement.

-Pertinent clauses from Metropolitan Toronto Act and other relevant legislation.

-Metro/York Region indemnified against potential problems in quality or quantity.

-Notwithstanding clause to allow for "Acts of God", emergency conditions, etc.

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WATER SUPPLY AGREEMENT

This Agreement made in quadruplicate this 9th day of June, 1998

B E T W E E N:

CITY OF TORONTO

("Toronto")

- and -

THE REGIONAL MUNICIPALITY OF YORK

("York")

WHEREAS The Municipality of Metropolitan Toronto (hereinafter referred to as "Metro") entered into an agreement, dated December 23, 1974, pursuant to the provisions of the Ontario Water Resources Act, with Her Majesty the Queen in Right of Ontario as represented by the Minister of the Environment (the "Crown") for the provision of water to York and, subsequently, by agreement, dated April 18, 1975, entered into a tripartite agreement with the Crown and York with respect thereto (the "Original Water Supply Agreements");

AND WHEREAS Metro and York participated in joint studies to identify capital improvements in Metro which would enable the delivery of additional water to York and participated in cost sharing of specific capital improvements to date;

AND WHEREAS Metro's Council, at its meeting on the 2nd and 3rd day of July, 1997, adopted Clause No. 3 of Report No. 9 of its Environment and Public Space Committee authorizing Metro to finalize an agreement with York for the supply of additional water upon the terms and conditions set out therein and based on proposed principles (the "Principles");

AND WHEREAS York's Council, at its meeting on the 10th day of July, 1997, adopted Clause No.3 of Report No. 14 of its Transportation and Works Committee authorizing York to enter into an agreement with Metro based on the Principles;

AND WHEREAS Toronto was incorporated on January 1, 1998 and, pursuant to the provisions of the City of Toronto Act, 1997, stands in the place of Metro for all purposes;

AND WHEREAS pursuant to the provisions of section 15 of the City of Toronto Act, 1997 (No.2) Toronto may enter into contracts for the supply of water to a regional municipality for its use or for resale to the inhabitants thereof;

AND WHEREAS pursuant to section 60(3) of the Regional Municipalities Act, York may enter into a contract for the purchase of water from Toronto;

AND WHEREAS Toronto's Council, at its meeting on the day of , 1998, adopted Clause No.of Report No. of its Works and Utilities Committee thereby authorizing execution of this agreement;

AND WHEREAS this Agreement settles all matters pertaining to the Principles;

NOW THEREFORE the parties covenant and agree with each other as follows:

ARTICLE 1

INTERPRETATION

1.1Definitions

In this agreement, including the Schedules,

(a)"Agreement" means this agreement and any and all schedules, appendices or amendments;

(b)"Delivery Point" means an existing or proposed point of interconnection between the Toronto System and the York System, approved by Toronto and York for the delivery of water from the Toronto System to the York System;

(c)"Effective Date" means January 1, 1998;

(d)"Facility" or "Facilities" means the infrastructure improvements to the Toronto System as set out in Schedule "B" to this Agreement, which Schedule may be altered from time to time by mutual agreement between Toronto and York;

(e)"Joint Study" means the Final Water Supply Joint Study, dated August 10, 1995, prepared for the parties by Fenco MacLaren Inc. in association with Knowles Engineering Inc., to determine expansion requirements for the Toronto System due to projected growth in population and employment;

(f)"Meter" means a flow measuring and recording device for measuring and recording the volume of water flowing through the Delivery Points;

(g)"Metering Point" means the location of a Meter within the Toronto System or at a Delivery Point as set out in Schedule "A" to this Agreement, as modified from time to time by mutual agreement between Toronto and York;

(h)"MIG" means a million Imperial Gallons of water;

(i)"ML" means a million litres of water;

(j)"Ontario Drinking Water Objectives" means the most current guidelines issued from time to time by the Ministry of the Environment for drinking water quality;

(k)"OWSA" means the Original Water Supply Agreements as referred to in the recitals to this Agreement;

(l)"Term" means the term of this Agreement as set out in section 13.1;

(m)"Toronto Area" has the meaning of "urban area" as defined in the City of Toronto Act, 1997, as amended;

(n)"Toronto's Commissioner" means Toronto's Commissioner responsible for Works and Emergency Services or his successor or the person holding a successor position and includes the Commissioner's designate duly appointed in writing;

(o)"Toronto System" means all of the water works system owned, operated and maintained by Toronto from time to time, including such facilities located within York Region;

(p)"Uncontrollable Circumstances" has the meaning set out in section 11.1;

(q)"Water" means potable water which meets the Ontario Drinking Water Objectives;

(r)"York's Commissioner" means York's Commissioner of Transportation and Works or his/her successor or the person holding a successor position and includes the Commissioner's designate duly appointed in writing; and

(s)"York System" means the York water works system owned, operated and maintained by York;

1.2Headings and Table of Contents

Headings used in this Agreement are inserted only as a matter of convenience and for reference and in no way are to be construed as defining, limiting or describing the scope or intent of this Agreement.

1.3Article, Section and Subsection References

Any article, sections or subsections mentioned in this Agreement by number only without reference to another document refer to those articles, sections or subsections contained in this Agreement.

1.4Construction of Terms

Unless otherwise specified in the Agreement, words describing material or work or terms that have a well-known technical or trade meaning shall be construed in accordance with the well-known meaning generally recognized by water supply professionals and engineers.

1.5Entire Agreement

This Agreement contains the entire agreement between the parties with reference to the subject matter hereof, supersedes all prior agreements, negotiations, representations and proposals, written or oral, relating to its subject matter and shall not be altered, modified or amended except by an agreement in writing duly executed by the parties or as otherwise expressly provided for in this Agreement.

ARTICLE 2

TORONTO RESPONSIBILITIES

2.1General

Toronto shall:

(a)provide Water to York on the basis of the projected requirements for average day and maximum day volumes as set out in Schedule "C" to an upper limit of 440 ML (97 MIG) per maximum day. By mutual agreement, Toronto shall provide water to York in excess of the average day volumes as set out in Schedule "C", provided that the maximum day volume limits are not exceeded at any time. For the purposes of this Agreement, an "average day" volume is the volume of water calculated by dividing the volume of water used in a calendar year by the number of days in that year and a "maximum day" volume is the maximum volume of water supplied on any day in a calendar year;

(b)ensure the accurate metering of water delivered to York by installing, operating and maintaining Meters at the Metering Points and by measuring and recording the quantity of water being delivered to York through the Metering Points;

(c)provide York with billings and metering records, every two (2) months, or at such other or different intervals as may be mutually agreed upon by the parties; and

(d)provide York with access to on-line SCADA (Supervisory Control and Data Acquisition) signals from the Metering Points, when available to Toronto.

2.2Calculation of Volumes of Water

Notwithstanding that a Metering Point may not be located at a Delivery Point but is located within the Toronto System, the volume of Water delivered to York shall be calculated based on the flow of water through the Metering Points. In calculating the net volume of water supplied to York, the volume of water returned to the Toronto System, through the Metering Points shown as bi-directional on Schedule "A", shall be deducted from the volume of water delivered to York.

2.3Volumes at Specific Delivery Points

The volumes of Water to be delivered at any Delivery Point, as measured by the pertinent Metering Point, shall be agreed upon. The appropriateness of any volume range shall be subject to consideration of the matters referred to in section 2.1(a).

2.4Conditions to Provision of Water Service

Toronto's obligation for the provision of Water under section 2.1 shall be subject to and conditional upon:

(a)York not exceeding the schedule of year by year increases in water volumes as set out in Schedule "C", as may be amended from time to time in accordance with this Agreement, up to the maximum upper limit of 440 ML (97 MIG) per maximum day;

(b)completion of the Facilities in the Toronto System as set out in Schedule "B", as amended from time to time, on the shared cost basis as set out in Article 4, and in accordance generally with the staging of construction as set out in Schedule "B1" to permit adherence to the schedule of York's forecasts of year to year increases; and

(c)The reduction by Toronto of the amount of water supplied to York in cases of Uncontrollable Circumstances but Toronto shall endeavour to provide reasonable notice, where possible, of any such reduction and the basis for same.

2.5Inspection of Meters

Toronto shall provide to York copies of "as constructed" record drawings for all Meters. York may from time to time request from Toronto the right to inspect any Meters installed in the Toronto System by Toronto and the records produced by such devices and Toronto shall reasonably accommodate such requests. Either party may witness all calibration tests of Toronto's Meters at such times as are agreed upon between Toronto's Commissioner and York's Commissioner.

2.6Inaccuracies in Meters

(a)In the event that either party determines that the quantity of water delivered to any Delivery Point, as measured through a Metering Point, during any period has not been accurately determined or recorded or has not been recorded, Toronto shall calculate, on the basis of quantities recorded before and after the period of such inaccurate recording or failure to record, a reasonable quantity which shall be deemed to be the quantity of water delivered to York;

(b)If, in the opinion of York, the quantity determined, recorded or calculated for any Delivery Point, as measured through the pertinent Metering Point, or any adjustment made under subsection 2.6(a) appears excessively high or low, Toronto shall supply York with details of the readings or calculations which resulted in such quantity and, if necessary, the parties shall meet to discuss the matter and to come to mutual agreement as to the correctness or otherwise of the account based on such quantity and, if required, an adjusting payment shall be added to or subtracted from the next payment due after such agreement is reached.

ARTICLE 3

YORK RESPONSIBILITIES

3.1General

York shall:

(a)purchase Water from Toronto at the Delivery Points, as measured through the Metering Points;

(b)take water from the Toronto System only at the Delivery Points;

(c)except with the consent of Toronto's Council, not supply water obtained from the Toronto System to persons or municipalities other than York's area municipalities and persons located within York;

(d)not exceed:

(i) the average day volume limits as set out in Schedule "C", or

(ii)the volumes at specific Delivery Points, as measured through the Metering Points,

as such volumes are agreed upon or such volumes or limits are amended from time to time in accordance with this Agreement;

(e)not exceed, on any day during the Term, the upper limit of maximum day volumes as out in Schedule "C";

(f)adhere to any reasonable request of Toronto's Commissioner that York decrease water pumping and consumption in order not to exceed the limits or volumes as set out in paragraph 3.1(d)(ii) or clause 3.1(e);

(g)pay to Toronto, on demand from Toronto's Commissioner, a premium rate pursuant to the provisions of Article 6 for York's daily Water consumption that exceeds the maximum day volume limits for the respective years set out in Schedule "C", subject to section 6.2;

(h)once the upper volume limit for average day supply as set out in Schedule "C' is reached, continue to purchase 259 ML (57 MIG) per average day, or such other amount as may be agreed between the parties; and

(i)contribute to the cost of the Facilities in accordance with the provisions of Article 4.

3.2Backflow Prevention

York shall not install, connect or operate any works, equipment or structures that will transmit, or cause or permit the transmission of, water to the Toronto System, at any time, at a rate of flow or of a quality unacceptable to Toronto's Commissioner and shall, if deemed necessary by Toronto's Commissioner, install, or reimburse Toronto the reasonable costs of installation of, suitable backflow prevention devices to prevent such flow.

ARTICLE 4

FACILITY COST SHARING

4.1York's Contribution to Cost Sharing of Facilities

York shall contribute to the capital costs of the Facilities in the percentages set out in Schedule "B", as revised from time to time, such percentages having been based on the proportion of anticipated use or benefit of the capacity of the specific infrastructure work by York and Toronto. It is acknowledged by the parties that the costs for any of the Facilities set out in the Schedule are estimates only and, accordingly, the percentage contributions by York shall not be limited to such estimates but to the actual costs of final construction, including engineering design costs, contract administration costs and applicable net taxes.

4.2Payment for Cost Share

(a)Toronto shall provide York with an invoice setting out in detail the project cost for any Facility based on the value of the construction contracts and consulting agreements entered into by Toronto in respect of the Facility and York's percentage share of such costs in accordance with this Agreement.

(b)York may inspect and audit Toronto's books, payrolls, accounts and records during regular office hours with respect to any item which York is required to pay hereunder. All invoices shall be accompanied by such further supporting information and documentation as York may reasonably request.

(c)York shall review each invoice received and shall notify Toronto within ten (10) business days of receipt thereof if York does not agree with Toronto that the amount is then due or as to the amount thereof. Toronto shall respond to York's notification of a disputed invoice within 10days of such notification.

(d)York shall pay all invoices within thirty (30) days of the date of receipt thereof. York shall pay such invoices pending the resolution of any dispute relating to an account. Toronto shall adjust any account in accordance with the resolution of any dispute and make any payment to York necessary to refund any overpayment by York determined by the adjustment, as the case may be.

4.3Final Project Statement

Upon the completion of construction of a Facility, Toronto shall provide to York a statement of final Facility costs and York's payments made in contribution thereof. The determination of final Facility costs shall incorporate any rebates from any taxes paid or Facility grants paid to Toronto for such construction from any source. The parties shall make any payment necessary to make up any shortfall or to refund any surplus, as the case may be, in order to reflect properly the agreed upon percentage contribution of York in respect of the actual capital costs of the Facility after construction.

4.4Effect of Cost Sharing

Despite any contribution by York to the capital costs of a Facility:

(a)Provided that Toronto advises York of any dispute with or claim made by a contractor which may affect the final costs or design of a Facility, Toronto may settle any such claim in its sole discretion;

(b)Toronto shall have no obligation to take into account, in determining the final costs of a Facility, any revenue from water rates given that the capital components of such rates exclude the capital costs of the Facilities, and

(c)York shall not acquire any interest or property rights in the Facility which shall be part of the Toronto System.

Clause 4.4(c) shall not be construed to limit York's entitlement to receive Water from Toronto under the terms of this Agreement.

4.5Variation of Facilities and Metering Points

The Facilities and Metering Points shall be as set out in Schedules "A" and "B", as revised from time to time by mutual agreement.

ARTICLE 5

RATES

5.1Charges for Water

York shall pay to Toronto the amounts charged for Water under this Agreement in accordance with accounts issued to York every two (2) months. The charge for Water shall be calculated for each billing period as the product of:

(a)the rate for Water applicable to such billing period; and

(b)the net quantity of water as determined under this Agreement delivered through the Metering Points during such billing period.

5.2When Accounts Due

Accounts shall be paid by York to Toronto within thirty (30) days from the date of receipt and overdue accounts shall be subject to an interest charge of 12% annually for each month or fraction thereof while such default continues.

5.3Inclusions Within Water Rates

The rate for Water shall be determined annually and shall be subject to change in every year from and after the commencement of the Agreement. The rate shall include the following components, the details of which are set out in Schedule "D" (the "Water Rate"):

(a)Operating Costs - that part of the operating costs of the Toronto System, excluding the local distribution system, net of capital funding, debt charges, reserve contributions and additional hydro costs for pumping to York;

(b)Operating Surcharge - an operating premium which takes into account that water consumed in York Region is pumped to a higher elevation than water consumed in Toronto and, therefore, demands greater power input and higher costs;

(c)Return-On-Investment (ROI) - a return, based on the depreciated value of existing capital assets not subject to cost sharing under Article 4 of this Agreement; and

(d)Replacement Allowance - a reserve contribution which acknowledges a life expectancy of assets.

5.4Effective Date for Water Rates

The Water Rate shall be calculated for the 1998 calendar year and shall be effective from the Effective Date of this Agreement. The Water Rate shall be recalculated annually for each successive calendar year with the recalculated Water Rate to be effective on January 1st of each year. Toronto shall determine the Water Rate in November of the prior year to the year in which the recalculated Water Rate is applicable and shall notify York of the Water Rate applicable to each calendar year no later than December 31st in the prior year.

5.5Example of Determination of Water Rate

For greater certainty, an example of the determination of the 1998 water rate to York, which incorporates the components referred to in section 5.3, is set out in Schedule "D1".

5.6Demand Forecasts

York agrees to provide to Toronto annually on or before October 31st in each year a demand forecast for the next succeeding five (5) year period, setting out the estimated demand for Water supply for the next five (5) years.

ARTICLE 6

PREMIUM WATER RATE ON EXCESS VOLUMES

6.1Premium Water Rate

Where Toronto's Commissioner determines that, for whatever reason, York has, in respect of any calendar year, taken Water from the Toronto System in quantities which exceed the maximum day volume limits referred to in section 3.1 and Schedule "C", Toronto's Commissioner may, in his sole discretion, demand payment from York of a premium water rate applicable to the excess quantities as set out in Schedule "D2". York shall pay such premium rate in accordance with section 5.2.

6.2Commissioner's Discretion

Toronto's Commissioner may, in his sole discretion, waive the premium water rate, if satisfied that actions were diligently taken by York to reduce Water consumption to within the maximum day volume limits and that exceedance of such limits did not result in reduction in Water supply within the Toronto System. Toronto's Commissioner may, in addition to such demand and the receipt of the premium water rate, take such other action as the Commissioner deems necessary, including:

(a) the reduction of the supply of Water to bring the quantities supplied to York in accord with the maximum day supply limits, or

(b)obtaining relief in the nature of a mandatory order to enforce compliance with the restriction on the maximum day supply limits.

ARTICLE 7

MAINTENANCE AND OPTIMIZATION OF TORONTO AND YORK SYSTEMS

7.1Responsibility for Costs

Except as provided in Article 4, the Toronto System shall be built at the expense of Toronto and the York System at the expense of York. Each party shall be responsible for the operation, maintenance and repair of its own system.

7.2Maintenance

The parties shall maintain their respective distribution networks in good working order to industry standards with the objective of minimizing stresses on the systems considered together. The parties acknowledge that there may be reductions in Water supply occasioned by the need to repair or extend a portion of the Toronto System through which Water is supplied to York. Toronto shall consult with York, to the extent possible in the circumstances, prior to any such repair or extension in order to properly plan for the continued supply of Water and the minimization of any disruption in such supply.

7.3Water Quality

The parties shall maintain water quality which, at a minimum, complies with Ontario Drinking Water Objectives. York acknowledges and agrees that there are no warranties or covenants by Toronto, express or implied, pertaining to the quality of water supplied to York other than that the water meets Ontario Drinking Water Objectives. York shall ensure that no mixing of the water supplied by Toronto occurs with water supplied to York from other sources, except with the consent of Toronto's Commissioner.

7.4Storage Systems

The parties shall maintain their storage systems to a design standard that will allow the parties to meet the demands on their respective systems for operational fluctuations, the provision of adequate fire protection and other emergency uses.

7.5Consultation

The parties shall consult with each other respecting the design and operation of their respective systems insofar as such design and operation may affect the operation of the system of the other party. All future infrastructure studies which consider the expansion of any of the systems shall consider the Toronto System and the York System as one system for purposes of the studies with a view to optimizing the efficiency of the respective operational systems prior to any infrastructure expansions.

7.6Joint Studies

The parties shall use their best efforts to complete joint infrastructure studies in a timely fashion and to confirm the need for construction of new capital works. The parties shall share in the cost of any joint infrastructure studies which consider the expansion of the Toronto System to service the Toronto Area and York Region. The cost of the contribution to be made by each of the parties shall be agreed upon.

7.7Water Use Efficiency

The parties shall use their best efforts in the implementation of their water use efficiency programs, as endorsed and funded by their respective Councils, in order to maintain consumptions within projected levels and maximize utilization of built infrastructure.

7.8Water Volumes at Metering Points

The parties shall periodically assess average daily volume flows through Metering Points to confirm adherence to the requirements stipulated in sections 2.4(a), 3.1(d) and Schedule "C".

