: Abbotsford rr "*/ IIvIission Water & Sewer Services

REPORT

To: Abbotsford Mission Water & Sewer Commission (WSC)

From: Tracy Kyle, Director of Water & Solid Waste

Date: February 3, 2011

Subject: Stave Lake Water Supply & Treatment Project - P3 Communications Plan

File: 5600-60

Report No.: WSC 28-2011

UTILITY MANAGEMENT COMMITTEE (UMC) RECOMMENDATION

THAT Report No. WSC 28-2011, dated February 3, 2011 , from Tracy Kyle, Director of Water & Solid Waste, regarding the Stave Lake Water Supply & Treatment Project - P3 Communications Plan, be received.

BACKGROUND

In June 2010, an application for the Stave Lake Water Supply & Treatment project was submitted to the P3 Canada Fund call for proposals. In September 2010, the Abbotsford Mission Water & Sewer Commission (AMWSC) was notified that PPP Canada has interest in developing the Stave Lake Water Supply & Treatment project for eventual Comprehensive Assessment. A business case must be developed to submit to PPP Canada for further consideration of the Stave Lake Water Supply & Treatment project.

Deloit!e & Touche are retained to provide financial advisory services for the business case phase and into the procurement phase if the project proceeds under the Public Private Partnership (P3) model. CH2M HILL are the owner's engineer for the Stave Lake Water Supply & Treatment Project (Project). Partnerships BC are providing P3 advisory services for the Project.

A schedule of P3 milestones (Appendix A) was developed to define the Project timeline.

DISCUSSION

Communications will be a critical component of the success of the Project, whether the AMWSC moves forward with a traditional or alternative procurement delivery. A communications strategy is required to establish goals, tools and processes for communicating with stakeholders, staff, the public and others.

Report No. WSC 28-2011 Page 2 of 2

ANALYSIS

The draft communications plan, developed by Corporate Communications and Marketing (with Partnerships BC as an advisor), is attached in Appendix B. As suggested by Council, an external communications team will be retained at a later date if required.

Each phase of the Project will be developed further to align with the P3 Milestones (Appendix C) as the previous phase is coming to a close. These phases are:

Phase 1 - Planning This is the current phase of the Project. The communications strategy will begin immediately by providing stakeholders with updated information on the status of the Project.

Phase 2 - Business Case This phase of the communications strategy will include communicating the results of the business case analysis and the recommended procurement plan which, if approved by Councils, will be submitted to PPP Canada.

Phase 3 - Procurement During the procurement phase stakeholders will be updated on the progress of this phase of the Project.

Phase 4 - Construction & Commissioning Regular updates on the Project budget, schedule and details such as roadwork will be required .

FINANCIAL IMPLICATIONS

There are no financial implications.

COMMUNICATIONS PLAN

A communications plan is in development and discussed within this report.

SUMMARY

The AMWSC is investigating a public private partnership procurement model for the Stave Lake Water Supply & Treatment project. A draft communications plan has been developed for the Project.

Jim Gor on, P. Eng. Gene I Manager of Engineering & Regional Utilities

Appendix A - Schedule of P3 Milestones

Milestone Date

Council endorsement of the business case March 17, 2011

Business case submitted to PPP Canada March 31, 2011

PPP Canada Board approval June 2011

AMWSC/Council approval to proceed with P3 procurement June/July 2011

PPP Canada Minister approval September 2011

RFQ release October 2011

Municipal election November 2011

RFQ close December 2011

Confirm Councils' endorsement of P3 procurement December 2011

Obtain Consent of Electors Jan/Feb 2012

RFQ evaluation and shortlist ~anuary 2012

RFP release March 2012

RFP close September 2012

Preferred proponent selected November 2012

Financial close January 2013

Construction start January 2013

Construction completion December 2015

Appendix B

Stave Lake Water Supply and Treatment Project

DRAFT COMMUNICATIONS PLAN FOR DISCUSSION

Communications Objectives

The primary objective of this communications plan is to provide general communications and information sharing advice on issues, opportunities, strategies and tactics during the business case development stage for the Stave Lake Water Supply and Treatment Project (the Project).

