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150713 Council= ATTENDANCE Mayor Stephen Molnar Deputy Mayor Dave Beres Councillor Maxwell Adam Councillor Penny Esseltine Councillor Jim Hayes Councillor Chris Rosehart Councillor Brian Stephenson Staff: David Calder, CAO Donna Wilson, Town Clerk Kevin De Leebeeck, Director of Operations Rick Cox, Director of Recreation, Culture and Parks Darrell Eddington, Director of Finance 1. Call to Order The meeting was called to order at 6:00 p.m. 2. Closed Session Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT Council move into Closed Session to consider: A proposed or pending acquisition or disposition of land by the municipality or local board, (TVDSB). Carried The Corporation of the Town of Tillsonburg COUNCIL MEETING Monday, July 13, 2015 6:00 PM Council Chambers 200 Broadway, 2nd Floor MINUTES Council Meeting – Agenda - 2 - 3. Adoption of Agenda Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT the Agenda as prepared for the Council meeting of Monday, July 13, 2015, be adopted. Carried 4. Moment of Silence 5. Disclosures of Pecuniary Interest and the General Nature Thereof Councillor Hayes and Councillor Stephenson declared a pecuniary interest in item number 7.2 St. Mary's Church Delegation Regarding Community Improvement Plan as well as item number 8.2 A-04/15 Application for Minor Variance, St. Mary’s Catholic Church due to their affiliation with the church. 6. Adoption of Council Minutes of Previous Meeting 6.1. Minutes of the Meeting of Minutes of June 22, 2015 Minutes June 22, 2015 It was noted that Councillor Hayes declared a conflict of interest at the June 22, 2015 Council meeting on item no. 9.2.1 Report DCS 15-27 CIP Application for 137 Rolph St., due to his affiliation with the Church as well as being part of the fund raising committee and personally donating funds to that project. Moved By: Councillor Hayes Seconded By: Councillor Rosehart THAT the Minutes of the Council Meeting of Monday June 22, 2015, be approved. Carried 7. Delegations and Presentations 7.1. Community Sustainability Plan presentation Jay Heaman, Committee Member, Gord Hough, Director of Community & Strategic Planning Oxford Community Sustainability Plan Council Meeting – Agenda - 3 - Gord Hough, Director of Community & Strategic Planning and Jay Heaman, Committee Member provided an overview of the draft sustainability plan. Council was given the opportunity to ask questions. The County is asking Tillsonburg Council to receive the presentation and for Council to provide comments either individually or through Council as a whole by August 14th, 2015. The plan will go to County council in the fall for adoption. Moved By: Councillor Hayes Seconded By: Councillor Rosehart THAT Council receive the Draft Community Sustainability Plan presentation, as information; AND THAT staff prepare a follow-up report for the August 10, 2015 Council meeting. Carried Councillor Hayes and Councillor Stephenson left the room at 6:34 p.m due to their declared conflict of interest. Carried 7.2. St. Mary's Church Delegation Regarding Community Improvement Plan Presented By: Urban Demaiter, Capital Campaign Chairperson and Andre Dedecker, Deacon Delegation request St. Mary Church Letter Urban Demaiter and Andre Dedecker appeared before Council to request the town reconsider their decision from the last meeting on their CIP application. Moved By: Councillor Adam Seconded By: Deputy Mayor Beres That Council reconsider the decision regarding Report DCS 15-27 Community Improvement Plan Application 137 Rolph St Application – 137 Rolph St. Carried Council Meeting – Agenda - 4 - Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council receive Report DCS 15-27 Community Improvement Plan Application – 137 Rolph St; AND THAT the Community Improvement Plan Application for the 137 Rolph St property be approved including rebates for applicable building permit fees; AND THAT a By-law be brought forward to authorize the rebate for Council consideration. Carried Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT Council receives the material from St. Mary’s Church delegation, as information. Carried Councillor Hayes and Councillor Stephenson returned to the meeting at 7:10 p.m 7.3. Youth Leadership Grant Guidelines Tammy Moore Delegation Request Youth Leadership Grant Guidelines Youth Leadership Grant Application Rebecca Moore Grant Application Discussion took place regarding the criteria for the grant application. Moved By: Deputy Mayor Beres Seconded By: Councillor Esseltine THAT Council receives the material from Tammy Moore’s delegation as information; AND THAT Council waive the requirement for residency for the Youth Leadership Grant Application; AND THAT the application be referred to the community Trust Trustees for consideration. Carried Council Meeting – Agenda - 5 - 7.4. Cultural Advisory Committee Grant Request Presented By: Deb Beard, Committee Cultural Advisory Committee Delegation Request Moved By: Councillor Adam Seconded By: Councillor Rosehart THAT Council receive the request from the Cultural Advisory Committee; AND THAT Council support the request to grant the Tillsonburg Thunder Senior AA Hockey Club $2,000.00 to assist with the cost of entertainment at the Annual Tillsonburg Ribfest. Carried 8. Public Meetings Moved By: Councillor Adam Seconded By: Councillor Esseltine THAT Council move into the Committee of Adjustment to hear Applications for Minor Variance at 7:35 pm. 8.1. A-03/15- Application for Minor Variance, Margaret Scantlebury, 7 Hogarth Drive CASPO 2015-129 Attachments Letter of Support Gord Hough, Director of Community & Strategic Planning, County of Oxford, appeared before Council and commented with respect to Minor Variance application A-03/15 and County Report CASPO 2015-129. Margaret Scantlebury appeared before Council to speak to her application. Opportunity was given for comments and questions from anyone in attendance. No other persons appeared in support of, or in opposition to, the subject application. The following resolution was passed: Moved By: Councillor Esseltine Seconded By: Councillor Stephenson That the Town of Tillsonburg Committee of Adjustment approve Application File A-03/15, submitted by Margaret Scantlebury, for lands described as Part Lot 78, Plan 41M-182, Town of Tillsonburg, as it relates to relief from Section 7.5.5.2.12.1 – Permitted Council Meeting – Agenda - 6 - Encroachments -Rear Yard, to increase the permitted encroachment for a covered deck from 1.5 m (5 ft) to 2.5 m (8 ft). Carried 8.2. A-04/15- Application for Minor Variance, St. Mary's Catholic Church, 51 Venison Street West CASPO 2015-145 Plate 1 Plate 2 Applicant's Sketch Gord Hough, Director of Community & Strategic Planning, County of Oxford, appeared before Council and commented with respect to Minor Variance application A-04/15 and County Report CASPO 2015-145. Deacon Andre DeDecker appeared before Council representing the applicant. Urbain Demaiter spoke in favour of the application particularly in support of the accessibility that will be provided by the project. Rob Schonberger was in attendance and spoke in favour of the application. He noted that the application will provide a much needed elevator and this will address the need for accessibility. No other persons appeared in support of, or in opposition to, the subject application. The following resolution was passed: Moved By: Councillor Esseltine Seconded By: Councillor Adam THAT the Town of Tillsonburg Committee of Adjustment approve Application File A- 04/15, submitted by The Roman Catholic Episcopal Corporation of the Diocese of London (St. Mary’s Catholic Church), for lands described as Lots 731, 733 & West Part Lot 734, Plan 500, in the Town of Tillsonburg, to permit a minor addition to the existing place of worship and recognize existing parking deficiencies to waive the minimum required loading spaces. Carried Council Meeting – Agenda - 7 - 8.3. A-05/15- Application for Minor Variance, Helen Klassen, 2 Alexander Ave CASPO 2015-146 Attachments Gord Hough, Director of Community & Strategic Planning, County of Oxford, appeared before Council and commented with respect to Minor Variance application A-05/15 and County Report CASPO 2015-146. The applicant George Klassen was in attendance and spoke to his application. Opportunity was given for comments and questions from anyone in attendance. No other persons appeared in support of, or in opposition to, the subject application. The following resolution was passed: Moved By: Councillor Stephenson Seconded By: Councillor Esseltine That the Town of Tillsonburg Committee of Adjustment approve Application File A-05/15, submitted by George & Helen Klassen, for lands described as Lot 51, Plan 507, Town of Tillsonburg, as it relates to relief from Table 5.1.1.4 – Regulations for Accessory Buildings and Structures, to increase the maximum permitted lot coverage from 50 m2 (538 ft2) to 58 m2 (624 ft2) to permit the construction of a detached accessory building; Subject to the following condition: i) A building permit for the proposed accessory building shall be issued within one year of the date of the Committee’s decision. Carried Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT Council move out of the Committee of Adjustment and move back into regular session at 7:56 p.m. Carried Council Meeting – Agenda - 8 - 8.4. ZN 7-15-03- Application for Zone Change, Michael & Krystal West, 304 Tillson Ave CASPO 2015-147 Attachments Gord Hough, Director of Community & Strategic Planning, County of Oxford, appeared before Council and commented with respect to application ZN 7-15-03 and County Report CASPO 2015-147. The applicant Michael West was in attendance and spoke to his application. Opportunity was given for comments and questions from anyone in attendance. No other persons appeared in support of, or in opposition to, the subject application. The following resolution was passed: Moved By: Councillor Hayes Seconded By: Councillor Rosehart Proposed Resolution #13 THAT Council approve the zone change application submitted by Krystal & Michael West, whereby the lands described as Lots 27 & 28, Plan 500, Town of Tillsonburg, known municipally as 304 Tillson Avenue are to be rezoned from ‘Neighbourhood Commercial Zone (NC)’ to ‘Low Density Residential Type 2 Zone (R2)’. Carried 8.5. ZN 7-15-04 - Application for Zone Change, John Veldman, 30 Old Vienna Road CASPO 2015-148 Attachments Gord Hough, Director of Community & Strategic Planning, County of Oxford, appeared before Council and commented with respect to application ZN 7-15-04 and County Report CASPO 2015-148. The property owner Margit Pusztahegy was in attendance and spoke to the application. Opportunity was given for comments and questions from anyone in attendance. Council Meeting – Agenda - 9 - No other persons appeared in support of, or in opposition to, the subject application. The following resolution was passed. Moved By: Councillor Hayes Seconded By: Councillor Rosehart Proposed Resolution #14 It is recommended that the Council of the Town of Tillsonburg approve the zone change application submitted by John Veldman, whereby the lands described as Part Block A, Plan 966, Town of Tillsonburg, known municipally as 30 Old Vienna Road are to be rezoned from ‘Low Density Residential Type 1 Zone (R1)’ to ‘Special Low Density Residential Type 1 Zone (R1-16)’ to permit the development of a single detached dwelling within the EP2 Overlay. Carried Council took a five minute recess at 8:10 p.m. Council resumed at 8:20 p.m. 8.6. Recreation, Culture & Park Services 8.6.1. RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request Memo from Planning Staff Map of Subject Property County planning does not suggest that the minor variance is the proper recourse but that a zone change application would be the more appropriate means to resolve the matter of the shed location. The structure encroaches upon the drainage easement currently and there are also building and fire code issues with the placement of the structure. Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT Council receives Report RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request for information; Council Meeting – Agenda - 10 - AND THAT Council does not consent to the Club’s request to approve the submission of an application for a minor variance. Carried 9. Information Items 9.1. Community Schools Alliance Community Schools Alliance 9.2. Ontario Provincial Police Commander and Superintendent Appointments Commissioner Hawkes letter 9.3. Ministry of Transportation Correspondence MTO Letter 9.4. Ministry of Energy correspondence June 2015 MoE Lteer June 2015 9.5. Municipality of Tweed, Disaster Relief Request Municipality of Tweed 9.6. Glendale to Gibson Proposed Trail Glendale letter Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council refer the correspondence regarding the proposal Glendale to Gibson Drive trail in the draft Tillsonburg Trails Master Plan to the Parks and Recreation Advisory Committee for their review and comment. Carried 9.7. Union Gas Limited - NEXUS - Notice of Application - EB-2015-0166 Union Gas Application Notice 9.8. Township of Montague Community Mailboxes resolution Community Mailbox resolution 9.9. New Tecumseth Electricity Rates Motion Council Meeting – Agenda - 11 - New Tecumseth motion Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT Council receives items 9.1 to 9.9 as information. Carried 10. Mayor 10.1. MYR 15-08 Update - County of Oxford MYR 15-08 Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT Council receives Report MYR 15-08 as information. Carried 11. Reports from Departments 11.1. Chief Administrative Officer 11.1.1. CAO 15-09, Moose Power Inc. Request for Council Resolution in Support of Rooftop Solar Applications Under the Provincial Feed-In Tariff (FIT) Program CAO 15-09 Moved By: Councillor Stephenson Seconded By: Councillor Esseltine WHEREAS the Province's FIT Program encourages the construction and operation of rooftop solar generation projects (the "projects"); AND WHEREAS one or more Projects may be constructed and operated in the Town of Tillsonburg; AND WHEREAS pursuant to the rules governing the FIT Program (the "FIT Rules"), Applications who’s Projects receive formal support of Local Municipalities will be awarded Priority Points, which may result in these Applications being offered a FIT Contract prior to other persons applying for FIT Contracts; NOW THEREFORE the Council of the Town of Tillsonburg supports without reservation the construction and operation of Projects in the Town of Tillsonburg. This resolution's sole purpose is to enable the participants in the FIT Program to receive priority points under the FIT Program and may not be used for the Council Meeting – Agenda - 12 - purpose of any other form of municipal approval in relation to the Application or Projects or any other purpose; AND THAT this resolution shall expire on July 13, 2016. Carried 11.2. Clerk’s Office 11.2.1. CL 15-17 Special Awards Committee CL 15-17 Special Awards Special Awards Committee Terms of Reference Volunteer Service Recognition Program Schedule A Nomination Form Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT Council receives Report CL 15-17, Special Awards Committee Appointment; AND THAT Council appoints Ann Loker, Sam Lamb and Mary Anne Vangeertruyde to represent the community; AND THAT Council appoints Mayor Stephen Molnar and Councillor Stephenson to represent the Town as members of the Special Awards Committee; AND THAT the Volunteer Service Recognition Program and the Terms of Reference for the Special Awards Committee be adopted. Carried 11.3. Development and Communication Services 11.3.1. DCS 15-28 Sign Variance - Tillsonburg District Memorial Hospital DCS 15-28 Site Plan & Sign Elevation Moved By: Councillor Esseltine Seconded By: Councillor Adam THAT Council receives report DCS 15-28 Sign Variance – Tillsonburg District Memorial Hospital; AND THAT Council approve the variance to Sign By-Law 3798 to allow for the construction of a 2 sided 5.5 square metres (60 sq.ft.) x 3.9 metres (12.8 ft) high ground sign located partially within the Town road allowance at 167 Rolph Street. Carried Council Meeting – Agenda - 13 - 11.3.2. Report DCS 15-26 Highway 3 Business Park Update Report DCS 15-26 Highway 3 Business Park Update Report DCS 15-01 Highway 3 Business Park Development Plan Moved By: Councillor Esseltine Seconded By: Councillor Stephenson THAT Council receives Report DCS 15-26 Highway 3 Business Park Update for information purposes. Carried 11.3.3. Report DCS 15-29 Certified Site Agreement with the Province of Ontario Report DCS 15-29 Certified Site Agreement with the Province of Ontario Agreement between Ontario and Town Schedule A - Project Timelines and Costs Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council receives Report DCS 15-29 Certified Site Agreement with the Province of Ontario; AND THAT the Mayor and Clerk be authorized to enter into an agreement with the Province of Ontario for participation by the Town of Tillsonburg in the Investment Ready: Certified Site Program to market the 20 Clearview Dr site and to receive reimbursement for costs related to the program; AND THAT a bylaw be brought forward for Council consideration. Carried 11.3.4. Report DCS 15-30 Town Branding Project Update Report DCS 15-30 Town Branding Project Update Task Force Terms of Reference Project Schedule Brand Identity - Historical Overview Council Meeting – Agenda - 14 - Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council receives Report DCS 15-30 Town Branding Project Branding Project Update; AND THAT a Branding Task Force be created with the attached Terms of Reference; AND THAT Councillor Adam be appointed as Council representation on the Branding Task Force. Carried 11.4. Finance 11.4.1. FIN 15- 29 2016 Budget Strategic Priorities as information. FIN 15-29 2016 Budget Strategic Priorities Moved By: Deputy Mayor Beres Seconded By: Councillor Adam That Council receives report FIN 15- 29 2016 Budget Strategic Priorities as information; AND THAT the direction as recommended be adopted. Carried 11.4.2. FIN 15 - 30 Information Technology Consulting Sole Source Purchasing. FIN 15-30 Information Technology Consulting Sole Source Purchasing Town of Tillsonburg_10538984_Exchange_SOW_v1_063015 Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT Council receives report FIN 15 - 30 Information Technology Consulting Sole Source Purchasing. And THAT Council approves sole source purchasing for information technology consulting services with Dell Canada Inc. at an estimated cost of $26,772 plus net HST. Carried Council Meeting – Agenda - 15 - 11.5. Operations 11.5.1. OPS 15-20 Loose Leaf Collection Program OPS 15-20 Loose Leaf Collection Program Loose Leaf Collection Map Loose Leaf Collection Draft Webpage Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT Council receive Report OPS 15-20 Loose Leaf Collection Program; AND THAT Council authorizes the procurement of leaf loading equipment in order to continue to provide loose leaf collection services. Carried 11.5.2. OPS 15-21 Results for RFP 15-006 Fire Rescue Apparatus OPS 15-21 Results for RFP 15-006 Fire Rescue Apparatus Moved By: Councillor Hayes Seconded By: Councillor Rosehart THAT Council receive Report OPS 15-21, Results for RFP 15-006 Fire Rescue Apparatus; AND THAT Council award RFP 15-006 to Carrier Centers Emergency Vehicles at a cost of $218,924.74 (net HST included). Carried 11.6. 11.6.1. RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction Email from Tillsonburg Shrine Club Moved by: Deputy Mayor Beres Seconded By: Councillor Esseltine THAT the motion to receive report RCP 15-30 – Tillsonburg Shrine Club Request for Fee Reduction be deferred until the 2016 budget deliberations. Defeated Council Meeting – Agenda - 16 - Moved By: Councillor Esseltine Seconded By: Councillor Stephenson THAT Council receives Report RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction; AND THAT Council approves a 25% discounted fee for the Kinsmen Memorial Arena floor during the 2015 Shriner’s BBQ. Defeated Moved By: Councillor Esseltine Seconded By: Councillor Stephenson THAT Council receives Report RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction; AND THAT Council approves the 50% discounted fee for the Kinsmen Memorial Arena floor during the 2015 Shriner’s BBQ. Carried 12. Staff Information Reports 12.1. RCP 15-29 – Apr-Jun 2015 RCP Departmental Activity Reports RCP 15-29 - Apr-Jun 2015 RCP Departmental Activity Reports RCP 15-29 - ATT 01 - Apr-Jun 2015 Activity - Rec Programs and Services RCP 15-29 - ATT 02 - Apr-Jun 2015 Activity - Culture and Heritage RCP 15-29 - ATT 03 - Apr-Jun 2015 Activity - Parks and Facilities Moved By: Councillor Adam Seconded By: Councillor Stephenson THAT Council receive Report RCP 15-29 – Apr-Jun 2015 RCP Departmental Activity Reports for information. Carried 13. Committee Minutes & Reports 13.1. Advisory Committee Minutes HBC Minutes May 2015 Airport Advisory June 2015 Development Committee April 2015 Development Committee May 2015 Council Meeting – Agenda - 17 - Parks & Rec Committee May 2015 Culture Committee May 2015 Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT Council receive the following minutes, HBC Minutes May 2015, Airport Advisory June 2015, Development Committee April 2015, Development Committee May 2015 Parks & Rec Committee May 2015 and the Culture Advisory Committee May 2015, as information. Carried 14. Notice of Motions Moved By: Deputy Mayor Beres THAT Staff review the 2016 rates and fee schedule to include discount rental rates for fundraising on Town owned properties. And that those discounts should apply to local Service Clubs and Fundraising organizations who partner in contributing funds for Town use. Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT Council waive the Procedural By-Law 3511 Section 10.1.1 to put a motion on the floor at this time without proper notice. Defeated 15. By-Laws By-Laws from the Meeting of Monday, July 13, 2015 Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT By-Law 3928, To enter into an Agreement with Her Majesty The Queen In Right Of Ontario as represented by the Minister of Economic Development, Employment and Infrastructure; Certified Site Program Agreement; AND THAT By-Law 3925, Being A By-Law to Amend Zoning By-Law Number 3295, John Veldman (ZN 7-15-04), Schedule A, Explanatory Note, Key Map; AND THAT By-Law 3926, Being a By-Law to Designate a Certain Area of Land within the Town of Tillsonburg as a Site Plan Control Area (ZN 7-15-04), Schedule; Council Meeting – Agenda - 18 - AND THAT By-law 3924, Being A By-Law to Amend Zoning By-Law Number 3295, Krystal & Michael West (ZN 7-15-03), Schedule A, Explanatory Note, Key Map AND THAT By-Law 3927 To Confirm the Proceedings of the Council Meeting of July 13, 2015, be read for a first, second and third and final time and that the Mayor and Clerk be and are hereby authorized to sign the same, and place the Corporate Seal thereunto. Carried 16. Items of Public Interest 17. Adjournment Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT the Council Meeting of Monday, July 13, 2015 be adjourned at 10:21 p.m. Carried Table of Contents Agenda 5 Minutes of the Council Meeting of June 22, 2015. Minutes June 22, 2015 18 Cultural Advisory Committee Grant Request Cultural Advisory Committee Delegation Request 27 Youth Leadership Grant Guidelines Tammy Moore Delegation Request 29 Youth Leadership Grant Guidelines 31 Youth Leadership Grant Application 33 Rebecca Moore Grant Application 34 Community Sustainability Plan presentation- Jay Heaman, Committee Member , Gord Hough, Director of Community & Strategic Planning Oxford Community Sustainability Plan 47 St. Mary's Church Delegation Regarding Community Improvement Plan Delegation request 69 St. Mary Church Letter 72 A-03/15- Application for Minor Variance, Margaret Scantlebury, 7 Hogarth Drive CASPO 2015-129 73 Attachments 76 Letter of Support 80 A-04/15- Application for Minor Variance, St. Mary's Catholic Church, 51 Venison Street West CASPO 2015-145 81 Plate 1 84 Plate 2 85 Applicant's Sketch 86 A-05/15- Application for Minor Variance, Helen Klassen, 2 Alexander Ave CASPO 2015-146 87 Attachments 90 ZN 7-15-03- Application for Zone Change, Michael & Krystal West, 304 Tillson Ave CASPO 2015-147 94 Attachments 98 ZN 7-15-04 - Application for Zone Change, John Veldman, 30 Old Vienna Road CASPO 2015-148 104 Attachments 109 Community Schools Alliance Community Schools Alliance 115 Ontario Provincial Police Commander and Superintendent Appointments 1 Commissioner Hawkes letter 117 Ministry of Transportation Correspondence MTO Letter 119 Ministry of Energy correspondence June 2015 MoE Lteer June 2015 122 Municipality of Tweed, Disaster Relief Request Municipality of Tweed 128 Glendale to Gibson Proposed Trail Glendale letter 131 Union Gas Limited - NEXUS - Notice of Application - EB-2015- 0166 Union Gas Application 134 Notice 339 New Tecumseth Electricity Rates Motion New Tecumseth motion 340 Township of Montague Community Mailboxes resoluion Community Mailbox resolution 342 MYR 15-08 Update - County of Oxford MYR 15-08 343 CAO 15-09, Moose Power Inc. Request for Council Resolution in Support of Rooftop Solar Applications Under the Provincial Feed-In Tarrif (FIT) Program CAO 15-09 347 CL 15-17 Special Awards Committee CL 15-17 Special Awards 349 Special Awards Committee Terms of Reference 351 Volunteer Service Recognition Program 354 Schedule A Nomination Form 358 DCS 15-28 Sign Variance - Tillsonburg District Memorial Hospital DCS 15-28 360 Site Plan & Sign Elevation 362 Report DCS 15-26 Highway 3 Business Park Update Report DCS 15-26 Highway 3 Business Park Update 364 Report DCS 15-01 Highway 3 Business Park Development Plan 368 Report DCS 15-29 Certified Site Agreement with the Province of Ontario Report DCS 15-29 Certified Site Agreement with the Province of Ontario 376 Agreement between Ontario and Town 383 Schedule A - Project Timelines and Costs 420 Report DCS 15-30 Town Branding Project Update Report DCS 15-30 Town Branding Project Update 422 Task Force Terms of Reference 425 Project Schedule 429 2 Brand Identity - Historical Overview 430 FIN 15- 29 2016 Budget Strategic Priorities as information. FIN 15-29 2016 Budget Strategic Priorities 438 FIN 15 - 30 Information Technology Consulting Sole Source Purchasing. FIN 15-30 Information Technology Consulting Sole Source Purchasing 440 Town of Tillsonburg_10538984_Exchange_SOW_v1_063015 442 OPS 15-20 Loose Leaf Collection Program OPS 15-20 Loose Leaf Collection Program 454 Loose Leaf Collection Map 458 Loose Leaf Collection Draft Webpage 459 OPS 15-21 Results for RFP 15-006 Fire Rescue Apparatus OPS 15-21 Results for RFP 15-006 Fire Rescue Apparatus 461 RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request 463 Memo from Planning Staff 465 Map of Subject Property 467 RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction 468 Email from Tillsonburg Shrine Club 470 RCP 15-29 – Apr-Jun 2015 RCP Departmental Activity Reports RCP 15-29 - Apr-Jun 2015 RCP Departmental Activity Reports 471 RCP 15-29 - ATT 01 - Apr-Jun 2015 Activity - Rec Programs and Services 472 RCP 15-29 - ATT 02 - Apr-Jun 2015 Activity - Culture and Heritage 477 RCP 15-29 - ATT 03 - Apr-Jun 2015 Activity - Parks and Facilities 479 Advisory Committee Minutes HBC Minutes May 2015 481 Airport Advisory June 2015 483 Development Committee April 2015 487 Development Committee May 2015 493 Parks & Rec Committee May 2015 500 Culture Committee May 2015 503 By-Law 3928, To enter into an Agreement with Her Majesty The Queen In Right Of Ontario as represented by the Minister of Economic Development, Employment and Infrastructure. Certified Site Program Agreement 505 By-Law 3928 542 By-Law 3925, Being A By-Law to Amend Zoning By-Law Number 3295, John Veldman (ZN 7-15-04) 3 By-Law 3925 543 Schedule A 545 Explanatory Note 546 Key Map 547 By-Law 3926, Being a By-Law to Designate a Certain Area of Land within the Town of Tillsonburg as a Site Plan Control Area (ZN 7-15-04) By-Law 3926 548 Schedule 549 By-Law 3927 To Confirm the Proceedings of the Council Meeting of July 13, 2015. By-Law 3927 550 By-Law 3924, Being A By-Law to Amend Zoning By-Law Number 3295, Krystal & Michael West (ZN 7-15-03) By-law 3924 551 Schedule A 552 Explanatory Note 553 Key Map 554 4 = 1. Call to Order 2. Closed Session Moved By: Seconded By: Proposed Resolution #1 THAT Council move into Closed Session to consider: A proposed or pending acquisition or disposition of land by the municipality or local board, (TVDSB) 3. Adoption of Agenda Moved By: Seconded By: Proposed Resolution #2 THAT the Agenda as prepared for the Council meeting of Monday, July 13, 2015, be adopted. 4. Moment of Silence 5. Disclosures of Pecuniary Interest and the General Nature Thereof 6. Adoption of Council Minutes of Previous Meeting 6.1. Minutes of the Meeting of Minutes June 22, 2015 The Corporation of the Town of Tillsonburg COUNCIL MEETING Monday, July 13, 2015 6:00 PM Council Chambers 200 Broadway, 2nd Floor AGENDA 5 Council Meeting – Agenda - 2 - Moved By: Seconded By: Proposed Resolution #3 THAT the Minutes of the Council Meeting of Monday June 22, 2015, be approved. 7. Delegations and Presentations 7.1. Community Sustainability Plan presentation Jay Heaman, Committee Member , Gord Hough, Director of Community & Strategic Planning Oxford Community Sustainability Plan Moved By: Seconded By: Proposed Resolution #4 THAT Council receive the Draft Community Sustainability Plan presentation, as information; AND THAT staff prepare a follow-up report for the August 10, 2015 Council meeting. 7.2. St. Mary's Church Delegation Regarding Community Improvement Plan Presented By: Urban Demaiter, Capital Campaign Chairperson and Andre Dedecker, Deacon Delegation request St. Mary Church Letter Moved By: Seconded By: Proposed Resolution #5 THAT Council receives the material from St. Mary’s Church delegation, as information. 7.3. Youth Leadership Grant Guidelines Tammy Moore Delegation Request Youth Leadership Grant Guidelines Youth Leadership Grant Application Rebecca Moore Grant Application 6 Council Meeting – Agenda - 3 - Moved By: Seconded By: Proposed Resolution #6 THAT Council receives the material from Tammy Moore’s delegation as information. 7.4. Cultural Advisory Committee Grant Request Presented By: Deb Beard, Committee Cultural Advisory Committee Delegation Request Moved By: Seconded By: Proposed Resolution #7 THAT Council receive the request from the Cultural Advisory Committee; AND THAT Council support the request to grant the Tillsonburg Thunder Senior AA Hockey Club $2,000.00 to assist with the cost of entertainment at the Annual Tillsonburg Ribfest. 8. Public Meetings Moved By: Seconded By: Proposed Resolution #8 THAT Council move into the Committee of Adjustment to hear Applications for Minor Variance at ____pm. 8.1. A-03/15- Application for Minor Variance, Margaret Scantlebury, 7 Hogarth Drive CASPO 2015-129 Attachments Letter of Support Moved By: Seconded By: Proposed Resolution #9 That the Town of Tillsonburg Committee of Adjustment approve Application File A-03/15, submitted by Margaret Scantlebury, for lands described as Part Lot 78, Plan 41M-182, Town of Tillsonburg, as it relates to relief from Section 7.5.5.2.12.1 – Permitted 7 Council Meeting – Agenda - 4 - Encroachments -Rear Yard, to increase the permitted encroachment for a covered deck from 1.5 m (5 ft) to 2.5 m (8 ft). 8.2. A-04/15- Application for Minor Variance, St. Mary's Catholic Church, 51 Venison Street West CASPO 2015-145 Plate 1 Plate 2 Applicant's Sketch Moved By: Seconded By: Proposed Resolution #10 It is recommended that the Town of Tillsonburg Committee of Adjustment approve Application File A-04/15, submitted by The Roman Catholic Episcopal Corporation of the Diocese of London (St. Mary’s Catholic Church), for lands described as Lots 731, 733 & West Part Lot 734, Plan 500, in the Town of Tillsonburg, to permit a minor addition to the existing place of worship and recognize existing parking deficiencies to waive the minimum required loading spaces. 8.3. A-05/15- Application for Minor Variance, Helen Klassen, 2 Alexander Ave CASPO 2015-146 Attachments Moved By: Seconded By: Proposed Resolution #11 That the Town of Tillsonburg Committee of Adjustment approve Application File A-05/15, submitted by George & Helen Klassen, for lands described as Lot 51, Plan 507, Town of Tillsonburg, as it relates to relief from Table 5.1.1.4 – Regulations for Accessory Buildings and Structures, to increase the maximum permitted lot coverage from 50 m2 (538 ft2) to 58 m2 (624 ft2) to permit the construction of a detached accessory building; Subject to the following condition: i) A building permit for the proposed accessory building shall be issued within one year of the date of the Committee’s decision. 8 Council Meeting – Agenda - 5 - Moved By: Seconded By: Proposed Resolution #12 THAT Council move out of the Committee of Adjustment and move back into regular session at ______ pm. 8.4. ZN 7-15-03- Application for Zone Change, Michael & Krystal West, 304 Tillson Ave CASPO 2015-147 Attachments Moved By: Seconded By: Proposed Resolution #13 THAT Council approve the zone change application submitted by Krystal & Michael West, whereby the lands described as Lots 27 & 28, Plan 500, Town of Tillsonburg, known municipally as 304 Tillson Avenue are to be rezoned from ‘Neighbourhood Commercial Zone (NC)’ to ‘Low Density Residential Type 2 Zone (R2)’. 8.5. ZN 7-15-04 - Application for Zone Change, John Veldman, 30 Old Vienna Road CASPO 2015-148 Attachments Moved By: Seconded By: Proposed Resolution #14 It is recommended that the Council of the Town of Tillsonburg approve the zone change application submitted by John Veldman, whereby the lands described as Part Block A, Plan 966, Town of Tillsonburg, known municipally as 30 Old Vienna Road are to be rezoned from ‘Low Density Residential Type 1 Zone (R1)’ to ‘Special Low Density Residential Type 1 Zone (R1-16)’ to permit the development of a single detached dwelling within the EP2 Overlay. 9. Information Items 9.1. Community Schools Alliance Community Schools Alliance 9 Council Meeting – Agenda - 6 - 9.2. Ontario Provincial Police Commander and Superintendent Appointments Commissioner Hawkes letter 9.3. Ministry of Transportation Correspondence MTO Letter 9.4. Ministry of Energy correspondence June 2015 MoE Lteer June 2015 9.5. Municipality of Tweed, Disaster Relief Request Municipality of Tweed 9.6. Glendale to Gibson Proposed Trail Glendale letter 9.7. Union Gas Limited - NEXUS - Notice of Application - EB-2015-0166 Union Gas Application Notice 9.8. Township of Montague Community Mailboxes resoluion Community Mailbox resolution 9.9. New Tecumseth Electricity Rates Motion New Tecumseth motion Moved By: Seconded By: Proposed Resolution #15 THAT Council receives items 9.1 to 9.9 as information. 10. Mayor 10.1. MYR 15-08 Update - County of Oxford MYR 15-08 Moved By: Seconded By: Proposed Resolution #16 THAT Council receives Report MYR 15-07 as information. 10 Council Meeting – Agenda - 7 - 11. Reports from Departments 11.1. Chief Administrative Officer 11.1.1. CAO 15-09, Moose Power Inc. Request for Council Resolution in Support of Rooftop Solar Applications Under the Provincial Feed-In Tarrif (FIT) Program CAO 15-09 Moved By: Seconded By: Proposed Resolution #17 WHEREAS the Province's FIT Program encourages the construction and operation of rooftop solar generation projects (the "projects"); AND WHEREAS one or more Projects may be constructed and operated in the Town of Tillsonburg; AND WHEREAS pursuant to the rules governing the FIT Program (the "FIT Rules"), Applications whose Projects receive formal support of Local Municipalities will be awarded Priority Points, which may result in these Applications being offered a FIT Contract prior to other persons applying for FIT Contracts; NOW THEREFORE the Council of the Town of Tillsonburg supports without reservation the construction and operation of Projects in the Town of Tillsonburg. This resolution's sole purpose is to enable the participants in the FIT Program to receive priority points under the FIT Program and may not be used for the purpose of any other form of municipal approval in relation to the Application or Projects or any other purpose; AND THAT this resolution shall expire on July 13, 2016. 11.2. Clerk’s Office 11.2.1. CL 15-17 Special Awards Committee CL 15-17 Special Awards Special Awards Committee Terms of Reference Volunteer Service Recognition Program Schedule A Nomination Form 11 Council Meeting – Agenda - 8 - Moved By: Seconded By: Proposed Resolution #18 THAT Council receives Report CL 15-17, Special Awards Committee Appointment; AND THAT Council appoints Ann Loker, Sam Lamb and Mary Anne Vangeertruyde to represent the community; AND THAT Council appoints Mayor Stephen Molnar and Councillor ______________________ to represent the Town as members of the Special Awards Committee; AND THAT the Volunteer Service Recognition Program and the Terms of Reference for the Special Awards Committee be adopted. 11.3. Development and Communication Services 11.3.1. DCS 15-28 Sign Variance - Tillsonburg District Memorial Hospital DCS 15-28 Site Plan & Sign Elevation Moved By: Seconded By: Proposed Resolution #19 THAT Council receives report DCS 15-28 Sign Variance – Tillsonburg District Memorial Hospital; AND THAT Council approve the variance to Sign By-Law 3798 to allow for the construction of a 2 sided 5.5 square metres (60 sq.ft.) x 3.9 metres (12.8 ft) high ground sign located partially within the Town road allowance at 167 Rolph Street. 11.3.2. Report DCS 15-26 Highway 3 Business Park Update Report DCS 15-26 Highway 3 Business Park Update Report DCS 15-01 Highway 3 Business Park Development Plan Moved By: Seconded By: Proposed Resolution #20 THAT Council receives Report DCS 15-26 Highway 3 Business Park Update for information purposes. 12 Council Meeting – Agenda - 9 - 11.3.3. Report DCS 15-29 Certified Site Agreement with the Province of Ontario Report DCS 15-29 Certified Site Agreement with the Province of Ontario Agreement between Ontario and Town Schedule A - Project Timelines and Costs Moved By: Seconded By: Proposed Resolution #21 THAT Council receives Report DCS 15-29 Certified Site Agreement with the Province of Ontario; AND THAT the Mayor and Clerk be authorized to enter into an agreement with the Province of Ontario for participation by the Town of Tillsonburg in the Investment Ready: Certified Site Program to market the 20 Clearview Dr site and to receive reimbursement for costs related to the program; AND THAT a bylaw be brought forward for Council consideration. 11.3.4. Report DCS 15-30 Town Branding Project Update Report DCS 15-30 Town Branding Project Update Task Force Terms of Reference Project Schedule Brand Identity - Historical Overview Moved By: Seconded By: Proposed Resolution #22 THAT Council receives Report DCS 15-30 Town Branding Project Branding Project Update; AND THAT a Branding Task Force be created with the attached Terms of Reference. 13 Council Meeting – Agenda - 10 - 11.4. Finance 11.4.1. FIN 15- 29 2016 Budget Strategic Priorities as information. FIN 15-29 2016 Budget Strategic Priorities Moved By: Seconded By: Proposed Resolution #23 That Council receives report FIN 15- 29 2016 Budget Strategic Priorities as information. 11.4.2. FIN 15 - 30 Information Technology Consulting Sole Source Purchasing. FIN 15-30 Information Technology Consulting Sole Source Purchasing Town of Tillsonburg_10538984_Exchange_SOW_v1_063015 Moved By: Seconded By: Proposed Resolution #24 THAT Council receives report FIN 15 - 30 Information Technology Consulting Sole Source Purchasing. And THAT Council approves sole source purchasing for information technology consulting services with Dell Canada Inc. at an estimated cost of $26,772 plus net HST. 11.5. Operations 11.5.1. OPS 15-20 Loose Leaf Collection Program OPS 15-20 Loose Leaf Collection Program Loose Leaf Collection Map Loose Leaf Collection Draft Webpage Moved By: Seconded By: Proposed Resolution #25 THAT Council receive Report OPS 15-20 Loose Leaf Collection Program; AND THAT Council authorizes the procurement of leaf loading equipment in order to continue to provide loose leaf collection services. 14 Council Meeting – Agenda - 11 - 11.5.2. OPS 15-21 Results for RFP 15-006 Fire Rescue Apparatus OPS 15-21 Results for RFP 15-006 Fire Rescue Apparatus Moved By: Seconded By: Proposed Resolution #26 THAT Council receive Report OPS 15-21, Results for RFP 15-006 Fire Rescue Apparatus; AND THAT Council award RFP 15-006 to Carrier Centers Emergency Vehicles at a cost of $218,924.74 (net HST included). 11.6. Recreation, Culture & Park Services 11.6.1. RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request Memo from Planning Staff Map of Subject Property Moved By: Seconded By: Proposed Resolution #27 THAT Council receives Report RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request for information; AND THAT Council does not consent to the Club’s request to approve the submission of an application for a minor variance. 11.6.2. RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction Email from Tillsonburg Shrine Club Moved By: Seconded By: Proposed Resolution #28 THAT Council receives Report RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction; 15 Council Meeting – Agenda - 12 - AND THAT Council approves the 50% discounted fee for the Kinsmen Memorial Arena floor during the 2015 Shriner’s BBQ. 12. Staff Information Reports 12.1. RCP 15-29 – Apr-Jun 2015 RCP Departmental Activity Reports RCP 15-29 - Apr-Jun 2015 RCP Departmental Activity Reports RCP 15-29 - ATT 01 - Apr-Jun 2015 Activity - Rec Programs and Services RCP 15-29 - ATT 02 - Apr-Jun 2015 Activity - Culture and Heritage RCP 15-29 - ATT 03 - Apr-Jun 2015 Activity - Parks and Facilities Moved By: Seconded By: Proposed Resolution #29 THAT Council receive Report RCP 15-29 – Apr-Jun 2015 RCP Departmental Activity Reports for information. 13. Committee Minutes & Reports 13.1. Advisory Committee Minutes HBC Minutes May 2015 Airport Advisory June 2015 Development Committee April 2015 Development Committee May 2015 Parks & Rec Committee May 2015 Culture Committee May 2015 Moved By: Seconded By: Proposed Resolution #30 THAT Council receive the following minutes, HBC Minutes May 2015, Airport Advisory June 2015, Development Committee April 2015, Development Committee May 2015 Parks & Rec Committee May 2015 and the Culture Advisory Committee May 2015, as information. 16 Council Meeting – Agenda - 13 - 14. Notice of Motions 15. By-Laws By-Laws from the Meeting of Monday, July 13, 2015 Moved By: Seconded By: Proposed Resolution #31 THAT By-Law 3928, To enter into an Agreement with Her Majesty The Queen In Right Of Ontario as represented by the Minister of Economic Development, Employment and Infrastructure; Certified Site Program Agreement; AND THAT By-Law 3925, Being A By-Law to Amend Zoning By-Law Number 3295, John Veldman (ZN 7-15-04), Schedule A, Explanatory Note, Key Map; AND THAT By-Law 3926, Being a By-Law to Designate a Certain Area of Land within the Town of Tillsonburg as a Site Plan Control Area (ZN 7-15-04), Schedule; AND THAT By-law 3924, Being A By-Law to Amend Zoning By-Law Number 3295, Krystal & Michael West (ZN 7-15-03), Schedule A, Explanatory Note, Key Map AND THAT By-Law 3927 To Confirm the Proceedings of the Council Meeting of July 13, 2015, be read for a first, second and third and final time and that the Mayor and Clerk be and are hereby authorized to sign the same, and place the Corporate Seal thereunto. 16. Items of Public Interest 17. Adjournment Moved By: Seconded By: Proposed Resolution #32 THAT the Council Meeting of Monday, July 13, 2015 be adjourned at _____ p.m. 17 = ATTENDANCE Mayor Stephen Molnar Deputy Mayor Dave Beres Councillor Maxwell Adam Councillor Penny Esseltine Councillor Jim Hayes Councillor Chris Rosehart Councillor Brian Stephenson Staff: David Calder, CAO Donna Wilson, Town Clerk Kevin De Leebeeck, Director of Operations Rick Cox, Director of Culture, Recreation and Parks Darrell Eddington, Director of Finance 1. Call to Order The meeting was called to order at 6:00 pm 2. Adoption of Agenda Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT the Agenda as prepared for the Council meeting of Monday, June 22, 2015, be adopted. Carried 3. Moment of Silence 4. Disclosures of Pecuniary Interest and the General Nature Thereof Councillor Stephenson and Councillor Hayes declared a pecuniary interest in item 9.3.1 DCS 15- 27 due to their affiliation with the applicant. 5. Adoption of Council Minutes of Previous Meeting The Corporation of the Town of Tillsonburg COUNCIL MEETING Monday, June 22, 2015 6:00 PM Council Chambers 200 Broadway, 2nd Floor MINUTES 18 Council Meeting – Agenda - 2 - 5.1. Minutes of the Meeting of June 11, 2015 June 11, 2015 Council Minutes Moved By: Councillor Hayes Seconded By: Councillor Rosehart THAT the Minutes of the Council Meeting of June 11, 2015, be approved. Carried Council Minutes June 16, 2015 Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT the Minutes of the Council Meeting of June 16, 2015, be approved. Carried 6. Delegations and Presentations 6.1. Minor Variance Application Request for Equipment Shed at Soccer Park Soccer Club Delegation Request Presented By: George Ambrus The soccer club is requesting that the shed be allowed to stand where it is currently located and that the Town bring forward an application for a minor variance on their behalf. Staff to bring a report to council at the next Council meeting. Moved By: Councillor Esseltine Seconded By: Councillor Stephenson THAT Council receive the request for a Minor Variance Application from the Tillsonburg Minor Soccer Club. AND ask Staff to prepare a report and recommendations. Carried 6.2. 161st Tillsonburg Fair Presented By: Mike Dean, President & Frank Kemp, Vice-President Delegation Reguest Mike Dean went over the highlights of this year’s Tillsonburg Tri-County Fair as well as the various options for ticket purchasing. The Fair Board is asking Council for a portion of the glass to be removed around the arena and to cover the cost for the ESA approval for the hydro connection. 19 Council Meeting – Agenda - 3 - Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council receive the 161st Tillsonburg Fair presentation as information; AND THAT Council support the request for the glass removal and the ESA approval and that the costs be covered by the Town. 7. Information Items 7.1. Town of Newmarket Community Mailboxes Resolution - Newmarket Resolution 7.2. Ministry of Transportation Correspondence regarding Off-road Vehicle (ORV) Use in Ontario - MTO Corr 7.3. Muscular Dystrophy Canada - Muscular Dystrophy Correspondence 7.4. Communications 7.5. Police Service Board Request for Fortification By-Law - PSB Fortification By-Law Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT Council receives the correspondence from the Police Service Board regarding a Fortification By-Law; AND THAT the matter be referred to staff. Carried 7.6. Police Service Board correspondence regarding vagrant grocery carts within the Community - PSB Vagrant Shopping Carts Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT Council receives the correspondence from the Police Service Board regarding vagrant grocery carts; AND THAT the matter be referred to staff. Carried 8. Mayor 8.1. MYR 15-07 Update - County of Oxford MYR 15-07 20 Council Meeting – Agenda - 4 - Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council receives Report MYR 15-07 as information. Carried 9. Reports from Departments 9.1. Chief Administrative Officer 9.1.1. CAO 15-09, Moose Power Inc. Request for Council Resolution in Support of Rooftop Solar Applications Under the Provincial Feed-In Tarrif (FIT) Program CAO 15-09 Moved By: Councillor Esseltine Seconded By: Councillor Stephenson THAT item 9.1.1. CAO 15-09 be deferred until the July 13, 2015 meeting of Council. Carried 9.2. Clerk’s Office 9.2.1. CL 15-18, Physician Recruitment & Retention Appointment CL 15-18 Chamber Appointment Terms of Reference Physician Recruitment Council representatives will bring before the committee the possibility of bringing Nurse Practitioners to the community. Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT Council appoint Lance Scott to represent the Tillsonburg Chamber of Commerce as a member of the Physician Recruitment & Retention Committee; AND THAT the Terms of Reference for the Physician Recruitment & Retention Committee be adopted. Carried 9.3. Development and Communication Services 21 Council Meeting – Agenda - 5 - Councillor Hayes and Councillor Stephenson excused themselves from the room as they have declared a pecuniary interest in this item. 9.3.1. Report DCS 15-27 Community Improvement Plan Application – 137 Rolph St Report DCS 15-27 Community Improvement Plan Application 137 Rolph St Application-137 Rolph St The CIP process is currently in review and a draft document will be coming before council at a future Council meeting. Councillor Adam called for a Recorded Vote. Moved By: Councillor Rosehart Seconded By: Councillor Esseltine THAT Council receive Report DCS 15-27 Community Improvement Plan Application – 137 Rolph St; AND THAT the Community Improvement Plan Application for the 137 Rolph St property be approved including rebates for applicable building permit fees; AND THAT a By-law be brought forward to authorize the rebate for Council consideration. NAME VOTE IN FAVOUR VOTE AGAINST Councillor Adam X Deputy Mayor Beres X Councillor Esseltine X Mayor Molnar X Councillor Rosehart X The recorded vote reflects the vote is 2 in favour of the Motion and 3 against the Motion. The motion is "defeated" Councillor Hayes and Councillor Stephenson returned to the room to join the meeting. 9.3.2. Report DCS 15-25 Airport Hangar Land Lease Report DCS 15-25 Airport Hangar Land Lease Lease Agreement 22 Council Meeting – Agenda - 6 - Moved By: Councillor Hayes Seconded By: Councillor Rosehart THAT Council receive Report DCS 15-25 Airport Hangar Land Lease; AND THAT the Mayor and Clerk be authorized to enter into a lease agreement with Jeff Miller for the construction of a 4,096 square foot hangar at the Tillsonburg Regional Airport for a twenty (20) year term expiring on December 31, 2035 subject to the terms and conditions contained within the lease agreement; AND THAT a By-Law be brought forward for Council consideration. Carried 9.4. Finance 9.4.1. FIN 15-28 RFP Results - Legal Services FIN 15-28 RFP Results -Legal Services Council would like clarification that travel time is not part of the charges. Moved By: Councillor Stephenson Seconded By: Councillor Esseltine That Council receives report FIN 15- 28 RFP Results – Legal Services. AND THAT Council award RFP 2015-001 to Duncan, Linton, LLP of Waterloo, Ontario at an hourly rate of $225 per hour (excluding HST), the highest scoring proposal received, effective for a term of three years beginning July 1, 2015 with an option to extend the term for an additional two years. Carried 9.5. Operations 9.5.1. OPS 15-19 Results for Tender #T2015-008 Tree Trimming and Removal OPS 15-19 Results for Tender #T2015-008 Tree Trimming and Removal Moved By: Councillor Esseltine Seconded By: Councillor Stephenson THAT Council receive Report OPS 15-19, Results for Tender #T2015-008 Tree Trimming and Removal; 23 Council Meeting – Agenda - 7 - AND THAT Council award Tender #T2015-008 to Davey Tree Expert Co. of Ancaster, Ontario, the lowest bid received satisfying all Tender requirements, for an upset limit budget of $33,000. Carried 9.6. Recreation, Culture & Park Services 9.6.1. PRS 15-27 Green Energy Act Reporting 2015 PRS 15-27 Green Energy Act Reporting 2015 Briefing Note Memorandum Moved By: Councillor Adam Seconded By: Deputy Mayor Beres THAT Council receives Report PRS 15-27 Green Energy Act Reporting 2015 for information; AND THAT The Town of Tillsonburg sole-source contract with I.B. Storey Inc. to conduct a Detailed Engineering Study of the Tillsonburg Community Centre subject to approval of a 100% IESO funding grant application; AND THAT Council approves submission of the Energy Consumption and GHG Emissions report for 2013 to the Province to meet legislated reporting requirements. Carried 9.6.2. RCP 15-28 Children’s Recreation Program Fee Subsidy Contract 2015-2018 RCP 15-28 Children’s Recreation Program Fee Subsidy Contract 2015-2018 Service Contract Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT Council receives Report RCP 15-28 Children’s Recreation Program Fee Subsidy Contract 2015-2018; 24 Council Meeting – Agenda - 8 - AND THAT the Town of Tillsonburg enters a three-year agreement with the County of Oxford to provide subsidized recreation programs; AND THAT Council authorizes the Mayor and Clerk to sign the Service Contract. Carried 10. Staff Information Reports 10.1. FIN 15-27 Liability for Presumptive Claims Under the Workplace Safety and Insurance Act FIN 15-27 Liability for Presumptive Claims under WSIB Moved By: Councillor Rosehart Seconded By: Councillor Hayes THAT Council receive report FIN 15-27 Liability for Presumptive Claims Under the Workplace Safety and Insurance Act as information. Carried 11. Notice of Motions 12. By-Laws By-Laws from the Meeting of Monday, June 22, 2015 Moved By: Deputy Mayor Beres Seconded By: Councillor Adam THAT By-Law 3923,To Enter into an Airport Hanger Land Lease Agreement with Jeff Miller; AND THAT By-Law 3921, To Confirm the proceedings of Council at its meeting held on the 22nd day of June, 2015, be read for a first, second and third and final time and that the Mayor and the Clerk be and are hereby authorized to sign the same, and place the Corporate Seal thereunto. Carried 13. Items of Public Interest 14. Adjournment 25 Council Meeting – Agenda - 9 - Moved By: Councillor Stephenson Seconded By: Councillor Esseltine THAT the Council Meeting of Monday, June 22, 2015be adjourned at 8:26 p.m. Carried 26 Council Committee Request Council Committee Request forms and any written submissions or background information for consideration by Council must be submitted to the Clerk's office by the following deadline: 4:30 P.M. ON THE MONDAY PRIOR TO THE REQUESTED MEETING DATE Committee Information Committee Name Committee Chair Tillsonburg Cultural Advisory Committee Deb Beard Phone Number E-mail 519-842-6151 office@stationarts.ca Request Details Desired Council meeting date (Council regularly meets the 2nd and 4th Monday of each month) July 13, 2015 Subject of the Request Dollar Amount Requested Council Approval for the awarding of a Tillsonburg Cultural Advisory Grant in the amount of $2000.00 to The Tillsonburg Thunder Senior AA Hockey Club to assist with the payment of the live entertainment at the 1st Annual Tillsonburg Ribfest hosted by the 2015 WOAA Champions Tillsonburg Thunder. __________________________________________________________________________________ Should you require assistance completing this form, please contact: Deputy Clerk at 519-688-3009 Ext. 3221 or jbunn@tillsonburg.ca Please note that submission of this form does not guarantee the approval of the request. The Clerk's office will confirm the request by e-mail after receiving this form. PLEASE COMPLETE PAGE TWO Copy of the Resolution as passed by the Committee From the Minutes of the Tillsonburg Cultural Advisory Committee – Wednesday, July 8, 2015 27 A presentation regarding their application for funding was made by Mr. Michael Holly and members of the Ribfest Committee. Following the departure of the delegation, discussion ensued around grant application resulting in the following motion. MOTION: That the grant application request from the Tillsonburg Thunder Senior AA Hockey Club in the amount of $2,000 to assist with the payment of live entertainment at Ribfest be approved. Made by Erin Getty, seconded by Ann Loker – carried Further directive to staff liaison by Chair of Committee – That the staff liaison proceed with the necessary paperwork and Council Committee Request process to award the funding, making every attempt to have the request placed on the July 13, 2015 Council agenda Name of Staff Liaison Patricia Phelps Is there any supporting documentation you will be providing to Council? No Will there be a Power Point presentation accompanying the request? No I acknowledge that the Chair of the Committee (or representative) must be in attendance of the Council meeting to speak and answer questions Council may have: Deb Beard, chair of the Tillsonburg Cultural Advisory Committee will be in attendance I acknowledge that all supporting documentation must be submitted by 4:30 p.m. to the Deputy Clerk by Monday before the meeting date: Personal information on this form is collected under the legal authority of the Municipal Act, as amended. The information is collected and maintained for purpose of creating a records that is available to the general public, pursuant to Section 27 of the Municipal Freedom of Information and Protection of Privacy Act. Questions about this collection should be directed to the Municipal Clerk, Town of Tillsonburg, 200 Broadway Street, 2nd Floor, Tillsonburg, ON, N4G 5A7, Telephone 519-688-3009 Ext. 3224. 28 29 30 Town of Tillsonburg Youth Entrepreneur Funding Guidelines.docx 1/2 Town of Tillsonburg Youth Leadership Grant Guidelines Purpose The Town of Tillsonburg supports youth in our community in many ways. This program is intended to provide financial support to Tillsonburg youth who have demonstrated a desire to succeed and improve themselves. The initial grant pool will be a fund of $5,000 available starting in 2013. Unused funds can be carried over into the next budget year, and Council can replenish the fund as part of the annual budget process. Leadership Grants: Youth Leadership Grants are in place to provide the Town with a mechanism to assist an individual youth resident of Tillsonburg who has an opportunity to represent Tillsonburg at a local, regional, Provincial, National or International level. The Town of Tillsonburg supports these opportunities and views them as character building opportunities for our young people. The leadership opportunity can be in the areas of entrepreneurship, sport, visual arts, performance arts, volunteerism, scholarship or any other area deemed appropriate by the Trustees. The individual applying for the Grant must fill out the Town of Tillsonburg Youth Leadership Grant application form, providing the Town with all required information. If the individual is applying as part of a larger organization, the application must be accompanied with a letter of support from the organization. Funding will not be approved for expenses that have occurred before the application is reviewed. Funding will only be approved for not for profit opportunities. Applications will be accepted at the Tillsonburg Community Centre Customer Service Desk Located at 45 Hardy Ave. Applications for support through this program are accepted on an ongoing basis until all of the funds have been dispersed. Selection Committee: The Selection Committee will be the Trustees of the Community Trust. A preliminary review will be done by Parks and Recreation Services staff. The Committee will meet in a timely manner when an application has been received to review the Leadership Grant application(s). The Trustees will follow a documented scoring protocol to ensure consistency in evaluating the applications. The Trustees will select recipients for the grant, determine the value of the award, and advise the applicants of their decision. PRS Quarterly Reports will include the list of successful applicants. Recipients are asked to provide a short report or presentation to inform Council of how the funds were used. 31 Town of Tillsonburg Youth Entrepreneur Funding Guidelines.docx 2/2 Scoring Protocol This protocol may be revised as appropriate, and the protocol applied for the current intake will be available on the Town website along with the application forms. 1. Tillsonburg resident Required. No eligibility for funds if not a resident of Tillsonburg. 2. Scale of event/opportunity Local gets 1, SCOR Region gets 2, Provincial gets 3, National gets 4, International gets 5 3. References/endorsements 1 point per reference up to 5 4. Other funds secured none = 1, less than matching = 3, matching = 5, more than matching = 8, more than 2x match = 10 5. Subjective merit/presentation of request up to 20 points (average of committee member scores). Total score is out of 40. Score of 20 or less = no funds awarded. Score of 21-35 - request is weighted at 1 Score above 35 - request is weighted at 2 The dollar value of grant awards are determined by Community Trustees, and can be of any amount up to the current amount in the grant pool but cannot exceed the amount requested. 32 Town of Tillsonburg Youth Leadership Grant (Youth Leadership Grants will be given to Tillsonburg youth between the ages of 13-19) Name of individual: _________________________________________ Program: _________________________________________ Name of Coach/Mentor (if applicable):________________________________ Name of Sponsor (if applicable):______________________________________ Contact person: ___________________________________________ Contact Information: (please include phone number / numbers and email address) ______________________________________________________________________ ______________________________________________________________________ Please provide a detailed summary of needs. Include the following information.  Description of event / project / purpose of award  Age of Youth involved  Time frame of event/project/purpose of award  Grant amount requested  Budget outline  How does this benefit Tillsonburg Please provide a letter of support from the local organization sponsoring your participation in this opportunity. (Please attach summary to application for submission) ________________________________ Print name of Applicant ________________________________ ______________________ Signature of Applicant DATE 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Report No: CAO 2015-05 CAO/CLERK Council Date: June 24, 2015 To: Warden and Members of County Council From: Director, Community and Strategic Planning Oxford Community Sustainability Plan RECOMMENDATION 1. That County Council endorse the Draft Community Sustainability Plan for the purpose of circulating the plan to the Area Municipalities for their review and comment. REPORT HIGHLIGHTS  The purpose of this report is to obtain Council’s endorsement of the draft Community Sustainability Plan (CSP) for the purpose of circulating the plan to the Area Municipalities for their review and comment.  The draft plan will be presented to the Area Municipal Councils in July and August by members of the CSP Steering Committee (with support from staff) with a view to outlining the development of the plan and the Multi-Criteria Assessment (MCA) Tool and the proposed implementation and reporting strategy.  It is anticipated that the CSP and accompanying MCA tool and implementation strategy will be presented to County Council for adoption in September 2015. Area Municipal adoption is expected to follow County Council’s adoption of the plan. Implementation Points The adoption of this report will endorse the draft CSP and initiate the circulation of the plan to the Area Municipalities for their review and consideration. The plan, together with the MCA tool and implementation and reporting strategy will be presented to the Area Councils by members of the CSP Steering Committee with a view to obtaining the endorsement of the material by the Area Municipalities prior to adoption by County Council, which is anticipated to occur in September 2015. Area Municipal adoption of the plan is expected to follow County Council adoption. Financial Impact The recommendations contained in this report will have no financial impact with respect to the 2015 budget. The Treasurer has reviewed this report and agrees with the above-noted statement. Page 1 of 5 47 Report No: CAO 2015-05 CAO/CLERK Council Date: June 24, 2015 Risks/Implications There are no risks or other implications anticipated as a result of this initiative that would not be inherent in the consideration of any similarly broad-based community development plan. Strategic Plan County Council adopted the County of Oxford Strategic Plan (2015-2018) at its regular meeting of May 27, 2015. The initiatives contained in this report support the Values and Strategic Directions as set out in the Strategic Plan as they pertain to the following: 3. ii. A County that Thinks Ahead and Wisely Shapes the Future – Implement development policies, land uses and community planning guidelines that: - Strategically grow our economy and our community - Provides a policy framework which supports community sustainability, health and well- being - Supports healthy communities within the built environment - Supports and protects a vibrant and diversified agricultural industry 3. iii. A County that Thinks Ahead and Wisely Shapes the Future - Demonstrated commitment to sustainability by: - Ensuring that all significant decisions are informed by assessing all options with regard to the community, economic and environmental implications including: o Potential impacts to the vulnerable population in our community o Life cycle costs and benefit/costs, including debt, tax and reserve levels and implications o Responsible environmental leadership and stewardship o Supporting the community implementation of the Community Sustainability Plan DISCUSSION Background Council initiated the development of a County-wide Community Strategic Plan in March 2014. To advance Council’s vision of creating a community driven process, Council appointed an Adhoc Committee of Council to select a Steering Committee of active and informed citizens with interests in community, economy and the environment. A consulting team with expertise in both community sustainability and community engagement was retained in August 2014 and the Steering Committee commenced a broadly based program designed to obtain the views and input of community groups and service providers representing interests in conservation, housing, education, cultural heritage and the economy, together with those of the broader public. The term ‘Future Oxford’ was coined by the Steering Committee to reflect the commitment to developing a long-term vision for sustainability across the entire Oxford community. Public engagement included a variety of workshops in the community and with the County’s municipal partners in which participants were asked to identify current sustainable initiatives in the community as well as their vision for Oxford’s future. Page 2 of 5 48 Report No: CAO 2015-05 CAO/CLERK Council Date: June 24, 2015 Further, social media events and activities such as the Vision 2030 contest, Ideascale and the Wiki-Draft Plan and Kitchen Table Draft Plan exercise were utilized to obtain the views of the community regarding the role of sustainable principles in Oxford’s future going forward. Using all of the input obtained through the above-noted public and community engagement initiatives, the Steering Committee has developed a draft CSP comprising 6 Goals, 15 Objectives and 70 Actions intended to provide a ‘sustainability’ framework that will provide guidance to the community with respect to assessing emerging issues and future opportunities. Comments FutureOxford – A Community Sustainability Plan The Community Sustainability Plan (CSP) was developed with a view to the importance of meeting the community’s needs today without compromising the future and embraces the importance of managing human, natural and financial resources through integrated solutions rather than through fragmented approaches that meet one goal or objective at the expense of others. As noted above, the draft CSP has been developed from a broad consultation and engagement process led by a Steering Committee comprising of active and informed citizens representing a cross-section of the community from both a geographic perspective as well as with respect to the ‘pillars’ of sustainability (i.e. community, economy, environment). The CSP is premised on a vision that encompasses vibrancy, prosperity and responsibility with a simple mission to ‘achieve community sustainability throughout Oxford’. The plan’s goals and objectives reflect the community’s perspectives regarding accessibility, education and creativity as well as growing a sustainable economy and creating an Oxford that is a leader in environmental action. While the CSP is specific, particularly with respect to the 70 actions that have been identified through the broad engagement process, the document is not intended to be prescriptive. Further, it is the expectation of the Steering Committee that the CSP will be a ‘living document’ that is intended to evolve over time through both use in the community and periodic review. When reviewing the draft CSP, Council will note that each objective identified in the plan includes one or more associated targets that are intended to be an appropriate measure of the success of the said objective. While each target had originally included specific numbers intended to quantify the target going forward, it was determined through the public and stakeholder engagement process that it may be premature to establish firm targets in the plan initially and that the development of targets that are meaningful to the Oxford community could be developed as a ‘first step’ in the implementation phase of the CSP. As such, while maintaining ‘generic’ targets, (i.e. ‘reducing core housing need in Oxford’) over short and longer terms is recognized as an appropriate target for the related objective, a more thorough review of the objectives and actions is considered necessary in order to establish more specific targets. The full text of the draft CSP is attached here. Further, a report prepared by the consulting team retained to assist with the development of the plan (IndEco Strategic Consulting and Sustainable Solutions Group) is also linked for Council’s consideration. The latter report is a companion to the CSP document and provides a more detailed overview of the process that was undertaken regarding the development of the CSP. Page 3 of 5 49 Report No: CAO 2015-05 CAO/CLERK Council Date: June 24, 2015 Multi-Criteria Assessment (MCA) Tool The Multi-Criteria Assessment (MCA) Tool (see attached) has been developed in conjunction with the Community Sustainability Plan (CSP) with a view to creating a methodology to assess alternative actions through a ‘sustainability’ lens. The tool incorporates a weighted, multiple criteria approach which is intended to assess potential actions on a ‘triple bottom line’ basis (i.e. community, economy, environment). The weighting of the criteria provides balance across the broader sustainability framework and also factors in both costs and time related to the implementation of the action. It is intended that the use of the MCA tool will produce a ‘score’ that can be used to establish the relative sustainability of an action against other potential actions. It is further intended that the tool will assist in defining sustainability thresholds (i.e. the ‘tipping point’ at which an action or actions can no longer be considered sustainable and/or at which may cause serious negative and possibly irreversible consequences) which can be used, in turn, to inform decisions on a broad basis. In this regard, it is anticipated that various ‘thresholds’ will be developed over time through practical experience with the MCA tool. The MCA tool provides a methodology that can be used to inform decisions with respect to the sustainability of an action or group of actions and is not intended to be the sole ‘decision- making’ tool when assessing issues and opportunities facing the community. MCA will provide an evaluation of the sustainability of an action (in accordance with the criteria developed through the CSP) and the said evaluation would typically represent one means of informing a decision. As with the CSP, it is expected that the MCA tool will evolve over time through use and review. Implementation and Reporting The importance of developing an effective strategy for the implementation of the Community Sustainability Plan was identified by the Steering Committee at the outset of the process. Further, it was clearly articulated through the public and stakeholder consultation that there was real concern that the CSP would lose momentum if a clear strategy for moving the plan forward was not identified at the time of adoption. In response, the Steering Committee has discussed a general framework for the implementation of the CSP, together with a reporting structure that can be developed in a manner in-keeping with the overall ‘community-driven’ nature of the CSP. The principles of the strategy, in addition to being community oriented, would include the development of public, private and community partnerships that would be largely volunteer driven and funded in a manner that is sustainable going forward, including community investment funding and in-kind services/support. While the specifics as to how implementation and reporting with regard to the CSP would be developed together with use and review of the CSP and the MCA tool, it is recommended that the strategy, much like the development of the CSP itself, take advantage of the energy and enthusiasm of the community with respect to championing sustainability as well as governance and funding opportunities. Please refer to the attached Implementation and Reporting Strategy document. Page 4 of 5 50 Report No: CAO 2015-05 CAO/CLERK Council Date: June 24, 2015 Conclusions The development of a community-driven sustainability plan is supported by all of the strategic directions contained in the County Strategic Plan, and in particular, the County’s commitment to thinking ahead and wisely shaping the future by applying social, financial and environmental sustainability lenses to significant decisions. The plan has been developed through engagement with a broad cross-section of the community and addresses a variety of issues relating to quality of life, healthy environments, effective governance and economic security. The CSP, together with the multi-criteria assessment tool and a community-oriented implementation and reporting strategy, will be an effective tool for the County when considering emerging issues and opportunities going forward. SIGNATURES Report Author: Original signed by _________________________ Gordon K. Hough, MCIP, RPP Director Approved for submission: Original signed by Peter M. Crockett, P.Eng. Chief Administrative Officer ATTACHMENTS Attachment 1 - Future Oxford Draft Plan Attachment 2 - Multi-Criteria Assessment Tool Attachment 3 - Implementation and Reporting Strategy Page 5 of 5 51 A Community Sustainability Plan DRAFT June 24, 2015 Executive Summary The Community Sustainability Plan aims to improve quality of life for Oxford’s current and future generations and to balance Oxford’s collective economic, community, and environmental interests. Background Located in the heart of southwestern Ontario, Oxford has a population of approximately 109,000 residents. Oxford is “growing stronger together” through demonstrated partnerships with residents, businesses, the County of Oxford, and the eight area municipalities: Blandford-Blenheim, East Zorra-Tavistock, Ingersoll, Norwich, South-West Oxford, Tillsonburg, Woodstock, and Zorra. One of Ontario’s foremost farming communities, Oxford’s location at the crossroads of Highways 401 and 403 has contributed to the development of a significant commercial and industrial sector. Oxford is home to a thriving local arts, culture, and culinary community, and boasts conservation parks, natural areas, and more than 100 kilometres of scenic trails. What is Sustainability? Sustainability is an approach to meeting the needs of the present without compromising the ability of future generations to meet their own. It takes into account the short and long-term ecological, social, and economic consequences of our actions and emphasizes both environmental and human well-being as essential ends in themselves. Oxford has adopted the lens of sustainability to create an integrated and effective approach to addressing challenges, including economic and social inequities, human health, ecosystem decline, and community development. Attachment 1 Page 1 of 12 52 DRAFT June 24, 2015 Figure 1 illustrates a sustainability framework of nested circles, recognizing that community and economic activity occurs within environmental, or ecological, limits. This framework provides a guide through which Oxford can work together to build a sustainable, resilient, and vital future. The goal of Future Oxford is to articulate how we balance these interests in a model that informs decisions about our future. Figure 1: Sustainability Framework Page 2 of 12 53 DRAFT June 24, 2015 Words from the Steering Committee Community sustainability represents a vision of how Oxford can work together to build a sustainable, vital and more resilient future. Giving shape to that vision, and informing the plan and tools that will make it happen, has been a key component to the Future Oxford initiative. The Community Sustainability Plan Committee has guided the development and implementation of Future Oxford. The Steering Committee was selected to represent the community on the basis of both geography and areas of focus for sustainability (economic, community, and environment). It includes the following members: Chris Friesen (Chair) George Klosler Jay Heaman David Gilvesy Jeff Surridge Marilyn Price Jason Smith Cher Sprague Dave Steenburg Bryan Smith Ian Heikoop Joan Morris Ian Stevens Nicole Langlois Jurgen van Dijken In working towards a collective vision for a sustainable future, the Community Sustainability Steering Committee needed to consider the viewpoints of community members throughout the County. Our goal has been to connect and engage as much of Oxford as possible to inform and inspire the vision, goals, actions, and targets of Oxford’s Community Sustainability Plan. Over the last few months, Oxford residents have come together to listen, brainstorm, and ultimately dream, about what our community can look like in 2020 and 2030 through a series of innovative community engagement initiatives. The Community Sustainability Plan is a reflection of that community spirit and thought. The Steering Committee has integrated all the ideas that have emerged from our community into the goals, targets, actions, and objectives of this plan, reflecting the diverse needs and aspirations of Oxford. The elements of this Community Sustainability Plan will assist Oxford to become a leading resilient, sustainable, and thriving County. Page 3 of 12 54 DRAFT June 24, 2015 Vision: A vibrant, prosperous, and responsible Oxford for all. Mission: To achieve community sustainability throughout Oxford. Goals 1. COMMUNITY GOAL 1i: An Oxford that is accessible for all citizens OBJECTIVES ACTIONS 1iA Provide high-quality and accessible health care, social services, support programs, and housing that meet the needs of all citizens. Targets: Reduce core housing need in Oxford by X% by 2020 and Y% by 2030.i Reduce % population living in poverty by X% in 2020 and by Y% in 2030 1. Create partnership opportunities that encourage the private sector to invest in affordable housing. 