ARTICLE 8

FURTHER AGREEMENTS

8.1Further Agreement on Certain Issues

Toronto's Commissioner and York's Commissioner (together referred to as the "Commissioners") may by agreement in writing settle or amend the matters that are expressly stated in this Agreement to be subject to further agreement of or mutual consent of the parties, but only to the extent such settled or amended provisions are in respect to the following:

(a)the modification or addition to the number, location and design of the Metering Points and the Facilities during the Term;

(b)the frequency with which metering records and billings are provided by Toronto to York, including the form and content of such records;

(c)the correctness of any account as a result of inaccurate metering as provided for in section 2.6;

(d)the range of the volumes of water to be supplied at any of the Delivery Points, as measured through the pertinent Metering Points, and the average day volume limits set out in Schedule"C";

(e)the cost-share of any of the Facilities, in the event changes in projected demands impact on the percentage of proportional use which was originally utilized in determining the cost-share for the relevant Facility;

(f)the respective party's contributory share to the cost of the Toronto infrastructure studies which consider expansion of the Toronto System; or

(g)the percentage rates used in the Water Rate determination for return on investment, replacement allowance, and depreciation.

8.2Limitation on Commissioners' Agreement

In no event shall any of such settled or amended provisions affect the upper limits of the maximum day water volumes to be supplied under this Agreement.

8.3Notice of Settlement or Amendment

A respective party's Commissioner may at any time provide written notice to the other of the need to settle or amend any of the matters referred to in section 8.1. The notice shall set out in reasonable detail the substance of the provision to be settled or amended and the basis and rationale for the proposed provision. The giving of notice under this section shall be deemed to be a dispute within the meaning of Article 9 in order that the resolution process set out in Schedule "E" shall be applicable.

ARTICLE 9

DISPUTE RESOLUTION

9.1General

Any dispute, controversy or claim arising under or in connection with this Agreement or the breach, termination, validity or enforceability of any provision of this Agreement (a "Dispute") shall be settled in accordance with the dispute resolution process set out in Schedules "E", "E1" and "E2".

9.2Exclusive Remedy

Other than any action necessary to enforce the award of a board of arbitration, the parties agree that the provisions of this Article are a complete defence to any suit, action or other proceeding instituted in any court or before any administrative tribunal with respect to any Dispute arising under or in connection with this Agreement.

9.3Continued Performance

The parties shall continue to fulfil their obligations under this Agreement during the dispute resolution process.

ARTICLE 10

REMEDIES

10.1Reduction of Water Service

York acknowledges and agrees that in the event that York exceeds the maximum day volume limits or the volumes referred to in clause 2.1(a) and section 2.3, Toronto may implement measures to reduce the supply of any quantity of water at any of the Delivery Points in order to ensure compliance with such provisions of the Agreement and Toronto shall not be liable for damages as a result thereof.

10.2Waiver

Failure of any party to insist in any one or more instances upon strict performance of any of the provisions of this Agreement, or to take advantage of any of its rights, shall not be construed as a waiver of any such provisions or the relinquishment of any such rights, which shall continue to remain in full force and effect.

ARTICLE 11

UNCONTROLLABLE CIRCUMSTANCES

11.1Uncontrollable Circumstances

Notwithstanding anything contained in this Agreement to the contrary, it is expressly understood and agreed that the obligations imposed upon Toronto may be suspended so long as and to the extent that Toronto is prevented from or delayed in performing such obligations by causes beyond the reasonable control of Toronto, provided that Toronto reasonably pursues the removal of the cause or causes preventing or hindering the performance of such obligation (hereinafter referred to as "Uncontrollable Circumstances"). This Agreement shall remain in full force and effect during any suspension of any of Toronto's obligations under any provisions of this section and for a reasonable time thereafter, provided that, after the removal of the cause or causes preventing or hindering the performance of such obligation, Toronto diligently commences or resumes the performance of such obligation.

11.2Temporary Reductions of Supply

Without limiting the generality of section 11.1, Toronto shall not be liable for damages caused by the shut-off or reduction of the amount of Water supplied to York in cases of Uncontrollable Circumstances but Toronto shall, wherever possible, give to York reasonable notice of intention to shut off or reduce the supply of Water, and use its best efforts to minimize interruption in the delivery of Water to York during such Uncontrollable Circumstance.

ARTICLE 12

INDEMNITY

12.1Toronto Indemnity

With the exception of actions, claims, demands and debts arising from Uncontrollable Circumstances, Toronto hereby releases York and indemnifies and saves York, its officers, officials and employees, harmless from and against all actions, claims, demands and debts, including costs, for all damages or injuries, including death to any person or persons and for damage to any and all property, including property of Toronto, arising out of the construction, operation and maintenance of the Toronto System or arising out of the failure of Toronto to comply with sections 2.1 and 7.3 of this Agreement.

12.2York Indemnity

York hereby releases Toronto and indemnifies and saves Toronto, its officers, officials and employees, harmless from and against all actions, claims, demands and debts, including costs, for all damages or injuries, including death to any person or persons and for damage to any and all property, including property of York, arising out of the construction, operation and maintenance of the York System or arising out of the failure of York to comply with sections 3.1 and 7.3 of this Agreement.

ARTICLE 13

TERM

13.1Term

The term of this Agreement shall be twenty (20) years commencing from the Effective Date, provided however that York may, at its option, renew this Agreement for successive terms of twenty (20) years each, upon the same terms and conditions.

ARTICLE 14

COMPLIANCE WITH LAWS

14.1City of Toronto Act, 1997

This Agreement is subject to the provisions of the Cit+y of Toronto Act, 1997, the City of Toronto Act, 1997 (No. 2) and any other applicable laws and regulations in effect now or during the Term.

ARTICLE 15

OWSA

15.1Termination of the OWSA

From and after the Effective Date, the parties waive any and all rights under the OWSA, release each other from any obligations under the OWSA and shall cooperate with each other by providing any consent or executing any document necessary to give effect to the foregoing if, at any time, formal termination of the OWSA is required.

ARTICLE 16

NOTICES

16.1General

All notices, requests, demands and other communications under this Agreement shall be in writing by the respective Commissioner and shall only be given:

(a)when delivered by hand (against receipt);

(b)on the date of sending, if transmitted by facsimile and the recipient has acknowledged receipt; or

(c)on the fifth business day after posting, if sent, during normal postal conditions, by registered or certified mail to the party for which it is intended and addressed as follows:

1. to York at:

The Regional Municipality of York

P.O. Box 147

17250 Yonge Street

Newmarket ON L3Y 6 71

Fax: (905) 895-3031

Attention:

1. to Toronto at:

City of Toronto

Metro Hall Office, 55 John Street

19th Floor, Station 1180

Toronto ON M5V 3C6

Fax: (416) 397-5001

Attention: Commissioner responsible for Works and Emergency Services

Each party may change any such address by giving five (5) calendar days prior written notice of such change to the other party in the manner prescribed above.

ARTICLE 17

BENEFITS

17.1Assignment

This Agreement shall not be assigned by either party without the consent of the other, which consent may be unreasonably and arbitrarily withheld, unless the assignment is to another governmental body pursuant to statutory authorization.

Toronto has caused this Agreement to be executed under seal this day of , 1998.

CITY OF TORONTO

_____________________________________

Clerk

_____________________________________

Treasurer

York has caused this Agreement to be executed under seal this day of , 1998

THE REGIONAL MUNICIPALITY OF YORK

Authorized by Report 14(3) of

the Transportation and Works

Committee and adopted by

Regional Council on July 10, 1997_____________________________________

Bill Fisch, Chair

__________________________________________________________________

Regional ClerkDennis Hearse, Clerk

SCHEDULE "A"

TORONTO TO YORK SYSTEM DELIVERY/METERING POINTS

* Scheduled to be placed into service in 1998.

SCHEDULE "B"

TORONTO FACILITIES

COST-SHARED

INFRASTRUCTURE ADDITIONS REQUIRED FOR SUPPLY

UNDER AGREEMENT

SCHEDULE "D"

WATER RATE

1.For the purposes of this Schedule "D" "Toronto System" means the City-wide water works system comprising facilities, infrastructure and equipment required for the production, pumping, storage and bulk transmission of water and excludes the local distribution systems within the Toronto districts.

2.The costs and consumptions used in determination of the rate for a particular year shall be actual values as of October in the prior year projected to year end.

3.The rate for Water shall be the sum of A, B, C and D below:

A.OPERATING COSTS

The total cost of operating, maintaining and repairing the Toronto system for the prior year to the year in which the water rate is to be applicable is determined. The net operating cost is determined by subtracting the following components from the total cost:

-Capital financing

-Debt repayment

-Reserve contributions

-Additional hydro costs for pumping to York, as determined in rate Component B

The operating cost component is calculated by dividing York's share of operating cost (on the basis of proportionate consumption) by York's consumption for the prior year.

B.OPERATING SURCHARGE

The additional hydro cost for pumping to York is based on the additional lift from Pressure Districts three to five (assumed as centroids of consumption for Toronto and York respectively).

The additional unit hydro cost is determined annually using developed formulae utilizing proportionate consumptions and hydro costs for the prior year.

C.RETURN ON INVESTMENT

A schedule summarizing the cumulative historical cost of Capital assets in service in the Toronto system at the end of the prior year excluding components cost-shared with York shall be provided to York on an annual basis.

The agreed upon cumulative historical cost of capital assets in service (excluding cost-shared components) as of December 31, 1997 is $445,488,740.00.

The depreciated asset value is then calculated using a depreciation rate of 1.25% applied annually to the historical asset cost using the straight-line method.

The depreciated value of assets used to supply York is determined on the basis of proportionate consumption during the prior year.

A return on capital investment is calculated by applying a rate of return based on a five year rolling average of Toronto's cost of capital (8% for 1997) on the depreciated value of assets used for York.

D.REPLACEMENT ALLOWANCE

A replacement allowance is calculated by applying a rate of 2 ½ % on the depreciated value of assets used for York.

SCHEDULE "D1"

DETERMINATION OF 1998 YORK REGION RATE

A.OPERATING COST

1997 Total Operating Cost=$84,419,015

1997 Net Operating Cost (Excludes Capital Financing

& Debt Charges)=$60,220,275

1997 Net Operating Cost less Operating Surcharge =$59,200,534

(from Component B)

Proportionate Operating Cost to York = 13.01% x $59,200,534 = $7,701,990

Operating Cost Component =$7,701,990

66,678,189 m³ = 11.55¢/m³

B.OPERATING SURCHARGE

Referring to formulae and applying 1997 costs and consumptions:

Total System Hydro Unit Cost (H_S) =$19,613,893

512,592,970 m³= $.0383/m³

Assume P = average pumping cost above lake level in $/m³/m

and Toronto's hydro unit cost (H_T)=109 P

and York's hydro unit cost (H_Y)=155 P

C_T=Toronto Consumption =445,914,781 m³

Total System Consumption512,592,970 m³or 86.99%

C_Y=York Consumption =66,678,189 m³

Total System Consumption512,592,970 m³or 13.01%

H_S= (H_T) (C_T) + (H_Y) (C_Y)

.0383=(109P) (.8699) + (155P) (.1301)

Solving for P,

P =$.000333/m³/m

Additional Unit Hydro Cost = H_Y- H_T = 155 (.000333) - 109 (.000333) = $.0153/m³

Operating Surcharge = $.0153/m³ x 66,678,189 m³ =$1,020,176

Operating Surcharge Component= 1.53¢/m³

C.RETURN ON INVESTMENT

Cumulative Historical Cost of Toronto System Assets in Service (Excluding Cost-shared Assets)

Assumed in 1953$ 51,300,000

1953 to 1973$154,200,000

1974 to December 1997$239,988,740

TOTAL$445,488,740

Depreciated Asset Value @ 1.25%=$317,100,000

York/Total System Consumption 1997 = 13.01%

Net Asset use by York = 13.01% x $317,100,000 =$41,254,710

Return on Investment = 8.0% x $41,254,710= $ 3,300,377

Return on Investment Component =$3,300,377

66,678,189 m³= 4.95¢/m³

D.REPLACEMENT ALLOWANCE

Replacement Allowance = 2.5% x $41,254,710 = $1,031,368

Replacement Allowance Component= $1,031,368

66,678,189 m³ = 1.55¢/m³

TOTAL RATE = 19.58¢/m³

1998 YORK REGION RATE = 19.5¢/m³

SCHEDULE "D2"

DETERMINATION OF PREMIUM WATER RATE

ON EXCESS VOLUMES

1.The premium water rate shall apply to the entire volume of water supplied to York during each day in which the applicable maximum day supply limit as set out in Schedule "C" was exceeded, regardless of the magnitude of exceedance.

2.The premium water rate shall be 100% in excess of the annual Water Rate as established for the year.

EXAMPLE:

Maximum day limit for 1998 per Schedule C=308 ML/d

1998 water rate=19.5¢/m³

1998 premium rate=39.0¢/m³

If daily consumption is greater than limit, say 320 ML/d,

daily billing @ 39.0¢/m³=$124,800

Therefore, peaking premium for day=$62,400

SCHEDULE "E"

DISPUTE RESOLUTION

1.1Three Tiered Dispute Resolution

Toronto and York agree that any dispute, controversies, claims or questions or other matters arising out of or relating to this Agreement which cannot be resolved in the first instance by direct discussions between the parties, or where agreement on a major decision cannot be achieved, such matter shall be referred for dispute resolution by High Level Negotiation, Mediation and Binding Arbitration in the manner hereinafter described. For greater certainty, a matter in dispute may be referred by either party to dispute resolution under the provisions of this section by the delivery of a Notice Requesting Dispute Resolution to the other party which notice shall set out in reasonably sufficient detail the matter or matters in dispute.

1.2High Level Negotiation

In the event that a Notice Requesting Dispute Resolution has been issued by one party to the other, then the Mayor and the Regional Chair or their designates, which designates shall be members of their respective Councils, shall meet and make a good faith effort to resolve any disputes, controversies, questions or claims arising out of or relating to this Agreement as set out in the Notice Requesting Dispute Resolution in a prompt manner and, for the purpose of same, both such persons shall be provided with full and timely disclosure of all relevant facts, information and documents to facilitate such negotiation. Such negotiations shall be commenced within ten (10) business days of the delivery of a Notice Requesting Dispute Resolution by either party and shall, unless both parties agree to the contrary, be concluded within ten (10) business days of their commencement. In the event that a resolution satisfactory to both parties is achieved through such negotiations, the parties shall issue a joint statement detailing the manner in which the matter in dispute has been resolved. Such joint statement shall be deemed to be a Determination under this Schedule.

1.3Mediation

If the matter identified in the Notice Requesting Dispute Resolution has not been resolved through High Level Negotiation, the matter will be referred to structured negotiation with the assistance of a mediator appointed by mutual agreement of the parties (the "Mediator") within ten (10) business days of either party issuing a Notice Requesting Mediation Resolution. The Mediator shall be an independent person who by training and experience has the professional qualifications and the mediation skills to mediate any dispute that may arise between the parties under this Agreement. Unless the parties agree otherwise at the time, the Mediation shall proceed in accordance with the Mediation Procedures set out in Schedule "E1". Any resolution of the dispute with the assistance of the Mediator shall be deemed to be a Determination under this Schedule.

1.4Binding Arbitration

(a)After the expiry of the post-mediation period referred to in Schedule "E1", or if a Mediator cannot be agreed upon, or if the mediation is terminated by the Mediator, the Dispute shall be settled by arbitration in accordance with the provisions of Schedule "E 2".

(b)For so long as the parties are required by legislation to arbitrate only in a manner prescribed by such legislation, then any binding arbitration provided for under this Agreement shall be conducted in accordance with such legislation, provided the parties agree that to the extent permitted thereunder, the provisions for proceeding with binding arbitration under Schedule "E2" shall be followed.

(c)A dispute will be finally resolved by arbitration in accordance with the process for the appointment of arbitrators, and for the rules of arbitration as set out in Schedule "E2". The decision of the arbitration panel shall be deemed to be a Determination under this Schedule.

1.5Determination Final and Binding

Upon any Determination having been made under the terms of this Schedule, such Determination shall be final and binding upon the parties for all purposes save and except if such Determination is that this Agreement be terminated, in which event such Determination may be reviewed by or appealed to a court of law.

1.6Performance to Continue

Notwithstanding that a matter has been referred to dispute resolution under the provisions of this Schedule, both parties shall throughout the period of Dispute Resolution endeavour to perform their respective obligations under the terms of this Agreement to the best of their abilities.

SCHEDULE "E1"

MEDIATION PROCEDURES

1.Time and Place for Mediation

In consultation with the Mediator, Toronto and York shall promptly designate a mutually convenient time and place for the mediation (and unless circumstances require otherwise, such time to be not later than 10 calendar days after selection of the Mediator).

2.Summary of Views

Two business days prior to the first scheduled session of the mediation, each party shall deliver to the Mediator and to the other party, a concise written summary of its views on the facts and issues in dispute, not to exceed 5 pages.

3.Staffing at Mediation

In the mediation, each party may be represented by counsel. In addition, each party may bring such additional persons as needed to respond to questions, contribute information and participate in the mediation.

4.Conduct of Mediation

Toronto and York will attempt to resolve the Dispute with the assistance of the Mediator. To this end the Mediator is authorized to conduct both joint meetings and separate private caucuses with Toronto and York.

5.The Mediator's Views

Any opinions or recommendations of the Mediator shall not be binding on Toronto or York.

6.Termination of Procedure

Toronto and York agree to participate in the mediation for at least 4 hours (unless terminated earlier by the Mediator). After that time, either Toronto or York may leave the mediation at any time. Toronto and York agree not to take any action in relation to the Dispute (other than good faith attempts to negotiate a settlement to the Dispute) prior to the conclusion of a 10 calendar day post-mediation period that commences on the day after the conclusion of the mediation.

7.Fees of Mediator; Disqualification

The fees of the Mediator shall be shared equally by Toronto and York. The Mediator shall be disqualified as a witness, consultant, expert or counsel for either party with respect to the matters in dispute and any related matters.

8.Confidentiality

The mediation shall be confidential and no stenographic, visual or audio records shall be made. All conduct, statements, promises, offers, views and opinions, whether oral or written, made in the course of the mediation by either of Toronto or York, their agents, employees, representatives or other invitees and by the Mediator (who will be the parties' joint agent for the purposes of the mediation) are confidential. Any conduct, statements, promises, offers, views and opinions shall not be discoverable or admissible for any purposes, including impeachment in any litigation or other proceeding involving Toronto or York, and shall not be disclosed to anyone not an agent, employee, expert, witness, or representative of either Toronto or York; provided, however, that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the mediation .

SCHEDULE "E2"

ARBITRATION PROCEDURES

1.All Disputes will be referred to a board of arbitration ("the Board") to be settled in accordance with the provisions of the Arbitration Act (Ontario) and any amendments thereto, based on the following procedure:

a.Subject to paragraph (b) of this Schedule, the Board will be composed of one person appointed by the party requesting a Board (the "Applicant"), one person appointed by the other party (the "Respondent") and a third person to act as chairperson chosen by the other two members of the Board, or, if both parties agree, the Board will consist of a sole arbitrator.

b.The Applicant shall deliver to the Respondent written notice of its intent to refer the Dispute to the Board within twenty calendar days after any of the events described in subsection 1.4 (a) of Schedule "E" and shall at the same time name its appointee to the Board. The Respondent shall within fifteen business days of receipt of such notice advise the Applicant, in writing, of the name of its appointee to the Board. If the Respondent fails to notify the Applicant of its appointee, the Respondent shall be deemed to have concurred in the appointment of the arbitrator appointed by the Applicant, and such arbitrator shall constitute the Board.

c.If the Respondent appoints an arbitrator pursuant to paragraph (b) of this Schedule, then, within five business days of the appointment of such additional arbitrator, the two appointed arbitrators shall agree on the appointment of an additional arbitrator to act as chairperson (the "Chairperson"). If the appointed arbitrators cannot agree on the additional arbitrator, the Applicant or Respondent may apply to the Ontario Court General Division to appoint an impartial third member to act as Chairperson or promptly take such other action to appoint a Chairperson as the parties may agree.

d.No person may be appointed as an arbitrator unless he or she is independent of the Applicant and Respondent, is skilled in the subject matter of the Dispute and is not directly or indirectly carrying on or involved in a business being carried on in competition with the business of the parties.

e.The Board shall allow such discovery as is appropriate, consistent with the purposes of arbitration in accomplishing fair, speedy and cost effective resolution of disputes.

f.The decision of the Board shall be made by a majority vote or by the sole arbitrator, as the case may be. In the event of the failure of the Board to reach a majority decision, the decision of the Chairperson shall constitute the decision of the Board.

g.The decision of the Board with respect to the Dispute shall be made in writing within the sixty (60) days following the appointment of the last member to the Board, shall be final and binding on the parties, not subject to any appeal, and shall deal with the question of costs of arbitration and all related matters, including interest.

h.The arbitration shall take place in Toronto, Ontario.