This plan covers the period from January 2011 to submission of the project business case in March 2011 through to June 2011 when a funding decision is expected.

Following implementation of this plan it is recommended that a procurement communications plan be developed and supported with a dedicated communications resource throughout the competitive selection process.

Project Background

The City of Abbotsford manages water delivered to Abbotsford and Mission on behalf of the Abbotsford Mission Water & Sewer Commission (AMWSC). The existing AMWSC water supply includes two surface water sources (Norrish Creek and Cannell Lake), 19 groundwater wells, two water storage reservoirs (Maclure Reservoir and Mt. Mary Ann Reservoir) and 86km of high pressure, steel water transmission mains.

Abbotsford and Mission are expanding cities and a new water source is required to meet the growing demand. Although there is currently sufficient water available throughout most of the year, water use increases significantly over the summer months. A water conservation awareness campaign has been successful at reducing demand for water during peak summer months and informing residents of both Abbotsford and Mission about the need for an additional water source.

The AMWSC has undertaken various studies and determined that Stave Lake will provide the best water source for residents and will offer high water quality, sufficient quantity to meet demand and was the most economical choice. The Project will be developed in three stages to an ultimate capacity of 400 Million Litres per Day (MLD) within a 50-year horizon. The first stage aims to provide 150 MLD of treated water to Abbotsford and Mission by 201S. As such, the following infrastructure is required:

• A raw water intake and pump station at the south end ofthe lake; • A 6.6km raw water pipeline; • A new water treatment plant (WTP); • An 8.7km treated water pipeline from the new WTP to the Lougheed Highway in Mission;

and

• An 8.6km treated water pipeline from Lougheed Highway to Maclure Road.

The AMWSC applied for PPP Canada funding (P3 Canada Fund) during the May 2010 to June 2010 proposal call.

The Project met the review criteria and the AMWSC has been invited to submit a business case including detailed procurement options analysis, for comprehensive assessment by PPP Canada. The business case will confirm project scope, cost and schedule and determine which procurement delivery approach is best for the project and most cost-effective for local ratepayers. The AMWSC has hired Deloitte & Touche as business advisor to assist with drafting the business case and CH2M HILL were selected as Owner's engineer for the Project. Partnerships BC has been hired by the AMWSC to provide Public Private Partnership (PPP) advisory services and guidance on recommended practices associated with quantitative analysis. The bus,iness case will be submitted to the Abbotsford and Mission Councils for approval on March 17, 2011 and is due to PPP Canada by the end of March 2011. A funding decision by PPP Canada would be expected by June 2011.

Situation Analysis

Strengths Weaknesses

• Need for a new water supply source is • Subject matter complexity well understood within the community • Perception of failed PPP projects in water

• Abbotsford Regional Hospital and Cancer treatment sector Centre viewed as a success in the region

• Good relationships with local media

• Mayor Peary - strong spokesperson, credible

Opportunities Threats

• Application to P3 Canada Fund accepted; • Election year for local government possible funding pending outcome of • Criticism from special interest groups (e.g. business case CUPE, labour, and contractors)

• Regularly scheduled Council meetings to update/brief officials on project status

Audiences

• Mayor and Councillors, City of Abbotsford • Mayor and Councillors, District of Mission

• City of Abbotsford employees • District of Mission employees

• Project Team o Deloitte o PPP Canada o Partnerships BC o CH2M

• Abbotsford Mission Water & Sewer Commission

• Local media o Abbotsford News o Abbotsford Mission Times o Mission City Record o Country 107.1 Radio

