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Home My WebLink AboutFND-008-01 r .' " CIW:i!Jgton REPORT FINANCE DEPARTMENT , Date: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Resolution #:01;1- 5}f-o / MONDAY, OCTOBER 22, 2001 File #: "eo~ FND-008-01 By-law #: Meeting: Report #: Subject: FUNDING OF COURTICE WATER POLLUTION CONTROL PLANT Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1,0 THAT Report FND-008-01 be received; 2.0 THAT funds be provided to the Region of Durham from the Clarington/Region Station "Au Reserve Fund in the amount of $3,500,000 to be applied to the non- growth share of the Courtice Water Pollution Control Plant and related infrastructure costs under the following payment schedule: Amount Due Date $ 500,000 $1,000,000 $1,000,000 $1,000,000 December 31,2001 July 1, 2002 July 1, 2003 July 1, 2004 Submitted by: Reviewed bYO ~ Franklin Wu Chief Administrative Officer NT/hjl 930 REPORT NO.: FND-00B-01 PAGE 2 Background and Comment: 1.0 The 1993 tri-party agreement between Ontario Hydro, the Region of Durham and the Municipality of Clarington provided for funds transferred to Clarington from the Station "A" account which are currently held in the Clarington/Region Station "Au Reserve Fund for the purpose of making a contribution to servicing studies, land acquisition, design and/or construction of all regional services required to service the South Courtice Area, 1.1 The Courtice Water Pollution Control Plant project is now underway and the Region of Durham is requesting access to the Station "Au funds to partially offset the non-growth share of the costs of the project. The Region of Durham Finance Report 2001-F-81 is attached, marked Schedule "A". 1.2 The current balance in the Reserve Fund is approximately $3,7 million. In order to accommodate ongoing construction timing and to accommodate the impact on the investment portfolio, staff at Region Finance and Clarington Finance are proposing a schedule of payments over the next few years. 1.3 The remaining balance in the Reserve Fund will be applied to projects at Clarington's request which meet the criteria of the 1993 tri-party agreement and are jointly approved by both parties, CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-0608 931 OCT 15 2001 09:37 FR REG OF DUR-FINANCE 905 571 7460 TO 99056230608 P.02/05 SCHEDULE "A" .. The Regional Municipality of Durham Report to: The Finance and Administration C~,,"ni1t_ From: R.J. Clapp, Commissioner of Finance Report No.: 2001-F-81 Date: October 17, 2001 SUBJECT: APPROVAL TO AUTHORIZE FUNDING FROM THE DARLINGTON GENERATING STATION ACCOUNT "A" FOR THE COURTICE WPCP PROJECT RECOMMENDATION: That the Finance and Administration Committee recommend to Regional Council that: 1, The Municipality of Clarington be requested to provide $3,500,000 from the Darlington Generating Station Account "A" to be applied to the non-growth share of the Courtice Water Pollution Control Plant and related infrastructure costs under the following payment schedule: Amount Due Date $500,000 $1,000,000 $1,000,000 $1,000,000 December 31, 2001 July 1, 2002 July 1, 2003 July 1, 2004 2. The Municipality of Clarington be advised that the Region of Durham agrees that the remaining balance of the Darlington Generating Station Account "A", which is anticipated to be the interest eamings on the declining balance, may be applied to projects requested by the Municipality which meet the criteria of the existing agreement between the Region and the Municipality and are jointly approved by both parties. REPORT: 1.0 BACKGROUND . In 1977, the Region of Durham entered into a tri-partite agreement with Ontario Hydro and the Municipality of Clarington which provided compensation to the Municipality and/or the Region for any social, economic or financial related impacts resulting from the construction and operation of the Darlington Generating Station. Payments were made from two Station Accounts which were originally established, maintained and funded by Ontario Hydro in 1977. 932 44 OCT 15 2001 09:37 FR REG OF DUR-FINANCE 905 571 7460 TO 99056230608 P.0J/05 Report No.: 2001-F-81 Page No.: 2 · Under the terms of the original agreements, the Municipality of Clarington was compensated for impacts on local services from Station Account "8" including costs incurred for fire protection, hospitals, lawenforecment, recreational facilities, administration facilities, libraries, etc. · Similarly, the Region of Durham was compensated for impacts on Regional services from funds set aside in Station Account "A" primarily for water, sewer, roads and policing, · In 1 993, Ontario Hydro agreed to transfer custodianship of the funds in both Accounts to the Municipality of Clarington subject to the establishment of a new agreement between the Region and Clarington. The new Agreement provides for the payment of funds to the Region from Station Account "A" for impacts on Regional services relating to the operation of the Darlington Generating Station subject to a joint resolution of the Councils of the Region and the Municipality of Clarington. . On February 7,2001, Regional Council concurred with a request from the Municipality of Clarington to withdraw funds not to exceed $300,000 to finance the cost of signalization and infrastructure improvements at the intersection of Highway #2 and Holt Road in Courtice. · Prior to the February 2001 payment, no disbursements had been made from the Station Account "A" since 1993. The current balance of the Station Account "A" is approximately $3.7 million. 