2.The time limits referred to in this Schedule may be extended or modified by mutual agreement of the parties' respective Commissioners.

--------

The Works and Utilities Committee also submits the following report (June 3, 1998) from the Interim Functional Lead for Water and Wastewater Operations:

Purpose:

To provide information with regards to the Region of York's long-term water supply strategy and further opportunities for partnership with the City of Toronto.

Recommendation:

That this report be received for information.

Funding Sources, Financial Implications and Impact Statement:

There are no funding implications resulting from this report.

Council Reference/Background/History:

At the meeting of March 25, 1998, the Works and Utilities Committee had before it a communication dated March 2, 1998, from Councillor Jack Layton with respect to the Region of York's Long-Term Water Supply Project, Lake Ontario Water Supply via Durham West. The communication referred to an attached package from Consumers Utilities containing information in regards to the Environmental Assessment (EA) process for the aforementioned project, advising that an opportunity for partnership between the Region of York and City of Toronto could be missed and that York's need for water could be met through water efficiency projects in the City of Toronto, and suggesting the Committee may wish to address conservation issues in regards to the drafting of the terms of reference for York Region's EA before the next round of public information centres planned for September of this year.

The Committee also had before it a communication dated March 25, 1998, from Ms. Karey Shinn, Chair, Public Committee for Safe Sewage Treatment in Toronto, requesting that this matter be a deputation item at the next Works and Utilities Committee meeting. In summary, the following issues were raised in the aforementioned communications:

(1)the opportunities for partnership between Toronto and Region of York regarding water supply are not addressed in an EA that the Region is currently undertaking;

(2)York Region's need for water could be met through water efficiency projects in Toronto;

(3)the Works and Utilities Committee may wish to address conservation issues in regards to the EA;

(4)a request that the Commissioner present the water supply request from York Region and any new terms of reference; and

(5)concerns that additional water supply to York Region will threaten the integrity of the Toronto tax base.

The Committee referred these communications to the Commissioner of Works and Emergency Services for a report thereon to the Committee.

Comments and/or Discussion and/or Justification:

The City of Toronto has been providing water to the Region of York since 1975. The provision of water to the Region of York has mutual benefits. This partnership has enabled the development of an integrated system with multiple production and distribution facilities providing enhanced security of supply to over 2.8 million residents. With the principle of cost-share based on proportional use, this is achieved fairly and in the most cost effective way possible.

The former Council of Metropolitan Toronto at its meeting of July 2 and 3, 1997, adopted Clause No. 3 of Report No. 9 of The Environment and Public Space Committee, headed "Agreement for Additional Water Supply to the Region of York". The report dealt with the process for developing a new water supply agreement with the Region of York, given that the limit of 30 Million Imperial Gallons per day (MIGD) average day supply under the previous agreement has been exceeded since 1988. Council was advised that staff had reached an agreement on a supply limit of 57 MIGD with additional infrastructure requirements as identified in a joint water supply study undertaken by the consulting engineering firm of Fenco-MacLaren Inc. These infrastructure requirements were based on meeting City of Toronto projected water demands to the year 2011, less a 13 percent reduction as a result of water efficiency, and providing 57 MIGD average day demand to the Region of York. The cost of additional infrastructure will be shared between Toronto and the Region of York, based on proportional use. A report requesting authorization to execute a new agreement is included in the agenda of this Works and Utilities Committee meeting.

At its meeting of September 24 and 25, 1997, the former Metropolitan Council received for information Clause No. 28 (l) of Report No. 12 of The Environment and Public Space Committee regarding the York Region Long-Term Water Project Master Plan. This report provided information on the Region's Master Plan process. The plan identified water demands incorporating water efficiency within the Region of York for the years of 2001, 2011, 2021 and 2031. Alternative water supply sources to meet these demands were assessed, including use of ground water and supply from Lake Simcoe, Georgian Bay and Lake Ontario. The preferred solution involved four components: expansion of supply from Toronto to 57 MIGD, implementation of a regional water efficiency program, additional supply from Lake Simcoe and additional supply from Lake Ontario via a Durham west route.

Staff from the former Metro Works, Planning, Legal and Finance Departments reviewed the Master Plan document and provided comments to the Region of York in a letter dated September 23, 1997. Key issues identified include:

(a)Toronto's ability to provide water beyond the planned 57 MIGD which appears to be the most effective and low cost option should be evaluated in detail;

(b)the estimated demand reduction resulting from water efficiency measures appears to be modest; and

(c)an integrated Greater Toronto Area (GTA) wide service coordination strategy should be considered in more detail.

The Region of York responded in a letter dated December 18, 1997, providing the following information:

(i)the Region is eager to explore the viability and effectiveness of additional supply from Toronto;

(ii)the demand reductions due to water efficiency are considered reasonable, based on their analysis; and

(iii)the Region has fully supported the principle of optimization of water infrastructure on a GTA-wide basis.

The Region of York has recently initiated an environmental assessment (EA) for their Long-Term Water Supply Project - Lake Ontario Water Supply via Durham West. This represents the preferred long-term alternative for supply of additional water to the Region. Toronto staff are monitoring this EA and will provide comments with regards to the draft terms of reference prior to the September public information session. These comments will address source of supply, water efficiency, and any other appropriate issues. Further, the EA process allows for agency input following public input. This agency input will take place after September and would allow Toronto to provide additional input into the terms of reference for the EA if required.

Both the City of Toronto and Region of York have incorporated water efficiency programs into their respective water supply strategies. At its meeting of August 14, 1996, the former Council of Metropolitan Toronto approved Clause No. 14 of Report No. 13 of The Environment and Public Space Committee. This report, headed "Engineering Studies - Water Efficiency Plan", authorized the expenditure of funds to engage a consultant to develop a water efficiency plan. REIC Consultants has since been engaged to complete this plan. The goal of this plan is to develop a City of Toronto wide water efficiency plan containing a set of acceptable water efficiency measures and an implementation plan that will enable reduction in water use in the most cost efficient way. The target is to reduce Toronto's overall projected average day water demand by a least 15 percent by the year2011. Work on the study is ongoing and has included input from each of the former cities within the new City of Toronto and members of the public through a Public Advisory Committee. Results to date indicate a 15 percent reduction is achievable, subject to completion of the cost benefit analysis. The study is expected to be complete by October 1998.

On May 7, 1998, the Region of York Council approved a report recommending that staff proceed with implementation of a Water Efficiency Program. The report indicates an anticipated reduction in water demand of about 4MIGD, representing 8 percent of the 1995 average day demand.

With regards to assessing the ability for Toronto to meet the Region of York's requirements through the use of water efficiency projects within the City of Toronto, it should be noted that demand reductions due to water efficiency have been considered in all recent infrastructure planning. In the 1995 Water Supply Joint Study, the supply to Toronto was based on projected population and employment growth and allowed for a reduction of 13 percent in demand due to water efficiency. Recent census information indicates population growth is on target but employment population is below target. A preliminary assessment of 2011 demands considering reduced employment growth and 15 percent demand reduction due to water efficiency indicates that expansion of the water supply system will still be required to meet 2011 demands within Toronto and 57 MIGD to York. The analysis also suggests that additional supply could be provided to York, however, the exact volumes and costs would need to be determined.

Given the reductions in Toronto's employment projections and York's reduction in long-term (2031) demand projections, staff from the Region and City of Toronto are developing the terms of reference for a Joint Optimization Study that would identify infrastructure requirements to meet long-term needs for the City of Toronto and York. This study continues the ongoing partnership between Toronto and York with respect to water supply.

The main objectives of the study include:

(1)a high-level assessment of GTA-wide services and identification of opportunities to meet growth and security needs;

(2)determination of projected water demands within City of Toronto for the years 2011 and2031 and incorporating existing water demand projections for York Region to the same planning horizons;

(3)to identify and incorporate the effects of ongoing water efficiency programs in Toronto and York Region; and

(4)determination of optimal infrastructure required to meet the above demands. This includes assessment of options for additional supply to York including the Durham west route and additional supply from Toronto.

Following completion of the Terms of Reference, an engineering consultant will be selected and engaged to carry out the work. The cost of this comprehensive study will be equally shared between Toronto and York Region. At its meeting of February 4, 5 and 6, 1998, City of Toronto Council adopted Clause No. 12 of Report No. 2 of The Strategic Policies and Priorities Committee authorizing Capital funding for the City of Toronto's share of the Joint Optimization Study.

Concerns in regards to the integrity of Toronto's tax base as a result of providing additional water supply to York were identified in the communication dated March 25, 1998, from Ms. Karey Shinn. Issues raised include the anticipated ability for Toronto to provide additional supply to York at a lower cost than any of the alternatives, the rate of growth in York, and associated sprawl and having the tax base migrate from Toronto to the 905area. Given Toronto's long-standing partnership with York Region with respect to water supply, we should consider any requests from York for additional supply. York Region pays their share of all Capital and Operating costs for water they receive from Toronto, and there are mutual benefits that support the development of cost-shared infrastructure. Issues with regards to urban sprawl would be best addressed through the planning process.

York Region clearly would prefer to obtain its short-term water supply from Toronto and is willing to consider its long-term supply from Toronto. Based on analysis to date, there appear to be mutual benefits for York's long-term supply to be provided through the Toronto system. The planning processes being used will identify the best alternative from both an environmental and cost perspective.

Conclusion:

To mutual benefit since 1975, Toronto has been providing water to York Region, and a new agreement has been developed to meet York's short-term needs to 2004. Additional infrastructure is required to meet Water Supply demands as a result of planned growth while incorporating water efficiency measures within the City of Toronto and York Region. In partnership with the Region of York, a Joint Optimization Study will be undertaken to establish the most effective manner of meeting York Region's long-term water demands. Toronto staff will be providing input during the EA process for York's Durham West long-term supply alternative.

Contact Name and Telephone Number:

Mr. H.A. Taniguchi, P. Eng., Director of Water Supply Division

Phone: (416) 392-8220; Fax: (416) 392-3639

E-mail: htaniguchi@metrodesk.metrotor.on.ca.

The Works and Utilities Committee also submits the following report (June 2, 1998) from the City Solicitor:

Recommendation:

It is recommended that this report be received for information.

Council Reference/Background/History:

At its meeting held on July 2 and 3, 1997, Metropolitan Council, by its adoption of Clause No. 3 of Report No. 9 of its Environment and Public Space Committee, as amended, authorized the preparation of a new agreement for additional water supply to the Region of York ("York"). Metropolitan Council requested a report to its Environment and Public Space Committee on the implications of the proposal that the agreement with York be in perpetuity. In particular, the proposed principles forming the basis of the agreement were set out in attachment A of the Clause. The relevant proposed principle states "Agreement in perpetuity subject to review at mutually agreed intervals (say ten years)". This report addresses the issue as requested by the former Metropolitan Council.

Comments and/or Discussion and/or Justification:

The statutory authority allowing the Metropolitan Corporation to supply water to York was contained in subsection 40(2) of the Municipality of Metropolitan Toronto Act. Similar provisions are contained in the City of Toronto Act, 1997 (No. 2). The relevant subsections state as follows:

"15(1)The city may enter into a contract to supply water to another municipality for its own use or for resale to the inhabitants of that municipality.

(2)The contract may run for a period not exceeding 20 years and may be renewable for further periods not exceeding 20 years at any one time.

(3)No contract under subsection (1) shall be made with a local municipality of a regional municipality."

A statutory limitation therefore exists that the contract with York cannot exceed twenty years. While there can be further renewal periods (each of which cannot exceed twenty years) upon expiry of the initial and subsequent renewal periods, one or more of the parties (depending upon the contractual terms) would have the discretion to renew the contract or renegotiate. Under the terms of the subject draft agreement, as negotiated, York has the option to renew the agreement upon the same terms and conditions for successive renewal terms of 20 years.

Contact Name:

J. Anderson, 392-8059.

The Works and Utilities Committee also submits the following report (July 10, 1998) from the General Manager of Water and Wastewater Services:

Purpose:

To provide information as requested by the Works and Utilities Committee at the meeting of June17, 1998.

Recommendation:

That this report be received for information.

Funding Sources, Financial Implications and Impact Statement:

There are no funding implications resulting from this report.

Council Reference/Background/History:

At its meeting of June 17, 1998, the Works and Utilities Committee had before it Items Nos. 3, 3a and 3b related to the proposed agreement for additional water supply to the Region of York. Deputations were made by Karey Shinn, Chair of the Safe Sewage Committee; Elizabeth Borek, Lakeside Area Neighbourhood Association; Lois James, Scarborough; Debra Kyles, Kleinburg; and Karen Buck, Board Member, Citizens for a Safe Environment.

In considering the report, the Committee requested that the Commissioner of Works and Emergency Services:

(1)explore with the Commissioner of Urban Development and Planning Services opportunities to address sprawl issues flowing from existing Official Plans through this agreement; and

(2)report to the Committee on:

(i)the progress in considering the proposal by Councillor Layton to meet the Region of York's water needs through conservation investment in Toronto;

(ii)strengthening water efficiency provisions in the proposed agreement in order to lock in requirements and processes to achieve efficiencies in Toronto and in York Region;

(iii)the increased sewage treatment that would result from this agreement, and how such increase would be met;

(iv)a clear outline of the relationship which would result between the City of Toronto and the private sector partner that has been engaged by York Region to supply their water; and

(v)all issues raised during the deputations.

The Committee deferred consideration of the aforementioned reports until the next meeting scheduled for July15, 1998.

Comments and/or Discussion and/or Justification:

The contents of the deputations were reviewed and the issues raised were extracted and categorized under the headings water efficiency, business, planning, financial and environmental. A detailed list is provided in Appendix A.

Many of the issues raised by Committee and the deputants were addressed in the aforementioned reports related to the proposed agreement. This report expands on that information and provides information on the additional issues raised during the Works and Utilities Committee meeting of June17.

The following information responds directly to the requests made by Committee:

(1)In order to explore opportunities to address sprawl issues, staff from Works and Emergency Services initiated discussions with Planning staff. The results of these discussions form the basis of the section headed Planning Issues in this report.

(2)(i)Water efficiency is an integral part of both Toronto's and York's water supply management strategy. Development of a Water Efficiency Implementation Plan for Toronto was endorsed by the former Metropolitan Council at its meeting of August 14, 1996, through adoption of Clause No. 14 of Report No. 13 of The Environment and Public Space Committee approving the engagement of a consultant to prepare the plan. This plan is targeted for completion in the fall of 1998. The Region of York's Council in May, 1998, approved a $10million water efficiency plan involving public education, residential/commercial retrofits, leakage control and industrial/commercial/institutional (ICI) sector audits. On the basis of anticipated demand reductions through Toronto's programs and current demand projections for the year 2011, future water demands can not be sufficiently reduced through water efficiency to preclude infrastructure expansion.

Toronto's Water Efficiency Plan will provide current data on reductions achievable through water efficiency measures. Preliminary information suggests a reduction of 15 percent, albeit aggressive, is considered achievable by means of a well-managed and appropriately funded program. Reductions beyond this level would be extremely costly and are not considered realistically achievable given that the cost of water efficiency measures exceeds the cost of new infrastructure at some point. Central to this reduction target is an ambitious ultra low flow toilet replacement program involving the replacement of 670,000 toilets throughout the City.

(2)(ii)Clause 7.7 of the proposed Agreement binds both parties to use their best efforts in the implementation of water efficiency programs as endorsed and funded by their respective Councils in order to maintain consumptions within projected levels and maximize utilization of built infrastructure. Considering the commitment demonstrated at the political and staff levels in each organization, the water efficiency provision in the proposed agreement is considered to be appropriate.

(2)(iii)With regards to the issue of increased sewage flow as a result of this agreement, the Region of York under agreement with the Region of Durham would have additional sewage treated at the Dufferin Creek Sewage Treatment Plant. Accordingly, the additional sewage will not impact Toronto's system.

(2)(iv)The Region of York has contracted Consumers Utilities to complete four elements of the Region's Long-term Water Supply Master Plan. These are: trunk transmission system optimization, water efficiency program, Lake Simcoe supply, Class Environmental Assessment and Lake Ontario Supply Durham West Route, Individual Environmental Assessment.

While a partnership between York and Consumers Utilities in operational areas remains a future possibility, the proposed agreement to supply water to York Region is strictly between the City of Toronto and the Region of York and the cost-shared infrastructure identified in the proposed agreement will be owned and operated solely by Toronto.

The following summary contains information which addresses additional issues raised by the deputants:

(1)Water Efficiency:

A Water Efficiency Implementation Plan is near completion for Toronto. This plan will address issues related to incentives, cost benefit analysis of water efficiency measures and will confirm the achievable demand reduction. The level of water efficiency based reduction in Toronto required to enable additional water supply to York is unlikely to be achievable. Therefore, the proposal of having York Region pay for water efficiency measures within Toronto to obviate infrastructure expansion is not viable.

It is recognized that rates can be used as a demand management tool. The water efficiency study will contain a recommendation for a separate study to assess this complex matter including establishing the basis for a "lowest" rate.

Due to fundamental differences in development stages, Toronto and York have separate water efficiency plans. Toronto represents an older established city, whereas York is rapidly growing with new development incorporating water efficient fixtures under new plumbing codes. Both Toronto and York have active water efficiency programs, but the potential reduction within Toronto is higher than York's.

Infrastructure plans under the proposed agreement are based on consumptions that reflect water conservation.

(2)Business Issues:

The additional infrastructure identified in the proposed agreement is based on the results of a 1995 Water Supply Joint Study which identified projected demands within the City of Toronto in the year 2011 and allowed for a 13 percent reduction in demand due to water efficiency. The study assumed a maximum day supply to York of 440 ML/d.

The additional infrastructure includes expansion of the Horgan Water Treatment Plant, the Dufferin Reservoir, various water mains and additional pumps in existing pumping stations. A portion of these works is required to meet projected demands within Toronto regardless of additional supply to York. Some of the works are necessary to meet system design criteria and provide a consistent level of service throughout Toronto.

Given the Island Plant production capacity during peak periods is included in the existing total system capacity, year-round operation proposed to enable the Deep Lake Water Cooling project does not alter future expansion needs which are based on capacity to meet maximum day demands.

Based on York Region's Master Plan completed in July 1997, the total maximum day demand in 2011 is forecast to be 526 megalitres per day (ML/d) which includes water conservation impacts. Toronto would supply 440 ML/d of this demand under the proposed agreement. The aforementioned Master Plan was prepared in a manner consistent with the environmental assessment master planning process. The plan was developed in 1996 with the final document released in July 1997. There was public input through six open houses. Though none were held within Toronto boundaries, advertisements were placed in Toronto media.

Consistent with this Master Plan, the proposed Agreement provides for York Region's short-term water requirements. The potential for York Region's long-term supply from Toronto is a more recent development which was acknowledged by York Region following submission of Toronto's comments on York's Master Plan.

The Master Plan outlines both ground water and surface water sources of supply. Any new facility from either source must follow the environmental assessment process which allows for public and agency input.

The additional water provided to York Region under the proposed agreement will be delivered to the southern urban areas of York including Vaughan, Richmond Hill and Markham. The ultimate distribution of water within the Region is a matter under the Region's control, including the source of supply to Queensville.

