Ontario Construction News staff writer
The City of Ottawa will face significant shortfalls in its water and sewer infrastructure budgets through 2046 unless additional revenues are raised or projects are deferred or cancelled, says the city’s general manager, Infrastructure and Water Services, in a memo to Ottawa Mayor Mark Sutcliff and City Council members.
“The total estimated cost of the growth-related upgrades in the IMP (Infrastructure Master Plan) related to water and water services is $1.4 billion for the period 2023-2046 (excluding Tewin),” Tammy Rose wrote in her memo last Thursday (Dec. 5).
The Tewin community, to be built outside of original planning objectives in an undeveloped area on Ottawa’s east side, is expected to cost approximately $618 million: $396 million for water and $222 million for wastewater “and in accordance with Council direction needs to be funded by the development,” she wrote.
While the Tewin development is expected to be self-funded, “a total of $167 million of Tewin’s water and sewer costs are required to accommodate potential growth needs beyond the 2046 planning period,” Rose wrote.
“Although this oversizing of the water and wastewater infrastructure is cost-effective over the long term, the cost must be financed in the near term.”
While Tewin’s developers are expected to front-end and cover these costs, “given the size of the area for future potential growth that currently does not have an urban designation status in the Official Plan and multiple landowners that could potentially benefit from the provision of oversizing, discussions about how these costs will be financed remain ongoing.”
Outside of Tewin, the city anticipates needs for:
- 26 proposed water distribution projects estimated to cost approximately $901 million;
- 37 wastewater collection projects estimated to cost approximately $742 million; and
- Growth-related projects at ROPEC (the Robert O. Pickard Environmental Centre) and at the Lemieux water purification plant are expected to cost approximately $376 million.
The $1.4 billion includes approximately $1.2 billion of development charges and about $200 million in costs beneficial to the existing community.”
However, at current budget/funding levels, there won’t be enough money to pay for these projects,” Rose wrote.
“Preliminary results indicate that the current level of funding from rate-supported budgets and development charge levels are insufficient to cover all the IMP’s capital costs.”
She indicates that ratepayers will need increase funding by an additional $16 million annually (a seven per cent increase) “from the forecasted level of investment approved in the LRFP (Long Range Financial Plan.”
As well, there is a projected shortfall in development charge revenue, reflecting discounting of $54 million in water and $61 million in wastewater costs until 2046, she wrote.
If these costs are to be paid for by developers (and ultimately home purchasers), there could be further stresses on housing affordability.
“Financial funding options to improve affordability could include a combination of increasing water services development revenue, issuing debt, or deferring projects,” Rose wrote. “The degree to which these funding levers would be applied, could potentially be reduced by funding from other levels of government. Consultation with the development industry during consideration of the IMP and the upcoming DC By-law update is critical to ensure that Ottawa remains a competitive place for housing development.”
Rose says that the Infrastructure Master Plan (IMP) “is anticipated to be presented for council’s consideration in 2024, while “discussions with Tewin are also ongoing to determine how best to finance oversizing costs associated with Tewin infrastructure.”
She says staff “continue to focus efforts on maximizing funding opportunities fro various levels of government. This includes submitting future applications to the newly announced Building Faster Fund and Housing-enabling Water Systems Fund aimed at supporting critical water infrastructure projects that enable housing development.”
“Staff are analyzing the impacts of removing the provincially-added urban expansion lands and plans for the impacts of legislative changes and the effects on the IMP,” Rose wrote. “City staff will continue to identify key initiatives, projects and cots essential for meeting the city’s growth needs and the goals of our provincial and federal partners. Collaborative efforts are critical to fostering a sustainable city for all residents.”