Strategy and Tactics

Strategy Tactics

• Clearly define the Project in • Focus on the benefits of a new water supply project

terms of the benefits to the for the residents of the City of Abbotsford and community and repeat those District of Mission (not the procurement delivery benefits at every possible approach) opportunity • Focus on the tangible benefits that will apply

immediately (i.e. construction jobs, regional economic benefits)

• Develop key messages for the project that emphasize project benefits (see Key Messages in this plan)

• Implement an ongoing and • Identify potential issues and prepare responses (see proactive issues management Section B) strategy that ensures issues are • Develop an internal question and answer document addressed quickly, accurately and for the project (see Section A) appropriately • Designate a spokesperson(s) for the project (see Key

Messages in this plan)

• Consider technical briefings for media, as appropriate

• Respond to media inquiries in a timely and consistent manner

• Keep decision makers informed • Present to the Mayor and Councillors, City of about the status of the project, Abbotsford and the Mayor and Councillors, District key issues and opportunities of Mission

• Provide regular briefings for elected officials and members of the AMWSC

• Strive to inform elected officials about any potential issues before such issues arise or reach the media

• Commit to a high level of • Create and maintain a project website (possibly use

openness and transparency www.ourwatermatters.ca) about the project • Consider posting FAQs to a project website

• Proactively disclose information about the project consistent with local government policy ( unless commercially sensitive)

Strategy Tactics

• Clearly define the roles and • Weekly project team meetings (communications is a responsibilities of the different standing item on the agenda) members and agencies on the • PPP 101, PPP Canada Overview presentations to the project team AMWSC (December 9, 2010) and other stakeholders

as requested

• Project overview presentations to stakeholders as requested

Key Messages

• Abbotsford and Mission are growing quickly and are in urgent need of a new water supply source to meet the growing demand for water now and in the future.

• The AMWSC has identified Stave Lake as the best new water supply source. Stave Lake will provide residents with water that is high quality, sufficient in quantity and is the most economical source to develop.

• The AMWSC is currently preparing a business case that will analyze a variety of procurement options for how best to deliver the Project in the most cost-effective way for local ratepayers.

• No decisions have been made about whether the Project will be delivered as a PPP or not. The next step in the process is to complete the business case and submit it to PPP Canada for funding consideration. The opportunity to receive up to 25 per cent funding support for this project would greatly benefit local ratepayers.

• Regardless of how the project will be delivered, the Project will be owned by the public sector.

Roles and Responsibilities

Katherine Jeffcoatt, Manager, Corporate Communications and Marketing for the City of Abbotsford, is the lead on all project-related communications, internal communications and community relations/stakeholder relations.

Partnerships BC will provide support in the development of communications tools (e.g. QA,

presentations, backgrounders, etc.) and the implementation of this communications plan, as required and requested by the client.

Section A: Questions and Answers

1. What is this Project?

• Abbotsford and Mission are growing and a new water source is required to meet the growing demand.

• The Stave Lake Water Supply and Treatment Project consists of a new water treatment plant at Stave Lake, a water intake and pump station and associated pipelines to transfer the water to residents.

• Stave Lake will provide residents with water that is high quality, sufficient in quantity and is the most economical source to develop.

2. What is a public private partnership?

• A public private partnership (PPP) is a long-term, performance-based contract between government and business to deliver infrastructure such as roads, hospitals, water and wastewater treatment facilities.

o In British Columbia, regardless of the procurement delivery approach, the asset is always owned by the public sector.

• Partnerships bring the strength of the public and private sector together: o The public sector maintains accountability for each project through a performance­

based contract to ensure high-quality standards are met throughout the life of the contract.

3. What is the status of the Project?

• The Abbotsford Mission Water & Sewer Commission (AMWSC) applied to PPP Canada for funding consideration during the May 2010 to June 2010 proposal call. The project was considered eligible for a comprehensive assessment.

• The AMWSC is currently drafting the business case and has hired Deloitte & Touche to assist with business planning. Partnerships BC has also been hired to provide Public Private Partnership (PPP) advisory services and guidance on recommended practices associated with quantitative analysis for the business case. CH2M HILL has been appointed Owner's Engineer for the Project.