The reference in the Agreement to consider Metro and York systems together as one, refers only to the process of joint system studies given an integrated system is the optimal method of determining infrastructure. This in no way implies joint ownership. The infrastructure identified under Schedule B of the proposed agreement will be solely owned and operated by Toronto. The capital cost of the additional infrastructure is shared, based on proportional use. The water rate formula within the Agreement captures all operating costs to the Toronto system for the ongoing supply of water to York. This formula also ensures that Toronto receives a return on investment for infrastructure solely paid for by Toronto and that supply of water to York does not increase the cost of water in Toronto.

There is no need to include in the Agreement the requirement to access York's meter records and books as Toronto is the supplier to York and is responsible for engaging consultants and contractors and administering contracts for cost-shared projects.

The proposed Agreement will minimize future capital infrastructure requirements thereby enabling more funding is available for water quality improvements and for research into new technologies such as alternative coagulants and managing plant residue in an environmentally sound manner.

(3)Planning Issues:

The population of the Greater Toronto Area (GTA) is expected to increase by more than two million persons over the next 20 - 25 years. Current forecasts anticipate that the City of Toronto will accommodate about 300,000 to 500,000 of that increase, with the balance (1.5 to 1.7 million people) being absorbed in the Regions of Halton, Peel, York and Durham. While the number of people leaving Toronto for the Regions is unknown, the projection of continued growth within Toronto suggests this may not be an ongoing issue. All Regions now have approved Official Plans to guide new development in a manner that respects environmental, economic and social considerations within each individual jurisdiction. The City and surrounding Regions, through the Greater Toronto Services Board when established, will be in a position to develop GTA-wide long-term growth management and infrastructure plans for the provision of transportation, water, sewers, etc., to support the Official Plan goals. These implementation plans would be the most effective way to address urban sprawl and many of the other related issues referenced in the Safe Sewage Committee's correspondence. In the interim, the City should continue to ensure its capability to meet its own future needs while working cooperatively with the 905 Regions. The maximum daily cap in the proposed agreement with York Region was established to maintain an adequate water supply to York to 2004 while providing for growth within the City to 2011 consistent with our Official Plan.

An Infrastructure Coordination Strategy is being formulated, under the guidance of the Province in connection with the pending Greater Toronto Services Board (GTSB), to coordinate the provisions of major forms of growth-related infrastructure based on the Region's and City's long-term official plans. The anticipated mandate of the GTSB will be to evaluate infrastructure needs, monitor timing and needs and to find cost-effective solutions. There will be a mechanism to ensure that official plans and long-term capital budgets "have regard for" decisions made through the Infrastructure Coordination Strategy.

(4)Financial Issues:

Implementation of the proposed agreement will have no impact on property taxes given Toronto's water supply system is user fee based.

The revised water rate formula provides for the full recovery of operating costs associated with the additional supply of water to the Region of York, plus a return on investment and replacement allowance for existing capital assets used for providing this additional water, and ensures rate stability and adequate reserve balances over the long term.

The cost of energy to treat and deliver water to York is factored into the rate and, therefore, will be fully recovered. There are no other utility costs involved.

The capital component of the formula provides for a fair return on capital investments made in the waterworks system, based on proportionate use. The formula provides for this rate of return to be applied to the historic cost of assets in service less accumulated depreciation, a method which is used by major utility companies.

The formula also provides for a replacement allowance to provide for repair, maintenance and replacement of assets, which is applied to the historic cost of the assets, less accumulated depreciation.

Given the cost of the City's existing water system used to supply water to York is included in the return on investment component of the water rate, adding an infrastructure credit will amount to a double charge for the same assets.

In addition to the revenue generated through the water rate, Toronto will receive from York Region a contribution of approximately 50 percent of the capital cost of new facilities required based on proportional use of the assets.

It is difficult to assess the impact on property taxes due to business or population migration to the Region of York. The existing migration trend between Toronto and York is hard to control. However, current planning projections anticipate a population increase of 300,000 to 500,000 persons in Toronto over the next 20 - 25 years which will translate to a net positive impact on the City's economy.

With respect to the impact on tourism dollars, growth of the GTA will likely have a positive impact as tourism is also dependent on the health and growth of the GTA.

York's cost share of water infrastructure, as outlined in the proposed Agreement, is an equitable arrangement that is based on proportional use.

Staff of the former Metro Finance Department were involved extensively in the development of the rate calculation and are in concurrence with its form and content.

(5)Environmental Issues:

Specific impacts on features such as the Oak Ridges Moraine and loss of farm resources and trees as a result of this Agreement can not be identified. It should be noted that this Agreement will provide for York Region's short-term water needs. York Region has considered water supply through alternate sources to sustain their long-term development plans. The planning and environmental approvals processes are the appropriate methods to address these areas of concern.

Toronto Region Conservation Authority (TRAC) storm water management criteria covers issues that deal with flooding, erosion and water quality due to development related activities, to ensure adequate protection, preservation and conservation of watershed and water environment. City of Toronto and headwaters municipalities are accountable to each other in this respect, through watershed and subwatershed planning activities coordinated by TRAC.

TRAC is also a member of Toronto's Wet Weather Flow Management Master Plan Steering Committee and a lead coordinator between the City and the headwaters municipalities and regions in this major planning process.

Staff of TRAC have commented on York's long-term water supply project in a report to the Authority at its meeting of No. 2/98. TRAC has directed its staff to work with York Region to ensure that subsequent environmental approvals documents for various project components will adequately address those issues.

In summary, the issues raised have been addressed to the extent possible at this time. It should be noted that all major expansion projects identified in the Agreement would undergo an environmental approvals process to review alternative solutions, to confirm that water efficiency measures have been considered, and to ensure public and agency concerns have been addressed.

Conclusion:

We believe that through this and previous reports, we have adequately addressed the various issues related to water efficiency, business, planning, financial and environmental matters in regards to the proposed Agreement for supply of additional water to the Region of York and that on this basis the execution of the agreement should proceed.

Contact Name and Telephone Number:

Mr. H.A. Taniguchi, P. Eng., Director of Water Supply Division

Phone: (416) 392-8220; Fax: (416) 392-3639

E-mail: htaniguchi@metrodesk.metrotor.on.ca.

Appendix "A"

Issues Raised by Deputants

(1)Water Efficiency:

(a)Lack of incentives to conserve water, status of water conservation plans, concerns that Toronto and York Region have separate plans;

(b)proposal to have York pay for water efficiency measures in Toronto and provide available water resulting from these measures to York;

(c)is the maximum daily limit for supply to York based on consumptions that reflect water conservation in York; and

(d)proposing water rates be set so that increased usage is charged at higher rates, with the lowest rate based on a reasonable per capital per day usage.

(2)Business Issues:

(a)Planned use for the additional water supply and as it relates to Queensville development;

(b)a claimed shift from the York approved (Master Plan) Environmental Assessment of December 1996, concern that no "open house" to receive public comment was held in Toronto;

(c)no plan for use of ground water versus surface water;

(d)impact on expansion plans due to year-round operation of Island Plant as a result of deep lake water cooling project;

(e)questioning the need to expand the Horgan Water Treatment Plant and Dufferin Reservoir for Toronto's use;

(f)relationship with Consumers Utilities;

(g)basis for cost share of infrastructure;

(h)concerns that water supply infrastructure paid for by Toronto is to be used by York at no charge;

(i)proposing Toronto have access to Region of York's books and meter records;

(k)provisions to control water supplied to York so as not to cause shortages in Toronto;

(j)why should York's need for water impact the cost of water in Toronto;

(l)lack of money to improve water quality due to expansion; and

(m)the need to find new technologies to reduce residual problems of alum and disposal.

(3)Planning Issues:

(a)Control of urban sprawl and ensuring compact growth;

(b)ensure development in serviced areas first;

(c)ensuring York is following their official plan;

(d)Planning and Legal mechanisms to prevent development in the Region; and

(e)number of people and businesses leaving Toronto for York Region.

(4)Financial Issues:

(a)Impact on property taxes due to population and/or business migration to York;

(b)impact on tourist dollars;

(c)York's cost-share of GO Transit versus the cost-share of water supply;

(d)any increases in other utility costs;

(e)basis for determining the fair return on capital investment, and, is the use of depreciated value appropriate; and

(f)can there be a mechanism to compensate the old City of Toronto properties for capital investment in the R.C. Harris Water Treatment and Main Sewage Treatment Plants, including suggestions to lower the millrate, offset by increased water costs to York and/or by receiving development charges from York.

(5)Environmental Issues:

(a)Impacts on geographical features such as the Oak Ridges Moraine;

(b)loss of farm resources and trees;

(c)development impact on recharge of ground water; and

(d)has Toronto Regional Conservation Authority (TRAC) reviewed this plan.

The Works and Utilities Committee also submits the following communication (July 15, 1998) from Councillor Jack Layton, Don River:

York Region requires 260 million liters of water/day (ML/d) on average from Toronto. An agreement has been finalized to accomplish this. The agreement includes planned water efficiency programs which are projected to reduce demand by 15 percent in Toronto and by 8 percent in the Region of York. It also includes expanding our water supply at a capital cost of $205.7 million to be shared 50-50 between York and Toronto.

We may be missing a very significant opportunity here.

It turns out, for example, that replacing every toilet in Toronto (residential and commercial) would reduce demand in Toronto by 250 ML/d. This is virtually the full supply required by York Region. The cost to replace all toilets in the City would be $340 million.

How could we achieve this opportunity?

First, York Region could provide its share identical to the proposed agreement at $103 million and the City of Toronto could provide its share also at $103 million. This would leave $134 million to be raised.

Given that every new toilet owner would see a very large reduction in his/her water bill as soon as the new toilet is installed (estimated $75.00/year/household), there is a possible mechanism for financing the $134 million cost. If the savings from the new toilets in 1,000,000 households were retained by the municipality to finance the capital cost of the new toilets, the payback would be less than two years. Commercial toilet operators could keep their savings, encouraging local business. Households could see their water bills drop by $75.00/year in year three and beyond.

Other benefits would be: reduced operating costs due to avoided energy use; and reduced operating and capital costs in both Toronto and York through reduced sewage usage.

Recommendation:

That the proposal to replace all toilets in Toronto as a means to meet York's water requirements be further investigated, and that the Toronto/York water agreement be adjusted to permit this possibility or similar arrangements to be made as mechanisms to meet the agreement. The key feature would be that Toronto would have the option to bring forward alternative techniques to meet the water demands of York and that York's approval may not be unreasonably withheld.

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The Works and Utilities Committee reports, for the information of Council, having also had before it during consideration of the foregoing matter the following communications:

(i)(May 12, 1998) from the Regional Clerk, Region of York, forwarding a copy of Clause No. 4 contained in Report No. 9 of the Transportation and Works Committee, headed "Aurora, Newmarket and East Gwillimbury Water Servicing Issues", which was adopted, without amendment, by the Council of the Regional Municipality of York on May 7, 1998, together with related Clauses respecting the Region's Long-Term Water Strategy; and

(ii)(June 25, 1998) from Ms. Jean Martin, Newmarket, Ontario, forwarding a copy of a communication addressed to Councillor Jack Layton on the issue of water privatization in the Region of York.

The following persons gave presentations to the Works and Utilities Committee in connection with the foregoing matter, and submitted material with respect thereto:

-Mr. Hiroshi A. Taniguchi, Director, Water Supply Division, Works and Emergency Services Department, City of Toronto; and

-Mr. Alan Wells, Chief Administrative Officer, and Mr. Bruce Macgregor, Director, Water and Wastewater, Region of York.

The following persons appeared before the Works and Utilities Committee in connection with the foregoing matter:

-Ms. Jean Martin, East Gwillimbury Watch, Newmarket, Ontario, and submitted a communication with respect thereto;

-Ms. Karey Shinn, Chair, Safe Sewage Committee, and submitted a communication with respect thereto;

-Ms. Karen Buck, Toronto, Ontario;

-Mr. Hamish Wilson, Toronto, Ontario; and

-Ms. Lois James, Scarborough, Ontario.

(City Council on July 29, 30 and 31, 1998, had before it, during consideration of the foregoing Clause, the following report (July 28, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

To provide information as requested by the Works & Utilities Committee at the meeting of July 15, 1998, for Council in its consideration of the report requesting authority to execute the proposed Agreement for the supply of water to the Region of York.

Recommendation:

It is recommended that this report be received for information.

Funding Sources, Financial Implications and Impact Statement

The financial implications resulting from this report are consistent with those resulting from our previous report dated June 3, 1998, requesting authority to execute the proposed Agreement for the supply of water to the Region of York.

Council Reference/Background/History:

At its meeting of July 15, 1998, the Works and Utilities Committee had before it Items 2, 2(a), 2(b), 2(c), 2(d) and 2(e) related to the proposed Agreement for additional water supply to the Region of York.

The Committee recommended the adoption of Item 2, being a report dated June 3, 1998 from the Interim Functional Lead for Water and Wastewater Operations which recommended that authority be granted to execute an Agreement for the supply of water to the Regional Municipality of York, essentially in accordance with the draft Agreement attached as an appendix.

The Committee also requested that the General Manager of Water and Wastewater Services and the City Solicitor submit a report to Council at its meeting scheduled for July 29, 1998 addressing the following motion by Councillor Layton:

"That the proposal to replace all toilets in Toronto as a means to meet the Region of York's water requirements be further investigated, and that the agreement between the City of Toronto and the Region of York for the supply of water be adjusted to permit this possibility or similar arrangements to be made as mechanisms to meet the agreement; the key feature being that Toronto would have the option to bring forward alternative techniques to meet the water demands of York, and that York's approval may not be unreasonably withheld."

Comments and/or Discussion and/or Justification:

The existing capacity of Toronto's water supply system is 2100 Megalitres per day (ML/d). Demands exceeding this capacity for any day would result in a situation where reservoir levels would start to drop, lower pressures could result and fire protection could be compromised in some districts. The infrastructure identified in the proposed Agreement at a total estimated cost of $206 million (cost shared at 50 percent on an average basis between Toronto and York) would increase system capacity to 2375 ML/d and would achieve the following:

(i)ensure system design standards are consistently applied across the City in the areas of district storage, fire protection and reliability of supply;

(ii)provide additional supply for Toronto's projected population and employment growth to 2011; and

(iii)provide additional supply to York to meet their short-term needs to 2004.

If no additional infrastructure is built beyond that which currently exists today, and no reductions in demand occur through water efficiency measures, the projected shortfall (the difference between projected demand and system capacity) on maximum day in 2011 would be over 600 ML/d.

A 15 percent or 340 ML/d reduction on maximum day demands has been assumed as a result of a cost-effective water efficiency program. Infrastructure requirements have already been reduced accordingly at a cost saving of $114 million, based on an assumption of achieving this level of reduction.

Achievement of a 15 percent reduction is dependent on successful implementation of the following measures:

(1)public education program;

(2)50 percent toilet replacement across the City with ultra low flow toilets (ULF);

(3)showerhead replacements;

(4)watermain leak detection;

(5)water audits in the Industrial, Commercial and Institutional sector;

(6)universal metering; and

(7)reduction in outdoor water use.

Councillor Layton's communication to Works and Utilities Committee dated July 15, 1998, (appended to this report ) outlined some alternative approaches to financing and implementation of water efficiency programs, through deferral of infrastructure construction. The approach focused on an ultra low flow toilet program targeting 100 percent replacement, much more ambitious than initially envisaged .

Subsequent to the Committee meeting, the preliminary estimates of demand reductions for a full toilet replacement program as reported at the meeting were reevaluated. It has been determined that a 100 percent toilet replacement program could further decrease the projected maximum day demand by up to 70 ML/d, increasing the potential for water demand reduction from 340 to 410 ML/d. Given that a significant gap of 200 ML/d between projected demand and system capacity would remain, additional infrastructure would still be required.

Although the approach proposed by Councillor Layton has merit given its many benefits including timely water use reductions, cost savings to the consumers, reduced sewage flows and reduced operating and capital costs, a further deferral of infrastructure construction presents a substantial risk. If demand reductions anticipated due to implementation of the identified water efficiency measures are not realized, system capacity would fall short of actual demands.

There is an alternative approach which would minimize this level of risk and ensure that infrastructure is not overbuilt. This involves proceeding with execution of the agreement and construction of the Capital Works as identified in the agreement in parallel with the implementation of a highly aggressive water efficiency program.

Any water efficiency reductions achieved beyond that currently projected would result in additional capacity being available for supply to York above and beyond their short-term needs of 440 ML/d, potentially reducing their long-term requirements from alternative sources. The benefits identified through the approach proposed by Councillor Layton would still be realized in the context of the longer-term requirements of Toronto and York.

At a meeting on July 2 and 3, 1997, Metropolitan Council requested information on Toronto's ability to supply additional water to York beyond the maximum specified in the proposed Agreement. The feasibility of York's long-term demands being supplied from Toronto will be reviewed as part of the scope of work for a joint optimization study to be undertaken by Toronto and York commencing in 1998.

The financial aspects of the proposed Agreement have been carefully formulated to ensure an appropriate rate formula which includes only wholesale costs and a Capital cost sharing mechanism based on proportional use of specific infrastructure required to meet Toronto's and York's future demands. Any amendments to the Agreement which provide for alternative means to meet its requirements would require the Agreement to be changed fundamentally.

Accordingly, the Agreement should be executed in its present form to enable necessary Capital Works to proceed for mutual benefits of Toronto and York. In addition, water efficiency measures should be further investigated and implemented on an ongoing basis with a view to amending the Agreement in the future at such time as alternatives to meeting future demands of Toronto and York have been mutually determined to be feasible . Amendments would be required to the rate formula and Capital cost sharing mechanisms detailed in the proposed Agreement.

Any future amendments in this regard would require authorization by respective Councils. The City Solicitor has been consulted in the preparation of this report.

Conclusion:

Execution of the proposed Agreement in its existing form should proceed. Alternative techniques to meet the future water demands of York focusing on water efficiency should be investigated with a view to future amendments to the Agreement if and when alternatives have been deemed to be feasible.

Contact Name and Telephone Number:

Mr. H.A. Taniguchi, P. Eng.

Director of Water Supply Division

Phone: (416) 392-8220

Fax: (416) 392-3639

E-mail: htaniguchi@metrodesk.metrotor.on.ca.)

(A copy of the communication dated July 15, 1998 from Councillor Jack Layton, Don River, was distributed to Member of the Works and Utilities Committee on July 15, 1998 and a copy is also on file in the office of the City Clerk.)

2

Emery Creek Stormwater Quality Ponds Project

(City Council on July 29, 30and 31, 1998, amended this Clause by adding thereto the following:

"It is further recommended that:

(1)the Commissioner of Urban Planning and Development Services be requested to prepare a report on the reasons why the ponds could not be located on the tableland just north of Finch Avenue, or on the Works and Parks yard parking lot for presentation, for information, to the Emery Creek Neighbourhood Liaison Committee and the Emery Creek Environmental Association by the end of September, 1998; and that Council endorse the Environmental Study report as submitted to the Ministry of the Environment; and

(2)the Mayor be requested to write a reassuring letter to the Ward 6 residents who have been so sadly misinformed.")

The Works and Utilities Committee recommends:

(1)the adoption of the report dated June 30, 1998, from the Commissioner of Works and Emergency Services;

(2)that the appropriate staff be requested to work with the Emery Creek Neighbourhood Liaison Committee and the Emery Creek Environmental Association to evaluate the number and design of the ponds;

(3)that the Commissioner of Works and Emergency Services be requested to establish the Emery Creek Industry Action Plan to examine ideas such as:

(i)downspout disconnection;

(ii)rainwater storage for irrigation, cooling or other process water purpose;

(iii)catch basin devices; and

(iv)water rate/tax incentives to be examined in the context of:

(a)cost;

(b)reliability;

(c)quality of water; and

(d)seasonal impact; and

(4)that the final design be submitted to the Works and Utilities Committee.