2. Foster collaboration among citizens, community partners, and all levels of government to advance preventative health (including decreasing substance abuse and improving mental health) through active living and building social capital. 3. Encourage infill development including mixed-use projects and/or small homes, secondary homes, and in home suites on existing lots. 1iB Develop accessible intercommunity transportation options to reduce reliance on personal automobile ownership. Target: Reduce the average distance driven per resident by X% from 2007 levels by 2020 and by Y% by 2030. 4. Provide frequent, cost-efficient transportation options that connect all of Oxford and larger to hubs outside of Oxford. 5. Provide real time transportation information on-site, online, and in an Oxford transportation guidebook to highlight routes, connections, and timetables. Page 4 of 12 55 DRAFT June 24, 2015 OBJECTIVES ACTIONS 1iC Promote and support volunteering. Target: Increase the percentage of the population that volunteers by X% by 2020 and by a further Y% by 2030. 6. Increase the use and awareness of the Volunteer Opportunities Directory in Oxford. 7. Enhance the capacity of volunteer organizations through: • expanded recruitment programs; • training support for all ages; • a public recognition program; and, • addressing transportation needs of volunteers. 1iD Ensure that affordable, healthy food options are accessible to all residents. Target: To be Determined in conjunction with development of the Food Security Plan 8. Develop a food securityii plan that supports food affordability and accessibility of food to all of Oxford’s population. 9. Promote backyard gardens, community gardens, and community food hubs in partnership with community partners and schools. 1iE Promote engagement in decisions that affect the public good. Target: Increase voter turn-out rates to all elections by X% by 2020 and a further Y% by 2030. 10. Ensure broad communication, engagementiii and community awareness of government initiatives/plans and community programs/services. 11. Develop a collaborative voter engagement program, including supporting volunteers to stimulate voter turnout and a voter information package on sustainability issues for all elections. Page 5 of 12 56 DRAFT June 24, 2015 GOAL 1ii: A knowledgeable and equitable Oxford OBJECTIVES ACTIONS 1iiA Ensure access to affordable education for all ages. Targets: Increase the number of residents with post-secondary education by X% by 2020 and to the Y% by 2030. X% functional literacy within Oxford by 2020 and Y% by 2030. 12. Work to develop a university campus in Oxford. 13. Expand opportunities for post-secondary programs, including: • self-directed learning opportunities; • co-op programs; • skilled trade programs; • employment training programs; and • loans and grants for students. 14. Ensure high-speed/high-capacity broadband throughout Oxford. 15. Provide access to collaborative spaces and services for people who are participating in online studies and support self-directed learning. 1iiB Advance the community dialogue on sustainability issues. Target: Increase the sustainability quotient by X% by 2020 and by Y% by 2030. 16. Create and support community sustainability roundtables to lead a region-wide dialogue on sustainability issues and the implementation of sustainability actions. 17. Establish an environmental responsibility program in collaboration with schools. 18. Support organizations and programs working to eliminate the use of fossil fuels. Page 6 of 12 57 DRAFT June 24, 2015 GOAL 1iii: A creative Oxford OBJECTIVES ACTIONS 1iiiA Promote arts, recreation and culture. Target: Increase the number of participants at arts, recreation, and culture activities by X% by 2020 and by Y% by 2030. 19. Encourage relevant organizations to convene to develop: • an arts and culture plan; and • a funding initiative and a strategy to use under-utilized facilities and spaces to support a thriving arts, recreation, and culture community in Oxford. 20. Support and promote collaborations among theatres, galleries, and museums (e.g. such as Oxford Creative Connections). 21. Enhance and promote arts and recreation programming within schools and for residents. 22. Develop a major arts and culture tourist destination in Oxford. 2. ECONOMY GOAL 2i: A thriving local economy OBJECTIVES ACTIONS 2iA Build a vibrant economy. Target: Grow the total number of jobs in the region in relation to projected population growth targets by X% by 2020 and by Y% by 2030. 23. Enhance collaboration between all local and regional economic development officers and agencies. 24. Develop a mechanism to enhance support of local business expansion and retention. 25. Support companies that can process Oxford-based agricultural products (e.g. dairy, soy, corn, market vegetables, and fruit). 26. Amend zoning to encourage on-farm processing. 27. Promote emerging employment opportunities to youth. 28. Encourage high-tech manufacturing in Oxford. Page 7 of 12 58 DRAFT June 24, 2015 OBJECTIVES ACTIONS 2iB Cultivate entrepreneurship throughout Oxford. Target: Increase the number rate of successful new start-ups per year (including youth) by X% by 2020 and by Y% by 2030. 29. Enhance employment mentorship programs for new entrepreneurs. 30. Provide incentive programs to support equity and diversity. 2iC Encourage production and consumption of locally produced food and products. Target: Increase the quantity of local food consumed/purchased by 25% by 2020 and 50% by 2030. 31. Enhance the visibility and capacity of farmers’ markets to showcase Oxford farmers and local products for Oxford residents and beyond. 32. Incentivize and encourage local restaurants and grocery stores to use or sell local products. 33. Ensure preservation of farmland through proactive land-use and other policies. GOAL 2ii: A local economy that supports and fosters community sustainability OBJECTIVES ACTIONS 2iiA Grow the sustainable economy. Target: Oxford has the highest percentage of sustainability related jobs in the province by 2020. 34. Develop an Oxford job strategy that stimulates the sustainable economy, including an inventory of sustainability related jobs. 35. Develop incentives to support ecological farming approaches or techniques. 36. Ensure appropriate access to Community Employment Services across Oxford. 37. Support local business through procurement policies and full- cost accountingiv by government and public sector organizations. 38. Encourage green entrepreneurship through incentives and programs. 39. Organize job fairs in each community and promote existing online employment resources. Page 8 of 12 59 DRAFT June 24, 2015 3. ENVIRONMENT GOAL 3.i Oxford is recognized, within and by the world, as a leader in environmental action OBJECTIVES ACTIONS 3iA Protect and restore the ecosystem. Targets: Plant 10,000 native species trees per year. Restore and/or rehabilitate X ha of native species, grasslands, wetlands, and natural features per year. X% tree cover in settlement areas by 2020 and Y% by 2030. X% overall tree cover by 2020 and Y% by 2030. 40. Develop a green infrastructure plan including a tree planting strategy. 41. Create a biodiversity plan to preserve and enhance biodiversity in Oxford, with a focus on native species. . 42. Establish a Natural Heritage System within the Official Plan to increase and connect green space to support biodiversity and to protect significant natural features in Oxford. 43. Encourage sustainable agricultural practices. 44. Develop a plan that encourages restoration of abandoned pits, quarries and brownfield sites. 45. Create a region-wide plan for adaptation to climate change. 3iB Move away from fossil fuels and enhance low carbon transportation. Targets: Reduce Oxford greenhouse gas emissions by X% below 2013 levels by 2020 and by Y% by 2030. 100% Renewable Energy by 2050 46. Develop an Oxford Energy Plan and reduction target strategy. 47. Provide incentives for renewable energy, retrofits, zero-energy homes, passive housing, and other advanced low-carbon strategies. 48. Encourage local electric utilities to use renewable electricity through a renewable energy (solar) lease program. 49. Develop a marketing strategy and campaign to educate elementary and secondary students and the public at large about energy conservation initiatives. 50. Develop a plan to ensure Oxford is carbon-positive by 2050. 51. Develop a plan to ensure Oxford achieves 100% Renewable Energy by 2050. 52. Evaluate the impact of new developments on Greenhouse Gas (GHG) emissions. Page 9 of 12 60 DRAFT June 24, 2015 OBJECTIVES ACTIONS 3iB (cont.) Transition away from fossil fuels and enhance low carbon transportation. (continued) Target: Increase the percentage of low carbon transportation usage by X% by 2020 and by Y% by 2030. 53. Develop funding initiatives to stimulate energy and demonstration projects, including district energy projects throughout Oxford. 54. Advocate for Building Code revisions to reduce fossil fuel consumptions through green construction and retrofits. 55. Develop an Oxford program to support companies tracking and reducing their GHG emissions (along the lines of Climate Smart). 56. Develop a network of bike lanes throughout Oxford, including physically separated trails where feasible, paved shoulders and bike stands. 57. Develop a transportation demand management strategy that includes programs and incentives for ridesharing (including school buses), active transportation, bike sharing, and workplace mode-shifting with a particular focus on marginalized residents. 3iC Achieve Zero waste in Oxford. Target: Reduce total waste disposed per capita by 40% by 2020 and by 60% by 2030. Achieve the highest total waste diversion rate/capita in Ontario by 2020. 58. Develop a waste reduction and diversion strategy to ensure the Oxford County Waste Management site can meet Oxford’s total landfill disposal needs of residents and businesses to at least 2060. 59. Enhance and incentivize reuse and recycling programs 60. Develop a composting strategy to divert 100% of organics from landfill. 61. Actively investigate the potential for waste to energy projects that support renewable energy principles and targets. 62. Advocate for sustainable packaging reform in Ontario. 63. Prohibit the importation of contaminated excess soils. Page 10 of 12 61 DRAFT June 24, 2015 OBJECTIVES ACTIONS 3iD Ensure long-term protection of all source water. Target: Reduce municipal water consumption per capita served by X% by 2020 and by Y% by 2030. 64. Develop a County-wide water management plan to protect all source water, similar to municipal source water protection plans now in development. 65. Enhance water efficiency programs, including conservation awareness, xeriscaping, and incentives for rainwater capture and grey water systems. 66. Develop regulations for sustainable water use for quarrying and gravel extraction. 67. Develop a penalty structure for industries that dump into or pollute water systems. 68. Prevent importation of sewage from outside Oxford. 69. Encourage river and stream bank soil erosion protection and water quality protection from manure and/or chemical products. 70. Develop water metering throughout Oxford. Steps towards implementation The goal of the Future Oxford community engagement process was to connect and engage as much of Oxford as possible to inform and inspire the vision, goals, actions, and targets of Oxford’s Sustainability Plan. Individuals throughout Oxford also took part in workshops, participated on-line and hosted their own round tables to comment, edit, and inform the Community Sustainability Plan. The Community Sustainability Plan Steering Committee considered all community input in developing this “draft final” version of Oxford’s first-ever Community Sustainability Plan (CSP). A Multi-Criteria Assessment Tool has been included in the CSP as a means to inform major decision making and priority setting along with an Implementation and Reporting Strategy designed to foster community action and progress reporting throughout the delivery of the Community Sustainability Plan. County Council and all eight Area Municipal Councils are now being presented the “draft final” Community Sustainability Plan, Multi- Criteria Assessment Tool and the recommended Implementation and Reporting Strategy for final comment. Following the final consultation process, the Steering Committee will ask Oxford County Council and all eight Area Municipal Councils to formally adopt the Community Sustainability Plan, Multi-Criteria Assessment Tool, and the Implementation and Reporting Strategy. Page 11 of 12 62 DRAFT June 24, 2015 Endnotes i Note that all targets refer to 2015 as a base year. ii In 1996, countries at the World Food Summit agreed that: “Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.” World Health Organization (WHO). A food security plan is a plan for how this food security will be achieved for the County. iii Public engagement can occur in a variety of forms including but not limited to: • attending Council meetings; • emails to council and council members; • communication via social media; • one-on-one meetings with councilors on specific issues; • voting at elections; • formal and informal referendums; • kitchen table discussions; • delegations and; • public meetings chaired by staff or elected officials. iv Full-cost accounting is a method of cost accounting that traces direct and indirect environmental, social, and economic costs throughout the lifecycle of a product. Page 12 of 12 63 A Community Sustainability Plan DRAFT June 24, 2015 Multi-Criteria Assessment (MCA) Tool Purpose  a methodology to assess the sustainability of alternative options or actions in consideration of the of the goals and objectives of the Future Oxford Plan. MCA Approach  Each action is relatively assessed against others with respect to the degree of a positive impact to the criteria (0WORST through 5BEST )  Criterion Assessment x Weighting = CRITERIA SCORE  ∑CRITERIA SCORES = TOTAL SCORE  Highest total score = MOST SUSTAINABLE ACTION (Max. = 400)  Practical use of the MCA during initial implementation of the Future Oxford Plan will inform the determination of appropriate thresholds to determine sustainability. Assessment Criteria  Criteria developed using goals and objectives within the Future Oxford Plan along with implementation costs and time;  Criteria are weighted to ensure a balanced assessment  The criteria and weighting are illustrated in the table below  An example assessment is also provided to illustrate use of the MCA. Attachment 2 Page 1 of 3 64 DRAFT May 25, 2015 Evaluation Criteria Weighting Community Weight Total 1. Will the action lead to an Oxford that is accessible for all citizens? 10 20 2. Will the action improve its citizenry’s access to information and/or equity? 5 3. Will the action advance Oxford’s creative arts, culture, or recreation? 5 Economy 1. Will the action improve the vibrancy of the Oxford Economy? 5 20 2. Will the action enhance entrepreneurship opportunities in Oxford? 5 3. Will the action advance local food production? 5 4. Will the action advance Oxford’s green economy? 5 Environment 1. Will the action improve Oxford’s ecological systems? 5 20 2. Will the action reduce fossil fuel use in Oxford? 5 3. Will the action reduce solid waste disposal demand in Oxford? 5 4. Will the action protect Oxford’s water? 5 Implementation 1. What is the cost to implement the action? 10 20 2. How long will it take to plan and implement the action? 10 Page 2 of 3 65 DRAFT May 25, 2015 Example Evaluation Criteria Weighting Alternative or Action A Assessment B CRITERIA SCORE (AxB) Community 1. Will the action lead to an Oxford that is accessible for all citizens? 10 2 20 2. Will the action improve its citizenry’s access to information and/or equity? 5 1 5 3. Will the action advance Oxford’s creative arts, culture, or recreation? 5 1 5 Economy 1. Will the action improve the vibrancy of the Oxford Economy? 5 5 25 2. Will the action enhance entrepreneurship opportunities in Oxford? 5 5 25 3. Will the action advance local food production? 5 5 25 4. Will the action advance Oxford’s green economy? 5 5 25 Environment 1. Will the action improve Oxford’s ecological systems? 5 3 15 2. Will the action reduce fossil fuel use in Oxford? 5 3 15 3. Will the action reduce solid waste disposal demand in Oxford? 5 3 15 4. Will the action protect Oxford’s water? 5 3 15 Implementation 1. What is the cost to implement the action? 10 5 50 2. How long will it take to plan and implement the action? 10 5 50 ∑CRITERIA SCORES = TOTAL SCORE 290 Page 3 of 3 66 A Community Sustainability Plan June 24, 2015 Implementation and Reporting Strategy Principles  Implemented through public, private and community partnerships  Partnership funded and supported  Volunteer driven  Publicly accountable Proposed Future Oxford Organization Model  Similar to the Workforce Development Partnership model – a proven community based model for success in Oxford  Purpose is to foster and coordinate community implementation of the Future Oxford Plan  A virtual organization  Financially supported by community investment funding and in-kind service contributions  Governed by a board of community members  Limited staff resource(s)  Community volunteer-based committees and work groups Proposed Roles Funding Partners  Provide stable funding  Provide up to two members on the Future Oxford Partnership Board  Support and/or sponsor external funding opportunities as necessary  Demonstrated sustainability focused organization Future Oxford Partnership Board  Six Community Members at Large (inaugural Board may be seeded by up to six Steering Committee members)  Up to six funding partner members  Accountable to funding partners for  Annual reporting to funding partners (demonstration of value)  Work plan approval (action prioritization), monitoring  Accomplishments (public) reporting  Business and community relationship building Attachment 3 Page 1 of 2 67 Draft June 24, 2015 Committees  Three Committees (Community, Economy, Environment)  Each chaired by a member of Future Oxford Partnership Board  Volunteer members (business and community)  May establish Action-based Working Groups as necessary  Responsible to the board for:  Coordination of Future Oxford actions with business and community actions  Business and Community relationship building and information sharing/reporting Future Oxford Staff Resources  Administrative and strategic support for Board and Committees  Facilitation  Organization  Advice and research  Documentation Page 2 of 2 68 6 9 7 0 7 1 ST MARY’S CATHOLIC CHURCH 51 Venison Street West Tillsonburg, Ontario, Canada N4G 1V1 Phone: (519) 842-3224 Fax:(519) 660-7290 Email:stma r ytils@do l .ca June 30, 2015 To the Mayor and Councillors of the Town of Tillsonburg, Thank you for granting us permission to address you this evening. We are grateful for the opportunity. For many years St Mary's Roman Catholic Parish and the Town of Tillsonburg has had an excellent working relationship. We have been able to draw upon your support and guidance for many projects we have undertaken, and we know you have benefited from the volunteers, and leadership of many of our parishioners. As well, many people from the community at large, religious and non- religious alike, have been assisted by the care of many citizens who attend St Mary's Church. As far back as 1932, our present Church has stood as one of the many historical landmarks in our town and has been a source of community, strength and faith for many generations. We have excellent relationships with the other Church communities, the non-profit organizations, and the businesses in Tillsonburg. Everyone is mutually enriched by each others presence and our town's diversity makes Tillsonburg a wonderful home for many people. We ask you to reconsider your decision at the last town council meeting to refuse the rebate you have made available to businesses and non-profit organizations in the downtown core. Our Church fulfils all the criteria you have set for that benefit, and we are aware that you have already granted such a favour to another Church in Tillsonburg. As a matter of fairness to the townspeople, we ask that you reconsider your decision to favour one group of citizens over another. If this is not possible we ask you to clearly articulate to our parishioners why we are not able to receive the rebate when we have met the requirements you set forth, and when other Churches have received it. These reasons will help to alleviate any incorrect perception of religious discrimination from the Town of Tillsonburg toward its Catholic citizens. We know that the amount of monies discussed is a small amount in the Town budget but for the Church it will go a long way toward the work that is needed. We have an ambitious project to restore the beauty of the historic Church building, and provide accessibility through an elevator and barrier-free washrooms. These projects are expensive and we rely solely on the generosity of the members of the Town of Tillsonburg who attend St. Mary's Church. Any assistance you can provide to your citizens in this matter will appreciated by the townspeople you serve and will not be forgotten. We sincerely hope you will reconsider and we are grateful for your time. Sincerely, Fr Tom Ferrera 72 Community and Strategic Planning P. O. Box 1614, 21 Reeve Street Woodstock Ontario N4S 7Y3 Phone: 519-539-9800 • Fax: 519-421-4712 Web site: www.oxfordcounty.ca Our Files: A-3/15 APPLICATION FOR MINOR VARIANCE TO: Town of Tillsonburg Committee of Adjustment MEETING: July 13, 2015 REPORT NUMBER: 2015-129 OWNER: Margaret Scantlebury 7 Hogarth Drive, Tillsonburg Ontario VARIANCES REQUESTED: Relief from Section 7.5.5.2.12.1 – Permitted Encroachments -Rear Yard, to increase the permitted encroachment for a covered deck from 1.5 m (5 ft) to 2.5 m (8 ft). LOCATION: The subject lands are described as Part Lot 78, Plan 41M-182, in the Town of Tillsonburg. The subject property is located on the west side of Hogarth Avenue, west of Quarter Town Line Road, and is known municipally as 7 Hogarth Avenue. BACKGROUND INFORMATION: COUNTY OF OXFORD OFFICIAL PLAN: Schedule ‘T-1’ Town of Tillsonburg Land Use Plan Low Density Residential TOWN OF TILLSONBURG ZONING BY-LAW: Special Low Density Residential Type 2 Zone (R2-5) SURROUNDING USES: surrounding uses include low density residential development. COMMENTS: (a) Purpose of the Application: The applicant is requesting relief from the above noted provision of the Town Zoning By-law to facilitate the construction of a pergola to cover an existing deck attached to the rear of the single detached dwelling present on the subject lands. 73 File Number: A 3-15 Report Number 2015-129 Page 2 The subject property is approximately 369 m2 (3971 ft2) in size and contains a single detached dwelling (circa. 2011). An existing deck, 2.4 m (8’) x 5.2 m (17’) is attached to the rear of the dwelling. The applicant proposes to cover the deck with a pergola. Plate 1, Location Map (with Existing Zoning and Parcel Lines), shows the location of the subject property and the zoning in the immediate vicinity. Plate 2, 2010 Air Photo, provides an aerial view of the subject lands and surrounding properties. Plate 3 Applicant’s Sketch, shows the location of the proposed pergola and the distance between the existing deck and rear lot line. (b) Agency Comments This application was circulated to a number of public agencies. The Town Engineering Services Department indicated they have no concerns with the proposal; however the applicant must not alter the final grades in the rear yard apron swale. The Oxford County Public Works Department & Town Building Services Department indicated they had no concerns with the application. Public Notice was mailed to surrounding property owners on June 11th, 2015. As of the writing of this report, one letter of support was received from an adjacent property owner. A letter of support from the Baldwin Place Resident’s Association was submitted with the application. (c) Intent and Purpose of the Official Plan: The subject lands are designated ‘Low Density Residential’ according to the Official Plan. Within the ‘Low Density Residential’ designation, permitted land uses are primarily low density housing forms including single detached dwellings, duplexes and street fronting town houses and accessory uses. The use of the lands for a single detached dwelling conforms to the ‘Low Density Residential’ policies of the Official Plan. (d) Intent and Purpose of the Zoning By-law: The subject property is zoned ‘R2-5’, which permits a single detached dwelling and several modified zoning provisions that are prevalent in the ‘Baldwin Place’ development. The provisions of the ‘R2-5’ zone provide for a minimum rear yard depth of 7.0 m (23’), but allow covered porches and decks to encroach into the required rear yard a maximum of 1.5 m (5’). The applicant proposes to increase the permitted encroachment for a covered deck into the required rear yard to 2.5 m (8’). The purpose of rear yard depth provisions is to ensure that adequate amenity area remains to the rear of the dwelling, and to ensure that adequate separation exists between common lot lines and noise-sensitive rear yards of adjacent dwellings. In many developments in the Town, rear yard drainage swales and easements are also common for lot grading and drainage and stormwater management purposes. In this instance, planning staff are satisfied that the proposed increased encroachment for the covered deck is appropriate as the proposed pergola will enclose an existing deck and is not out 74 File Number: A 3-15 Report Number 2015-129 Page 3 of character with surrounding development. The 3.0 m drainage swale and easement at the rear of the property will remain undisturbed. Staff are satisfied that the proposed encroachment of the covered deck into the required rear yard depth maintains the general purpose and intent of the Zoning By-law as the encroachment is only minimally larger than what is permitted and there is no impact to existing approved drainage patterns. (e) Desirable Development/Use: Notwithstanding that the requested rear yard depth is less than what is typically permitted, in this case, Planning staff are satisfied that the proposed pergola/ covered deck is in keeping with the general purpose and intent of the Official Plan and Zoning By-law, and is desirable development for the subject lands. The presence of the covered deck/ pergola is unlikely to negatively impact any adjacent properties, and will form part of the outdoor amenity area for the residential use of the property. The existing approved lot grading plan and drainage swales and easements will not be disturbed. In light of the foregoing, it is the opinion of this Office that the requested relief maintains the general intent of the Official Plan and the Zoning By-law and can be given favorable consideration. RECOMMENDATION: That the Town of Tillsonburg Committee of Adjustment approve Application File A-03/15, submitted by Margaret Scantlebury, for lands described as Part Lot 78, Plan 41M-182, Town of Tillsonburg, as it relates to: 1. Relief from Section 7.5.5.2.12.1 – Permitted Encroachments -Rear Yard, to increase the permitted encroachment for a covered deck from 1.5 m (5 ft) to 2.5 m (8 ft). As the proposed variance is: (i) a minor variance from the provisions of the Town of Tillsonburg Zoning By-law No. 3295; (ii) desirable for the appropriate development or use of the land; (iii) in-keeping with the general intent and purpose of the Town of Tillsonburg Zoning By-law No. 3295; and (iv) in-keeping with the general intent and purpose of the Official Plan. Authored by: Eric Gilbert, MCIP RPP, Development Planner Approved by: Gordon K. Hough, MCIP, RPP, Director EG June 22, 2015 75 June 3, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 510 Notes NAD_1983_UTM_Zone_17N 26 Meters Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 76 June 3, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 260 Notes NAD_1983_UTM_Zone_17N 13 Meters Civic Address Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 77 78 1 Eric Gilbert From:Eric Gilbert <egilbert@oxfordcounty.ca> Sent:June-19-15 9:42 AM To:Planning Cc:npropper@tillsonburg.ca Subject:FW: M. Scantlebury / Hearing A-03/15T From: Eileen Bank [mailto:ke_bank@hotmail.com] Sent: June-19-15 9:38 AM To: Eric Gilbert Subject: M. Scantlebury / Hearing Dear Sir,                 I have no objections to the proposed changes Mrs M. Scantlebury needs,                               Yours Truly,                                 E Bank  79 For the best experience, open this PDF portfolio in Acrobat X or Adobe Reader X, or later. Get Adobe Reader Now! 80 Community and Strategic Planning P. O. Box 1614, 21 Reeve Street Woodstock Ontario N4S 7Y3 Phone: 519-539-9800 • Fax: 519-421-4712 Web site: www.oxfordcounty.ca Our Files: A-4/15 APPLICATION FOR PERMISSION TO: Town of Tillsonburg Committee of Adjustment MEETING: July 13, 2015 REPORT NUMBER: 2015-145 OWNER: The Roman Catholic Episcopal Corporation of the Diocese of London St. Mary’s Catholic Church 51 Venison St W, Tillsonburg Ontario REQUESTED PERMISSION: Pursuant to Section 45(2) of the Planning Act, the owners have applied for permission to permit a minor addition to the existing place of worship and recognize existing parking deficiencies. LOCATION: The subject lands are described as Lots 731, 733 & West Part Lot 734, Plan 500, in the Town of Tillsonburg. The subject property is located on the south west corner of Rolph Street and Venison Street West, and is known municipally as 51 Venison Street West. BACKGROUND INFORMATION: COUNTY OF OXFORD OFFICIAL PLAN: Schedule ‘T-1’ Town of Tillsonburg Land Use Plan Entrepreneurial District TOWN OF TILLSONBURG ZONING BY-LAW: Minor Institutional Zone (IN1) SURROUNDING USES: surrounding uses include institutional uses to the north and east, residential uses to the south, and ravine lands to the west. COMMENTS: (a) Purpose of the Application: The applicant has applied for permission under Section 45(2) of the Planning Act to permit the extension of a legal non-conforming use. The applicant proposes to construct a minor addition to the existing place of worship and recognize existing parking deficiencies. 81 File Number: A-04/15 Report Number 2015-145 Page 2 The current zoning of the property does not permit a place of worship with a gross floor area exceeding 650 m2 (7,000 ft2). The existing place of worship has a gross floor area of 1 167 m2 (12 560 ft2) and the applicant proposes to construct a minor addition with an approximate area of 52 m2 (560 ft2) to accommodate a barrier free elevator. The applicant proposes to recognize an existing parking deficiency to waive the requirement for a loading space. The subject property has an area of 0.84 ha (2.1 ac) and contains a place of worship, former school/ office building, and single detached dwelling. Plate 1, Location Map (with Existing Zoning and Parcel Lines), shows the location of the subject property and the zoning in the immediate vicinity. Plate 2, 2010 Air Photo, provides an aerial view of the subject lands and surrounding properties. Plate 3 Applicant’s Sketch, shows the location of the proposed barrier free addition. (b) Agency Comments This application was circulated to a number of public agencies. The Town Engineering Services Department indicated they have no concerns with this application. Any concerns will be addressed through the site plan process. The Oxford County Public Works Department & Town Building Services Department indicated they had no concerns with the application. Public Notice was mailed to surrounding property owners on June 25th, 2015. As of the writing of this report, no concerns have been received from the public. (c) Planning Review: The subject lands are designated Entrepreneurial District in the Official Plan. The permitted uses of this designation include a range of commercial and business development opportunities through the conversion of existing residential dwellings and new development or redevelopment. Minor institutional uses such as places of worship are also permitted. The Official Plan (Section 10.3.5 - ZONING BY-LAWS AND NON-CONFORMING USES) states that the Committee of Adjustment may permit the extension or enlargement or change of use of a legally established land use which does not conform to the Official Plan and the local area municipal Zoning By-law. In evaluating such applications, the Committee shall consider the following criteria: • the use has been continuous from the day the zoning by-law came into effect; • there will be no extension of the site or building beyond the limits of the land owned and used from the effective date (of the by-law); • permission for the extension, enlargement or change in the non-conforming use is in keeping with the general intent of the Official Plan and will not aggravate those aspects of the use that do not conform to the Official Plan and zoning by-law. • that existing municipal services such as water, sewers, stormwater management facilities and roads will be adequate; • that there are adequate parking and loading facilities to accommodate the proposed use; • that the proposed extension, enlargement or change in use will not adversely affect desirable development in adjacent areas which are in conformity with the Official Plan and zoning by-law; 82 File Number: A-04/15 Report Number 2015-145 Page 3 • that the proposed extension, enlargement or change in use would include measures that will reduce nuisances, protect adjacent properties and improve the compatibility of the use with the surrounding areas; and, • that the extension, enlargement or change in use is necessary to avoid undue hardship to the applicant, provided that all other criteria have been met, there are no negative effects on environmental resources identified in Section 3.2 and the proposed use is more compatible than the existing use relative to the relevant Official Plan policies. In considering such applications for permission, the policies also state that the Committee of Adjustment may attach such conditions as it deems appropriate to the approval of an application within its jurisdiction to extend, enlarge or change a legal non-conforming use. It is the opinion of Planning staff that this application complies with the criteria of Section 10.3.5 of the Official Plan. The institutional use of the property was established some time ago and there will be no extension beyond the limit of the subject lands. The permission for the extension of the non-conforming use is in keeping with the general intent of the Official Plan. Matters such as storm water management, grading, drainage, and water and wastewater servicing will be addressed through the site plan process. The reduction of the required loading space is not expected to negatively impact the function of the parking lot or the site as the site has operated for many years without the required loading space and bulk goods are not delivered to the site at the same time as peak parking demand. The minor addition will facilitate accessibility for the congregation and public who use the Church building. Planning staff are of the opinion that the applicant’s proposal would be in conformity with the Official Plan review criteria for applications requesting permission to expand or enlarge an existing legal non- conforming land use. (d) Summary: It is the opinion of this Office that this application as submitted complies with the criteria as outlined in Section 45(2) of the Planning Act and complies with the policy direction as set out in Section 10.3.5 of the County Of Oxford Official Plan respecting non-conforming uses. RECOMMENDATION: It is recommended that the Town of Tillsonburg Committee of Adjustment approve Application File A-04/15, submitted by The Roman Catholic Episcopal Corporation of the Diocese of London (St. Mary’s Catholic Church), for lands described as Lots 731, 733 & West Part Lot 734, Plan 500, in the Town of Tillsonburg, to permit a minor addition to the existing place of worship and recognize existing parking deficiencies to waive the minimum required loading spaces. Authored by: Eric Gilbert, MCIP RPP, Development Planner Approved by: Gordon K. Hough, MCIP, RPP, Director EG June 29, 2015 83 84 June 25, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 450 Notes NAD_1983_UTM_Zone_17N 22 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 85 www.allanavisarchitects.com60 West Street, Goderich, Ontario, N7A 2K3 SCHEMATIC DESIGN SCALE: St. Mary Church - Barrier Free Addition Addition Redesign - Exterior Perspective 51 Venison Street W, Tillsonburg, Ontario July 2, 2015 1457.00 86 Community and Strategic Planning P. O. Box 1614, 21 Reeve Street Woodstock Ontario N4S 7Y3 Phone: 519-539-9800 • Fax: 519-421-4712 Web site: www.oxfordcounty.ca Our Files: A-5/15 APPLICATION FOR MINOR VARIANCE TO: Town of Tillsonburg Committee of Adjustment MEETING: July 13, 2015 REPORT NUMBER: 2015-146 OWNER: George & Helen Klassen 2 Alexander Avenue, Tillsonburg Ontario REQUESTED VARIANCE: Relief from Table 5.1.1.4 – Regulations for Accessory Buildings and Structures, to increase the maximum permitted lot coverage from 50 m2 (538 ft2) to 58 m2 (624 ft2) to permit the construction of a detached accessory building. LOCATION: The subject lands are described as Lot 51, Plan 507, in the Town of Tillsonburg. The subject property is located on the west side of Alexander Avenue, between Arbor Lane and Christopher Court, and is known municipally as 2 Alexander Avenue. BACKGROUND INFORMATION: COUNTY OF OXFORD OFFICIAL PLAN: Schedule ‘T-1’ Town of Tillsonburg Land Use Plan Residential Schedule ‘T-2’ Town of Tillsonburg Residential Density Plan Low Density Residential TOWN OF TILLSONBURG ZONING BY-LAW: Low Density Residential Type 1 Zone (R1) SURROUNDING USES: surrounding uses include low density residential uses, consisting of single detached dwellings. 87 File Number: A-05/15 Report Number 2015-146 Page 2 COMMENTS: (a) Purpose of the Application: The applicant is requesting relief from the above noted provision of the Town Zoning By-law to facilitate the construction of a detached accessory building on the subject lands. The subject property is approximately 780 m2 (0.19 ac) in size and contains a single detached dwelling (circa. 1956). The applicants recently demolished an accessory building (depicted on Plate 2) having an area of 49 m2 (527 ft2) and propose to replace it with a slightly larger structure in the same general location. Plate 1, Location Map (with Existing Zoning and Parcel Lines), shows the location of the subject property and the zoning in the immediate vicinity. Plate 2, 2010 Air Photo, provides an aerial view of the subject lands and surrounding properties. Plate 3 Applicant’s Sketch, shows the dimensions of the proposed accessory building. (b) Agency Comments This application was circulated to a number of public agencies. The Town Engineering Services Department indicated a lot grading plan will be required as part of the building permit process. The Town Building Services Department indicated a building permit and site and lot grading plan will be required. Public Notice was mailed to surrounding property owners on June 25th, 2015. As of the writing of this report, no concerns have been received from the public. (c) Intent and Purpose of the Official Plan: The subject lands are designated ‘Low Density Residential’ according to the Official Plan. Within the ‘Low Density Residential’ designation, permitted land uses are primarily low density housing forms including single detached dwellings, duplexes and street fronting town houses and accessory uses. The use of the lands for a single detached dwelling and accessory uses thereto conforms to the ‘Low Density Residential’ policies of the Official Plan. (d) Intent and Purpose of the Zoning By-law: The subject property is zoned ‘R1’, which permits a single detached dwelling. Provisions respecting accessory buildings and structures are outlined in Table 5.1.1.4- Regulations for Accessory Buildings and Structures. Structures accessory to a residential use are permitted to occupy up to 10% of the lot area, or 50 m2 (538 ft2) of gross floor area, whichever is less. Lot coverage provisions for accessory structures are intended to ensure that accessory uses and structures remain clearly secondary to the main residential use of the property and have minimal impact on neighbouring properties. In this instance, the requested relief would facilitate a detached accessory structure that would be slightly larger (8 m2 or 86 ft2) larger than what is permitted. Planning staff note that the lot 88 File Number: A-05/15 Report Number 2015-146 Page 3 coverage would represent 7.4 % of the total lot area, and represents less than the 10% maximum lot area. (e) Desirable Development/Use: Notwithstanding that the requested lot coverage of the proposed accessory structure is larger than what is typically permitted, in this case, Planning staff are satisfied that the proposed accessory structure is in keeping with the general purpose and intent of the Official Plan and Zoning By-law, and is desirable development for the subject lands. The presence of the accessory building is unlikely to negatively impact any adjacent properties, and is only slightly larger than a previous accessory building that was present on the subject property. An approved lot grading plan will be required as part of the building permit application to ensure the presence of the accessory building will not negatively impact surrounding properties. In light of the foregoing, it is the opinion of this Office that the requested relief maintains the general intent of the Official Plan and the Zoning By-law and can be given favorable consideration. RECOMMENDATION: That the Town of Tillsonburg Committee of Adjustment approve Application File A-05/15, submitted by George & Helen Klassen, for lands described as Lot 51, Plan 507, Town of Tillsonburg, as it relates to: 1. Relief from Table 5.1.1.4 – Regulations for Accessory Buildings and Structures, to increase the maximum permitted lot coverage from 50 m2 (538 ft2) to 58 m2 (624 ft2) to permit the construction of a detached accessory building; Subject to the following condition: i) A building permit for the proposed accessory building shall be issued within one year of the date of the Committee’s decision. As the proposed variance is: (i) a minor variance from the provisions of the Town of Tillsonburg Zoning By-law No. 3295; (ii) desirable for the appropriate development or use of the land; (iii) in-keeping with the general intent and purpose of the Town of Tillsonburg Zoning By-law No. 3295; and (iv) in-keeping with the general intent and purpose of the Official Plan. Authored by: Eric Gilbert, MCIP RPP, Development Planner Approved by: Gordon K. Hough, MCIP, RPP, Director EG June 29, 2015 89 June 25, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 770 Notes NAD_1983_UTM_Zone_17N 38 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 90 June 25, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 260 Notes NAD_1983_UTM_Zone_17N 13 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 91 92 A-05/15– Klassen Site Photos Figure 1- View of Subject Lands (Facing west from Alexander Avenue) Figure 2- View of Subject Lands (Facing west from Alexander Avenue) 93 Report No: CASPO 2015-147 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 To: Mayor and Members of Tillsonburg Council From: Eric Gilbert, Development Planner, Community and Strategic Planning Application for Zone Change ZN 7-15-03 – Krystal & Michael West REPORT HIGHLIGHTS • The application for zone change proposes to rezone the subject property from ‘Neighbourhood Commercial Zone (NC)’ to ‘Low Density Residential Type 2 Zone (R2)’ to permit a duplex dwelling on the subject lands. • Planning staff are recommending approval of the application, as it is consistent with the Provincial Policy Statement and maintains the general intent and purpose of the Official Plan regarding the provision of affordable housing and utilizing existing infrastructure and public services efficiently. • No concerns were identified through the agency circulation of this application. DISCUSSION Background OWNER: Krystal & Michael West 57 Glendale Drive, Tillsonburg ON N4G 1J6 LOCATION: The subject property is legally described as Lots 27 & 28, Plan 500, Town of Tillsonburg. The subject property is located on the north east corner of the Tillson Ave / Barker Street intersection. The lands are municipally known as 304 Tillson Ave, Tillsonburg. COUNTY OF OXFORD OFFICIAL PLAN: Schedule “T-1” Town of Tillsonburg Land Use Plan Residential Schedule “T-2” Town of Tillsonburg Residential Density Plan Low Density Residential Page 1 of 4 94 Report No: CASPO 2015-147 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 TOWN OF TILLSONBURG ZONING BY-LAW NO.3295: Existing Zoning: Neighbourhood Commercial Zone (NC) Proposed Zoning: Low Density Residential Type 2 Zone (R2) PROPOSAL: The purpose of the Application for Zone Change is to permit the conversion of the existing single detached dwelling to a duplex. The subject property comprises an area of approximately 1600 m2 (0.4 ac) and contains a single detached dwelling (c. 1910). The building is presently being used as a single detached dwelling, but according to assessment records, it was used as a retail store in the past. Surrounding land use to the south are service commercial uses. Industrial uses are located to the west, and low density residential uses are located to the east and north. Plate 1, Location Map (with Existing Zoning and Parcel Lines), shows the location of the subject property and the existing zoning in the immediate vicinity. Plate 2, 2010 Air Photo, provides an aerial view of the subject property. Plate 3, Official Plan Designation (with Existing Zoning and Parcel Lines) depicts the Official Plan designations for the property and adjacent properties. Plate 4, Applicants’ Sketch shows the existing dwelling on the lot. Application Review PROVINCIAL POLICY STATEMENT: The 2014 Provincial Policy Statement (PPS) provides policy direction on matters of provincial interest related to land use planning and development. Under Section 3 of the Planning Act, where a municipality is exercising its authority affecting a planning matter, such decisions “shall be consistent with” all policy statements issued under the Act. Section 1.1.1 provides that healthy liveable and safe communities are sustained by accommodating an appropriate range and mix of residential (including second units, affordable housing, and housing for older persons) to meet long-term needs, and promoting cost-effective development that minimizes land consumption and service costs. Section 1.4.3 provides that planning authorities shall provide for an appropriate range and mix of housing types and densities to meet projected requirements of current and future residents by permitting and facilitating all forms of housing required to meet the social, health, and well-being requirements of current and future residents, including special needs requirements and increasing the supply of affordable housing, and utilizing existing infrastructure and public service facilities. Page 2 of 4 95 Report No: CASPO 2015-147 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 OFFICIAL PLAN: The subject lands are designated ‘Residential’ and ‘Low Density Residential’ according to the Land Use Plan and Residential Density Plan for the Town of Tillsonburg, as contained in the Official Plan. The Official Plan states that Low Density Residential areas are those lands that are primarily developed or planned for a variety of low-rise, low density housing forms including single detached, semi-detached, duplex, converted dwellings, quadraplexes, townhouses, and low density cluster development. In these areas, it is intended that there will be a mixing and integration of different forms of housing to achieve a low overall density of use. The Official Plan also contains policies that encourage increasing the supply of affordable housing, and supplementing the choice of type and tenure of housing in the Town. TOWN OF TILLSONBURG ZONING BY-LAW: The subject property is currently zoned ‘’Neighbourhood Commercial Zone (NC)’, according to the Town of Tillsonburg Zoning By-law. Permitted uses include neighbourhood serving commercial uses and an accessory residential dwelling unit. A duplex is a permitted use in the R2 zone. The proposed conversion to a duplex will meet all of the R2 zone provisions. AGENCY COMMENTS: The application was circulated to various public agencies considered to have an interest in the proposal. The Town Engineering Department, Oxford County Public Works Department, Sourcewater Protection Risk Management Official and Tillsonburg Chamber of Commerce indicated that they had no concerns with the proposal. The Town Building Services Department indicated a building permit will be required for the duplex conversion. The Town’s Development Commissioner indicated that there is no objection to the proposed rezoning. This corridor is not a significant commercial area and the rezoning will not affect commercial development opportunities in the Town. PUBLIC CONSULTATION: Notice of complete application and notice of public meeting regarding this application was circulated to surrounding property owners on two occasions, June 11, 2015 & June 25, 2015, 2015. At the time this report was written, no comments or concerns had been received from the public. Page 3 of 4 96 Report No: CASPO 2015-147 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 Planning Analysis It is the opinion of this Office that the proposed zoning application is consistent with the policies of the Provincial Policy Statement and Official Plan and can therefore be supported from a planning perspective. The proposal is consistent with the goals and objectives of the PPS and Official Plan to increase the supply and variety of housing types while using land, infrastructure, and public services wisely and effectively. The proposed zoning change will recognize the current residential use of the property and will allow for a moderate intensification of the residential use. The commercial use of the property has ceased for some time. The R2 zoning will be consistent with other residential properties in the vicinity on the east side of Tillson Ave. A copy of the draft amending by-law is attached for Council’s consideration. RECOMMENDATION 1. It is recommended that the Council of the Town of Tillsonburg approve the zone change application submitted by Krystal & Michael West, whereby the lands described as Lots 27 & 28, Plan 500, Town of Tillsonburg, known municipally as 304 Tillson Avenue are to be rezoned from ‘Neighbourhood Commercial Zone (NC)’ to ‘Low Density Residential Type 2 Zone (R2)’. SIGNATURES Authored by: original signed by Eric Gilbert, MCIP RPP, Development Planner Approved for submission: original signed by Gordon K. Hough, MCIP, RPP Director Page 4 of 4 97 June 3, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 1020 Notes NAD_1983_UTM_Zone_17N 51 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 98 June 3, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 350 Notes NAD_1983_UTM_Zone_17N 18 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 99 June 3, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 350 Notes NAD_1983_UTM_Zone_17N 18 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) 100 Metre Buffer Ingersoll Heritage Residential Woodstock Village Land Use Designation Village Core (VILCOR) Service Commercial (SERCOM) Low Density Residential (LOWDEN) Medium Density Residential (MEDDEN) Industrial (INDUST) Major Institutional (COMFAC) Future Urban Growth (FUG) Open Space (OSPACE, CPARK, NPARK) Environmental Protection (ENVPRO) School (SCHOOL) Land Use Designation Residential (RESID) Residential Reserve (RESRES) Central Area (CAPLAN) Central Business District (CENTRE) Entrepreneur District (ENTREP) Neighbourhood Shopping Centre (NESHOP) Service Commercial (SERCOM) Highway Service Commercial (HWYSER) Regional Commercial Node Development (REGCOM) Business Park (BUSIPK) Traditional Industrial (INDUST) Community Facility (COMFAC) Open Space (OSPACE) Environmental Protection (ENVPRO) Future Urban Growth (FUG)100 1 0 1 ZN 7-15-03– Krystal & Michael West Site Photos Figure 1- View of Subject Lands (Facing north from Barker Street) Figure 2- View of Subject Lands (Facing east from Tillson Ave) 102 ZN 7-15-03– Krystal & Michael West Site Photos Figure 3- View of Subject Lands (Facing East from Tillson Avenue) 103 Report No: CASPO 2015-148 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 To: Mayor and Members of Tillsonburg Council From: Eric Gilbert, Development Planner, Community and Strategic Planning Application for Zone Change ZN 7-15-04 – John Veldman REPORT HIGHLIGHTS • The application for zone change proposes to rezone the subject property to remove the ‘Environmental Protection 2 Overlay’ from the subject lands to facilitate the construction of a single detached dwelling, and satisfy a condition of consent relating to File No. B14-49-7. • Planning staff are recommending that the development of the dwelling be subject to site plan control, to ensure that the severed lot is serviced as per Town and County standards and appropriate securities are collected. A draft site plan control by-law is attached for consideration. • Agency circulation did not raise any concerns with the proposed development. Conditions of the approved consent application will satisfy agency requirements. • Planning staff recommend approval of the application as it complies with the policies of the Provincial Policy Statement and the Official Plan respecting low density residential uses. DISCUSSION Background OWNER: Anton & Margit Pusztahegy 30 Old Vienna Road, Tillsonburg ON N4G 3C4 APPLICANT: John Veldman 105 Concession St. W, Tillsonburg ON N4G 1R8 LOCATION: The subject property is legally described as Part 2 of 41R-5549 & Part Block A, Plan 966, Town of Tillsonburg. The subject property is located on the east side of Old Vienna Road, lying between Van Street and Simcoe Street. The lands are municipally known as 30 Old Vienna Road, Tillsonburg. Page 1 of 5 104 Report No: CASPO 2015-148 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 COUNTY OF OXFORD OFFICIAL PLAN: Schedule “T-1” Town of Tillsonburg Land Use Plan Residential & Environmental Protection Schedule “T-2” Town of Tillsonburg Residential Density Plan Low Density Residential TOWN OF TILLSONBURG ZONING BY-LAW NO.3295: Existing Zoning: Low Density Residential Type 1 Zone (R1), with Environmental Protection 2 (EP2) Overlay Proposed Zoning: Low Density Residential Type 1 Zone (R1) PROPOSAL: The purpose of the Application for Zone Change is to permit the development of a single detached dwelling on the subject property within the area affected by the Environmental Protection 2 (EP2) overlay on the lands. The subject property is the severed lot created by consent application B14-49-7 and comprises an area of approximately 0.20 ha (0.5 ac) and is presently vacant. A dwelling is present on the retained lands. Conditions of provisional consent for B14-49-7 included the requirement for an approved grading and servicing plan, and that the lot to be severed be appropriately zoned. The agent has now selected a building footprint for the proposed new dwelling and now requires the EP2 overlay to be removed from the area where the building is proposed. Plate 1, Existing Zoning & Location Map, shows the location of the subject property and the existing zoning in the immediate vicinity. Plate 2, 2010 Air Photo, provides an aerial view of the subject property. Plate 3, Applicants’ Sketch shows the proposed dwelling location on the subject lands. Application Review PROVINCIAL POLICY STATEMENT: The Provincial Policy Statement (PPS) directs that Ontario’s long-term prosperity, environmental health and social well-being depend on wisely managing change and promoting efficient land use and development patterns. Efficient land use and development patterns support strong, liveable and healthy communities, protect the environment as well as public health and safety, and facilitate economic growth. In support of these provincial interests and goals, settlement areas shall be the focus of growth and their vitality and regeneration shall be promoted. Page 2 of 5 105 Report No: CASPO 2015-148 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 Section 1.4.3 of the PPS directs that planning authorities shall provide for an appropriate range of housing types and densities to meet projected requirements of current and future residents of the regional market area by: • permitting and facilitating all forms of residential intensification and redevelopment and all forms of housing required to meet the social, health and well-being requirements of current and future residents; • promoting densities for new housing which efficiently use land, resources, infrastructure and public service facilities and support the use of alternative transportation modes; • establishing development standards for residential intensification, redevelopment and new residential development which minimize the cost of housing and facilitate compact form while maintaining appropriate levels of public health and safety. Section 2.1.1 states that natural features and areas shall be protected for the long term. Additionally, Section 2.1.4 states that where natural heritage features exist, no development and site alteration is permitted unless it has been demonstrated that there will be no negative impacts on the natural features or their ecological functions. OFFICIAL PLAN: The subject lands are designated ‘Environmental Protection’, ‘Residential’ and ‘Low Density Residential’ according to the Land Use Plan and Residential Density Plan for the Town of Tillsonburg, as contained in the Official Plan. The Official Plan states that Low Density Residential areas are those lands that are primarily developed or planned for a variety of low-rise, low density housing forms including single detached, semi-detached, duplex, converted dwellings, quadraplexes, townhouses, and low density cluster development. In these areas, it is intended that there will be a mixing and integration of different forms of housing to achieve a low overall density of use. The lands are designated Environmental Protection due to the presence of Significant Valleylands. Section 3.2.4.2.4 provides that development and site alteration may be permitted on lands within and adjacent to significant valleylands where an Environmental Impact Study prepared in accordance with Section 3.2.6 demonstrates that the proposal will not cause a negative impact on the significant valleyland and where the policies of Sections 3.2.8.1 (Flood Plain Policies) and 3.2.8.2 (Erosion Hazard and Unstable Soils) are satisfied, as appropriate. Section 3.2.6.2 provides that where the proposal has been circulated to relevant provincial agencies and/ or the Conservation Authority have indicated no concern which warrants the preparation of an Environmental Impact Study, the requirement for an EIS may be waived. TOWN OF TILLSONBURG ZONING BY-LAW: The subject property is zoned ‘Low Density Residential Type Zone (R1)’ which permits a single detached dwelling and a home occupation. The lands are also subject to the Environmental Protection 2 (EP2) Overlay which permits existing dwellings and minor additions thereto. New dwellings are not permitted within the EP2 Overlay area. Page 3 of 5 106 Report No: CASPO 2015-148 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 Environmental Protection 2 (EP2 Overlay) applies to lands containing significant valleylands, significant woodlands, Areas of Natural and Scientific Interest for the Life Sciences, significant wildlife habitat, and fish habitat consisting of all watercourses, ponds, lakes and reservoirs within the Town. AGENCY COMMENTS: The application was circulated to various public agencies considered to have an interest in the proposal. The Oxford County Public Works Department and the Sourcewater Protection Risk Management Official indicated that they had no concerns with the proposal. Long Point Region Conservation Authority indicated that the property is located outside of the 1:100 year flood limit and from a natural hazards/wetland perspective, there do not appear to be any concerns that would warrant the preparation of an Environmental Impact Study. The construction of a dwelling and placing of any fill will require a permit from the LPRCA under Ontario Regulation 178/06. The Town Building Services Department indicated that due to the topographical nature and servicing of the proposed lands, the development of this site will require the owner to enter into a site plan agreement with the Town of Tillsonburg prior to permit issuance. The site will require soils reports, engineered fill and potentially engineered foundations to develop the property. Tillsonburg Chamber of Commerce indicated that they have no issues with this application; however, we note that an application will likely need to be filed with the Conservation Authority before proceeding. Town Engineering Department indicated that they have no concerns with the rezoning, however the development of the house / site should be subject to site plan control. PUBLIC CONSULTATION: Notice of complete application and notice of public meeting regarding this application was circulated to surrounding property owners on two occasions, June 11, 2015 & June 25, 2015. At the time this report was written, no comments or concerns had been received from the public. Planning Analysis It is the opinion of this Office that the proposed zoning application is consistent with the policies of the Provincial Policy Statement and Official Plan and can therefore be supported from a planning perspective. A condition of consent B14-49-7 requires that the property by appropriately zoned, to remove the EP2 overlay to permit the construction of a dwelling as proposed. The Environmental Protection 2 Overlay present on the property encompasses the land on the north side of the slope. During pre-consultation meetings with Town and County staff for the consent application, Long Point Region Conservation Authority staff indicated that in their Page 4 of 5 107 Report No: CASPO 2015-148 COMMUNITY AND STRATEGIC PLANNING Council Date: July 13, 2015 opinion, none of the features present onsite warranted the EP2 overlay. Based on the guidance provided by the Conservation Authority and as per Section 3.2.4.2 and 3.2.6 of the Official Plan, the requirement for an Environmental Impact Study was waived. Given the Conservation Authority’s position, planning staff concur that it is appropriate to remove the EP2 Overlay from the area that is proposed to be developed, shown on Plate 3. Planning staff note that the property falls within the LPRCA Regulation limit, and a permit from the LPRCA will be required prior to any building permit issuance. The subject lands are not serviced with municipal water and sanitary services, the applicant is required to provide a detailed grading and site servicing plan to the satisfaction of the County and Town. Due to the location and depth of the services on Old Vienna Road, significant work and restoration is expected within the municipal right of way. To collect and administer the appropriate securities, Town and County staff recommend that the development of the project be subject to site plan control. Once the proposed servicing works have been approved and undertaken and the municipal right of way has been restored, securities can be returned as per the site plan process. The applicant has indicated agreement with this approach. The development of a single detached dwelling is exempt from site plan control as per Site Plan Control By-law No. 3513. Accordingly, to give staff the authority to use the site plan process, it is recommended that a site-specific site plan control by-law be adopted to designate the development of a single detached dwelling as being subject to site plan control. A copy of the draft amending by-law and the site-specific site plan control by-law are attached for Council’s consideration. RECOMMENDATION 1. It is recommended that the Council of the Town of Tillsonburg approve the zone change application submitted by John Veldman, whereby the lands described as Part Block A, Plan 966, Town of Tillsonburg, known municipally as 30 Old Vienna Road are to be rezoned from ‘Low Density Residential Type 1 Zone (R1)’ to ‘Special Low Density Residential Type 1 Zone (R1-16)’ to permit the development of a single detached dwelling within the EP2 Overlay. SIGNATURES Authored by: original signed by Eric Gilbert, MCIP RPP, Development Planner Approved for submission: original signed by Gordon K. Hough, MCIP, RPP Director Page 5 of 5 108 August 19, 2014 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 850 Notes NAD_1983_UTM_Zone_17N 42 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) Road Restriction/Closures 109 August 19, 2014 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 250 Notes NAD_1983_UTM_Zone_17N 13 Meters Parcel Lines Property Boundary Assessment Boundary Unit Road Municipal Boundary Environmental Protection/Flood Overlay Flood Fringe Floodway Environmental Protection (EP1) Environmental Protection (EP2) Zoning Floodlines/Regulation Limit 100 Year Flood Line 30 Metre Setback Conservation Authority Regulation Limit Regulatory Flood And Fill Lines Zoning (Displays 1:16000 to 1:500) Road Restriction/Closures 110 111 Site Photos ZN 7-15-04 (John Veldman) Figure 1 –View of Subject Lands (facing south east from Old Vienna Road) 112 Site Photos ZN 7-15-04 (John Veldman) Figure 2 – View of Subject Lands (facing east on Old Vienna Road) 113 Site Photos ZN 7-15-04 (John Veldman) Figure 3- View of Proposed Building Footprint (facing east) 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 May 28, 2015 Ms. Kirsten Walli Board Secretary Ontario Energy Board 2300 Yonge Street, 27th Floor Toronto, ON M4P 1E4 Dear Ms. Walli: Re: EB-2015-0166 - Union Gas Limited – Pre-Approval of the Cost Consequences of NEXUS Long Term Contract Please find attached Union Gas Limited’s (“Union”) application and evidence seeking pre-approval of the cost consequences of a long-term transportation contract that supports the development of new natural gas infrastructure. This application is made pursuant to section 36 of the Ontario Energy Board Act, 1998 and is filed in accordance with filing guidelines for Pre-Approval of Long-term Natural Gas Supply and/or Upstream Transportation Contracts issued by the Ontario Energy Board (the “Board”) in EB-2008-0280. The application and evidence have been filed through the Board’s RESS and will be available on Union’s website at: www.uniongas.com. Union intends execute this transportation contract to increase security of supply through diversification, maintain liquidity at Dawn, ensure competitive energy prices for its customers and create supply competition and opportunities for all Ontario consumers. It will provide Ontario with a direct connection to the Appalachian region of the U.S. Northeast which has emerged as the single largest and fastest growing production region of natural gas in North America. 134 Union signed a Precedent Agreement with the intention of entering into a long-term (15- year) contract with NEXUS for 150,000 Dth/d (158,258 GJ/d) of transportation capacity with an expected total cost of approximately $715 million. Based on landed cost analysis Union estimates potential gas cost savings of over $700 million over the term of the contract. As noted in the attached evidence, Union must waive or satisfy the condition precedent of obtaining Board approval by October 1, 2015. If approval is not received, Union will not commit to the NEXUS capacity. Please contact me at (519) 436-5473 if you have any questions or wish to discuss this submission in more detail. Yours truly, [Original signed by] Karen Hockin Manager, Regulatory Initiatives c.c.: Charles Keizer, Torys Mark Kitchen, Union Gas EB-2014-0271 Intervenors 135 Filed: 2015-05-28 EB-2015-0166 ONTARIO ENERGY BOARD IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Schedule B) s.36; AND IN THE MATTER OF an Application by Union Gas Limited for an order or orders pre- approving the cost consequences associated with one long-term natural gas transportation contract. APPLICATION 1. Union Gas Limited (“Union”) is a business corporation incorporated under the laws of the province of Ontario, with its head office in the Municipality of Chatham-Kent. 2. Union conducts both an integrated natural gas utility business that combines the operations of distributing, transmitting and storing natural gas, and non-utility storage and Liquefied Natural Gas business within the meaning of the Ontario Energy Board Act, 1998. 3. In accordance with the Filing Guidelines for Pre-Approval of Long-Term Natural Gas Supply and/or Upstream Transportation Contracts, issued by the Ontario Energy Board (the “Board”) in EB-2008-0280, Union is seeking pre-approval of the cost consequences associated with one long-term gas transportation contract. 4. Union has entered into an agreement, subject to certain conditions precedent, to contract for long-term transportation capacity with the NEXUS Gas Transmission (“NEXUS”) pipeline commencing November 1, 2017. 5. To support development of the NEXUS project, Union signed a Precedent Agreement (“PA”) with the intention of entering into a long-term (15-year) contract with NEXUS for 150,000 Dth/d (158,258 GJ/d) of transportation capacity with an expected total cost of approximately $715 million. Based on assumed values for the landed cost analysis and 136 Filed: 2015-05-28 EB-2015-0166 displaced volumes on Alliance/Vector and TransCanada paths, Union estimates potential gas cost savings of over $700 million over the term of the contract compared to current contracted supplies. 6. The NEXUS project will transport growing supplies of Appalachian shale gas, including Marcellus and Utica shale gas production, to consumers in Ohio, Michigan, and ultimately the Dawn Hub in Ontario, Canada. 7. Union’s obligations under the PA include supporting the project timelines by receiving required approvals in a timely fashion, including this application for contract pre- approval. The date by which Union must waive or satisfy this condition precedent is October 1, 2015. 8. Union hereby applies for an order or orders, pursuant to section 36 of the Act, pre- approving the costs associated with the NEXUS contract. Without such pre-approval, Union will not commit to the NEXUS capacity. 9. Union also applies to the Board for such interim orders or orders approving interim rates or other charges and accounting orders as may from time to time appear appropriate or necessary. 10. Union further applies to the Board for all necessary orders and directions concerning pre- hearing and hearing procedures for the determination of this application. 11. This application is supported by written evidence. This evidence may be amended from time to time as required by the Board, or as circumstances may require. 137 Filed: 2015-05-28 EB-2015-0166 12. The persons affected by this application are the customers resident or located in the municipalities, police villages and Indian reserves served by Union, together with those to whom Union sells gas, or on whose behalf Union distributes, transmits or stores gas. It is impractical to set out in this application the names and addresses of such persons because they are too numerous. 13. The address of service for Union is: Union Gas Limited P.O. Box 2001 50 Keil Drive North Chatham, Ontario N7M 5M1 Attention: Karen Hockin Manager, Regulatory Initiatives Telephone: (519) 436-5473 Fax: (519) 436-4641 138 Filed: 2015-05-28 EB-2015-0166 Exhibit A NEXUS CONTRACT PRE-APPROVAL DRAFT EVIDENCE TABLE OF CONTENTS PAGE 1. EXECUTIVE SUMMARY 1 2. INTRODUCTION AND BACKGROUND 6 3. THE NEXUS PROJECT 14 4. THE NEED FOR THE NEXUS PROJECT 18 5. BENEFITS OF THE NEXUS PROJECT 26 6. THE NEXUS AGREEMENT 42 7. RISK MITIGATION OF THE NEXUS AGREEMENT 46 8. SUMMARY 53 Schedule 1 – The NEXUS Agreement Schedule 2 – OEB Template for Contract Pre-Approval Schedule 3 – Sussex Market Study Report Schedule 4 – JANUARY 2014 Landed Cost Analysis Schedule 5 – JANUARY 2015 Landed Cost Analysis Schedule 6 – Union Gas System Overview 139 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 1 of 54 1. EXECUTIVE SUMMARY 1 The purpose of this evidence is to request pre-approval of the cost consequences of a long-term 2 transportation contact in accordance with the filing guidelines for Pre-Approval of Long-term 3 Natural Gas Supply and/or Upstream Transportation Contracts (the “Guidelines”), issued by the 4 Board in EB 2008-02801. 