Emergency Response Department: Fire Hydrant Service Agreement

Recommendation:
1.  That a four-year agreement with EPCOR Water Services, Inc. for the maintenance and operation of the fire hydrant infrastructure for the firefighting needs of the City of Edmonton, and for the payment for the maintenance and operation, all in accordance with the terms and conditions described in Attachment 1 of the November 12, 2002, Emergency Response Department report, be approved.
2.  That the agreement be acceptable in form to Corporate Services Department (Law Branch), and in content to the General Manager of the Emergency Response Department.

Report Summary

The current three-year fire hydrant service agreement with EPCOR Water Services, Inc. (EWSI) expires on December 31, 2002. In this report the Emergency Response Department (ERD) recommends approval of a new agreement in accordance with specified terms and conditions. The terms and conditions are essentially the same as in the current agreement, with minor improvements and with a slight reduction in the cost to the City.

Previous Council/Committee Action

At the January 24, 2000, Community Services Committee meeting, the following motion was approved:

That the Fire Hydrant Service Agreement (Attachment 1 of the December 6, 1999, Emergency Response Department report) between the City of Edmonton and EPCOR Water Services Inc. be approved.

Report

·  Fire hydrants, which provide the water used by the City of Edmonton (ERD) for firefighting, are owned by EPCOR.

·  By longstanding arrangement, originating when EWSI was a corporate department, ERD covers the cost of the operation, maintenance and servicing of the fire hydrants owned by the “water system.” This includes the equity financing of the capital cost of the infrastructure, both the infrastructure directly attributable to fire protection and the infrastructure which is “in common” with other water infrastructure.

·  In December 1998, various agreements with the then Aqualta for the provision of fire hydrant service, were terminated, extended or amended by a new agreement with EWSI. The 1998 agreement was then renewed to December 1999, and subsequently extended to the end of 2002 by the agreement currently in place.

·  The $4.66 million annual fee is slightly reduced from the $4.69 million cost to the City under the current agreement.

·  It is Administration’s, and EWSI’s, intent to examine, over the four years of the recommended new agreement, alternative proposals for funding the annual cost of EWSI providing the services specified.

Budget / Financial Implications

The services by EWS specified in Attachment 1 will cost the City of Edmonton $4.66 million annually. This is included in the 2003 Budget submission.

Justification of Recommendation

  1. The City (ERD) requires EWSI to operate, maintain and service the EPCOR-owned fire hydrants, according to its (ERD’s) specifications. The recommended agreement, with the terms and conditions contained in Attachment 1, will do this. The terms and conditions are essentially the same as provided in the current agreement.
  2. Administration will prepare, finalize and then execute the recommended agreement, in accordance with standard delegation.

Background Information Attached

  1. Terms and Conditions, Fire Hydrant Service Agreement with EPCOR Water Services, Inc.

Others Approving this Report

Randy Garvey, General Manager, Corporate Services Department

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Emergency Response Department: Fire Hydrant Service Agreement

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Attachment 1

Terms and Conditions, Fire Hydrant Service Agreement with EPCOR Water Services Inc.

Staff of the Emergency Response Department (ERD), assisted by staff of the Law Branch, Corporate Services Department, have agreed with officials of EPCOR Water Services, Inc. (EWSI), to the following terms and conditions to be incorporated into a “Fire Hydrant Service Agreement”, and they are recommended for approval:

  1. Parties to the agreement are the City of Edmonton and EPCOR Water Services, Inc.
  1. Services to be provided by EWSI:

(a)  The agreement will apply to all EPCOR-owned fire hydrants located within the City.

(b)  EWSI will maintain, inspect and repair hydrants in accordance with Alberta Fire Code guidelines.

(c)  EWSI will inspect each hydrant twice annually, flushing and lubricating and repairing deficiencies as required.

(d)  EWSI will notify the City (Emergency Response Department) of hydrants that are out of service, repairing them within a minimum specified period.

(e)  EWSI will paint and clean the hydrants in accordance with an annual schedule reviewed by ERD, and with colour-coding approved by ERD.

(f)  EWSI and the City agree to review service levels, operation and maintenance costs, and to share all pertinent information.

(g)  EWSI will annually provide a written report to ERD on the services provided.

(h)  Water is provided for firefighting.

  1. Duration of the agreement:

(a)  The agreement is to run from January 1, 2003 to December 31, 2006.

(b)  The agreement may be terminated by either party upon six month’s written notice.

  1. Cost of the service:

(a)  The fee to be paid by the City of Edmonton will be $4.66 million per year.

(b)  The $4.66 million annual fee is comprised of $1.63 million for operation and maintenance of the “direct infrastructure”, $0.67 million for operation and maintenance of “common infrastructure”, and $2.36 million for debt interest, cost of equity financing, and depreciation.

(c)  If the agreement is terminated by either party, payment for the operation and maintenance of the “common infrastructure” and the debt interest, cost of equity financing and depreciation (total $3.03 million of the $4.66 million) will continue until all amounts otherwise payable under the agreement (i.e. for its term) have been paid.

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