The Works and Utilities Committee reports, for the information of Council, having requested:

(1)the Commissioner of Works and Emergency Services to submit a report to the Works and Utilities Committee at its next meeting scheduled to be held on September 9, 1998, on the following suggested criteria for a user pay model for funding the Emery Creek Stormwater Quality Ponds Project, noting that such model also addresses the issue of industry being responsible for undertaking stormwater reduction initiatives:

(i)the cost of the Emery Creek Ponds project should be borne by the generators of stormwater runoff;

(ii)the costs should be borne based on a flat rate per square meter of roof and paved area (roads not included);

(iii)if an industry or commercial operation can show that it can reduce its stormwater discharges (and will do so before construction is initiated), then they can apply for an exemption equivalent to the amount of water they redirect; and

(iv)industry must fund projects that will address costs incurred by their business operations, not the taxpayers;

(2)that all interested parties be advised in writing when this matter is again before the Committee, with the opportunity to address the Committee at that time, and be kept informed of the public consultation process; and

(3)that the Commissioner of Economic Development, Culture and Tourism, be requested to explore ways of improving public accessibility to the Toryork ravine.

The Works and Utilities Committee submits the following report (June 30, 1998) from the Commissioner of Works and Emergency Services;

Purpose:

To seek City Council's endorsement of the preferred alternative for the Emery Creek Stormwater Quality Ponds Project, as described in the project's Schedule "C" Class Environmental Assessment.

Funding Sources, Financial Implications and Impact Statement:

Funding has been provided for in the 1998-2002 Capital Works Program of $2.2 million for detailed design and construction.

Recommendations:

It is recommended that:

(1)City Council endorse the preferred alternative for the Emery Creek Stormwater Quality Ponds Project's (the "St. Lucie-Storer" three-pond option), as recommended in the project's Schedule "C" Class Environmental Assessment Study Report, December 1997;

(2)with approval of Recommendation No. (1), City Council direct the Commissioner of Works and Emergency Services to advise the Minister of the Environment of Council's endorsement of the Class Environmental Assessment's preferred alternative, and to additionally advise the Minister of the inclusion of a supplementary appendix to the Class Environmental Assessment Study Report, containing additional safety measures (as described in the body of this report) associated with the operation of the proposed Emery Creek stormwater ponds;

(3)with approval of Recommendations Nos. (1) and (2), City Council authorize the Commissioner of Works and Emergency Services to establish the Emery Creek Stormwater Ponds Neighborhood Liaison Committee, to provide for public consultation on issues and matters related to detailed design, construction, operations, and monitoring of the proposed Emery Creek stormwater ponds; and

(4)the appropriate officials be authorized to give effect thereto.

Council Reference/Background/History:

In 1981, the Ministry of the Environment (MOE) began a study of water quality in the Don and Humber Rivers and Mimico, Etobicoke and Highland Creeks. As a result of this study, the Toronto Area Watershed Management Strategy (TAWMS) study was formally initiated. From 1982-1986, the TAWMS Steering Committee carried out a detailed study of the Humber River. The TAWMS report was released to the public for its review and comments in July 1986 and was successfully endorsed. The study found that the water quality within the Humber River was severely impaired. Urban stormwater runoff was identified as a major source of contaminants contributing to the impaired water. Bacteria and heavy metals were of particular concern in the Humber River drainage area.

The first project recommended by TAWMS was the construction of a stormwater quality control pond on Emery Creek. Emery Creek is located in the north-western section of the former City of North York in the vicinity of Finch Avenue and Weston Road. The Emery Creek site was selected as it had a technically feasible location for a pond facility, a relatively small drainage area of 770hectares and high pollutant loadings from a fully urbanized area. The Emery Creek drainage area contains a large industrial/commercial component in addition to residential land uses.

Stormwater ponds are a standard feature in new suburban neighborhoods, as they are a proven technology to control and manage stormwater runoff.

Stormwater ponds temporarily retain stormwater to allow for settling of sediment and biological uptake by marsh plants. This results in improved water quality. Periodically the ponds are cleaned out and sediments and contaminants removed as appropriate. The material removed from the ponds, following testing, would be sent to a sanitary landfill for disposal.

If the Finch Avenue and Weston Road area was being developed today for residential and business purposes, it would include stormwater ponds as part of the overall development, under regulatory procedures. The goal of the Emery Creek Stormwater Quality Ponds Project is to retrofit stormwater ponds into an existing developed area as a remedial measure.

On April 24, 1991, by adoption of Clause No. 13 of Report No. 10 of The Works Committee, the former Metropolitan Council authorized the Commissioner of Works to engage the consulting engineering firm of Marshall Macklin Monahan Ltd. to undertake the preliminary engineering and environmental assessment for the proposed Emery Creek Stormwater Quality Ponds.

In support of the undertaking, both the MOE and Environment Canada agreed to contribute a third of the study costs or approximately $50,000.00 each. As it was felt that valuable data could be gathered with regard to the performance of a stormwater quality control pond in a retrofit situation, Environment Canada also committed to provide an additional $50,000.00 a year for two years following construction to cover the costs of a comprehensive monitoring program.

The project is being carried out as a Schedule "C" Class Environmental Assessment (Class EA) according to the Municipal Engineers Association Class Environmental Assessment for Municipal Sewage and Water Projects. The Class EA is a step-by-step approach to planning and requires that a comprehensive process be followed, including extensive public consultation, which documents the steps and decisions made in the selection, evaluation and implementation of the preferred alternative in an Environmental Study Report (ESR). The Class EA has three different schedules, from "A" to"C", with the Schedule "C" Class EA being the most involved of the three.

As this project has a long history and potential to influence future remedial stormwater quality projects throughout the new City of Toronto, a project steering committee was assembled to oversee the project. The Committee is comprised of representatives from the MOE (Water Resources Branch and Central Region), Toronto Region Conservation Authority (TRCA), Metro Toronto Remedial Action Plan (RAP), Ministry of Natural Resources, Environment Canada, the former Metro, Etobicoke and North York Works Departments, and local citizens. Due to the land ownership and easement considerations, several other agencies and private corporations such as Ontario Hydro and Interprovincial Pipelines were also consulted as required.

Due to the highly urbanized character of the Emery Creek watershed, only two locations were available in which facilities could potentially be constructed. The first potential location was the wooded ravine area north of Finch Avenue behind the former City of North York Works Yard located on Toryork Drive (the "Toryork" option). The second potential location was the area near the confluence of Emery Creek and the Humber River behind St. Lucie and Storer Drive (the "St.Lucie-Storer" option). Refer to Figure 4.1 in the appendix of this report.

Based on the constraints observed and the input provided by agencies, landowners and the public, five alternatives were considered for evaluation which consisted of a number of combinations of stormwater treatment facilities at the two potential locations:

Alternative 1:an underground tank or surface retention pond within the Toryork ravine;

Alternative 2:three ponds in series within the St. Lucie-Storer Greenbelt (utilizes land within the hydro corridor);

Alternative 3:one facility within the St. Lucie-Storer Greenbelt (does not utilize land within the hydro corridor);

Alternative 4:a facility within the Toryork ravine and one facility within the St. Lucie-Storer Greenbelt (does not utilize land within the Hydro Corridor); and

Alternative 5:do nothing (continue stringent source control programs).

An extensive evaluation of the five alternatives was conducted. This assessment was conducted on the basis of technical effectiveness, environmental impact, cost, and agency/landowner/public input. Many of the alternatives share anticipated impacts as they involve facilities at the same location. Through this assessment, Alternative 2, the three ponds within the St. Lucie-Storer greenbelt, (refer to sketch in appendix) was recommended in the ESR as the preferred alternative based on the following:

-The three ponds capture stormwater from the entire Emery Creek drainage area and therefore are more effective in terms of overall treatment effectiveness in comparison to the Toryork facility.

-The ponds system incorporates a "natural system" wetland for biological uptake of contaminants, whereas the Toryork facility will act primarily as a sedimentation facility only.

-The ponds can be sited to avoid the majority of the existing trees and significant vegetation in the St. Lucie-Storer greenbelt. In general the significant wooded areas would be retained, and the majority of land converted to ponds would be "old field" habitat.

-Positive agency, landowner and public assessment.

-Cost.

The recommended three-pond system has a surface area at the high water elevation of approximately 2.4 hectares (6 acres). For comparison purposes, Grenadier Pond in High Park in the former City of Toronto has a surface area of 19 hectares (47 acres).

The configuration of the preferred stormwater treatment pond system is dictated by the presence of mature natural resource areas that are to be avoided, pipelines, watermains, sanitary sewers, an old landfill, hydro towers, and the channels of Emery Creek and the Humber River.

The three connected ponds are required to fit into the space available while maximizing the facility volume available for stormwater treatment. Flow is diverted from Emery Creek to the pond system and after passing through the facility is discharged into the Humber River, upstream of where Emery Creek enters the Humber River.

The first pond in the system is the sedimentation pond. This is the smallest element in the system. The purpose of the sedimentation pond is to allow the largest sediment particles to settle and hence pretreat the stormwater prior to transfer to the other ponds.

The second pond in the system is a shallow natural wetland, with a fairly long flowpath. The wetland will remove sediment through settling, but will also provide nutrient and heavy metal uptake through appropriate wetland/marsh vegetation.

The final pond in the stormwater system is the finishing pond. This is the largest pond and will provide the greatest settling of finer sediment. The finishing pond discharges to the Humber River.

Alternatives that would involve construction in the Toryork ravine were ranked lower than the preferred alternative of three ponds in the St. Lucie-Storer greenbelt based on the following:

-The ravine contains a small but biologically significant pocket of natural mixed woodland habitat. The Toronto Field Naturalists regard a continuous stand of Eastern Hemlock located in the northern section of the greenbelt as environmentally sensitive. Because of the limited space available, construction of a pond or tank in this area will destroy the majority of the existing woodland.

-The side slopes of the Toryork ravine are very steep, and as such construction or maintenance of a facility in this area would be difficult.

-A facility in this area will not capture stormwater runoff from the entire drainage area but would only capture the portion of predominately industrial and commercial development above Finch Avenue or approximately 484 hectares or 63 percent of the entire Emery Creek Drainage Area. Unless facilities are located in the St. Lucie-Storer greenbelt, stormwater from 37 percent or 286 hectares of the Emery Creek drainage area would be left untreated. In addition, there is a potential for future industrial/commercial and possibly residential development in the Emery Creek drainage area that could not be treated at a facility within the Toryork ravine.

-The TRCA does not generally support the enclosure of watercourses draining greater than 125 hectares. Their Valley and Stream Corridor Management Program establishes a strong interest in protecting the integrity of valley corridors by keeping watercourses open and preserving existing well-vegetated areas. As there is no additional benefit with respect to water quality improvement in comparison to the three ponds within the St. Lucie-Storer alternative, and in view that the existing mature vegetation would be lost, the TRCA does not support any of the alternatives considered that would involve disruption of the Toryork ravine.

-The cost of constructing a tank within the Toryork ravine would be extremely high and prohibitive.

Current Project Status:

The project's Environmental Study Report was submitted to the Ministry of the Environment, and a "Notice of Completion" was posted in local newspapers on January 21 and 24, 1998, and by direct mailout to 225 persons on the project mailing list. This was followed by a 30-day public review and comment period. Within the 30-day review period, a person or party may request that the Minister of the Environment "bump up" the project to an individual environmental assessment. An individual EA would require a very lengthy, detailed and potentially costly re-examination of the problem by the City.

On February 18, 1998, the Minister received requests from Mr. and Mrs. D. Crowden and Toronto City Councillor George Mammoliti, asking that the proposed project be bumped up to an individual environmental assessment.

Staff were advised by Councillor Mammoliti that he would be holding two public meetings concerning the proposed Emery Creek project on April 20 and 21, 1998. A copy of the meeting notice has been included in the appendix to this report. Given that these meetings concluded only three days before the end of the Minister's review period, we formally requested an extension of the review period to June 19, 1998. This would allow staff to review the additional public input and submit a response to the Minister for his review.

At the request of Councillor Mammoliti, staff hosted an additional public meeting on May 26, 1998, at St.Jude's Separate School. The meeting consisted of an open house with displays and staff members to answer questions and a short staff presentation. The presentation portion of the evening was chaired by Councillor Dick O'Brien, Chair of the Toronto and Region Conservation Authority.

Comments and/or Discussion and/or Justification:

The project consultant and staff were in attendance at both of Councillor Mammoliti's community meetings and the third public meeting chaired by Councillor Dick O'Brien. A very short presentation on the project was given by staff and the project consultant followed by a question and answer period. Although the majority of the concerns raised by the public have been addressed in previous consultation activities over the past several years, it was apparent that clarification of these concerns was required. The following outlines the areas of major concern:

(1)There was a concern that information requested from Works and Emergency Services was not provided.

Response:

Councillor Mammoliti's request for information and the subsequent response from staff is included in the appendix of this report.

(2)Residents were very concerned about the safety risk to children and the general public from coming in contact with "toxins" in the ponds.

Response:

In general, stormwater runoff is not considered toxic or harmful to humans.

The pollutants that are typically found in stormwater are nutrients such as phosphorus and nitrogen from fertilizers and detergents, soil/sand, silt, heavy metals, bacteria from animal droppings, and general street trash.

It should be noted that new contaminants are not being introduced to the area. The pollutants currently are being discharged to Emery Creek and the Humber River every time it rains as they are washed off the roads and land in the drainage area. These pollutants come from both residential and industrial areas. These pollutants would be captured and controlled by the stormwater ponds and once accumulated, the sediment would be tested and removed and disposed of safely at a sanitary landfill. It is anticipated that the sediment will be removed from the first pond approximately every five years and every 15 years for the wetland and finishing pond.

Stormwater quality control ponds such as the Emery Creek Ponds are not intended or designed to be recreational water use facilities. The TRCA and other municipal agencies and authorities that have had experience with several hundred stormwater quality ponds throughout Ontario have found that such pond facilities are not used for swimming or other water contact activities even without any fencing or barriers. Although incidental exposure to stormwater is not considered to be hazardous to humans, to provide an added factor of safety, human access will be actively discouraged through interpretive signs and public education programs and appropriate vegetation barriers such as thorn bushes.

(3)The proposed vegetation barriers such as thorny bushes will not keep children and others away from the ponds. There is a potential for drowning.

Response:

Through the experience of many authorities and agencies that manage similar facilities, children have not been found to be using ponds for recreation even in situations where barriers or fencing have not been installed. It should be noted that currently access to the Humber River and Emery Creek is unrestricted. However, in response to public input we are recommending the inclusion of the following safety measures:

-a public education program in local schools;

-interpretive signs;

-safety rescue rings and poles around the ponds;

-gradual slopes at pond edges and small 0.3 metre drops to warn of deepening water;

-fencing around areas such as pipe outlets and steeper areas; and

-a safety monitoring program.

These safety features will be incorporated into the final detailed design of the facility in addition to the plantings to discourage access. The list of safety features will be included in a supplementary appendix to the Class Environmental Assessment ESR.

(4)The public were not adequately consulted regarding this project.

Response:

Extensive public consultation was conducted through the course of this project. The Class EA outlines the required public contact to be undertaken through the various phases of the process. For a Schedule "C" Class Environmental Assessment - Water and Wastewater Projects, the proponent is required to consult with the public only three times, including the Notification of Completion at the end of the project. However, it was felt that due to the retrofit nature and public concerns expressed early in the process, public consultation in addition to the requirements were warranted. A chart outlining the details of every public contact is included in the Appendix to this report.

From October 1992 until May 1996, there were 11 public workshops or meetings held to discuss the Emery Creek Ponds. The Notice of Completion, the 12th contact with the public, was mailed and advertised in January 1998.

Public events were promoted using a variety of methods including flyer delivery to the surrounding neighbourhood, newspaper advertisements, direct first class mail to addresses close to the site (portions of St. Lucie Drive and Storer Drive and all of Azalea Court and Tampa Terrace), mailings to others who had expressed prior interest in the project and posters placed at prominent locations near bus stops and in local retail establishments. Notice information was provided in English, Italian and Spanish, with staff or voice mail answering inquiries, depending upon the language.

To date, over 150 people living within one kilometre of Emery Creek are on the project mailing list. Regular mailings, including meeting minutes and notices and project updates, have been mailed to the more than 200 addresses on the full mailing list since January 1993. Staff have regular contact with residents living in the area who report that they have canvassed and notified the broader neighbourhood about the project.

Public sentiment was apprehensive at the first few meetings held in December 1992 and February 1993. The public at these meetings expressed concern over (1) safety, (2) health, (3) the use and appearance of the valley, and (4) the role of industry. However, as the meetings progressed and questions and concerns were answered, this public concern was greatly reduced and a spirit of co-operation toward improving the environment emerged. A regularly updated question and answer page was distributed to the public to answer their concerns in an open manner.

After the June 7, 1993 meeting at Gulfstream Public School, the public in attendance gave their approval to the preferred option, with the some minor conditions.

Acting on public concerns about the involvement of business in pollution reduction activities, the former Metro Works Department became actively involved in the start-up of the Emery Creek Environmental Association in June 1993. The Association's mandate is to educate local industry on how they can reduce their impact on the local environment and currently has a membership of some 70 businesses.

Since that time, Metro Works (now City of Toronto) has provided staff, financial and in-kind support to the Association. The Association's mandate is to educate local industry on how they can reduce their impact on the local environment. Public consultation and water pollution control staff have worked closely with Association staff, volunteers and the local businesses to develop programs, information bulletins and educational sessions. The Association's newsletter, "Up the Creek", and various other activities including workshops and seminars have gone a long way in promoting environmental awareness in local industry and business. Companies involved in this Association include Bell Canada, Coca Cola, Apotex, Canadian Tire, Reynolds Aluminum and McGregor's Meat and Seafood among many others. Woodwaste Solutions has donated office space to the Association since 1994.

(5)Ontario Hydro has required that the City (former Metro) indemnify Hydro against all liabilities associated with the construction, maintenance, public use and environmental degradation of their lands. There is a perception that this indicates that Ontario Hydro believes that this project is dangerous and is a risk to residents.

Response:

This is not accurate. As the City is proposing to use Ontario Hydro lands for this project, it is standard and normal operating procedure to require full indemnification from the proponent no matter how minimal the risk. Ontario Hydro has expressed their full support for this project as documented in correspondence from their office.

(6)The pollution is coming from industrial discharges and not the residential areas.

Response:

The purpose of the Emery Creek Stormwater Quality Ponds is to improve the quality of stormwater that flows into Emery Creek and the Humber River and not to treat industrial discharges. The elimination of illegal and accidental discharges and other "point source" pollution is ongoing in the Emery Creek drainage area. There has been a significant improvement in Emery Creek water quality during dry weather as a result of the City's point source abatement work (see Concern 8). However, every time it rains, pollutants are washed off the land and roads into the storm sewer system, and into Emery Creek and the Humber River, and eventually into Lake Ontario. These pollutants that are to be captured in the ponds are "neighborhood" pollutants which come from a wide range of sources and are deposited on the parking lots, sidewalks, roofs, roads and landscaped areas from vehicles, atmospheric deposition and wind, and poor industrial and residential housekeeping practices. Source control work cannot eliminate these sources of pollution.

Industrial land uses, in general, generate more polluted stormwater runoff than residential areas. This is mainly due to the fact that industrial areas usually have large areas of hardened or paved surfaces to collect pollutants but little landscaping or pervious areas to prevent pollutants from being washed off the site. Large roofs and increased vehicular traffic also contribute to the pollutant accumulation and wash-off. Residential areas also generate significant pollutants from such sources as vehicles and roads, fertilizer use, and animal droppings.

As the Emery Creek drainage area is predominately zoned industrial (75 percent of the drainage area), the majority of the pollutants are generated in the industrial area lands, however it is important to understand that the pollutants are not necessarily being generated by the industries themselves.

(7)The pond should be moved to the Toryork ravine closer to the industrial area.