2.0 APPLICATION TO THE COURTICE WPCP PROJECT · The 1993 tri-partite agreement provided $3.0 million to be deposited with the Municipality of Clarington by Ontario Hydro in respect of impacts regarding the construction and operation of the Darlington Nuclear Plant. The agreement specifies that the monies and interest can only be disbursed on the joint resolution of the Councils of the Municipality and the Region for any one or more of the following purposes. i) decommissioning, demolition and site rehabilitation of the Soper Creek WPCP (now completed); Ii) preparing studies and reports including an Environmental Assessment for additional WPCP in the south Courtice area (in progress); Iii) making a contribution to servicing studies, land acquisition, design and/or construction of all Regional services required to service the south Courtice area (in progress), 93345 OCT 15 2001 09:38 FR REG OF DUR-FINANCE 905 571 7460 TO 99056230608 P.04/05 Report No,: 2001-F-81 Page No.: 3 . · The Environmental Assessment for the new Courtice WPCP has been completed. Studies and Reports related to archeology and land acquisition are currently in progress. Selection of an Engineering Consultant to undertake the design of the new facility is underway and expected to be presented to Regional Council for approval this fall. The new facility is expected to cost $120 million_ · Regional Works Department made application and has received approval for funding assistance under the Green Municipal Enabling Fund (GMEF) Federal Government Program. This program will support Process and Pre- design studies that are to examine potential process and energy saving/recovery opportunities, which may be of economic and environmental benefit. The studies are to be funded as follows: GMEF Grant Durham Share Tri-partite Agreement Total $100,000 $118,620 $ 81,380 $300,000 · Regional Works and Finance staff have approached the staff of the Municipality of Clarington to discuss the applicability of the Station Account "A" funds to the current and forthcoming costs related to the Courtice WPCP. Those discussions revealed a common agreement that the project clearly meets the criteria for use of the Station Account "A" funds. · Staff of the Municipality of Clarington have expressed their understanding that the funds were to be applied to benefit existing residents and business and thus the contribution from the "Station A" funds should be applied to the non- growth share of the costs. · In recognition of the ongoing construction timing as well as the detrimental impact on the investment portfolio of the withdrawal of a significant amount of principal. staff from Durham and Clarington have agreed to a schedule of payments over the next few years - $500,000 on December 31, 2001: $1.0 million on July 1,2002; $1.0 million on July 1, 2003; and $1.0 million on July 1 , 2004. 3.0 EXPENDITURE ON ANY OUTSTANDING FUNDS · Since the outstanding balance of the Station Account "A" funds will be largely limited to interest earnings on a declining balance, it is recommended that Regional Council advise the Municipality of Clarington that the expenditure of those outstanding funds will be at the initiation of Clarington and under the existing terms of the agreement with regard to use and joint resolution by Regional and Municipal Councils. 934 46 OCT 15 2001 09:38 FR REG OF DUR-FINANCE 905 571 7460 TO 99056230608 P.05/05 Report No.: 2001-F-S1 Page No.: 4 4.0 CONCLUSION · Application of $3.5 million from the existing Station Account "Au fund of approximately $3.7 million towards the non-growth share of the Courtice WPCP will provide a positive impact for the Region and Clarington and conforms with the 1993 tri-partite agreement. It is recommended that Regional Council respectively request the agreement from the Municipality of Clarington in order to access the funding. · The recommended application to the non-growth share of the project, the payment schedule and the agreement to use any remaining funds at Clarington's incentive reflect the mutual recommendations of the Regional and Municipal staff. A-o:::>, ,"p. R.J. Clapp, CA Commissioner of Finance Recommended for Presentation to Committee G.H. Cubitt, M.S.w. Chief Administrative Officer dlk\2001 reportlcourlicewpcp 47 935 ** TOTAL PAGE.05 **