5 6 Union Gas Limited (“Union”) has entered into an agreement to contract, subject to certain 7 conditions precedent, for long-term transportation capacity with the NEXUS Gas Transmission 8 (“NEXUS”) Pipeline commencing November 1, 2017. This contract will increase security of 9 supply through diversification, maintain liquidity2 at Dawn, ensure competitive energy prices for 10 its customers and create supply competition and opportunities for all Ontario consumers. The 11 NEXUS project is designed to transport supplies of Appalachian shale gas production, including 12 Marcellus and Utica shale gas production, from the single largest and fastest growing supply 13 basin in North America to customers in Ohio, Michigan, and ultimately the Dawn Hub in 14 Ontario, Canada; creating a direct connection from the largest source of natural gas on the 15 continent to Ontario. 16 17 DTE Energy and Spectra Energy Corp. are jointly developing the NEXUS project. To support 18 the development of this project, Union has signed a Precedent Agreement (“PA”) and obtained 19 1 See Schedule 2 for OEB prescribed filing guidelines 2 The liquidity of a hub such as Dawn is defined by the ease with which parties can physically buy or sell natural gas in the market. The most liquid hubs have the most significant competition, natural gas infrastructure (pipeline interconnects, and storage), and transparent pricing mechanisms. 140 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 2 of 54 anchor shipper status with the intention of entering into a long-term (15-year) contract with 1 NEXUS. Anchor shipper is a common term referring to large shippers that participate in pipeline 2 infrastructure projects, such as NEXUS, to allow them to proceed. The large volume, long term 3 commitments made by the anchor shipper ensure that significant demands exist for the capacity 4 and revenues will be guaranteed for the period of time required to justify the project. The 5 Affiliate Relationship Code (“ARC”) does not apply to the relationship between Union Gas and 6 NEXUS because NEXUS is a 50-50 partnership between DTE Energy and Spectra Energy Corp 7 where neither DTE nor Spectra have control. 8 9 Union has reviewed Filing Guidelines for the Pre-Approval of Long-Term Natural Gas Supply 10 and/or Upstream Transportation Contracts, EB-2008-0280, and it is Union’s view that the 11 Guidelines apply to the NEXUS contract. The contract is significant in that it ties new supply 12 basins to Ontario, is long term in nature, does not represent day-to-day contracting in Union’s 13 portfolio, and provides significant benefits to Union’s customers and all of Ontario. This is the 14 first time since the Alliance and Vector pipeline project in 2000 that Union has made a 15 comparable commitment to a major pipeline project that would ultimately bring substantial new 16 supplies to Dawn. 17 141 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 3 of 54 Specifically, the Guidelines apply because: 1 • The contract is a long-term commitment that is required to support the development of 2 new greenfield natural gas infrastructure that will directly link Ontario and more 3 specifically, Dawn, to new natural gas supply basins in the Appalachian region. 4 5 • The long-term contract requires a substantial financial commitment by Union Gas. The 6 contracted volume of 150,000 Dth/d (158,258 GJ/d) of transportation capacity for 15 7 years will result in a total cost commitment estimated to be approximately $715 million. 8 9 As a major natural gas utility in Ontario, Union must encourage and support new infrastructure 10 projects such as NEXUS to connect and bring new supplies to Ontario. The Board has previously 11 recognized the role that an LDC plays in encouraging these new, large-scale infrastructure 12 projects: 13 “The Board recognized that the enrolment of regulated utilities for such long term 14 arrangements would be a necessary and desirable element in new infrastructure 15 development.”3 16 17 Union has entered into a long-term commitment (subject to certain conditions precedent in 18 Schedule 1 Precedent Agreement) with NEXUS for a significant volume. Given the financial 19 obligations resulting from the commitment, Union is requesting contract pre-approval. The 20 3 EB-2010-0300/EB-2010-0333 Decision and Order, page 7 142 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 4 of 54 Board has recognized the need for utilities to obtain contract pre-approval in this situation, 1 stating that: 2 3 “…regulated utilities whose sourcing decisions are typically and conventionally subject 4 to ex post facto prudence review would be reluctant or unwilling to accept very 5 significant long-term commitments without assurances of costs recovery. The result 6 would be a frustration of demonstrably needed new natural gas infrastructure.”4 7 8 Without the assurance provided by contract pre-approval, Union will not commit to a contract of 9 this magnitude. In a scenario where Union was unable to obtain contract pre-approval and not 10 commit as an anchor shipper to the contract as proposed, there is significant risk that producers, 11 who are also anchor shippers on the NEXUS project, may interpret Union’s action as a lack of 12 endorsement of Dawn as an important market hub and an indication of a weak market for their 13 supplies at Dawn. If these producers were to reconsider their participation on the project, or their 14 plans to bring supplies to Dawn, there is significant risk that the NEXUS project would not 15 proceed as planned. 16 17 Attracting more supplies to Dawn is critical to maintain Dawn’s liquidity and overall 18 competitiveness in the surrounding market. Given declining Vector volumes and the decrease in 19 4 EB-2010-0300/EB-2010-0333 Decision and Order, page 7 143 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 5 of 54 natural gas flowing from the WCSB to the Ontario market5 as well as the increasing take away 1 capacity from Dawn, Ontario needs supply projects from the growing Appalachian Basin, such 2 as NEXUS, to maintain supply and liquidity. Were these NEXUS supplies not to arrive at 3 Dawn, this would eliminate the benefits that the pipeline would bring to Union’s customers, the 4 Dawn Hub, and the rest of Ontario. 5 6 Union’s obligations under the PA include supporting the project timelines by receiving required 7 approvals in a timely fashion, including this application for contract pre-approval. The date by 8 which Union must waive or satisfy this condition precedent is October 1, 2015. 9 5 Schedule 3 - NEXUS Market Study Report, Sussex Economic Advisors, LLC, page 3 144 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 6 of 54 2. INTRODUCTION AND BACKGROUND 1 North American natural gas markets are undergoing a dramatic change in supply dynamics, as 2 described in the Sussex Market Study Report included in this filing at Schedule 3. Union has 3 also filed evidence addressing the substantive changes in North American natural gas supply in 4 numerous prior applications including EB-2012-04336 and EB-2013-00747, EB-2014-01458, as 5 well as EB-2014-02619. 6 7 North American natural gas markets have experienced and are expected to continue to 8 experience dramatic change. Production from conventional, mature North American natural gas 9 basins is in decline while production from shale gas formations continues to exceed expectations. 10 While natural gas reserves still exist in mature natural gas basins, the economics of natural gas 11 production favour shale gas and tight gas formations. 12 13 Natural gas utilities, through their planning process, look to diversify their natural gas supply 14 portfolio and seek secure, reliable and reasonably priced natural gas. The shift in natural gas 15 supply portfolios by eastern LDCs reflects the changes in the North American natural gas supply 16 and transportation markets. Market participants are re-balancing with new supply sources and 17 replacing long-haul transportation contracts with short-haul transportation contracts. 18 6 EB-2012-0433, Parkway West Project, Exhibit A, Tab 4. 7 EB-2013-0074, Brantford to Kirkwall Pipeline/Parkway D Compressor, Exhibit A, Tab 4. 8 EB-2014-0145, 2013 Deferral Disposition, Exhibit A, Tab 4, Appendix B and Appendix C. 9 EB-2014-0261, Dawn Parkway 2016 Expansion Project, Exhibit A, Tab 5 145 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 7 of 54 Union has taken considerable steps to meet market demands and create the ability to transport 1 new and more affordable incremental natural gas volumes from Dawn to points east and north. 2 This has included the necessary facilities required to allow for supply diversification for Union’s 3 customers in Union North as well as those of Enbridge and Gaz Metro through access to supplies 4 at or upstream of the Dawn Hub. It is essential that, as takeaway capacity from Dawn is 5 increased, the supply coming into Dawn is also enhanced. Through NEXUS, this goal will be 6 achieved. Expansions planned for 2015 and 2016 will increase the Dawn Parkway system 7 capacity by 875 TJ/d (433 TJ/d in 201510, 443 TJ/d in 201611) and further growth is planned for 8 2017. This incremental throughput capacity drives the need for additional supply at Dawn. 9 10 The Appalachian region of the U.S. Northeast as shown in Figure 2-1 is home to the Utica and 11 Marcellus shale formations in Ohio, Pennsylvania, and West Virginia which have emerged as the 12 single largest and fastest growing production region of natural gas in North America. 13 10 EB-2013-0074 Exhibit A, Tab 8, page 6, Figure 8-3 11 EB-2016-0261 Exhibit A, Tab 8, page 10, Table 8-2 146 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 8 of 54 Figure 2-1 The Appalachian Shale Region (Source: Schedule 3 - Sussex Economic Advisors Market Study Report) This basin, although still in its infancy, has grown from essentially producing almost no supply 1 as recent as 2008 to exceeding the Western Canadian Sedimentary Basin (“WCSB”) production 2 levels by the end of 2014 as shown in Figure 2-2. This region is expected to continue to grow 3 and produce almost 40 PJ/d by 203512 Ontario is very fortunate to be in close proximity to this 4 supply basin, and yet Ontario does not currently have access to a direct pipeline route from this 5 basin to Dawn. 6 12 Schedule 3 - NEXUS Market Study Report, Sussex Economic Advisors, LLC, page 32 147 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 9 of 54 Figure 2-2 1 Growth of Appalachian Shale Production vs. WCSB Production 2 3 (Source: Schedule 3 - Sussex Economic Advisors Market Study Report) 4 5 The majority of Ontario’s natural gas supply needs for the past five decades have been met 6 through the large resources of the WCSB. Natural gas from the WCSB was supplied to Ontario 7 on the TransCanada Mainline either from Empress across northern Ontario or from pipelines 8 passing through the northern US and eventually back into Canada to Dawn. In parallel with the 9 emergence of shale gas supplies, there has been a pattern of declining flows from conventional 10 western supply sources, including the WCSB, and corresponding de-contracting of long-haul 11 148 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 10 of 54 transportation from these sources13. Directionally, these changes result in less supply arriving at 1 Dawn through existing pipeline infrastructure and have impacted the diversity and liquidity of 2 the Dawn Hub. The continuation of these flow changes represents a significant risk to all natural 3 gas consumers and market participants in Ontario. 4 5 Without access to the abundant and affordable supplies in the Utica and Marcellus shale basins, 6 gas prices at Dawn, and therefore energy prices in Ontario, would be disconnected from the 7 continent-wide lower costs resulting from these emerging supplies. In other words, the cost of 8 energy in Ontario would not benefit from the moderating effect of the low-priced natural gas in 9 the Appalachian Basin available to neighbouring areas. 10 11 By Union entering into a firm transportation contract, and therefore supporting the NEXUS 12 project and its ability to connect and deliver incremental supplies into Ontario, Union customers 13 and all of Ontario will see multiple significant benefits including: 14 15 • Providing a direct pipeline route between Appalachian shale basins and Ontario that will 16 benefit Union’s sales service customers by significantly increasing the security and 17 diversity of Union’s transportation and supply portfolio. Access to these basins will 18 greatly reduce Union’s reliance on WCSB supplies, and will offset the declining volumes 19 13 The financial impact of various parties de-contracting TransCanada long-haul transportation has already been contemplated in the NEB RH-001-2014 settlement agreement. The NEXUS project will not have an incremental impact to the TransCanada Mainline. 149 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 11 of 54 arriving at Dawn from these traditional western sources. The NEXUS capacity will allow 1 Union to displace WCSB supplies that are becoming less economic over time. WCSB 2 basis differentials, once they are combined with the cost of transportation to Ontario, 3 have become less favourable than Appalachian supplies due to rise in demands in 4 Western Canada and the abundance of natural gas supplies located in the Appalachian 5 shale region. Additional diversity will allow Union to have options as to where it sources 6 natural gas supplies in future market shifts or as prices between supply basins change. 7 8 Specifically, the NEXUS capacity will; 9 a) Replace an Alliance Pipelines contract that is expiring in the portfolio for 10 Union South customers, and 11 b) Replace TransCanada long-haul transportation contracts serving the Union 12 North and South. 13 These changes to Union’s contracted capacity were contemplated and approved in the 14 TransCanada Settlement Agreement RH-001-2014. 15 16 • Introducing new pipeline infrastructure and enhancing supply at Dawn will also benefit 17 Ontario and other market participants at Dawn, such as Quebec and U.S. northeast, by 18 adding another transportation option and supporting the liquidity of the Dawn Hub. 19 Dawn liquidity is supported by adding additional physical supplies, as well as additional 20 active market participants. The Board has previously concluded that it “…is in the public 21 150 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 12 of 54 interest to maintain and enhance the depth and liquidity of the market at the Dawn Hub as 1 a means of facilitating competition”14. This will be of benefit to not only Union’s sales 2 service customers as noted above, but all direct purchase customers, including large 3 industrial and power customers who rely on arranging their natural gas supply at the 4 Dawn Hub. 5 6 • Connecting Ontario to growing, affordably priced Appalachian shale gas will help to 7 lower natural gas prices and enhance energy pricing stability in Ontario. Reduced price 8 and reduced long term price volatility is a major benefit to all market participants, 9 including power generation customers who rely on supply arrangements made at the 10 Dawn Hub. 11 12 As part of considering a contractual commitment to the NEXUS project, Union considered the 13 needs of both its sales service and direct purchase customers, as well as the rest of Ontario’s 14 natural gas market participants. This evidence will outline the fact that the increased security 15 and diversity of supply that the NEXUS pipeline would bring to Dawn is critical to shaping 16 Ontario’s energy future. 17 18 Union has been negotiating a contractual commitment to the NEXUS project since the initial 19 open season in 2012. This evidence will outline the contract analysis and risk mitigation 20 activities that have been performed to date. In addition to activities related to the transportation 21 14 EB-2005-0551 NGEIR Decision with Reasons, page 45 151 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 13 of 54 contract, Union has started working on gas supply arrangements with producers in the 1 Appalachian shale region. This has included participating in ongoing discussions with potential 2 suppliers, educating them on the Ontario market dynamics, negotiating North American Energy 3 Standards Board (“NAESB”) base agreements, and investigating supply options through an 4 Expression of Interest and subsequent Request for Proposal (“RFP”) process. 5 6 In summary, the resulting benefits of NEXUS are extensive, and will not only apply to Union’s 7 customers for which it is responsible to procure supply and transportation, but to all natural gas 8 market participants in Ontario including Direct Purchase and Power Generation customers, and 9 other LDCs. 10 152 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 14 of 54 3. THE NEXUS PROJECT 1 Project Description 2 The NEXUS project will transport growing supplies of Appalachian shale gas including 3 Marcellus and Utica shale gas production to customers in the U.S. Midwest, including Ohio and 4 Michigan, and to customers in Ontario, Canada including the Dawn Hub. DTE Energy and 5 Spectra Energy Corp. are jointly developing the NEXUS project. 6 7 The proposed path for the NEXUS project will consist of two components, the first being a 8 newly-constructed greenfield pipeline and the second being the use of existing infrastructure in 9 Ontario and Michigan. The greenfield portion of the pipeline will extend approximately 250 10 miles (400 kilometers) from the Utica/Marcellus receipt points in eastern Ohio to interconnects 11 with the existing DTE/Michcon (“DTE”) pipeline grid at Willow Run in southeastern Michigan. 12 13 For most shippers, the NEXUS path will then utilize capacity on the DTE and Vector pipeline 14 systems from Willow Run to the Dawn Hub in Ontario, as outlined in Figure 3-1. The DTE and 15 Vector facilities that NEXUS will utilize will likely require reinforcement, but will allow 16 NEXUS to connect supplies to Dawn without the need for greenfield infrastructure to be 17 constructed in these areas. The result is an efficient use of existing pipeline infrastructure. 18 153 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 15 of 54 Figure 3-1 1 Proposed Path of the NEXUS Pipeline 2 3 (Source: NEXUS Gas Transmission) 4 Although most of the capacity held by shippers will flow on the greenfield portion of NEXUS to 5 the facilities of DTE, Vector, and then to Dawn, Union’s arrangement will take a slightly 6 different path as shown in Figure 3-2. For Union, the contracted volumes will still flow on the 7 same greenfield portion of NEXUS from Ohio to DTE at Willow Run. However, instead of 8 supplies then flowing on DTE facilities to Vector, they will flow on the DTE system to the 9 International Border and St. Clair Pipelines to reach the Union Gas facilities. This path offers an 10 advantage as it will allow the use of St. Clair to Dawn facilities that already exist and reduce the 11 requirement for NEXUS to construct new pipeline infrastructure in Ontario. 12 154 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 16 of 54 Figure 3-2 1 NEXUS Pipeline Paths to Ontario/Dawn 2 3 4 (Source: Union Gas) 5 The NEXUS project will be capable of transporting approximately 1.5 billion cubic feet per day 6 (Bcf/d) of natural gas away from the Utica/Marcellus to markets in Ohio, Michigan and Ontario. 7 The anticipated in-service date for the NEXUS pipeline project is November 1, 2017. 8 155 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 17 of 54 The shipper support of the NEXUS project is a combination of demand-pull15 market 1 participants such as end-use LDCs (i.e. Union, Enbridge and DTE), and supply-push16 market 2 participants such as the Appalachian suppliers (i.e. Chesapeake, Consol and Noble). Having both 3 types of entities supporting the project is a significant advantage as it enhances the likelihood 4 that the project will succeed. 5 6 There is significant market competition for the supply available from the growing Utica and 7 Marcellus shale basins. Numerous projects are already in progress to take these supplies to other 8 markets, including the Gulf Coast, U.S. Midwest, U.S. Northeast, and the U.S. Southeast. It is 9 critical for Union and Ontario consumers that contractual commitments to the NEXUS project be 10 made and supported to ensure Ontario and those market participants that access supplies at 11 Dawn, gain access to these supplies in a similar fashion to the other markets in the eastern half of 12 North America. This will ensure Ontario and Dawn stay well connected to new affordable and 13 competitively priced North American supplies. 14 15 The Kensington receipt point will be the outlet of a major gas processing plant in the Utica basin 16 in South East Ohio and is the starting point for the greenfield portion of the NEXUS project. 17 Given the immediate supply available, as well as the multiple additional upstream connections 18 into the NEXUS pipeline in that area, there will be sufficient supply and liquidity at this point. 19 15 “Demand Pull” entities located within a market area (i.e. LDCs, end use marketers, large customers) attract natural gas to a market by procuring transportation from a supply producing area in order to access suppliers. 16 “Supply Push” entities located within a supply producing region (i.e. natural gas producers, marketers, traders) seek out markets to sell their supply by procuring pipeline access to a market area in order to sell gas to market participants. 156 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 18 of 54 4. THE NEED FOR THE NEXUS PROJECT 1 When the NEXUS project was announced in 2012, it was the first greenfield infrastructure 2 project proposed to bring significant, incremental supplies to Ontario since the Alliance and 3 Vector pipelines in 2000. Union has limited room within its upstream transportation portfolio to 4 make major commitments to a pipeline project. As a result, Union needs to carefully evaluate 5 and assess its ability to make a contractual commitment for new pipeline capacity in situations 6 where support is required to ensure new pipeline capacity gets built to connect new supplies to 7 Ontario and the Dawn Hub. Some projects require the collective support of numerous LDCs 8 while others may be supported by producers located in the respective supply basin. 9 10 At the time of the project announcement, Union recognized NEXUS as an opportunity to benefit 11 from the changing North American supply dynamics and to: 12 a) replace declining flows from the WCSB by gaining access to abundant, economic 13 Appalachian shale supplies, 14 b) increase the diversity and security of supply for Union’s customers, 15 c) reduce price volatility of the Dawn Hub, and 16 d) bring major benefits to the rest of Ontario. 17 18 This fundamental shift toward Appalachian shale supplies in the U.S. northeast is supported by 19 the Sussex Report provided in Schedule 3. As it states at page 2, “The Canadian and U.S. natural 20 gas markets are evolving to accommodate large, emerging sources of natural gas in the U.S. 21 157 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 19 of 54 Northeast and Mid-Atlantic (i.e., Marcellus and Utica shale), which is displacing more traditional 1 sources of natural gas (e.g., Western Canada) serving eastern markets in the U.S. and Canada”. 2 The Needs of Union’s Customers 3 When managing its transportation portfolio and analyzing potential pipeline paths and supply 4 sources, including the NEXUS project, Union does so in the context of the Gas Supply Planning 5 Principles17. These principles ensure customers consistently receive secure, diverse natural gas 6 supply at a prudently incurred cost and minimal risk. They also help Union to determine 7 whether changes are required to the current transportation and supply portfolios. The principles 8 are as follows: 9 1. Ensure secure and reliable natural gas supply to Union’s service territory; 10 2. Minimize risk by diversifying contract terms, supply basins and upstream pipelines; 11 3. Encourage new sources of supply as well as new infrastructure to Union’s service 12 territory; 13 4. Meet planned design day and seasonal gas delivery requirements; and, 14 5. Deliver natural gas to various receipt points on Union’s system to maintain system 15 integrity. 16 17 The Gas Supply Planning Principles have been presented to and accepted by the Board on many occasions. Most recently these principles were presented to the Board in Union’s 2013 Rate Case (EB-2011-0210), the 2012 Deferral Disposition Proceeding (EB-2013-0109), and the Parkway Projects Proceeding (EB-2012-0433/EB-2013-0074). 158 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 20 of 54 As demonstrated in Figure 4-1 below, there is currently a lack of pipeline and supply diversity in 1 the 2015 Union North sales service and bundled direct purchase portfolio due to its 100% 2 reliance on WCSB supplies delivered to Ontario via TransCanada long-haul transportation. This 3 lack of diversity introduces risks around security of supply, and leaves customers in Union North 4 exposed to the pricing characteristics and potential volatility of a single basin. With the 5 declining flows from traditional WCSB sources, Union recognized the need to introduce new, 6 secure, and affordable supplies that are in close proximity into the northern portfolio. 7 Figure 4-1 January 2015 North Portfolio In order to address this lack of diversity in the north, Union has worked to facilitate an increased 8 diversity of supply options for these customers in future years through the TransCanada 9 Settlement Agreement by converting TransCanada long-haul transportation from Empress into 10 short-haul transportation from Dawn. Once these conversions are completed, customers in 11 Union North will have the ability to access supplies at Dawn, including those from upstream 12 transportation projects such as NEXUS. These changes are contingent upon significant 13 159 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 21 of 54 infrastructure investments by TransCanada, Enbridge, and Union in the Dawn to Maple corridor 1 as discussed in recent regulatory forums including Union’s Dawn Parkway 2016 Expansion 2 evidence EB-2014-0261. To facilitate and take advantage of Union North having access to 3 Dawn, Union recognized the importance of supporting the NEXUS project to introduce growing 4 Appalachian supplies into Dawn and ultimately into the northern portfolio. 5 6 As can be seen in Figure 4-2, the Union South portfolio is currently much more diverse than 7 Union North; however there is still a significant reliance on supplies directly from the WCSB. 8 Approximately 36% of Union South is sourced from the WCSB, with an additional 31% sourced 9 from Chicago. As the supplies arriving from these traditional western sources decline, Union 10 needs to find replacement capacity upstream of Dawn to deliver new gas supplies and ensure the 11 continued liquidity and diversity at the Dawn Hub. 12 Figure 4-2 January 2015 South Portfolio 160 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 22 of 54 1 To further enhance diversity, Union determined the need for a direct pipeline path that would 2 connect Dawn to the growing Appalachian shale supplies. This would allow the Union South 3 portfolio to further diversify and introduce additional security and exposure to more stable 4 pricing in the Appalachian shale region. 5 The Needs of Ontario 6 As mentioned previously, North American natural gas markets are undergoing a dramatic change 7 in supply dynamics. This is supported by the Sussex Market Study Report in Schedule 3, and 8 has been discussed in numerous previous filings by Union including EB-2012-043318 and EB-9 2013-007419, EB-2014-014520, as well as EB-2014-026121. 10 The Appalachian region of the U.S. Northeast has emerged as the single largest producing region 11 of natural gas in North America. The basin is estimated to grow to production levels of 40 PJ/d 12 by 2035, and will exceed the entire WCSB at its peak production of 18 PJ/d by the end of 2015. 13 Unfortunately, there is currently no direct pipeline route into Dawn from the Appalachian shale 14 region. The NEXUS project, once completed, will provide that connection and help to enhance 15 security of supply through diversification, for all Ontario market participants. 16 18 EB-2012-0433, Parkway West Project, Exhibit A, Tab 4. 19 EB-2013-0074, Brantford to Kirkwall Pipeline/Parkway D Compressor, Exhibit A, Tab 4. 20 EB-2014-0145, 2013 Deferral Disposition, Exhibit A, Tab 4, Appendix B and Appendix C. 21 EB-2014-0261, Dawn Parkway 2016 Expansion Project, Exhibit A, Tab 5. 161 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 23 of 54 The Board has previously recognized the importance of maintaining the liquidity of Dawn, 1 stating that “The development of the Dawn Hub has brought substantial benefits to consumers in 2 Ontario and to other market participants” and also that “it is in the public interest to maintain and 3 enhance the depth and liquidity of the market at the Dawn Hub as a means of facilitating 4 competition”.22 5 In its Decision regarding Union’s Parkway Projects and Enbridge’s GTA Project, the Board 6 reiterated this position: “It is the Board’s view that while uncertainties exist for all supply 7 sources in terms of future cost and availability, it is widely acknowledged, including by this 8 Board in prior decisions, that supply diversification enhances reliability and brings cost benefits 9 through enhanced competition” 23 10 11 Ontario gas-fired generation has increased demand for natural gas. As Ontario is projected to 12 rely more heavily on natural gas-fired power generation while Ontario undergoes the 13 refurbishment of its nuclear facilities24, it is important for Ontario to have access to affordably-14 priced natural gas supplies in order to secure its energy future. Having new greenfield supply 15 options available will enhance and help maintain diversity and security of supplies to the Dawn 16 Hub, reduce natural gas prices and volatility and bring benefits to all of Ontario. 17 22 EB-2005-0551, Decision November 7, 2006, page 44, 45 23 EB -2012-0451/EB-2012-0433/EB-2013-0074 Decision January 30, 2014 pp. 23-24 24 Schedule 3 – NEXUS Market Study Report, Sussex Economic Advisors, LLC, page 38, 39 162 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 24 of 54 Analysis of Alternative Pipeline Projects 1 When Union bid into the NEXUS Open Season in 2012, it was the only project at the time that 2 was planning to build a greenfield, direct pipeline path from the Marcellus and Utica shale basins 3 to bring significant incremental supplies directly into Dawn and Ontario. As this was the first 4 such project since the Alliance/Vector pipeline projects in 2000, Union believed it was critical to 5 encourage, support, and commit to the NEXUS project to ensure this incremental supply and 6 diversity was connected to the Dawn Hub. 7 In June 2014, Energy Transfer Partners (“ETP”) announced the Rover Pipeline (“Rover”) project 8 and held their first open season. In conjunction with the open season, ETP announced it had 9 signed long-term agreements with multiple shippers to support the construction of the pipeline. 10 These commitments were from three large producers who were operating in the Appalachian 11 shale region. Union is not aware of any commitments on Rover from end users in Ontario. 12 13 The toll being offered to shippers on Rover was very similar to that of NEXUS. However, the 14 contracted volumes required to obtain a Most Favored Nations (“MFN”) clause were much 15 higher than NEXUS. As Rover offered no incentives beyond what Union had already obtained 16 with NEXUS, and the upstream portfolio could not absorb another significant long-term 17 commitment, Union determined that it would not participate in the Rover Open Season. The 18 existence of both NEXUS and Rover pipeline projects highlights the requirement for additional 19 163 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 25 of 54 infrastructure connecting Appalachian shale basins to Dawn and is positive for Ontario to the 1 extent that both projects proceed as planned. 2 3 Over time, numerous other pipeline projects have been proposed that are expansions and 4 reversals of existing, mature pipeline infrastructure. These include TransCanada’s Niagara to 5 Kirkwall pipeline, ANR pipelines, and Tallgrass Energy’s REX pipeline. Union did in fact 6 commit to TransCanada’s Niagara to Kirkwall capacity and commenced flow from Niagara in 7 2012. 8 In its role as an LDC, Union believed it to be both prudent and required to ensure the ability to 9 make large, long-term commitments within its portfolio for a project that would result in new 10 infrastructure that would make a significant difference to the future of Ontario and all natural gas 11 consumers. Union will consider these additional upstream transportation contracting options 12 whenever Union is looking for incremental supply within its portfolio in the future. 13 164 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 26 of 54 5. BENEFITS OF THE NEXUS PROJECT 1 When determining whether to support a pipeline project with a long-term commitment for 2 significant volumes, Union considers whether the proposed project will make a significant 3 impact to Ontario in terms of increasing diversity and reliability of supply, and enhancing the 4 liquidity of the Dawn Hub. This, in turn, allows Union to ensure supply diversity in its role of 5 supplying gas to Ontario customers. 6 7 The NEXUS project offers a number of important benefits to both Union’s customers and the 8 rest of Ontario. This section of the evidence outlines the benefits from the NEXUS pipeline and 9 resulting access to Appalachian shale gas supplies. 10 Benefits to Union’s Customers 11 As demonstrated in Section 4, there is a need for increased diversity of supply for customers in 12 Union North and South due to the declining flows from traditional western sources. Union 13 determined that the NEXUS project was an opportunity to connect the fastest growing and 14 largest supply basin in North America to Dawn. Further, Union determined that this capacity 15 would have a very positive effect on increasing the level of diversity in its transportation and 16 supply portfolio. As stated by the Sussex Report, “By diversifying its natural gas supply basins, 17 the Ontario LDCs will increase the overall reliability of their portfolio and, therefore, service to 18 customers.”25 19 25 Schedule 3 – NEXUS Market Study Report, Sussex Economic Advisors, LLC, page 35 165 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 27 of 54 These benefits are further supported by the Sussex Report in Schedule 3. As it states, “The 1 NEXUS benefits (e.g., reliability, diversity, and price stability) increase the flexibility of the 2 Union and Enbridge natural gas supply portfolios; thus providing additional options to the 3 Ontario LDCs to manage natural gas supply and transportation costs, improve overall reliability, 4 and provide increased priced stability.”26 5 6 With the increased diversity of these new supplies and the replacement of the WCSB supplies 7 within the Union portfolio, there may also be expected gas cost savings. These potential savings, 8 which are described in the landed cost section, will help to make Ontario more competitive with 9 neighbouring jurisdictions. Exposure to the Appalachian basin will also provide benefits to the 10 overall stability of natural gas prices in Ontario. As stated in the Sussex Report, “direct access to 11 the Marcellus and Utica supply basins will provide the Ontario LDCs with increased price 12 diversity. Specifically, the Marcellus/Utica gas supply basins will have certain price signals and 13 price indices not previously accessed by the Ontario LDCs, thus increasing overall price 14 diversity and providing more stability with respect to natural gas costs for Ontario LDC 15 customers.”27 16 17 Union participated in a NEXUS non-binding open season which was held between October 15, 18 2012 and November 30, 2012. Union analyzed its future transportation requirements and chose 19 26 Schedule 3 – NEXUS Market Study Report, Sussex Economic Advisors, LLC, page 4 27 Schedule 3 – NEXUS Market Study Report, Sussex Economic Advisors, LLC, page 37 166 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 28 of 54 to bid for an amount of 150,000 Dth/d (158,258 GJ/d). This is the minimum volume required for 1 a party to qualify as an anchor shipper on the project. The project developers have offered 2 anchor shippers appropriate rate and rate-related incentives, including lower transportation rates 3 as compared to non-anchor shippers. Anchor shippers generally receive a rate that is $.015 to 4 $.03 US/Dth lower than other shippers. 5 6 Union negotiated a unique path for the NEXUS pipeline with supplies being transported to St. 7 Clair Pipelines at the International Border. Union will then utilize its own, existing facilities to 8 transport supplies to Dawn. 9 10 This capacity is intended to serve both the needs of customers in Union North and Union South, 11 and will replace long-term WCSB-sourced transportation contracts on Alliance and TransCanada 12 that are expiring within the portfolio. The transportation capacity will be allocated based on a 13 split of approximately 2/3 for Union South and 1/3 for Union North. 14 15 Once the TransCanada settlement facilities within the Parkway to Maple corridor are in service, 16 Union North will have direct access to Dawn for the very first time and will have the ability to 17 further enhance diversity through access to the NEXUS upstream transportation capacity. This 18 greatly diversifies the North’s reliance on WCSB supplies, and will allow Union North 19 customers to benefit from enhanced supply access and diversity of Dawn and the basins 20 connected to Dawn 21 167 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 29 of 54 The results of the added diversity can be seen in Figure 5-1 as reliance on WCSB supplies in the 1 Union North drops from 100% (as seen earlier in Figure 4-1) down to 48%. Increased diversity 2 includes the addition of 26% of the portfolio from Appalachian supplies facilitated through the 3 NEXUS pipeline. 4 Figure 5-1 January 2015 North Portfolio January 2018 Projected North Portfolio 168 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 30 of 54 The Union South portfolio will benefit from NEXUS capacity as upstream transportation 1 reductions on Alliance/Vector and TransCanada take place. By accessing a portion of the 2 NEXUS capacity, the Union South portfolio will benefit from additional diversity and the 3 potential for cost savings by introducing an abundant, affordably priced source of natural gas in 4 close proximity to Ontario. This increased diversity can be seen in Figure 5-2 below as 5 TransCanada WCSB supplies drop from 21% (as seen earlier in Figure 4-2) down to 3%, and the 6 portfolio would then source 30% from Appalachian shale basins. The diverse Union South 7 portfolio still has 23% sourced from Chicago, as well as 17% from Dawn, both of which would 8 include a level of supplies from the WCSB. 9 169 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 31 of 54 Figure 5-2 January 2015 South Portfolio November 2017 Projected South Portfolio Looking at the entire Union transportation portfolio together (i.e. Union North and Union South), 1 the NEXUS capacity will add Appalachian shale supplies and will reduce the overall reliance on 2 170 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 32 of 54 WCSB from 53% in January 2015 as shown in Figure 5-3, down to 19% in January 2018 as 1 shown in Figure 5-4. 2 Figure 5-3 January 2015 North/South Combined Portfolio Figure 5-4 Projected January 2018 North/South Combined Portfolio 171 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 33 of 54 The goal of achieving supply diversity has been supported in previous Board decisions. 1 Specifically, the Board has stated that “Supply diversity enhances security and has the tendency 2 to lower gas prices from what they would otherwise be if the market continued to rely on fewer 3 sources of supply.”28 Utica and Marcellus supplies will be transported through the new and 4 existing infrastructure and will have direct access to Dawn via a single pipeline provider. 5 Cost Recovery of St. Clair to Dawn Transportation from Sales Service Customers 6 Union is proposing to charge Union North and Union South sales service customers the Board-7 approved C1 St. Clair to Dawn transportation rate for the volumes transported from St. Clair to 8 Dawn. 9 10 In Union’s 2013 Board-approved cost allocation study, the cost associated with St. Clair to Dawn 11 transportation capacity are allocated to Union South in-franchise rate classes and ex-franchise 12 rate classes based on the design day demands of the Ojibway/St. Clair transmission system. The 13 costs allocated to Union South in-franchise rate classes are recovered from all customers in 14 delivery rates, while the costs allocated to ex-franchise rate classes (C1 and M16) are recovered 15 in transportation rates. 16 28 EB-2012-0433/EB-2013-0074 Decision January 30, 2014, page 29 172 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 34 of 54 Union’s 2013 Board-approved revenue forecast includes approximately $2.8 million in Storage 1 and Transportation (S&T) revenue associated with St. Clair to Dawn transportation service. This 2 revenue (less allocated costs) is included in revenue for ratemaking purposes. Delivery rates for 3 all customers are lower as a result of forecasted S&T revenue from St. Clair to Dawn. S&T 4 transportation revenue also forms part of utility earnings, which are subject to sharing with 5 ratepayers during Union’s 2014 to 2018 IRM term. 6 7 With Union North and Union South sales service customers utilizing the majority of the St. Clair 8 to Dawn transportation capacity effective November 1, 2017, Union will have less opportunity to 9 generate S&T revenue on this path. To offset the revenue already included in rates, and to 10 ensure there is no cross-subsidy between sales service customers and other customers, Union is 11 proposing to charge sales service customers for St. Clair to Dawn transportation service in a 12 manner consistent with how Union would charge other customers. Further, this results in the 13 same impact to sales service and bundled direct purchase customers under a scenario where 14 NEXUS would contract to St. Clair transportation service and then charge Union for the full 15 path. 16 17 Specifically, Union is proposing to charge Union North and Union South sales service customers 18 the Board-approved C1 St. Clair to Dawn transportation rate (approximately $0.035/GJ/day 19 currently). These charges will be treated as gas supply costs and recorded in the Union North 20 and Union South Purchased Gas Variance Accounts (“PGVA”’s). The costs will be recovered in 21 173 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 35 of 54 gas supply commodity rates, from sales service customers only, as part of Union’s QRAM 1 process. 2 3 Union estimates that the annual gas supply costs for sales service customers in 2018 associated 4 with St. Clair to Dawn transportation will be approximately $2.0 million (158,258 GJ/d x 5 $0.035/GJ x 365 days). St. Clair to Dawn transportation costs have also been included in the 6 landed cost analysis described in Schedule 4. 7 8 In summary, by executing a firm transportation agreement, and therefore supporting the NEXUS 9 project, Union will satisfy all of its Gas Supply Planning principles as follows: 10 1. Ensuring secure and reliable supply by accessing the most prolific supply basin in North 11 America at a prudently-incurred cost 12 2. Committing to the NEXUS pipeline, and working with Appalachian suppliers to 13 understand the Ontario market and the benefits of Dawn, will help to ensure the new 14 supply is attracted to Ontario and the required infrastructure gets constructed 15 3. Replacing existing firm transportation capacity with NEXUS capacity and accessing new 16 secure supplies will assist Union in meeting design day and seasonal gas needs 17 174 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 36 of 54 Benefits to Ontario/Market Participants accessing supply at Dawn 1 The depth of liquidity of the Dawn Hub provides value to all Ontario customers by way of 2 competitive natural gas commodity prices and attracting natural gas supply to Ontario. Union 3 secures the supply and upstream transportation capacity required for approximately 35% of the 4 volume of its total in-franchise distribution system, while the remaining 65% is supplied by 5 direct purchase market participants. This includes most large, medium and small industrial 6 plants, large commercial operations and natural gas electricity generators. From a 7 competitiveness perspective, it is critical for these customers to have access to a robust and liquid 8 Dawn Hub with many sellers from which to access supply. Accessing this new supply will be 9 essential in providing diversity of supply, enhancing liquidity at Dawn and creating the 10 opportunity for affordable energy prices to fuel Ontario’s economic competitiveness. By 11 providing access to Appalachian shale gas, it will also introduce additional stability to natural 12 gas prices in Ontario and present an additional, economic supply option to the benefit of all 13 Ontario natural gas customers. 14 15 As mentioned previously, a subset of the end-use customers that purchase their natural gas 16 supply at Dawn include the natural gas fired power generators. This market relies on a healthy 17 and liquid Dawn Hub. Most power generation contracts are commercially structured based on 18 the price of natural gas at Dawn for a large portion of Ontario’s electricity production capacity. 19 These generators have access to unique services at Dawn that provide the necessary flexibility to 20 175 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 37 of 54 effectively operate their facilities in the hourly priced electricity market that is dispatched every 1 five minutes. 2 3 The NEXUS project provides the opportunity to introduce new infrastructure that will provide 4 much-needed access to Appalachian shale supplies and will deliver these supplies into Dawn, 5 helping to maintain and grow the diversity and liquidity of the Dawn Hub. This will also allow 6 Ontario to diversify its current reliance on WCSB as a source of natural gas, which is a 7 significant benefit to all natural gas consumers in Ontario. As indicated above, and in the Sussex 8 Market Study in Schedule 3, the additional transportation infrastructure and supply diversity will 9 benefit all market participants in Ontario, including Direct Purchase and Power Generation 10 customers. 11 Sussex Economic Advisors Market Report 12 Union Gas and Enbridge Gas Distribution, Inc. (“Enbridge”) retained Sussex Economic 13 Advisors, LLC (“Sussex”) to perform an independent evaluation of the NEXUS project and its 14 benefits to Ontario natural gas consumers found at Schedule 3. 15 16 The main conclusions of the Sussex report are: 17 • The NEXUS project will provide reliability and price stability benefits to Ontario LDCs 18 by introducing transportation and supply diversity and access to low-priced natural gas. 19 176 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 38 of 54 • Other Ontario natural gas market participants (e.g. power generation and direct purchase 1 customers) will also benefit from the increased diversity and resulting liquidity at Dawn. 2 • Sussex reviewed the landed costs analysis performed by Union and, given their 3 experience and expertise, believe that although it will be subject to change over time, it is 4 a reasonable analysis that complements the many other benefits described. 5 • As a result, Sussex concludes that the NEXUS project is a reasonable contracting 6 decision and will result in numerous qualitative and quantitative benefits to Ontario. 7 Landed Costs 8 Union has performed two distinct landed cost analyses – one in January 2014 prior to signing the 9 initial PA with NEXUS, and a second in January 2015 prior to signing a renegotiated PA with 10 updated terms. Each of the landed cost analyses were performed with different assumptions 11 based on the information known at the time. 12 As indicated above, the first landed cost was performed in January 2014, prior to signing the 13 initial PA with NEXUS. The analysis was performed using the range of tolls provided in the 14 agreement as the final rate and capital cost tracker specifics had not yet been negotiated. At that 15 point in time, the Rover project had not yet been announced and there were no other large, 16 greenfield infrastructure projects that would connect Dawn directly to the Appalachian region. 17 As such, Union’s analysis was performed to determine whether the landed cost of supplies 18 177 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 39 of 54 transported through the NEXUS pipeline were competitive with existing transportation paths in 1 Union’s portfolio. 2 3 As of January 2014, NEXUS was contemplating two phases to the project. The first phase 4 would have NEXUS providing Union with 75,000 Dth/d (79,125 GJ/d) of transportation capacity 5 for two years commencing November 1, 2015 by using existing pipeline infrastructure in 6 Michigan and Ontario. As discussed later in this section of the evidence, this phase was 7 subsequently removed from the project scope. Phase 2 was similar to how the NEXUS project is 8 now structured, providing Union with 150,000 Dth/d (158,258 GJ/d) of transportation capacity 9 from Kensington, Ohio commencing November 1, 2017. The Phase 2 path, as contemplated in 10 January 2014, would go all the way to the Dawn Hub in Ontario, however, rather than the current 11 plan of Union receiving the supplies at St. Clair. As such, the 2014 landed cost includes both 12 phases with supplies in Michigan as well as the Appalachian basin. In this landed cost analysis, 13 NEXUS would have contracted for St. Clair to Dawn to facilitate the service. 14 15 The analysis demonstrated that Appalachian shale gas transported via NEXUS was competitive 16 with other alternative upstream transportation paths available at the time, in addition to the 17 numerous other major benefits of the project. This analysis is provided in Schedule 4. 18 19 The second landed cost analysis was performed in January, 2015 using a number of assumptions 20 that had changed since the initial landed cost in 2014. Union received an updated PA with a 21 178 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 40 of 54 number of changes that were the result of ongoing negotiation and the MFN clause within the 1 PA. The NEXUS project scope no longer included Phase 1 as described above, and the 2 transportation path for Union would stop at the St. Clair river crossing. As the negotiated rate 3 was now included in the rate agreement, Union was able to perform the landed cost analysis to 4 validate that NEXUS was still competitive with existing pipeline paths in Union’s portfolio. To 5 allow for easy comparison between NEXUS and other existing transportation paths in Union’s 6 portfolio, the currently posted St. Clair to Dawn C1 toll of $0.035 GJ/d was added to the 7 negotiated NEXUS rate. The analysis also showed that it was almost identical to the Rover 8 pipeline project that was announced in 2014. A summary of this landed cost analysis is provided 9 in Figure 5-5. For the detailed landed cost analysis, please see Schedule 5. 10 Figure 5-5 Summary of January 2015 Landed Cost Analysis Rank Path Landed Cost ($CDN/GJ) 1 TCPL Niagara to Kirkwall $8.10 2 Rover $8.36 3 NEXUS / St. Clair $8.38 4 NEXUS/St. Clair (Increase Upper end of toll by 15%) $8.49 5 Vector (2014 - 2017) $8.54 6 Dawn $8.56 7 Michcon (2014-2015) $8.62 8 Vector (2012 - 2016) $8.72 9 Trunkline / Panhandle $8.87 10 Panhandle (2012-2017) $8.91 11 Alliance / Vector $9.00 12 Panhandle (2014-2015) $9.02 13 Panhandle (2010-2017) $9.02 14 TCPL Empress to Dawn $9.67 15 TCPL Empress to Union CDA $9.83 179 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 41 of 54 In Figure 5-5, there is a significant difference between the landed cost of the NEXUS supply 1 compared to the Alliance and TransCanada long-haul supplies that it replaces within Union’s 2 supply portfolio. For example, when you consider the upper-end of the NEXUS landed cost 3 (assuming the full 15% increase of the capital cost tracker) vs. the Alliance supplies, there is a 4 savings of $0.51/GJ over the entire 15 year term. For the TransCanada-based supplies, the 5 savings on the NEXUS path are $1.18/GJ over the term. Based on the landed cost analysis, and 6 assuming NEXUS supplies replace volumes on the discussed paths, Union estimates potential 7 cost savings of over $700 million29 over the term of the contract to sales service customers 8 compared to current contracted supplies. Overall, the landed cost of NEXUS supplies is very 9 similar to Rover, and is competitive or lower cost than other paths available in Union’s portfolio. 10 29 (Alliance/Vector vs. NEXUS plus 15%) times by Alliance/Vector volume being reduced plus (TCPL long haul vs. NEXUS plus 15%) times by volume being shifted over 15 years = (($9.00-$8.49) *85,000GJ/day)) + (($9.67- $8.49)*73,000GJ./day)) * 365 *15 years = ($43,000/day * 365 *15) +($86,000/day * 365 *15) = ~$708 million 180 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 42 of 54 6. THE NEXUS AGREEMENT 1 Shortly after Union was awarded capacity from the non-binding open season with NEXUS in 2 late 2012, Union began negotiating a binding Precedent Agreement (“PA”) with NEXUS. 3 Union executed a binding PA with NEXUS on August 11, 2014. This PA has been amended and 4 restated as of May 28, 2015 to include changes to the original agreement that are a result of 5 continuous negotiations and the MFN clause. The PA also contains Conditions Precedent (“CP”) 6 that must be met before it becomes fully binding. The agreement is for a 15-year commitment, 7 which is the length of time commonly required by pipeline companies, including Union’s own 8 pipeline expansion projects, to balance the investment risk and ensure a return on the major 9 investments needed to expand natural gas infrastructure (some pipelines required a 20-year or 10 longer commitment). 11 12 Union’s obligations under the PA include supporting the project timelines by receiving required 13 approvals in a timely fashion, including this application for contract pre-approval. Upon Board 14 approval of the contract commitment, Union has 30 days to execute the firm transportation 15 contract. 16 NEXUS Agreement Parameters 17 Union has signed a binding PA with NEXUS with the following parameters: 18 • Transportation Provider: NEXUS Gas Transmission 19 • Quality of Service: Firm Transportation 20 181 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 43 of 54 • Primary Term : November 1, 2017 through October 31, 2032 (15 Years) 1 • Volume: 150,000 Dth/d (158,258 GJ/d) 2 • Rate: $0.77 US/Dth (subject to a capital cost tracker adjustment) 3 • Fuel: 2% - 3% (estimated) 4 • Receipt Point: Kensington, Ohio 5 • Delivery Point: Union St. Clair 6 • Renewal rights: Right of First Refusal (“ROFR”) after the Primary Term. 7 8 As an anchor shipper, Union has negotiated a rate of $0.77 US/Dth plus fuel, which is between 9 $0.015 US/Dth to $0.03 US/Dth lower than the rate offered to non-anchor shippers. The $0.77 10 US/Dth rate consists of $0.635 US/Dth for the greenfield portion of the pipeline and $0.135 11 US/Dth for transportation on the DTE system. This rate is subject to a capital cost tracker 12 adjustment that will be calculated based on a capital budget of $2.019 billion, outlined in the rate 13 agreement in Schedule 1, as compared to the actual costs upon completion of the project. This 14 will result in a maximum adjustment of +/- 15% applied only to the portion of the rate ($0.635 15 US/Dth) related to the greenfield pipeline construction or related expansion facilities. This will 16 cap the range of the final NEXUS negotiated rate between Kensington and Union St. Clair to be 17 between approximately $.67 US/Dth30 and $.87 US/Dth31 (plus fuel). These clauses are common 18 30 The lower end of the toll is calculated by reducing the greenfield toll of $0.635 US/Dth by 15%, and then adding the $0.135 US/Dth to transport supplies on the DTE system ($0.635 * 0.85 + $0.135 = $0.67) 31 The upper end of the toll is calculated by increasing the greenfield toll of $0.635 US/Dth by 15%, and then adding the $0.135 US/Dth to transport supplies on the DTE system ($0.635 * 1.15 + $0.135 = $0.87) 182 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 44 of 54 with U.S. pipelines and help to provide certainty to the parties should costs be higher than 1 expected, and to share the benefit should the actual costs will be lower than expected. 2 3 The PA contains a number of conditions precedent for both the pipeline and the shipper. These 4 include various approvals necessary to carry out the obligations of the agreement including 5 FERC and State approvals to build the greenfield pipeline, and the Ontario Energy Board pre-6 approval of the cost consequences of the NEXUS agreement. The date by which Union must 7 waive or satisfy this condition precedent is October 1, 2015. 8 9 The PA also contains cancellation provisions that would allow Union to terminate the PA and, in 10 most cases, not be subject to any project cancellation costs. Project cancellation cost clauses 11 traditionally protect the project proponents from shippers who terminate their participation after 12 construction has started and before the pipeline goes into service. Union has negotiated prudent 13 and fair provisions related to when it could terminate the agreement and not be subject to these 14 types of costs. This includes a right to terminate should the in service date be delayed past 15 November 1, 2018, excluding a material breach on the account of Union. 16 17 Union has also obtained an MFN clause which provides Union the ability to amend the PA 18 should another similar shipper negotiate more favourable terms than what Union has received. 19 This ensures Union will be treated fairly and equitably, and that Union is guaranteed the best 20 possible contracting terms available to similar shippers. 21 183 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 45 of 54 Union Relationship with Project Proponents 1 DTE Energy and Spectra Energy Corporation are lead developers of the NEXUS project and 2 each have 50% ownership. Union is a wholly owned subsidiary of Spectra Energy Corporation. 3 The NEXUS pipeline will be a standalone entity and does not have any relationship with Union 4 other than through the common parent of Spectra Energy and the transportation contract between 5 Union and NEXUS. As noted, the Affiliate Relationship Code does not apply because NEXUS is 6 a 50-50 partnership between DTE Energy and Spectra Energy Corp. and neither party has 7 control. 8 9 Union participated in the 2012 NEXUS Open Season. As was noted above, to ensure Union is 10 treated in a fair and equitable manner, Union has negotiated an MFN clause within the PA which 11 provides Union the ability to amend the PA should another similar shipper negotiate more 12 favourable terms than what Union has received. Union negotiated with NEXUS on an arm’s-13 length basis and in the same manner and with the same individuals as other potential shippers. 14 As a result, Union has negotiated a rate that is discounted to that of non-anchor shippers, and is 15 competitive with other anchor shippers on the project. Further, Union notes that the pricing 16 Union will pay to NEXUS for the transportation contract service will be less than regulated 17 posted tolls (which will be approved by FERC). Union’s MFN clause also ensures Union will 18 receive the best possible contracting terms of similarly situated shippers. 19 184 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 46 of 54 7. RISK MITIGATION OF THE NEXUS AGREEMENT 1 2 Union has considered the following risks as they related to the NEXUS project, and has included 3 appropriate analysis and mitigation steps. Further independent analysis can be found in the 4 included Sussex Market Study report at Schedule 3. 5 Project Capital Costs 6 Risk Identification 7 Any major pipeline infrastructure project may experience capital cost variances due to a number 8 of factors. If not considered as part of negotiating a rate, there is risk that these cost overruns 9 will result in a toll that may no longer be economical for the shipper. 10 11 Risk Mitigation 12 Union has negotiated a fixed rate with NEXUS that includes a known capital cost tracker 13 adjustment mechanism. Union’s rate of $0.77 US/Dth will be adjusted to take into account 14 either higher or lower costs than anticipated. Union, and other similarly situated shippers, 15 negotiated a limit of +/-15% on the capital cost tracker adjustment that will only be applied to 16 $0.635 US/Dth of the total rate of $0.77 US/Dth (i.e. the greenfield and expansion portion of the 17 rate). The baseline capital budget used to calculate the tracker is $2.019 billion as outlined in 18 Schedule 1. Having a capital cost tracker allows Union to participate in any cost savings realized 19 while limiting any cost overrun potential. This tracker defines the range of final rates of the 20 185 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 47 of 54 service and allows for a landed cost analysis to be performed with certainty. For Union, this 1 tracker will limit the final rate to be within the range of $0.67US/Dth to $0.87 US/Dth. 2 Project Delays or Cancellation 3 Risk Identification 4 Any major pipeline infrastructure project may experience delays, or, in extreme cases, 5 cancellation, due to a number of factors. If this were to occur, the shipper would experience a 6 shortfall of transportation capacity in their portfolio. 7 8 Risk Mitigation 9 Union will mitigate any delays in construction by leveraging the diverse upstream transportation 10 and supply options that exist at Dawn. By entering into short-term transportation and/or supply 11 commitments, Union is able to address any gaps in the portfolio that are due to a delayed in-12 service date for NEXUS for a short period of time. 13 14 Should the NEXUS project be delayed beyond November 1, 2018 or cancelled, Union can 15 withdraw from the project and will not be subject to any pre-service project costs. Union would 16 analyze its portfolio and replace the anticipated NEXUS transportation capacity with other 17 upstream transportation options that are available at the time. 18 186 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 48 of 54 Demand Risks 1 Risk Identification 2 Entering into a transportation contract requires certain assumptions around the demands that will 3 support the requirements for the contracted capacity. This is especially true of long-term 4 commitments required to support a new infrastructure project such as NEXUS. If forecasted 5 demands do not materialize, the shipper is at risk of holding excess capacity within its portfolio. 6 7 Risk Mitigation 8 To ensure that any unplanned changes in demands do not jeopardize the decision to support 9 NEXUS, Union has not deviated from its normal gas supply planning practices that have been 10 validated by the Board in past proceedings. 11 12 As such, entering into a long-term contract with NEXUS does not increase Union’s exposure to 13 decreases in demand. Union’s current Gas Supply Plan has identified the need for upstream 14 transportation capacity in excess of 150,000 Dth/d for November 1, 2017. The contracted 15 capacity on the NEXUS pipeline will address this need, while still leaving appropriate flexibility 16 within Union’s upstream portfolio should there be any fluctuations in customer demand. Should 17 natural gas demands decline in the Union franchise area, there are multiple opportunities to 18 leverage existing flexibility embedded within the portfolio to rebalance the upstream 19 transportation and gas supply portfolios. 20 187 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 49 of 54 Supply Risks 1 Risk Identification 2 In order to support an infrastructure build, pipeline projects require customers to contract for 3 significant volumes for a long period of time. In the case of NEXUS, the requirement for anchor 4 shippers was a 15-year commitment. There is risk that supplies available to be transported 5 through the newly-constructed infrastructure would not be available for the entire length of the 6 term. 7 8 Risk Mitigation 9 When evaluating the long-term commitment required to support the NEXUS project, Union also 10 evaluated its ability to access adequate supplies for the duration of the contract. Union has 11 accessed various resources including the Sussex Report (see Schedule 3) to gauge the level of 12 supply available in the Appalachian basin and available to the NEXUS Project. 13 14 The production estimates for the Appalachian shale region are forecasted to exceed 18 PJ/d in 15 2015 and will continue to increase steadily for the duration of the 15-year NEXUS contract 16 period referenced in Schedule 3. These production levels represent sufficient supply production 17 for the duration of the NEXUS contract’s primary term. 18 188 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 50 of 54 The abundance of shale production has also been supported previously by the Board, stating that 1 “Further, the evidence in the proceeding is that shale production is expected to remain strong and 2 there are no regulatory impediments to ongoing production where it is currently taking place.”32 3 4 The receipt point of the NEXUS pipeline is located at Kensington, Ohio, which is an area that 5 will be well-connected to the Utica and Marcellus shale basins. In addition to the various 6 producers in the area, Kensington is also located near a number of major pipeline interconnects 7 and previously-announced expansion projects. These additional transportation and supply 8 interconnects help enhance diversity and security of supply for the duration of the NEXUS 9 contract. Up to this point, Union had not worked with many of the major suppliers that are 10 currently operating in the Appalachian shale basins. Union has been in discussions with these 11 potential suppliers since early 2013 and has conducted numerous supplier meetings and attended 12 relevant industry conferences. Many of these suppliers are new to Union as they are 13 predominantly sourcing their supply from the Appalachian shale region. These suppliers are 14 seeking a balanced portfolio of customers, and as a result have been eager to work with Union 15 and to better understand Dawn and the Ontario market dynamics. These discussions have 16 included talks regarding multiple supply alternatives ranging from standard monthly indexed 17 supply arrangements to long-term indexed netback arrangements. Union has also begun 18 negotiating NAESB base agreements with these suppliers so they can become part of the supplier 19 32 EB-2012-0433/EB-2013-0074 Decision January 30, 2014, pages 23-24 189 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 51 of 54 pool that Union can draw upon when the NEXUS contract becomes effective. No supply 1 contracts have been executed at this time. 2 3 Union has also issued an Expression of Interest for a portion of the supply necessary once the 4 NEXUS project is completed and in service. The goal of this Expression of Interest and 5 subsequent RFP is to understand and potentially secure up to 50,000 Dth/d (52,753 GJ/d) of 6 supply at Kensington starting November 1, 2017 (or the date when NEXUS is in service, 7 whichever is later). This supply commitment could be a term of 5 years or longer depending on 8 market terms and conditions and will be subject to Union’s standard credit and other NAESB 9 requirements. Union will be open to any combination of pricing arrangements (except for fixed 10 prices) that suppliers are willing to offer. Union will evaluate each and every bid on its own 11 merits and determine the successful bidders within the prescribed timelines that accompany the 12 RFP. 13 14 To gain experience working with these new suppliers prior to the in-service date for NEXUS, 15 Union is also investigating potential firm services that will allow it to purchase gas, on an interim 16 basis, in the Appalachian basin. This will allow Union to form relationships and gain experience 17 with suppliers in that region in preparation for purchasing the supplies required once NEXUS is 18 in service. 19 190 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 52 of 54 TransCanada Mainline Risk 1 Risk Identification 2 As mentioned previously, natural gas transported to Dawn via NEXUS will replace supplies that 3 will no longer be transported using TransCanada long-haul transportation from the WCSB. 4 Historically, the trend of shippers de-contracting TransCanada long-haul transportation resulted 5 in concerns as to the economic viability of the Mainline system, which was the subject of the 6 NEB RH-001-2014 settlement hearing. 7 8 Risk Mitigation 9 All impacts resulting from Union (and the other eastern LDCs) turning back TransCanada long-10 haul transportation have already been contemplated in the RH-001-2014 settlement agreement 11 that was approved by the NEB in December, 2014. The financial impacts of those decisions 12 have been incorporated into TransCanada’s approved tolls. The NEXUS capacity will simply 13 replace these supplies that would have otherwise been purchased at Dawn, and have no 14 incremental impact to the TransCanada Mainline system. 15 191 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 53 of 54 8. SUMMARY 1 As discussed in the Sussex Report at Schedule 3, North American transportation and supply 2 dynamics are changing dramatically due to the emergence of abundant, affordably-priced natural 3 gas in the Appalachian shale basins. At the same time, conventional supplies arriving in Ontario 4 from the WCSB are in decline, leading to the need to explore other transportation options. To 5 replace these declining supplies arriving from traditional western sources, Ontario requires 6 NEXUS as a direct pipeline from the Utica and Marcellus basins to increase diversity, enhance 7 reliability, strengthen the liquidity of the Dawn Hub, decrease price volatility and create the 8 opportunity of affordable energy prices to fuel Ontario’s economic competitiveness. 9 10 In its role as an LDC, Union and other similarly sized LDCs are the only market participants who 11 are able to support new infrastructure projects such as NEXUS. Virtually all other natural gas 12 market participants (i.e. large industrial direct purchase or power customers who rely more on 13 the day-to-day market) do not have the ability to make these types of long term contract 14 commitments. As such, in order to support new pipeline infrastructure upstream of Ontario, 15 Union has moved forward and has advanced a significant long-term commitment to a 15-year 16 transportation contract, with a commitment in excess of $715 million. The Board’s process for 17 Pre-Approval of Long-Term Natural Gas Supply and/or Upstream Transportation Contracts was 18 created to allow the utilities to make these significant commitments that will ultimately benefit 19 all of Ontario, while receiving the assurance of recovery of the associated costs based on the 20 market conditions that exist at the time the commitment is being considered and made. This 21 192 Filed: 2015-05-28 EB-2015-0166 Exhibit A Page 54 of 54 process applies to the NEXUS contract as it is supporting the development of new greenfield 1 pipeline infrastructure that will allow access to a new supply basin that will provide incremental 2 supplies and numerous benefits to Ontario. 3 193 RESTATED PRECEDENT AGREEMENT This RESTATED PRECEDENT AGREEMENT (“Restated Precedent Agreement”) is made and entered into this 28th day of May, 2015 (“Effective Date”), by and between DTE Pipeline Company, a Michigan corporation (“DTE”), and Spectra Energy Transmission, LLC, a Delaware limited liability company (“Spectra”) (DTE and Spectra are collectively referred to herein as “Pipeline”), and Union Gas Limited, an Ontario corporation (“Customer”). Pipeline and Customer are sometimes referred to individually as a “Party” and collectively as the “Parties.” W I T N E S S E T H: WHEREAS, Pipeline is proposing a project that will ultimately provide up to approximately one and one half (1.5) billion cubic feet per day of firm transportation service for natural gas production from the Appalachian production areas, including but not limited to the Utica Shale and Marcellus Shale production areas in Ohio and Pennsylvania, to the international border between the United States and Canada near St. Clair, Michigan (the “International Border”) and continuing from the International Border to Dawn, Ontario (“Dawn”). Pipeline will construct an approximately 250-mile greenfield pipeline extending from points expected to be located at or near Kensington, Ohio to various interconnections in the State of Michigan, utilizing subscriptions of firm pipeline capacity on existing U.S. pipeline systems to transport to the International Border, and thereafter from the International Border to point(s) of delivery in or near Dawn, utilizing one or more of: subscriptions of firm pipeline capacity on existing Canadian pipeline systems, an expansion of the existing Vector Canada and/or Customer’s Canadian pipeline systems, and/or construction of greenfield pipeline facilities (the services and subscriptions contemplated herein and the facilities that Pipeline intends to construct (or use Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 1 of 68 194 reasonable efforts to cause others to construct) and/or subscribe to provide such services are collectively referred to herein as the “Project”); WHEREAS, Pipeline is proposing to commence service for the Project on or about November 1, 2017; WHEREAS Customer, based on its qualifying bid submitted in the Open Season conducted by Pipeline from October 15, 2012 through November 30, 2012 (“Open Season”), entered into a Precedent Agreement with Pipeline dated August 11, 2014 (“the Original Precedent Agreement”); WHEREAS, in lieu of the service contemplated in the Original Precedent Agreement, Customer now desires firm natural gas transportation service in respect of the Project from a point expected to be located at or near Kensington, OH, to a point at or near the International Border; WHEREAS, Pipeline has secured commercial support for the Project evidenced by executed precedent agreements, including this Restated Precedent Agreement with Customer; WHEREAS, the Parties contemplate that NEXUS Gas Transmission, LLC will take assignment of the rights and obligations of and be novated as the Pipeline for all purposes of this Restated Precedent Agreement; WHEREAS, subject to the terms and conditions of this Restated Precedent Agreement, Pipeline is willing to undertake the steps necessary to provide the Project service for Customer described herein and other customers subscribing for capacity as part of the Project, to construct the Project facilities or subscribe for firm pipeline capacity that will extend from eastern Ohio to Dawn in order to provide such services, and, if necessary, to construct, or to use reasonable efforts to cause the construction of facilities on existing pipeline systems to provide service on Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 2 of 68 195 the Project; WHEREAS, subject to the terms and conditions of this Restated Precedent Agreement, Pipeline is willing to provide the firm transportation service to Customer described herein and Customer is willing to pay Pipeline for such service; NOW, THEREFORE, in consideration of the mutual covenants herein assumed, and intending to be legally bound, Pipeline and Customer agree as follows: 1)Pipeline Obligations. a)Subject to the terms and conditions of this Restated Precedent Agreement, Pipeline shall proceed with due diligence to file applications for and to obtain from all governmental and regulatory authorities having competent jurisdiction over the Project, including, but not limited to, the Federal Energy Regulatory Commission (“FERC”) and the National Energy Board of Canada (“NEB”), the authorizations, approvals, certificates, permits, notices and/or exemptions (collectively, the “Governmental Authorizations”) Pipeline determines are necessary: (i) for Pipeline to construct, own, operate, and maintain (and, if necessary, to use reasonable efforts to cause others to construct, own, operate, and maintain) the Project facilities necessary to provide the firm transportation service contemplated herein commencing on the Service Commencement Date (as determined in accordance with Section 4 of this Restated Precedent Agreement); and (ii) for Pipeline to otherwise perform its obligations as contemplated in this Restated Precedent Agreement, (including, without limitation, to provide firm transportation service contemplated herein and set forth in the applicable Pipeline tariff approved by the FERC). Pipeline retains full control and discretion in the filing and prosecution of any and all applications for such Governmental Authorizations and/or any supplements or amendments thereto, and, if Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 3 of 68 196 necessary, any court review, provided it does so in a manner that is consistent with the terms of this Restated Precedent Agreement and designed to implement the firm transportation service contemplated herein in a timely manner. Pipeline agrees to promptly notify Customer in writing when each of the Governmental Authorizations are received, obtained, rejected or denied. Pipeline shall also promptly notify Customer in writing as to whether each of the Governmental Authorizations received or obtained are acceptable to Pipeline. b) During the term of this Restated Precedent Agreement, and provided it would be reasonable and prudent for Pipeline to do so, Pipeline agrees to use reasonable efforts to support and cooperate with the efforts of Customer to obtain all Customer’s Authorizations and supplements and amendments thereto, to better understand and analyze the markets for the supply of gas at the proposed initial receipt points for the Project and to otherwise perform its obligations as contemplated by this Restated Precedent Agreement. c)The reservation rates payable by Customer for transportation service (as set forth in the applicable Pipeline tariffs approved by the FERC, the “Reservation Rates”) will be set and applied for on a commercially reasonable basis. 