• The business case will include the expected scope of the project, an estimate of capital and operating costs and a project schedule. In addition, the business case will include an ana lysis of procurement options to determine which delivery approach works best for the Project (e.g. PPP delivery, traditional delivery or a combination).

• The business case will be presented to the Abbotsford and Mission Councils for approval in March 2011. If the procurement options analysis indicates that a PPP is the best delivery approach, then the business case will then be submitted to PPP Canada for consideration under the P3 Canada Fund.

o The private partner manages the project to ensure it is delivered on time, on budget and to a high-quality standard established in the contract.

4. What is the role of PPP Canada?

• PPP Canada is a Crown corporation established by the federal government to support the development of public private partnerships and the development of the Canadian partnership market.

• The federal government established a $1.2 billion fund that is managed by PPP Canada to support PPP infrastructure projects.

5. How does the P3 Canada Fund work?

• The P3 Canada Fund is a merit-based program which helps deliver infrastructure by co­funding public infrastructure projects which are best delivered using a PPP.

• The fund is focused on provincial, territorial, municipal and First Nations PPP projects.

• The amount of funding support provided by PPP Canada may not exceed 25 per cent of the project's direct construction costs (this includes any other direct federal funding) . The level, form and conditions of any funding support will vary based on the needs of the project.

• PPP Canada issued a call for proposals between May 2010 and June 2010: o 73 proposals were received for projects in 11 provinces and territories; o 35 are municipal projects; and o 7 are water/wastewater; 13 are energy/green energy; 18 are transportation; 12 are

First Nations projects; plus some sports, recreation and tourism-related projects.

6. Why is Partnerships BC involved?

• The AMWSC has engaged Partnerships BC to provide PPP advisory services and guidance on recommended practices associated with quantitative analysis for the business case.

• Partnerships BC was created in May 2002 to support the Province's commitment to sound fiscal management in the delivery of affordable infrastructure projects that meet the needs of British Columbians.

• Partnerships BC has been involved with the planning and procurement of more than 35 projects across a variety of sectors, including: transportation, water treatment, energy, health care and schools.

• Partnerships BC works with its public sector clients to analyze the size, scope and complexity of a project to determine whether it can best be delivered through a partnership approach. The project team examines the opportunities for innovation; the potential for transferring risks, such as construction cost and schedule; and the potential for performance-based contracts.

• On of the first major partnership projects in this Province was the Abbotsford Regional Hospital and Cancer Centre - a $355 million state-of-the-art facility that was completed on time, on budget and within scope. An unprecedented achievement for a hospital project of that size and complexity.

Section B: Issues and Recommended Responses

There are some issues associated with projects delivered using the partnership approach. These issues are outlined below, along with recommended responses.

Issue #1: PPPs result in the privatization of public assets Response: • Government retains ownership of the public assets and controls the services through a

performance-based contract. • The public sector sets high quality performance standards and the private sector gets paid

only for services that meet those standards.

Issue #2: Critics will say that the quality of service will decline under PPPs because the private sector is more focused on maximizing profit than providing high quality service Response:

• Government has more control over the quality of services through performance-based contracts.

• Private partners will be financially penalized if services don't meet specified performance standards.

• Government can enforce provisions of the contract dealing with quality control.

Issue #3: PPPs are shrouded in secrecy, lack transparency and accountability Response:

• In British Columbia, PPPs are among the most transparent procurement processes.

Issue #4: PPPs lead to public sector job losses Response:

• The water treatment plant at Stave Lake will be a brand new plant at a new site - it represents job growth for the region in terms of construction jobs and long-term operations jobs.

Issue #S: The AMWSC should finance the project the traditional way since PPPs cost more (government can borrow money cheaper) Response:

• No decisions have been made about whether the project will be delivered as a public private partnership or not. The next step in the process is to complete the business case and submit it to PPP Canada for funding consideration. The opportunity to receive up to 25 per cent funding support for this project will greatly benefit local ratepayers.

