Compliance Program with Monetary Concession -

Nu-Way Potato Products Limited

The Works and Utilities Committee recommends the adoption of the following report (June 2, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

To issue a Compliance Program with monetary concession to Nu-Way Potato Products Limited to allow them to pay 50 percent of the increase to the existing agreement for 2 years, in order to facilitate the installation of an on-site pretreatment system.

Funding Sources, Financial Implications and Impact Statement:

This Department maintains approximately 157 Industrial Waste Surcharge Agreements, which allow for the recovery of approximately $7.5 million per year in additional treatment costs. These charges reflect a user pay philosophy and directly offset the cost of the operation of our treatment plants. Nu-way Potato Products Limited's new annual surcharge is $17,066.36 per quarter, an increase of $7,645.62 over their old surcharge of $9,420.74 per quarter. By allowing the company to pay at a reduced rate of 50 percent of the increase of $7,645.62 per quarter would mean a reduction in revenue of $15,291.24 per year for a total of $30,582.48 for two years.

Recommendation:

It is recommended that a Compliance Program with monetary concession be granted to Nu-Way Potato Products Limited, as described herein, to allow for payment of their re-assessed surcharge less 50 percent of the increase for two years, subject to Nu-Way Potato Products Limited's investment of the avoided surcharge payment in the purchase and installation of an on-site pretreatment system.

Council Reference/Background/History:

On November 9, 1989, Metropolitan Council, by adoption of Clause No. 6 of Report No. 16 of The Works Committee, authorized execution of agreements with industries, permitting them to discharge wastewater in excess of the limits set out under By-law No. 153-89, providing that the overstrength discharges are amenable to treatment at our treatment plants. Industries are required to pay for the additional cost of treatment above the limit of the by-law.

Section 6 of this by-law allows the owner of industrial premises to submit to the Commissioner of Works a program to prevent, or to reduce and control the discharge of wastewater into the sewer system. The Commissioner of Works may then issue an approval known as a "Compliance Program" to the person who submitted the program. The person to whom a Compliance Program has been issued shall not be prosecuted under the by-law during the period within which the Compliance Program is applicable, provided that the person complies fully with the terms of the Compliance Program.

On August 10 and 11, 1994, Metropolitan Council, by adoption of Clause No. 12 of Report No. 14 of The Works Committee, authorized the Works Department to discuss modifications to Industrial Waste Surcharge Agreements and Compliance Program policies with existing and potential surcharge companies to promote and encourage improvements in on-site treatment and source reduction.

The policy approved by Metropolitan Council was to allow industries facing significantly increased surcharge for new agreements or amendments to existing agreements to apply to be allowed to avoid up to 50 percent of the payment of the new agreement or the increase to the existing agreement, for up to three years if they commit under a Compliance Program to invest the avoided surcharge payment for specific improvements to their on-site pretreatment system.

There have been two Compliance Programs with monetary concession approved by Metropolitan Council to date.

Comments and/or Discussion and/or Justification:

Recently, several companies have complained that their new surcharge assessment or increased surcharge assessment on existing agreements are creating financial hardship and have expressed an unwillingness to pay the surcharge. These companies would like to reduce these costs, however, they would have to install treatment facilities which would add further costs.

Recognizing that some industries are really facing financial hardship, we recommend that industries facing significant increases in surcharges for new agreements or amendment to existing agreements could apply for a surcharge reduction of 50 percent of the new agreement or the increase to the existing agreement, for up to three years if they commit under a Compliance Program to invest the reduced surcharge payment for specific pollution control equipment. In this way, the discharger benefits in the long term because they permanently reduce their surcharge costs. We also benefit in that more treatment capacity is free for additional development.

The following conditions must be met to be considered for a Compliance Program with monetary concessions:

(1)the applicant must commit in writing, in the form of a Compliance Program, to reduce their waste loading by at least 50 percent by a specified date;

(2)the reduction in surcharge could be for a period of between one and three years, depending on the time required to complete the installation of pretreatment equipment;

(3)an applicant can only be granted one Compliance Program with monetary concession per lifetime; and

(4)at the end of the Compliance Program period, the companies who are unsuccessful in reducing their waste loading to within by-law limits must resume paying surcharge based on the actual waste loading at that time.

The Region of Niagara has a similar policy of granting a discharges "Program Approval" (which is similar to our Compliance Program) with monetary concessions. The concession has been as high as 50 percent for a period of one year. The reduction is based on the size of the surcharge compared to the spending the discharger plans to spend in effecting a reduction in both the hydraulic and contaminant load to the municipal sewage treatment system.

The type of waste generated by Nu-Way Potato Products Limited is biodegradable and amenable to treatment at our Main Treatment Plant.

On May 21, 1998, Nu-Way Potato Products Limited through its consultant, Venerus International Purification Inc., submitted an application to have the industrial waste surcharge amount reduced in accordance with the policy adopted by Metropolitan Council on August 10 and 11, 1994.

 The company had retained Venerus International Purification Inc. in Guelph to undertake a study to evaluate their production processes and develop an effluent solids reduction process, procure, construct and operate a waste treatment system to bring their effluent contaminants down by 50 percent by December 31, 1999. They have provided us with the following schedule for their Compliance Program.

Compliance ScheduledScheduledProject

Program ActivitiesStart Date Completion DateCosts ($)

(a)Select ConsultantJanuary 1998March 199810,000.00

(b)Investigation of PlantMarch 1998June 1998 1,000.00

Conditions

(c)Treatability StudiesJuly 1998October 199820,000.00

(d)Design of SystemNovember 1998February 1999 1,000.00

(e)Contractor SelectionMarch 1999April 199920,000.00

(+Deposit on Equipment)

(f)Commence ConstructionMay 1999August 199920,000.00

(2nd payment)

(g)Pretreatment SystemSeptember 1999December 199920,000.00

Start-up

(h)Operating ManualSeptember 1999December 1999 1,000.00

Preparation

(i)Commissioning & OperatorSeptember 1999December 1999 5,000.00

Training

Nu-Way Potato Products Limited is currently under a surcharge agreement with the City. The surcharge is based on an average suspended solids (S.S.) concentration of 14,490 mg/L at an annual discharge of 8,334 cubic metres. The average biochemical oxygen demand (B.O.D.) concentration is 4,007 mg/L. The estimated annual S.S. and B.O.D. loading from the facility before the proposed treatment are 120,760 kg per year and 33,400 kg per year, respectively. With the assumption that the pretreatment will reduce the S.S. and B.O.D. concentrations by 50 percent, the estimated loading for S.S. and B.O.D. after pretreatment will be 60,380 kg per year and 16,700 kg per year, respectively.

Conclusions:

In accordance with section 6, of our Sewer Use By-law No. 153-89 and the policy adopted by Metropolitan Council on August 10 and 11, 1994, a Compliance Program with monetary concession should be issued to Nu-Way Potato Products Limited to provide a mechanism by which the overstrength effluent which exceeds the by-law limit for S.S. and B.O.D. can be discharged on a 50 percent reduced fee basis while the company implements further wastewater treatment controls, under the conditions previously stated in this report.

Contact Name:

V. Lim, Chief Engineer - Environmental Services

Water Pollution Control Division

Telephone: (416) 392-2966; Fax: (416) 397-0908

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