2) Customer Obligations. a)Prior to the Effective Date, Customer shall have advised Pipeline in writing of: (i) any facilities which Customer must construct, or cause to be constructed, in order for Customer to utilize the firm transportation service contemplated in this Restated Precedent Agreement; and (ii) any necessary or desirable contractual and/or governmental or regulatory authorizations having jurisdiction over the Customer which Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 4 of 68 197 Customer determines are necessary or desirable for Customer in order to execute and deliver the Service Agreement (as defined in Section 3 below) and to fulfill its obligations thereunder and to otherwise perform its obligations under this Restated Precedent Agreement (“Customer’s Authorizations”). b) Subject to the terms and conditions of this Restated Precedent Agreement, Customer shall proceed with due diligence to obtain the Customer’s Authorizations. Customer retains full control and discretion in the filing and prosecution of any and all applications for such Customer’s Authorizations and/or any supplements or amendments thereto, and, if necessary, any court review, provided it does so in a manner that is consistent with the terms of this Restated Precedent Agreement and in a manner designed to implement the firm transportation service contemplated herein in a timely manner. Customer agrees to promptly notify Pipeline in writing when each of the Customer’s Authorizations, are received, obtained, rejected or denied. Customer shall also promptly notify Pipeline in writing as to whether each of the Customer’s Authorizations received or obtained are acceptable to Customer. c) During the term of this Restated Precedent Agreement, and provided it would be reasonable and prudent for Customer to do so, Customer agrees to use reasonable efforts to support and cooperate with the efforts of Pipeline to obtain all Governmental Authorizations and supplements and amendments thereto necessary for Pipeline to provide the services contemplated hereunder and to construct, own, operate, and maintain (or, if necessary, to use reasonable efforts to cause others to construct, own, operate and maintain) the Project facilities for transportation service and to otherwise perform its obligations as contemplated by this Restated Precedent Agreement. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 5 of 68 198 3)Service Agreements. a)[RESERVED]. b)Firm Service Agreement. To effectuate the firm transportation service contemplated herein for transportation service, Customer and Pipeline agree that no later than thirty (30) days following the date on which Pipeline provides written notice to Customer that the FERC, the Michigan Public Service Commission, and any other governmental agencies or authorities having jurisdiction over the U.S. portion of the Project transportation service have all issued the necessary authorizations to Pipeline or other pipelines to construct the greenfield and expansion facilities necessary to provide the Project service, Pipeline and Customer will execute a firm transportation service agreement governing the service (the “Service Agreement”). The Service Agreement and the rights and obligations arising thereunder shall only become effective if, in addition to receipt of the aforementioned authorizations for the U.S. portion of the service, Pipeline has also provided confirmation that the NEB, Ontario Energy Board (“OEB”) and any other governmental agencies or authorities having jurisdiction over the Canadian portion of the Project have all issued the necessary authorizations to Pipeline or other pipelines proposing to construct and/or provide the facilities necessary to provide the Canadian portion of the Project. For clarity, the Canadian portion of the Project service shall have no application to the transportation service that Customer is contracting for hereunder, but receipt of the Governmental Authorizations and the Customer’s Authorizations for the Canadian portion of the Project are a condition precedent to the Service Agreement between Pipeline and Customer becoming effective as reflected in Section 7(b)(ii), 7(c)(ii) and 7(c)(iii). The Parties agree to consider in good faith executing the Service Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 6 of 68 199 Agreement at a time earlier than contemplated in the first sentence above if required to allow Pipeline to obtain the requisite notice to proceed with Project construction from any governmental agency or authority having jurisdiction. The Service Agreement will specify: (i) an MDQ of 150,000 Dth/d (“Customer’s MDQ”), exclusive of fuel requirements, effective on the Service Commencement Date; (ii) a primary term of fifteen (15) years commencing on the Service Commencement Date and continuing from year to year thereafter unless terminated in accordance with the provisions thereof; (iii) a Primary Point of Receipt (as such term will be defined in the Service Agreement) at the head of the Project facilities in Ohio (such point to be designated by Pipeline at such time as Pipeline provides notice to Customer in accordance with Section 3(c) below) (MDRO of 150,000 Dth/d); (iv) a Primary Point of Delivery (as such term will be defined in the Service Agreement) at the International Border (MDDO of 150,000 Dth/d); and (v) security requirements consistent with the provisions set forth in Section 13 below. To the extent Pipeline is authorized to offer access to secondary receipt and delivery points as part of the Project service, Customer shall have the right under the Service Agreement to access secondary receipt and delivery points in accordance with such authorization(s). Attached hereto as Exhibit A is an illustrative form of transportation service agreement for the Project services. Prior to the Effective Date, the Parties acknowledge that Pipeline has provided to Customer copies of the Rate Agreement and a table of the expected contents of general terms and conditions that will be incorporated by reference into the transportation service agreement to form the applicable FERC gas tariff, as well as any changes to the illustrative form of transportation service agreement in Exhibit A (collectively, the “Forms of Commercial Agreements”). Pipeline will seek Customer’s Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 7 of 68 200 review of the Forms of Commercial Agreements and will consider in good faith any comments provided by Customer. Pipeline shall keep Customer informed of any revisions to the Forms of Commercial Agreements including revisions resulting from comments received from other Customers; provided that, for clarity, the Rate Agreement shall not be revised by Pipeline other than for the sole purpose of conforming the terms of the same with the terms of the NEXUS FERC Gas Tariff (when approved by FERC) and, to the extent not to the substantive detriment of Customer, with the terms agreed to in rate agreements of other anchor shippers for the Project. Pipeline shall apply for and seek the Governmental Authorizations in a manner consistent with the Forms of Commercial Agreements. The Parties acknowledge and agree that these Forms of Commercial Agreements may change, as required, as a result of the terms and conditions of approvals from the FERC. c) Status of Service Commencement Date. On a quarterly basis, Pipeline will notify Customer regarding Pipeline’s progress regarding the Project, and whether the Service Commencement Date (as determined in accordance with Section 4 of this Restated Precedent Agreement) is expected to occur on November 1, 2017, or some later date. No later than November 1, 2015, Pipeline shall in good faith have notified Customer of its bona fide estimate of the Service Commencement Date (the “Estimated Commencement Date”). In the event that Pipeline’s bona fide estimate of the Estimated Commencement Date is a date that is after November 1, 2018, then, unless such deadline(s) are extended by mutual consent: Customer shall have no further obligation in respect of contracting for Project service and Customer shall have the right to terminate this Restated Precedent Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 8 of 68 201 Agreement without liability between the Parties including in respect of the Customer being required to pay any Pre-Service Costs. d)Rates. i)[RESERVED]. ii)The rates that will apply to the Service Agreement shall be as set forth in the rate agreement to be executed in accordance with this Section 3(d), for service under the Service Agreement. Pipeline and Customer have agreed to the following with regard to the rates for service under the Service Agreement: (1)Subject to the terms and conditions set forth herein and in the Service Agreement and in the Rate Agreement (as defined below), upon execution of such Service Agreement and Rate Agreement, Customer shall be obligated to pay Pipeline the rates specified for service under the Service Agreement commencing on the Service Commencement Date and continuing to the end of the primary term (as set forth in the Service Agreement) thereof. (2)The estimated Reservation Rates and fuel rates for service under the Service Agreement shall be set forth in the Rate Agreement provided in accordance with Section 3(d)(ii)(3) below. The estimated capital costs associated with the construction of the facilities necessary for Pipeline to provide Project service for Customer and all other customers subscribing Project service in the U.S. (the “Project Facilities”) will be reflected in an estimate to be provided by Pipeline to Customer in accordance with Section 3(d)(ii)(3) below. (3)Contemporaneously with the execution of this Restated Precedent Agreement, Pipeline shall deliver to Customer the following: (a) the final rate agreement for Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 9 of 68 202 the Service Agreement (the “Rate Agreement”), which shall include the final estimate of the Reservation Rate (the “Final Estimated Reservation Rate”) (subject only to the Capital Cost Tracking Adjustment, as defined below) and estimated fuel rate; (b) a final breakdown of how Pipeline derived the Final Estimated Reservation Rate, including a breakdown of such portion of the Final Estimated Reservation Rate that is derived from the Final Capital Cost Estimate (as defined below) (“Rate Breakdown”); and (c) an estimate of the capital costs associated with the construction of the Project Facilities (“Final Capital Cost Estimate”). The Rate Agreement shall provide, consistent with Exhibit C, that the Final Estimated Reservation Rate shall be subject to an aggregate fifteen percent (+ / - 15%) capital cost tracking adjustment (as more particularly described in Exhibit C, the “Capital Cost Tracking Adjustment”). Pipeline and Customer shall hereafter execute the Rate Agreement as expeditiously as is practicable. e) Most Favored Nations. i) Except as provided in Section 3(e)(ii) below, in the event that Pipeline enters into firm transportation service and/or recourse, negotiated or discount rate agreements with other similarly situated customers (as to transportation path, quantity and length of term) in respect of this Project containing any rate provisions and other terms of service that are more favorable to such other customers than the negotiated rate provisions set forth in the Rate Agreement, Pipeline shall offer Customer, within ten (10) business days of entering into the rate agreements with such other customer, those same rate provisions and other terms of service. If Customer is willing to accept the offer on the same terms and conditions as such other customer(s), Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 10 of 68 203 including provisions regarding transportation path, volume and length of term, then Customer will so notify Pipeline within thirty (30) days of its acceptance, and Pipeline will make the necessary amendments to the Rate Agreement and the Service Agreement, if applicable, and the Parties will enter into an amended agreement at the more favorable rate for the remainder of the term of the applicable agreement(s). This section will apply only to contracts Pipeline enters into for service utilizing Project capacity on or before the Service Commencement Date. ii) Exclusions. Pipeline is not required to offer to Customer and Customer is not entitled to, any rate provisions provided to other customers if such rate provisions are contained in long-term firm service agreements for capacity that becomes available as a result of the breach, default or unauthorized termination of a precedent agreement or associated service agreement by a Project customer or the bankruptcy, insolvency, liquidation or other similar action affecting a Project customer. In addition, the most favored nation right set forth in this Section 3(e) will not be available to Customer in respect of any short term (i.e., less than one year) service. Further, the most favored nation right set forth in this section 3 will not apply to credit provisions. (f) Right of First Refusal. Customer will, in respect of the Service Agreement, be granted a contractual Right of First Refusal (“ROFR”) in accordance with the applicable Pipeline tariff approved by the FERC. Further, the Service Agreement will be considered a ROFR Agreement in accordance with, and as that term is used in, the applicable tariff. 4) Commencement of Service. (a) [RESERVED]. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 11 of 68 204 (b)Pipeline shall provide at least ninety (90) days’ prior notice (the “In-Service Date Notice”) to Customer of the projected service commencement date for service under the Service Agreement, which date shall be the beginning of a calendar month and cannot be earlier than the date upon which all of the conditions precedent set out in Section 7 have been satisfied, or waived by the Party having such waiver right, provided that the actual service commencement date for purposes of the Service Agreement (the “Service Commencement Date”) shall be the date that is the later of: (i) November 1, 2017; (ii) the date provided in the In-Service Date Notice; (iii) the date that is the first day of the first calendar month following the date on which the Pipeline places the Project Facilities into service; or (iv) if, pursuant to Section 7(f), the Pipeline has filed an appeal or is pursuing a rehearing, reconsideration or clarification by the applicable regulatory authority of the Governmental Authorization, then 90 days from the date of receipt of a positive decision addressing Customer’s concerns unless such period is waived by Customer. On and after the Service Commencement Date, Pipeline shall provide firm transportation service for Customer pursuant to the terms of the Service Agreement and Customer will pay Pipeline for all applicable charges required by the Service Agreement and the Rate Agreement. 5)Design and Permitting of Project Facilities. Pipeline will undertake with due diligence, or use reasonable efforts to cause others to undertake, the design of the Project Facilities and any other preparatory actions necessary for Pipeline, or Pipeline’s designee(s), to complete and file application(s) related to the Project Facilities with the FERC and/or other governmental authorities as appropriate. Prior to satisfaction of the conditions precedent set forth in Section 7(b)(i) through 7(b)(vii) of this Restated Precedent Agreement, Pipeline, or Pipeline’s designee(s), shall have the right, but not the obligation, to proceed with the Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 12 of 68 205 necessary design of facilities, acquisition of materials, supplies, properties, rights-of-way and any other necessary preparations to implement the firm transportation service under the Service Agreement as contemplated in this Restated Precedent Agreement. Additionally, Pipeline will use commercially reasonable efforts to keep Customer informed on a regular basis and respond to any of Customer’s requests for information concerning Project schedule changes, status of Governmental Authorizations, service commencement dates, and/or changes to any of the rates described herein. 6) Construction of Project. Upon satisfaction of the conditions precedent set forth in Sections 7(a), 7(b)(i) through 7(b)(vii), inclusive and 7(c) of this Restated Precedent Agreement, or waiver of the same by Pipeline or Customer, as applicable, Pipeline shall proceed with due diligence to construct, or to use reasonable efforts to cause others to construct, the authorized Project Facilities and to implement the firm transportation service contemplated in this Restated Precedent Agreement for Project service on or about November 1, 2017, or such later date as may be designated by Pipeline in accordance with Section 3(c) above. If, notwithstanding Pipeline’s due diligence, Pipeline, or Pipeline’s designee(s), is unable to commence the Project service for Customer on November 1, 2017, or such later date as may be designated by Pipeline in accordance with Section 3(c) above, Pipeline will continue to proceed with due diligence to complete arrangements for such firm transportation service, and commence such service for Customer at the earliest practicable date thereafter. Subject to Section 9(a), Pipeline will neither be liable nor will this Restated Precedent Agreement or the Service Agreement be subject to cancellation if Pipeline, or Pipeline’s designee(s), is unable to complete the construction of such authorized Project facilities and commence the Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 13 of 68 206 Project service for Customer by November 1, 2017 or such later date as may be designated by Pipeline in accordance with Section 3(c) above. 7) Conditions Precedent. Commencement of service under the Service Agreement, and Pipeline’s and Customer’s rights and obligations thereunder are expressly made subject to satisfaction or waiver, as applicable, of the following conditions precedent in Sections 7(b) and 7(c); only Pipeline shall have the right to waive the conditions precedent set forth in Section 7(b) and only Customer shall have the right to waive the conditions precedent in Section 7(c): a) [RESERVED]. b) Pipeline’s Conditions Precedent for Project Service. i) Pipeline filing by April 1, 2016 the necessary requests with the FERC for approval to provide service as contemplated herein and in the Service Agreement; ii) Subject to Section 7(d), Pipeline’s receipt and acceptance in accordance with Section 7(f) by May 1, 2017, of all necessary Governmental Authorizations to construct, own, operate and maintain the Project facilities, all as described in Pipeline’s applications as they may be amended from time to time, necessary to provide the service contemplated herein and in the Service Agreement; iii) Pipeline (or Pipeline’s owners or their respective affiliates) having received on or before May 1, 2017, a binding commitment from a financial institution(s) to provide the necessary financing of the construction of the Project Facilities; iv) Other pipelines having received and accepted in accordance with Section 7(f) by May 1, 2017, all necessary Governmental Authorizations to construct, own, operate and maintain the Project facilities, all as described in their applications as they may be Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 14 of 68 207 amended from time to time, necessary to provide the service contemplated herein and in the Service Agreement; v) Pipeline receiving approval, no later than thirty (30) days after its acceptance of the certificates and authorizations specified in Section 7(b)(i), from its Management Committee, or similar governing body, to expend the capital necessary to construct the Project facilities and to proceed with the Project-related firm pipeline transportation arrangements with other pipelines for service on the Project facilities; vi) Pipeline’s receipt no later than four (4) months prior to the Service Commencement Date of all necessary authorizations required to construct the Project facilities necessary to provide the firm transportation service contemplated herein and in the Service Agreement, other than those specified in Section 7(b)(ii); vii) Pipeline’s procurement, no later than four (4) months prior to the Service Commencement Date, of all rights-of-way, easements or permits (in form and substance acceptable to Pipeline, acting reasonably) necessary for the construction and operation of the Project facilities; viii) Pipeline’s completion of construction of the Project facilities and all other facilities required to render the Project service for Customer and for other customers subscribing Project service pursuant to the Service Agreement and Pipeline being ready, able and authorized to place such facilities into gas service; and ix) The completion of the construction of the facilities necessary to create the pipeline capacity subscribed to Pipeline as part of the Project by other pipelines, as applicable, and each such Party being ready, able and authorized to place such facilities into service. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 15 of 68 208 c) Customer’s Conditions Precedent. i) Customer’s confirmation to Pipeline, no later than 90 days following receipt of the Estimated Commencement Date, that it has completed its review and approval of regional supply necessary to support natural gas supply arrangements associated with Customer’s service under the Service Agreement; ii) Subject to Section 7(d), Customer’s receipt and acceptance of the approvals from the OEB for its application related to the Project no later than October 1, 2015; and iii) Subject to Section 7(d), Customer’s receipt and acceptance no later than 30 days following satisfaction of the condition in Section 7(c)(ii), of any necessary Customer’s Authorizations identified in accordance with Section 2 of this Restated Precedent Agreement. iv) Customer acknowledges that it has received, prior to the Effective Date, the requisite internal corporate approvals for the performance of Customer’s obligations under this Restated Precedent Agreement and other agreements related to the service contemplated hereunder. d) Temporary Waiver of Conditions Precedent – Governmental Authorizations. Notwithstanding Sections 7(b)(ii), 7(b)(iv), and 7(c)(ii) and subject to Section 21, either Party may, in its sole discretion, temporarily waive satisfaction of its conditions precedent listed above for a period of 90 days. During such a delay, upon reasonable request by the other Party, the Party waiving its condition precedent shall use commercially reasonable efforts to provide timely notices to the other Party in writing regarding the filing of any applications for such Governmental Authorizations or Customer’s Authorizations, as the context requires, and will provide periodic updates Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 16 of 68 209 regarding the status of such applications, including notice when each of the authorizations are received, obtained, rejected or denied. The Party temporarily waiving its condition precedent shall also promptly notify the other Party in writing as to whether each of the Governmental Authorizations or Customer Authorizations, as the context requires, received or obtained are acceptable to such Party. If the Party temporarily waiving its condition precedent has not satisfied the conditions precedent associated with the receipt of all Governmental Authorizations or Customer Authorizations, as the context requires, within ninety (90) days’ time, either Party may terminate this Restated Precedent Agreement on thirty (30) days’ written notice and no Pre-Service Costs will be payable by Customer. e)With respect to each condition precedent set forth in Section 7(b) of this Restated Precedent Agreement, with the exception of the conditions precedent set forth in clauses (vii) and (viii) of Section 7(b), Pipeline shall provide notice to Customer within five (5) days of the satisfaction of such condition precedent that the condition precedent has been satisfied. With respect to each condition precedent set forth in Section 7(c) of this Restated Precedent Agreement, Customer shall provide notice to Pipeline within five (5) days of the satisfaction of each such condition precedent that the condition precedent has been satisfied. f)Unless otherwise provided for herein, the Governmental Authorization(s) contemplated in Section 1 of this Restated Precedent Agreement must be issued in form and substance satisfactory to both Parties, acting reasonably. For purposes of this Restated Precedent Agreement, such Governmental Authorization(s) shall be deemed satisfactory if issued or granted with terms and conditions which are: (i) consistent with this Restated Precedent Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 17 of 68 210 Agreement and all ancillary agreements and documents to be delivered pursuant to this Restated Precedent Agreement for the applicable service; and (ii) to the extent not contemplated by this Restated Precedent Agreement or any of the ancillary agreements and documents, not materially onerous on Pipeline, as determined by Pipeline, acting reasonably, and will not otherwise have a material adverse effect on Customer. Customer shall notify Pipeline in writing not later than fifteen (15) days after Pipeline notifies Customer of the issuance of the FERC certificate(s), authorization(s) and approval(s), including any order issued as a preliminary determination on non-environmental issues, contemplated in Section 1 of this Restated Precedent Agreement if Customer determines, acting reasonably, that such certificate(s), authorization(s) and approval(s) will have a material adverse effect on Customer. Customer cannot assert that any authorization will have a material adverse effect on Customer unless: (i) the governing provisions of such authorization differ materially and adversely from the provisions requested by Pipeline in its application, unless the provisions requested by Pipeline were inconsistent with the terms of this Restated Precedent Agreement; and (ii) such differences materially and adversely affect the rate to be charged pursuant to the rate agreement contemplated herein, or the terms and conditions of service pursuant to the service agreement contemplated herein, and the Parties cannot mutually agree upon a modification or alternative to such provision which preserves the relative economic positions of the Parties under the operative agreement(s). All other Governmental Authorizations that Pipeline must obtain must be issued in form and substance acceptable to Pipeline, acting reasonably. All Governmental Authorizations that Pipeline is required by this Restated Precedent Agreement to obtain must be duly granted by the FERC or other governmental Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 18 of 68 211 agency or authority having jurisdiction, and must be final and no longer subject to rehearing or appeal; provided, however, Pipeline may waive the requirement that such Governmental Authorizations be final and no longer subject to rehearing or appeal. If any of the Governmental Authorizations are issued on material terms not acceptable to either Party, subject to the foregoing provisions of this Section 7(f), then the non- accepting Party, acting reasonably, shall give notice to the other Party, and the Parties shall promptly meet and work in good faith in an attempt to agree upon a commercially acceptable resolution for both Parties, each Party in its sole discretion, to continue forward with respect to the Project. If, after thirty (30) days, the Parties are unable to agree upon a mutually acceptable resolution, either Party shall have the right to terminate this Restated Precedent Agreement and, if executed, the applicable service agreement and rate agreement. Any termination of this Restated Precedent Agreement by a Party pursuant to this Section will be without liability between the Parties including in respect of the Customer being required to pay any Pre-Service Costs. Notwithstanding the foregoing, if the Parties cannot agree on a modification or alternate provision, Pipeline may, in its sole discretion, appeal or otherwise pursue rehearing, reconsideration or clarification by the applicable regulatory authority of any such provision(s) which Customer alleges will have a material adverse effect on it, and Customer may not terminate this Restated Precedent Agreement until a final order or decision is rendered by such regulatory authority which does not grant relief that is satisfactory to Customer, acting reasonably, to address such material adverse effect, or 180 days from the date that Pipeline makes its application for rehearing, reconsideration or clarification, whichever occurs first. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 19 of 68 212 g)The Customer’s Authorization(s) contemplated in Section 2 of this Restated Precedent Agreement shall be deemed satisfactory if issued or granted in form and substance substantially as requested, or if issued in a manner acceptable to Customer and such Customer’s Authorization(s), as issued, will not otherwise have a material adverse effect on Pipeline. Pipeline cannot assert that any authorization will have a material adverse effect on Pipeline unless: (i) the governing provisions of such authorization differ materially and adversely from the provisions requested by Customer in its application, unless the provisions requested by Customer were inconsistent with the terms of this Restated Precedent Agreement; and (ii) such differences materially and adversely affect the rate to be charged pursuant to the rate agreement contemplated herein, or the terms and conditions of service pursuant to the service agreement contemplated herein, and the Parties cannot mutually agree upon a modification or alternative to such provision which preserves the relative economic positions of the Parties under the operative agreement(s). If any of the Customer’s Authorizations are issued on terms not acceptable to either Party, subject to the foregoing provisions of this Section 7(g), then the non-accepting Party shall give notice to the other Party, and the Parties shall promptly meet and work in good faith in an attempt to agree upon a commercially acceptable resolution for both Parties, each Party in its sole discretion, to continue forward with respect to the Project. If, after thirty (30) days, the Parties are unable to agree upon a mutually acceptable resolution, either Party shall have the right to terminate this Restated Precedent Agreement and, if executed, the applicable service agreement and rate agreement. Any termination of this Restated Precedent Agreement by a Party pursuant to this Section will Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 20 of 68 213 be without liability between the Parties including in respect of the Customer being required to pay any Pre-Service Costs. h)In the event the Estimated Commencement Date is changed to a date later than November 1, 2017 in accordance with Section 3(c), the Parties agree that each of the dates in Sections 3(d)(ii), 7(b)(i) through 7(b)(iii), Sections 7(c)(ii) through 7(c)(iii), and Section 10 will be changed to a later date by the same amount of time as such change to the Estimated Commencement Date. 8)Pre-Service Costs. If: (a) Customer is in material breach of any of its material obligations arising pursuant to this Restated Precedent Agreement; and (b) such material breach is not cured within 30 days of notice to Customer by Pipeline of such material breach, or if such material breach is not capable of being cured within 30 days; and (c) Customer is not continuing thereafter in good faith and with diligence to cure such breach; and (d) as a direct result of the occurrence and continuation of Sections 8(a), 8(b) and (8c) taken collectively, the Service Commencement Date does not occur; then Customer shall, at the option and election of Pipeline, reimburse Pipeline within thirty (30) days of Pipeline’s invoice, for its pro-rata share, based on Customer’s MDQ for transportation service to total contracted MDQ for transportation service by all customers with executed Precedent Agreements, for the Pre- Service Costs incurred or otherwise committed to by Pipeline up to the date of the occurrence of the material breach which resulted in the Service Commencement Date to not occur. In no event shall Customer’s exposure to Pre-Service Costs exceed $219 million U.S. dollars. Customer’s liability for its share of the Pre-Service Costs in accordance with this Section 8 constitutes a genuine pre-estimation of Pipeline’s liquidated damages and not as a penalty, and the payment by Customer of such amount, if such payment is required to be made in Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 21 of 68 214 accordance with this Section 8 shall constitute Pipeline’s sole remedy in such instance, with no right to claim further damages or other remedies from Customer. Customer shall make reasonable efforts to minimize and if possible eliminate the withholding tax related to the Pre-Service Costs paid to Pipeline, including but not limited to requesting from Pipeline the relevant documentation necessary to determine the appropriate withholding amount, if any, for tax purposes. In the event that taxes are withheld from the Pre-Service Costs paid by Customer, then Customer shall deduct or withhold such amount from the Pre-Service Costs and remit such withheld taxes to the applicable taxing authority and Customer will provide to Pipeline, after the applicable calendar year end, Pipeline’s U.S. Federal Form 1099, a comparable state form or Canadian Revenue Authority equivalent, if applicable, within the applicable statutory time frame. If this Restated Precedent Agreement is terminated for any reason other than a material breach by Customer, then such termination shall be without any liability on the part of Customer to Pipeline, including in respect of the Customer being required to pay any Pre-Service Costs. The term, “Pre-Service Costs” for all purposes in this Restated Precedent Agreement means only those expenditures and/or costs reasonably and prudently incurred, accrued, allocated to, or for which Pipeline is contractually obligated to pay in furtherance of Pipeline’s efforts to develop and construct the Project and to satisfy its obligations under this Restated Precedent Agreement and all other precedent agreements for service on the Project facilities, including such expenditures associated with design, testing, engineering, construction, commissioning, materials and equipment, environmental, regulatory, and/or legal activities, allowance for funds used during construction, negative salvage, internal overhead and administration and any other costs reasonably incurred in furtherance of Pipeline’s efforts to develop and construct the Project and to satisfy its Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 22 of 68 215 obligations under this Restated Precedent Agreement and all other precedent agreements for service on the Project facilities. In the event Customer incurs liability for Pre-Service Costs, Pipeline shall use commercially reasonable efforts to mitigate the amount of Pre-Service Costs. NOTWITHSTANDING THE FOREGOING, THE PARTIES HERETO AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY PUNITIVE, SPECIAL, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR FOR BUSINESS INTERRUPTIONS) ARISING OUT OF OR IN ANY MANNER RELATED TO THIS RESTATED PRECEDENT AGREEMENT, AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE SOLE, CONCURRENT OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE OR PASSIVE), STRICT LIABILITY (INCLUDING, WITHOUT LIMITATION, STRICT STATUTORY LIABILITY AND STRICT LIABILITY IN TORT) OR OTHER FAULT OF EITHER PARTY. THE IMMEDIATELY PRECEDING SENTENCE SPECIFICALLY PROTECTS EACH PARTY AGAINST SUCH PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES EVEN IF WITH RESPECT TO THE NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, STRICT LIABILITY OR OTHER FAULT OR RESPONSIBILITY OF SUCH PARTY; AND ALL RIGHTS TO RECOVER SUCH DAMAGES OR PROFITS ARE HEREBY WAIVED AND RELEASED. 9)Termination of Restated Precedent Agreement for Failure of Conditions Precedent. a)If the conditions precedent set forth in Section 7 of this Restated Precedent Agreement have not been fully satisfied or waived by Pipeline or Customer, as applicable, by the Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 23 of 68 216 earlier of the applicable dates specified therein, or within one year after the Estimated Service Commencement Date, and this Restated Precedent Agreement has not otherwise been terminated pursuant to the other terms of this Restated Precedent Agreement, including in respect of Sections 10 or 11 hereof, then this Restated Precedent Agreement (and the Service Agreement, as applicable) shall terminate effective 30 days after the date such condition precedent was to be satisfied or waived by the applicable Party and such termination shall be without liability including in respect of Customer being required to pay any Pre-Service Costs, except to the extent the failure is as a direct result of a material breach by a Party of its other obligations set forth in this Restated Precedent Agreement. b) For any termination in accordance with Section 9(a) above, the Parties agree to promptly meet and work diligently and in good faith for a period of 30 days following the date such condition precedent was to be satisfied or waived to attempt to agree upon changes to this Restated Precedent Agreement that would allow the Restated Precedent Agreement to continue, which may include a waiver of and/or change in the deadline for any of the conditions precedent that are the subject of such termination notice, provided that if the Parties are unable to come to an agreement upon changes that would allow the Restated Precedent Agreement to continue, then this Restated Precedent Agreement (and the Service Agreement, as applicable) shall nonetheless terminate effective on the expiry of such 30 day period. c) Any delay or failure in the performance by either Party hereunder shall be excused if and to the extent caused by the occurrence of a Force Majeure, provided that such Party claiming Force Majeure shall give written notice of the suspension of such performance Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 24 of 68 217 for this reason as soon as reasonably possible to the other Party and stating the date and extent of such suspension and the cause thereof. The Party whose obligations have been suspended as aforesaid shall resume the performance of such obligations as soon as reasonably possible after the removal of the cause and shall so notify, in writing, the other Party that the suspension has terminated. Notwithstanding the foregoing, if any condition precedent set forth in Section 7 hereof has not been satisfied as a result of an occurrence of Force Majeure, the deadline for satisfying the condition precedent shall be extended for each day that the occurrence of Force Majeure continues up to a maximum of ninety (90) days or as mutually agreed to by the Parties. For purposes of this Precedent Agreement, “Force Majeure” as employed herein shall mean any cause, whether of the kind enumerated herein or otherwise, not within the reasonable control of the Party claiming suspension, and which by the exercise of due diligence, such Party has been unable to prevent or overcome, including without limitations acts of God, the government, or a public enemy; strikes, lockouts, or other industrial disturbances; wars, terrorism, blockades, or civil disturbances of any kind; epidemics, landslides, hurricanes, washouts, tornadoes, storms, fires, explosions, arrests, and restraints of governments or people, freezing of, breakage or accident to, or the necessity for making repairs to machinery or lines of pipe, and the inability of either the claiming Party to acquire, or the delays on the part of either of the claiming Party in acquiring, at reasonable cost and after the exercise of reasonable diligence: (a) any servitudes, rights of way, grants, permits or licenses; (b) any materials or supplies for the construction or maintenance of facilities; or (c) any Governmental Authorizations, permits or permissions form any governmental Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 25 of 68 218 agency; if such are required to enable the claiming Party to fulfill its obligations hereunder. 10) Termination for Default. The occurrence and continuation of a material breach by a Party of any of its obligations under this Restated Precedent Agreement, unless caused by a breach by the other Party of its obligations under this Restated Precedent Agreement is referred to herein as a “Default". Upon the occurrence of a Default by a Party hereto, the non-defaulting Party may provide written notice to the defaulting Party, describing the Default in reasonable detail and requiring the defaulting Party to remedy the Default (the "Default Notice"). If the Default is not cured within 30 days of receipt by the defaulting Party of the Default Notice, or if such breach is not capable of being cured within 30 days, and the defaulting Party is not continuing thereafter in good faith and with diligence to cure such Default, the non- defaulting Party may, by termination notice to the defaulting Party, terminate this Restated Precedent Agreement effective on the tenth (10th) day following receipt of the termination notice by the defaulting Party; provided, however, that if during such ten (10) day period the defaulting Party has commenced to remedy the Default and is continuing in good faith its efforts to remedy such Default, the entitlement of the non-defaulting Party to terminate this Restated Precedent Agreement will be suspended until the earlier of the cessation by the defaulting Party of such efforts and the date which is ninety (90) days after the date of the Default Notice. 11) Other Pipeline Termination Rights. In addition to the provisions of Section 9 hereof, Pipeline may terminate this Restated Precedent Agreement at any time upon fifteen (15) days’ prior written notice to Customer, if: (i) Pipeline, in its sole and reasonable discretion, determines for any reason on or before October 1, 2016, that the Project contemplated herein Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 26 of 68 219 is no longer economically viable, (ii) Pipeline incurs or will incur costs which are twenty-five percent (25%) or more than the cost estimate submitted as part of Pipeline’s application to the FERC for the certificate of public convenience and necessity for the Project related to the Project construction, or (iii) on or before October 1, 2016, substantially all of the other precedent agreements, service agreements or other contractual arrangements for the firm transportation service to be made available by the Project are terminated, other than by reason of commencement of service. In the event Pipeline terminates this Restated Precedent Agreement in accordance with this Section 11, Customer shall not be liable pursuant to Section 8 above for Pre-Service Costs. 12) Termination Upon Service Commencement Date; Survival. If this Restated Precedent Agreement is not terminated pursuant to Sections 9, 10 or 11 hereof, or otherwise in accordance with the terms of this Restated Precedent Agreement, then, except for those provisions herein that are stated to survive any termination of this Restated Precedent Agreement, this Restated Precedent Agreement will terminate by its express terms on the Service Commencement Date, and thereafter Pipeline’s and Customer’s rights and obligations related to the transportation service contemplated herein shall be determined pursuant to the terms and conditions of the Service Agreement and Rate Agreement, as applicable, and Pipeline’s FERC gas tariff, as effective from time to time. Notwithstanding any termination of this Restated Precedent Agreement, each Party shall remain liable to the other Party for all losses or damages suffered, sustained or incurred by the other Party as a result of a breach of any obligations of a Party which breach arose prior to termination of this Restated Precedent Agreement, provided that Customer’s liability shall only apply if and to the extent it is to be liable in accordance with Section 8 and, such liability, if any, shall not Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 27 of 68 220 exceed its share of Pre-Service Costs determined in accordance with Section 8. Notwithstanding any termination of this Restated Precedent Agreement pursuant to terms of this Restated Precedent Agreement, to the extent that a provision of this Restated Precedent Agreement contemplates that one or both Parties may have further rights and/or obligations hereunder following such termination, the provision shall survive such termination as necessary to give full effect to such rights and/or obligations. 13)Creditworthiness. At all times during the effectiveness of this Restated Precedent Agreement and the related Service Agreement(s), Customer, pursuant to the criteria and terms set forth in this Section 13, shall either maintain a Creditworthy status, as defined below, or furnish sufficient credit support to Pipeline. a)Creditworthiness Standard. Customer shall at all times during the effectiveness of this Restated Precedent Agreement and the Service Agreement(s) be Creditworthy or provide the Guaranty or the Letter of Credit contemplated herein. For purposes herein, “Creditworthy” means, in respect of the applicable entity, such entity has and maintains: (i)a long-term senior unsecured debt rating from (a) Moody’s Investors Service, Inc. (“Moody’s”) of Baa3 or higher, and (b) Standard & Poor’s (“S&P”) of BBB- or higher and, with respect to each rating, not on negative credit watch or outlook, and (ii) a sufficient open line of credit as of the Effective Date. Pipeline acknowledges and agrees that, as of the effective date of this Restated Precedent Agreement, Customer has a sufficient open line of credit with Pipeline and Customer shall not at any time hereafter be required to establish any line of credit in connection with this Restated Precedent Agreement. If Customer is rated by only one of the foregoing credit rating agencies, Customer shall be creditworthy if it has the rating described in the foregoing sentence Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 28 of 68 221 from the agency by which it is rated. If Customer is rated by both of the rating agencies described above but one such agency’s rating is lower than the other agency’s rating, then Customer’s creditworthiness shall be determined based on the lower of the Moody’s or S&P rating. Alternatively, Customer may be accepted as Creditworthy by Pipeline if Pipeline determines that, notwithstanding the absence of the rating requirements in this Section 13(a), the financial position of Customer (or an entity that guarantees all of Customer’s payment obligations) is and remains acceptable to Pipeline during the term of the Restated Precedent Agreement, and the Service Agreement. b) Failure to Meet Creditworthiness Standard. In the event Customer fails at any time or from time to time during the term of this Restated Precedent Agreement or the applicable service agreement to meet the Creditworthy standard set forth in Section 13(a) (including if its Guarantor, if applicable is no longer Creditworthy), Customer shall provide credit support to Pipeline in the form of one of the following methods set forth in this Section 13(b): i) Guaranty. Customer will provide, or cause to be provided, a guaranty (a “Guaranty”) from Customer’s parent company or from an affiliate (a “Guarantor”), provided the Guaranty shall serve to satisfy Customer’s obligations under this Section 13 only if such Guarantor is Creditworthy, and only for so long as the Guarantor remains Creditworthy and for so long as it guarantees Customer’s payment obligations and the Guaranty otherwise satisfies the requirements of this clause (i). The Guaranty shall: (a) guarantee all payment obligations of Customer under this Restated Precedent Agreement and the Service Agreement, (b) remain in effect until all payment obligations under this Restated Precedent Agreement, and the Service Agreement Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 29 of 68 222 have been satisfied in full, and (c) be in a form and content substantially similar to Exhibit D hereto. Pipeline may require, at any time and from time to time, Customer to provide, or cause to be provided, an additional guaranty from a Creditworthy guarantor if the original Guarantor is, at any time, no longer Creditworthy. If Customer becomes Creditworthy after providing a Guaranty, Customer may request a discharge and return of such Guaranty, and following such request Pipeline shall promptly provide such discharge and return. ii)Letter of Credit. If, at any time and from time to time, during the effectiveness of this Restated Precedent Agreement or the Service Agreement Customer fails to meet the requirements of Sections 13(a) and 13(b)(i) above, Customer shall provide, or cause to be provided, at its sole cost, a standby irrevocable letter of credit (a “Letter of Credit”) from a Qualified Institution. For purposes herein, a “Qualified Institution” shall mean a major U.S. or Canadian commercial bank, or the U.S. branch offices of a foreign bank, which is not the Customer or Customer’s Guarantor (or a subsidiary or affiliate of the Customer or Customer’s Guarantor) and which has assets of at least $10 billion dollars and a credit rating of at least “A-” by S&P, or “A3” by Moody’s. Pipeline may require Customer at Customer’s cost to substitute a Qualified Institution if the Letter of Credit provided is, at any time, from a financial institution which is no longer a Qualified Institution. The Letter of Credit shall: (i) remain in effect until all payment obligations under this Restated Precedent Agreement and the Service Agreement have been satisfied in full, (ii) be in a form acceptable to Pipeline, which for purposes herein shall mean in form and content substantially similar to Exhibit E hereto, and (iii) be in the amount equal to twenty-four (24) months of reservation Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 30 of 68 223 charges based on the MDQ and reservation rates under the Service Agreement(s). If Customer becomes Creditworthy after providing a Letter of Credit, Customer may request a discharge and return of such Letter of Credit, and following such request Pipeline shall promptly provide such discharge and return. c)Demand for Assurances. At any time and from time to time, Pipeline shall have the right to require that Customer demonstrate Customer’s, or its Guarantor’s, continuing satisfaction of the creditworthiness and credit support requirements in this Section 13. Customer will have a period of five (5) business days to make such demonstration or to furnish credit support acceptable to Pipeline in accordance with this Section 13. d)Failure to Comply. The failure of Customer to timely satisfy or maintain the requirements set forth in this Section 13 shall in no way relieve Customer of its other obligations under this Restated Precedent Agreement and/or the Service Agreement, nor shall it affect Pipeline’s right to seek damages or performance under this Restated Precedent Agreement and/or the Service Agreement(s). Further, if, prior to the Service Commencement Date, Customer fails to timely satisfy or maintain the requirements set forth in this Section 13, then Pipeline may give written notice to Customer of such failure, and, if such failure has not been cured within five (5) business days following the receipt by Customer of such notice, then Pipeline may elect to suspend or terminate performance under this Restated Precedent Agreement, or to terminate this Restated Precedent Agreement and, if applicable, the Service Agreement. e)Term of Credit Provisions and Survival. This Section 13 shall survive the termination of this Restated Precedent Agreement and shall remain in effect until all payment Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 31 of 68 224 obligations under this Restated Precedent Agreement, and the Service Agreement, if applicable, have been satisfied in full. f) Replacement Customer Creditworthiness. In the event Customer assigns this Restated Precedent Agreement and/or the Service Agreement in accordance with the applicable assignment provision(s), or in the event Customer permanently releases all or a portion of Customer’s capacity under the Service Agreement in accordance with Pipeline’s FERC Gas tariff, then the assignee and/or the permanent replacement customer, as applicable, shall be required to satisfy the requirements of this Section 13 with respect to all such assigned or replacement agreements, and upon satisfaction of the requirements of this Section 13, Pipeline shall return to Customer any Guaranty or Letter of Credit which had been furnished by Customer pursuant to this Section 13. 14) Amendments. This Restated Precedent Agreement may not be modified or amended unless the Parties execute written agreements to that effect. 15) Successors; Assignments. Any company which succeeds by purchase, merger, or consolidation of title to all or substantially all of the assets of a Party will be entitled to the rights and will be subject to the obligations of such Party in title under this Restated Precedent Agreement, and in such respect, no consent to such an assignment shall be required from the other Party. In addition, this Restated Precedent Agreement is assignable in whole or in part without the prior written consent of the Customer: (a) by Pipeline or either DTE or Spectra to NEXUS Gas Transmission, LLC;; (b) by Pipeline to any joint venture or similar collaborative entity created between DTE and Spectra, provided such entity is created for the sole purpose of advancing the Project; or (c) between DTE and Spectra, in respect of each Party’s interests in the Project. Otherwise, neither Customer nor Pipeline may assign Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 32 of 68 225 any of its rights or obligations under this Restated Precedent Agreement without the prior written consent of the other Party hereto, such consent not to be unreasonably withheld. Notwithstanding the foregoing, Pipeline shall have the right, without obtaining Customer’s consent, to pledge or assign its rights under this Restated Precedent Agreement, the Service Agreement, and/or the Rate Agreement as collateral security for indebtedness incurred by Pipeline (or by an affiliate of Pipeline) for the Project. 16) No Third-Party Rights. Except as expressly provided for in this Restated Precedent Agreement, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person not a Party hereto any rights, remedies or obligations under or by reason of this Restated Precedent Agreement. 17) Joint Efforts: No Presumptions. Each and every provision of this Restated Precedent Agreement shall be considered as prepared through the joint efforts of the Parties and shall not be construed against either Party as a result of the preparation or drafting thereof. It is expressly agreed that no consideration shall be given or presumption made on the basis of who drafted this Restated Precedent Agreement or any specific provision hereof. 18) Recitals and Representations. The recitals and representations appearing first above are hereby incorporated in and made a part of this Restated Precedent Agreement. 19) Choice of Law. This Restated Precedent Agreement shall be governed by, construed, interpreted, and performed in accordance with the laws of the State of Ohio, without recourse to any laws governing the conflict of laws. 20) Notices. Except as herein otherwise provided, any notice, request, demand, statement, or bill provided for in this Restated Precedent Agreement, or any notice which either Party desires to give to the other, must be in writing and will be considered duly delivered when mailed by Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 33 of 68 226 registered or certified mail or overnight courier or when provided by personal delivery or electronic mail to the other Party’s address set forth below: Pipeline: Vice President, Business Development 5400 Westheimer Court Houston, TX 77056 brmckerlie@spectraenergy.com Phone – (713) 627-4582 Fax – (713) 627-4727 Customer: Manager Transportation Acquisition 50 Keil Dr N, Chatham, Ontario, Canada thodgson@uniongas.com Phone - (519) 436-4606 Fax - (519) 436-4643 or at such other address as either Party designates by written notice. Routine communications, including monthly statements, will be considered duly delivered when mailed by registered mail, certified mail, ordinary mail, or overnight courier or when provided by electronic mail to the person and at the addresses noted above or as otherwise designated pursuant to this Section 20. 21) Waivers. The waiver by either Party of a breach or violation of any provision of this Restated Precedent Agreement will not operate as or be construed to be a waiver of any subsequent breach or violation hereof. 22) Counterparts. This Restated Precedent Agreement may be executed in any number of counterparts, each of which will be an original, but such counterparts together will constitute one and the same instrument. 23) Headings. The headings contained in this Restated Precedent Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Restated Precedent Agreement. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 34 of 68 227 24)Governmental Authorizations. Notwithstanding any provision to the contrary, each provision of this Restated Precedent Agreement shall be subject to all applicable laws, statutes, ordinances, regulations, rules, court decisions and Governmental Authorizations. 25)Definitions. Capitalized terms used herein have the meanings ascribed to them in the body of this Restated Precedent Agreement, and for the purposes of reference only are listed in Exhibit F attached hereto 26)Entire Agreement. This Restated Precedent Agreement embodies the complete agreement and understanding among the Parties with respect to the subject matter hereof and supersedes and pre-empts any prior understandings, agreements (including, without limitation, the Original Precedent Agreement) or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way. [signature page follows] Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 35 of 68 228 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 36 of 68 229 EXHIBIT A Form of Service Agreement See Attached. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 37 of 68 230 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 38 of 68 231 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 39 of 68 232 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 40 of 68 233 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 41 of 68 234 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 42 of 68 235 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 43 of 68 236 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 44 of 68 237 EXHIBIT B [RESERVED] Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 45 of 68 238 EXHIBIT C Capital Cost Tracking Adjustment for Statement of Negotiated Rates Project Facilities Pipeline and Customer acknowledge that the capital costs attributable to the Project Facilities, which capital costs will underlie a portion of the Reservation Rate for firm transportation service for the Project, will be reflected in the Final Capital Cost Estimate to be provided to Customer by Pipeline in accordance with Sections 3(d)(ii)(2) and 3(d)(ii)(3). Negotiated Reservation Rate Adjustment The Final Estimated Reservation Rate will be adjusted, pursuant to the provisions set forth herein, to reflect any differences between the Final Capital Cost Estimate and the actual amount of capital costs attributable to the Project Facilities. Pipeline will adjust the portion of the Final Estimated Reservation Rate attributable to the Project Facilities as set forth in the final Rate Breakdown (the “Project Facilities Rate Portion”) at least thirty (30) days, but not more than sixty (60) days, prior to the Service Commencement Date. The adjustment to the Project Facilities Rate Portion will be based on a comparison between the Final Capital Cost Estimate and an updated cost report prepared by Pipeline and provided to Customer which updates the estimate of the capital costs for the Project Facilities, substantially in the form of an Exhibit K (the “Updated Capital Cost”). Pipeline will file such Updated Capital Cost report with the Federal Energy Regulatory Commission (“Commission”) at least thirty (30) days, but not more than sixty (60) days, prior to the Service Commencement Date. In making the adjustment described above, Pipeline will adjust the Project Facilities Rate Portion to reflect the percentage increase or decrease between the Updated Capital Cost and the Final Capital Cost Estimate. In the event that the Updated Capital Cost exceeds the Final Capital Cost Estimate, the Project Facilities Rate Portion of the Final Estimated Reservation Rate will be adjusted upward by multiplying it to the ratio of the Updated Capital Cost to the Final Capital Cost Estimate; provided that, notwithstanding any other provision contained herein, if the Updated Capital Cost exceeds the Final Capital Cost Estimate by more than 15%, then the multiplier to the Project Facilities Rate Portion will be 1.15. For the avoidance of doubt, in any event, the maximum upward adjustment to the Project Facilities Rate Portion shall be capped at 1.15 of what was set forth in the Rate Breakdown for the Project Facilities Rate Portion provided by Pipeline pursuant to Section 3(d)(ii)(3). In the event that the Updated Capital Cost is less than the Final Capital Cost Estimate, the Project Facilities Rate Portion of the Final Estimated Reservation Rate will be adjusted downward by multiplying it to the ratio of the Updated Capital Cost to the Final Capital Cost Estimate; provided that, notwithstanding any other provision contained herein, if the Updated Capital Cost is less than the Final Capital Cost Estimate by Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 46 of 68 239 more than 15%, then the multiplier to the Project Facilities Rate Portion will be .85. For the avoidance of doubt, in any event, the maximum downward adjustment to the Project Facilities Rate Portion shall be capped at .85 of what was set forth in the Rate Breakdown for the Project Facilities Rate Portion provided by pursuant to Section 3(d)(ii)(3). The reservation rate resulting from the adjustment provided for in this paragraph shall be the “Final Reservation Rate”. Pipeline will make a final adjustment to the Project Facilities Rate Portion no later than 210 days after the Service Commencement Date. In making the final adjustment, Pipeline shall prepare and provide to Customer a final cost report which sets forth the actual capital costs for the Project Facilities, substantially in the form of an Exhibit K (“Final Capital Cost”). In the event the Final Capital Cost exceeds the Final Capital Cost Estimate, then the Project Facilities Rate Portion of the Final Reservation Rate will be adjusted upward by multiplying it to the ratio of the Final Capital Cost to the Final Capital Cost Estimate; provided that, in any event, the maximum upward adjustment to the Project Facilities Rate Portion shall be capped at 1.15 of what was set forth in the Rate Breakdown for the Project Facilities Rate Portion provided by Pipeline pursuant to Section 3(d)(ii)(3). In the event the Final Capital Cost is less than the Final Capital Cost Estimate, then the Project Facilities Rate Portion of the Final Reservation Rate will be adjusted downward by multiplying it to the ratio of the Final Capital Costs to the Final Capital Cost Estimate; provided that, in any event, the maximum downward adjustment to the Project Facilities Rate Portion shall be capped at .85 of what was set forth in the Rate Breakdown for the Project Facilities Rate Portion provided by Pipeline pursuant to Section 3(d)(ii)(3). In the event that the adjusted Reservation Rate decreases because the Final Capital Cost is less than the Final Capital Cost Estimate, Pipeline will refund Customer an amount (including interest at the Commission’s approved interest rate pursuant to 18 C.F.R. §154.501, hereafter the “FERC Interest Rate”) equal to the difference between the revenue received from Customer for the time period that Customer paid the higher rate and the revenue that Pipeline would receive for such time period had Customer paid the adjusted rate. In the event that the adjusted Reservation Rate increases because the Final Capital Cost is more than the Final Capital Cost Estimate, Customer will pay Pipeline an amount (including interest at the FERC Interest Rate) equal to the difference between the revenue received from Customer for the time period that Customer paid the lower rate and the revenue that Pipeline would have received for the time period had Customer paid the adjusted rate. Recourse Reservation Rate Adjustment In the case of an upward adjustment to the Final Estimated Reservation Rate, Pipeline will file the Updated Capital Cost report, together with an adjusted recourse rate applicable to transportation service for the Project, with the Commission at least thirty (30) days, but no more than sixty (60) days, prior to the Service Commencement Date. In the case of a downward adjustment to the Final Estimated Reservation Rate, Pipeline has the right, but not any obligation, to prepare and file such Updated Capital Cost report and/or an adjustment to the recourse rate applicable to transportation service for the Project with the Commission. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 47 of 68 240 Cost Reports Pipeline will prepare the Updated Capital Cost report in accordance with Section 157.14(a)(13) of Title 18 of the Code of Federal Regulations. Such report will reflect Pipeline’s reasonable good faith estimate at the time of the total capital costs attributable to Project Facilities as constructed. Pipeline will prepare the Final Capital Cost report in accordance with Section 157.14(a)(13) of Title 18 of the Code of Federal Regulations. Such report will reflect Pipeline’s actual capital costs attributable to the Project Facilities as constructed. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 48 of 68 241 EXHIBIT D Form of Guarantee See Attached. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 49 of 68 242 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 50 of 68 243 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 51 of 68 244 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 52 of 68 245 EXHIBIT E Form of Letter of Credit See Attached. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 53 of 68 246 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 54 of 68 247 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 55 of 68 248 EXHIBIT F DEFINITIONS 1) Definitions In the Restated Precedent Agreement: a) “Capital Cost Tracking Adjustment” has the meaning ascribed to that term in Section 3(d)(ii)(3). b) “Creditworthy” has the meaning ascribed to that term in Section 12(a). c) “Customer” has the meaning ascribed to that term in the recitals. d) “Customer’s Authorizations” has the meaning ascribed to that term in Section 2(a). e) “Customer’s MDQ” has the meaning ascribed to that term in Section 2(d). f) “Dawn” has the meaning ascribed to that term in the recitals. g) “Default” has the meaning ascribed to that term in Section 10. h) “Default Notice” has the meaning ascribed to that term in Section 10. i) “DTE” has the meaning ascribed to that term in the recitals. j) “Effective Date” has the meaning ascribed to that term in the recitals. k) “Union” has the meaning ascribed to that term in the recitals. l) “Estimated Commencement Date” has the meaning ascribed to that term in Section 3(c). m) “FERC” has the meaning ascribed to that term in Section 1(a). n) “FERC Interest Rate” has the meaning ascribed to that term in Exhibit C. o) “Final Capital Cost” has the meaning ascribed to that term in Exhibit C. p) “Final Capital Cost Estimate” has the meaning ascribed to that term in Section 3(d)(ii)(3). q) “Final Estimated Reservation Rate” has the meaning ascribed to that term in Section Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 56 of 68 249 3(d)(ii)(3). r) “Final Reservation Rate” has the meaning ascribed to that term in Exhibit C. s) “Force Majeure” has the meaning ascribed to that term in Section 9(c). t) “Forms of Commercial Agreements” has the meaning ascribed to that term in Section 3(b). u) “Governmental Authorizations” has the meaning ascribed to that term in Section 1(a). v) “Guarantor” has the meaning ascribed to that term in Section 13(b)(i). w) “Guaranty” has the meaning ascribed to that term in Section 13(b)(i). x) “In-Service Date Notice” has the meaning ascribed to that term in Section 4(b). y) “International Border” has the meaning ascribed to that term in the recitals. z) “Letter of Credit” has the meaning ascribed to that term in Section 13(b)(ii). aa) “MDDO” means maximum daily delivery obligation. bb) “MDRO” means maximum daily receipt obligation. cc) “MDQ” means maximum daily quantity. dd) “Moody’s” has the meaning ascribed to that term in Section 13(a). ee) “NEB” has the meaning ascribed to that term in Section 1(a). ff) “Open Season” has the meaning ascribed to that term in the recitals. gg) “Party” or “Parties” has the meaning ascribed to that term in the recitals. hh) “Pipeline” has the meaning ascribed to that term in the recitals. ii) “Pre-Service Costs” has the meaning ascribed to that term in Section 8. jj) “Project” has the meaning ascribed to that term in the recitals. kk) “Project Facilities” has the meaning ascribed to that term in Section 3(d)(ii)(2). ll) “Project Facilities Rate Portion” has the meaning ascribed to that term in Exhibit C. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 57 of 68 250 mm)“Qualified Institution” has the meaning ascribed to that term in Section 13(b)(ii). nn) “Rate Agreement” has the meaning ascribed to that term in Section 3(d)(ii)(3). oo) “Rate Breakdown” has the meaning ascribed to that term in Section 3(d)(ii)(3) pp) “Reservation Rate” has the meaning ascribed to that term in Section 1(c). qq) “ROFR” has the meaning ascribed to that term in Section 3(f). rr) “S&P” has the meaning ascribed to that term in Section 13(a). ss) “Service Agreement” has the meaning ascribed to that term in Section 3(b). tt) “Service Commencement Date” has the meaning ascribed to that term in Section 4(b). uu) “Spectra” has the meaning ascribed to that term in the recitals. vv) “Updated Capital Cost” has the meaning ascribed to that term in Exhibit C. ww) “Willow Run” has the meaning ascribed to that term in the recitals. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 58 of 68 251 May 28, 2015 Mark J. Isherwood Vice President, Business Development Union Gas Limited 50 Keil Dr. N. Chatham, Ontario Re: NEXUS-US Negotiated Rate Letter Agreement for Service Agreement No. 00004 Dear Mark: DTE Pipeline Company (“DTE”) and Spectra Energy Transmission, LLC (“Spectra”) (where DTE and Spectra are collectively referred to herein as “Pipeline”) and Union Gas Limited (“Customer”) have entered into a Restated Precedent Agreement dated May 28, 2015 (the “Precedent Agreement”) to contract for firm transportation service as part of the NEXUS Gas Transmission Project. The Precedent Agreement contemplates, inter alia, that Pipeline and Customer will enter into a negotiated rate agreement applicable to service provided by Pipeline to Customer pursuant to the terms and conditions contained in the Service Agreement. Customer acknowledges that it is electing negotiated rates as an alternative to the recourse rates that will be available for service under the NEXUS FERC Gas Tariff, as it may be in effect from time to time. The NEXUS FERC Gas Tariff will include appropriate provisions allowing for Pipeline to provide service to customers at negotiated rates in accordance with FERC’s negotiated rates policies. In this letter and the attached Pro Forma Statement of Negotiated Rates, capitalized terms not otherwise defined herein and therein which are defined terms in the Precedent Agreement and Service Agreement, or either of them, as applicable, shall have the meanings given to them in such agreements, as applicable. Pipeline and Customer hereby agree that the provisions of the attached Pro Forma Statement of Negotiated Rates reflect the terms of their agreement, including the effectiveness of the negotiated rate. After execution of this letter by both Pipeline and Customer and on or about 30 to 60 days prior to the Service Commencement Date, Pipeline shall file a Statement of Negotiated Rates with the Federal Energy Regulatory Commission (“FERC”) containing rate-related provisions identical to those provisions on the attached Pro Forma Statement of Negotiated Rates in accordance with the General Terms and Conditions of the NEXUS FERC Gas Tariff. To the extent necessary to conform terms used in the NEXUS FERC Gas Tariff when filed with terms used in this negotiated rate agreement, the attached Pro Forma Statement of Negotiated Rates may be revised before Pipeline files it with FERC to conform to the NEXUS FERC Gas Tariff. