Council enter into Master Servicing Agreement with Calgary

Miriam Ostermann
Times Associate Editor

 

Amid negotiations between the City of Calgary and its regional water customers for new Master Servicing Agreements (MSAs), Strathmore residents will face increased charges over the next few years – an agreement town council entered into on July 22.
A Strathmore-owned 43 km long pipeline, the East Calgary Regional Water Line (ECRWL) connecting the town to the City of Calgary is essential in supplying and delivering potable water. Calgary completed a Cost of Service study from 2011 to 2014 to determine a fixed and a usage charge for the cost of water used. All customers of the City of Calgary participated in the study: Airdrie, Cochrane, Chestermere, Tsuu T’ina, and Strathmore.
The study provided an estimated cost, deemed appropriate, for the city to build water infrastructure to accommodate regional water customers and included transmission as well as Water Treatment Plant costs.
New fixed charges, based on the projected maximum daily flow to the town of Strathmore in the MSA – necessary to determine the amount of infrastructure needed by Calgary to provide the required amount of water – were proposed. The new fixed charges replace the Regional Growth Charge, which was originally agreed upon for 2013 and 2014.
“The fixed cost, the easiest way, it’s the amount of infrastructure the City of Calgary has to build to deliver the amount of water we said we need as a maximum capacity at the end of that contract period,” said Gord Elenko, director of engineering for the Town of Strathmore.
“The Master Servicing Agreement does require alignment with the City of Calgary water restrictions if necessary. With those risks, there is also some offsetting opportunities, and these opportunities would include potential for improvement and control over metering, improve leak detection that we may want to do, and emergency response that’s more closely coordinated with the City of Calgary than it is now.”
Strathmore will be subject to two types of increases. The fixed component rate charge will spike three per cent in 2016, 2017, and 2018. The volume component rate charge, which is based on consumption, increases by 6.1 per cent for each of the previously mentioned years. According to Elenko, the overall cost, including both usage cost and fixed cost, increases by 26.7 per cent over the next three years of the contract. The water increases shown in 2015 are already included in the rates. The City of Calgary provides only water services to the Town of Strathmore, who will retain its water license as part of the agreement.
“It should be added that this was a very, very long process, that had moved from much bigger numbers then, to what we’re looking at today,” said Councillor Bob Sobol. “It’s not a good news story, but it could’ve been a much worse story.”
While the regional water service from Calgary involves some risks that need addressing, according to town staff, the town also gains numerous benefits.
Elenko was concerned about the reliance on water quality at the delivery point, future growth of Calgary that may demand a revised delivery point, the requirement to align with the Calgary water restrictions, and the ECRWL is a single supply line subject to damage or failure.
However, council was also made aware of the benefits, including the security of supply for potable water, consistency of quality, reduced capital and operating cost for the water supply treatment, and the alignment with water conservation programs and targets. Elenko advised that the two specific areas to pay attention to are water conservation and leak detection.
Although Strathmore consumes nearly one percent of Calgary’s water supply, waning infrastructure is resulting in a 30 per cent loss in town that, according to Chief Administrative Officer Dwight Stanford, is not being billed.
“If you take the big meter at Calgary… there’s about 30 percent loss,” said Stanford. “A lot of that, all of that is in town. We’re looking at various options on how to improve that.”
Strathmore has received some upgrades to its underground infrastructure over the past few years, and Elenko assured council that any major leaks would be detected fairly quickly due to current monitoring in place. He added that entering into the agreement provides opportunities for enhanced operational effectiveness of the ECRWL water supply pipeline. This would allow for additional control over metering, emergency response agreements with Calgary, and improved leak detection and monitoring.
“One of the reasons that I would support it in the positive, is that there’s been a lot of good thought and good work going into the principles that drive this,” said Councillor Denise Peterson. “I feel there’s a certain amount of trust in this document and all the players that are in this, and in terms of us supporting the people that will eventually pay for this service.”
Council passed a motion to enter into the Master Servicing Agreement between Calgary and the Town of Strathmore for the supply of potable water through the East Calgary Water Line on July 22. There will be a final legal review as part of entering into a Master Servicing Agreement.