June 15, 2009 - District of Mission

66
UMC Report No. 32 -2009
Page 4 of 5
Benefits
The proposed cost sharing formula is an improvement to the current method and provides the
following benefits:
• Equitable - Joint Water Capital Projects are typically designed to accommodate "future
growth" and based on "peak day demands". This strategy incorporates the concepts of
"future growth" and "peak day demands" and is considered equitable to both
municipalities.
• Promotes Water Conservation — The proposed cost sharing formula calculates the
annual asset usage by each municipality based on "growth". Reducing the "growth"
(expressed in terms of "peak day demands") delays the time when the next asset is
required to come online, and therefore reduces the overall long term capital cost for the
Joint Water System. "Growth" reduction can be achieved by promoting water
conservation.
• Accommodates Deviations from Initial Projections — Annual adjustments will be made
between two municipalities on each asset based on the deviation between the actual
"growth" and the projected "growth".
Peak Day Demands
Historical Peak Day Demands from 2006 to 2008 have been reviewed and are included in
Appendix B. The percentage split between Abbotsford and Mission for (a) Peak Day;
(b) Average of Top 5 Peak Days; (c) Average of Top 10 Peak Days; and (d) Average of Top 20
Peak Days have been calculated and are summarized in the following table:
2006 (%) 2007 (%) 2008 (%)
Abby Mission Abby Mission Abby Mission
(a)Peak Day 80.8 19.2 75.0 25.0 76.9 23.1
(b)Avg of Top 5 Peak Days 81.4 18.6 76.0 24.0 77.1 22.9
(c)Avg of Top 10 Peak Days 79.8 20.2 75.8 24.2 76.0 24.0
(d)Avg of Top 20 Peak Days 79.1 20.6 75.6 24.4 74.9 25.1
Although the upgrades to the Joint Water System are typically designed based on Peak Day
Demand, using a single Peak Day Demand to determine the cost sharing of Joint Water Capital
Projects between the two municipalities can be unreliable, and may not capture the Peak Day
from the two municipalities.
As illustrated in the above table, the percentage split varies from (a) to (c), but in some cases is
relatively stable between (c) and (d). It is therefore proposed to use (c) Average of Top 10 Peak
Days in the cost sharing formula. This will also allow more peaks of both municipalities to be
captured.