Response:

A detailed assessment of alternatives was conducted as outlined previously in this report. The Toryork pond was considered, however this option would not capture approximately 37 percent of the drainage area. Although the area south of Finch Avenue is predominately residential, there are areas of existing and proposed industrial/residential development south of Finch Avenue that would generate stormwater runoff and additional pollution that would not be treated. The Toryork ravine contains areas of mature woodlot and vegetation that would be lost should a pond be constructed in the ravine.

(8)Source control and prosecution of polluting industries is lacking.

Response:

City of Toronto Industrial Waste Control (IWC) Branch has one full time inspection crew dedicated to the Emery Creek area. Staff conducted 621 industry site visits in the Emery Creek area for sampling and/or inspection purposes in 1997. Similar numbers of inspections have also been conducted in previous years. The inspectors take a proactive approach with industry. Inspections of facilities with industry officials identify minor problems for corrective action before serious problems arise. Violations are handled in a manner dependent on a number of factors including: the seriousness of the infraction, repeat offenses and intent. Prosecution is the first approach in the case of intentional waste dumping. However, this is the exception rather than the norm, as greater that 95percent of the industries are environmentally conscious.

In addition to the work of the IWC Branch with local businesses, the Emery Creek Environmental Association, with City support, continues to promote environmental awareness and source control of pollution in local industry and business.

(9)There are hundreds of reported spills yet only a handful of convictions.

Response:

Companies are required by law to report all spills. Once reported, inspectors will investigate the spill and ensure that corrective action is taken to prevent further occurrences. Most spills are accidental. In the case where a spill results from negligent action, prosecution would ensue. In some cases the MOE supersedes the City's authority and will conduct an independent investigation and prosecution.

(10)Will the regular flooding of the area in the spring be affected and will this flooding destroy the ponds?

Response:

As the facilities would have to be located within the floodplain of the Humber River, flood protection has been provided in the pond design to prevent washout of accumulated sediments and damage to the ponds from flooding. Protection has been provided against a storm event of a magnitude that would occur once every 25 years.

An increase in flood levels is anticipated in the flood plain due to some loss in floodplain storage. However, the increase will not be of a significant magnitude to adversely affect nearby residents. It is anticipated that in the event of a very large storm, such as an event that would occur once every 100 years, the flood levels in the Humber River would increase approximately 0.12 metres (0.4 feet).

Public Consultation Activities Following Approval:

Upon approval of the ESR by the Minister of the Environment, the City will then be able to proceed to detailed design and construction of the preferred alternative as recommended.

A new Emery Creek Neighbourhood Liaison Committee will be formed. The purpose of the committee will be to discuss the detailed design, construction and operation of the ponds. The committee will be open to all who wish to attend the meetings and events.

Public education and consultation activities will include the publication of fact sheets, newsletters and other printed materials as required, the holding of special open houses, committee meetings with presentations on the project and other information. Taking the time to ensure that the public feels comfortable with the ponds will be an important part of the ongoing public consultation activities.

Conclusions:

We believe that the project has met or surpassed all requirements of the Class Environmental Assessment process under the Environmental Assessment Act. The technical studies have been intensive and have responded to public input. The public consultation program has far surpassed the minimum requirements of the Class EA process. There is a strong level of support and commitment to the project from all affected agencies and levels of government.

In a recent letter to the Honourable Norm Sterling, Minister of the Environment, the Humber Watershed Alliance unanimously expressed their support for the Emery Creek stormwater quality by stating that "... it is the opinion of the Humber Watershed Alliance that the Emery Creek Stormwater Quality Ponds, as proposed by the City of Toronto, be allowed to proceed without further delay. This plan is the result of many years of rigorous public consultation."

The City will continue its point source pollution abatement programs through proactive enforcement of the Sewer Use By-law and work with Emery Creek Environmental Association to further educate industry and residents on how they can minimize their impact on the environment.

In addition, the public will be consulted on the detailed design, construction, operations and monitoring of the proposed stormwater quality ponds through the Neighborhood Liaison Committee.

The Emery Creek Stormwater Quality Ponds Project is a unique opportunity to apply standard stormwater quality control technology in a retrofit situation, for much needed improvement of water quality in the Humber Watershed. This project exemplifies the environmental leadership role of the new City of Toronto.

Contact Name:

Mr. R. M. Pickett, Director, Water Pollution Control Division

(416) 392-8230, Fax: (416) 397-0908

E-Mail: bob_pickett@metrodesk.metrotor.on.ca.

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The Works and Utilities Committee reports, for the information of Council, having also had before it during consideration of the foregoing matter the following:

(i)communication (June 10, 1998) from Ms. Sharon Morgan, North York, Ontario, in favour of the Emery Creek Stormwater Quality Ponds Project, and reviewing reasons for the importance of this initiative;

(ii)communication (June 23, 1998) from Mr. Gerry White, Toronto, Ontario, expressing support for the Emery Creek Stormwater Quality Ponds Project, and commenting on concerns raised at the last meeting with the community;

(iii)material submitted by Councillor George Mammoliti, North York Humber, as follows:

(i)communications from the following expressing concerns with respect to the Emery Creek Ponds proposal:

-Mr. Barry Flude, Weston, Ontario;

-Mr. Jorma Palomaki, Weston, Ontario;

-Mr. David R. Crowden, Weston, Ontario; and

-Mr. Paul Mercieca, Weston, Ontario;

(ii)petitions from residents in the boundaries of North York Humber in support of a working plan for the Toryork site as a proposed option; and

(iii)Notice of Public Meeting, held by the Works and Emergency Services Department on May 26, 1998;

(iv)communication (July 13, 1998) from Councillor George Mammoliti, North York Humber, requesting that the matter of the Emery Creek Stormwater Quality Ponds Project be deferred for consideration until the next scheduled meeting of the Works and Utilities Committee on September 9, 1998, to provide the opportunity for the community's residents to speak to the Committee;

(v)communication (July 13, 1998) from Mr. John P. Wilson, Pollution Probe, commenting on his experience as a member of the Task Force to Bring Back the Don with the Chester Springs Marsh urban wetland project; and advising that the Emery Creek proposal could provide the same benefits;

(vi)communication (July 10, 1998) from Mr. Brian E. Denney, Director, Watershed Management Division, Toronto and Region Conservation Authority, expressing support for the Emery Creek Stormwater Pond Project and summarizing the Toronto Region and Conservation Authority's involvement in this project; and

(vii)fact sheets submitted by Councillor Judy Sgro, North York Humber, on the Emery Creek Stormwater Quality Ponds Project, the Community Involvement Program and an artist's rendition of the project.

The following persons gave a presentation to the Works and Utilities Committee on the Emery Creek Stormwater Quality Ponds Project:

-Mr. Doug Andrews, Marshall Macklin Monoghan;

-Mr. Kiyoshi Oka, Engineer, Water Pollution Control Division, Works and Emergency Services Department;

-Mr. Lawson Oates, Manager, EA Co-ordination Branch, Management and Technical Services, Works and Emergency Services Department; and

-Mr. Greg Gris, Industrial Waste Control and Enforcement, Works and Emergency Services Department.

Mr. Frank Kershaw, Director, Policy and Development, Economic Development, Culture and Tourism Department, was also present at the meeting of the Works and Utilities Committee to respond to questions from Members respecting the Toryork ravine.

The following persons appeared before the Works and Utilities Committee in connection with the foregoing matter:

-Ms. Crystal Caschera, North York, Ontario;

-Mr. Dalton Shipway, Toronto, Ontario;

-Ms. Karey Shinn, Chair, Safe Sewage Committee;

-Mr. Gerry White, Weston, Ontario;

-Mr. Brian E. Denney, Director, Watershed Management Division, Toronto and Region Conservation Authority;

-Mr. Barry Flude, Weston, Ontario;

-Ms. Karen Buck, Toronto, Ontario;

-Councillor George Mammoliti, North York Humber, and submitted a list of names, addresses and telephone numbers of the signed petition list on the Emery Creek project; and

-Councillor Judy Sgro, North York Humber.

The Works and Utilities Committee also viewed a video submitted by Councillor Sgro on behalf of Ms. Sharon Morgan, North York, Ontario.

(A copy of the appendix referred to in the foregoing report has been forwarded to all Members of Council with the agenda for the Works and Utilities Committee meeting of July 15, 1998, and a copy thereof is on file in the office of the City Clerk.)

(City Council on July 29, 30 and 31, 1998, had before it, during consideration of the foregoing Clause, the following communications (July 29, 1998) from Councillor George Mammoliti, North York Humber, which are on file in the office of the City Clerk:

(i)advising that the Ministry of the Environment has advised that the ponds project is currently on hold until the community consultation process has been sufficiently fulfilled; and submitting a facsimile transmission dated July 29, 1998, from the Environmental Assessment Branch, Ministry of the Environment, regarding the status beyond August 21, 1998;

(ii)submitting a copy of a communication hand-delivered to Ward 6 constituents on July 27, 1998, at St. Jude's Church by Councillor Judy Sgro's staff, containing a contradiction to the information received from the Ministry of the Environment;

(iii)submitting a 19-page petition from Ward 6 residents, dated July 27, 1998;

(iv)submitting a 15-page petition from Ward 6 residents, dated April 20, 1998, who had requested that he review the proposed alternative being presented by City staff; and advising that requests for a soil analysis of the industrial area is also recommended;

(v)submitting a communication (undated) addressed to Councillor Judy Sgro, North York Humber, from Betty and Don Dawson requesting that this issue be deferred until a full Environmental Assessment has been conducted; and

(vi)submitting a communication (July 28, 1998) from Mr. Barry Flude requesting his support to stop this project as currently proposed by City staff and accepted by the Works and Utilities Committee.)

(City Council also had before it, during consideration of the foregoing Clause, the following documentation submitted by Councillor Judy Sgro, North York Humber:

(i)fact sheet (undated), headed "Emery Creek Stormwater Quality Ponds," together with an artist's rendition depicting the ponds;

(ii)copies of correspondence from the following persons, in support of the Emery Creek Stormwater Quality Ponds:

-(July 29, 1998) from Ms. Vivian Broersma;

-(July 29, 1998) from Mr. Terry Hamilton and Mr. Frank Wood, Members, Humber Crang Community Environmental Project;

-(July 29, 1998) from Ms. Crystal Caschera, Facilitator/Spokesperson, Humber Crang Community Environmental Project;

-(July 28, 1998) from Mr. Fred Morgan;

-(July 29, 1998) from Ms. Cecile White;

-(October 16, 1997) from Ms. Lorie Marangoni and Ms. Emily Marangoni; and

-(July 30, 1998) from Ms. Carol Armstrong and Mr. Brian Armstrong, and family;

(iii)media release (July 24, 1998), headed "City Councillor Approves Toxic Pollution Ponds for Toronto Suburb," together with copies of the following correspondence:

-(July 20, 1998) from Councillor George Mammoliti, North York Humber, respecting the July 27, 1998 Community Meeting; and

-(undated) from Members of the Humbermede Ratepayers Association; and

(iv)facsimile transmission (July 30, 1998) addressed to Mr. Bill Crowther, Works and Emergency Services Department, from the Environmental Assessment Branch, Ministry of the Environment, providing information on the requirements with respect to Environmental Study Reports.)

3

Corporate Voluntary Challenge and

By-law to Prohibit the Burning of Used Motor Oil

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends:

(1)the adoption of the report dated July 6, 1998, from the Commissioner of Works and Emergency Services; and

(2)that Councillors Ila Bossons and Jack Layton be requested to work with the appropriate staff to develop initiatives to publicize the corporate challenge.

The Works and Utilities Committee reports, for the information of Council, having referred the communication dated July 15, 1998, from Mr. Lloyd Clare, The Environmental Permit Corporation, to the Strategic Policies and Priorities Committee with a request that, if possible, an opportunity be provided for Mr.Clare to appear before the Strategic Policies and Priorities Committee at its meeting scheduled to be held on July 24, 1998.

The Works and Utilities Committee submits the following report (July 6, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

To comment on a proposal for a by-law to prohibit the burning of used motor oil.

Funding Sources, Financial Implications and Impact Statement:

There are no direct funding implications of this report.

Recommendations:

It is recommended that:

(1)the City of Toronto initiate a voluntary challenge to businesses in the City and showcase those that adopt a corporate policy not to burn used motor oil;

(2)the proposed by-law given in Appendix A to this report be considered for enactment by Council of the City of Toronto by December 31, 1998, if still required, in order to completely eliminate the burning of used motor oil in space heaters; and

(3)municipalities in the Greater Toronto Area be encouraged to take similar action to eliminate the burning of used motor oil in space heaters.

Council Reference/Background/History:

The City of Toronto Council, at its meeting held on May 13 and 14, 1998, adopted Clause No. 1 of Report No. 4 of The Works and Utilities Committee, as amended. In the Clause, the Commissioner of Works and Emergency Services is requested to comment on a motion to adopt a by-law to prohibit the burning of used motor oil in space heaters.

Comments and/or Discussion and/or Justification:

The Commissioner of Works and Emergency Services has received a draft by-law from the City Solicitor to prohibit the burning of used motor oil. A communication from the City Solicitor's Department to the Works and Emergency Services Department forwarding the draft by-law is contained in Appendix A to this report. The by-law focuses on the fuel rather than the heating device. As such, the by-law would not render existing space heating devices unusable but instead would prohibit the burning of used motor oil in them. No. 2 heating oil can be substituted for used motor oil as a fuel.

We have confirmed that Suncor, Sunoco Group, has a policy not to burn used oil at its outlets. A corporate challenge to other business might reduce or eliminate the burning of used motor oil in due course. An initial option for Council is to publicize a voluntary corporate challenge to encourage more businesses to step forward and discontinue used oil burning. The corporate challenge could involve full public recognition and appreciation to businesses choosing to voluntarily discontinue the burning of used motor oil. The City could maintain a database of businesses that have volunteered not to burn waste oil for the reference of the media and general public.

City Council could establish a firm time line for full participation. After allowing time for voluntary action, City Council could proceed to implement a by-law. A by-law would level the playing field. Competition for businesses having volunteered to discontinue burning of used motor oil would be required not to burn used motor oil and therefore could not secure any business advantage by burning used motor oil.

By allowing time for business to volunteer before enacting a by-law, businesses would have the opportunity to show environmental leadership in the community. By taking a leadership position, businesses would gain public recognition. Voluntary action would serve to promote businesses that step forward with voluntary action.

In addition to allowing time for voluntary action, time would be required for businesses to make fuel storage modifications to substitute heating oil for used motor oil. By scheduling the enactment of a by-law, if necessary, after December 31, 1998, the City would give businesses sufficient notice in order to plan and implement heating system modifications.

To achieve a level playing field for businesses located in the City near the City boundary, neighbouring municipalities should be requested to take similar action to eliminate the burning of used motor oil. Residents of neighbouring municipalities will benefit from better air quality resulting from the elimination of the burning of used motor oil in the City, depending on the wind direction. Neighbouring municipalities can reciprocate by taking similar action.

Conclusions:

A corporate challenge could yield significant participation by Toronto businesses in a clean air initiative to end the burning of used motor oil in space heaters. If required, a by-law would complete the discontinuation of the burning of used motor oil in space heaters in the City and, by levelling the competitive playing field, serve to support those businesses having already volunteered to discontinue the burning of used motor oil. Time should be provided to businesses to implement fuel storage modifications to end the burning of used oil prior to a by-law coming into effect.

Contact Name:

Kevin Loughborough, P. Eng., Works and Emergency Services

(416) 392-8845; (416) 392-4540 fax.

(Communication dated July 2, 1998, from Legal Services

referred to in the foregoing report)

In considering Clause No. 1 of Report No. 4 of The Works and Utilities Committee at its meeting on May 13 and 14^,, 1998, City Council referred a motion by Councillor Sgro to the Commissioner of Works and Emergency Services for a report. The motion by Councillor Sgro recommends that Council adopt a by-law to prohibit the use of used motor oil for space heating by or in businesses in the City of Toronto.

In relation to this matter, I thought that it would be useful for me to provide some legal comments for possible incorporation in your report going to the Works and Utilities Committee. The comments must be read in the context of the report from the City Solicitor, dated April 16, 1998, entitled "Options to Ban and Grandfather the Operation of Waste Oil Heaters", and the legal opinions expressed there about the validity of any municipal by-law. My comments are as follows:

The proposed by-law purports to utilize section 257.2 (the licensing provisions) of the Municipal Act as authority for enactment of the by-law. The by-law, however, as drafted, is simply regulatory in that it neither imposes conditions to any existing licenced business nor attempts to define and licence a new business and, in conjunction therewith, impose conditions. In particular, sections 2 and 3 of the proposed by-law read as follows:

"(2)the purpose of this by-law is to prohibit the use of used motor oil for space heating".

"(3)no business may burn "used motor oil" for space heat within the municipality of the City of Toronto".

If the intent of Councillor Sgro is to propose a by-law based on utilization of the licencing provisions of the Municipal Act, any by-law (if the intent is to make it enforceable as a licensing by-law) must amend the general licencing by-law of the City, namely By-law No. 20-85 of the former Municipality of Metropolitan Toronto, as amended. In that by-law, one would either attach conditions to existing licenced businesses or create a definition of a new business to be licenced and attach conditions to the operation of that business.

Given the intent of Councillor Sgro's proposed by-law to simply regulate the fuel source for these space heaters, it may be simpler to utilize the specific regulatory provision which would appear to apply, namely, paragraph 156 of Section 210 of the Municipal Act. Again, that paragraph reads as follows:

"For regulating, controlling and inspecting heating and cooking appliances, or any classes thereof, the installation thereof and the storage of fuel for use in connection therewith".

(I have not, however, finished research into the provision, including a search of Hansard to determine the legislative intent of the section - although an initial search has not been fruitful.)

If paragraph 156 of Section 210 of the Municipal Act is to be used, however, I would also make two points about the proposed by-law, as a regulatory by-law:

1.The very breadth of the definition of "space heater" encompasses every type of heating device in prohibiting the burning of used motor oil as a fuel. While the by-law attempts to limit this absolute prohibition to businesses, arguably there is no provision in paragraph 156 of section210 of the Municipal Act allowing such regulation to be discriminatory, i.e., applicable to one class of persons and not to others. The by-law, as a regulatory by-law, would have to be re-drafted to provide a prohibition on the burning of used motor oil by all persons within the City. This should not make a difference, as I understand residences do not utilize waste oil heaters; and

2."space heat" is not defined; "space heater" is defined so that the proposed section (3) or similar section should in fact read as follows:

"(3)no person may burn "used motor oil" within a space heater within the City of Toronto."

A possible by-law on the basis of paragraph 156 of section 210 of the Municipal Act is set out in the attached appendix. I would be pleased to discuss any of the above at your convenience.

APPENDIX

Authority:

Intended for first presentation to Council:

Adopted by Council:

CITY OF TORONTO

Bill No.

BY-LAW No.

WHEREAS paragraph 156 of section 210 of the Municipal Act allows municipalities to regulate and control heating appliances, or any class thereof; and

WHEREAS space heaters burning used motor oil generate significantly more pollution than other fuels used for space heating; and

WHEREAS Toronto residents currently bear the monetary, human health and environmental costs of air pollution; and

WHEREAS space heaters currently burning used motor oil can burn cleaner fuels without modification and at no capital cost;

NOW THEREFORE the Council of the City of Toronto HEREBY ENACTS as follows:

1.In this by-law,

(a)" used motor oil" means lubricating oil that has been used as a lubricant in any commercial or industrial operation or as a lubricant in the crankcase of motor vehicles; and

(b)"space heater" means a heating device that, through combustion of fuel, provides heat energy to an internal or external area.

2.No person may burn used motor oil within a space heater.

ENACTED AND PASSED this day of , A.D. .