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 59 of 68 252 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 60 of 68 253 STATEMENT OF NEGOTIATED RATES 1/ 8/ Customer Name: Union Gas Limited Service Agreement: Service Agreement No. 00004 2/ 4/ Project: As used in this Negotiated Rate Agreement, the term “Project” shall mean an approximately 250-mile greenfield pipeline and related facilities extending from eastern Ohio to various interconnections in Michigan, along with subscriptions of firm pipeline capacity on existing or expanding pipeline systems in Michigan for ultimate delivery to the international border between the United States and Canada near St. Clair, Michigan. Term of Negotiated Rate: The term of this negotiated rate commences on the Service Commencement Date and continues for the Primary Term. Rate Schedule: FT MDQ: 150,000 Dth/d Customer shall pay the following Reservation Rate, Commodity Rate, Fuel and Other Charges for service provided pursuant to Service Agreement 00004: Reservation Rate: During the Primary Term, shall be as follows: (1) Customer shall pay on a monthly basis a negotiated Reservation Charge per Dth per day of Customer’s MDQ under Service Agreement No. 00004, equal to US$0.77, subject to further adjustment as set forth herein and in the Restated Precedent Agreement dated May 28, 2015 (the “Precedent Agreement”). 3/ 5/ 6/ 7/ (2) Customer shall also pay all other FERC approved demand charges and demand surcharges applicable to Customer’s Contract No. 00004. 7/ Usage Rate and Fuel Rate: During the Primary Term, shall be as follows: (1) The Usage-1 Charge shall be zero ($0.00) multiplied by the quantity of gas, in Dekatherms, delivered during the applicable Day. For all purposes hereunder, the “Usage-1 Charge” shall mean the charge at the negotiated commodity rate for volumes up to Customer’s MDQ. (2) The Usage-2 Charge shall be the maximum applicable Rate Schedule FT recourse Usage-2 Charge multiplied by the quantity of gas, in Dekatherms, delivered during the applicable Day that qualifies under NEXUS Pipeline’s Rate Schedule FT for the Usage-2 Charge. For all purposes hereunder, the “Usage-2 Charge” shall mean the maximum recourse commodity charge rate applicable to Authorized Overrun quantities delivered by the Pipeline multiplied by the quantity of gas, in Dekatherms, Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 61 of 68 254 delivered during the applicable Day in excess of Customer’s MDQ, plus the applicable Fuel Rate and shrinkage and lost and unaccounted for gas charges applicable to Rate Schedule FT, in-kind. (3) Customer shall also pay the Fuel Rate equal to the applicable Fuel Rate under NEXUS Pipeline’s Rate Schedule FT (as calculated based upon the Commission approved ASA methodology and / or application of any Commission approved tracking mechanism), which Fuel Rate is currently anticipated to be 2 - 3%, and all other FERC approved usage charges and usage surcharges applicable to Customer’s Contract No. 0004. 7/ Primary Receipt Point: The head of the Project facilities in eastern Ohio, which shall be the most upstream mainline receipt point into the greenfield pipeline portion of the Project, as Pipeline shall notify Customer, and which is currently anticipated to be at or near Kensington, OH. Primary Delivery Point: Near a meter at an exact location to be determined at the international border between the United States and Canada, near St. Clair, Michigan. Recourse Rate(s): The Recourse Rate(s) applicable to this service is the applicable maximum rate(s) stated on Pipeline’s Statement of Rates for Rate Schedule FT as such rate may be in effect from time to time. Customer acknowledges that the negotiated rate may be lower than or higher than the applicable Recourse Rate as it may be in effect from time to time. FOOTNOTES: 1/ This negotiated rate transaction does not deviate in any material respect from the form of service agreement to be set forth in Pipeline’s FERC Gas Tariff. 2/ This negotiated rate shall apply only to transportation service under Service Agreement No. 00004, up to Customer's MDQ, using the Primary Receipt Point(s) and Primary Delivery Point(s) designated herein, and including at the negotiated rate any secondary receipt and delivery points available under Rate Schedule FT that are within the path of Customer’s Primary Receipt Point(s) and Primary Delivery Point(s) (“Customer In Path Nominations”, and the total scheduled quantity of Customer In Path Nominations for a given day, the “Customer Daily In Path Quantity”), except as otherwise provided herein. Customer nominations from or to points outside of the path of Customer’s primary point(s) are referred to hereinafter as “Customer Out of Path Nominations”, and the total scheduled quantity of Customer Out of Path Nominations for a given day is hereinafter referred to as the “Customer Daily Out of Path Quantity”. Related replacement shipper nominations that are outside of the path of Customer’s primary points are referred to hereinafter as “Related Replacement Shipper Daily Out of Path Nominations”, and the total scheduled quantity of Related Replacement Shipper Daily Out of Path Nominations (across all related replacement Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 62 of 68 255 contracts) is hereinafter referred to as the “Related Replacement Shipper Daily Out of Path Quantity”. The sum of the Customer Daily Out of Path Quantity plus the Related Replacement Shipper Daily Out of Path Quantity for a given day shall hereinafter be referred to as the Total Daily Out of Path Quantity. The Total Daily Out of Path Quantity shall be charged to Customer at the greater of the then effective maximum applicable rates for Rate Schedule FT, or the applicable negotiated rates, as more fully detailed below. The reservation charges pursuant to this negotiated rate agreement will be calculated daily. When the negotiated Reservation Rate set forth above and applicable to Customer’s service hereunder is greater than or equal to the then effective maximum applicable recourse reservation rate (inclusive of all reservation surcharges and other reservation charges) for Rate Schedule FT, the daily equivalent negotiated Reservation Rate shall apply each day to the MDQ. When the negotiated Reservation Rate set forth above is less than the then effective maximum applicable recourse reservation rate for Rate Schedule FT (inclusive of all reservation surcharges and other reservation charges), (1) the negotiated Reservation Rate shall apply each day to the greater of a) zero or b) the MDQ less the Total Daily Out of Path Quantity and (2) the daily equivalent maximum applicable recourse reservation rate (inclusive of all reservation surcharges and other reservation charges) applicable to service under Contract No. 00004 as effective from time to time under Pipeline’s Rate Schedule FT-1 shall apply each day to the lesser of a) the MDQ or b) the Total Daily Out of Path Quantity. The negotiated Usage-1 Rate as set forth above shall apply to the Customer Daily In Path Quantity. When the negotiated Usage-1 Rate set forth above is greater than or equal to the then effective maximum applicable recourse Usage-1 rate (inclusive of all usage surcharges and other usage charges) for Rate Schedule FT, the negotiated Usage-1 Rate shall apply to the Total Daily Out of Path Quantity, less a credit for the total Usage-1 charges assessed for the Related Replacement Shipper Daily Out of Path Quantity. When the negotiated Usage-1 Rate set forth above is less than the then effective maximum applicable recourse Usage-1 rate (inclusive of all usage surcharges and other usage charges) for Rate Schedule FT, the then effective maximum applicable recourse Usage-1 rate (inclusive of all usage surcharges and other usage charges) for Rate Schedule FT shall apply to the Total Daily Out of Path Quantity, less a credit for the total Usage-1 charges assessed for the Related Replacement Shipper Daily Out of Path Quantity. The negotiated Fuel Rate as set forth above shall apply to the Customer Daily In Path Quantity and to the Customer Daily Out of Path Quantity. The negotiated Usage-2 rate as set forth above shall apply to the portion of both the Customer Daily In Path Quantity and the Customer Daily Out of Path Quantity that qualifies under NEXUS Pipeline’s Rate Schedule FT for the Usage-2 charge. Provided, if Customer changes its primary point(s) listed above or the related MDROs or MDDOs at any time or from time to time, pursuant to the provisions of Pipeline’s FERC Gas Tariff but without the written approval of Pipeline to continue the negotiated rate, Pipeline shall have the option to terminate this negotiated rate by providing Customer with written notice of Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 63 of 68 256 Pipeline’s intent to do so and, in such case, this negotiated rate shall terminate and Pipeline’s maximum applicable Recourse Rates for Rate Schedule FT shall apply for the remaining term of Service Agreement No. 00004, unless and until otherwise mutually agreed in writing between Customer and Pipeline. 3/ Pipeline and Customer acknowledge that the capital costs attributable to the greenfield facilities necessary to be constructed by Pipeline for the provision of service on the Project (the “Project Facilities”), which underlie a portion of the monthly Reservation Charge described in the Reservation Rate section above, is reflected in an estimate provided by Pipeline to Customer in accordance with the Precedent Agreement (“Final Capital Cost Estimate”). 4/ Pipeline and Customer agree that Service Agreement No. 00004 is a ROFR Agreement. 5/ The Reservation Charge described in the Reservation Rate section above will be adjusted, pursuant to the provisions of this footnote 5, to reflect any difference between the Final Capital Cost Estimate and the actual amount of capital costs attributable to the Project Facilities, as reflected by Pipeline in an updated cost report for the Project, substantially in the form of an Exhibit K (“Updated Capital Cost”). Pipeline will provide the Updated Capital Cost report to the Customer at least thirty (30) days, but no more than sixty (60) days, prior to the in-service date of the Project, as such in-service date is estimated to occur by Pipeline at the time. Pipeline will adjust the portion of the Reservation Rate attributable to the Project Facilities (the “Project Facilities Rate Portion”) to reflect the percentage increase or decrease between the Updated Capital Cost and the Final Capital Cost Estimate. In the event that the Updated Capital Cost exceeds the Final Capital Cost Estimate, the Project Facilities Rate Portion will be adjusted upward by multiplying it by the ratio of the Updated Capital Cost to the Final Capital Cost Estimate; provided that, notwithstanding any other provisions contained herein, if the Updated Capital Cost exceeds the Final Capital Cost Estimate by more than 15%, then the multiplier to the Project Facilities Rate Portion will be 1.15. For the avoidance of doubt, in any event, the maximum upward adjustment shall be capped at 1.15 of what was set forth as the Project Facilities Rate Portion of the Final Reservation Rate in the Rate Breakdown provided to Customer by Pipeline in accordance with the Precedent Agreement. In the event that the Updated Capital Cost is less than the Final Capital Cost Estimate, the Project Facilities Rate Portion will be adjusted downward by multiplying it by the ratio of the Updated Capital Cost to the Final Capital Cost Estimate; provided that, notwithstanding any other provisions contained herein, if the Updated Capital Cost is less than the Final Capital Cost Estimate by more than 15%, then the multiplier to the Project Facilities Rate Portion will be 0.85. For the avoidance of doubt, in any event, the maximum downward adjustment shall be capped at 0.85 of what was set forth as the Project Facilities Rate Portion of the Final Reservation Rate in the Rate Breakdown provided to Customer by Pipeline in accordance with the Precedent Agreement. No later than 210 days after the Service Commencement Date, Pipeline will provide to Customer a final cost report, and will file with the Commission an adjustment to Customer’s Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 64 of 68 257 then-effective adjusted Reservation Rate to reflect any increase or decrease between the Final Capital Cost Estimate and the final capital costs (“Final Capital Costs”) as set forth in Pipeline’s post-construction cost report filed with the Commission pursuant to Part 157.20(c)(3) of Title 18 of the Code of Federal Regulations, prepared in accordance with Section 157.14(a)(13). Such report will reflect Pipeline’s final actual capital costs attributable to the Project Facilities. In the event that the Final Capital Costs are less than the Final Capital Cost Estimate, Pipeline will adjust downward the Project Facilities Rate Portion by multiplying it by the ratio of the Final Capital Costs to the Final Capital Cost Estimate; provided however that, notwithstanding any other provisions contained herein, the maximum downward adjustment shall be capped at 0.85 of what was set forth as the Project Facilities Rate Portion of the Final Reservation Rate in the Rate Breakdown provided to Customer by Pipeline in accordance with the Precedent Agreement. In such event, Pipeline will refund via an invoice credit to Customer an amount (including interest at the Commission’s approved interest rate pursuant to 18 C.F.R. §154.501, hereafter the “FERC Interest Rate”) equal to the difference between such rates for the time period that Customer paid the higher rate. In the event that the Final Capital Costs are more than the Final Capital Cost Estimate, Pipeline will adjust upward the Project Facilities Rate Portion by multiplying it by the ratio of the Final Capital Costs to the Final Capital Cost Estimate; provided however that, notwithstanding any other provisions contained herein, the maximum upward adjustment shall be capped at 1.15 of what was set forth as the Project Facilities Rate Portion of the Final Reservation Rate in the Rate Breakdown provided to Customer by Pipeline in accordance with the Precedent Agreement. In such event, Customer will pay Pipeline an amount (including interest at the FERC Interest Rate) equal to the difference between such rates for the time period that Customer paid such lower rate. 6/ Prior to filing this statement of negotiated rates to reflect the Updated Capital Cost, the negotiated Reservation Rate stated above will be replaced with the adjusted Reservation Rate, which is the applicable rate updated to reflect estimated and actual cost increases or decreases according to the cost sharing rate adjustments set forth in footnotes 3 and 5. 7/ Customer agrees to pay the applicable Annual Charge Adjustment surcharge and any existing and any future surcharge or other charge approved by FERC in a generic proceeding or in a Pipeline-specific proceeding, which mechanism recovers cost components not reflected in Pipeline’s initial recourse rates applicable to this FT Service Agreement and which surcharge or other charge is designed to recover costs that are incurred due to a mandate from FERC or any other governmental authority, or otherwise related to pipeline safety or environmental compliance costs associated with Pipeline’s operations pursuant to the NEXUS FERC Gas Tariff. 8/ In this Negotiated Rate Agreement, capitalized terms not otherwise defined herein which are defined terms in the Precedent Agreement and Service Agreement, or either of them, as applicable, shall have the meanings given to them in such agreements, as applicable. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 65 of 68 258 May 28, 2015 Mark J. Isherwood Vice President, Business Development Union Gas Limited 50 Keil Dr. N. Chatham, Ontario Re: Rate Breakdown and Final Capital Cost Estimate Under Restated Precedent Agreement Dated May 28, 2015 Dear Mark: DTE Pipeline Company (“DTE”) and Spectra Energy Transmission, LLC (“Spectra”) (where DTE and Spectra are collectively referred to herein as “Pipeline”) and Union Gas Limited (“Customer”) have entered into a Restated Precedent Agreement dated May 28, 2015 (the “Precedent Agreement”) to contract for firm transportation service as part of the NEXUS Gas Transmission Project. All capitalized terms used but not defined in this letter have the meanings given them in the Precedent Agreement. The Precedent Agreement provides in Section 3(d)(ii)(3) that Pipeline shall deliver to Customer a Rate Breakdown in connection with the Rate Agreement, consisting of a final breakdown of how Pipeline derived the Final Estimated Reservation Rate reflected in the Rate Agreement, including a breakdown of such portion of the Final Estimated Reservation Rate that is derived from the estimated capital costs associated with the construction of the Project Facilities that will be required to be constructed and owned by Pipeline or constructed and owned by a third party on third party owned existing pipeline systems for the provision of transportation service for the Project. Section 3(d)(ii)(3) further provides that Pipeline shall deliver to Customer an estimate of the capital costs associated with the construction of the Project Facilities (defined as the “Final Capital Cost Estimate”). Consistent with Section 3(d)(ii)(3), the Rate Breakdown and the Final Capital Cost Estimate are set forth below. Consistent with Exhibit C to the Precedent Agreement and the Rate Agreement, such Final Capital Cost Estimate will be the base cost for purposes of comparison to the Updated Capital Cost and application of the capital cost tracker and rate adjustment provisions of Exhibit C to the Precedent Agreement and the Rate Agreement. Rate Breakdown The Final Estimated Reservation Rate, as set forth in the separately provided Rate Agreement, includes the following portion derived from the estimated capital costs associated with the construction of the Project Facilities for Customer’s service under the Service Agreement: $0.635 US/dth. For the avoidance of doubt, such amount is the Project Facilities Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 66 of 68 259 Rate Portion as such term is defined and used in the Precedent Agreement and the Rate Agreement. Final Capital Cost Estimate The capital costs associated with construction of the Project Facilities are currently estimated to be $2,019,000,000.00. For the avoidance of doubt, such estimate is the Final Capital Cost Estimate as such term is defined and used in the Precedent Agreement and the Rate Agreement. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 67 of 68 260 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 1 68 of 68 261 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 2 Page 1 of 2 OEB TEMPLATE FOR CONTRACT PRE-APPROVAL Part I – Identification of Applicant Name of Applicant: Union Gas Limited File No: (OEB Use Only) Address of Head Office: 50 Keil Drive North, Chatham, ON N7M 5M1 Telephone Number: (519)-436-4600 Facsimile Number: (519) 436-5461 Email Address: cshorts@uniongas.com Name of Individual to Contact: Chris Shorts Director, Gas Supply Telephone Number: (519) 436-4668 Facsimile Number: (519) 436-5461 Email Address: cshorts@uniongas.com Part II – Needs, Costs and Benefits 2.1 A description of the proposed project that includes need, costs, benefits (such as this project improves the security of supply and the diversity of supply sources) and timelines. 2.2 An assessment of the landed costs (supply costs + transportation costs including fuel costs) for the newly contracted capacity and/or natural gas supply compared to the landed costs of the possible alternatives. Part III – Contract Diversity 3.1 A description of all the relevant contract parameters such as transportation/supply provider, contract length, conditions of service, price, volume, and receipt and delivery points. 3.2 An assessment on how the contract fits into the applicant’s overall transportation and natural gas supply portfolio in terms of contract length, volume and services. Part IV - Risk Assessment 4.1 Identification of all the risks (such as forecasting risks, construction and operational risks, commercial risks and regulatory risks) and plans on how 262 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 2 Page 2 of 2 these risks are to be minimized and allocated between ratepayers, parties to the contract and/or the applicant’s shareholders. For example, forecasting risks include future demand, prices, actual landed costs and performance of basin; commercial risks include competitive and credit-worthiness of provider/operator; construction and operational risks include costs escalations, delays or reliability issues pertaining to new construction, and gas interchangeability and quality issues; and regulatory risks include changes in laws or regulations. Part V – Other Considerations 5.1 A description of the relationship and any other conditions, rights or obligations between the parties to the contract and the applicant’s parent company and/or affiliates. 5.2 An assessment of retail competition impacts and potential impacts on existing transportation pipeline facilities in the market (in terms of Ontario customers). Part VI – Contract 6.1 The contract for which the utility is seeking pre-approval for is filed in this application. The utility may request confidential treatment of its contract in accordance with the Ontario Energy Board’s Practice Direction on Confidential Filings. 263 Union Gas Limited and Enbridge Gas Distribution, Inc. NEXUS Gas Transmission – Market Study May 2015 Prepared by Sussex Economic Advisors, LLC Sussex Economic Advisors, LLC (“Sussex”) has relied upon certain public sources of information consistent with standard consulting practices. Sussex makes no warranties or guarantees regarding the accuracy of any estimates, projections or analyses contained herein. Those reviewing the information contained herein waive any claim against Sussex, its partners, employees, and subcontractors. Sussex shall not be liable to any party reviewing this information. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 1 of 64 264 I.INTRODUCTION Sussex Economic Advisors, LLC (“Sussex”) was retained by Union Gas Limited (“Union”) and Enbridge Gas Distribution, Inc. (“Enbridge”), collectively the Ontario LDCs, to conduct an independent evaluation of the NEXUS Gas Transmission Project (the “Project” or “NEXUS”). The Ontario LDCs have entered into precedent agreements with NEXUS (“Precedent Agreements”) in order to secure capacity on the Project. In particular, the Precedent Agreements with NEXUS will: (1) support the development of new natural gas transportation infrastructure; (2) provide a new path to transport natural gas supplies from the Marcellus and Utica shale basins to Dawn, Ontario; (3) provide significant volumes of natural gas to the Dawn Hub; and (4) be a significant investment for the Ontario LDCs. Finally, as discussed in the evidence of the Ontario LDCs, Union and Enbridge are requesting the Ontario Energy Board (“OEB”) to pre-approve the cost consequences of the long-term transportation contract with NEXUS as detailed in the NEXUS Precedent Agreements. DTE Energy Company (“DTE”)1 and Spectra Energy Partners, LP (“Spectra”)2 are the lead developers of NEXUS, which is a proposed 400 kilometer (250 mile), 36-inch greenfield natural gas pipeline that will deliver 1.5 Bcf/day of natural gas supplies from the Appalachian Basin to Ohio, Michigan, and Ontario markets. To facilitate the delivery of natural gas to these markets, NEXUS has executed agreements for pipeline capacity with Vector Pipeline (“Vector”), Texas Eastern Transmission, LP (“Texas Eastern” or “TETCO”), and DTE Gas Company (an indirect wholly owned subsidiary of DTE). With respect to shippers, NEXUS has executed precedent agreements with both “demand pull” entities (e.g., the Ontario LDCs and DTE) and “supply push” entities (i.e., natural gas producers). Finally, NEXUS initiated the Federal Energy Regulatory Commission (“FERC”) pre-filing process in 2014, and is expected to enter service in late 2017.3 1 DTE is headquartered in Detroit, Michigan and owns regulated electric and natural gas distribution utilities in Michigan, intrastate and interstate natural gas storage and transportation assets, and other related assets. The marketing capitalization of DTE is approximately $15 billion. DTE is rated A3 by Moody’s, BBB+ by S&P, and BBB by Fitch Ratings. 2 Spectra is headquartered in Houston, Texas. It is the owner of more than 22,000 miles of interstate natural gas transmission pipelines, and approximately 300 Bcf of natural gas storage assets. Spectra also owns Union Gas Limited. Spectra is rated BBB by S&P, and has a market capitalization of approximately $22 billion. 3 In Re: Request for Approval to Use the Pre-Filing Process NEXUS Gas Transmission, LLC – NEXUS Gas Transmission Project, FERC Docket No. PF15-10-000, December 30, 2014; and In Re: NEXUS Gas Transmission, LLC, NEXUS Gas Transmission Project, Updated Stakeholder List and Project Update, FERC Docket No. PF15-10-0200, March 20, 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 2 of 64 265 With respect to our assessment of NEXUS, Sussex conducted the following analyses and evaluations: 1.Reviewed current trends in the production and supply of natural gas in certain relevant supply basins; 2.Assessed the benefits associated with contracting for pipeline capacity on the proposed Project; 3.Reviewed the approach used by the Ontario LDCs to evaluate the cost of the NEXUS capacity relative to alternative transportation paths and natural gas supply basins (i.e., landed cost analysis); 4.Reviewed certain risks associated with NEXUS and potential mitigating factors; and 5.Reviewed the regulatory process used in other jurisdictions when considering pre- approval of pipeline transportation contracts. Based on the results of those analyses, Sussex has the following findings and conclusions: Natural Gas Market Trends •The Canadian and U.S. natural gas markets are evolving to accommodate large, emerging sources of natural gas in the U.S. Northeast and Mid-Atlantic (i.e., Marcellus and Utica shale), which is displacing more traditional sources of natural gas (e.g., Western Canada and the Gulf of Mexico) serving eastern markets in the U.S. and Canada. •The Ontario market has been predominately supplied with natural gas from the Western Canadian Sedimentary Basin (“WCSB”). Since 2006, two market dynamics have contributed to the decrease in natural gas flowing from the WCSB to the Ontario market: (1) increased natural gas consumption within the WCSB for certain market segments (e.g., industrial-oil sands and power generation); and (2) decreased conventional natural gas production from the WCSB. •The rise of the Marcellus and Utica shale basins as proximate and competitive sources of natural gas for the Ontario market presents new opportunities to source natural gas from these basins. •The natural gas supply reserves and production in the Marcellus and Utica supply basins are expected to be more than adequate for the term of the NEXUS transportation Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 3 of 64 266 agreements. In addition, NEXUS provides access to other pipelines and, therefore, other natural gas supply basins. •The ability to access these sources of natural gas is premised on sufficient natural gas transportation capacity to deliver Marcellus and Utica natural gas to the Ontario market. Benefits of NEXUS •NEXUS will provide numerous reliability and price stability benefits to the Ontario LDCs, including: 1.Access to proximate and competitive natural gas supply; 2.Natural gas supply basin diversity; 3.Enhanced liquidity for natural gas purchases made at the Dawn Hub; 4.Transportation path diversity; 5.Transportation cost stability; 6.Natural gas price index diversity; and 7.Service flexibility. •The NEXUS benefits (e.g., reliability, diversity, and price stability) increase the flexibility of the Union and Enbridge natural gas supply portfolios; thus providing additional options to the Ontario LDCs to manage natural gas supply and transportation costs, improve overall reliability, and provide increased priced stability. •NEXUS will also provide several benefits to other Ontario natural gas market participants (e.g., the power generation segment and direct purchase customers), including: (1) access to new natural gas supply basins; (2) pipeline diversity; and (3) improved liquidity at the Dawn Hub. Landed Cost Analysis •Sussex reviewed the landed cost analysis prepared by the Ontario LDCs and concluded that: (1) the approach used by Union and Enbridge is reasonable and consistent with typical landed cost approaches; (2) alternative options were identified and modeled; and (3) the Ontario LDCs’ decision process and analysis were documented. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 4 of 64 267 • The landed cost analysis prepared by Union and Enbridge consisted of four components: (1) alternative4 paths to transport natural gas supply to a specific delivery point were identified; (2) the natural gas supply basin associated with each transportation path was identified; (3) the natural gas supply cost was developed for each path; and (4) the transportation cost for all pipelines within the path was calculated. • The transportation paths identified and modeled by the Ontario LDCs represent a reasonable range of alternative options to NEXUS. Specifically, the Union landed cost analysis evaluated fifteen transportation paths to the Dawn Hub; and Enbridge identified and modeled four options associated with the NEXUS capacity and seven alternative transportation routes to the Dawn Hub. • The Union and Enbridge landed cost analyses used reasonable approaches to develop the gas supply cost and transportation cost (i.e., demand, variable, and fuel charges). The landed cost analyses prepared by the Ontario LDCs covered the full contract term (i.e., 15 years) of the capacity obligation outlined in the NEXUS Precedent Agreements. • As illustrated by the results of the Ontario LDCs’ landed cost analyses, the NEXUS transportation path is competitive with the alternatives evaluated. • Both Union and Enbridge developed appropriate documentation of their approach, analysis and results. In addition, the approach used by Union and Enbridge with respect to their landed cost analysis is reasonable and consistent with typical landed cost analysis. Please see Schedules 4 and 5 of the Union evidence, and Appendices B and C of the Enbridge evidence. Risk Assessment • As summarized in Table 1.1 below, Sussex identified and reviewed six categories of risk related to NEXUS. For each risk category, Sussex identified the potential impact on the Project, and the mitigation strategies employed by the Ontario LDCs and NEXUS. 4 For purposes of the Sussex report, the term “alternative” with respect to the Union and Enbridge landed cost analyses includes both existing transportation routes (i.e., paths from the Ontario LDCs’ existing supply portfolios), as well as certain proposed transportation routes (e.g., Rover Pipeline). Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 5 of 64 268 Table 1.1: NEXUS Risk Review Risk Category Risk Mitigation Construction Risk The Ontario LDCs were able to mitigate their exposure to construction- related risks by entering into negotiated rate agreements. A negotiated rate agreement apportions the majority of the risk associated with schedule delays and construction cost overruns to the party that is best positioned to manage that risk (i.e., the project developer). In addition, the Ontario LDCs have certain termination rights that can also facilitate management of this risk. Demand Forecasting Risk The Ontario LDCs’ Precedent Agreements with NEXUS are not dependent on load growth, as the NEXUS capacity will replace existing transportation capacity contracts. The term (i.e., 15 years) of the firm transportation agreement outlined in the Precedent Agreements is on the shorter end of the range of typical firm transportation agreements associated with new infrastructure, thus mitigating the risk of long-term demand erosion. The Ontario LDCs also have the ability to manage their respective gas supply portfolios by terminating other transportation/supply contracts. Supply Risk The Marcellus/Utica shale basins (i.e., the origination point for NEXUS) are the fastest growing natural gas supply basins in North America. Various third-party forecasts support the availability of sufficient natural gas supply for the duration of the NEXUS contract. In addition, NEXUS has access to other natural gas supply basins via interconnections with other pipelines. The term (i.e., 15 years) of the firm transportation agreement outlined in the Precedent Agreements is on the shorter end of the range of typical firm transportation agreements associated with new infrastructure, thus mitigating the risk of a long-term reduction in natural gas supply from the Marcellus/Utica shale basins. Regulatory Risk The NEXUS lead developers (i.e., Spectra and DTE) have significant and recent experience regarding the federal and state regulatory approval processes for pipeline infrastructure; and Spectra/DTE have initiated the FERC pre-filing process for NEXUS. The Ontario LDCs are requesting the OEB’s pre-approval of the cost consequences outlined in the NEXUS Precedent Agreements to manage the provincial regulatory risks. Project Development Risk The NEXUS lead developers are highly experienced pipeline developers that have begun outreach to landowners and have held three open seasons to secure shipper demand. The open seasons have resulted in shipper commitments from a mix of “supply push” and “demand pull” entities, which is further evidence of the viability of the Project. Both lead developers are subsidiaries of large, creditworthy holding companies. Operational Risk The NEXUS lead developers have extensive experience with pipeline operations. Further, any operational issue or cost would likely be subject to the FERC review and approval process. •Sussex concludes that the overall risk to the Ontario LDCs and their customers are largely mitigated by: (1) the usual and customary terms and conditions in the NEXUS Precedent Agreements, (2) the strength of the lead developers, (3) the strategy employed by the Ontario LDCs to limit their exposure to potential construction cost Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 6 of 64 269 overruns, and (4) the current production expectations for the Marcellus and Utica supply basins. Pre-Approval of Cost Consequences of NEXUS • The NEXUS transportation agreements, as outlined in the Ontario LDCs’ Precedent Agreements, represent a significant commitment of 15 years at approximately USD $1.0 billion of pipeline demand charges for Union and Enbridge. • Pre-approval of the cost consequences outlined in the Precedent Agreements would eliminate the risk to the Ontario LDCs of an ex-post facto cost disallowance, assure an opportunity to recover the pipeline demand charges, and facilitate the development of new natural gas infrastructure. • Certain state utility regulatory commissions in the U.S. have adopted pre-approval guidelines to facilitate the development of new natural gas pipeline infrastructure. Report Organization The remainder of the report is organized into the following sections: II. Description and Overview of NEXUS – Provides a detailed description of NEXUS, including its proposed capital costs, route, and schedule for completing the development and construction of the Project. III. Natural Gas Supply Trends and Impact on the Ontario Market – Reviews certain natural gas supply trends to provide a common understanding of the effects of certain fundamental changes in the natural gas market. This section includes a review of natural gas supply dynamics in the U.S. Mid-Atlantic region associated with the Marcellus and Utica shale basins, as well as the traditional natural gas supply source for the Ontario market (i.e., Western Canada). IV. Benefits of NEXUS – Reviews the benefits of NEXUS, including the benefits that accrue directly to the Ontario LDCs and to the Ontario market generally. V. Landed Cost Analysis – Summarizes the Sussex review of the landed cost analysis used by the Ontario LDCs to evaluate several natural gas transportation paths to the Dawn Hub from various natural gas supply basins. VI. Risk Assessment – Assesses certain potential risks associated with NEXUS and discusses the risk mitigation options that may limit the risks to the Ontario LDCs. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 7 of 64 270 VII. Review of State Processes for Pre-Approval – Summarizes how certain U.S. state jurisdictions have implemented pre-approvals of long-term natural gas transportation agreements. VIII. Conclusions – Summarizes the Sussex findings and conclusions. Appendix A: Summary Biographies of Sussex Project Team Overview of Sussex and Project Team Sussex is a management and economic advisory firm providing consulting services to regulated industries such as natural gas, electricity, water, and thermal energy distribution. The firm’s Partners have held senior positions in utility companies, competitive energy suppliers, management consulting firms, and business focused academic institutions. Our Consulting Staff, Executive Advisors, and Affiliated Experts have substantial experience and training in matters relating to regulatory strategy and policy development, natural gas infrastructure development and open season processes, gas supply planning and capacity portfolio optimizing, energy market analysis and assessments, financial and economic analysis, rate proceedings and regulatory compliance, due diligence and valuation, and management reviews and audits. Sussex has a substantial list of clients including natural gas distribution companies, electric utilities, combination utilities, electric transmission providers, natural gas pipeline companies, municipal utilities, state agencies, and non-regulated energy market participants. Sussex has previously appeared before the OEB and La Régie de l’Énergie du Québec to support energy market studies. The Sussex project team responsible for this report consists of Mr. James M. Stephens, Mr. Peter Newman, Ms. Kim Nguyen, and Mr. Samuel G. Eaton. Please see Appendix A for the summary biographies of the Sussex project team. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 8 of 64 271 II. DESCRIPTION AND OVERVIEW OF NEXUS Project Overview NEXUS is a proposed 36-inch natural gas pipeline that will transport approximately 1.5 Bcf/day of natural gas supplies from the Appalachian Basin to markets in Ohio, Michigan, and Ontario, with an anticipated in-service date of November 2017.5 DTE and Spectra are the lead developers of NEXUS, and initiated the FERC pre-filing process in late 2014. The estimated capital expenditures for the Project are approximately USD $2.0 billion.6 Please see Table 2.1 (below) for context regarding capital expenditures for greenfield pipeline projects that are in various stages of development. Table 2.1: Estimated Capital Expenditures Project Number of Pipeline Miles Estimated Capital Expenditures (USD$) Capital Expenditures per Mile (USD$000/Mile) NEXUS 250 $2.0 billion $8.00 Rover Pipeline7 474 $4.2 billion $8.90 Constitution Pipeline8 125 $0.7 billion $5.60 Northeast Energy Direct – Market Path9 188 $2.9 - $3.5 billion $15.40 - $18.60 Project Description The proposed Project will consist of approximately 250 miles of 36-inch greenfield pipeline from the Utica East Ohio Midstream Processing Plant in Kensington, Ohio (the “Kensington Processing Plant”) to interconnects with the existing DTE system and Vector in Michigan as 5 In Re: Request for Approval to Use the Pre-Filing Process NEXUS Gas Transmission, LLC – NEXUS Gas Transmission Project, FERC Docket No. PF15-10-000, December 30, 2014; and In Re: NEXUS Gas Transmission, LLC, NEXUS Gas Transmission Project, Updated Stakeholder List and Project Update, FERC Docket No. PF15-10-000, March 20, 2015. 6 See, Qualifications and Direct Testimony of Mr. Robert G. Lawshe, Michigan PSC Case No. U-17691, December 30, 2014, at 43. 7 See, Application of Rover Pipeline LLC for a Certificate of Public Convenience and Necessity, Volume I, FERC Docket No. 15-93-000, February 20, 2015, at 10, 26. Rover Pipeline consists of approximately 474 miles of 42-inch greenfield pipeline and 237 miles of supply laterals. 8 See, Constitution Pipeline, Media Statement: NYS DEC Section 401 WQC Permit Request, April 29, 2015. 9 See, Kinder Morgan, Natural Gas Pipelines, presentation at the Kinder Morgan 2015 Analyst Conference, January 28, 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 9 of 64 272 shown in Figure 2.1 below.10 Natural gas will flow to the Dawn Hub via transportation agreements held by NEXUS with DTE and Vector or other arrangements.11 Figure 2.1: NEXUS Proposed Route As shown by Figure 2.1, NEXUS will consist of the construction of the following new infrastructure: • Approximately 200 miles of new pipeline in Columbiana, Stark, Summit, Wayne, Medina, Lorain, Erie, Sandusky, Wood, Lucas, and Fulton Counties in Ohio; • Approximately 50 miles of new pipeline in Lenawee, Monroe, and Washtenaw Counties in Michigan; 10 In Re: NEXUS Gas Transmission, LLC, NEXUS Gas Transmission Project, Updated Stakeholder List and Project Update, FERC Docket No. PF15-10-000, March 20, 2015, at 2; and NEXUS Gas Transmission Project Resource Report 1, FERC Docket PF15-10-000, January 23, 2015. 11 See, Vector Electronic Bulletin Board, Results of the 2017 Mainline Expansion Project Open Season, http://bit.ly/1GAr7cz, accessed March 4, 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 10 of 64 273 • Approximately 1,000 feet of lateral pipeline to connect the Kensington Processing Plant to the TETCO system in Columbiana County, Ohio; and • Approximately 1.2 miles of lateral pipeline to connect the Kensington Processing Plant to the Tennessee Gas Pipeline (“TGP”) in Columbiana County, Ohio.12 In addition to the pipeline construction, NEXUS anticipates installing up to 52,000 horsepower (“HP”) of compression at the Columbiana station (Ohio), up to 26,000 HP at the Medina station (Ohio), up to 26,000 HP at the Erie station (Ohio), and up to 26,000 HP at the Lucas station (Ohio). Finally, four new meter stations are anticipated to be installed as part of NEXUS; one station each at the interconnections to the TETCO and TGP systems, one at the Kensington Processing Plant, and one at the terminus of the greenfield construction at Willow Run, Michigan.13 The Kensington Processing Plant (located at the origination point of NEXUS) is a greenfield natural gas processing facility that is part of the Utica East Ohio Processing project sponsored by Access Midstream Partners, LP, M3 Midstream LLC, and EnerVest, Limited.14 The first phase (or “train”) of the Kensington Processing Plant entered service in July 2013 and provided 200 MMcf/day of processing capacity.15 Two additional trains (i.e., expansion of processing capacity) of the Kensington Processing Plant recently entered service and provide an aggregate nameplate capacity of 600 MMcf/day of processing capacity.16 Once fully completed, the Utica East Ohio Processing project, including the Kensington Processing Plant, will have a gas processing capacity of over 1.1 Bcf/day.17 The Kensington Processing Plant has received firm commitments from natural gas producers in the Marcellus and Utica basins located in Ohio, 12 NEXUS Gas Transmission Project Resource Report 1, FERC Docket PF15-10-000, January 23, 2015, at 1-1, 1-2. 13 Ibid, at 1-2. 14 Access Midstream Partners, LP merged with Williams Partners in February 2015. In addition, Williams Partners recently announced an agreement to purchase EnerVest, Limited’s 21% interest in the Utica East Ohio Project. See, Williams Companies, Inc., Williams, Williams Partners and Access Midstream Partners Announce Closing of Merger, February 2, 2015; and Williams Companies, Inc., Williams Partners Agrees to Acquire Additional Interest in Utica East Ohio Midstream Partnerships, April 6, 2015. 15 M3 Midstream LLC, Utica East Ohio Facilities Begin Sales July 28, July 29, 2013. 16 Akron Beacon Journal, Utica East Ohio’s gas-processing system to grow to provide additional capacity, January 7, 2015. 17 Access Midstream Partners, Utica East Ohio Announces Major Expansion, May 12, 2014. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 11 of 64 274 West Virginia and Pennsylvania, including affiliates of Chesapeake Energy Corporation (“Chesapeake”), Total Gas & Power North America, and American Energy Partners.18 The Texas Eastern Appalachian Lease (“TEAL”) project may present additional natural gas supply certainty by providing NEXUS shippers access to supply delivered by natural gas producers in southern Ohio, West Virginia, and Pennsylvania to a new interconnection with the greenfield portion of NEXUS at Kensington, Ohio. NEXUS will lease up to 950,000 Dth/Day of capacity on the TEAL project, which is scheduled to enter service in November 2017.19 Finally, NEXUS will interconnect with the DTE Gas Company (formerly, Michigan Consolidated Gas Company) and Consumers Energy systems in Michigan, and, via Union and Vector to certain Ontario natural gas infrastructure (e.g., the Enbridge Storage facility and Union’s Dawn Hub).20 NEXUS held an initial open season in late 2012, resulting in approximately 1.0 Bcf/day of interested shippers.21 Two supplemental open seasons were conducted, enabling shippers to adjust receipt point access or request lateral locations.22 Initial project shippers include both demand-pull parties (e.g., the Ontario LDCs and DTE) and supply push entities (e.g., Chesapeake, CONSOL Energy, and Noble Energy).23 NEXUS Development Schedule In late 2014, NEXUS filed an application to initiate the FERC pre-filing process, which was accepted by the FERC on January 9, 2015.24 In 2015, NEXUS anticipates that the FERC will complete its scoping of preliminary issues related to the Project. Concurrently, NEXUS expects to complete and file its application for a FERC Certificate of Public Convenience and Necessity (“CPCN”). The FERC review of the NEXUS CPCN application is expected to require approximately one year, with construction of NEXUS commencing in early 2017, and an in- 18 Ibid. 19 In Re: Request for Approval of Pre-Filing Review Texas Eastern Transmission, LP – Texas Eastern Appalachian Lease Project, FERC Docket No. PF15-11-000, January 16, 2015. 20 NEXUS Gas Transmission, Supplemental Open Season Notice for Firm Service – July 23, 2014 – August 21, 2014. 21 Ibid. 22 Ibid; and NEXUS Gas Transmission, Supplemental Open Season Notice for Firm Service – January 14, 2015 – February 12, 2015. 23 PRN Newswire, Spectra Energy Reports Third Quarter 2014 Results, November 5, 2014. 24 In Re: Approval of Pre-Filing Request, FERC Docket No. PF15-10-000, January 9, 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 12 of 64 275 service date of late 2017. Table 2.2 (below) provides a summary of the NEXUS development schedule. Table 2.2: NEXUS Project Development Schedule25 Activity Anticipated Timeline Initial Project Evaluation 2013 – 2nd Quarter 2014 Initial Information Meetings 3rd & 4th Quarter 2014 FERC Pre-Filing Process Initiated 4th Quarter 2014 FERC Issue Scoping 2015 FERC CPCN Application Filing 4th Quarter 2015 FERC Review; Stakeholder Engagement 2016 FERC Approval 4th Quarter 2016 FERC Notice to Proceed with Construction 1st Quarter 2017 Major Construction Initiated Early 2017 Proposed In-Service Date 4th Quarter 2017 25 See, NEXUS Gas Transmission, Fact Sheet: Project Overview, April 1, 2015; and In Re: Request for Approval to Use the Pre-Filing Process NEXUS Gas Transmission, LLC – NEXUS Gas Transmission Project, FERC Docket No. PF15-10-000, December 30, 2014. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 13 of 64 276 III. NATURAL GAS SUPPLY TRENDS AND IMPACT ON THE ONTARIO MARKET Introduction The Ontario market has been predominantly supplied by natural gas sourced from the WCSB. The natural gas supplies from the WCSB are generally transported to Ontario via three transportation paths: (1) TransCanada Pipelines Limited (“TCPL” or “TransCanada”) Canadian Mainline from Empress to Ontario; (2) Great Lakes Gas Transmission (“GLGT”) from Emerson to Dawn; and (3) Alliance Pipeline (“Alliance”) and Vector to Dawn from the WCSB and Chicago, respectively. Recently, the Canadian-U.S. natural gas market has undergone fundamental changes that have affected natural gas supplies to the Ontario market, as well as the transportation paths utilized to deliver that natural gas. Specifically, the volume of natural gas shipped from the WCSB to markets in Eastern Canada and the U.S. Northeast has declined. This trend in the availability of WCSB volume for other markets (e.g., Ontario) is the result of certain market dynamics including: (1) decreased production of conventional natural gas resources in the WCSB; (2) increasing natural gas consumption by certain market segments in Alberta (e.g., industrial-oil sands and power generation); and (3) increasing natural gas production from the Marcellus and Utica shale basins, which are geographically closer to the traditional demand markets. In addition, WCSB producers have begun to investigate alternative markets for existing and new natural gas production, including the export of liquefied natural gas (“LNG”) from Western Canada to natural gas markets in the Western Pacific. Given the importance of the WCSB and Appalachian gas supplies to the Ontario market, each supply basin is reviewed in detail below. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 14 of 64 277 WCSB Overview As illustrated by Figure 3.1, the WCSB natural gas production basin is situated in Alberta, British Columbia and Saskatchewan. Figure 3.1: Map of WCSB26 Declining Production from Traditional WCSB Resources The WCSB is a major source of natural gas supply for Canadian and U.S. markets; however, over the past several years, the production of conventional natural gas resources has declined. Specifically, as illustrated by Figure 3.2, natural gas production in the WCSB has declined since 2006. 26 FNR Asset Management Inc., http://www.fnrm.ca/html/swca/index.cfm, accessed July 14, 2014. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 15 of 64 278 Figure 3.2: WCSB Production27 As shown by Figure 3.2, the WCSB produced approximately 17.3 PJ/day of natural gas in 2000, however, by 2006 natural gas production begin to decline and averaged 13.6 PJ/day by 2013, a decline of approximately 24% from its 2001 level.28 The reduction in natural gas supply availability from the WCSB to other markets is illustrated by a review of nominated volumes at Empress (i.e., the interconnection point between the TransCanada NGTL System and the Canadian Mainline). As illustrated in Figure 3.3, the nominated deliveries at Empress have declined over the 2006 to 2014 period. 27 National Energy Board of Canada, Canada’s Energy Future 2013 – Energy Supply & Demand Projections to 2035, November 2013, Figure 6.2 at 52. See also, Appendix 4: Natural Gas. Values have been converted from 106m3/day to PJ/day at a rate of 0.0374 106m3/day per PJ/day. 28 Ibid. 0 2 4 6 8 10 12 14 16 18 20 0 2 4 6 8 10 12 14 16 18 20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (P J / d a y ) (P J / d a y ) 23.8% Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 16 of 64 279 Figure 3.3: TransCanada Canadian Mainline Nominated Deliveries (2007-January 2015)29 As shown in Figure 3.3, from November 2003 to October 2008, the daily volume at Empress ranged between 4.0 PJ/day and 7.0 PJ/day. In 2006, shipments from Empress began to decline, since 2009 daily volumes at Empress have been well below 4.0 PJ/day, and by 2013 daily volumes were below 2.0 PJ/day. This decline in flows from 5.4 PJ/day (i.e., 2003-2009 average) to 3.0 PJ/day (i.e., 2009-2014 average) is a reduction of approximately 43%. In terms of forecasted natural gas production from the WCSB, certain publicly available forecasts, including one prepared by the National Energy Board of Canada (“NEB”), suggest that the decline in WCSB production is likely to continue until at least 2018. For example, the NEB recently noted that: (1) overall Canadian natural gas production would continue to decline until 2018 when new LNG facilities provide additional price support for WCSB production; and (2) production will not achieve the levels seen in 2000 until 2035.30 Please see Figure 3.4 (below). 29 Source: Union Gas Limited. 30 National Energy Board of Canada, Canada’s Energy Future 2013 – Energy Supply & Demand Projections to 2035, November 2013, Figure 6.2 at 52. See also, Appendix 4: Natural Gas. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 1 1 / 1 / 2 0 0 3 5 / 1 / 2 0 0 4 1 1 / 1 / 2 0 0 4 5 / 1 / 2 0 0 5 1 1 / 1 / 2 0 0 5 5 / 1 / 2 0 0 6 1 1 / 1 / 2 0 0 6 5 / 1 / 2 0 0 7 1 1 / 1 / 2 0 0 7 5 / 1 / 2 0 0 8 1 1 / 1 / 2 0 0 8 5 / 1 / 2 0 0 9 1 1 / 1 / 2 0 0 9 5 / 1 / 2 0 1 0 1 1 / 1 / 2 0 1 0 5 / 1 / 2 0 1 1 1 1 / 1 / 2 0 1 1 5 / 1 / 2 0 1 2 1 1 / 1 / 2 0 1 2 5 / 1 / 2 0 1 3 1 1 / 1 / 2 0 1 3 5 / 1 / 2 0 1 4 1 1 / 1 / 2 0 1 4 (P J / d a y ) (P J / d a y ) Empress Sendout 2003-2009 Average 2009-2014 Average ~43% Decline Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 17 of 64 280 Figure 3.4: Canadian Natural Gas Production Forecast31 As seen in Figure 3.4, the majority of the long-term WCSB production will consist of non- traditional sources such as tight gas and shale gas. Specifically, combined production from these sources will increase from 3.3 PJ/day in 2000 to 16.6 PJ/day in 2035, a 400% increase. Conversely, production from non-associated gas will decline from 12.0 PJ/day in 2000 to 1.1 PJ/day in 2035, or a decline of over 90%. Increasing Intra-regional Demand With respect to the second factor influencing the reduction in WCSB volumes shipped eastward (i.e., increasing demand for natural gas from the industrial-oil sands and power generation segments), the NEB noted that intra-regional demand in the WCSB increased by approximately 25% between 2006 (4.8 PJ/day) and 2012 (6.0 PJ/day).32 The NEB attributed this growth in consumption to increased natural gas demand by the oil sands industry.33 The NEB also noted that increasing demand for natural gas in the WCSB region would result in a reduction in WCSB natural gas available for inter-regional shipment.34 31 Ibid. 32 Ibid, at 15. 33 Ibid. 34 Ibid. 0 2 4 6 8 10 12 14 16 18 20 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 6 2 0 1 8 2 0 2 0 2 0 2 2 2 0 2 4 2 0 2 6 2 0 2 8 2 0 3 0 2 0 3 2 2 0 3 4 (P J / d a y ) Solution Non Associated Tight Shale Coalbed Methane Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 18 of 64 281 Separately, the Alberta Energy Regulator (“AER”) has noted that natural gas demand in Alberta was approximately 5.2 PJ/day in 2013 and represented approximately 50% of the total Alberta production.35 By 2023, the AER expects natural gas demand in Alberta to reach 7.1 PJ/day, or approximately 78% of the total Alberta production.36 The AER has further forecasted that the available natural gas supply for export from Alberta will decline from approximately 11.7 PJ/day in 2001 to approximately 2.0 PJ/day in 2022.37 The actual and forecasted natural gas demand in Alberta by segment is illustrated in Figure 3.5. Figure 3.5: Alberta Natural Gas Demand (2000-2023)38 In terms of actual demand, the AER has noted that the use of natural gas for oil sands extraction has increased approximately 275% between 2000 and 2013 (i.e., from approximately 0.3 PJ/day to 1.2 PJ/day), and the use of natural gas for electricity generation has increased by 35 The AER notes that the remainder of the natural gas production was transported to other Canadian provinces and the U.S. See, Alberta Energy Regulator, Alberta’s Energy Reserves 2013 and Supply/Demand Outlook 2014-2023, ST98-2014, at 5-51. 36 Ibid, at 5-46. 37 Ibid. 38 Ibid. Residential Commercial Industrial -Oil SandsIndustrial -Petrochemical Other Industrial Electricity Generation Transportation Reprocessing Plant Shrinkage 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 (P J / d a y ) Reprocessing Plant ShrinkageTransportationElectricity GenerationOther IndustrialIndustrial - PetrochemicalIndustrial - Oil SandsCommercialResidential Historical Forecast Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 19 of 64 282 more than 100% (i.e., from approximately 0.4 PJ/day to 0.8 PJ/day).39 With respect to forecasted demand, the AER is forecasting that natural gas consumption for oil sands extraction will have increased by approximately 800% of its 2000 levels by 2023 (i.e., from approximately 0.3 PJ/day to 2.9 PJ/day), or at a compound annual growth rate of approximately 10%.40 The additional demand from oil sands extraction is expected to provide price support for natural gas production in the WCSB region. To summarize the impact of certain market dynamics on the availability of WCSB natural gas production for other markets (e.g., Ontario), the expected production from the WCSB is compared to the forecasted regional consumption – please see Figure 3.6. Figure 3.6: WCSB Regional Production and Consumption41 As shown above, the NEB forecasts a decline in available production with a low point of approximately 6 PJ/day in 2020. Following 2020, the NEB is forecasting a return to growth in 39 Ibid, Figure S5.16. 40 Ibid. 41 National Energy Board of Canada, Canada’s Energy Future 2013 – Energy Supply & Demand Projections to 2035, November 2013, Appendix 2: Energy Demand, Appendix 4: Natural Gas. 0 2 4 6 8 10 12 14 16 18 20 0 2 4 6 8 10 12 14 16 18 20 2000 2005 2010 2015 2020 2025 2030 2035 (P J / d a y ) (P J / d a y ) WCSB Demand WCSB Production Net Available Production Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 20 of 64 283 natural gas production and net available supply; however, that growth is likely dependent upon the NEB’s assumptions for additional LNG export demand.42 Marcellus and Utica Supply Basins Concurrent with the decline in the availability of WCSB natural gas to Eastern Canadian and U.S. markets is the rise of natural gas production in the Marcellus and Utica shale basins in the U.S. Northeast and Mid-Atlantic. The Marcellus and Utica Shale basins are the fastest growing natural gas supply basins in North America and extend from Western Ohio to West Virginia, Pennsylvania, and New York, and are proximate to demand centers in Eastern Canada and the U.S. Northeast. Figure 3.7 (below) illustrates the location of the Marcellus and Utica shale basins. Figure 3.7: Map of Marcellus and Utica Shale Basins43 42 WCSB natural gas producers and project sponsors are considering the export of LNG from the Canadian and U.S. West Coast in response to the changing natural gas market dynamics. The NEB has received 30 applications for natural gas export licenses, encompassing 21 export facilities, and approved nine licenses relating to LNG facilities along the coast of British Columbia and the Oregon coast. The proposed LNG export facilities are expected to encourage WCSB production by creating additional demand and price support for natural gas. See, National Energy Board of Canada, LNG Export and Import License Applications, https://www.neb- one.gc.ca/pplctnflng/mjrpp/lngxprtlcnc/index-eng.html, accessed January 2015. 43 Source: Union Gas Limited. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 21 of 64 284 As illustrated by Figure 3.7, there are several pipelines with direct access to the Marcellus and Utica supply basins; however, none of these pipelines directly connect to the Dawn Hub. To provide perspective regarding the rapid development of the Marcellus and Utica production basins, Figure 3.8 is a comparison of natural gas production from the WCSB and Appalachian basins. Figure 3.8: Comparison of Appalachian and WCSB Production (2000-2014)44 As illustrated above, from 2000 to 2006, natural gas production in the Appalachian region was nearly flat at an average of approximately 1.3 PJ/day. Beginning in 2006, Appalachian production began to trend slightly upward as producers applied newer technologies and extraction techniques to the Marcellus and Utica shale basins. By 2009 through 2011, the increases in Appalachian production accelerated with average daily production rising to 5.1 44 U.S. Energy Information Administration, Natural Gas Gross Withdrawals & Production for West Virginia, Pennsylvania, and Ohio, http://www.eia.gov/dnav/ng/ng_prod_sum_dcu_NUS_m.htm, accessed February 2015; U.S. Energy Information Administration, Drilling Productivity Report for Marcellus Region and Utica Region, http://www.eia.gov/petroleum/drilling/, accessed February 2015; and National Energy Board of Canada, Canadian Marketable Natural Gas Production 2000-2014, https://www.neb-one.gc.ca/nrg/sttstc/ntrlgs/stt/mrktblntrlgsprdctn-eng.html, accessed February 2015. 0 2 4 6 8 10 12 14 16 18 20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (P J / d a y ) WCSB Production Appalachian Production Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 22 of 64 285 PJ/day by 2011. From 2011 through 2013, the growth of Appalachian production further accelerated and reached an average of 12.0 PJ/day by 2013, and over 16.0 PJ/day by the end of 2014. In contrast, WCSB production remained relatively flat until 2006 at approximately 18 PJ/day. Subsequent to 2006, WCSB production declined to approximately 15.5 PJ/day in 2010, and to approximately 15 PJ/day in 2012 before trending upward in 2014 when production averaged 15.4 PJ/day. Marcellus and Utica Proved Reserve Estimates Given the significant impact of the Marcellus and Utica basins on U.S. and Canadian natural gas market dynamics, a review of this potential resource is discussed below. To analyze the long-term availability of natural gas in the Marcellus and Utica supply basins, Sussex relied on several sources of independent reserve assessments and production forecasts including forecasts from the Energy Information Administration (“EIA”); the Potential Gas Committee (“PGC”), an independent research entity affiliated with the Colorado School of Mines; and citations from several other third-party forecasts. The EIA is the data and analysis division of the U.S. Department of Energy, and, as such, the EIA: (1) accumulates and publishes data from energy consumers and suppliers; and (2) produces annual forecasts of long-term trends in energy supply and consumption. For this report, Sussex relied on two sources of information published by the EIA: • U.S. Oil and Natural Gas Proved Reserves – An annual estimate of regional and U.S. wide proved reserves of oil and natural gas. • Annual Energy Outlook (“AEO”) – An annual forecast of energy production, which includes natural gas production for the Marcellus and Utica supply basins. Because natural gas pipelines generally require 15 to 20 year contract terms to support the construction of new infrastructure, Sussex reviewed natural gas production estimates through 2035 (i.e., the likely termination date of the primary term of a contract starting in the 2017 to 2020 time period). As described below, the forecast and analyses by the EIA, the PGC, and the other third parties provide support for the long-term availability of natural gas in the Marcellus and Utica basins. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 23 of 64 286 In general, an estimate of the natural gas resource potential is divided into two categories: (1) proved reserves; and (2) potential resources. Proved reserves are those resources that are demonstrated with reasonable certainty to be recoverable from known reservoirs under existing economic and operational conditions.45 Potential resources are more expansive and, as discussed below, include resources that may be considered speculative based on current natural gas prices and extraction technologies. In addition, production forecasts are an indication of the rate at which the Marcellus and Utica shale basins have been, and are expected to be, developed by natural gas producers. The U.S. EIA annually produces an estimate of proved reserves. The EIA considers proved reserves the most certain resource category. Proved reserves are defined as the natural gas reserves that are demonstrated with reasonable certainty (i.e., 90% probability or greater) to be recoverable from known reservoirs under existing economic and operation conditions.46 The EIA’s estimate of proved reserves depicts an overall increase in U.S. proved reserves in 2013 of 9.7% (to 371,694 PJ or 353,994 Bcf) due to an improvement in natural gas prices and additional development in certain shale basins, including the Marcellus Shale. The EIA’s estimate of proved reserves in the Marcellus Shale gas play increased in 2013, and surpassed those of the Barnett Shale in Texas to become the largest natural gas shale play in the U.S.47 Figure 3.9 (below) illustrates the EIA’s estimate of proved reserves in the Marcellus and Utica regions; specifically, in the states of Ohio, Pennsylvania, and West Virginia (i.e., the likely sources of supply for NEXUS). 45 See, U.S. Energy Information Administration, U.S. Crude Oil and Natural Gas Proved Reserves, 2012, April 2014, at 6. 46 U.S. Energy Information Administration, Oil and natural gas resources categories reflect varying degrees of certainty, Today in Energy, July 17, 2014, at 2. 47 U.S. Energy Information Administration, U.S. Crude Oil and Natural Gas Proved Reserves, 2012, April 2014, at 16. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 24 of 64 287 Figure 3.9: EIA Shale Gas Proved Reserves – Ohio, Pennsylvania, and West Virginia48 As illustrated by Figure 3.9, Pennsylvania has the greatest volume of proved reserves associated with the Marcellus and Utica shale basins, and experienced substantial growth in proved reserves each year since 2008. West Virginia has experienced similar growth in its proved reserves since 2008, but the total volume of proved reserves in West Virginia is approximately 40% of the Pennsylvania reserves. The growth of proved reserves in Ohio is just beginning to follow the trend of Pennsylvania and West Virginia. The aggregate 2013 proved reserves estimate for all three states is approximately 67,958 PJ (64,722 Bcf) compared to the 2008 estimate of 107 PJ (102 Bcf). Stated differently, the proved reserves in the Appalachian supply basin for 2013 are approximately 634 times the proved reserves in 2008. The substantial growth in proved reserves, the most certain of the resource estimates, suggests that the basin will sustain future production. The second broad category of resource potential is an estimate of potential resources. The PGC, an independent research analyst affiliated with the Colorado School of Mines, produces 48 Ibid, at 38-39. 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2008 2009 2010 2011 2012 2013 (P J ) (B c f ) Pennsylvania West Virginia Ohio Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 25 of 64 288 biennial estimates of potential natural gas resources in the U.S.49 The estimates are delineated into three categories as described below: 1. Probable resources are discovered but unconfirmed resources associated with known fields and field extensions, and undiscovered resources in new pools in both productive and nonproductive areas of known fields. 2. Possible resources are undiscovered resources associated with new field and pool discoveries in known productive formations and productive areas. 3. Speculative resources are undiscovered resources associated with new field and pool discoveries in as-yet nonproductive areas.50 The PGC’s most recent estimate of potential natural gas resources was completed in spring 2015 based on data from 2014,51 while the prior PGC estimate of potential natural gas resources was completed in 2013 utilizing data from 2012. The 2014 PGC estimate of potential natural gas resources shows significant gains for the U.S. overall and even greater gains for the Atlantic Region, which encompasses the Marcellus and Utica supply basins. As illustrated in Figure 3.10, the 2014 PGC estimate for Total Projected Gas Resources in the Atlantic Region is over 875,000 PJ (833,000 Bcf) compared to 371,000 PJ (353,000 Bcf) in the 2010 PGC estimate, a change of approximately 136%. 49 See, Potential Gas Committee, What We Do, http://potentialgas.org/what-we-do-2, accessed May 2015. 50 Ibid. 51 Potential Gas Agency, Potential Supply of Natural Gas in the United States, Report of the Potential Gas Committee (December 31, 2014), April 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 26 of 64 289 Figure 3.10: Atlantic Region Projected Gas Resources (2010-2014)52 Additionally, the PGC provided a separate Atlantic Region shale gas assessment in 2014, which is one component of the overall Atlantic Region resource assessment.53 Figure 3.11 (below) illustrates that shale gas in the Atlantic Region accounts for nearly all of the Atlantic Region’s growth in potential resources between the 2010, 2012 and 2014 PGC assessments.54 52 Ibid. 53 Ibid. 54 Ibid. 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Probable Possible Speculative Total 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 (B c f ) (P J ) 2010 PGC 2012 PGC 2014 PGC % Change from 2010 Estimate 303.3% 80.7% 82.3% 135.7% Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 27 of 64 290 Figure 3.11: Atlantic Region Shale Gas Resources (2010-2014)55 As illustrated in Figure 3.11, the 2012 PGC forecast of Atlantic Region shale natural gas is more than double the 2010 PGC forecast. In 2014, the PGC forecast of Atlantic Region shale natural gas has continued to increase with largest increase in the resources classified as probable resources. Between 2010 and 2014, this group of resources has grown more than 423%. Overall, the Atlantic Region shale natural gas resources has grown more than 208% from the 2010 PGC forecast to the 2014 PGC forecast. In order to determine the total natural gas resource potential, an estimate can be made by summing the EIA’s proved reserve estimates (i.e., Reference Case) discussed earlier with the PGC’s potential resource assessment (i.e., Most Likely Case) for similar time periods.56 Figure 3.12 (below) illustrates the total future natural gas resources estimate for northeast shale by the source and type of resource. 55 Ibid. 56 Potential Gas Agency, Potential Supply of Natural Gas in the United States, Report of the Potential Gas Committee (December 31, 2014), slides accompanying press release, April 8, 2015. 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Probable Possible Speculative Total (P J ) (B c f ) 2010 PGC 2012 PGC 2014 PGC 423.8%107.6% 208.0%% Change for 2010 Estimate Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 28 of 64 291 Figure 3.12: Total Future Natural Gas Resource Assessment – Atlantic Shale57 As depicted above, the EIA proved reserves for natural gas from shale developments in Ohio, Pennsylvania, and West Virginia constitute 8.5% of the total Atlantic shale natural gas resource estimate of approximately 803 EJ (765 Tcf). Approximately 42.9% of the total Atlantic shale resource estimate is probable resources, 44.7% is possible resources, and 3.9% are speculative resources. To provide context, and assuming an annual overall U.S. natural gas consumption level of 27.4 EJ (26.1 Tcf),58 the combined EIA proved reserves of shale natural gas and PGC potential shale resources in the Atlantic Region alone would provide sufficient supply for all U.S. natural gas demand for approximately 30 years. When compared with prior estimates of the natural gas resource potential, these production basins (i.e., Marcellus and Utica) have shown significant growth and, given the location of the supply, provide competitive supply alternatives for the Eastern Canada natural gas markets. 57 U.S. Energy Information Administration, U.S. Crude Oil and Natural Gas Proved Reserves, 2012, April 2014, at 16; and Potential Gas Agency, Potential Supply of Natural Gas in the United States, Report of the Potential Gas Committee (December 31, 2014), April 2015. 58 The EIA notes that the 2013 annual consumption of natural gas in the U.S. was 26,131 Bcf or 27,438 PJ, which converts to approximately 71.5 Bcf/day or 75.1 PJ/day. See, U.S. Energy Information Administration, Natural Gas Consumption by End Use, http://www.eia.gov/dnav/ng/ng_cons_sum_dcu_nus_m.htm, accessed February 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 29 of 64 292 Marcellus and Utica Production Forecasts In addition to the natural gas reserves analysis, Sussex also evaluated natural gas production estimates. Estimates of natural gas production are necessary to understand the level of natural gas that will be extracted in a given period. EIA and several third-party natural gas market analysts periodically prepare production forecasts that include the Marcellus and Utica basins. Figure 3.13 (below) provides a summary of the EIA’s natural gas production estimate from 2008 to 2014 in Ohio, Pennsylvania, and West Virginia from its 2014 estimate of U.S. proved reserves. In total, the annual production for the three states increased from approximately 500 PJ (or 1.4 PJ/day) in 2010 to approximately 3,860 PJ (or 10.6 PJ/day) in 2013.59 Figure 3.13: EIA Shale Gas Production – Ohio, Pennsylvania, and West Virginia60 The EIA also produces a forecast of natural gas production in its AEO. Specifically, the AEO, which covers a 30 to 35 year forecast horizon, includes a forecast of natural gas production in the Northeast region (i.e., Marcellus and Utica shale basins). As illustrated in Figure 3.14, for the 2010 and 2011 AEOs, the production forecast increased substantially in every forecast period. Between 2011 and 2013, the EIA’s production forecast was relatively consistent. 59 U.S. Energy Information Administration, U.S. Crude Oil and Natural Gas Proved Reserves, 2012, April 2014, at 38-39. 60 Ibid. 0 1 2 3 4 5 6 7 8 9 10 11 0 1 2 3 4 5 6 7 8 9 10 11 2008 2009 2010 2011 2012 2013 (P J / d a y ) (B c f / d a y ) Pennsylvania West Virginia Ohio Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 30 of 64 293 However, by 2014, the EIA was again forecasting an increase in natural gas production for the Northeast region; and in the 2015 AEO, there is a substantial increase in production compared to the 2014 forecast. Specifically, in the 2015 AEO, the increase in natural gas production occurs early in the forecast period (i.e., before 2020) and remains relatively flat until 2030 with increasing production through 2040. Figure 3.14: 2010-2015 EIA AEO Northeast Natural Gas Production Forecast61 As illustrated by Figure 3.14, by 2020, the difference in Northeast natural gas production between the 2010 AEO and 2015 AEO is approximately 17.1 PJ/day (16.3 Bcf/day), or an approximately 475% increase in forecasted production.62 By 2035, the difference between the two AEO forecasts is 20.3 PJ/day (19.3 Bcf/day), or a nearly 450% increase in production.63 Other third-party market analysts provide support for sustained or increasing natural gas production from the Marcellus and Utica supply basins. In general, those forecasts call for large increases in Marcellus and Utica production. For example, BENTEK Energy (“BENTEK”) 61 U.S. Energy Information Administration, Annual Energy Outlook 2010 – 2015, Lower 48 Natural Gas Production and Supply Prices by Supply Region, Reference Case, April 2010 through April 2015. 62 Ibid. 63 Ibid. 