• The risks transferred to the private partner - cost, schedule and long-term performance of the asset - more than offset the higher cost of private finance.

• Typically PPPs are only undertaken where the analysis shows that a PPP approach will provide more value to taxpayers.

Issue #6: There are fewer opportunities for local trades to participate on public private partnership projects Response:

• There are many opportunities for local contractors to be involved in public private partnership projects. In fact, PPPs are quite often a blend of international experience and local expertise.

• National and international companies rely on local talent and expertise to get the job done and partnering with local contractors just makes sense.

• For the Abbotsford Regional Hospital and Cancer Centre, PCL hired more than 20 local companies to work on the hospital and cancer centre. For example, site excavation and site services were provided by Chester Thorton-Chet Construction Limited-an Abbotsford company. And bricks for the exterior of the facility were provided by Clayburn Industries-another local Abbotsford company.

Appendix C - Schedule of Communications Activities Aligned with P3 Milestones

Phase One -Planning

The communications strategy will begin immediately by providing parties who have expressed concern with the Project with updated information on the status, implications and significance of the Project.

• Information sessions with Mission/Abbotsford CUPE executive • Preparation/finalization of communications information materials: PowerPoint

presentation, Project Information Flat Sheet, Draft Media Release

Phase Two - Business Case Project Milestones: Council endorsement of the business case, March 17, 2011 Business case submitted to PPP Canada, March 31,2011 PPP Canada Board approval, June 2011

This phase of the communications strategy will include communicating the results of the business case analysis and the recommended procurement plan to the media/public.

• March 17, 2011 - pending Council approval, the Media Release will go to local media announcing Council endorsement of the business case and the application to PPP Canada for Federal support. Key messages include - this is an application phase, nothing has been decided yet; there is potential for taxpayers to save up-to $30 million by applying through th is process; background information on project. Follow-up interviews with Mayor Peary and Mayor Atebe as spokespersons for the Project. Project information Flat Sheet posted on the AMWSC website (www.ourwatermatters.ca). COA website and Mission website. City Page (COA/Mission) information bulletin referring public to the AMWSC website as the main source of information for the Project. City websites also updated to refer public to the AMWSC website for more information on the project.

• March through June 2011 - pending response to application phase, public information sessions may be required.

• June 2011 - Media Release announcing PPP Canada Board Approval and AMWSC next steps (Procurement). The AMWSC website updated to reflect Project on home page. Supporting City websites refer public to the AMWSC website. The AMWSC website now becomes central source of Project information/updates for public. (reference: McCallum/Clearbrook Interchange Project websites). Public information session may be required to support procurement actions.

Phase Three - Procurement

Project Milestones - part one: AMWSC/Council approval to proceed with P3 procurement, JunelJuly 2011 PPP Canada Minister approval, September 2011

June/July 2011 - Pending Council approval, stakeholders will be updated on the progress of this phase of the Project through the AMWSC website, the City Page (COA/Mission) and milestone news releases. Stakeholder analysis may warrant Public Information Sessions take place to support public understanding of the process at this pOint.

Report No. WSC 28-2011

Project Milestones - part two: RFQ release, October 2011 Municipal election, November 2011 RFQ close, December 2011 Confirm Councils' endorsement of P3 procurement, December 2011 Obtain Consent of Electors, Jan/Feb 2012 RFQ evaluation and shortlist, January 2012 RFP release, March 2012 RFP close, September 2012 Preferred proponent selected, November 2012 Financial close, January 2013

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At this stage of the process, stakeholders should be well informed. Information updates will be regularly provided via the AMWSC website, the City Page (CONMission) and milestone news releases.

Phase Four - Construction & Commissioning

Project Milestones: Construction start, January 2013 Construction completion, December 2015

Regular updates on the Project budget, schedule and details such as roadwork will be required .