MayorCity Clerk

(Corporate Seal)

--------

The Works and Utilities Committee reports, for the information of Council, having also had before it during consideration of the foregoing matter a communication (July 15, 1998) from Mr. Lloyd Clare, The Environmental Permit Corporation, requesting that the Works and Utilities Committee defer consideration of the aforementioned report until proper notice can be given to the affected parties; and expressing concern with respect to the lack of adequate notice in this matter.

4

Ontario Clean Air Alliance

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the following reports from the Commissioner of Works and Emergency Services:

(June 30, 19989)

Purpose:

To comment on the recommendations of, and membership in the Ontario Clean Air Alliance.

Funding Sources, Financial Implications and Impact Statement:

There are no direct funding implications of this report, however the implications to the benefit of the City economy are significant.

Recommendations:

It is recommended that:

(1)the City of Toronto accept membership in the Ontario Clean Air Alliance;

(2)the air emission standards proposed by the Alliance be endorsed and that staff report further on ways to achieve additional reductions in emissions;

(3)prior to the deregulation of the power market, Ontario Hydro be requested to purchase power generated from methane recovery projects at municipal landfills in Ontario as a way to improve air quality in Toronto and other Ontario municipalities;

(4)Toronto Hydro be requested to consider the purchase of power from City methane recovery projects should a deregulated electricity market be implemented;

(5)staff and representatives of Toronto Hydro be requested to invite the operators of the Britannia Landfill, located in the Region of Peel, to discuss a proposal for a project to maximize the use of methane for green power production and possible electricity purchase by Toronto Hydro should a deregulated electricity market be implemented;

(6)Toronto Hydro and Toronto District Heating Corporation be invited to participate with staff in a project to develop local cogeneration in connection with heat production for district energy customers in preparation for implementation of a deregulated electricity market; and

(7) staff be requested to prepare presentations to the Standing Committee of the Ontario legislature scheduled for August 1998 on the proposed Energy Competition Act, 1998.

Council Reference/Background/History:

The Works and Utilities Committee, at its meeting on May 20, 1998, endorsed, in principle, the recommendations embodied in a communication from the Ontario Clean Air Alliance, "Electricity Competition and Clean Air", April 1998, and requested the Commissioner of Works and Emergency Services to report on the recommendations and membership in the Alliance.

Comments and/or Discussion and/or Justification:

Recently, Ontario Hydro announced the planned shut down of 4400 megawatts of nuclear generating capacity in Ontario. To make up for the lost capacity, Ontario Hydro plans to increase the use of fossil fired generation in Ontario and under contract with mid-western US power suppliers. Increased power production is expected from Lakeview Generating Station and Nanticoke Generating Station which are southwest of the City of Toronto. The prevailing winds in the summer smog season are from the southwest. We are concerned that the increased use of fossil generation will increase the risk of smog events in Toronto.

Recently, Ontario Hydro issued two requests for proposals (RFP) to help to overcome the shortage in generating capacity. One RFP focused on demand management which is reducing the demand for electricity, and the other RFP focused on generation. Unfortunately the second RFP was time-limited and received little interest from independent power producers.

Using methane instead of coal to generate electricity reduces air pollution and CO₂ emissions. While in the past Ontario Hydro had a policy of not accepting power from independent producers due to a generating capacity surplus, the change to a shortage of generating capacity as a result of nuclear shutdown would support a new policy of accepting power generated from landfill gas and local cogeneration. It is recommended that the City of Toronto request the Board of Ontario Hydro to review its position respecting the purchase of power generated using methane recovered from landfill.

The Britannia landfill located west of Toronto has the potential to support power generation in the same manner as Keele Valley. The Britannia Landfill is operated by the Region of Peel. If Ontario Hydro were to agree to purchase power from the Britannia landfill, Ontario Hydro could conceivably reduce the burning of coal at the Lakeview Generating Station. This action would improve Toronto air quality.

On implementation of an electricity market, power purchasers would have the option of purchasing green power from landfill gas recovery. The amalgamated Toronto Hydro has a very significant purchasing power. It may have green power customers prepared to purchase power from landfill gas recovery projects. The three existing City projects at Brock West, Beare and Keele Valley would be able to generate power for sale to Toronto Hydro. There is potential for an electrical power production project at the Britannia landfill that would be environmentally friendly by virtue of the clean methane fuel and that would improve City air quality.

Air emission standards are essential for the proposed deregulated power sector. There are significant structural opportunities to reduce emissions other than traditional stack technology. The opportunities include local cogeneration coupled with Toronto District Heating Corporation heating plants and additional methane recovery from municipal landfills in Southern Ontario. The Ontario Clean Air Alliance has proposed that the existing standards that Ontario Hydro must meet should apply to the entire new deregulated electricity market. We concur and add that further reductions in allowable emissions levels can be realized through the use of innovative energy systems such as local cogeneration. Cogeneration is a very significant way to help meet the City target for the reduction of carbon dioxide emissions of 20 percent below the 1988 level by 2005.

The Ontario Government is expected to schedule hearings before the Standing Committee of the legislature into the proposed Energy Competition Act, 1998 in August 1998. The City of Toronto in collaboration with the Ontario Clean Air Alliance has the opportunity to present a case for strong emissions controls at the hearings.

The revised Ontario Energy Board Act, 1998 would establish the Ontario Energy Board (OEB) as the independent regulator for the electricity market. The OEB would ensure environmental standards compliance through licensing: emissions trading, emissions caps, emissions performance standards and pollution disclosure requirements.

Conclusions:

The recommendations of the Ontario Clean Air Alliance should be endorsed and the City of Toronto should join other members including municipal electric utilities and accept membership in the Alliance to work for better controls of emissions from power generation.

Contact Name:

Kevin Loughborough, P. Eng., Works and Emergency Services

(416) 392-8845; (416) 392-4540 fax.

--------

(July 14, 1998)

Purpose:

To add a further recommendation to the report entitled "Ontario Clean Air Alliance", dated June30, 1998.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendation:

It is recommended that the Commissioner of Works and Emergency Services in consultation with the Commissioners of Community and Neighbourhood Services; Economic Development, Culture and Tourism; Urban Planning and Development Services; and Corporate Services, be authorized to represent the City of Toronto to the Standing Committee of the Ontario Legislature commencing in August 1998 on the proposed Energy Competition Act, 1998, to address the potential impact of this Act on the City.

Council Reference/Background/History:

The Works and Utilities Committee, at its meeting on May 20, 1998, endorsed, in principle, the recommendations embodied in a communication from the Ontario Clean Air Alliance, "Electricity Competition and Clean Air", April 1998, and requested the Commissioner of Works and Emergency Services to report on the recommendations and membership in the Alliance.

Comments and/or Discussion and/or Justification:

Recommendation No. (7) of the report entitled "Ontario Clean Air Alliance", dated June 30, 1998, states that "staff be requested to prepare presentations to the Standing Committee of the Ontario Legislature scheduled for August 1998 on the proposed Energy Competition Act, 1998".

Ontario's Energy Competition Act, 1998 was introduced as a Bill in the Legislature earlier this year. The Act substantively reflects the White Paper on the electricity reform released by the Ontario Government last November. The Ontario Government plans to hold public hearings on the Act starting in August 1998, and to past the Act into law a few months later.

This Act potentially has major implications for the City of Toronto with respect to energy efficiency and protection of the environment, economic development, protection of consumers' interest with regard to price, security of electricity services, reliability and a range of other major areas.

The Act is composed in four parts as below:

(1) the new Electricity Act, 1998 ;

(2) a revised Ontario Energy Board Act, 1998;

(3) amendments to the Ontario Municipal Employee Retirement System Act; and

(4) amendments to and repeals of a number of legislation.

Conclusions:

In view of the potential impact of this Act on the City of Toronto, a strategic and coordinated response to the Standing Committee of the Ontario Legislature should be undertaken.

Contact Name and Telephone Number:

Eleanor McAteer, Director, Environmental Division

City Works Services, Toronto Community Council Area

Phone: (416) 392-7763; Fax: (416) 392-1456

E-mail: "emcateer@city.toronto.on.ca".

5

Retention of Biosolids Project Manager and

Consultant for Beneficial Reuse Program

at the Main Treatment Plant

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends that:

(1)Council endorse, for planning purposes, the following target dates respecting the 100Percent Biosolids Beneficial Reuse Program at the Main Treatment Plant:

July 20, 1998-short list for Project Manager;

Week of August 4, 1998-interviews for Project Manager;

August 10, 1998-Project Manager to start;

August 14, 1998-issue Expressions of Interest (EOI) to proponents for biosolids system;

August 21, 1998-receive EOIs for biosolids system;

September 1, 1998-short list respondents from EOI;

September 30, 1998-close Request for Proposals;

October 21, 1998-report preparation;

November 4, 1998-Works and Utilities Committee; and

November 25, 1998-Council; and

(2)the following report dated July 14, 1998, from the Commissioner of Works and Emergency Services be received:

Purpose:

This report is to inform the Works and Utilities Committee about variations to the July 8, 1998 report to City Council as proposed by the Biosolids Multi-Stakeholder Committee, and to seek direction with respect thereto.

Funding Sources, Financial Implications and Impact Statement:

There are no financial implications arising from this report.

Recommendations:

It is recommended that the Works and Utilities Committee provide direction on the Biosolids Multi-Stakeholder Committee recommendations that:

(1)the Biosolids Project Manager will preferably be separate from the consulting firm(s) and will be engaged before the consulting firm(s) is selected;

(2)the search for the Biosolids Project Manager and the consulting firm(s) be carried out concurrently and be expanded to international markets, using the most expeditious methods including the Internet, newspapers and contact with professional and trade organizations, with the deadline for receiving Expressions of Interest to be August 15, 1998; and

(3)to support these recommendations, the Commissioner of Works and Emergency Services be authorized to negotiate separate agreements/contracts, as required, with the selected Biosolids Manager and consulting firm agreeable to the Commissioner of Works and Emergency Services and the City Solicitor within the funding request contained in our June16, 1998 report to the Works and Utilities Committee.

Council Reference/Background/History:

The Works and Utilities Committee on June 17, 1998, had before it a report (June 16, 1998) from the Commissioner of Works and Emergency Services recommending that a Biosolids Multi-Stakeholder Committee for the City of Toronto be established immediately to facilitate ongoing public consultation and involvement in the ending of incineration at the Main Treatment Plant.

The Works and Utilities Committee on June 17, 1998, had before it a report (June 16, 1998) from the Commissioner of Works and Emergency Services seeking authorization to retain a Project Manager at an estimated 1998 cost of $50,000.00, with an annual expenditure thereafter of $100,000.00 to manage ceasing of incineration at the Main Treatment Plant and implementation of a 100 percent beneficial use program for the biosolids; and further, that the Commissioner of Works and Emergency Services provide funding up to a maximum of $400,000.00 for technical consultant in 1998, and $100,000.00 in each of 1999 and 2000, to support staff and the Technical Advisory Committee (renamed the Independent Review Panel).

A report dated July 8, 1998, from the Commissioner of Works and Emergency Services was submitted to and approved by City Council on July 10, 1998. The report stated that the Biosolids (Project) Manager would be provided by the consultant team and would lead the consultant team.

Comments and/or Discussion and/or Justification:

The role of the Biosolids Multi-Stakeholder Committee (BMSC) is to assist in the overall development of the biosolids program by helping to chart the direction of the program, its goals and intentions. The BMSC will provide input into the assessment of options or types of technology and highlight specific concerns of the community. It was agreed at the July 6, 1998 meeting of the BMSC that it would report to the Works and Utilities Committee. At the July 13, 1998 meeting of the BMSC, four motions were made addressing the role of the Biosolids Manager and the (technical) consulting firm(s). The motions are:

-the Biosolids Project Manager will preferably be separate from a consulting firm and will be engaged before the consulting firm(s) is selected;

-the search for the Biosolids Project Manager and the consulting firm(s) be carried out concurrently and be expanded to international markets, using the most expeditious method, with Expressions of Interest from individuals and firms to be returned by August 15, 1998;

-a sub-committee, as defined in Item 4 of the July 8, 1998 report from the Commissioner of Works and Emergency Services to City Council regarding "Implementation of a 100 Percent Biosolids Beneficial Reuse Program at the Main Treatment Plant", will define the role of the Biosolids Manager and clarify the role of the consulting firm(s); and

-a sub-committee of the Biosolids Multi-Stakeholder Committee (or the Committee of the Whole) will review the Expressions of Interest and forward comments to the selection subcommittee through the Biosolids Multi-Stakeholder Committee representatives on the selection committee. All submissions will be held in confidence.

The BMSC agreed by consensus to the above motions. These motions vary from the report dated July 8, 1998, from the Commissioner of Works and Emergency Services which was approved by City Council on July 10, 1998, and would require an additional authority to modify Council's previous direction. Recommendations Nos. (1) and (2) of this report reflect the motions of the BMSC. Recommendation No. (3) of this report has been added by staff to give effect to the BMSC direction.

The Biosolids Multi-Stakeholder Committee has reached consensus that it would be preferable to have the Biosolids Manager hired before the consulting firm(s) so that she/he will have input into selecting the consulting firm. Further, the BMSC recommends that the Biosolids Manager must be accessible to staff, the public, consultants and private companies, continuously.

The Biosolids Manager will oversee the implementation of the transition to 100 percent beneficial biosolids use. The BMSC recommends that this process of change will best be served by an individual manager, who may be seconded to the City or hired through a contract, and who will be present continuously. The daily presence of this individual is seen as a key element is implementing a successful biosolids beneficial use program. Ongoing involvement of the Biosolids Manager through leading the consulting team responsible for the Expressions of Interest and Request for Proposals; implementing the 100 percent beneficial use program, commencement of any design/build projects, is seen as a key to success of the biosolids project. The BMSC recommends that the Biosolids Manager will also be responsible for the information transfer to operations and management staff. The learning curve will supported through the ongoing and continuous support of the Biosolids Manager. The BMSC had before it a letter from the Safe Sewage Committee describing their suggestion for the role of Biosolids Manager. The BMSC asked that this letter be provided to Works and Utilities Committee, as attached.

The BMSC recognizes that there may be a minor delay in reaching the first milestone for issuance of RAPs (October 1998). Members of the BMSC believe that the project must start with the engagement of the Biosolids Manager and are willing to risk a slight delay in the move to 100percent biosolids beneficial use.

Conclusions:

Adopting the motions of the Biosolids Multi-Stakeholder Committee, as recommended at its July 13, 1998 meeting, may compromise the project's first milestone. The intent to develop the Request For Proposals, for approval of the Independent Review Committee, to be reviewed by the Biosolids Multi-Stakeholder Committee and to be issued in October 1998 is the first milestone.

Adopting these motions will acknowledge the input of the Biosolids Multi-Stakeholder Committee. Acknowledging the BMSC's first recommendation will support the process and set the BMSC up for more successes during the course of the 100 percent biosolids beneficial use project.

Contact Name:

W.G. Crowther, Director, Management and Technical Services

Telephone: (416) 392-8256; Fax: (416) 392-2974

E-Mail: william_g_crowther@metrodesk.metrotor.on.ca.

(A copy of the communication dated July 12, 1998, from the Safe Sewage Committee referred to in the foregoing report has been forwarded to all Members of Council, and a copy thereof is on file in the office of the Ciy Clerk.)

6

Geotechnical Consulting Services -

Western Beaches Storage Tunnel

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the report dated June26, 1998 from the General Manager of Water and Wastewater Services.

The Works and Utilities Committee reports, for the information of Council, having requested the Commissioner of Works and Emergency Services to immediately alert the media to the success of the Western Beaches Storage Tunnel project and to provide an update on the pollution counts at all the beaches, including Woodbine Beach.

The Works and Utilities Committee submits the following report (June 26, 1998) from the General Manager of Water and Wastewater Services:

Purpose:

To obtain authorization to amend the consulting agreement dated September 25, 1996, with Geo-Canada Limited to provide geotechnical consulting services during the Phase I design and construction period of the Western Beaches Storage Tunnel project.

Funding Sources, Financial Implications and Impact Statement:

Funding in the total amount of $38.5 million for engineering services and construction of Phase I of the Western Beaches Storage Tunnel (WBST) project has been previously approved by the Council of the former City of Toronto, and is available in Account Nos. 295480-39220-76000-295480 and217713-39220-76000-217713 of the former City of Toronto. A contract for the amount of $32.0million for the design/build of Phase I of the project has been awarded, and the amount of $60,000.00 for geotechnical consulting services during design and construction of Phase I of the project has been provided for within the approved budget of $38.5 million.

Recommendations:

It is recommended that:

(1) the terms of reference of the consulting agreement dated September 25, 1996, for undertaking geotechnical investigations for the Western Beaches Storage Tunnel be amended to include the provision of geotechnical consulting services during the Phase I design and construction of the project;

(2) the consulting fee of $266,865.70, including GST, provided for in the consulting agreement dated September 25, 1996, with Geo-Canada Limited be increased by $60,000.00 to $326,865.70, including GST; and

(3)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

The Board of Management of the former City of Toronto, at its meeting of September 19 to September 25, 1996, in considering a report dated September 13, 1996, from the Commissioner of Corporate Services, approved the engagement of Geo-Canada Limited to undertake geotechnical investigation for the Western Beaches Storage Tunnel (Board of Management Minute No. 27). Geo-Canada Limited was selected for this assignment as a result of a proposal call whereby a total of 34 firms were invited and proposals from seven geotechnical consultants were received. The Geo-Canada Limited proposal achieved the overall highest ranking based on a pre-determined point score system.

Further, the Board of Management of the former City of Toronto at its meeting of December18, 1997, in considering a report dated December 17, 1997, from the City Engineer, approved, inter alia, the award of Phase I of the WBST Design/Build Project at a cost of $32.0 million to the McNally-Frontier Joint Venture.

Comments and/or Discussion and/or Justification:

As indicated above, Geo-Canada Limited was engaged by the City in 1996 to undertake geotechnical investigations along the alignment of the WBST. The results of these investigations have been utilized in the preparation of the conceptual design of the tunnel project and form part of the design/build contract documents.

In the meantime, Phase I of the tunnel project has been awarded and the contractor is undertaking detailed design and construction work for the storage facility.

During the entire design and construction period for Phase I of the project (approximately 20months), specialized geotechnical consulting services are required to assist the City in:

-reviews and approvals of detailed design calculations, design/shop drawings and contractors' methodology statements;

-field inspections, as required, to ensure that the work is being carried out in accordance with approved designs and methodology statements from a geotechnical point of view; and

-reviews of claims by the contractor for change conditions and extra work related to geotechnical conditions.

The estimated cost of these geotechnical services amounts to $60,000.00, including GST, and services will be paid on the basis of time plus expenses. We are requesting authorization to continue and extend the engagement of Geo-Canada Limited to provide these services for reasons as follows:

(1) Geo-Canada Limited has carried out the initial geotechnical investigations for the WBST project which have been incorporated into the design/build contract document. Therefore, they are most familiar with geotechnical conditions in the vicinity of the project and the specifics of the WBST project.

(2) Geo-Canada Limited was selected for the initial engagement for the WBST as a result of a (competitive) proposal call. Of seven proposals received, they achieved the overall highest ranking.

(3) As per the requirement in consulting agreements, Geo-Canada Limited has provided Professional Liability Insurance for their services related to the initial geotechnical investigations. The City's protection provided by this insurance may be jeopardized if another geotechnical consultant is engaged to assist the City in the design and construction phase.

(4) The costs for the required geotechnical services have been estimated and the actual costs are dependent on the design/construction schedule, project progress, difficulties encountered in the field and contractors' performances. Therefore, these services are to be paid on the basis of time plus expenses and do not lend themselves to the calling of competitive bids.

Conclusions:

Geotechnical consulting services are required to assist the City during the Phase I design and construction period of the WBST project. Geo-Canada Limited has carried out the initial geotechnical investigations and has a detailed knowledge of local geotechnical conditions and of the specifics of the project.

Therefore, this firm would provide seamless continuation of geotechnical services for the WBST to the City and is best suited to assist the City during the Phase I design and construction period.

Contact Name and Telephone Number:

Werner Wichmann, City Engineer, Former City of Toronto

Toronto Community Council Area

Phone: (416) 392-7703; Fax: (416) 392-0816

Email: "wwichman@city.toronto.on.ca".

7

Construction of Sewers and Water Mains at Various Locations

(Don River, Trinity-Niagara and North Toronto)

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the following report (June29, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

To authorize the construction of sewers and water mains at various locations.

Funding Sources, Financial Implications and Impact Statement:

The costs of the sewer and water main works set out in this report are to be borne by private developers and/or the City. Funds to cover the City's shares are accommodated in the approved 1998 Capital and Operating Budgets.

Recommendations:

It is recommended that:

(1) approval be given to construct the sewers described in Schedule "A" attached to this report;

(2) approval be given to construct the water mains described in Schedule "B" attached to this report; and

(3) the appropriate City officials be requested to take whatever action is necessary to give effect thereto including the introduction in Council of any Bills that are required.

Comments:

City Council has approved the 1998 Capital and Operating Budgets and authorized the construction of a number of sewer and water main projects as part of the 1998 Works Sewer and Water Main Construction Programs. During the detailed design stage and as a result of ongoing development activity, it has been established that the construction of additional sewer and water main works are necessary as set out below:

(1) Sewer Works:

(a) Lane Outlets:

On May 14, 1998, City Council enacted By-law No. 245-1998, respecting the improvement of certain lanes at various locations by the construction of lane pavements and drains. (Items Nos. 471, 505 and 507 of the By-law).

During the detailed design stage of the lane drains, staff have established that storm sewer outlets will be required on Balliol Street, River Street and Richmond Street West. The proposed sewer work is described in Items Nos. (1), (2) and (3) of Schedule "A", attached.

Funds to cover the cost of these sewer connections have been accommodated within the approved 1998 Capital Budget, Account No. 295810.

(b) Development-Related Sewer Construction:

The Council of the former City of Toronto, at its meeting of July 11, 1996, adopted Clause 4 in Executive Committee Report No. 11, and in so doing authorized the development of a housing project east of River Street, north of Queen Street East.

In accordance with the obligations set out in the Statement of Approval/Undertaking, the developer is responsible for the costs associated with municipal services.

The construction of a sanitary sewer is required in connection with this development. The proposed sewer work is described in Item No. (4) of Schedule "A", attached. The cost of this work is to be borne by the developer.

In connection with a housing development at premises Nos. 12 and 15 Sudbury Street, certain municipal services required to serve the site are proposed to be constructed by and at the developer's expense within the Sudbury Street right-of-way. The proposed storm sewer is described in Item No. (5) of Schedule "A" attached. The cost of this work is to be borne by the developer.

(2) Water Works:

City Council, at its meeting of March 6, 1998, adopted By-law No. 109-1998, authorizing the improvement and extension of the City's water works at various locations. In addition to these locations, water mains on Sudbury Street and on the lane system east of River Street are to be included under this authorization.

The construction of two water mains is required in connection with the housing developments discussed above on the laneway system north of Queen Street East, east of River Street and on Sudbury Street. These water main projects are described as Items Nos. (1) and (2) of Schedule "B", attached.

The cost of these water mains is to be borne by the developers of the adjacent properties.

The sewer and water main works recommended in this report are pre-approved in accordance with Schedule "A" of the Class Environmental Assessment for Municipal Sewer and Watermain Projects.

Contract Name and Telephone Number:

Richard Young, Programmes Assistant

Infrastructure Planning and Transportation Division

392-7711

Schedule "A"

(1)The construction of a 300 mm diameter R.C.P. storm sewer on Balliol Street from Bayview Avenue to the lane 36.6 metres west of Bayview Avenue.

(2) The construction of a storm drain outlet, 300 mm diameter R.C.P. storm sewer on River Street from Queen Street East to the lane 45.7 metres north of Queen Street East, as shown on the attached print of Plan No. SYE-2810, dated January 8, 1998.

(3) The construction of a 300 mm diameter R.C.P. storm sewer on Richmond Street West from Tecumseth Street to the lane 46.6 metres east of Tecumseth Street.

(4) The construction of a 300 mm diameter sanitary sewer on the lane 40.7 metres east of River Street, east on the lane 45.2 metres north of Queen Street East then south on the lane 76.5metres east of River Street from 120 metres north of Queen Street East to Queen Street East, as shown on the attached print of Plan No. SYE 2810-1, dated January 8, 1998.

(5) The construction of an R.C.P. storm sewer varying in diameter from 300 mm to 450 mm on Sudbury Street from King Street West to Dovercourt Road.

Schedule "B"

(1) The construction of a 150 mm diameter water main on the lane 128 metres north of Queen Street West, hence south on the lane 40.7 m east of River Street and west on the lane 45.7metres north of Queen Street East from River Street to River Street, as shown on the attached print of Plan No. SYE-2810-1 dated January 8, 1998.

(2) The construction of a 300 mm P.U.C. pipe water main on Sudbury Street from King Street West to Dovercourt Road, as shown on the attached print of Plan No. WE-572, dated May 1998.

(A copy of each of the plans referred to in the foregoing report has been forwarded to all Members of Council, and a copy thereof is on file in the office of the City Clerk.)

8

Keele Valley Landfill Amendment to

Consulting Agreement with Golder Associates

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the following report (July 7, 1998) from the General Manager of Solid Waste Management Services:

Purpose:

To seek authority to extend the agreement and to update the authorized expenditure between the City of Toronto and Golder Associates Limited (Golder) for consulting services with respect to liner monitoring and reporting at the Keele Valley Landfill Site.

Funding Sources, Financial Implications and Impact Statement:

On April 29, 1998, City Council approved the Capital Works Program thereby authorizing expenditure of $3,693,000.00 after the G.S.T. rebate to continue ongoing development of the Keele Valley Landfill Site in 1998, including consulting services for liner monitoring. Funds are available in the approved 1998 Capital Works Program under the Solid Waste Management Account No.C-SW165, Keele Valley Development, Clay Liner Consultants.

Recommendations:

It is recommended that:

(1)authority be granted to increase the approved amount of the contract for consulting services for Golder Associates Limited by an amount of $69,000.00 from $6,907,983.00 to $6,976,983.00 after the Municipal Goods and Services Tax Rebate to provide consulting services in 1999 with respect to liner monitoring and reporting at the Keele Valley Landfill Site;

(2)the term of the agreement be extended to December 31, 1999; and

(3)the appropriate City of Toronto officials be authorized to amend the existing agreement between the City of Toronto and Golder Associates Limited to give effect thereto.

Council Reference/Background/History:

On August 13, 1997, Metropolitan Council approved Clause No. 5 of Report No. 11 of The Environment and Public Space Committee extending the agreement between the Metropolitan Corporation and Golder to December 31, 1998, and raising the limit on the approved expenditure by $60,255.00 to $6,907,983.00 after the Municipal Goods and Services Tax Rebate.

Comments and/or Discussion and/or Justification:

Golder has been directly involved with the development of the Keele Valley Landfill Site since the site's inception. Golder has provided consulting services with respect to design of the final cover, supervision of liner construction, borrow pit development and extraction, geotechnical testing both in the field and laboratory, design and installation of monitoring devices in and under the clay liner, interpretation of data generated, devising geotechnical programs as required, and reporting on a semiannual and annual basis to the satisfaction of this Department and the Ministry of the Environment (MOE). If the City of Toronto were to hire a new consultant, that consultant would be required to become completely familiar with the ongoing projects as well as the history of the site before being able to participate effectively in the ongoing dialogue presently underway with the MOE. This would result in additional costs to the City of Toronto, especially in view of significant ongoing design and operations developments at the site.

Golder's current agreement for consulting services in relation to the Keele Valley Landfill Site expires on December 31, 1998. The request to extend the agreement date and increase the approved level of expenditures for consulting services is due to the following:

(1)services under this agreement are mandated by conditions of the provisional Certificate of Approval governing the development and operation of the landfill. Included in these services is the interpretation of data generated from liner monitoring devices installed in and under the clay liner and presenting the interpreted data in reports to the MOE;

(2)the MOE's approval process which requires a response to the MOE's third party consultant's (TrowLimited) review of the landfill liner reports is lengthy. This long delay time in finalizing reports increases Golder's costs, since files must be reviewed when assessing the validity of changes requested by Trow Limited;

(3)due to the large size and prominence of the Keele Valley Landfill Site, the MOE has paid particularly close attention to the site's design and operation and environmental impact and control. It is the only active site in Ontario requiring ongoing approvals by the MOE. When we were originally considering consultants to provide engineering services for the Keele Valley Landfill Site, the MOE encouraged us to hire our present consultants, including Golder, because of their knowledge of the site; and

(4)staff of the MOE recognize the existing consultants at Keele Valley as being fully qualified to carry out the work, and have verbally encouraged the City of Toronto to retain the same consultants in order to provide continuity and consistency of approach. The MOE, who have similar hiring practices with respect to engaging consultants, have maintained their same consulting team at the Keele Valley Landfill Site by rehiring their own third party consultant, Trow Limited, for the reasons stated in (1), (2) and (3) above.

It is in the City of Toronto's best interest to extend Golder's engagement and ensure continuity through this time period because of the sensitivity of the issues and cost implications of effectively meeting the requirements of the Certificate of Approval.

Since 1983 to date, all major stakeholders involved in the approval and development of the Keele Valley Landfill Site have remained the same. These stakeholders include key decision-makers at the MOE and the MOE's prime consultant, community members of the Keele Valley Landfill Site Liaison Committee, representatives of the City of Vaughan, and others, including Golder. The MOE approval and review process for significant engineered systems and/or site operations of the Keele Valley Landfill Site is ongoing. By retaining the same consultant, potential disputes with respect to any future undertakings will be avoided in regard to the respective responsibility between two different consultants who have worked on the same project. Golder has continuously provided excellent quality and cost-effective project engineering and design services to the City of Toronto.

An extension of Golder's agreement to December 31, 1999, would ensure that the City of Toronto is provided the necessary continuity required for the development of the Keele Valley Landfill Site in a cost-effective manner.

Conclusions:

A consultant is required for consulting services with respect to liner monitoring and reporting at the Keele Valley Landfill Site. Extending the agreement between the City of Toronto and Golder for these services has many advantages. It is therefore recommended that authority be granted to increase the approved amount of the contract for these consulting services by $69,000.00 after the Municipal Goods and Services Tax Rebate.

Contact Name:

Lou Ciardullo, Sr. Eng. - Keele Valley Landfill

Solid Waste Management Services, Keele Valley Landfill Site

Phone: (905) 832-0682 (235); Fax: (905) 832-4944

E-mail: Lou_Ciardullo@metrodesk.metrotor.on.ca.

9

Settlement of Lawsuit Against OMMRI and CSR

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the confidential joint report (July 8, 1998) from the City Solicitor and the Commissioner of Works and Emergency Services entitled "Settlement of Lawsuit against OMMRI and CSR", which was forwarded to Members of Council under "Confidential" cover.

10

Legal Claim Against the City of Toronto

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Works and Utilities Committee recommends the adoption of the confidential joint report (June 24, 1998) from the City Solicitor and the Commissioner of Works and Emergency Services respecting a legal claim against the City of Toronto, which was forwarded to Members of Council under "Confidential" cover.

11

Other Items Considered by the Committee

(City Council on July 29, 30and 31, 1998, received this Clause, for information.)

(a)Timing Options for Closure of Keele Valley Landfill Site.

The Works and Utilities Committee reports having:

(1)deferred consideration of the following report until its next meeting scheduled to be held on September 9, 1998, to provide an opportunity for the Solid Waste Management Industry Consultation Committee (SWMICC) and any other interested parties to make a deputation; and

(2)requested the Commissioner of Works and Emergency Services to submit a report to such meeting providing more detailed information on the financial implications of the various options and outlining the timing of the proposal call for long-term disposal capacity, such report to include a breakdown of the origin of waste being disposed of at landfill:

(July 9, 1998) from the General Manager of Solid Waste Management Services reviewing the potential utilization of the remaining approved capacity in the Keele Valley Landfill Site, and discussing the impacts of the following three options for filling the site to its approved capacity: (1) Status Quo; (2) Rapid Fill; and (3) Slow Fill; providing an update on the City's environmental assessment planning process for post-Keele Valley disposal capacity; advising that it is staff's intention to discuss the content of this report with staff in the City of Vaughan and York Region, and that a subsequent report will provide information related to their positions on the closure issue, in addition to more specific detail related to financial matters; and recommending that this report be received for information.

--------

The following persons appeared before the Works and Utilities Committee in connection with the foregoing matter:

-Councillor Mario Ferri, City of Vaughan; and

-Ms. Nancy Porteous-Koehle, Canadian Waste Services Inc.

(b)Award of Contract for Small Scale Mixed Waste

Recycling and Organics Processing Facility.

The Works and Utilities Committee reports having recommended to the Budget Committee the adoption of the following report:

(July 6, 1998) from the General Manager of Solid Waste Management Services recommending that:

(1)staff be authorized to enter into a contract with a joint venture of Stone and Webster Canada Limited and Canada Composting Inc. (a company designated by Stone and Webster Canada Limited) for:

(a)the design and construction of a Small Scale Mixed Waste Material Recycling and Organics Processing Facility at the Dufferin Transfer Station, at a total cost of $10.4 million after the municipal GST rebate, and

(b)the operation of the facility and the marketing of the output material for a one-year term with options for two one-year extensions in accordance with the operating fee schedule contained in this report,

such contract to be in accordance with the Request for Proposals and the Proposal submitted, modified as set out in this report, and on terms and conditions satisfactory to the Commissioner of Works and Emergency Services, including such financial and performance guarantees to be provided by Stone and Webster Canada Limited as deemed appropriate by the Commissioner, and in a form satisfactory to the City Solicitor;

(2) a contingency amount of $500,000.00 be provided for any approved additional work in relation to Recommendation No. (1)(a);

(3)subject to finalization of an agreement as set out in Recommendation No. (1), MacViro Consultants Inc. be engaged as project consultants to review the design of the facility, inspect site construction and monitor contractor progress and performance at a cost not to exceed $238,000.00 after the municipal GST rebate; and

(4)financing in the amount of $3.2 million be transferred from Project C-SW360 - Recycling to Project C-SW004 - Recycling Facilities to accommodate the shortfall in financing resulting from the Request for Proposals process.

(c)Amendment to Agreement to Facilitate the Expansion

of Access Rights to Municipal Road Allowances -

Metronet Communications Group Inc.

The Works and Utilities Committee reports having:

(1)deferred consideration of the following reports until its next meeting, scheduled to be held on September 9, 1998; and

(2)requested the Commissioner of Corporate Services to submit a report to the Committee at that time with comments on any information and technology implications:

(i)(June 30, 1998) from the Commissioner of Works and Emergency Services recommending that:

(1)City Council authorize an amendment to the Agreement with Metronet Communications Group Inc. to allow Metronet to enter upon the Public Highways under the jurisdiction of the City of Toronto beyond the bounds of the former Toronto city limits, for the purposes of installing, maintaining and operating a fibre optic telecommunications network throughout the City and renting spare City duct capacity, subject always to the City's requirements and permissions for construction within the street allowance; and

(2)that the amended Agreement with Metronet contain such terms and conditions as have been negotiated and agreed to between the parties and described generally in this report, and approved by City Council, and such other terms and conditions as may be satisfactory to the Commissioner of Works and Emergency Services and the City Solicitor to protect the interests of the City.

(ii)confidential report (July 14, 1998) from the City Solicitor respecting legal issues on the proposed extension of the Metronet agreement.

(d)Banning of Wine and Spirit Containers from

the Blue Box and Landfill Site.

The Works and Utilities Committee reports having received the following report:

(July 6, 1998) from the General Manager of Solid Waste Management Services, providing further information with respect to the banning of wine and spirit containers from the Blue Box program and landfill effective September 1, 1998, as requested by the Committee at its meeting on June 17, 1998; advising that City staff have met with representatives of the Liquor Control Board of Ontario (LCBO) who advised that they are not able to provide space on their properties for bulk lift containers for the recycling of wine and spirit containers, and that they will not contribute to the cost of the City operating a depot system near their stores; further advising that if it is decided to implement collection of wine and spirit containers adjacent to the LCBO stores, the annual operating cost would be approximately $1,600,000.00 per year and the capital cost for implementation would be approximately $1,200,000.00; concluding that it would take approximately one year following authorization by City Council to acquire the necessary containers and trucks and implement the proposed recycling system, and that therefore the system cannot practically be implemented on September 1, 1998; and recommending that the report be received for information.

(e)Removal of Coloured Glass from the Blue Box Program.

The Works and Utilities Committee reports having received the following report:

(June 29, 1998) from the General Manager of Solid Waste Management Services, providing information on the impact of removing coloured glass from the Blue Box program, as requested by the Committee at its meeting on June 17, 1998; advising that the removal of coloured glass containers (other than liquor and wine bottles) from the Blue Box program would result in a net saving of approximately $580,000.00 per year and an increase in garbage costs of approximately $110,000.00, for a net benefit of approximately $470,000.00 per year; advising that a further report on methods of improving collection of all materials will be submitted following completion of the solid waste management service review currently underway; and recommending that this report be received for information.

(f)Provision of a Standard Garbage and

Recycling Collection Calendar.

The Works and Utilities Committee reports having received the following report; and having requested the Commissioner of Works and Emergency Services to submit a sample of the calendar to the Committee at its next meeting, scheduled to be held on September 9, 1998:

(July 3, 1998) from the General Manager of Solid Waste Management Services respecting the publication of a single garbage and recycling collection calendar for 1999 for distribution to all residences of eight units or less which receive curbside collection in the City of Toronto, to provide a consistent message regarding appropriate methods of waste management; and recommending that the report be received for information.

(g)Cleaning and Cement Mortar Lining of Existing Water Mains,

North York District - Contract No. NY9881WS.

The Works and Utilities Committee reports having awarded the contract as recommended in the following report, in accordance with By-law No. 57-98, the Interim Purchasing By-law, as amended:

(July 8, 1998) from the Commissioner of Works and Emergency Services recommending that:

(1)Contract No. NY9881WS for the cleaning and cement mortar lining of cast and ductile iron water mains in the North York District be awarded to the lowest bidder, Fer-Pal Construction Ltd., for the total price of $1,624,232.18 including the Goods and Services Tax; and

(2)the appropriate City officials be authorized to take the necessary action to give effect thereto.

(h)Waste Management Collection Costs.

The Works and Utilities Committee reports having deferred consideration of the following report until its next meeting, scheduled to be held on September 9, 1998:

(July 13, 1998) from the General Manager of Solid Waste Management Services outlining the costs of curbside and bulk lift waste collection in Toronto, based on the operating systems of the six former municipalities, as requested by the Committee at its meeting on April 22, 1998; noting that while every attempt has been made to provide an accurate costing analysis, further work is required to ensure that costs related to such things as building maintenance, human resources and general governance are reported in a consistent manner; and recommending that the Works and Emergency Services Department, in conjunction with the Finance Department, develop a costing framework which provides a uniform set of guidelines and principles for all activities and programs within the Solid Waste Management Division, and which will provide accurate and standardized cost accounting and will allow for an activity-based costing analysis.

(Councillor Giansante, at the meeting of City Council on July 29, 30 and 31, 1998, declared his interest in Item (c), headed "Amendment to Agreement to Facilitate the Expansion of Access Rights to Municipal Road Allowances - Metronet Communications Group Inc.," embodied in the foregoing Clause, in that his wife is an employee of Bell Canada.)

Respectfully submitted,

BETTY DISERO,

Chair

Toronto, July 15, 1998

(Report No. 7 of The Works and Utilities Committee, including additions thereto, was adopted, as amended, by City Council on July 29, 39 and 31, 1998.)