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 2010 2015 2020 2025 2030 2035 2040 (P J / d a y ) (B c f / d a y ) 2010 AEO 2011 AEO 2012 AEO 2013 AEO 2014 AEO 2015 AEO Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 31 of 64 294 recently noted that it expects production in the Marcellus and Utica supply basins to grow by approximately 9.5 PJ/day over the next ten years.64 In addition, BENTEK has separately estimated approximately 2,000 wells have been drilled in the Marcellus/Utica region, but are not producing.65 Wood Mackenzie, another firm specializing in natural gas market forecasting, noted in a recent report prepared for Gaz Métro Limited Partnership (“Gaz Métro”) and Gazifère Inc. that Northeast production is expected to grow to 29.6 PJ/day by 2020.66 Lastly, a projection from ICF International (“ICF”) indicates substantially increased production from the Marcellus and Utica regions between 2015 and 2035. In total, ICF expects daily production to increase to 21 PJ/day by 2016, 35.7 PJ/day by 2025, and 39.9 PJ/day by 2035.67 Summary of Ontario Natural Gas Supply Dynamics Traditionally, the Ontario market was predominately supplied with natural gas from the WCSB. Since 2006, two primary effects have contributed to a decrease in the availability of natural gas from the WCSB to the Ontario market: (1) increased natural gas consumption within the WCSB for certain market segments (e.g., industrial-oil sands and power generation); and (2) decreased production of conventional resources from the WCSB. The combination of the 25% increase in intra-regional demand and the approximately 24% reduction in WCSB conventional production, results in less natural gas available for west to east shipments.68 The rise of the Marcellus and Utica shale basins as proximate and competitive sources of natural gas for the Ontario market presents new opportunities to source natural gas from these basins. The reserve estimates and natural gas production forecasts indicate long-term natural gas availability from the Marcellus and Utica basins. Overall, the estimates of the resource potential in the Marcellus and Utica shale basins, and the production forecasts have grown dramatically since 2010. Although takeaway capacity from the Marcellus and Utica basins is currently limited, the proximity of the 64 BENTEK Energy, Son of a Beast: Utica Triggers Regional Role Reversal, October 2013, at 5. 65 BENTEK Energy, Welcome Back Volatility, June 18, 2014. 66 Wood Mackenzie, Proposed Energy East Pipeline Project White Paper, September 2, 2014, at 5. 67 ICF International, Future Trends: Assessing Ontario Natural Gas Market Requirements Through 2020, November 25, 2014, at 16. 68 Ibid. See also, National Energy Board of Canada, NEB Docket No. RH-003-2011, Reasons for Decision – TransCanada Pipelines Limited, Nova Gas Transmission Ltd., and Foothills Pipe Lines Ltd., March 2013, for the NEB’s assessment of the long-term declines in west to east natural gas flows and effects of that trend on the TransCanada Canadian Mainline. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 32 of 64 295 basins to the demand centers in Eastern Canada positions the Marcellus and Utica supply basins to be competitive with natural gas sourced from the WCSB. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 33 of 64 296 IV. BENEFITS OF NEXUS In addition to the landed cost analysis discussed in Section V, Sussex reviewed the benefits of NEXUS that accrue to: (1) customers of the Ontario LDCs; (2) other Ontario natural gas market participants including power generation customers and direct purchase customers; and (3) the Province of Ontario in general. Benefits to the Ontario LDCs The benefits of NEXUS to the Ontario LDCs include: (1) access to proximate and competitive natural gas supply; (2) natural gas supply basin diversity; (3) enhanced liquidity for natural gas purchases made at the Dawn Hub; (4) transportation path diversity; (5) transportation cost stability; (6) natural gas price index diversity; and (7) service flexibility. For the Ontario LDCs, these benefits represent important objectives in managing their respective natural gas transportation capacity portfolios. Specifically, the identified benefits improve the optionality of the natural gas supply portfolios of the Ontario LDCs, particularly with respect to the management of natural gas supply and transportation costs, improving overall portfolio reliability, and providing increased priced stability. Access to Proximate and Competitive Natural Gas Supply As proposed, NEXUS will provide the Ontario LDCs with direct access to the Marcellus and Utica natural gas supply basins, which are located in a region that is proximate to southwestern Ontario. Specifically, the distance from Kensington, Ohio (i.e., the origination point of NEXUS) to Sarnia, Ontario (i.e., the Dawn Hub) is approximately 480 kilometers (300 miles), or the relative distance of Sarnia to Toronto or Chicago. By comparison, the distance from Empress, Alberta (i.e., the interconnection between the NGTL system and the Canadian Mainline) to Sarnia, Ontario is approximately 2,900 kilometers (1,800 miles). In addition to being proximate to Ontario, the Marcellus and Utica natural gas supply is competitive from a price perspective. Specifically, over the last twelve months, some of the lowest natural gas prices are associated with price indices for the Marcellus and Utica basins. By way of example, Figure 4.1 compares the daily spot prices of two price indices associated with the Marcellus and Utica basins (i.e., Dominion South Point and Leidy) to the Henry Hub and Empress price indices. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 34 of 64 297 Figure 4.1: Daily Spot Prices (April 2014-March 2015)69 Supply Basin Diversity and Associated Reliability NEXUS will provide the Ontario LDCs with direct access to the Marcellus and Utica supply basins, which increases gas supply diversity. Currently, the Ontario LDCs do not have direct access to the Marcellus/Utica supply, which, as discussed in Section III, is one of the largest and fastest growing North American natural gas supply basins. This direct access to the Marcellus/Utica production augments the current gas supply basins and market hubs accessed by the Ontario LDCs, which include natural gas production or availability in the WCSB, Chicago Hub, Gulf of Mexico, and U.S. Mid-continent. By diversifying its natural gas supply basins, the Ontario LDCs will increase the overall reliability of their portfolio and, therefore, service to customers. Similarly, natural gas supply basin diversity mitigates the risk to the Ontario LDCs of any individual supply basin being negatively impacted by operational, regulatory, economic, social, or political developments that inhibit or reduce natural gas production. Enhanced Dawn Liquidity As proposed, NEXUS provides a direct pipeline path between the Marcellus and Utica supply basins and the Dawn Hub, allowing more supply to be delivered to the Dawn Hub. NEXUS will 69 Daily spot prices and currency exchange rates from SNL Financial. $0 $1 $2 $3 $4 $5 $6 A p r - 1 4 M a y - 1 4 J u n - 1 4 J u l - 1 4 A u g - 1 4 S e p - 1 4 O c t - 1 4 N o v - 1 4 D e c - 1 4 J a n - 1 5 F e b - 1 5 M a r - 1 5 (C d n $ / G J ) Dominion South Leidy Henry Hub Empress Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 35 of 64 298 not only increase the physical supply to the Dawn Hub, but also increase the number of counterparties that are active at the Dawn Hub (e.g., the NEXUS capacity holders that are natural gas producers). This increase in natural gas supply and counterparties will increase the overall liquidity of the Dawn Hub. In addition, the transportation capacity on NEXUS that is contracted by the Ontario LDCs will be utilized to deliver physical natural gas supply to the Dawn Hub to meet customer demand. Stated differently, NEXUS capacity contracted by the Ontario LDCs provides more certainty that Marcellus and Utica natural gas supply will be delivered to the Dawn Hub. This diversification of natural gas supply at the Dawn Hub will benefit the counterparties that may transact certain volumes at the Dawn Hub price index. Transportation Path Diversity and Associated Reliability A contract on NEXUS provides the Ontario LDCs with additional diversity in their transportation portfolio and, therefore, more reliability from a delivery perspective. Currently, the Ontario LDCs receive most of their flowing natural gas supplies via transportation paths that connect the WCSB, U.S. Mid-continent, or Chicago Hub to Ontario. NEXUS will provide an alternative natural gas supply basin and transportation path by directly connecting the Marcellus/Utica basin to the Dawn Hub. By adding a new pipeline path, the Ontario LDCs will increase the reliability of the overall transportation portfolio and, therefore, service to their customers. For example, NEXUS provides an alternative delivery path if one of the existing pipelines utilized by the Ontario LDCs experiences a delivery curtailment. The additional pipeline path diversity may also provide the Ontario LDCs with increased leverage in negotiating with other pipelines with respect to services and associated rates. Transportation Cost Stability One of the benefits provided to the Ontario LDCs from NEXUS is the option to negotiate a fixed rate for the term of the firm transportation agreement or to choose the cost based recourse rate. While the recourse rate may increase subject to review and approval by the FERC, the negotiated rate provides a fixed, known rate for the duration of the firm transportation agreement. Specifically, under the recourse rate, a shipper is exposed to any cost increase (e.g., construction cost overrun) that is approved by the FERC. Under a negotiated rate, the shipper usually caps its exposure to construction cost overruns and shares in certain reductions should the construction cost of the project be lower than expected. In this manner, the shipper has a known rate for the duration of the term of the firm transportation contract. Therefore, under a negotiated rate agreement, the risk of construction cost overrun is shared with the Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 36 of 64 299 shipper up to an agreed cap and, thereafter, the risk is borne by the pipeline development entity. The Ontario LDCs have elected to enter into a negotiated rate agreement with NEXUS, thus placing a cap on their exposure to construction cost overruns. Stated differently, by contracting for a negotiated rate, the Ontario LDCs have shifted some of the risk of construction cost from their customers to the NEXUS developers. In addition, by entering into a negotiated rate agreement, the Ontario LDCs have a capped rate for the 15-year term of the contract. Finally, with respect to total pipeline transport charges in the overall portfolio of the Ontario LDCs, a negotiated rate on NEXUS provides a known and stable rate that may augment certain rate uncertainty on other pipelines. Natural Gas Price Index Diversity and Associated Cost Stability In addition to natural gas supply basin and transportation path diversity, direct access to the Marcellus and Utica supply basins will provide the Ontario LDCs with increased price diversity. Specifically, the Marcellus/Utica gas supply basins will have certain price signals and price indices not previously accessed by the Ontario LDCs, thus increasing overall price diversity and providing more stability with respect to natural gas costs for the Ontario LDCs’ customers. By way of example, adding direct access to Marcellus/Utica supplies may provide the Ontario LDCs with the ability to leverage diverse price signals and maximize flow on specific pipelines when warranted by market conditions. Service Flexibility NEXUS will be a FERC regulated pipeline and, as such, will provide certain service flexibility to the portfolio of the Ontario LDCs, which may augment existing contracts on other pipelines (e.g., the TransCanada Canadian Mainline). For example, NEXUS will likely provide various terms and conditions that provide service flexibility, including access to secondary receipt and delivery points, windows for nomination adjustments, and capacity segmentation/release to mitigate demand charges. With respect to capacity release, this service will provide the Ontario LDCs with an opportunity to manage un-utilized capacity and develop revenues to offset capacity demand charges. NEXUS will access various markets in Ohio and Michigan (i.e., within the capacity contract path of the Ontario LDCs), which should provide the Ontario LDCs with various counterparties to structure deals or provide bids for available capacity. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 37 of 64 300 Other Benefits In addition to benefiting the Ontario LDCs, NEXUS will benefit other stakeholders, including: (1) power generation entities; (2) direct purchase customers; (3) other transportation customers; and (4) the Province of Ontario. The benefits to these customers are directly related to more natural gas supply (i.e., volume), counterparties, and liquidity available at the Dawn Hub as a result of NEXUS. The Province of Ontario will generally benefit by preserving, and potentially improving, its economic competitiveness relative to regions that currently have access or are developing access to the Marcellus and Utica supply basins. The benefits to these customer segments from NEXUS (e.g., more supply and price discovery) are particularly important in light of the natural gas demand trends in Ontario. For example, demand for natural gas in the Province increased by 4.6% from 2.9 PJ/day in 2000 to 3.0 PJ/day in 2012, mainly due to increased usage from the electric generation sector beginning in 2010.70 Please see Figure 4.2. Figure 4.2: Historical Natural Gas Demand by Segment71 70 National Energy Board of Canada, Canada’s Energy Future 2013 – Energy Supply & Demand Projections to 2035, November 2013, Appendix 2.7. 71 Ibid. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (P J / d a y ) Residential Commercial Industrial Electric Generation Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 38 of 64 301 As shown in Figure 4.2 (above), the electric generation segment represented 10% (i.e., 0.3 of 2.9 PJ/day) of the natural gas consumed in 2000, but by 2012, this segment represented approximately 20% (i.e., 0.6 of 3.0 PJ/day).72 As illustrated in Figure 4.3 (below), by 2015, the Province of Ontario completed the phase-out of coal-fired generation, which was replaced by nuclear, natural gas-fired, and wind generation. Figure 4.3: Historical Ontario Generation by Fuel73 Generation by Fuel (2005) Generation by Fuel (2015YTD) Consistent with the historical trends discussed above, a primary driver of future natural gas demand in Ontario is the electric generation segment. The increase in natural gas consumption associated with this sector is in response to refurbishments (primarily nuclear generation) and retirements (coal and nuclear generation).74 72 Ibid. 73 National Energy Board of Canada, Canada’s Energy Future 2013 – Energy Supply & Demand Projections to 2035, November 2013, Appendix 2.7, Appendix 5.1; and Independent Electricity System Operator, 2015 Generator Output by Fuel Type Monthly Year-to-Date, http://www.ieso.ca/Pages/Power-Data/Supply.aspx, accessed May 2015. The last coal-fired generation station in Ontario (i.e., the Thunder Bay Generating Station) ceased burning coal in April 2014, and was converted to an advanced biomass generating station in 2015. See, Ontario Power Generation, Thunder Bay Generating Station, http://www.opg.com/generating- power/thermal/stations/thunder-bay-station/Pages/thunder-bay-station.aspx, accessed May 2015. 74 Ontario Power Authority, Generation and Conservation Tabulations and Supply/Demand Balance– 2013 LTEP: Module 3, January 2014, at 7. Hydro23.8% Wind/Other Renewable1.1% Nuclear45.5% Coal20.3% Natural Gas8.7% Oil0.6% Nuclear58.7% Natural Gas/Oil12.4% Hydro22.7% Wind/Other Renewable6.2% Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 39 of 64 302 The planned refurbishments of Bruce Power’s Bruce B generating station and Ontario Power Generation’s Darlington nuclear station are expected to be completed by 2032.75 If completed on schedule, the refurbishment of the ten nuclear units is expected to reduce the long-term demand for natural gas by displacing natural gas-fired electric generation. However, should the refurbishment of the Bruce B and Darlington nuclear complexes be extended or cancelled, Ontario’s reliance on natural gas fueled power generation could be expected to increase. Access to New Natural Gas Supply Basins The Ontario market primarily depends on the same natural gas supply basins as the Ontario LDCs, specifically, natural gas supplies from the WCSB, Gulf of Mexico, U.S. Mid-continent, and Chicago Hub. NEXUS will provide a direct connection between the Marcellus and Utica supply basins and the Dawn Hub. By providing access to new sources of natural gas supply at the Dawn Hub, power generators and direct purchase customers will have additional market liquidity and greater security of supply. Finally, given the various pipeline expansion projects to increase takeaway capacity from Dawn on the Dawn-Parkway system, additional deliverability to Dawn may be needed. The evidence of Union provides more detail regarding the Dawn- Parkway expansions. Pipeline Diversity The Ontario market is dependent on deliveries from the TransCanada Canadian Mainline and its affiliated pipelines, as well as the Alliance/Vector and Chicago Hub/Vector transportation paths. NEXUS will provide a new entrant to supply the Ontario market with natural gas sourced from a different natural gas supply basin. Ontario’s direct purchase customers and those relying on the natural gas supply and price signals at the Dawn Hub can expect to benefit from a new competing pipeline and route for providing natural gas to the Dawn Hub and Ontario. In particular, the existing pipelines will see additional competitive pressures to control costs and develop new services that would better serve the long-term needs of the Ontario market. In addition, the Ontario market participants would be less dependent on any one pipeline or route 75 Ontario Ministry of Energy, Achieving Balance – Ontario’s Long-Term Energy Plan, December 2013, at 29-30. Ontario’s Long-Term Energy Plan notes that both the Bruce B and Darlington nuclear complexes will commence refurbishment of one unit each in 2016. Decisions on completing subsequent refurbishments will be made following the completion of each initial unit. Bruce Power and Ontario Power Generation will require at least 16 years to complete the refurbishment of all ten units. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 40 of 64 303 to supply natural gas to the Ontario market, thus reducing Ontario’s exposure to the risk of pipeline service interruptions or long-term changes in natural gas flow patterns. Improved Liquidity at the Dawn Hub The OEB has historically recognized the benefits of developing and improving the liquidity of the Dawn Hub.76 Those benefits include offering natural gas supply and pricing service near the Ontario market, which provides access to counterparties, supply options, and price discovery for customers. NEXUS will provide natural gas supplies from the Marcellus and Utica basins to the Ontario/Michigan region, which will increase the volume of natural gas available for purchase at the Dawn Hub, thus directly benefiting customers that purchase at the Dawn Hub natural gas price index (e.g., power generation and direct purchase customers). The NEXUS transportation capacity held by the Ontario LDCs (i.e., to serve customers), will provide a greater likelihood that certain volumes will flow to Ontario and provide benefits to other market participants (e.g., direct purchase customers). Improved Economic Competitiveness in Ontario Access to the Marcellus and Utica natural gas supply basins can be expected to help preserve the economic competitiveness of the Province of Ontario with respect to industries that are energy intensive (i.e., significant reliance on natural gas and/or electricity). Specifically, many of the regions with which Ontario competes (i.e., Michigan, Ohio, Pennsylvania, and New York) are either located within the Marcellus and Utica basins or have direct pipeline transportation paths to access that natural gas supply. Those regions (i.e., Michigan, Ohio, Pennsylvania, and New York) are able to benefit from that direct access to abundant and lower cost natural gas supplies. Ontario would similarly benefit from lower cost natural gas supplies since the Marcellus and Utica basins are geographically proximate to Ontario, thus increasing the diversity of natural gas supplies and introducing more price stability to the Province. As a fuel source for electrical energy and manufacturing processes, lower and more stable natural gas costs would maintain Ontario’s competitiveness with surrounding regions. 76 See, for example, Decision with Reasons – Natural Gas Electricity Interface Review, OEB Board File No. EB-2005-0551, November 7, 2006, at 44. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 41 of 64 304 V. LANDED COST ANALYSIS As part of their decision process regarding the contracting for pipeline capacity, the Ontario LDCs use a landed cost analysis to evaluate the delivered cost of various natural gas supply paths to a specific delivery point. Specifically, the Ontario LDCs’ landed cost analysis, with respect to a capacity contract on NEXUS, compares the delivered cost of natural gas supply to the Dawn Hub from various alternative pipeline transportation routes.77 Sussex Review Sussex reviewed the landed cost analysis prepared by the Ontario LDCs to verify that: (1) the approach was reasonable and consistent with typical landed cost approaches; (2) alternative options had been identified and modeled; and (3) the decision process and analysis was documented. With respect to the first Sussex review item listed above (i.e., the reasonableness of the Ontario LDCs approach), a typical landed cost analysis approach is illustrated in Table 5.1 (below). In general, a landed cost analysis assumes the pipeline demand charges are priced at a 100% load factor (i.e., the transportation path is used every day at full volume) and variable and/or fuel charges are based on full contracted volumes. This approach allows multiple paths to be compared in a transparent manner. Table 5.1: Illustrative Landed Cost Analysis Approach 1 2 3 4 3+4 Path Gas Supply Basin Gas Supply Cost Pipeline 1 Pipeline 2 Total A WCSB Henry Hub + x $D N/A Henry Hub + x + $D = A Total B Rockies Henry Hub + y $E $F Henry Hub + y + $E + $F = B Total As shown in Table 5.1, a landed cost analysis usually consists of four components: 1. Alternative paths to transport natural gas supply to a specific delivery point are identified; 2. The natural gas supply basin associated with each transportation path is identified; 77 For purposes of the Sussex report, the term “alternative” with respect to the Union and Enbridge landed cost analyses includes both existing transportation routes (i.e., paths from the Ontario LDCs’ existing supply portfolio), as well as certain proposed transportation routes (e.g., Rover Pipeline). Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 42 of 64 305 3. The natural gas supply cost is developed for each path, which is generally calculated relative to Henry Hub (i.e., plus or minus a basis differential); and 4. The transportation cost (i.e., demand, variable, and fuel charges) for all pipelines within the path is calculated. Finally, the landed cost for each path is totaled (i.e., the gas supply cost plus the total transport costs). For example, as demonstrated in Table 5.1 (above), Path A consists of a WCSB gas supply, which is priced at Henry Hub plus (or minus) a basis differential of “x” and is transported on Pipeline 1 for a total landed cost comprised of the gas supply cost (i.e., “Henry Hub + x”) and the transportation cost for Pipeline 1 (i.e., “$D”).78 Similarly, Path B consists of a Rockies gas supply transported on both Pipeline 1 and Pipeline 2 for a landed cost comprised of the gas supply cost (i.e., “Henry Hub + y”) plus total transport cost on Pipeline 1 and Pipeline 2 (i.e., “$E + $F”). Union Landed Cost Analysis The Sussex review of the Union landed cost analysis is based on the evidence submitted by Union with respect to the NEXUS capacity contract. To perform the landed cost analysis, Union identified and modeled fifteen transportation paths, which access various Canadian and U.S. gas supply basins, as well as different transportation routes to the Dawn Hub. Specifically, the alternative paths modeled by Union include access to nine natural gas production basins and/or supply hubs (e.g., Marcellus/Utica shale basins, Chicago Hub, or WCSB). Therefore, with respect to the second Sussex review item (i.e., range of options), the Union landed cost analysis identified and modeled a reasonable range of alternative options regarding various natural gas supply paths to the Dawn Hub. Next, for each of the transportation routes, Union calculated the natural gas supply cost as the Henry Hub price index plus (or minus) a basis differential, as provided by ICF. Specifically, Union relied upon ICF and the associated natural gas price projections developed by ICF in their Base Case dated January 2014 and January 2015. The ICF Base Case dated January 2014 was used by Union in their January 2014 landed cost analysis as summarized in Schedule 78 The basis differential of “x” may be positive or negative depending on the available supply and demand for natural gas at a particular pricing point. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 43 of 64 306 4 of the Union evidence. Similarly, the ICF Base Case dated January 2015 was used by Union in their January 2015 landed cost analysis as summarized in Schedule 5 of the Union evidence. For both the January 2014 and January 2015 landed cost analysis, Union calculated a simple average of the natural gas prices at specific gas supply basins as that data was listed in the ICF Base Cases. This calculation was used as the gas supply cost assumption in the Union landed cost analysis. Sussex understands that the use of ICF natural gas price projections is consistent with Union past practices regarding landed cost analyses. In addition, this approach is reasonable and consistent with a typical landed cost analysis. Finally, consistent with the typical landed cost approach, Union calculated the total transport cost (i.e., demand, variable,79 and fuel charges) for each alternative path, assuming a 100% load factor (i.e., the transportation path is used every day at full volume). Specifically, Union developed toll/rate values for the various identified paths by using current, approved tolls/rates. The use of current tolls/rates, as adjusted by tolls/rates approved in recent regulatory proceedings, is reasonable and consistent with a typical landed cost analysis. In addition, an appropriate estimate of fuel charges was included. The landed cost for each path was calculated as the sum of the total transport cost and estimated gas supply cost. With respect to the third Sussex review item (i.e., decision documentation), Union conducted a landed cost analysis prior to signing the NEXUS Precedent Agreement in January 2014 in order to assess the NEXUS capacity contract against Union’s existing transportation paths. The results of the January 2014 analysis demonstrated that the total landed cost for the NEXUS path was within the range of the existing portfolio options as documented in Schedule 4 of the Union evidence. In January 2015 (i.e., after executing the NEXUS Precedent Agreement), Union updated the landed cost analysis to reflect revised natural gas prices and updated tolls/rates on certain pipelines (e.g., NEXUS). In addition to analyzing the delivered cost associated with NEXUS relative to Union’s existing transportation paths, Union also reviewed the total landed cost of alternative paths (e.g., Rover Pipeline). The results of the updated 79 The variable charges may include the NEB Abandonment Surcharges and the FERC Annual Charge Adjustment, as applicable. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 44 of 64 307 landed cost analysis indicate that the NEXUS path was a competitive option relative to the existing paths and the Rover Pipeline as documented in Schedule 5 of the Union evidence. Enbridge Landed Cost Analysis Sussex reviewed the Enbridge landed cost analysis based on the evidence submitted by Enbridge with respect to their NEXUS Precedent Agreement. To perform the landed cost analysis, Enbridge evaluated four options for the NEXUS path80 and seven alternative transportation paths. The paths reviewed by Enbridge include access to various Canadian and U.S. gas supply basins, as well as different transportation routes to the Dawn Hub. Specifically, the alternative paths modeled by Enbridge include access to six natural gas production basins and/or supply hubs (e.g., Marcellus/Utica shale basins, Chicago Hub, or WCSB). Therefore, with respect to the second Sussex review item (i.e., range of options), the Enbridge landed cost analysis identified and modeled a reasonable range of alternative options regarding various natural gas supply paths to the Dawn Hub. Next, for each of the transportation routes evaluated, Enbridge relied upon commodity prices sourced from Openlink81 to calculate the natural gas supply cost for each transportation path over the 15-year time period from 2017 to 2032 (i.e., the term of the capacity contract as outlined in the NEXUS Precedent Agreement). Specifically, Enbridge obtained from Openlink the 21-day average settlement price for each forward contract month from November 2017 through November 2032, which was used as the natural gas supply cost assumption for each month of the analysis. Sussex understands that the use of price projections from Openlink is consistent with Enbridge’s past practices regarding gas commodity price assumptions. In addition, this approach is reasonable and consistent with a typical landed cost analysis. 80 The four NEXUS options reflect certain provisions of the NEXUS Precedent Agreement, which provides Enbridge with a capital cost tracking adjustment and preferred rights to increase its contracted capacity. 81 Openlink is the risk management software utilized by Enbridge for energy and financial risk management. The prices contained in Openlink are provided by independent third parties (e.g., NGX and Kiodex) who specialize in generating and developing market information, including forward curves. See, Enbridge Gas Distribution Inc. Response to TCPL Interrogatory #2, Issue A1, OEB EB-2012-0451/EB-2012-0433/EB-2013-0074, August 12, 2013. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 45 of 64 308 Finally, Enbridge calculated the total monthly transport cost (i.e., demand, variable,82 and fuel charges) for each alternative path, assuming a 100% load factor (i.e., the transportation path is used every day at full volume), which is consistent with the typical landed cost approach. Specifically, Enbridge developed toll/rate values for the various identified paths based on currently approved tolls/rates except for certain paths where the tolls/rates utilized in the landed cost analysis reflect proposed tolls/rates (e.g., Vector, Rover Pipeline, and ANR East).83 The use of approved tolls/rates for existing transportation paths, and proposed tolls/rates to reflect expected tolls/rates on proposed pipeline projects/expansions, is reasonable and consistent with a typical landed cost analysis. In addition, an appropriate estimate of fuel charges was included. For each year of the analysis period (i.e., 2017 through 2032), the total costs for each path was then calculated as the sum of the total monthly transport cost and estimated gas supply cost. Next, the total costs are divided by the annual quantity to calculate the landed cost. The simple average of the landed cost over the 15-year time period was used to evaluate the cost of the NEXUS capacity relative to alternative transportation paths. With respect to the third Sussex review item (i.e., decision documentation), Enbridge conducted a landed cost analysis in November 2014 (as part of the process to obtain the necessary internal approvals to proceed with the NEXUS Precedent Agreement) in order to assess the NEXUS capacity contract against various alternative transportation paths. The results of the November 2014 analysis demonstrated that the total landed cost for the NEXUS path was within the range of the options reviewed as documented in Appendix B of the Enbridge evidence. In May 2015, Enbridge updated its landed cost analysis to reflect revised commodity prices and tolls/rates for certain pipelines (e.g., Vector). The results of the updated landed cost analysis indicated that the NEXUS path is a competitive option as documented in Appendix C of the Enbridge evidence. Sussex Findings Based on a review of the landed cost analyses performed by Union and Enbridge, Sussex has the following findings: • The process utilized by both Union and Enbridge is reasonable and consistent with the typical landed cost analysis approach as described above (i.e., alternative paths to 82 The variable charges may include the NEB Abandonment Surcharges and the FERC Annual Charge Adjustment, as applicable. 83 Based on the proposed tolls/rates in the recent open seasons on the various pipelines. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 46 of 64 309 transport natural gas supply to a specific delivery point are identified, the natural gas supply basin associated with each transportation path is identified, the natural gas supply cost is developed for each path, and the transportation cost for all pipelines within the path is calculated). • Union’s landed cost analysis identified and modeled fifteen transportation paths, which include access to nine natural gas production basins and/or supply hubs in the U.S. and Canada, as well as different transportation routes to the Dawn Hub. The paths reviewed by Union represent a reasonable range of alternative options to NEXUS. • The Enbridge landed cost analysis reviewed four options associated with the NEXUS capacity and seven alternative transportation paths to the Dawn Hub, which include access to six U.S. and Canadian natural gas production basins and/or supply hubs. The transportation paths reflect a reasonable range of alternative options regarding various natural gas supply paths to the Dawn Hub. • Although the data sources used by Union and Enbridge to calculate the natural gas supply cost are different, both are reasonable. Specifically, the Union landed cost analysis calculated the gas supply cost for each of the transportation routes based on a price projection forecast from ICF, which is consistent with Union’s past practices regarding the evaluation of pipeline contracts. Enbridge relied on commodity price projections sourced from Openlink as the gas supply cost assumption, which is consistent with Enbridge’s past practices regarding gas commodity price assumptions. • Union and Enbridge used similar approaches to calculate the transportation cost (i.e., demand, variable, and fuel charges) for the various identified paths. Specifically, the Ontario LDCs relied on current or proposed tolls/rates to reflect expected tolls/rates on proposed pipeline projects/expansions. In addition, both the Union and Enbridge landed cost analyses covered the full contract term (i.e., 15 years) of the capacity obligation as outlined in the NEXUS Precedent Agreements. • As illustrated by the results of the Ontario LDCs’ landed cost analyses, the NEXUS transportation path is competitive with the alternatives evaluated. • Finally, Union’s decision process and analysis are documented in Schedules 4 and 5 of the Union evidence. Similarly, the Enbridge decision process and analysis are documented in Appendices B and C of the Enbridge evidence. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 47 of 64 310 VI. RISK ASSESSMENT As part of the assessment of NEXUS, Sussex reviewed and considered certain risks related to the Project, including: • Construction, • Demand Forecasting, • Supply, • Regulatory, • Project Development, and • Operational. The Sussex review includes a description of the risk and the potential impact on the Ontario LDCs as shippers on NEXUS. As noted below, in many instances, the risks faced by the Ontario LDCs are mitigated by the negotiated rate agreements executed by the Ontario LDCs. These agreements include terms and conditions, which cap the cost of transportation, provide capacity mitigation options, and provide termination rights to mitigate certain of the risks described below. Construction Risk As with any major pipeline infrastructure project, NEXUS will face the risk of cost increases and schedule extensions during the construction phase. Cost increases and schedule extensions may be due to route changes, unforeseen subsurface conditions, permit requirements, construction quality, labor productivity and availability, and material cost and availability. Generally, a negotiated rate agreement apportions the risk of schedule extensions and construction cost overruns to the party that is best positioned to manage that risk (i.e., the project developer). Specifically, under a negotiated rate agreement, the shipper in a typical pipeline project subject to the jurisdiction of the FERC may be obligated to contribute to construction cost overruns, but that contribution is limited by the contractual terms (e.g., capped limit to the transportation rate). Similarly, the Ontario LDCs, in their negotiated rate agreement, have capped the risk of construction cost overruns, thus limiting the exposure to this risk. In addition, shippers on pipeline infrastructure projects may have certain termination rights that could also facilitate management of this risk. Lastly, precedent agreements often include a date certain for commencing service. Specifically, if NEXUS is not placed in-service by November 1, 2018, then the Ontario LDCs may terminate their Precedent Agreements. In addition, should Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 48 of 64 311 the project be delayed, the Ontario LDCs can potentially contract for short-term market purchases to fill potential gaps in their respective supply portfolios. Demand Forecasting Risk The Ontario LDCs may face certain risks related to whether the demand for natural gas will meet the Ontario LDCs’ expectations that underpin the decision to enter into the NEXUS Precedent Agreements. Demand forecasting risks include potential demand forecast model errors, changes in economic conditions, and changes in social or political conditions. The primary mitigation factor regarding demand forecasting risks is that the Ontario LDCs are entering into the Precedent Agreements with NEXUS as replacement capacity for existing contracts within their respective supply portfolios. As such, the decision to enter into the NEXUS Precedent Agreements are not premised on future demand growth, and are instead premised on existing demand. Although the Ontario LDCs face the risk that natural gas demand could decline, the consistent historical natural gas consumption by the Ontario LDCs’ customers and the current cost competitiveness of natural gas minimizes the likelihood of this risk materializing. In addition, the Ontario LDCs have the ability to manage their respective supply portfolios through the termination of other transportation/supply contracts. Also, the term (i.e., 15 years) of the firm transportation agreement outlined in the Ontario LDCs’ Precedent Agreements with NEXUS is on the shorter end of the range, thus mitigating the risk of long-term demand erosion. Further, given the substantial undertakings with respect to the refurbishment of certain nuclear generating facilities in Ontario and the expectation that natural gas-fired power generation capacity would be the likely backstop should those projects require additional time, Ontario may require additional natural gas transportation capacity. Lastly, NEXUS, as a FERC jurisdictional pipeline, will be required to provide shippers with measures to mitigate any un-utilized capacity, such as capacity release and segmentation. The NEXUS pipeline will access various markets in Ohio and Michigan (i.e., within the NEXUS transportation path of the Ontario LDCs), which should provide the Ontario LDCs with counterparties to structure deals regarding un-utilized capacity. These services (e.g., capacity release and segmentation) and access to markets will enhance the ability of the Ontario LDCs Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 49 of 64 312 to manage un-utilized capacity and potentially provide revenues to offset the NEXUS pipeline demand charges. Supply Risk Supply risk incorporates several subcategories of potential risks related to NEXUS, including: • The cost competitiveness of natural gas relative to alternative fuels; • The cost of alternative transportation paths; • The cost of alternative supply basins; and • The overall availability of natural gas to supply NEXUS. With regard to the cost competitiveness of natural gas relative to alternative fuels, the substantial increase in natural gas production from shale basins has fundamentally re-shaped the projections of the cost of natural gas and the availability of natural gas supply. As such, natural gas will continue to effectively compete for various market segments (e.g., residential, commercial, industrial, and power generation), thus encouraging natural gas exploration and production. The cost effectiveness of the NEXUS transportation path is described in the evidence of Union and Enbridge. Based on that analysis, NEXUS is expected to be a competitively priced option. Nonetheless, it is important to recognize that NEXUS has the additional benefits described in Section IV (e.g., diversity in natural gas supply basins, pipelines, and price) that further enhance the value of NEXUS capacity to the Ontario LDCs. Additionally, NEXUS will provide access to alternative supply basins through connections with the TETCO and TGP systems. The availability of natural gas to serve NEXUS is discussed in Section III; and, based on those discussions, sufficient natural gas supply is forecasted to be available for the term of the NEXUS Precedent Agreements. Finally, should natural gas availability from the Marcellus and Utica basins become an issue, NEXUS will have access to other natural gas supply basins through the NEXUS interconnections with upstream pipelines. Regulatory Risk Sussex considered several areas of regulatory risk related to delays or failure to secure regulatory permits and approvals that are necessary to construct and operate NEXUS. Overall, the regulatory processes for securing these approvals are initiated and managed by the lead Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 50 of 64 313 developers of NEXUS (i.e., DTE and Spectra). The lead developers initiated the pre-filing process with FERC in late December 2014, and have outlined a detailed plan for securing the necessary permits in their pre-filing application. More notably, both DTE and Spectra have an extensive record of developing, constructing, and owning natural gas transmission pipelines, particularly in the relevant market area, which is likely to mitigate the potential for regulatory approval delays. Spectra, for instance, operates more than 22,000 miles of interstate pipelines and approximately 300 Bcf of storage in the U.S. and Canada.84 DTE, in addition to owning a regulated natural gas distribution utility, intrastate pipeline, and storage facilities in Michigan, has ownership interest in the Vector and Millennium pipelines and the Bluestone Gathering System. Given this combined experience, if NEXUS should encounter significant permitting or regulatory approval delays, the lead developers have the experience to manage and mitigate this risk. In general, shippers who participate in open seasons for pipeline capacity manage regulatory risk by including conditions or terms in the precedent agreement that provide opportunities for shippers to re-assess their position if certain milestones and schedule deadlines are not met. To that end, shippers may be permitted to terminate the precedent agreements should the shippers not receive their required regulatory approvals. By way of example, the NEXUS Precedent Agreements have as a condition precedent approval of the agreement by the OEB by October 1, 2015. Project Development Risk NEXUS faces three subcategories of project development risk. First, a major interstate natural gas transportation pipeline, such as NEXUS, faces the risk of potential opposition from landowners along the proposed route. Second, a major pipeline, such as NEXUS, could experience a lack of shipper interest and insufficient firm capacity contracts to underpin the project. Third, the potential risk that the contractual counterparties fail to perform pursuant to the agreements. 84 See, Spectra Energy, About Us: At a Glance, http://www.spectraenergy.com/About-Us/At-a- Glance/, accessed January 2015. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 51 of 64 314 To mitigate the risk of landowner opposition, NEXUS has identified a 600-foot corridor along the proposed route of NEXUS for study and review.85 The lead developers have also identified approximately 3,500 land parcels that fall within that corridor and have already begun outreach to those landowners.86 The risk of insufficient demand has been mitigated by the three open seasons held by the lead developers of NEXUS, which have resulted in various shipper commitments, including precedent agreements with “supply push” and “demand pull” entities. Specifically, certain natural gas producers (e.g., Chesapeake, CONSOL Energy, and Noble Energy) or “supply push” parties have expressed interest in long-term transportation contracts on NEXUS. Similarly, certain LDCs (e.g., Union and Enbridge) or “demand pull” parties have expressed interest in long-term transportation contracts.87 The experience of the NEXUS lead developers coupled with the diverse shipper base provides mitigation with respect to project development risk. In terms of failure to perform risk, the lead developers (i.e., DTE and Spectra) have been involved in the development, construction, and operation of numerous pipeline projects.88 From a creditworthiness perspective, both lead developers are rated investment grade by the major credit ratings agencies and have market capitalizations of approximately $15 billion or more. Both Spectra and DTE have also been involved in the development, construction, and operation of numerous pipeline projects. Therefore, the counterparty or credit risks associated with the lead developers of the NEXUS Project are likely mitigated. Operational Risk The Ontario LDCs face two primary subcategories of operational risks: (1) operational costs, and (2) operational performance risks. The risk of operational costs exceeding the current expectations is mitigated by the negotiated rate agreement, which defines levels of rates. In addition, any operating costs not covered by the negotiated rate agreement would be subject to 85 In Re: Request for Approval to Use the Pre-Filing Process NEXUS Gas Transmission, LLC – NEXUS Gas Transmission Project, FERC Docket No. PF15-10-000, December 30, 2014, at 5. 86 Ibid, at 7. The lead developers were granted survey permission for approximately 72% of the proposed NEXUS route. 87 PRN Newswire, Spectra Energy Reports Third Quarter 2014 Results, November 5, 2014. 88 In December, 2014, Spectra was recognized as the 2014 Premier Construction Project by Platts Global Energy Awards. This award is provided to an entity to recognize, “excellence in project execution and management.” Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 52 of 64 315 review and approval by the FERC, thus providing the Ontario LDCs with an opportunity to participate in a regulatory process regarding operating costs. Similarly, FERC approved tariff requirements and the complaint/review process at the FERC limit the risk of operational performance shortfalls. Both risks are further mitigated by the substantial project development and operational records of the NEXUS lead developers (i.e., Spectra and DTE). Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 53 of 64 316 VII. REVIEW OF STATE PROCESSES FOR PRE-APPROVAL In addition to the Ontario market review, the qualitative and quantitative discussion of NEXUS, and the analysis of benefits and risks associated with the Project, Sussex also reviewed various regulatory approaches regarding pre-approval of pipeline capacity contracts. Specifically, Sussex reviewed the pre-approval processes in certain jurisdictions, including Massachusetts, Connecticut, Florida, and North Carolina. Massachusetts In Massachusetts, the Department of Public Utilities (“DPU”) reviews the actions of the LDC (i.e., contracting for pipeline capacity) to determine if it is “consistent with the public interest”. Among other considerations, the primary requirements for the LDC to meet this guideline are: 1. Consistency with the company’s portfolio objectives; and 2. Favorable comparison to the range of alternative options reasonably available to the LDC at the time of the acquisition or contract renegotiation. To establish consistency with portfolio objectives, the LDC may reference “portfolio objectives established in a recently approved forecast and requirements plan or in a recent review of supply contracts under Section 94A, or may describe its objectives in the filing accompanying the proposed resource.”89 Additionally, the DPU process requires a review of “relevant price and non-price attributes of each contract to ensure a contribution to the strength of the overall supply portfolio.”90 The DPU requires an LDC to review alternative natural gas supply options by evaluating “whether the pricing terms are competitive with those for the broad range of capacity, storage, and commodity options that were available to the LDC at the time of the acquisition, as well as with those opportunities that were available to other LDCs in the region”.91 Other considerations include non-price objectives, such as supply reliability and diversity. 89 Order in Re: Petition of Boston Gas Company and Colonial Gas Company each d/b/a National Grid, pursuant to G.L. c. 164, § 94A, for Approval of Two Precedent Agreements for Firm Transportation Service with Algonquin Gas Transmission, LLC, Docket No. D.P.U 13-157, January 31, 2014, at 3. 90 Ibid, at 4. 91 Ibid. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 54 of 64 317 The Massachusetts LDCs have received pre-approval of pipeline capacity contracts from the DPU on several occasions, including in recent filings involving precedent agreements between affiliates of National Grid, Columbia Gas, and Northeast Utilities, as shippers, and Spectra, as developer and owner of the Algonquin Incremental Market (“AIM”) Project.92 The AIM Project will provide certain New England LDCs with more access to natural gas supplies from the Marcellus and Utica basins. In their DPU filing, National Grid provided support with respect to the consistency of the 15-year AIM precedent agreements with their portfolio objectives (as illustrated by National Grid’s Forecast and Supply Plan) and requirements (i.e., existing customer loads and future load growth). In addition, National Grid evaluated “how the AIM Project would affect the reliability, flexibility, and diversity of the Company’s portfolio.”93 The applications by the affiliates of Columbia Gas and Northeast Utilities were generally similar to that submitted by National Grid. The DPU approved the AIM precedent agreements, finding that the contracts were in the public interest. The DPU noted that the AIM capacity compared favorably (e.g., competitive delivered cost) with the alternatives that were considered by the LDCs.94 In addition, the DPU stated in its order approving the AIM precedent agreement with an affiliate of Northeast Utilities, that: Moreover, the AIM Project will significantly enhance the Company’s ability to access a new supply source [Marcellus Shale] located in close proximity to New England…Because the Company’s access to eastern Canadian supplies and imported LNG has declined notably in recent years, and western Canadian supplies will be more expensive, the AIM Project provides the Company with an opportunity to replace these supplies with a more reliable source [Marcellus Shale].95 Connecticut Connecticut is implementing its Comprehensive Energy Strategy (“CES”), which established significant customer-growth objectives, requiring Connecticut Natural Gas Corporation, The Southern Connecticut Gas Company, and Yankee Gas Services Company (the “Connecticut LDCs”) to update their capacity requirements, calculate shortfalls, and identify sources of 92 See, Docket Nos. D.P.U. 13-157, D.P.U. 13-158, and D.P.U. 13-159. 93 Order in Re: Petition of Boston Gas Company and Colonial Gas Company each d/b/a National Grid, pursuant to G.L. c. 164, § 94A, for Approval of Two Precedent Agreements for Firm Transportation Service with Algonquin Gas Transmission, LLC, Docket No. D.P.U 13-157, January 31, 2014, at 16. 94 Ibid, at 22. 95 Order in Re: Petition of NSTAR Gas Company, pursuant to G.L. c. 164, § 94A, for Approval of a Precedent Agreement for Firm Transportation Service with Algonquin Gas Transmission, LLC, Docket No. D.P.U. 13-159, January 31, 2014, at 20 [clarification added]. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 55 of 64 318 additional capacity. In a proceeding related to the implementation of the Connecticut CES, the Connecticut LDCs filed for pre-approval of their precedent agreements associated with the AIM Project and the TGP Connecticut Expansion, which will increase their access to natural gas supplies from the Marcellus and Utica shale basins. As part of the pre-approval process, the LDCs were required to file the following information with the Public Utilities Regulatory Authority (“PURA”): 1. Peak-Day Demand Forecast; 2. Forecasted Requirement for Additional Capacity; 3. Fit with LDC’s Existing Portfolios; 4. Comparison with Alternative Sources; and 5. Other Considerations.96 The Connecticut LDCs received pre-approval for their precedent agreements from the PURA.97 However, the PURA noted that, although it does not usually pre-approve pipeline capacity contracts, based on the information provided by the Connecticut LDCs, and acknowledging that the CES legislation would require significant load growth, PURA approved the precedent agreements in order “to make the expansion plan viable.”98 Florida In Florida, Florida Power & Light (“FPL”) filed for pre-approval of the precedent agreements with Sabal Trail and the Florida Southeast Connection (“FSC”) with the Florida Public Service Commission (“FPSC”).99 The FPSC noted that FPL was not legally required to obtain their approval since the pipelines fall under the jurisdiction of the FERC. However, the precedent agreements would require FPSC action “at the time FPL seeks recovery of costs in the fuel clause proceeding.”100 Due to the magnitude of costs associated with the precedent agreements, FPL requested a determination from the FPSC that the “decision to enter into long- 96 Decision in Re: PURA Investigation of Connecticut's Local Distribution Companies' Proposed Expansion Plans to Comply with Connecticut's Comprehensive Energy Strategy, Docket No. 13- 06-02, November 22, 2013, at 17-23. 97 Ibid, at 64-65. 98 Ibid, at 23. 99 Proposed Agency Action Order on Florida Power & Light Company’s Proposed Sabal Trail Transmission, LLC and Florida Southeast Connection Pipelines, Docket No. 130198-EI, Order No. PSC-13-0505-PAA-EI, October 28, 2013, at 4. 100 Ibid, at 2. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 56 of 64 319 term gas transportation contracts is prudent and that the associated costs are eligible for recovery through the fuel clause.”101 The FPSC’s evaluation of FPL’s precedent agreements involved several steps, including a review of the Company’s need for additional capacity. As a vertically integrated electric utility, FPL’s need for incremental capacity is tied to its projection of increased electricity load. The FPSC reviewed FPL’s customer load forecast and proposed generation resource portfolios, comparing the requirements resulting from these projects to the Company’s existing contracted capacity. Following this review, the FPSC concluded, “FPL has adequately demonstrated a need for an additional 400 MMcf/day of firm natural gas transmission capacity by 2017.”102 The FPSC next evaluated the alternative options to determine if the Sabal Trail and FSC precedent agreements represented the most cost-effective solutions to meet this capacity need. The FPSC found that the Sabal Trail and FSC precedent agreements provided cost savings and offered additional benefits related to supply diversity and opportunities for further expansion.103 North Carolina In North Carolina, Duke Energy, a vertically integrated electric utility, and Piedmont Natural Gas Company, Inc. (“Piedmont”), a natural gas utility, received pre-approval from the North Carolina Utilities Commission (“NCUC”) related to a precedent agreement with the Atlantic Coast Pipeline, LLC (“ACP”) for the transport of natural gas from the Marcellus Shale supply region.104 The NCUC accepted Piedmont’s demonstration of the reasonableness of the precedent agreement.105 Piedmont emphasized, among other benefits, that the ACP project would provide: • Additional natural gas supplies from highly liquid trading points in the Marcellus and Utica basins; • New transportation infrastructure at favorable and stable rates; • Operational enhancements and additional supply deliverability; and 101 Ibid. 102 Ibid, at 9. 103 Ibid, at 13-15. 104 Order Accepting Affiliated Agreements for Filing and Permitting Operation Thereunder Pursuant to G.S. 62-153 and Authorizing Piedmont to Enter into Related Redelivery Agreements, Docket No. G-9, Sub 655, October 28, 2014. 105 Ibid. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 57 of 64 320 • Economic development benefits related to construction and operation of the pipeline.106 Summary and Conclusions of State Processes for Pre-Approval While the specific requirements with respect to each jurisdiction’s pre-approval process can vary, the information submitted in a pre-approval filing generally addresses the following: • The need for the project; • The competitiveness of the project; • The quantitative and qualitative benefits associated with the project; • The compatibility of the project with the existing portfolio; and • The mitigation of the risks associated with the project. Finally, the regulatory process for pre-approval of the cost consequences associated with long- term capacity agreements in the jurisdictions reviewed by Sussex is generally consistent, specifically: • The LDC, at its discretion, may file for pre-approval of the cost consequences associated with the capacity contract; • The capacity contracts usually represent significant investments by the project developers and shippers; • The LDC provides evidence addressing the requirements listed above; • The LDC requires certainty regarding the recovery of costs and, therefore, requests pre- approval; and • The infrastructure or project may not be developed absent pre-approval of the capacity contract. 106 Ibid. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 58 of 64 321 VIII. CONCLUSIONS Sussex has completed certain research and analyses to evaluate NEXUS, and has developed the following observations and conclusions. Natural Gas Market Trends The North American natural gas market is evolving in response to certain large, emerging sources of natural gas in the U.S. Northeast and Mid-Atlantic (i.e., Marcellus and Utica shale basins), which are displacing the traditional sources of natural gas (e.g., WCSB) in Eastern Canada, including the Province of Ontario. The natural gas supply reserves and production in the Marcellus and Utica supply basins are forecasted to be more than adequate for the term of the NEXUS transportation agreements. In addition, NEXUS provides access to other pipelines and, therefore, other natural gas supply basins. The ability to access these growing and competitive sources of natural gas is premised on sufficient natural gas transportation capacity to deliver Marcellus and Utica natural gas to the Ontario market. Benefits of NEXUS NEXUS will provide numerous reliability and price stability benefits to the Ontario LDCs, including: 1. Access to proximate and competitive natural gas supply; 2. Natural gas supply basin diversity; 3. Enhanced liquidity for natural gas purchases made at the Dawn Hub; 4. Transportation path diversity; 5. Transportation cost stability; 6. Natural gas price index diversity; and 7. Service flexibility. A contract for capacity on NEXUS increases the flexibility of the Union and Enbridge natural gas supply portfolios; thus, providing additional options to the Ontario LDCs to manage natural gas supply and transportation costs, improve overall reliability, and provide increased priced stability. NEXUS will also provide several benefits to other Ontario natural gas market participants (e.g., the power generation segment and direct purchase customers), including: (1) access to new natural gas supply basins; (2) pipeline diversity; and (3) improved liquidity at the Dawn Hub. In addition, NEXUS will directly connect the Ontario LDCs to a growing and competitively priced natural gas supply basin, which is proximate to Ontario. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 59 of 64 322 Landed Cost Analysis The landed cost analysis prepared by Union and Enbridge regarding NEXUS consists of four components: (1) alternative paths to transport natural gas supply to a specific delivery point were identified; (2) the natural gas supply basin associated with each transportation path was identified; (3) the natural gas supply cost was developed for each path; and (4) the transportation cost (i.e., demand, variable, and fuel charges) for all pipelines within the path was calculated. The Ontario LDCs’ process is reasonable and consistent with the typical approach used to conduct a landed cost analysis. The transportation paths identified and modeled by the Ontario LDCs represent a reasonable range of alternative options to NEXUS. Specifically, the Union landed cost analysis evaluated fifteen transportation paths to the Dawn Hub; and Enbridge identified and modeled four options associated with the NEXUS capacity and seven alternative transportation routes to the Dawn Hub. As illustrated by the results of the Ontario LDCs’ landed cost analyses, the NEXUS transportation path is competitive with the alternatives evaluated. Finally, Union and Enbridge developed appropriate documentation of their approach, analysis and results. Risk Assessment As shown in Table 8.1, Sussex identified six categories of risk related to NEXUS. For each risk category, Sussex identified the potential impact on the Project, and the mitigation strategies employed by the Ontario LDCs and NEXUS. Table 8.1: NEXUS Risk Review Risk Category Risk Mitigation Construction Risk The Ontario LDCs were able to mitigate their exposure to construction- related risks by entering into negotiated rate agreements. A negotiated rate agreement apportions the majority of the risk associated with schedule delays and construction cost overruns to the party that is best positioned to manage that risk (i.e., the project developer). In addition, the Ontario LDCs have certain termination rights that can also facilitate management of this risk. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 60 of 64 323 Risk Category Risk Mitigation Demand Forecasting Risk The Ontario LDCs’ Precedent Agreements with NEXUS are not dependent on load growth, as the NEXUS capacity will replace existing transportation capacity contracts. The term (i.e., 15 years) of the firm transportation agreement outlined in the Precedent Agreements is on the shorter end of the range of typical firm transportation agreements associated with new infrastructure, thus mitigating the risk of long-term demand erosion. The Ontario LDCs also have the ability to manage their respective gas supply portfolios by terminating other transportation/supply contracts. Supply Risk The Marcellus/Utica shale basins (i.e., the origination point for NEXUS) are the fastest growing natural gas supply basins in North America. Various third-party forecasts support the availability of sufficient natural gas supply for the duration of the NEXUS contract. In addition, NEXUS has access to other natural gas supply basins via interconnections with other pipelines. The term (i.e., 15 years) of the firm transportation agreement outlined in the Precedent Agreements is on the shorter end of the range of typical firm transportation agreements associated with new infrastructure, thus mitigating the risk of a long-term reduction in natural gas supply from the Marcellus/Utica shale basins. Regulatory Risk The NEXUS lead developers (i.e., Spectra and DTE) have significant and recent experience regarding the federal and state regulatory approval processes for pipeline infrastructure; and Spectra/DTE have initiated the FERC pre-filing process for NEXUS. The Ontario LDCs are requesting the OEB’s pre-approval of the cost consequences outlined in the NEXUS Precedent Agreements to manage the provincial regulatory risks. Project Development Risk The NEXUS lead developers are highly experienced pipeline developers that have begun outreach to landowners and have held three open seasons to secure shipper demand. The open seasons have resulted in shipper commitments from a mix of “supply push” and “demand pull” entities, which is further evidence of the viability of the Project. Both lead developers are subsidiaries of large, creditworthy holding companies. Operational Risk The NEXUS lead developers have extensive experience with pipeline operations. Further, any operational issue or cost would likely be subject to the FERC review and approval process. Based on the review of the risk categories, Sussex concludes that the overall risk to the Ontario LDCs and their customers are largely mitigated by: 1. The usual and customary terms and conditions in the NEXUS Precedent Agreements; 2. The strength of the lead developers; 3. The strategy employed by the Ontario LDCs to limit their exposure to potential construction cost overruns; and 4. The current production expectations for the Marcellus and Utica supply basins. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 61 of 64 324 Pre-Approval of Cost Consequences of NEXUS Finally, the NEXUS transportation agreements, as outlined in the Ontario LDCs’ Precedent Agreements, represent a significant commitment of 15 years at approximately USD $1.0 billion of pipeline demand charges for Union and Enbridge. Pre-approval of the cost consequences outlined in the Precedent Agreements would eliminate the risk to the Ontario LDCs of an ex- post facto cost disallowance, assure an opportunity to recover the pipeline demand charges, and facilitate the development of new natural gas infrastructure. Certain state utility regulatory commissions in the U.S. have adopted pre-approval guidelines to facilitate the development of new natural gas pipeline infrastructure. In general, these regulatory guidelines provide a framework (e.g., required information) for the utility to seek pre-approval from the regulatory body for the costs associated with pipeline capacity; thus, reducing the risk of a cost disallowance for the utility, while increasing the probability of the development of new infrastructure. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 62 of 64 325 APPENDIX A: SUMMARY BIOGRAPHIES OF SUSSEX PROJECT TEAM James M. Stephens, Partner Mr. Stephens has 25 years of experience in the energy industry and he has held senior management positions at consulting firms, energy marketing companies and natural gas utilities. He has assisted numerous clients with regulatory policy strategy/tactics and energy market analyses/assessments including: the analysis of regional energy market dynamics and the associated drivers for new natural gas infrastructure (e.g., pipeline expansions); the evaluation of new markets/opportunities (e.g., distributed LNG); market entry/exit strategies (e.g., service territory or product/service expansions); market implications of new energy infrastructure (e.g., LNG facilities and pipelines); integrated resource plans (e.g., natural gas demand forecasting and resource portfolio analysis); natural gas supply portfolio evaluation and optimization (e.g., asset management agreements); and management prudence (e.g., implementation of risk management/portfolio strategies). In addition to his consulting experience, Mr. Stephens served as the President of a retail energy marketing firm where he was responsible for all aspects of business unit management including front, mid and back office functions. Mr. Stephens was also responsible for the Gas Supply Procurement and Portfolio Optimization function for a local distribution company. Mr. Stephens holds a B.S. in Management and an M.B.A. with a concentration in Operations Management from Bentley College. Samuel G. Eaton, Managing Consultant Mr. Eaton has nearly ten years of consulting experience in the electric and natural gas industries. Mr. Eaton’s work includes assessing the prudence of project management and internal control systems used to evaluate, select, initiate and manage major capital projects in the U.S. and Canada. In addition, Mr. Eaton has assisted utilities with regulatory policy issues, consolidated tax adjustments, rate design, and natural gas expansion projects. He has also aided in the development of expert reports ranging in topics from round-trip trades to the economic impact of storing spent nuclear fuel. Separately, Mr. Eaton has participated in approximately $10 billion of nuclear and fossil-fueled power plant divestitures, and corporate acquisitions. His experience on these transactions includes due diligence, workforce matters, the development and negotiation of purchase and sale agreements, and closing the transactions. Prior to entering consulting, Mr. Eaton was employed by the Jacksonville Economic Development Commission, where he supported several local development projects Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 63 of 64 326 and created and managed an extensive database of local companies eligible for economic development incentive programs. Mr. Eaton graduated cum laude from Brandeis University with a Bachelor of Arts in Economics and Business (minor). Kim Nguyen, Managing Consultant Ms. Nguyen has ten years of consulting experience in the energy and utility industries. She has contributed to engagements involving regulatory strategy and market analyses including: the evaluation of regional energy market demand/supply dynamics, energy pricing and basis implications, and the associated drivers for new natural gas infrastructure; the development and evaluation of natural gas demand forecasts; and natural gas supply portfolio evaluation and optimization. Ms. Nguyen has also provided analytical support for expert witness testimony on a variety of issues including: cost of capital and capital structure, marginal costs studies, and expense and operating performance benchmarking. She has extensive experience in database development, researching regulatory and energy market issues, performing statistical analysis, and financial analysis and modeling. Ms. Nguyen holds a B.A. in Economics from Clark University, where she graduated summa cum laude and was a member of the Omicron Delta Epsilon Society. Peter Newman, Executive Advisor Mr. Newman, who is an Executive Advisor with Sussex, has over thirty-five years of experience in various natural gas supply management roles for WE Energies. Specifically, Mr. Newman was responsible for managing all the natural gas supply functions including: long term supply planning and acquisition; natural gas purchasing strategies and execution; capacity portfolio optimization; development and implementation of risk management objectives and policies; and management of the gas control function. In addition, Mr. Newman participated in numerous Federal Energy Regulatory Commission proceedings with respect to natural gas pipeline expansions, rate proceedings, new services and other regulatory issues. Mr. Newman was also a key member of the management team that developed and built the Guardian Pipeline and, in that role, Mr. Newman contributed to a variety of activities, including: market development and project management, developing and implementing the open season process, market assessment, regulatory strategy and proceedings, capacity marketing and tariff development. Mr. Newman is an engineering graduate of the University of Wisconsin-Platteville. Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 3 Page 64 of 64 327 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 4 Page 1 of 1 Route Point of Supply Basis Differential $US/mmBtu Supply Cost $US/mmBtu Unitized Demand Charge $US/mmBtu(1) (7) Commodity Charge $US/mmBtu (1) Fuel Charge $US/mmBtu (1) 100% LF Transportat ion Inclusive of Fuel $US/mmBtu Landed Cost $US/mmBtu Landed Cost $Cdn/G Point of Delivery Comment (A)(B)( C )(D) = Nymex + C (E)(F)(G)(I) = E + F + G (J) = D + I (K)(L) (6)Trunkline / Panhandle Trunkline Field Zone 1A -0.127 7.0325 0.1926 0.0275 0.2633 0.4833 $7.52 $7.43 Dawn Includes Ojibway to Dawn costs (6)Panhandle (2013-2014)Panhandle Field Zone -0.282 6.8776 0.2671 0.0443 0.3587 0.6700 $7.55 $7.46 Dawn Includes Ojibway to Dawn costs (6)Vector (2012 - 2016)Chicago 0.108 7.2670 0.2500 0.0018 0.0698 0.3216 $7.59 $7.50 Dawn (6)Panhandle (2012-2017)Panhandle Field Zone -0.282 6.8776 0.3524 0.0443 0.3587 0.7554 $7.63 $7.54 Dawn Includes Ojibway to Dawn costs (2)Dawn Dawn 0.509 7.6681 0.0000 0.0000 0.0000 0.0000 $7.67 $7.58 Dawn (6)Panhandle (2010-2017)Panhandle Field Zone -0.282 6.8776 0.4579 0.0443 0.3587 0.8609 $7.74 $7.65 Dawn Includes Ojibway to Dawn costs (6)Niagara to Kirkwall Niagara 0.558 7.7167 0.1441 0.0000 0.0000 0.1441 $7.86 $7.77 Kirkwall (6)Alliance / Vector CREC -0.832 6.3270 1.7393 -0.4152 0.3513 1.6754 $8.00 $7.91 Dawn (3)*NEXUS Michcon Generic/Southwest PA 0.057 7.2165 0.7500 0.0000 0.1739 0.9239 $8.14 $8.05 Dawn Michcon Generic for 3 years, Southwest PA as Nexus project impacting other node (2)TCPL Empress to Dawn Empress -0.469 6.6899 1.4368 0.0000 0.1552 1.5920 $8.28 $8.18 Dawn (5)*NEXUS (Increase Upper end of toll by 15%)Michcon Generic/Southwest PA 0.057 7.2165 0.9660 0.0000 0.1739 1.1399 $8.36 $8.26 Dawn Michcon Generic for 3 years, Southwest PA as Nexus project impacting other node (2)TCPL Empress to Union CDA Empress -0.469 6.6899 1.5588 0.0000 0.1820 1.7407 $8.43 $8.33 Union CDA (1) Unitized Demand Charges, Commodity Charges and Fuel Charges per Maximum Applicable Tariff and include capacity required to flow fuel for downstream pipeline segments (2) For Reference Only (3) Toll Estimates used in lieu of official toll for portion of path (4) Assumes $0.15 USD/MMBTU charge to get from producing region to beginning of path (5) Sensitivity Analysis - TCPL Niagara path (6) Existing Union Contract (7) No assumptions made for incremental tolling or cost recovery for infrastructure changes required. Assumptions used in Developing Transportation Contracting Analysis: Annual Gas Supply & Fuel Ratio Forecasts Point of Supply Col (B) above Nov 2014 - Oct 2015 Nov 2015 - Oct 2016 Nov 2016 - Oct 2017 Nov 2017 - Oct 2018 Nov 2018 - Oct 2019 Nov 2019 - Oct 2020 Nov 2020 - Oct 2021 Nov 2021 - Oct 2022 Nov 2022 - Oct 2023 Nov 2023 - Oct 2024 Nov 2024 - Oct 2025 Nov 2025 - Oct 2026 Nov 2026 - Oct 2027 Nov 2027 - Oct 2028 Nov 2028 - Oct 2029 Nov 2029 - Oct 2030 Nov 2030 - Oct 2031 Nov 2031 - Oct 2032 Average Annual Gas Supply Cost $US/mmBtu Col (D) above Fuel Ratio Forecasts Col (G) above Henry Hub (NYMEX)Henry Hub $4.16 $4.46 $5.20 $5.33 $5.90 $6.84 $6.48 $6.68 $6.88 $7.15 $7.30 $7.63 $8.46 $8.51 $8.96 $9.43 $9.65 $9.84 $7.16 Trunkline / Panhandle Trunkline Field Zone 1A $4.12 $4.41 $5.14 $5.26 $5.81 $6.73 $6.37 $6.56 $6.76 $7.03 $7.17 $7.49 $8.30 $8.34 $8.78 $9.24 $9.45 $9.64 $7.03 3.74% Panhandle (2013-2014)Panhandle Field Zone $4.10 $4.38 $5.07 $5.16 $5.70 $6.59 $6.23 $6.42 $6.60 $6.86 $6.99 $7.32 $8.12 $8.15 $8.58 $9.01 $9.18 $9.34 $6.88 5.21% Vector (2012 - 2016)Chicago $4.45 $4.72 $5.42 $5.49 $6.03 $6.92 $6.55 $6.74 $6.96 $7.23 $7.37 $7.71 $8.53 $8.59 $9.02 $9.49 $9.70 $9.89 $7.27 0.96% Panhandle (2012-2017)Panhandle Field Zone $4.10 $4.38 $5.07 $5.16 $5.70 $6.59 $6.23 $6.42 $6.60 $6.86 $6.99 $7.32 $8.12 $8.15 $8.58 $9.01 $9.18 $9.34 $6.88 5.21% Dawn Dawn $4.97 $5.24 $5.84 $5.88 $6.36 $7.29 $6.93 $7.07 $7.30 $7.57 $7.73 $8.07 $8.91 $8.98 $9.44 $9.92 $10.15 $10.37 $7.67 0.00% Panhandle (2010-2017)Panhandle Field Zone $4.10 $4.38 $5.07 $5.16 $5.70 $6.59 $6.23 $6.42 $6.60 $6.86 $6.99 $7.32 $8.12 $8.15 $8.58 $9.01 $9.18 $9.34 $6.88 5.21% Niagara to Kirkwall Niagara $4.46 $4.73 $5.48 $5.88 $6.41 $7.34 $7.06 $7.24 $7.47 $7.76 $7.89 $8.24 $9.09 $9.17 $9.66 $10.12 $10.35 $10.56 $7.72 0.00% Alliance / Vector CREC $3.59 $3.84 $4.42 $4.51 $4.96 $5.89 $5.63 $5.83 $6.08 $6.33 $6.47 $6.86 $7.62 $7.67 $8.11 $8.57 $8.68 $8.81 $6.33 5.55% NEXUS Michcon Generic/Southwest PA $4.72 $4.99 $5.59 $5.44 $5.97 $6.89 $6.51 $6.66 $6.84 $7.09 $7.24 $7.56 $8.38 $8.45 $8.87 $9.34 $9.58 $9.77 $7.22 2.41% TCPL Empress to Dawn Empress $3.80 $4.07 $4.70 $4.82 $5.29 $6.28 $6.00 $6.20 $6.42 $6.70 $6.86 $7.22 $8.01 $8.10 $8.55 $8.99 $9.13 $9.29 $6.69 2.32% NEXUS (Increase Upper end of toll by 15%)Michcon Generic/Southwest PA $4.72 $4.99 $5.59 $5.44 $5.97 $6.89 $6.51 $6.66 $6.84 $7.09 $7.24 $7.56 $8.38 $8.45 $8.87 $9.34 $9.58 $9.77 $7.22 2.41% TCPL Empress to Union CDA Empress $3.80 $4.07 $4.70 $4.82 $5.29 $6.28 $6.00 $6.20 $6.42 $6.70 $6.86 $7.22 $8.01 $8.10 $8.55 $8.99 $9.13 $9.29 $6.69 2.72% Sources for Assumptions: Gas Supply Prices (Col D): ICF Base Case Jan 2014 Fuel Ratios (Col G):Average ratio over the previous 12 months or Pipeline Forecast Transportation Tolls (Cols E & F):TCPL 2013 Approved Tolls, Union Tolls in Effect Oct 2013 Foreign Exchange (Col K)$1 US =1.0427 CDN Source: Oct 1, 2013 Bank of Canada Closing Energy Conversions (Col K)1 dth = 1 mmBtu = 1.055056 Union's Analysis Completed:January 2014 * indicates path referenced in evidence for this analysis January 2014 Landed Cost Analysis (Nov 2014 to Oct 2032 Transportation Contracting Analysis) 328 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 5 Page 1 of 1 Route Point of Supply Basis Differential $US/mmBtu Supply Cost $US/mmBt u Unitized Demand Charge $US/mmBt u(1)(7) Commodity Charge $US/mmBt u (1) Fuel Charge $US/mmBt u (1) 100% LF Transportat ion Inclusive of Fuel $US/mmBt u Landed Cost $US/mmBt u Landed Cost $Cdn/G Point of Delivery Comment (A)(B)( C )(D) = Nymex + C (E)(F)(G)(I) = E + F + G (J) = D + I (K)(L) (6)TCPL Niagara to Kirkwall Niagara -0.449 7.0511 0.2008 0.0000 0.0103 0.2111 $7.26 $8.10 Kirkwall (3)Rover Southwest PA -0.954 6.5455 0.8000 0.0000 0.1577 0.9577 $7.50 $8.36 Dawn *NEXUS / St. Clair Southwest PA -0.954 6.5455 0.8030 0.0000 0.1728 0.9758 $7.52 $8.38 Dawn Includes St. Clair to Dawn costs (5)NEXUS/St. Clair (Increase Upper end of toll by 15%)Southwest PA -0.954 6.5455 0.8984 0.0000 0.1728 1.0712 $7.62 $8.49 Dawn Toll is $ 0.77+ $ 0.635*15%. Includes St. Clair to Dawn costs (6)Vector (2014 - 2017)Chicago -0.103 7.3972 0.1893 0.0018 0.0732 0.2643 $7.66 $8.54 Dawn (2)Dawn Dawn 0.177 7.6769 0.0000 0.0000 0.0000 0.0000 $7.68 $8.56 Dawn (6)Michcon (2014-2015)Michcon Generic 0.023 7.5229 0.0663 0.0000 0.1398 0.2061 $7.73 $8.62 Dawn Includes St. Clair to Dawn costs (6)Vector (2012 - 2016)Chicago -0.103 7.3972 0.2500 0.0990 0.0732 0.4222 $7.82 $8.72 Dawn (6)Trunkline / Panhandle Trunkline Field Zone 1A -0.092 7.4075 0.2245 0.0268 0.2995 0.5508 $7.96 $8.87 Dawn Includes Ojibway to Dawn costs (6)Panhandle (2012-2017)Panhandle Field Zone -0.377 7.1230 0.3524 0.0439 0.4687 0.8650 $7.99 $8.91 Dawn Includes Ojibway to Dawn costs (6)Alliance / Vector CREC -1.067 6.4335 1.6460 -0.3643 0.3593 1.6409 $8.07 $9.00 Dawn (6)Panhandle (2014-2015)Panhandle Field Zone -0.377 7.1230 0.4579 0.0439 0.4687 0.9705 $8.09 $9.02 Dawn Includes Ojibway to Dawn costs (6)Panhandle (2010-2017)Panhandle Field Zone -0.377 7.1230 0.4579 0.0439 0.4687 0.9705 $8.09 $9.02 Dawn Includes Ojibway to Dawn costs (2)TCPL Empress to Dawn Empress -0.722 6.7782 1.6246 0.0000 0.2745 1.8992 $8.68 $9.67 Dawn (6)TCPL Empress to Union CDA Empress -0.722 6.7782 1.7631 0.0000 0.2793 2.0423 $8.82 $9.83 Union CDA (1) Unitized Demand Charges, Commodity Charges and Fuel Charges per Maximum Applicable Tariff and include capacity required to flow fuel for downstream pipeline segments (2) For Reference Only (3) Toll Estimates used in lieu of official toll for portion of path (5) Sensitivity Analysis (6) Existing Union Contract * indicates path referenced in evidence for this analysis Assumptions used in Developing Transportation Contracting Analysis: Annual Gas Supply & Fuel Ratio Forecasts Point of Supply Col (B) above Nov 2017 - Oct 2018 Nov 2018 - Oct 2019 Nov 2019 - Oct 2020 Nov 2020 - Oct 2021 Nov 2021 - Oct 2022 Nov 2022 - Oct 2023 Nov 2023 - Oct 2024 Nov 2024 - Oct 2025 Nov 2025 - Oct 2026 Nov 2026 - Oct 2027 Nov 2027 - Oct 2028 Nov 2028 - Oct 2029 Nov 2029 - Oct 2030 Nov 2030 - Oct 2031 Nov 2031 - Oct 2032 Average Annual Gas Supply Cost $US/mmBtu Col (D) above Fuel Ratio Forecasts Col (G) above Henry Hub (NYMEX)Henry Hub $4.62 $5.43 $6.12 $6.59 $6.81 $6.89 $7.06 $7.23 $7.56 $8.03 $8.44 $8.90 $9.26 $9.62 $9.96 $7.50 TCPL Niagara to Kirkwall Niagara $4.62 $5.35 $5.96 $6.37 $6.54 $6.59 $6.71 $6.78 $7.00 $7.33 $7.71 $8.13 $8.56 $8.86 $9.26 $7.05 0.15% Rover Southwest PA $4.09 $4.88 $5.50 $5.89 $6.06 $6.12 $6.25 $6.32 $6.53 $6.85 $7.19 $7.58 $7.98 $8.28 $8.66 $6.55 2.41% NEXUS / St. Clair Southwest PA $4.09 $4.88 $5.50 $5.89 $6.06 $6.12 $6.25 $6.32 $6.53 $6.85 $7.19 $7.58 $7.98 $8.28 $8.66 $6.55 2.64% NEXUS/St. Clair (Increase Upper end of toll by 15%)Southwest PA $4.09 $4.88 $5.50 $5.89 $6.06 $6.12 $6.25 $6.32 $6.53 $6.85 $7.19 $7.58 $7.98 $8.28 $8.66 $6.55 2.64% Vector (2014 - 2017)Chicago $4.63 $5.41 $6.07 $6.52 $6.73 $6.81 $6.97 $7.14 $7.46 $7.91 $8.31 $8.75 $9.09 $9.42 $9.73 $7.40 0.99% Dawn Dawn $4.82 $5.62 $6.29 $6.76 $6.98 $7.07 $7.24 $7.42 $7.75 $8.21 $8.63 $9.08 $9.43 $9.77 $10.09 $7.68 0.00% Michcon (2014-2015)Michcon Generic $4.70 $5.49 $6.16 $6.62 $6.84 $6.92 $7.09 $7.26 $7.59 $8.05 $8.46 $8.91 $9.25 $9.59 $9.90 $7.52 1.86% Vector (2012 - 2016)Chicago $4.63 $5.41 $6.07 $6.52 $6.73 $6.81 $6.97 $7.14 $7.46 $7.91 $8.31 $8.75 $9.09 $9.42 $9.73 $7.40 0.99% Trunkline / Panhandle Trunkline Field Zone 1A $4.56 $5.37 $6.05 $6.51 $6.72 $6.80 $6.97 $7.14 $7.46 $7.93 $8.33 $8.79 $9.14 $9.49 $9.83 $7.41 4.04% Panhandle (2012-2017)Panhandle Field Zone $4.42 $5.20 $5.84 $6.29 $6.48 $6.56 $6.71 $6.88 $7.19 $7.63 $8.02 $8.44 $8.76 $9.07 $9.36 $7.12 6.58% Alliance / Vector CREC $3.69 $4.44 $5.08 $5.54 $5.77 $5.87 $6.04 $6.23 $6.55 $6.99 $7.36 $7.78 $8.09 $8.39 $8.67 $6.43 5.58% Panhandle (2014-2015)Panhandle Field Zone $4.42 $5.20 $5.84 $6.29 $6.48 $6.56 $6.71 $6.88 $7.19 $7.63 $8.02 $8.44 $8.76 $9.07 $9.36 $7.12 6.58% Panhandle (2010-2017)Panhandle Field Zone $4.42 $5.20 $5.84 $6.29 $6.48 $6.56 $6.71 $6.88 $7.19 $7.63 $8.02 $8.44 $8.76 $9.07 $9.36 $7.12 6.58% TCPL Empress to Dawn Empress $4.03 $4.78 $5.42 $5.87 $6.09 $6.18 $6.36 $6.55 $6.88 $7.33 $7.72 $8.15 $8.47 $8.78 $9.07 $6.78 4.05% TCPL Empress to Union CDA Empress $4.03 $4.78 $5.42 $5.87 $6.09 $6.18 $6.36 $6.55 $6.88 $7.33 $7.72 $8.15 $8.47 $8.78 $9.07 $6.78 4.12% Sources for Assumptions: Gas Supply Prices (Col D): ICF Base Case Jan 2015 Fuel Ratios (Col G):Average ratio over the previous 12 months or Pipeline Forecast Transportation Tolls (Cols E & F):Union Tolls in Effect Jan 2015 Foreign Exchange (Col K)$1 US =1.1762 CDN Source: Jan 2, 2015 Bank of Canada Closing Energy Conversions (Col K)1 dth = 1 mmBtu = 1.055056 Union's Analysis Completed:January 2015 * indicates path referenced in evidence for this analysis January 2015 Landed Cost Analysis (Nov 2017 to Oct 2032 Transportation Contracting Analysis) 329 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 1 of 9 UNION GAS SYSTEM OVERVIEW The purpose of this Schedule is to provide an overview of Union’s system, including the Dawn Parkway System and the Dawn Hub, and its importance to energy supply in Ontario, Québec and the U.S. Northeast.1 Union serves approximately 1.4 million customers in northern, eastern and southern Ontario through an integrated network of over 68,000 kilometres of natural gas pipelines. Union operates storage and transmission assets that include 166 Bcf of underground natural gas storage at the Dawn Hub as well as the Dawn Parkway System, which connects the Dawn Hub to consuming markets in Ontario, Québec and the U.S. Northeast. Throughput serving Union’s in- franchise customers during 2013 was over 500 Bcf. Throughput serving Union’s ex-franchise storage and transmission customers during 2013 was 890 Bcf. In total, Union transported approximately 1.4 Tcf of natural gas in 2013, which is slightly greater than all of the natural gas consumed in Ontario and Québec or approximately 5% of North American demand. Union divides its service territory areas into Union North and Union South. Union South includes customers located west of Mississauga and south of Georgian Bay (Windsor/Chatham, London/Sarnia, Waterloo/Brantford and Hamilton/Halton Districts). Union North includes customers located north of Barrie and north and west of North Bay (Northeast and Northwest Districts). Union North also includes customers located east of Bowmanville and west of the 1As per EB-2014-0261, Exhibit A, Tab 4. 330 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 2 of 9 Québec border (Eastern District). A map of Union’s service districts as well as Union’s system is provided as Figure 4-1. Figure 4-1 Union Gas System and Service Districts Union North is almost exclusively supplied from the TransCanada PipeLines Inc. (“TransCanada”) Mainline system, with no other option for the transportation or physical delivery of natural gas to the laterals serving Union’s districts. Therefore, these customers are reliant upon the TransCanada Mainline. 331 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 3 of 9 Dawn Parkway System In Union South, Union operates the Dawn Parkway System which includes an integrated network of natural gas transmission pipelines and compressors. The Dawn Parkway System transports natural gas between the Dawn Compressor Station (“Dawn”), near Sarnia at the west end of Union South, and the Parkway Compressor Station (“Parkway”), located in Mississauga at the east end of Union South. Union operates two additional compressor stations on the Dawn Parkway System: i) the Lobo Compressor Station (“Lobo”) located near London; and ii) the Bright Compressor Station (“Bright”) located between Woodstock and Kitchener. A map of Union’s Dawn Parkway System is provided in Figure 4-2. Figure 4-2 The Dawn Parkway System 332 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 4 of 9 Additionally, in January 2014, the Board approved the Parkway West Compressor Station (“Parkway West”) development2. Two compressors and related facilities are currently under construction at Parkway West. The Parkway West facilities will be placed into service in stages over 2014 and 2015. Parkway West is located on a new site directly west of Parkway. The Dawn Parkway System connects with other pipeline systems at three locations: 1) At Parkway, the Dawn Parkway System connects to the TransCanada Mainline and to the Enbridge Gas Distribution Inc. (“Enbridge”) system. Union connects to the TransCanada Mainline within the existing Parkway site at a delivery point referred to as Parkway (TransCanada). Union also connects to the Enbridge system within the existing Parkway site at a delivery point referred to as Parkway (Consumers), and at a second location two kilometres east of Parkway at a delivery point referred to as the Lisgar Custody Transfer Station (“Lisgar”). At Parkway West, once construction is complete, the Dawn Parkway System will connect to the Board-approved Enbridge GTA Project Segment A (also known as the Enbridge Albion Line), targeted for November 2015, and will also connect to the existing Enbridge system, targeted for December 2014, and TransCanada Mainline, targeted for December 2015. 2 EB-2012-0451/EB-2012-0433/EB-2013-0074 Decision January 30, 2014. 333 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 5 of 9 2) Near Hamilton, the Dawn Parkway System connects to the TransCanada Mainline at Union’s Kirkwall Custody Transfer Station (“Kirkwall”). This portion of the TransCanada Mainline, known as the Niagara Export Line, connects to the import/export points at Niagara and Chippawa at the Ontario/New York border. 3) At Dawn, near Sarnia, the Dawn Parkway System connects to a number of pipelines: Vector Pipeline; Panhandle Eastern Pipeline via the Union Panhandle system; Great Lakes Gas Transmission via TransCanada; Michigan Consolidated; Bluewater Gas Storage; and ANR via Niagara Gas Transmission (NiagaraLink) and the Enbridge (Tecumseh) system. As described above, Union receives natural gas at Dawn from a number of interconnecting pipelines which connect the Dawn Hub to most of North America’s major supply basins. Dawn is also indirectly connected to Tennessee Gas Pipeline, Dominion Transmission, National Fuel Gas Supply Corporation, and Empire State Pipeline via TransCanada’s Niagara Export Line (from the Niagara/Chippawa import/export points to Kirkwall) and Union’s Dawn Parkway System (Kirkwall to Dawn). In its Decision regarding Union’s Parkway Projects and Enbridge’s GTA Project, the Board concluded that “Supply diversity enhances security and has the tendency to lower gas prices from what they would otherwise be if the market continued to rely on fewer sources of supply3”. 3 EB-2012-0451/EB-2012-0433/EB-2013-0074 Decision January 30, 2014, p. 29. 334 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 6 of 9 The majority of Union South customers located east of Dawn are served via the Dawn Parkway System. Some of Union’s customers in the Hamilton/Haldimand-Norfolk and Burlington/Oakville areas are served from the TransCanada Mainline via TransCanada’s Niagara Export Line and, TransCanada’s Domestic Line. Union provides transportation services on the Dawn Parkway System to ex-franchise customers, including Enbridge, TransCanada, Gaz Métro Limited Partnership and U.S. Northeast natural gas utilities. Union also uses its Dawn Parkway System (and also TransCanada services from Parkway) to ship natural gas from Dawn to Union North. Union is accountable to its in- franchise customers and its ex-franchise firm transportation customers for the reliable delivery of natural gas. The Dawn HUB Union operates one of the largest and most important North American market hubs, the Dawn Hub. The Dawn Hub consists of a combination of interconnecting pipelines and underground natural gas storage, and is the main source of supply for the Dawn Parkway System. The Board recognized in its November 7, 2006 Natural Gas Electricity Interface Review Decision EB-2005- 0551, (“NGEIR Decision”), that “The development of the Dawn Hub has brought substantial benefits to consumers in Ontario and to other market participants4”. 4 EB-2005-0551 Decision, November 7, 2006, p. 44. 335 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 7 of 9 The Dawn Hub is also connected to the most significant amount of underground natural gas storage within the Great Lakes region. In Ontario, Union operates 166 Bcf of natural gas storage in 24 pools that are all connected to the Dawn Hub. All of this storage is either owned by Union or contracted from other Ontario storage operators. In addition, Enbridge operates 103 Bcf of natural gas storage (Tecumseh facilities) that is connected to Dawn. Dawn is also connected through various upstream pipelines to approximately 675 Bcf of underground natural gas storage in Michigan. Dawn is one of the most physically traded, liquid hubs in North America. The liquidity of Dawn is the result of the combination of: 1) access to underground storage; 2) interconnections with upstream pipelines; 3) take away capacity to growth markets; 4) a large number of buyers and sellers of natural gas; and, 5) price transparency. In its NGEIR Decision, the Board concluded that: “it is in the public interest to maintain and enhance the depth and liquidity of the market at the Dawn Hub as a means of facilitating competition5”. In its Decision regarding Union’s Parkway Projects and Enbridge’s GTA Project, the Board reiterated this position: “It is the Board’s view that while uncertainties exist for all 5 EB-2005-0551 Decision November 7, 2006, p. 45. 336 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 8 of 9 supply sources in terms of future cost and availability, it is widely acknowledged, including by this Board in prior decisions, that supply diversification enhances reliability and brings cost benefits through enhanced competition6”. The depth and liquidity of the market at Dawn provides value to all Ontario customers by way of competitive natural gas commodity prices, attracting natural gas supply to Ontario. Ontario’s natural gas-fired generation market relies on a healthy, liquid Dawn Hub. Power generation contracts are commercially structured based on the price of natural gas at Dawn for approximately 5,500 MW of Ontario’s electricity production capacity. Natural gas-fired generators have access to unique services at the Dawn Hub that provide operational flexibility through firm all day storage and transportation services that allow natural gas-fired generators to match natural gas supply needs to the electricity market that is priced hourly and dispatched every five minutes. The Board further identified the importance of the Dawn Hub in its NGEIR Decision: “The storage facilities are an integral part of what is commonly referred to as the Dawn Hub, which is widely recognized as one of the more important market centres in North America for the trading, transfer and storage of natural gas. In its Natural Gas Forum Report, the Board stated “The large amount of nearby storage, combined with the 6 EB-2012-0451/EB-2012-0433/EB-2013-0074 Decision January 30, 2014, pp. 23-24. 337 Filed: 2015-05-28 EB-2015-0166 Exhibit A Schedule 6 Page 9 of 9 convergence of pipelines linking the U.S. and Ontario gas markets, have made Dawn the most liquid trading location in Ontario. The Federal Energy Regulatory Commission, in its assessment of energy markets in the United States in 2004, made similar comments about the significance of Dawn: The Dawn Hub is an increasingly important link that integrates gas produced from multiple basins for delivery to customers in the Midwest and Northeast…Dawn has many of the attributes that customers seek as they structure gas transactions at the Chicago Hub: access to diverse sources of gas production; interconnection to multiple pipelines; proximity to market area storage; choice of seasonal and daily park and loan services; liquid trade markets; and opportunities to reduce long haul pipeline capacity ownership by purchasing gas at downstream liquid hubs. 7” Summary Union’s Dawn Parkway System is an integral part of the natural gas delivery system for Ontario, Québec and U.S. Northeast residents, businesses and industry. The Dawn Parkway System connects these consuming markets to most of North America’s major supply basins, to the largest region of underground natural gas storage in North America and to the liquid Dawn Hub. 7 EB-2005-0551 Decision November 7, 2006, pp. 7-8. 338 Ontario EnergyBoard Commission de l’énergiede l’Ontario ONTARIO ENERGY BOARD NOTICE TO CUSTOMERS OF UNION GAS LIMITED Union Gas Limited has applied for pre-approval of the cost consequences of a long-term natural gas transportation contract with NEXUS Gas Transmission. Learn more. Have your say. Union Gas Limited has applied to the Ontario Energy Board (OEB) for pre-approval of the cost consequences of a 15-year gas transportation contract commencing on November 1, 2017. Union Gas Limited estimates that the total cost over the 15-year term of contract will be $715 million. If its application is approved, Union Gas Limited says that the benefits will include: • increasing the security of gas supply • providing greater diversity of supply sources • supporting the liquidity of the natural gas hub at Dawn, Ontario • helping to lower natural gas prices and enhance price stability Union Gas Limited estimates potential gas cost savings of over $700 million over the term of the contract compared to current contracted supplies. THE ONTARIO ENERGY BOARD IS HOLDING A PUBLIC HEARING The OEB will hold a public hearing to consider the application filed by Union Gas. We will question Union Gas on the case. We will also hear arguments from individuals and from groups that represent the customers of Union. At the end of this hearing, the OEB will decide whether or not to pre-approve the costs as requested in the application. The OEB is an independent and impartial public agency. We make decisions that serve the public interest. Our goal is to promote a financially viable and efficient energy sector that provides you with reliable energy services at a reasonable cost. BE INFORMED AND HAVE YOUR SAY You have the right to information regarding this application and to be involved in the process. • You can review the application filed by Union on the OEB’s website now.• You can file a letter with your comments, which will be considered during the hearing. • You can become an active participant (called an intervenor). Apply by July 22, 2015 or the hearing will go ahead without you and you will not receive any further notice of the proceeding.• At the end of the process, you can review the OEB’s decision and its reasons on our website. LEARN MORE Our file number for this case is EB-2015-0166. To learn more about this hearing, find instructions on how to file letters or become an intervenor, or to access any document related to this case, please select the file number EB-2015-0166 from the list on the OEB website: www.ontarioenergyboard.ca/notice. You can also phone our Consumer Relations Centre at 1-877-632-2727 with any questions. ORAL VS. WRITTEN HEARINGS There are two types of OEB hearings – oral and written. The OEB will determine at a later date whether to proceed by way of a written or oral hearing. If you think an oral hearing is needed, you can write to the OEB to explain why by July 22, 2015. PRIVACY If you write a letter of comment, your name and the content of your letter will be put on the public record and the OEB website. However, your personal telephone number, home address and e-mail address will be removed. If you are a business, all your information will remain public. If you apply to become an intervenor, all information will be public. This rate hearing will be held under section 36 of the Ontario Energy Board Act, S.O. 1998 c.15 (Schedule B). 339 340 341 342 343 344 345 346 347 348 STAFF REPORT DEPARTMENT Report Title: SPECIAL AWARDS COMMITTEE Report No.: CL 15-17 Author: Donna Wilson Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: VOLUNTEER SERVICE RECOGNITION PROGRAM SPECIAL AWARDS COMMITTEE TERMS OF REFERENCE RECOMMENDATION: THAT Council receives Report CL 15-17, Special Awards Committee Appointment; AND THAT Council appoints Ann Loker, Sam Lamb and Mary Anne Vangeertruyde to represent the community; AND THAT Council appoints Mayor Stephen Molnar and Councillor ______________________ to represent the Town as members of the Special Awards Committee; AND THAT the Volunteer Service Recognition Program and the Terms of Reference for the Special Awards Committee be adopted. EXECUTIVE SUMMARY Council will recall that at the council meeting of May 11, 2015, staff was directed to advertise for Special Awards Committee volunteers. The advertisement went in the Tillsonburg update section of the Tillsonburg news for four consecutive weeks. Staff has received interest from three individuals from the Community. The proposed committee’s composition is three community members, the Mayor, one Councillor and a staff liaison. Staff is recommending that the appointments be made as set out above which will include the Mayor and one Town Councillor. The staff liaison shall be Lana Lund, Corporate Executive Assistant. 349 The Volunteer Service Recognition Program attached shall give authority to the Special Awards Committee Members to approve those individuals to be recognized for their volunteerism. At the second Council Meeting of each month the Special Awards Committee shall submit the name of the individual to be recognized and the Mayor shall present the individual with a pin at the start of the Council meeting. All recipients shall be invited to attend the formal event to acknowledge volunteerism which takes place during the first year of the Council’s term of office. COMMUNITY STRATEGIC PLAN IMPACT A Special Awards Committee will demonstrate culture & community by making Tillsonburg an attractive place to live. FINANCIAL IMPACT/FUNDING SOURCE There will be no financial impact for the volunteer of the month for a number of years as there currently is a large stock of volunteer pins. Page 2 / 2 CAO 350 Special Awards Committee TERMS OF REFERENCE Mandate: To advise Council and make recommendations on awards for volunteer service within the Town of Tillsonburg. The Volunteer Service Recognition Program shall recognize volunteers on a monthly basis when nominations are received by the Special Awards Committee. Goals for 2015-2018 Term: The Special Awards Committee will ensure volunteer service recognition nomination packages are available to the community which shall include various community groups including service clubs. 1.0 Role of the Special Awards Committee 1.1 Receive nominations for volunteer recognition; 1.2 Advise Council and make recommendations for volunteer recognition of a volunteer of the month, 2.0 Organization of the Committee: The Committee should be composed of people residing within or around the Town of Tillsonburg who demonstrate a strong commitment to the terms of reference. A cross section of people should attempt to be chosen in order to bring to the committee a variety of advocacy, communication and organizational skills. 2.1 Vacancies will be advertised in the local newspaper, on the Town’s website as well as various forms of social media as per Town's procedures for Committees of Council. 2.2 Committee Members will be appointed by Council. The composition will be three community members and two Council members. 2.3 The term of a Committee Member is four (4) years to coincide with the term of Council. 2.4 Additional members may be appointed throughout the term. 2.5 One member will be appointed by vote of the committee at the first meeting of each term to chair the meetings for that year. The committee will also, at this time, select a vice-chair for the same duration. 2.6 A Municipal staff person shall interact in an advisory manner to the committee. 351 3.0 Meetings: 3.1 The Committee will hold a minimum of six (6) meetings a year or as required. 3.2 The date and time of the regular meetings will be established at the first meeting of each term. 3.3 Meetings will have a formal agenda. 3.4 Agendas and information packages, that will include the minutes from the previous meeting, will be sent (via mail, e-mail, or fax) to Committee Members prior to each meeting. 3.5 A majority of Council appointed Committee Members will constitute quorum for the transaction of business. 3.6 The members may meet occasionally informally to discuss issues as warranted. 4.0 Role of The Chair: The Chair is responsible for insuring the smooth and effective operation of the Committee and its roles. This will include responsibility for: 4.1 Calling the meetings to order. 4.2 The Chair is encouraged to create an informal atmosphere to encourage the exchange of ideas such as, using a roundtable format. 4.3 Creating an agenda in consultation with the Secretary. 4.4 Chairing the meetings. 4.5 Acting as spokesperson. 4.6 Representing the Committee on other committees when necessary. 4.7 The Chair shall conduct meetings in accordance with the Town's Procedural By-law 5.0 Role of Vice-Chair In the absence of the Chair, the Vice-Chair shall assume the full responsibilities of the Chair as listed in points 4.1 to 4.7 inclusive. 6.0 Role of the Secretary: The Secretary is responsible for insuring a complete up to date record for the Committee. 6.1 In liaison with the Chair, arrange date, time and venue for meetings. 6.2 In liaison with the Chair, set agendas and circulate to the members two business days prior to the meeting. 6.3 Circulate draft minutes to the members. 6.4 Keep a complete up to date record of the committee minutes. 352 7.0 Role of Members: Membership on the Committee is a position of responsibility and requires a strong commitment to the Terms of Reference. Committee members are required to: 7.1 Attend all regular scheduled meetings. Members are required to notify the Chair, Secretary or the designated municipal staff liaison if they are unable to attend a meeting. 7.2 Review all information supplied to them. 7.3 Prepare information for use in the development of materials for the Committee. 7.4 Promote the role of the Committee. 7.5 Offer input to committee reports to Council. 7.6 Attend training as required to effectively perform their role as a committee member. 7.7 Committee Members are subject to The Municipal Conflict of Interest Act R.S.O, 1990, c.M50 and must disclose any direct or indirect pecuniary interest. The disclosure must be recorded in the minutes of the meeting. 8.0 Role of Municipal Staff: The Town of Tillsonburg, by its nature and purpose, affects and is affected by many different Municipal departments. Assistance will be provided on an as required basis from various departments. Municipal staff will be responsible for carrying out the following functions with respect to the Committee: 8.1 Acting as an information resource and secretary when required. 8.2 Orientation of Committee members at the first meeting after Council appointment. 8.3 Assist the Committee in its reporting to Council (see Sec. 9.0). 8.4 Provide correspondence to the Committee. 9.0 Reports to Council: The Committee may advise and make recommendations to Council in accordance with its role. Reports may be submitted as follows: 9.1 Verbally by a Council representative. 9.2 Verbally by the Committee Chair or the designated Committee representative. 9.3 Minutes from the Committee meetings 9.4 Written reports An annual report will also be submitted to Council at the beginning of each new year outlining a list of the volunteers recognized in the previous twelve months. 353 THE CORPORATION OF THE TOWN OF TILLSONBURG ADMINISTRATIVE POLICY VOLUNTEER SERVICE RECOGNITION PROGRAM APPROVAL DATE: REVISION DATE: Page 1 of 4 SCHEDULES A. Policy Statement Volunteerism is the lifeblood of any modern, caring neighbourhood, town, and city. Volunteering is so pervasive it's invisible. We take for granted all the things that have been pioneered by concerned, active volunteers. This policy shall attempt to ensure that volunteers are recognized for their many hours of contributions to the community. B. Purpose To advise Council and make recommendations on awards for volunteer service within the Town of Tillsonburg. The Volunteer Service Recognition Program shall recognize volunteers on a monthly basis when nominations are received by the Special Awards Committee. C. Scope Nominations for the Volunteer of the Month award will be accepted year round. Any individual, group or organization may nominate a citizen for their contributions to the Tillsonburg Community. D. General This program shall be administered by the Clerk’s Office. 354 THE CORPORATION OF THE TOWN OF TILLSONBURG ADMINISTRATIVE POLICY VOLUNTEER SERVICE RECOGNITION PROGRAM APPROVAL DATE: REVISION DATE: Page 2 of 4 SCHEDULES This program shall be referred to as the “Volunteer Service Recognition Program”. This program comes into force and effect on the date adopted. E. Authority The Council of the Town of Tillsonburg delegate the authority to name a volunteer for receipt and presentation of the volunteer service award pin to the Special Awards Committee. F. Program Section 1 - Nominations - Federal and Provincial Information received respecting Federal and Provincial award nominations will be posted on the Towns website as well as the Council Agenda as information. Section 2 - Nominations - Municipal Program Any member of the public may access the Nomination Form (Schedule “A”). To be eligible for Municipal Volunteer Service Recognition, nominees must have provided continuous service, be alive (posthumous recognition would only be provided through a direct/written request to Council) and must be a volunteer within the Town of Tillsonburg. Consideration of volunteer 355 THE CORPORATION OF THE TOWN OF TILLSONBURG ADMINISTRATIVE POLICY VOLUNTEER SERVICE RECOGNITION PROGRAM APPROVAL DATE: REVISION DATE: Page 3 of 4 SCHEDULES service commitment within the County of Oxford may be included (i.e. United Way, Red Cross, etc.). There are four (4) main categories identified under continuous volunteer services: 1.sports/recreation/education 2.arts/culture/heritage3.seniors/youth 4.civic Complete nominations would include a description of the volunteer service provided, length of volunteerism and reasons as to why the individual should be recognized. All nominations shall be forwarded to the Clerk’s Office. All nominations will be reviewed by the Special Awards Committee. At the second Council meeting of each month, the Special Awards Committee will present Council with a name to recognize one or more local volunteers for a Municipal Volunteer Service Recognition Award. Volunteers who have made a significant continuous service contribution to any or all of the four main categories would be acknowledged with a municipal pin. Ceremony and Reception Council may host a formal event to acknowledge the recipients once every four years, during the first year of a Council’s term of office. This event may occur in conjunction with the Town’s Advisory Committee Recognition Awards. 356 THE CORPORATION OF THE TOWN OF TILLSONBURG ADMINISTRATIVE POLICY VOLUNTEER SERVICE RECOGNITION PROGRAM APPROVAL DATE: REVISION DATE: Page 4 of 4 SCHEDULES 357 Tillsonburg Special Awards Committee NOMINATION FORM: VOLUNTEER RECOGNITION AWARD * Please print in blue or black ink Name of Individual Being Nominated Last First Middle Date of Birth ( DD / MM / YYYY) / / / Current Address Phone ( ) - Email address (if applicable) Summary of Volunteer Activities: Special Awards Committee Volunteer of the Month Nomination Form_2007 358 Other information (or a source of information) considered important: If additional space is needed in any of the above categories, be sure to attach ALL pages with this form. Please note that in order for the nomination to be considered, all information must be completed. Nominator Name of Nominator (print) Date of This Nomination Address Email Address Postal Code Home Phone Business Phone Signature of Nominator Please submit nomination forms to the attention of: Lana Lund, Corporate Executive Assistant (519)842-6428, ext.3225 Delivery Options: Email: llund@tillsonburg.ca Mail: Town of Tillsonburg Corporate Office 200 Broadway Street, 2nd Floor Tillsonburg, ON N4G 5A7 In person: Town of Tillsonburg – Corporate Office 200 Broadway Street, 2nd floor (Town Centre Mall) * Please submit form in a sealed envelope Special Awards Committee Volunteer of the Month Nomination Form_2007 359 1 CAO STAFF REPORT DEVELOPMENT & COMMUNICATION SERVICES Title: Sign Variance – Tillsonburg District Memorial Hospital Report No.: DCS 15-28 Author: GENO VANHAELEWYN – Chief Building Official Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: SITE PLAN & ELEVATION RECOMMENDATION: THAT Council receives report DCS 15-28 Sign Variance – Tillsonburg District Memorial Hospital; AND THAT Council approve the variance to Sign By-Law 3798 to allow for the construction of a 2 sided 5.5 square metres (60 sq.ft.) x 3.9 metres (12.8 ft) high ground sign located partially within the Town road allowance at 167 Rolph Street. EXECUTIVE SUMMARY Building Services received a request from the CEO of Tillsonburg District Memorial Hospital (TDMH) for the construction of a ground sign to be partially located within the Town’s road allowance in front of TDMH at 167 Rolph Street. A review of the request revealed that the proposed sign and location would not comply with Sign By-Law 3798 and therefore could not be processed/issued. This information was provided to the applicant and subsequently the applicant requested that the sign and the proposed location be considered for a variance to the Sign By-Law. The applicant proposes to construct a twelve foot high two-sided ground sign with a sign dimension of six feet wide by ten feet high to be partially located within the road allowance on the West side of Rolph Street just north of Bear Street as indicated on the attached drawings. The purpose of the signage is to promote “Campus of Care” which highlights specific medical services that are available at the Tillsonburg location and associated partners within the community. 360 2 CAO Sign By-Law 3798 notes the following related to this request and the application requires relief from: 5.2 Prohibited Locations f) No person shall erect a sign with a footing/foundation less than 1.0 metre (3.28 ft) from a street line; g) No person shall erect a sign higher than 0.75 metres (2.46 ft) within 3.0 metres (9.84 ft) of any road allowance where the sign may impede vision of an access from any improved public street to any lot; 8.5 Ground Sign Area & Height Schedule A – Permitted Sign Use/Property Use Institutional – maximum height is 3 metres (9.84 ft) In this case: - the proposed sign will be located partially within the road allowance. - the proposed sign will be 3.9 metres (12.8 ft) in height. CONSULTATION/COMMUNICATION A public notice was circulated to neighbouring properties within the location and no comments or concerns were received in favour or against the application. Engineering, Roads and Building Services noted that the proposed sign must be setback a minimum of 1.5 metres from the sidewalk and the sign/connection/foundation drawings need to be stamped by a professional engineer based on Part 4 of the Ontario Building Code. Should the variance be granted, TDMH will be required to enter into an encroachment agreement with the Town. Based on the information provided, staff makes note that this variance is major in nature and affects the intent of Sign By-Law 3798. Based on a site specific evaluation completed by staff and the nature and intent of the signage, staff recommends that the sign variance requested by TDMH for a 2 sided 5.5 square metres (60 sq.ft.) x 3.9 metres (12.8 ft) high ground sign located partially within the Town road allowance at 167 Rolph Street be granted subject to TDMH entering into an encroachment agreement with the Town. FINANCIAL IMPACT/FUNDING SOURCE No financial impact. 361 DCS 15-28 - Sign Variance – Tillsonburg District Memorial Hospital SITE PLAN 362 DCS 15-28 - Sign Variance – Tillsonburg District Memorial Hospital SIGN ELEVATION 363 STAFF REPORT DEVELOPMENT AND COMMUNICATION SERVICES REPORT TITLE: HIGHWAY 3 BUSINESS PARK UPDATE Report No.: DCS 15-26 Author: CEPHAS PANSCHOW Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: REPORT DCS 15-01 HWY 3 BUSINESS PARK DEVELOPMENT PLAN RECOMMENDATION: “THAT Council receive Report DCS 15-26 Highway 3 Business Park Update for information purposes.” EXECUTIVE SUMMARY The purpose of this report is to provide Council with an update on the status of the Highway 3 Business Park development plan further to the approved funding provided in the 2015 Capital Budget. BACKGROUND INFORMATION Staff provided a preliminary plan for the construction of the Highway 3 Business Park as part of the 2015 budget process. As detailed in Report DCS 15-01 Highway 3 Business Park Development Plan, the following phases had been tentatively identified: Phase Steps Timeline Final Design  Engineering Department to complete road/services design  CJDL to complete Stormwater Design & Servicing Report Q1 Q1 Marketing  Obtain design/build options for speculative industrial building construction through RFQ process  Obtain appraisal of value for lands  Reface existing sign on site Q2 Q3 2015 Q4 2015 Hwy 3  Monitor status of Ministry of Transportation Hwy Q1 – Q2 364 Interchange improvements improvements and timing  Release of Tender for Town led Hwy 3 Interchange Improvements  Construction of Hwy 3 Interchange Improvements Q3 Q3 – Q4 Phase 1: Construction  Release of Tender for Partial Construction  Partial road/SWM pond construction 2016 Phase 2: Construction  Completion of Construction 2017 Since this report was provided to Council, staff has been in consultation with the Ontario Ministry of Transportation (MTO) with respect to (1) their Highway 3 rehabilitation project and (2) the potential to include some of the Town’s works related to the Highway 3 Business Park in their works. Despite the Town having actively participated in MTO’s Environmental Assessment, MTO has advised that they are unable to accommodate any of the Town’s requests. Further, as MTO’s Highway 3 rehabilitation project is ongoing and will extend into 2016, there may be some significant impacts to the requirements for the Town including the potential for significantly increased costs. This includes a potential impact to the warranty on this year’s MTO work if the Town proceeds with the widening in 2016. MTO indicated that their policy of no “roadcuts” or joints being permitted on newly constructed roads could mean that they will require the Town to mill and resurface the full width of road as part of the proposed widening to the south to accommodate the access into the Town’s Business Park. MTO also identified the following items that will impact the project schedule: Item Impact Comments New requirement to place sanitary sewer crossing outside of intersection Potential cost impact Original crossing was shown in the intersection as per the draft Plan of Subdivision, which MTO had previously reviewed Confirmation of requirement to go through Provincial Environmental Assessment Class B Additional time As Town’s required improvements to Highway 3 are relatively minor, it is anticipated that it will drop down to a Class C review once initiated/scoped Additional geotechnical investigations/boreholes required Additional cost MTO wants better knowledge of ground around areas where services will be installed Traffic signals not required initially, but will be at Town’s cost including first 20 years maintenance Estimated cost of $90,000 for 20 year period ($4,500/year) once traffic signals are required 20 Year maintenance requirement is new information Design Standards All designs are required to be prepared by an MTO This will likely result in increased design costs as Page 2 / 4 CAO 365 approved consultant as per their Registry, Appraisal and Qualification System (RAQS) approved consultants tend to be the larger firms Based on the issues that have arisen, staff has developed a new construction schedule as follows (see Schedule A for a more detailed schedule): 2015 2016 2017 Hwy 3 Widening  Retain approved consultant  Design work initiation  Environmental Assessment Hwy 3 Widening  Final design  Select contractor  Construction N/A Clearview Drive Construction  Final design Clearview Drive Construction  Budget approval  Select contractor  Construction N/A SWM Pond  Final design SWM Pond  Approval by MOECC SWM Pond  Budget approval  Select contractor  Construction CONSULTATION/COMMUNICATION Not applicable. FINANCIAL IMPACT/FUNDING SOURCE It is not known at this time what the impact of the MTO requirements will be on the project budget. Staff will monitor and advise Council as the various phases of the project move forward. The approved 2015 Capital Budget includes $100,000 for detailed design of the business park and $506,000 for the Highway 3 widening. Any unused project costs will be carried forward into 2016 with information on budget impacts and construction timing and costs being brought forward during 2016 budget discussions. Page 3 / 4 CAO 366 SCHEDULE A – REVISED CONSTRUCTION SCHEDULE Final Design - Hwy 3 Interchange Activity Lead Completion Date Work Days % Complete Obtain RAQS Requirements and Consultant list from MTO CP Wed 6/10/15 100 Prepare RFP/RFQ for RAQS approved Design Consultant TBD Fri 8/28/15 Release RFQ CP Mon 8/31/15 Consultant Selection/Approval CP Wed 9/30/15 Design work - Initiation External Thu 10/01/15 Environmental Assessment External Thu 12/31/15 Design Work - Completion External Sun 1/31/16 Prepare & Release Tender Engineering Sun 2/28/16 Contractor Selection Engineering Thu 3/31/16 Start of Construction Subcontractor Spring 2016 Final Design - Clearview Dr S Activity Lead Completion Date Work Days % Complete Design work Engineering Thu 12/31/15 Budget Approval CP Sun 1/31/16 Prepare and release tender Engineering Sun 2/28/16 Contractor Selection/Approval Engineering Thu 3/31/16 Construction Contractor Fri 9/30/16 Project Completion CP Sat 12/31/16 Final Design - SWM Pond Activity Lead Completion Date Work Days % Complete Obtain quote from CJDL for design work Tue 6/30/15 Review internally and approve CP/CAO Fri 7/31/15 Design work CJDL Thu 12/31/15 Budget Approval CP/CAO Sun 1/31/16 Final Approval MOECC Sat 12/31/16 Prepare and release tender Engineering?Tue 1/31/17 Tender approval (Council)CP Fri 3/31/17 Construction Contractor Thu 8/31/17 Project Completion CP Sun 12/31/17 Design/Build Partnership Activity Lead Completion Date Work Days % Complete Prepare RFP CP Mon 6/01/15 Review Dev't Comm Tue 6/09/15 Release RFP Tue 6/30/15 Proposal Approval Fri 7/17/15 Concept Development Starts Aug 17 Marketing of Spec Building Concept Thu 12/31/15 Page 4 / 4 CAO 367 STAFF REPORT DEVELOPMENT & COMMUNICATIONS SERVICES Report Title: HIGHWAY 3 BUSINESS PARK DEVELOPMENT PLAN Report No.: DCS 15-01 Author: CEPHAS PANSCHOW Meeting Type: COUNCIL BUDGET MEETING Council Date: JANUARY 22, 2015 Attachments: RECOMMENDATION: “THAT Council receive Report DCS 15-01 Highway 3 Business Park Development Plan; AND THAT the development plan as outlined in Report DCS 15-01 be considered as part of the 2015 budget discussions.” EXECUTIVE SUMMARY The purpose of this report is to seek Council approval through the 2015 budget process to move forward with a development plan for the Highway 3 Business Park with the goal of facilitating investment in Tillsonburg and creating jobs and tax revenue. These lands have been in the Town’s ownership for decades although constrained until 2012 by a restrictive covenant in favour of the County of Oxford due to the former landfill located to the rear of these lands. Two residential properties were acquired in 2008/2009 in order to enable full ownership of the property. Although the acquisition costs for the subject property were zero as the property was already owned by the Town, there have been expenditures of $827,636 incurred to date for the development of the business park due to the purchase of two corner residential properties as well as costs for the preliminary design and approval processes (Plan of Subdivision). BACKGROUND INFORMATION On June 13, 2013 staff provided Report DCS 13-44 Industrial Land Update – Highway 3 Business Park to Council for information purposes. The report provided an overview of the actions undertaken with respect to the development of the Highway 3 Business Park. 368 On February 27, 2014 the following motion regarding an extension in the period to obtain plan registration was approved by Town Council and subsequently provided by Oxford County: That Tillsonburg Council advise Oxford County that the Town supports a 3 year extension to the draft approval of the Town Industrial Plan of Subdivision, (32T- 09004), for lands described as Part Lots 1 &2, Concession 5 (Middleton), Town of Tillsonburg, to March 9, 2017. Staff is recommending that Council move forward with the development of the Highway 3 Business Park for the following reasons:  Industrial vacancy rates across Southwestern Ontario are declining and this will lead to increased interest in Greenfield development opportunities;  Manufacturing employment is increasing and this points to decreased capacity within existing manufacturer facilities in the region;  Some local manufacturers have been contemplating expansions to meet demand;  Improving the “shovel-ready” status of these lands will make these lands more attractive to prospective purchasers and improve the likelihood that the Town will be successful in attracting investment and in a shorter timeframe. With the extension in the draft plan approval, the Town has an additional three years to obtain registration of the plan. Registration of the plan typically requires the installation of all roads/services. The cost estimate for the construction of the Highway 3 Business Park (2009 prices), including Highway 3 improvements and costs incurred to date, is $2,862,626. As this is a significant financial outlay with no offsetting revenue from land sales at this time, staff is recommending that the Business Park be constructed in phases as follows: Phase Steps Timeline Final Design  Engineering Department to complete road/services design  CJDL to complete Stormwater Design & Servicing Report Q1 Q1 Marketing  Obtain design/build options for speculative industrial building construction through RFQ process  Obtain appraisal of value for lands  Reface existing sign on site Q2 Q3 2015 Q4 2015 Hwy 3 Interchange improvements  Monitor status of Ministry of Transportation Hwy improvements and timing  Release of Tender for Town led Hwy 3 Interchange Improvements  Construction of Hwy 3 Interchange Improvements Q1 – Q2 Q3 Q3 – Q4 Phase 1:  Release of Tender for Partial Construction 2016 Page 2 / 8 CAO 369 Construction  Partial road/SWM pond construction Phase 2: Construction  Completion of Construction 2017 The following steps have been identified for 2015: Step Timeline Comment Confirm financing plan for Final Design and Construction Q4 14 Funded primarily through Debentures with design funded by Industrial Land Reserve. Goal is for all costs to be offset by future land sales. Obtain Council approval for financing Q1 15 As per Report DCS 15-01 Final design of Stormwater Pond and updated Servicing Report Q1 15 CJDL Engineering to handle Stormwater pond revisions and servicing report Final design of road/services Q1 15 Engineering Department to schedule in- house completion of final design for road/services Develop Phasing Plan Q1 15 Based on revised servicing report Hwy 3 improvements Q3 – Q4 Engineering to prepare and manage tenders for both road and pond and also do contraction administration and inspection (with some CJDL support for SWM pond as needed). Savings estimated at $80,000. Cost-sharing through Local Improvement Bylaw Q1 – Q2 15 Process for cost sharing with adjacent property owners to be determined The cost estimate originally prepared for the Highway 3 Business Park construction is from 2009 and staff will be requesting an updated estimate from CJDL Engineering Limited based on the final servicing report. Staff are also recommending that the Town obtain an appraisal on the value of land in the Business Park, and specifically, land parcels of different sizes and locations within the park. One issue relating to the attractiveness of municipal industrial land sales in Southwestern Ontario is the low gross commission payable to a real estate broker/agent who brings a client to the Town. A comparable sale in a larger city would result in a commission that is much higher than in Tillsonburg. An example of this is shown in the below table. As one can see in this illustration, commercial real estate brokers are incentivized by an difference of $115,000 to prefer larger communities over smaller communities based on the simple fact that prices per acre are higher in larger communities. One of Tillsonburg’s competitive advantages (low prices) is potentially reduced by this disincentive. One way that Tillsonburg can overcome this disincentive is to pay a higher commission on land sale transactions. Page 3 / 8 CAO 370 Community Size of Parcel Price/Acre Total Price Commission Payable @ 5% Tillsonburg 10 Acres $70,000 $700,000 $35,000 Larger City 10 Acres $300,000 $3,000,000 $150,000 Instead of lowering the asking price/acre to generate interest in the Highway 3 Business Park, Council could approve an increased commission rate for land sales and, by so doing, generate increased interest from the broker/agent community. If Council were to approve an increased commission rate as follows, the overall impact would be slightly higher costs, but also increased sales and revenue. Council may want to consider the following criteria:  Increased commission for first 10 acres purchased only;  10% commission rate (would result in commission of $70,000 in above example instead of $35,000 – almost half of larger city example);  Applicable to first few land sales only. CONSULTATION/COMMUNICATION The recently approved Community (Based) Strategic Plan identifies the value of promoting environmentally sustainable living (Culture and Community Goal 4.3). Although this particular goal relates to public transportation, staff has investigated what other communities are doing in terms of incorporating sustainability into the development of new business and industrial parks. Although there are not a lot of examples of this yet, they have been able to find some information on environmental features that are incorporated into either the development of the park or in the actual buildings within the park. Page 4 / 8 CAO 371 Boxwood Business Park David Johnston Research & Technology Park (University of Waterloo) McMaster Innovation Park Environmental Features  Conducted public workshop to collect ideas on how to incorporate green or sustainable features into infrastructure and building design  Protection of trees/vegetation  LED Street Lighting  Future Transit stop  Trails  Large buffer zones from natural features  Accommodation for passive solar  Included corridor for future district energy system  Improved Stormwater Mgmt  Use existing topography where possible  109 hectare (269 acre) Environmental Reserve along Laurel Creek  Provide a rehabilitation and management plan for the preservation and enhancement of environmental functions of the reserve  Bicycle lanes incorporated into road structure  Permeable hard surfaces to increase water infiltration and reduce runoff  Rainwater collection for grey water and irrigation use  Drainage swales where needed  Walking paths (future) Sustainable Features in Buildings  Optimize building to street ratio  Water conservation features  Increased vegetation for aesthetics and site energy Buildings are encouraged to make use of environmental best practices such as passive and active solar technology, green roofs and environmental  Utilize a ground source heat pump system with eco chillers and boilers to heat and cool the entire park (three buildings so far) with a district energy Page 5 / 8 CAO 372  Maximize natural light  Provide green areas between lots and pedestrian linkages  Financial incentives for green building features including fast track permits, reduced development charges, and rebates wastewater processing systems Primary landscape areas should convey a strong sense of environmental responsibility and corporate image system.  Two of the buildings have been built to LEED Silver and one to LEED Platinum standards.  Several features of the park and buildings incorporate locally sources products, or health and vitality to our tenants (such as an onsite fitness centre) Although there are not a lot of examples of sustainable business parks in Ontario, a number of Ontario municipalities provide for new development to include sustainable design features above and beyond the building code. For example, Toronto has a green strategy for commercial buildings, Caledon has a development charge incentive for green design, Hamilton has a green Tax Incentive Grant program, and East Gwillumbury has an extensive list of features that are incorporated into plans during the Site Plan Review process. Typically the goal is to create commercial or industrial areas that are more efficient and raise the standard of sustainability, which ultimately reduces the impact on the natural environment. Other benefits include lower costs to operate the building, greater employee comfort/productivity/satisfaction. Tillsonburg could proceed with the development of the park in keeping with the principles of Low Impact Development, or LID, which has emerged as a highly effective and attractive approach to controlling stormwater pollution and protecting watersheds. LID stands apart from other approaches through its emphasis on cost-effective, lot-level strategies that natural processes and reduce the impacts of development. By addressing runoff close to the source, LID can enhance the local environment and protect public health while saving developers and local government money. It is staff’s intention to work with the Long Point Region Conservation Authority to incorporate as many practical features related to Low Impact Development as possible in the new business park subject to meeting satisfactory cost/benefit analysis. These features would then be incorporated into the final design of the industrial park. It may also be desirable to engage the community in the naming of a business park that will ultimately benefit the whole community. In this regard, one suggestion that Council Page 6 / 8 CAO 373 may want to consider is a naming contest for the overall Business Park. Currently, the Town has two business parks (the VanNorman and Forest Hill) with the VanNorman Industrial Park being named after one of the founding families of Tillsonburg. The Town could lead a process to have an open competition for the business park naming, and in so doing, engage the community in this significant project. An additional benefit could be the marketing coverage obtained through this unique initiative. FINANCIAL IMPACT/FUNDING SOURCE The estimated construction costs for the Highway 3 Business Park are as follows: Item Cost Earth Grading & Site Preparation $365,000 Storm Water Pond $100,000 Sanitary Sewer $142,000 Storm Sewer $269,000 Watermain $117,000 Roadwork $417,000 Detailed Design $75,000 Tendering, Inspection, Supervision & Administration (Third Party)** $80,000 SUBTOTAL $1,575,000 MTO Required Improvements to Highway 3** $460,000 TOTAL $2,035,000 *Cost estimate from July 1, 2009 and does not take into account any changes in prices nor impact of reduced Storm Water Management requirement due to development of 1 Clearview Dr site. **Third party engineering/inspection costs included in these figures The 2015 draft Economic Development capital budget contains a plan to fund these works over the next three years with completion in 2017 and full registration of the plan of subdivision. Debentures would be used to fund the works in 2015 and 2016 with Phase 3 being financed by land sales once development is able to proceed in the business park. Overall, the goal is to recoup all or a significant portion of these costs through future land sales. The benefit of developing these lands is the generation of new tax revenues once development occurs. In terms of alternative financing, a portion of these costs could possibly be financed through the Industrial Land Reserve although proceeding in this regard should be considered cautiously as the current balance of the account is $495,960.21 (2014) and there are other commitments on these funds. Costs incurred to date for land acquisition, design, and approvals total $827,626. When construction costs are added to this, the estimated grand total to develop these lands is $2,862,626 or $78,001 per developable acre. Page 7 / 8 CAO 374 APPROVALS Author Name/Signature CEPHAS PANSCHOW Date: JAN 2, 2015 Chief Administrative Officer Name/Signature DAVID CALDER Date: Finance Name/Signature DARRELL EDDINGTON Date: Page 8 / 8 CAO 375 STAFF REPORT DEVELOPMENT AND COMMUNICATION SERVICES REPORT TITLE: CERTIFIED SITE AGREEMENT WITH THE PROVINCE OF ONTARIO Report No.: DCS 15-29 Author: CEPHAS PANSCHOW Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: AGREEMENT BETWEEN PROVINCE AND TOWN SCHEDULE A (TO THE AGREEMENT) – PROJECT TIMELINES RECOMMENDATION: “THAT Council receive Report DCS 15-29 Certified Site Agreement with the Province of Ontario; AND THAT the Mayor and Clerk be authorized to enter into an agreement with the Province of Ontario for participation by the Town of Tillsonburg in the Investment Ready: Certified Site Program to market the 20 Clearview Dr site and to receive reimbursement for costs related to the program; AND THAT a bylaw be brought forward in this regard.” EXECUTIVE SUMMARY The purpose of this report is to seek Council approval to enter into an agreement with the Province of Ontario with respect to participation by the Town of Tillsonburg in the Province’s Certified Site Program. Participation in this program will result in the Province of Ontario including the site in their international marketing initiatives while enabling the Town to recoup 50% of the eligible costs to meet the requirements of the program. 376 BACKGROUND INFORMATION The Ontario Government’s Certified Site Program is the first of its kind in Canada and is based on similar programs that have been developed in other jurisdictions including the United States. The intent of certified site programs is to provide investors with a higher level of certainty with respect to sites being considered for investment. Although many municipalities provide information on development opportunities within their jurisdictions, these sites can range from being “shovel-ready” to being years away from being able to be developed. The Province of Ontario has established a network of eleven International Marketing Centres in key markets worldwide. These Marketing Centres serve to promote investment and trade opportunities in Ontario as well as working with companies to find investment locations in Ontario. These investors are often working on expedited timeframes and expect a certain level of site readiness when considering locations to make an investment. The goal of Ontario’s Certified Site program is to give these investors easy access to development ready properties and attract jobs and investment to Ontario. A property with an Investment Ready: Certified Site designation is attractive to investors and site selectors because it:  Provides important background information on a site’s availability, utilities, transportation access and environmental records;  Encourages faster site selection decisions; and,  Can help greenfield or expansion projects get started. In order to qualify for the Certified Site designation, there are a number of requirements that are required to be met and these are detailed in Schedule F of the agreement. Staff has reviewed these requirements and are confident that these requirements can be met with only minor costs to the Town. A brief review of these requirements is attached as Schedule A for Council’s information. Participation in the Certified Site program provides the following benefits:  Financial support (50% funding) to achieve designated status;  An "Investment Ready: Certified Site" designation once all requirements are met;  An international marketing campaign aimed at the site selection community;  A profile on www.InvestinOntario.com/CertifiedSite; and,  Promotion at key global real estate, site selection and investment attraction events. Based on these benefits and in order to better market the 20 Clearview Dr property to international investors, staff is recommending that the Town enter into an agreement with the Province in order to participate in the Investment Ready: Certified Site. All of the requirements must be met by the Application to Certify Deadline Date, which is the first anniversary of the Effective Date, i.e. by June 30, 2016. Page 2 / 7 CAO 377 CONSULTATION/COMMUNICATION The legal agreement provided by the Province of Ontario is required to be accepted by applicants without any amendments. Staff has reviewed the agreement (see summary in Schedule B to this report) and is recommending that it be accepted. The agreement has not been reviewed by an external legal advisor. In terms of the Town’s Public Engagement Guidelines, staff believes that this initiative could fall under either Strategy 1 (Inform – Day to day Operations) or Strategy 2 (Inform – Specific) but has selected Strategy 2 due to the notification to Council at various stages in the project. FINANCIAL IMPACT/FUNDING SOURCE Staff is anticipating the following forecasts costs related to this initiative: Criteria Description Comment Forecast Costs A3 Title Title search showing clear ownership of property No issue providing but will be minor legal costs to have prepared by solicitor $500 A4 Property Characteristics Legal survey of property and Surveyor’s Real Property Report No issue providing but will be minor costs to have prepared by Ontario Land Surveyor $1,000 - $2,000 A9 Environmental Site Assessment (ESA) Recently completed Phase 1 ESA and, if applicable, a Phase 2 ESA. A Phase 1 ESA was completed for the subject property in May 2007 and did not recommend a Phase 2 ESA at that time. Staff would contact the firm and ask for an update to their study with some costs to the Town $500 - $3,000 A10 Archaeological Assessment A stage 1 assessment will be required with stage 2 – 4 assessments only required where the first report recommends Will be some costs for stage 1 assessment $1,000 - $3,000 Page 3 / 7 CAO 378 further study A11 Species at Risk Species at Risk Assessment prepared by a qualified professional Will be some costs for this assessment $1,000 - $3,000 A14 Documentation Review Confirmation that all documents are accurate/provided May be able to do in-house $500 TOTAL COST ESTIMATE (RANGE) $4,000 - $12,000 The approved 2015 Economic Development budget does not include any funds for participation in the Certified Site program. However, staff is recommending participation based on the significant benefits of the program in terms of marketing it through the Province of Ontario. Depending on the actual costs for the various requirements the budget impact could range from as low as $4,000 to a high of $12,000 with up to 50% of eligible costs being reimbursed by the Province. Staff will defer costs to the 2016 budget process (where possible) to reduce the impact to the 2015 budget. Page 4 / 7 CAO 379 SCHEDULE A – CERTIFICATION REQUIREMENTS Criteria Description Comment A1 Truthful Representation Signed letter from property owner confirming accuracy No issue providing A2 Property Identification Maps of property with identified sensitive land uses in close proximity (if any) No issue providing A3 Title Title search showing clear ownership of property No issue providing but will be minor legal costs to have prepared by solicitor A4 Property Characteristics Legal survey of property and Surveyor’s Real Property Report No issue providing but will be minor costs to have prepared by Ontario Land Surveyor A5 Developable Area Area of the property that can be developed No issue with providing A6 Planning Details on Official Plan and Zoning No issue with providing A7 Transportation Confirm existing and/or future access as applicable and proximity to major highways, airports and port facilities No issue with providing maps A8 Servicing Letters from service providers confirming status of various services and capacity along with maps of service locations No issue with providing A9 Environmental Site Assessment (ESA) Recently completed Phase 1 ESA and, if applicable, a Phase 2 ESA. A Phase 1 ESA was completed for the subject property in May 2007 and did not recommend a Phase 2 ESA at that time. Staff would contact the firm and ask for an update to their study with some costs to the Town A10 Archaeological Assessment A stage 1 assessment will be required with stage 2 – 4 assessments only required where the first report recommends further study Will be some costs for stage 1 assessment A11 Species at Risk Species at Risk Assessment prepared by a qualified professional Will be some costs for this assessment A12 Built Heritage and Cultural Heritage Landscapes Only applicable if property designated as a heritage property or owned by Provincial government No issues Page 5 / 7 CAO 380 A13 Environmental Assessment Confirmation of approvals if required Not applicable A14 Documentation Review Confirmation that all information and supporting documentation has been required No issues, but needs to be provided by a licensed Engineer, Surveyor, Planner or real estate lawyer SCHEDULE B –AGREEMENT REVIEW (SUMMARY) Article Description 1 Interpretation and Definitions 2 Representations, warranties and covenants – Town agrees to act in good faith, complete the works and meet the requirements 3 Terms – Starts on Effective Date and ends on the Expire Date (1 year after effective date) 4 Funds – Provide reimbursement for 50% of eligible costs only up to the maximum amount of $25,000 per site 5 Acquisition and Disposal of Goods – In accordance with purchasing process 6 Conflict of Interest – Defines conflict relationships and disclosure requirements 7 Reporting, Accounting and Review – Submit reports and ensure satisfy the Province and maintain records 8 Credit – Acknowledge support of Province 9 Freedom of Information and Protection of Privacy Act – Applies to project 10 Indemnity and Release – Holm harmless and release the Province from any claims 11 Insurance – Town to maintain $2 Million Commercial General Liability insurance 12 Termination on Notice – Province may terminate on 30 days’ notice and may cancel rebates or demand repayment 13 Termination where no Appropriation – Province may terminate agreement if appropriation (funding) from Ontario Legislature is not approved 14 Event of Default, Corrective Action and Termination for Default – Province may provide an opportunity to remedy any defaults it determines 15 Funds upon Expiry – Town to return any funds remaining at expiry 16 Repayment – Must be made immediately unless directed Otherwise by Province 17 Notice 18 Consent by Province – Province may impose conditions on any consent 19 Severability of Provisions 20 Waiver – Party may provide a waiver if cannot meet any term of the agreement 21 Independent Parties – Not an agent, joint venture, partner or employee of the Province 22 Assignment – No assignment without Province’s approval 23 Governing law – Laws of Ontario and Canada Page 6 / 7 CAO 381 24 Further Assurances – Carry out full terms of the agreement 25 Force Majeure – Event beyond reasonable control of either party 26 Survival – In effect for seven years from date of expiry or termination 27 Schedules to the agreement 28 Counterparts 29 Joint & Several Liability 30 Rights and Remedies Cumulative – Rights are in addition to the law 31 BPSAA – Subject to Broader Public Sector Accountability Act and these rights prevail 32 Failure to Comply with Other Agreements – If Recipient is not in compliance on other agreements with the Province, the Province may suspend payment of funds as Province deems appropriate 33 Independent Legal Advice – Recipient acknowledges having opportunity to seek legal advice 34 Entire Agreement – This agreement is the entire agreement Page 7 / 7 CAO 382 THE AGREEMENT effective as of the 1st day of July, 2015. B E T W E E N : HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the Minister of Economic Development, Employment and Infrastructure (the “Province”) - and - The Corporation of the Town of Tillsonburg (the “Recipient”) BACKGROUND: The Province has implemented the Program. Eligible applicants under the Program are entitled to receive reimbursements for Eligible Costs incurred under the Program subject to the terms and conditions contained in this Agreement. The Recipient is an applicant under the Program and wishes to apply for reimbursements of Eligible Costs under the Program and the Province wishes to provide such reimbursements subject to the terms and conditions contained in this Agreement. CONSIDERATION: In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, the Parties agree as follows: ARTICLE 1 INTERPRETATION AND DEFINITIONS 1.1 Interpretation. For the purposes of interpretation: (a) words in the singular include the plural and vice-versa; (b) words in one gender include all genders; (c) the background and the headings do not form part of the Agreement; they are for reference only and shall not affect the interpretation of the Agreement; (d) any reference to dollars or currency shall be to Canadian dollars and currency; and (e) “include”, “includes” and “including” shall not denote an exhaustive list. 383 Page 2 of 37 1.2 Definitions. In the Agreement, the following terms shall have the following meanings: “Agreement” means this agreement entered into between the Province and the Recipient and includes all of the schedules listed in section 27.1 and any amending agreement entered into pursuant to section 34.2. “Application to Certify Deadline Date” means the first anniversary of the Effective Date. “Application to Certify” means the application form developed by the Province that the Recipient is required to complete to apply for a Site Certification. "BPSAA" means the Broader Public Sector Accountability Act, 2010 (Ontario), including any directives issued pursuant to that Act. “Budget” means the budget attached to the Agreement as a part of Schedule “A”. “Business Day” means any day other than a Saturday, Sunday or a statutory holiday in the Province of Ontario. “Certification Date” means the date on which the Site obtains a Site Certification confirmation from the Province. “Certification Instructions and Requirements” has the meaning ascribed to it in Schedule “A”. “Effective Date” means the date set out at the top of the Agreement. “Eligible Costs” has the meaning ascribed to it in Schedule “F” under the heading “Eligible Costs and Reimbursement”. “Event of Default” has the meaning ascribed to it in section 14.1. “Expiry Date” means the earliest of: (i) the second anniversary of the Certification Date; (ii) when the Site is sold in accordance with the terms and conditions of the Agreement; or, (iii) four years after the Effective Date. “Force Majeure” has the meaning ascribed to it in Article 25. “Funds” means the money the Province provides to the Recipient pursuant to the Agreement. “Indemnified Parties” means her Majesty the Queen in right of Ontario, her ministers, agents, appointees and employees. “Intellectual Property” means any intellectual, industrial or other proprietary right of any type in any form protected or protectable under the laws of Canada, any foreign country, or any political subdivision of any country, including, without limitation, any intellectual, industrial or proprietary rights protected or protectable 384 Page 3 of 37 by legislation, by common law or at equity. “Maximum Funds” means the amount calculated as fifty percent (50%) of the Eligible Costs incurred by the Recipient for purposes of obtaining the Site Certification, up to a maximum amount of Twenty Five Thousand Dollars ($25,000.00). “Notice” means any communication given or required to be given pursuant to the Agreement. “Notice Period” means the period of time within which the Recipient is required to remedy an Event of Default, and includes any such period or periods of time by which the Province considers it reasonable to extend that time. “Parties” means the Province and the Recipient. “Party” means either the Province or the Recipient. “Pre-screening Application” has the meaning ascribed to it in Schedule “A”. “Program” has the meaning ascribed to it in Schedule “A”. “Project” means the undertaking described in Schedule “A”. “Releasees” means her Majesty the Queen in right of Ontario, her ministers, agents, appointees and employees. “Reports” means the reports described in Schedule “B”. “Site” means the property municipally known as 20 Clearview Drive, Tillsonburg, Ontario, more particularly described in Schedule “G”. “Site Certification” means a certification by the Province that the Site satisfies the requirements to be certified under the Program. “Timelines” means the timelines relating to the Project as set out in Schedule “A”. ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS 2.1 General. The Recipient represents, warrants and covenants that: (a) it is, and shall continue to be for the term of the Agreement, a validly existing legal entity with full power to fulfill its obligations under the Agreement; (b) it has, and shall continue to have for the term of the Agreement, the experience and expertise necessary to carry out the Project; 385 Page 4 of 37 (c) unless otherwise provided for in the Agreement, any information the Recipient provided to the Province in support of its request for funds (including information relating to any eligibility requirements) was true and complete at the time the Recipient provided it and shall continue to be true and complete for the term of the Agreement; and (d) it is, and shall continue to be for the term of the Agreement or until such time as the Site is sold or otherwise transferred by the Recipient, the registered owner of the Site. 2.2 Execution of Agreement. The Recipient represents and warrants that: (a) it has the full power and authority to enter into the Agreement; and (b) it has taken all necessary actions to authorize the execution of the Agreement. 2.3 Governance. The Recipient represents, warrants and covenants that it has, and shall maintain, in writing, for the period during which the Agreement is in effect: (a) a code of conduct and ethical responsibilities for all persons at all levels of the Recipient’s organization; (b) procedures to ensure the ongoing effective functioning of the Recipient; (c) decision-making mechanisms; (d) procedures to provide for the prudent and effective management of the Funds; (e) procedures to enable the successful completion of the Project; (f) procedures to enable the timely identification of risks to the completion of the Project and strategies to address the identified risks; (g) procedures to enable the preparation and delivery of all Reports required pursuant to Article 7; and (h) procedures to deal with such other matters as the Recipient considers necessary to ensure that the Recipient carries out its obligations under the Agreement. 2.4 Supporting Documentation. Upon request, the Recipient shall provide the Province with proof of the matters referred to in this Article 2. ARTICLE 2.1 MINIMUM ELIGIBILITY REQUIREMENTS 2.1.1 Minimum Eligibility Requirements. For greater certainty and without limiting other requirements for certification under the Program, the Site must satisfy the 386 Page 5 of 37 minimum eligibility requirements set out in Schedule “F” in order to be considered for Site Certification. ARTICLE 3 TERM OF THE AGREEMENT 3.1 Term. The term of the Agreement shall commence on the Effective Date and shall expire on the Expiry Date unless terminated earlier pursuant to Article 12, Article 13 or Article 14. ARTICLE 4 FUNDS AND CARRYING OUT THE PROJECT 4.1 Funds Provided. The Province shall: (a) provide the Recipient up to the Maximum Funds for the purpose of reimbursing the Recipient for Eligible Costs; (b) provide the Funds to the Recipient on or before the sixtieth (60th) day following the Certification Date; and (c) deposit the Funds into an account designated by the Recipient provided that the account: (i) resides at a Canadian financial institution; and (ii) is in the name of the Recipient. 4.2 Limitation on Payment of Funds. Despite section 4.1: (a) the Province is not obligated to provide any Funds to the Recipient until the Recipient provides the insurance certificate or other proof as provided for in section 11.2; (b) the Province is not obligated to, and will not, provide any Funds unless, in the Province’s sole opinion, the Site has satisfied the requirements for certification under the Program, including, without limiting the generality of the foregoing, that the Site satisfies the minimum eligibility requirements set out in Schedule “F”; (c) The Province is not obligated to reimburse any Eligible Costs for which supporting invoices have not been submitted to the Province within 30 days of the Certification Date; and (d) if, pursuant to the provisions of the Financial Administration Act (Ontario), the Province does not receive the necessary appropriation from the Ontario Legislature for payment under the Agreement, the Province is not obligated to make any such payment, and, as a consequence, the Province may: (i) reduce the amount of the Funds and, in consultation with the 387 Page 6 of 37 Recipient, change the Project; or (ii) terminate the Agreement pursuant to section 13.1. 4.3 Use of Funds and Project. The Recipient shall: (a) carry out the Project: (i) in accordance with the terms and conditions of the Agreement; and (ii) in compliance with all federal and provincial laws and regulations, all municipal by-laws, and any other orders, rules and by-laws related to any aspect of the Project; (b) use the Funds only for the purpose of paying for Eligible Costs; and (c) spend the Funds only in accordance with the Budget. 4.4 No Changes. The Recipient shall not make any changes to the Project, the Timelines and/or the Budget without the prior written consent of the Province. 4.5 Maximum Funds. The Recipient acknowledges that the Funds available to it pursuant to the Agreement shall not exceed the Maximum Funds. 4.6 Rebates, Credits and Refunds. The Recipient acknowledges that the amount of Funds available to it pursuant to the Agreement is based on the actual costs to the Recipient, less any costs (including taxes) for which the Recipient has received, will receive, or is eligible to receive, a rebate, credit or refund. 4.7 Availability of Site for Sale/Lease. The Recipient agrees to keep the Site available for sale or lease until the Expiry Date. 4.8 Intellectual Property. The Recipient agrees that all Province Intellectual Property and every other right, title and interest in and to all concepts, techniques, ideas, information and materials, however recorded, (including images and data) provided by the Province to the Recipient shall remain the sole property of Her Majesty the Queen in right of Ontario. ARTICLE 5 ACQUISITION OF GOODS AND SERVICES, AND DISPOSAL OF ASSETS 5.1 Acquisition. Subject to section 31.1, if the Recipient acquires supplies, equipment or services with the Funds, it shall do so through a process that promotes the best value for money. 5.2 Disposal. The Recipient shall not, without the Province’s prior written consent, sell, lease or otherwise dispose of any asset purchased with the Funds or for which Funds were provided, the cost of which exceeded $15,000 at the time of purchase. 388 Page 7 of 37 ARTICLE 6 CONFLICT OF INTEREST 6.1 No Conflict of Interest. The Recipient shall carry out the Project and use the Funds without an actual, potential or perceived conflict of interest. 6.2 Conflict of Interest Includes. For the purposes of this Article, a conflict of interest includes any circumstances where: (a) the Recipient; or (b) any person who has the capacity to influence the Recipient’s decisions, has outside commitments, relationships or financial interests that could, or could be seen to, interfere with the Recipient’s objective, unbiased and impartial judgment relating to the Project and the use of the Funds. 6.3 Disclosure to Province. The Recipient shall: (a) disclose to the Province, without delay, any situation that a reasonable person would interpret as either an actual, potential or perceived conflict of interest; and (b) comply with any terms and conditions that the Province may prescribe as a result of the disclosure. ARTICLE 7 REPORTING, ACCOUNTING AND REVIEW 7.1 Preparation and Submission. The Recipient shall: (a) submit to the Province at the address provided in section 17.1, all Reports in accordance with the timelines and content requirements set out in Schedule “B”, or in a form as specified by the Province from time to time; (b) submit to the Province at the address provided in section 17.1, any other reports as may be requested by the Province in accordance with the timelines and content requirements specified by the Province; (c) ensure that all Reports and other reports are completed to the satisfaction of the Province; (d) ensure that all Reports and other reports are signed on behalf of the Recipient by an authorized signing officer; (e) deliver to the Province, on or before the Application to Certify Deadline Date, a fully completed Application to Certify, together with all documents required under such application; and 389 Page 8 of 37 (f) promptly notify the Province in writing of any event or circumstance that may adversely affect the Site’s eligibility for Site Certification. 7.2 Record Maintenance. The Recipient shall keep and maintain: (a) all financial records (including invoices) relating to the Funds or otherwise to the Project in a manner consistent with generally accepted accounting principles; and (b) all non-financial documents and records relating to the Funds or otherwise to the Project. 7.3 Inspection. The Province, its authorized representatives or an independent auditor identified by the Province may, at its own expense, upon three Business Days’ Notice to the Recipient and during normal business hours, visit and inspect the Site, and enter upon the Recipient’s premises to review the progress of the Project and the Recipient’s expenditure of the Funds and, for these purposes, the Province, its authorized representatives or an independent auditor identified by the Province may, among other things: (a) inspect and copy the records and documents referred to in section 7.2; and (b) conduct an audit or investigation of the Recipient in respect of the expenditure of the Funds and/or the Project. 7.4 Disclosure. To assist in respect of the rights set out in section 7.3, the Recipient shall disclose any information requested by the Province, its authorized representatives or an independent auditor identified by the Province, and shall do so in a form requested by the Province, its authorized representatives or an independent auditor identified by the Province, as the case may be. 7.5 No Control of Records. No provision of the Agreement shall be construed so as to give the Province any control whatsoever over the Recipient’s records. 7.6 Auditor General. For greater certainty, the Province’s rights under this Article are in addition to any rights provided to the Auditor General pursuant to section 9.2 of the Auditor General Act (Ontario). 7.7 Use of Site Information. The Recipient hereby authorizes and consents to the Province using any information provided by the Recipient in connection with the Program as the Province deems appropriate, including for purposes of promoting the Site and/or the Program to potential purchasers as a part of international marketing materials or on the Province’s websites. ARTICLE 8 CREDIT 8.1 Acknowledge Support. Unless otherwise directed by the Province, the Recipient shall, in a form approved by the Province, acknowledge the support of the Province in any publication of any kind, written or oral, relating to the Project. 390 Page 9 of 37 8.2 Publication. The Recipient shall indicate, in any of its publications, of any kind, written or oral, relating to the Project, that the views expressed in the publication are the views of the Recipient and do not necessarily reflect those of the Province. ARTICLE 9 FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY 9.1 FIPPA. The Recipient acknowledges that the Province is bound by the Freedom of Information and Protection of Privacy Act (Ontario) and that any information provided to the Province in connection with the Project or otherwise in connection with the Agreement may be subject to disclosure in accordance with that Act. ARTICLE 10 INDEMNITY AND RELEASE 10.1 Indemnification. The Recipient hereby agrees to indemnify and hold harmless the Indemnified Parties from and against any and all liability, loss, costs, damages and expenses (including legal, expert and consultant fees), causes of action, actions, claims, demands, lawsuits or other proceedings, by whomever made, sustained, incurred, brought or prosecuted, in any way arising out of or in connection with (i) the Project, (ii) any sale, transfer, lease or other transaction relating to the Site, or (iii) otherwise in connection with the Agreement, unless solely caused by the negligence or wilful misconduct of the Province. 10.2 Release. The Recipient: (a) on behalf of itself, its successors and assigns, releases and forever discharges the Releasees from any and all actions, causes of action, claims and demands for damages, indemnity, costs, interest and loss or injury of every nature and kind howsoever arising which the Recipient now has, may have had or may hereafter have arising from or in any way related to (i) the Project, (ii) any sale, transfer, lease or other transaction relating to the Site, (iii) the Program, or (iv) otherwise in connection with the Agreement; (b) agrees not to make any claim or take any proceeding in connection with any of the claims released against any other person or corporation who might claim contribution or indemnity from the Releasees by virtue of the claim or proceeding; and (c) understands and agrees that any consideration paid by the Releasees in connection with this release is deemed to be no admission whatever of liability or responsibility on the part of the Releasees and that any such liability or responsibility is denied. ARTICLE 11 INSURANCE 391 Page 10 of 37 11.1 Recipient’s Insurance. The Recipient represents and warrants that it has, and shall maintain for the term of the Agreement, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all the necessary and appropriate insurance that a prudent person carrying out a project similar to the Project would maintain, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage, to an inclusive limit of not less than two million dollars ($2,000,000) per occurrence. The policy shall include the following: (a) the Indemnified Parties as additional insureds with respect to liability arising in the course of performance of the Recipient’s obligations under, or otherwise in connection with, the Agreement; (b) a cross-liability clause; (c) contractual liability coverage; and (d) a 30 day written notice of cancellation, termination or material change. 11.2 Proof of Insurance. The Recipient shall provide the Province with certificates of insurance, or other proof as may be requested by the Province, that confirms the insurance coverage as provided for in section 11.1. Upon the request of the Province, the Recipient shall make available to the Province a copy of each insurance policy. ARTICLE 12 TERMINATION ON NOTICE 12.1 Termination on Notice. The Province may terminate the Agreement at any time upon giving at least 30 days Notice to the Recipient. 12.2 Consequences of Termination on Notice by the Province. If the Province terminates the Agreement pursuant to section 12.1, the Province may, at its sole discretion: (a) cancel all instalments of Funds; and/or (b) demand the repayment of any Funds remaining in the possession or under the control of the Recipient. ARTICLE 13 TERMINATION WHERE NO APPROPRIATION 13.1 Termination Where No Appropriation. If, as provided for in section 4.2(c), the Province does not receive the necessary appropriation from the Ontario Legislature for any payment the Province is to make pursuant to the Agreement, the Province may terminate the Agreement immediately by giving Notice to the Recipient. 392 Page 11 of 37 13.2 Consequences of Termination Where No Appropriation. If the Province terminates the Agreement pursuant to section 13.1, the Province may, at its sole discretion: (a) cancel all further instalments of Funds; and/or (b) demand the repayment of any Funds remaining in the possession or under the control of the Recipient. ARTICLE 14 EVENT OF DEFAULT, CORRECTIVE ACTION AND TERMINATION FOR DEFAULT 14.1 Events of Default. Each of the following events shall constitute an Event of Default: (a) in the opinion of the Province, the Recipient breaches any representation, warranty, covenant or other material term of the Agreement, including failing to do any of the following in accordance with the terms and conditions of the Agreement: (i) carry out the Project; (ii) use or spend Funds; and/or (iii) provide, in accordance with section 7.1, Reports or such other reports as may have been requested pursuant to section 7.1(b); (b) the Recipient’s operations, property or its organizational structure, changes such that it no longer meets one or more of the applicable eligibility requirements of the Program under which the Province provides the Funds; (c) the Recipient makes an assignment, proposal, compromise, or arrangement for the benefit of creditors, or is petitioned into bankruptcy, or files for the appointment of a receiver; (d) the Recipient ceases to operate; (e) an event of Force Majeure that continues for a period of 60 days or more; (f) if any representation, warranty or other information, including in any application material, provided by the Recipient to Ontario in connection with this Agreement and/or for purposes of obtaining a Site Certification shall be or become materially untrue in any respect; (g) the Recipient fails to deliver to the Province any Reports required under this Agreement as outlined in Schedule “B”; (h) if the Recipient uses the Site Certification designation or seal for a purpose other than as authorized by the Province under the applicable guidelines, a copy of which will be provided; and 393 Page 12 of 37 (i) the Recipient applies for a re-zoning of the Site that would allow for non- industrial uses, including but not limited to, residential, commercial, institutional or recreational uses. 14.2 Consequences of Events of Default and Corrective Action. If an Event of Default occurs, the Province may, at any time, take one or more of the following actions: (a) initiate any action the Province considers necessary in order to facilitate the successful continuation or completion of the Project; (b) provide the Recipient with an opportunity to remedy the Event of Default; (c) suspend the payment of Funds for such period as the Province determines appropriate; (d) reduce the amount of the Funds; (e) cancel all further installments of Funds; (f) demand the repayment of any Funds remaining in the possession or under the control of the Recipient; (g) demand the repayment of an amount equal to any Funds the Recipient used, but did not use in accordance with the Agreement; (h) demand the repayment of an amount equal to any Funds the Province provided to the Recipient; (i) terminate the Agreement at any time, including immediately, upon giving Notice to the Recipient; and/or (j) cancel and revoke the Site Certification and the Recipient’s right to use the Program seal. 14.3 Opportunity to Remedy. If, in accordance with section 14.2(b), the Province provides the Recipient with an opportunity to remedy the Event of Default, the Province shall provide Notice to the Recipient of: (a) the particulars of the Event of Default; and (b) the Notice Period. 14.4 Recipient not Remedying. If the Province has provided the Recipient with an opportunity to remedy the Event of Default pursuant to section 14.2(b), and: (a) the Recipient does not remedy the Event of Default within the Notice Period; (b) it becomes apparent to the Province that the Recipient cannot completely 394 Page 13 of 37 remedy the Event of Default within the Notice Period; or (c) the Recipient is not proceeding to remedy the Event of Default in a way that is satisfactory to the Province, the Province may extend the Notice Period, or initiate any one or more of the actions provided for in sections 14.2(a), (c), (d), (e), (f), (g), (h), (i) and (j). 14.5 When Termination Effective. Termination under this Article shall take effect as set out in the Notice. ARTICLE 15 FUNDS UPON EXPIRY 15.1 Funds Upon Expiry. The Recipient shall, upon expiry of the Agreement, return to the Province any Funds remaining in its possession or under its control. ARTICLE 16 REPAYMENT 16.1 Debt Due. If: (a) the Province demands the payment of any Funds or any other money from the Recipient; or (b) the Recipient owes any Funds or any other money to the Province, whether or not their return or repayment has been demanded by the Province, such Funds or other money shall be deemed to be a debt due and owing to the Province by the Recipient, and the Recipient shall pay or return the amount to the Province immediately, unless the Province directs otherwise. 16.2 Interest Rate. The Province may charge the Recipient interest on any money owing by the Recipient at the then current interest rate charged by the Province of Ontario on accounts receivable. 16.3 Payment of Money to Province. The Recipient shall pay any money owing to the Province by cheque payable to the “Ontario Minister of Finance” and mailed to the Province at the address provided in section 17.1. ARTICLE 17 NOTICE 17.1 Notice in Writing and Addressed. Notice shall be in writing and shall be delivered by email, postage-prepaid mail, personal delivery or fax, and shall be addressed to the Province and the Recipient respectively as set out below, or as either Party later designates to the other by Notice: To the Province: To the Recipient: 395 Page 14 of 37 Ministry of Economic Development, Employment and Infrastructure 56 Wellesley St. W, 7th Floor Toronto, ON M7A 2E7 Attention: Investment Ready: Certified Site Program, Advanced Manufacturing Branch Fax: 416-326-9654 Email: investmentready@ontario.ca The Corporation of the Town of Tillsonburg 200 Broadway Street, Unit 204 Tillsonburg, ON N4G 5A7 Attention: Cephas Panschow Fax: (519) 842-9431 Email:cpanschow@tillsonburg.ca 17.2 Notice Given. Notice shall be deemed to have been received: (a) in the case of postage-prepaid mail, seven days after a Party mails the Notice; or (c) in the case of email, personal delivery or fax, at the time the other Party receives the Notice. 17.3 Postal Disruption. Despite section 17.2(a), in the event of a postal disruption: (a) Notice by postage-prepaid mail shall not be deemed to be received; and (b) the Party giving Notice shall provide Notice by email, personal delivery or by fax. ARTICLE 18 CONSENT BY PROVINCE 18.1 Consent. The Province may impose any terms and/or conditions on any consent the Province may grant pursuant to the Agreement. ARTICLE 19 SEVERABILITY OF PROVISIONS 19.1 Invalidity or Unenforceability of Any Provision. The invalidity or unenforceability of any provision of the Agreement shall not affect the validity or enforceability of any other provision of the Agreement. Any invalid or unenforceable provision shall be deemed to be severed. ARTICLE 20 WAIVER 20.1 Waivers in Writing. If a Party fails to comply with any term of the Agreement, that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions in Article 17. Any waiver must refer to a specific failure to comply and shall not have the effect of waiving any subsequent failures to comply. ARTICLE 21 INDEPENDENT PARTIES 396 Page 15 of 37 21.1 Parties Independent. The Recipient acknowledges that it is not an agent, joint venturer, partner or employee of the Province, and the Recipient shall not take any actions that could establish or imply such a relationship. ARTICLE 22 ASSIGNMENT OF AGREEMENT OR FUNDS 22.1 No Assignment. The Recipient shall not assign any part of the Agreement or the Funds without the prior written consent of the Province. 22.2 Agreement to Extend. All rights and obligations contained in the Agreement shall extend to and be binding on the Parties’ respective heirs, executors, administrators, successors and permitted assigns. ARTICLE 23 GOVERNING LAW 23.1 Governing Law. The Agreement and the rights, obligations and relations of the Parties shall be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada. Any actions or proceedings arising in connection with the Agreement shall be conducted in Ontario. ARTICLE 24 FURTHER ASSURANCES 24.1 Agreement into Effect. The Recipient shall do or cause to be done all acts or things necessary to implement and carry into effect the terms and conditions of the Agreement to their full extent. ARTICLE 25 CIRCUMSTANCES BEYOND THE CONTROL OF EITHER PARTY 25.1 Force Majeure Means. Subject to section 25.3, Force Majeure means an event that: (a) is beyond the reasonable control of a Party; and (b) makes a Party’s performance of its obligations under the Agreement impossible, or so impracticable as reasonably to be considered impossible in the circumstances. 25.2 Force Majeure Includes. Force Majeure includes: (a) infectious diseases, war, riots and civil disorder; (b) storms, floods and earthquakes; (c) lawful act by a public authority; and 397 Page 16 of 37 (d) strikes, lockouts and other labour actions, if such events meet the test set out in section 25.1. 25.3 Force Majeure Shall Not Include. Force Majeure shall not include: (a) any event that is caused by the negligence or intentional action of a Party or such Party’s agents or employees; or (b) any event that a diligent Party could reasonably have been expected to: (i) take into account at the time of the execution of the Agreement; and (ii) avoid or overcome in the carrying out of its obligations under the Agreement. 25.4 Failure to Fulfil Obligations. Subject to section 14.1(e), the failure of either Party to fulfil any of its obligations under the Agreement shall not be considered to be a breach of, or Event of Default under, the Agreement to the extent that such failure to fulfill the obligation arose from an event of Force Majeure, if the Party affected by such an event has taken all reasonable precautions, due care and reasonable alternative measures, all with the objective of carrying out the terms and conditions of the Agreement. ARTICLE 26 SURVIVAL 26.1 Survival. The provisions in Article 1, any other applicable definitions, sections 4.7, 4.8, 5.2, 7.1 (to the extent that the Recipient has not provided the Reports or other reports as may be requested by the Province to the satisfaction of the Province), 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, Articles 8 and 10, sections 12.2, 13.2, 14.1, 14.2(d), (e), (f), (g), (h) and (j), Articles 15, 16, 17, 19, 23, 26, 27, 29, 30 and 34, and all applicable cross-referenced provisions and schedules shall continue in full force and effect for a period of seven years from the date of expiry or termination of the Agreement. ARTICLE 27 SCHEDULES 27.1 Schedules. The Agreement includes the following schedules: (a) Schedule “A” - Project Description, Timelines and Budget; (b) Schedule “B” – Reporting Requirements; (c) Schedule “C” – Summary of Eligible Costs Table; (d) Schedule “D” – 10 Month Certification Process Update; (e) Schedule “E” – Semi-Annual Status Update Template; 398 Page 17 of 37 (f) Schedule “F” – Certification Instructions and Requirements; (g) Schedule “G” – Legal Description of Site. ARTICLE 28 COUNTERPARTS 28.1 Counterparts. The Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. ARTICLE 29 JOINT AND SEVERAL LIABILITY 29.1 Joint and Several Liability. Where the Recipient is comprised of more than one entity, all such entities shall be jointly and severally liable to the Province for the fulfillment of the obligations of the Recipient under the Agreement. ARTICLE 30 RIGHTS AND REMEDIES CUMULATIVE 30.1 Rights and Remedies Cumulative. The rights and remedies of the Province under the Agreement are cumulative and are in addition to, and not in substitution for, any of its rights and remedies provided by law or in equity. ARTICLE 31 BPSAA 31.1 BPSAA. For the purposes of clarity, if the Recipient is subject to the BPSAA and there is a conflict between any of the requirements of the Agreement and the requirements of the BPSAA, the BPSAA shall prevail. ARTICLE 32 FAILURE TO COMPLY WITH OTHER AGREEMENTS 32.1 Other Agreements. If the Recipient: (a) has failed to comply (a “Failure”) with any term, condition or obligation under any other agreement with Her Majesty the Queen in right of Ontario or a Crown agency; (b) has been provided with notice of such Failure in accordance with the requirements of such other agreement; (c) has, if applicable, failed to rectify such Failure in accordance with the requirements of such other agreement; and (d) such Failure is continuing, 399 Page 18 of 37 the Province may suspend the payment of Funds for such period as the Province determines appropriate. ARTICLE 33 INDEPENDENT LEGAL ADVICE 33.1 Independent legal advice. The Recipient acknowledges that the Province has provided the Recipient with a reasonable opportunity to obtain independent legal advice with respect to the Agreement, and that either: (a) the Recipient has obtained such independent legal advice prior to executing the Agreement, or; (b) the Recipient has willingly chosen not to obtain such advice and to execute the Agreement without having obtained such advice. ARTICLE 34 ENTIRE AGREEMENT 34.1 Entire Agreement. The Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained in the Agreement and supersedes all prior oral or written representations and agreements. 34.2 Modification of Agreement. The Agreement may only be amended by a written agreement duly executed by the Parties. [Remainder of page intentionally left blank. Signature page follows.] 400 Page 19 of 37 The Parties have executed the Agreement on the dates set out below. HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the Minister of Economic Development, Employment and Infrastructure ____________________ ______________ Name: Trevor Dauphinee Date Title: Director, Advanced Manufacturing Branch The Corporation of the Town of Tillsonburg ______________ Date ___________________ Name: Stephen Molnar Title: Mayor ______________ Date __________________Name: Donna Wilson Title: Town Clerk I/We have authority to bind the Recipient. 401 Page 20 of 37 SCHEDULE “A” PROJECT DESCRIPTION AND TIMELINES Background The Province has implemented the “Investment Ready: Certified Site Program” (the “Program”), which is a discretionary, non-entitlement program with limited funding. The purpose of the Program is to promote an inventory of sites that meet a set of minimum requirements as outlined in the document titled “Investment Ready: Certified Site Program – Certification Instructions and Requirements” (“Certification Instructions and Requirements”), a copy of which is attached in Schedule “F”. A Site Certification indicates that a landowner/applicant has provided the Province with the site related information described in Schedule “F” and has otherwise satisfied the requirements of the Program. The Province will collect such site related information from landowners/applicants and assemble it into a consistent and easy to use format. While the Province will make such site related information available to prospective purchasers, lessors and others for information purposes, the Province will not be guaranteeing the quality, accuracy, completeness or timeliness of any such information nor providing any representations or warranties regarding such information or a given site. Prospective purchasers and lessors will need to conduct their own usual due diligence and make such enquiries as they deem necessary before purchasing or leasing a given site. Eligible applicants under the Program will self-select sites to be brought forward to the Province for certification under the Program and submit a pre-screening application (“Pre-screening Application”). Once the Pre-screening Application is reviewed and a site is accepted into the Program, applicants will be required to successfully complete all Program requirements including all due diligence assessments. Once a site has completed the certification process, supporting documentation for certification costs would be submitted for the Province’s review. Applicants whose site is certified under the Program could be entitled to receive reimbursements of up to 50% of the eligible costs, with such reimbursements being capped at $25,000 per site. Project Description The project (the “Project”) consists of the process and activities undertaken by the Recipient to complete and deliver all Program requirements to obtain a Site Certification. The Project includes activities that confirm the availability and suitability of the Site for economic development purposes and all related due diligence. Timelines The section references below correspond to the sections listed in the Certification Instructions and Requirements under the heading “Certification Requirements”. 402 Page 21 of 37 Requirement Expected Date of Completion A.1: Truthful Representation A.2. Property Identification A.3. Title A.4. Property Characteristics / Surrounding Uses A.5. Developable Area A.6. Planning A.7. Transportation A.8. Servicing A.9. Environmental Site Assessments A.10. Archaeological Assessment A.11. Species at Risk Assessment A.12. Built Culture Heritage Landscapes A.13. Environmental Assessment A.14. Documentation Review Submit Application and Documentation Budget Forecast $ (Forecast) Supplier Name (if known) Sources of Funding Own Source Revenue NA Ontario Grant NA Other: NA Total Revenue Eligible Costs Title Opinion Title Insurance Survey Report Environmental Site Assessments Environmental Assessment Archaeological Species at Risk Technical Heritage Reports Documentation Review Digital Mapping Project Manager Fees (if required) Ineligible Costs Total Costs Note: The following costs are ineligible: (i) costs incurred prior to the Effective Date; and, (ii) costs for which no supporting invoice has been submitted within thirty calendar days of the Certification Date. See Schedule “F” for more details. 403 Page 22 of 37 SCHEDULE “B” REPORTING REQUIREMENTS The following table outlines the Reporting Requirements associated with the Project. Requirement Deadline Documentation Required 10 Month Certification Process Update On or before the 300th day following the Effective Date 1 copy of Schedule D Application to Certify Application to Certify Deadline Date 1 hard and electronic (USB or CD) copy of the Application to Certify and all Certification Requirements. 1 electronic (email) copy of the Application to Certify form. Semi-Annual Status Update for the period commencing on the Certification Date and ending on the earlier of: (a) the 180th day following the Certification Date; or, (b) the Expiry Date. The earlier of: (a) the 180th day following the Certification Date; or, (b) the Expiry Date. 1 copy of Schedule E Semi-Annual Status Update for the period commencing on the 181st day following the Certification Date and ending on the earlier of: (a) the first anniversary of the Certification Date; or, (b) the Expiry Date. The earlier of: (a) the first anniversary date of the Certification Date; or, (b) the Expiry Date. 1 copy of Schedule E Semi-Annual Status Update for the period commencing on the first anniversary of the Certification Date and ending on the earlier of: (a) the 180th day following the first anniversary of the Certification Date; or, (b) the Expiry Date. The earlier of: (a) the 180th day following the first anniversary of the Certification Date; or, (b) the Expiry Date. 1 copy of Schedule E Semi-Annual Status Update for the period commencing on the 181st day following the first anniversary of the Certification Date to the Expiry Date Expiry Date 1 copy of Schedule E All hard copy materials should be submitted to: Investment Ready: Certified Site Program Advanced Manufacturing Branch Ministry of Economic Development, Employment and Infrastructure 7th Floor, 56 Wellesley St. W. Toronto, ON M7A 2E7 All electronic materials should be submitted to investmentready@ontario.ca. 404 Page 23 of 37 SCHEDULE “C” SUMMARY OF ELIGIBLE COSTS TABLE I, , [name and title] of the Recipient, on behalf of the Recipient, do hereby certify that the following costs are eligible costs according to Schedule “F”. Eligible Cost Supplier Name Date of Invoice Invoice Amount Eligible Cost Amount Reimburse Amount (50%) Invoice Included (Y/N) Title Opinion Title Insurance Survey Report Environmental Site Assessment Environmental Assessment Archaeological Species at Risk Technical Heritage Documentation Review Digital Mapping Project Manager Fees* Total Note: The following costs are ineligible: (i) costs incurred prior to the Effective Date; and, (ii) costs for which no supporting invoice has been submitted within thirty calendar days of the Certification Date. See Schedule “F” for more details. *Up to a maximum “Total Amount” of $5000. IN WITNESS WHEREOF the undersigned has hereunto signed these presents this  day of , 201. Per: c/s [insert name and title of officer of Recipient] 405 Page 24 of 37 SCHEDULE “D” TEN MONTH CERTIFICATION PROCESS UPDATE DATE: TO: Ministry of Economic Development, Employment and Infrastructure Investment Ready: Certified Site Program 7th Floor, 56 Wellesley St. W. Toronto, ON M7A 2E7 Attention: RE: Agreement between Her Majesty the Queen in Right of Ontario as represented by the Ministry of Economic Development, Employment and Infrastructure (the “Province”) and  (the “Recipient”) dated  (the “Agreement”) Using the below table, for each criteria, please indicate whether all necessary assessments and supporting documentation have been completed, are in process or have not yet been initiated. For those criteria categories that have not been completed, provide details about the process, expected timelines or concerns with meeting deadlines. The section references below correspond to the sections listed in the Certification Instructions and Requirements under the heading “Certification Requirements”. Documentation Criteria Complete In Process Not Yet Initiated Details A.1: Truthful Representation A.2. Property Identification A.3. Title A.4. Property Characteristics and Surrounding Uses A.5. Developable Area A.6. Planning A.7. Transportation A.8. Servicing A.9. Environmental Site Assessments A.10. Archaeological Assessment A.11. Species at Risk Assessment A.12. Built Heritage and Culture Heritage Landscapes 406 Page 25 of 37 A.13. Environmental Assessment A.14. Documentation Review I, , [name and title] of the Recipient, on behalf of the Recipient, do hereby certify as follows: 1. the Recipient has satisfied all of the milestones and deliverables that are required to be met to date under the Agreement and is otherwise in compliance with all of the terms and conditions of the Agreement; 2. there have been no changes to date that would cause any of the information provided in the Pre-screening Application to be materially untrue or inaccurate and which would adversely affect the Recipient’s ability to obtain a Site Certification for the Site; and 3. there have been no changes to the condition of the Site that would make it ineligible for the Program or a Site Certification. IN WITNESS WHEREOF the undersigned has hereunto signed these presents this  day of , 201. Per: c/s [insert name and title of officer of Recipient] 407 Page 26 of 37 SCHEDULE “E” SEMI-ANNUAL STATUS UPDATE TEMPLATE DATE: TO: Ministry of Economic Development, Employment and Infrastructure Investment Ready: Certified Site Program 7th Floor, 56 Wellesley St. W. Toronto, ON M7A 2E7 Attention: RE: Agreement between Her Majesty the Queen in Right of Ontario as represented by the Ministry of Economic Development, Employment and Infrastructure (the “Province”) and  (the “Recipient”) dated  (the “Agreement”) Except as otherwise defined herein, all capitalized terms shall have the meanings given to them in the Agreement. I, , [name and title] of the Recipient, on behalf of the Recipient, do hereby certify as follows: 1. No event or circumstance has occurred that may adversely affect the Site’s eligibility for Site Certification. 2. The information provided in the Application to Certify and in the documents submitted in connection with such application continues to be true and accurate as at the date hereof. 3. The Site continues to satisfy the minimum eligibility requirements and certification requirements contained in Schedule “F”. 4. The Site has not been sold, leased or otherwise transferred and remains available for sale or lease in accordance with section 4.7 to the Agreement. 5. On and as of the date hereof, no Event of Default, whether or not Ontario has been given notice thereof, has occurred and is continuing. 6. I have reviewed the activities of the Recipient with a view of determining whether the Recipient has observed each of the covenants and conditions in the Agreement up to the date of this semi-annual update. I confirm that to the best of my knowledge and belief the Recipient has observed each of the covenants and conditions. [Note: include up to end of Term.] 7. For the Period dated ● [certification date or date of last semi-annual status update] to ● [today’s date] there have been: ● [number of] site visits by potential investors or site selectors on the site; ● [number of] enquires made about the prospective purchase of the site. 408 Page 27 of 37 8. For the Period dated ● [certification date or date of last semi-annual status update] to ● [today’s date], the following marketing or promotional materials have been developed (Please list all): a. ● b. ● These marketing or promotional materials follow the terms and conditions contained in the Guidelines for the Appropriate Use for the Program’s Official Seal, and copies of such material have been enclosed. IN WITNESS WHEREOF the undersigned has hereunto signed these presents this  day of , 201. Per: c/s [insert name and title of officer of Recipient] 409 Page 28 of 37 SCHEDULE “F” CERTIFICATION INSTRUCTIONS AND REQUIREMENTS Program Objective The Ontario Certified Site Program is a province-wide investment attraction program, the purpose of which is to promote an inventory of sites that meet a set of minimum requirements as outlined below. The program was designed by Deloitte Consulting, an internationally recognized leader in site selection. Information provided under the program is intended to include items most commonly required by those making site selection decisions for foreign direct investment and expansion projects. A site with an Investment Ready: Certified Site designation is intended to be attractive to potential investors and purchasers because it reduces some of the unknowns associated with development by providing detailed information about the availability, utilities servicing, access and environmental concerns. Providing this information can lead to faster site selection decisions and investment transactions. The benefits of this designation include the development of specialized marketing materials that are promoted to the site selection community, as well as a profile on the property on www.lnvestlnOntario.com and at key global investment attraction trade shows. Through this program, the Province of Ontario collects site related information from the land owner/applicant and assembles it into a consistent and easy to use format. Please note that the Province of Ontario will not represent or warrant the accuracy or completeness of the Application to Certify and any other information submitted by the applicant, owner or by third parties which may be made available to any agents, prospective purchasers or other parties. Purpose of Pre-screening The Pre-Screening application is the first step in the site certification process. Pre-screening Applications are used to determine eligibility for entry to the program. The purpose of the Pre-screening Application is to obtain general information about the site and determine whether mandatory eligibility and site requirements are met. Sites that meet the mandatory requirements identified in the pre-screening process will be eligible for acceptance into the certification program. Pre-screening will occur through a series of rounds with specific application deadlines. The number of eligible sites accepted into the program will depend on the number of applications received and availability of funding for eligible reimbursements. The fulfillment of minimum requirements does not guarantee acceptance into the program. Other information included in this application (e.g. site size, level of completed utilities servicing, proximity to transportation network, regional distribution, etc.) will be used to identify those sites that will be accepted into the program. 410 Page 29 of 37 Eligible applicants will be required to enter into a funding agreement with the Province of Ontario to be eligible for reimbursement of certain expenses (to a maximum of $25,000). Grant funding for reimbursements is through a discretionary fund and is subject to availability. An applicant will not be entitled to any grant funds if the site does not meet the requirements to achieve certification. In a case where a site is accepted through the application process, but funding is not available or the applicant/ landowner is unable to enter into a funding agreement, the applicant/owner will be given the option to either proceed with the certification process without receiving reimbursement or to reapply in a subsequent Pre-screening Application round. The Province of Ontario will endeavour to notify applicants of acceptance into the certification program within 45 days of the Pre-screening Application deadline. Minimum Eligibility Requirements The mandatory requirements that must be met for a site to be eligible for the certification program are identified below: Site Ownership The program is open to public and privately owned land. Property owner(s) must be willing to enter into a funding agreement with the Province to receive reimbursement through the grant program. Applicant Eligibility Applications must be submitted jointly by either municipalities or Economic Development Organizations (EDOs) and the owner(s) of the site. Applicants are limited to submitting two (2) sites for certification reimbursement per year. Commitment to Make the Property Available for Sale/Lease The property owner(s) must agree to make the property available for sale or lease for a period of two (2) years following the date of certification. Minimum Property Size The site must consist of at least four (4) hectares (ten (10) acres) of contiguous developable area. If the site is an assemblage of multiple properties, the properties must be contiguous and have the same registered owner on title. Existing Public Road Access The property must have existing road access from a public right-of-way or have plans to be able to extend road access within six (6) months of becoming certified. Official Plan and Zoning The property must be located within an urban or rural area designated for employment uses or industrial development in an in-effect municipal Official Plan and zoned to permit a range of industrial uses. Servicing and Utilities The property must either be serviced by existing water and wastewater systems, natural gas (for sites in municipalities with existing natural gas service), utilities and telecommunications or, alternatively, will be serviced within six (6) months of becoming certified. Major Development Constraints The property must be free of development constraints that could reasonably impact the developable area or range of industrial or other employment uses on the property. Potential constraints include restrictions on title, identified flood zones and the presence of significant natural environmental features or easements and existing Rights-of-Way. 411 Page 30 of 37 Pre-screening Application Letter confirming acceptance to program Yes No Letter indicating not accepted Submission of Application to Certify & Required Documentation Audit and Reimbursement of 50% of eligible expenses up to $25,000 Pre-screening Round Site Certification Audit & Reimbursement of Eligible Expenses Yes No Owner or applicant funds / undertakes certification requirements The Application to Certify and supporting documentation must be submitted within one (1) year. Letter confirming Certification Property owner enters into funding agreement with Province of Ontario The Ministry will endeavor to confirm site eligibility within forty-five (45) days following the closing of Pre-screening round. Reimbursement is contingent on achieving Certification. If a site is not successfully certified, the Ministry may grant an extension to the applicant(s) for the completion of additional due diligence/site remediation. Applicants can undertake additional due diligence/site remediation and resubmit for Certification approval Site remains certified for 2 years following date of Certification Certification Process The certification process is summarized in the following diagram: 412 Page 31 of 37 Certification Requirements The information below identifies and provides a brief description of information required to receive a Certified Site designation Certain studies identified in the requirements may be accepted if they were already completed prior to the certification process provided that they were undertaken within a reasonable timeframe, the subject or study area of the report encompasses the property in its entirety and there have been no significant changes to the property since the time of the report. The following studies, if already completed, may be accepted: Environmental Site Assessments, Archaeological Assessments, Species at Risk Assessments, Technical Heritage Reports and Environmental Assessments. Studies should be submitted with the Pre-screening Application form and applicants will be notified if they satisfy the necessary requirements. Note that Environmental Site Assessments should be no older than 6-9 months. Criteria Description of Requirements Documentation Required A.1 Truthful Representation • Signed letter from the applicant/property owner confirming that all materials are understood to be truthful and that there are no other known encumbrances affecting the property beyond those identified in the certification materials. • Signed form letter from applicant and owner (if different from applicant). A.2 Property Identification • Maps providing clear identification of property features, boundary and surrounding uses. • Context map illustrating location relative to regional transportation network, including rail, airports and ports. • Identification of closest sensitive land uses (residential or institutional) to the site as defined in Guideline D-6 Compatibility Between Industrial Facilities and Sensitive Land Uses (Ontario Ministry of the Environment, 1995). • Digital context map illustrating site location relative to regional transportation network. • Digital topographic map with environmental features for site and vicinity. • Digital orthophotography (20cm, orthorectified photography) for site and vicinity. A.3 Title • Provide results of a title search showing a clear title of the property. • Title Search Opinion prepared by a solicitor and/or Title Insurance. A.4 Property Characteristics and Surrounding Uses • Provide Plan of Survey and accompanying report (if applicable) outlining: legal description, address and property dimensions; location of all existing improvements; type and location of land related encumbrances or interests on property title; and surrounding uses. • Surveyor’s Real Property Report prepared by a licenced Ontario Land Surveyor. 413 Page 32 of 37 Criteria Description of Requirements Documentation Required A.5 Developable Area • Estimate of the developable area of the site, including supporting base map illustrating the parcel boundaries and developable area of the property after deductions including any setback/buffer requirements, including: floodplains, watercourses, woodlots and environmental features, easements, rights-of-way, or other encumbrances. • Topographic map showing environmental features and identifying the developable portion of the property. A.6 Planning • Provide details regarding the Official Plan designation/policies and zoning provisions, including range of permitted uses and setback requirements. • Identify zoning for adjacent properties. • Official Plan and Zoning By-law Excerpts, including relevant Official Plan schedules and zoning maps illustrating zoning for the subject property and adjacent properties. A.7 Transportation • Confirm existing access or plans to extend existing roads to access the site. • Confirm proximity to a major highway interchange. • Identification of property relative to rail lines, airport and port facilities. • Road classification or street maps illustrating existing transportation network, and if applicable, right-of-way widths and nature/timing of any proposed transportation improvements. • Regional map identifying closest rail, intermodal facilities, port and/or airports (where applicable). A.8 Servicing • Confirmation from the municipality and utilities providers regarding the presence of existing services or, where the site is not serviced, the timing, funding responsibilities and cost of extending services to the site. Services include the following infrastructure and utilities: o Water o Wastewater/sewer o Electricity o Natural gas o Telecommunications • Letters from the municipality and utilities providers that confirm the following: o Presence of existing services; o Excess capacity of existing services; o The timing and impact of any planned upgrades; and, o Where the extension of services is required to service the site, written confirmation that the site can be serviced within 6 months of the date of certification, that the timing is known or under control of the applicant or land owner, as well as an estimate of any cost to the landowner. • Infrastructure/utilities map(s) showing existing infrastructure for utilities and any proposed extensions • Letters from Service Providers. 414 Page 33 of 37 Criteria Description of Requirements Documentation Required A.9 Environmental Site Assessments • Qualified person must make statements and provide certifications about the environmental condition of the property, including verifying that the soil, ground water and sediment as required • Recently completed or updated Phase 1 Environmental Site Assessment and, if necessary, a Phase 2 Environmental Site Assessment conducted by a Qualified Person as defined in Part II of Ontario Regulation 153/04. • Verification that the Record of Site Condition has been filed to the Environmental Site Registry by the Ministry of the Environment, if applicable. A.10 Archaeological Assessment • Completion of all necessary stages of archaeological assessment (1-4). Only where sites are recommended for further assessment will Stage 3 and possibly Stage 4 be required. • Stage 1-4 Archaeological Assessment reports (as necessary). Assessments must be conducted by an archaeologist licensed in accordance with Part VI of the Ontario Heritage Act. • A copy of the letter(s) from the Ministry of Tourism, Culture and Sport to the licensed archaeologist confirming that all necessary archaeological assessment reports have been entered into the Register. A.11 Species at Risk • If a federally or provincially protected species or habitat is suspected to be associated with a site, then the appropriate assessments (with consideration given to timing/seasonality) should be undertaken. • If it is determined that a Species at Risk Assessment is not necessary, a written confirmation letter from a qualified environmental professional shall be required. • Species at Risk Assessment prepared by a qualified environmental professional indicating if and which species at risk are present. • Letter from the Ministry of Natural Resources confirming that the assessment has been reviewed. 415 Page 34 of 37 Criteria Description of Requirements Documentation Required A.12 Built Heritage and Cultural Heritage Landscapes • If the property is designated under the Ontario Heritage Act or listed on a municipal heritage register, completion of any required technical heritage studies as part of planning approvals. • If the property is owned or controlled by the Provincial government, assurance that the applicable provisions of the Standards and Guidelines for Conservation of Provincial Heritage Properties (2010) have been met. • If the property contains a former federal heritage building, a best effort demonstration to preserved the heritage character should have been made. • If it is determined that a Built Heritage and/or Cultural Heritage Landscape report is not necessary, a written confirmation letter from a municipal employee shall be required. • Technical heritage reports (if requested by the municipality). • Copy of any heritage permits or documents from Council providing consent for alterations. • Cultural Heritage Evaluation Report (CHER), or other technical heritage report, if one was completed as part of the EA process or a planning process authorized by legislation. • Strategic Conservation Plan, if the CHER identifies the property as a provincial heritage property legislation. • Copy of the Letter from the Minister Tourism Culture and Sport granting consent for disposition (transfer out of provincial control). • Written confirmation from the Federal Heritage Review Office that the requirements for disposal have been met. A.13 Environmental Assessment, if applicable • Confirmation of approvals under applicable environmental assessment processes required to facilitate the proposed undertaking, including sale/ lease of the property. • Statement of Completion, Ministry of Environment Minister's or Director's Decision Letter or a Notice of Approval. A.14 Documentation Review • Confirmation that: o All information and documentation required as part of this program are submitted; and o Studies and documentation meet the requirements of the certification process and demonstrate they were prepared by the required professionals and their findings support the certification of the site based on the criteria outlined and the purpose and stated objective of the Investment Ready Certified Site Program. • Letter from licenced Engineer, Surveyor or Registered Professional Planner and/or • Letter from a Real Estate Lawyer. 416 Page 35 of 37 Purpose of the Application to Certify The information collected in the application is a requirement for certification designation and will be used in developing marketing materials that will be distributed to site selection firms and/or investors seeking location opportunities in Ontario. It is desirable that applicants provide clear and detailed information, as this document may be sent in response to investment enquires. Application Submission Submit one (1) hard copy and (1) electronic copy (USB or CD) of the application and supporting documents to: Ministry of Economic Development, Employment and Infrastructure Advanced Manufacturing Branch Investment Ready: Certified Site Program 56 Wellesley St. W., 7th Floor Toronto ON M7A 2E7 In addition, email one (1) copy of the application form to investmentready@ontario.ca. Upon review of the application and certification documentation, applicants will be notified of certification. A site will remain certified for two (2) years, provided the condition of the site does not change. Eligible Costs and Reimbursement A maximum grant of 50% of eligible costs, up to $25,000 per application, will be paid as a reimbursement of eligible costs provided the following conditions have been met: • Applications have been accepted into the program through the Pre-screening Application process; • Sites have met all certification requirements and have been successfully certified; and • The Property Owner has entered into and agreed to the terms of a funding agreement with the Province of Ontario. To receive reimbursement, invoices for each eligible cost are required and must be submitted within thirty calendar days of the Certification Date. The invoices must be accompanied by a Summary of Eligible Costs Table (provided in the funding agreement). The grant will be paid in accordance with the terms and conditions of a funding agreement satisfactory to the Province of Ontario. Eligible expenditures must be directly related to the project and be actual cash outlays to third parties that are documented through paid invoices and proofs of payment. Eligible costs include assessments and documentation prepared by qualified professionals for the following services: • Title opinion. • Surveyor’s Real Property Report. • Environmental Site Assessments. • Environmental Assessments. 417 Page 36 of 37 • Archaeological Assessments. • Species at Risk Assessment. • Technical Heritage Reports. • Documentation Review. • Production of digital mapping and municipal documents (Official Plans, Zoning By- laws, etc.). • Management of the application process by a third party project manager (a maximum of 10% of eligible costs up to $5,000). Ineligible costs include: • Infrastructure or capital costs related to bringing the site up to eligibility. • Costs incurred prior to the Effective Date as outlined in the funding agreement with the Province of Ontario. • Costs incurred by an Ontario Ministry, Agency or Crown Corporation. • Travel costs incurred by the applicants\property owner as a result of the preparation of the application. • Ongoing operational expenses including labour costs, eg. salaries, wages, including those of staff working on the certification application. • Costs not incurred in Ontario, except when the only supplier(s) of services are outside of Ontario. • Entertainment expenses, meals or alcoholic beverages. • In kind contributions. • Costs, including taxes, for which the applicant(s) has received, will receive or is eligible to receive a rebate, credit or refund. Contact Us Program staff and OPS regional economic development staff are available to answer your questions. Contact the Investment Ready: Certified Site Program office at 1-855-585-0475 or at investmentready@ontario.ca. Visit our website at www.ontario.ca/certifiedsite for more information. 418 Page 37 of 37 SCHEDULE “G” LEGAL DESCRIPTION OF SITE PIN NO. 00035-0343 (LT) PT LT 2-3 CON 5 NTR MIDDLETON, PT 1 PLAN 41R8497; TOWN OF TILLSONBURG PIN NO. 00035-0344 (LT) PT LT 2-3 CON 5 NTR MIDDLETON PT 1 & 2, 41R3421 & PT 5 & 6, 41R3691 EXCEPT PT 2, 41R5307, EXCEPT PT 1, 41R5366, EXCEPT PT 1 & 2, 41R5504 & EXCEPT PT 1, 41R8497; DESCRIPTION MAY NOT BE ACCEPTABLE IN FUTURE; TOWN OF TILLSONBURG 419 Page 19 of 36 SCHEDULE “A” PROJECT DESCRIPTION AND TIMELINES Background The Province has implemented the “Investment Ready: Certified Site Program” (the “Program”), which is a discretionary, non-entitlement program with limited funding. The purpose of the Program is to promote an inventory of sites that meet a set of minimum requirements as outlined in the document titled “Investment Ready: Certified Site Program – Certification Instructions and Requirements” (“Certification Instructions and Requirements”), a copy of which is attached in Schedule “F”. A Site Certification indicates that a landowner/applicant has provided the Province with the site related information described in Schedule “F” and has otherwise satisfied the requirements of the Program. The Province will collect such site related information from landowners/applicants and assemble it into a consistent and easy to use format. While the Province will make such site related information available to prospective purchasers, lessors and others for information purposes, the Province will not be guaranteeing the quality, accuracy, completeness or timeliness of any such information nor providing any representations or warranties regarding such information or a given site. Prospective purchasers and lessors will need to conduct their own usual due diligence and make such enquiries as they deem necessary before purchasing or leasing a given site. Eligible applicants under the Program will self-select sites to be brought forward to the Province for certification under the Program and submit a pre-screening application (“Pre-screening Application”). Once the Pre-screening Application is reviewed and a site is accepted into the Program, applicants will be required to successfully complete all Program requirements including all due diligence assessments. Once a site has completed the certification process, supporting documentation for certification costs would be submitted for the Province’s review. Applicants whose site is certified under the Program could be entitled to receive reimbursements of up to 50% of the eligible costs, with such reimbursements being capped at $25,000 per site. Project Description The project (the “Project”) consists of the process and activities undertaken by the Recipient to complete and deliver all Program requirements to obtain a Site Certification. The Project includes activities that confirm the availability and suitability of the Site for economic development purposes and all related due diligence. Timelines The section references below correspond to the sections listed in the Certification Instructions and Requirements under the heading “Certification Requirements”. 420 Page 20 of 36 Requirement Expected Date of Completion A.1: Truthful Representation June 30, 2016 A.2. Property Identification August 30, 2015 A.3. Title August 30, 2015 A.4. Property Characteristics / Surrounding Uses September 30, 2015 A.5. Developable Area August 30, 2015 A.6. Planning August 30, 2015 A.7. Transportation October 30, 2015 A.8. Servicing December 31, 2015 A.9. Environmental Site Assessments December 31, 2015 A.10. Archaeological Assessment June 30, 2016 A.11. Species at Risk Assessment June 30, 2016 A.12. Built Culture Heritage Landscapes June 30, 2016 A.13. Environmental Assessment N/A A.14. Documentation Review June 30, 2016 Submit Application and Documentation June 30, 2016 Budget Forecast $ (Forecast) Supplier Name (if known) Sources of Funding Own Source Revenue $6,000 All suppliers subject to Town’s Ontario Grant $6,000 Purchasing Policy Other: Total Revenue Eligible Costs Title Opinion $500 Title Insurance N/A Survey Report $2,000 Environmental Site Assessments $3,000 Environmental Assessment N/A Archaeological $3,000 Species at Risk $3,000 Technical Heritage Reports N/A Documentation Review $500 Digital Mapping Project Manager Fees (if required) Ineligible Costs 2007 ESA $5,000 Total Costs $12,000 Note: Costs incurred prior to the Effective Date are ineligible. See Schedule “F” for more details. 421 STAFF REPORT DEVELOPMENT AND COMMUNICATION SERVICES REPORT TITLE: TOWN BRANDING PROJECT UPDATE Report No.: DCS 15 - 30 Author: COLLEEN PEPPER Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: TOWN BRANDING HISTORICAL EXAMPLES BRANDING TASK FORCE TERMS OF REFERENCE PROJECT SCHEDULE RECOMMENDATION: “THAT Council receive Report DCS 15-30 Town Branding Project Branding Project Update; AND THAT a Branding Task Force be created as per the attached Terms of Reference.” EXECUTIVE SUMMARY The purpose of this report is to provide an update on the Town Branding project to Council and to seek approval for the creation of a Branding Task Force. The mandate of this ad hoc committee is to recommend a new brand and identity package for Council’s consideration. Funds for this project were approved in the 2015 Budget. BACKGROUND INFORMATION In 1994, a committee was formed to create a promotional logo for the Town of Tillsonburg that would supplant the traditional otter crest and ‘forward’ motto on economic development materials. In 1995, a concept developed by Artfield Associates Inc, was presented to Council. The new logo was comprised of blue and green stripes under a stylized wordmark with the tag line, “A place to build your future.” Although the consultant recommended developing a graphic control manual as part of the project (i.e. establishing usage standards), it appears this work was not completed due to budget constraints. In fact, very little background 422 information related to the project exists in the Town’s corporate records. In particular, it is unclear whether the 1995 logo was intended to replace the otter crest in all corporate instances, or just economic development applications. Nevertheless, at some point in time, it appears that the Artfield concept was amended from straight lines to a ‘swoosh.’ This version seems to be the one used most often on vehicles, pins, clothing and stationery. However it should be noted that even then there are significant variations in font, spacing, sizing etc. Staff have been unable to find any records regarding the rationale for the brand’s tagline or visual elements. During the 2015 budget deliberations, it was determined that the Town’s brand identity should be refreshed to coincide with the Town’s new corporate website. Branding is more than just a new logo and/or tag line. In fact, branding is the process involved in creating a unique name and image for a product (or community) in the consumers' mind, mainly through advertising campaigns with a consistent theme. It is important to note the use of the word “process” in the above description of branding as it is a robust process that will help set apart a good brand from other brands. In that regard, it is key to ensure that the community, including stakeholders, have input into and help form the final identify chosen for the Town. Given the importance of branding to the broader community, a group of representative stakeholders is required to work with the consultant. The proposed Terms of Reference for are enclosed with this report. There will also be opportunities for the general public to provide feedback to the task force in accordance with the Town’s Public Engagement Policy (Strategy 3). In May 2015, the Town issued an Request For Quotation (RFQ) for a consultant to assist with the rebranding process. Three proponents responded and ifourone design of Tillsonburg was selected for the project. eSolutions, the vendor overseeing the development of the Town’s new website, could not meet the specifications of the RFQ within the available budget. It is anticipated that the Branding Task Force will make their report and recommendation to Council in September. COMMUNITY STRATEGIC PLAN IMPACT This initiative is in keeping with the broad strokes of the Community Strategic Plan; namely, demonstrating excellence in local government and improving communication. Further, new branding will also support economic sustainability and demographic balance by ensuring the Town’s public image is attractive to business owners and new residents. Page 2 / 3 CAO 423 CONSULTATION/COMMUNICATION As per the Town’s approved Public Engagement Guidelines, staff is recommending the use of Strategy 3 as per the objectives for that strategy; namely:  To seek public feedback on analysis, alternatives and/or decisions;  To ensure that public concerns and aspirations are consistently understood and considered;  To partner with the public in each aspect of the decision including the development of alternatives and the identification of the preferred solution;  To consult, involve or collaborate with the community and key stakeholders. FINANCIAL IMPACT/FUNDING SOURCE The approved 2015 Economic Development budget includes $10,000 for branding. The proposal submitted by iFourOne was valued at $8,500; which is below the approved budget amount. Page 3 / 3 CAO 424 BRAND DEVELOPMENT TASK FORCE Terms of Reference Mandate The Town of Tillsonburg is seeking to become more competitive in the marketplace by refreshing its municipal brand and identity package. The Town’s current wordmark is dated and lacks usage guidelines. Further, the tagline, “A place to build your future” does little to distinguish the community from neighbouring municipalities seeking to attract investment. The mandate of the Brand Development Task Force is to recommend a new brand for Council’s consideration. 2015 Goals/Deliverables The Brand Development Task Force will function as an “ad-hoc” task force and will meet frequently throughout the project with all meetings/work scheduled to be complete by the end of September 2015. The task force will assist the Town and the selected consultant in advising on the following deliverables: • Identity signature (logo) design • Tag line / slogan • Marketing collateral design • Brand Manual (Brand usage guidelines) 1.0 Role of the Brand Development Task Force 1.1 Review the Town’s historical brand(s), Community Strategic Plan, Community Engagement Policy and other relevant background materials 1.2 Provide input/direction to the consultant as required through each project phase Phase 1 - Preliminary Research & Discovery a. Clarify vision, strategies, goals and values b. Research stakeholder needs and perceptions c. Conduct marketing and competitive audits d. Evaluate existing brands and brand architecture (focus groups) e. Establish the strategy 425 Phase 2 – Strategic Planning and Strategy Clarification a. Clarify brand strategy b. Develop brand attributes c. Develop brand message d. Achieve brief agreement Phase 3 – Branding Identity Conceptualization a. Brainstorming and conceptualization b. Conception of visual identity c. Conception of brand attributes d. Explore applications e. Refinement and expansion of brand concepts f. Present visual strategy of three brand concepts g. Achieve agreement 2.0 Organization of the Task force The Task force will be composed of people with an interest in the success of the municipal brand. 2.1 Task force stakeholders will be appointed by Council 2.2 The term of task force members will coincide with the term of the project 2.3 Additional members may be appointed throughout the term 2.4 One member will be appointed by vote of the task force at the first meeting to chair the meetings for the term 2.5 A municipal staff person shall act as secretary to the task force. 3.0 Composition of the Task force 3.1 The Task force shall be comprised of the following: • Tillsonburg District Chamber of Commerce (President or designate) • Downtown Business Improvement Association (Board Chair or designate) • Station Arts Centre (President or designate) • Tillsonburg District Real Estate Board (President or designate) • Town Representatives: o Mayor or designate 426 o Councilor o Chief Administrative Officer o Development Commissioner o Marketing and Communications Officer o Director of Culture, Parks and Recreation 4.0 Meetings: 4.1 The Task force will hold between three and five meetings for the duration of the project in 2015. 4.2 The date and time of the regular meetings will be established at the first meeting of each term. 4.3 Meetings will have a formal agenda. 4.4 Agendas and information packages, that will include the minutes from the previous meeting, will be sent (via mail, e-mail, or fax) to Task force Members prior to each meeting. 4.5 A majority of Task force Members will constitute quorum for the transaction of business. 5.0 Role of the Chair: The Task force Chair is responsible for insuring the smooth and effective operation of the Task force and its roles. This will include responsibility for: 5.1 Calling the meetings to order. 5.2 The Chair is encouraged to create an informal atmosphere to encourage the exchange of ideas such as, using a roundtable format. 5.3 Creating an agenda in consultation with the consultant/staff 5.4 Chairing the meetings. 5.5 Acting as spokesperson. 5.6 Representing the Task force on other task forces when necessary. 5.7 The Chair shall conduct meetings in accordance with the Town's Procedural By-law 5.8 In the absence of the Chair, these responsibilities will be undertaken by the Vice- Chair. 6.0 Role of the Secretary: The Secretary is responsible for insuring a complete up to date record for the Task force. 6.1 In liaison with the Chair, arrange date, time and venue for meetings. 6.2 In liaison with the Chair, set agendas and circulate to the members two business days prior to the meeting. 427 6.3 Circulate draft minutes to the members. 6.4 Keep a complete up to date record of the task force minutes. 7.0 Role of Members: Membership on the Task force is a position of responsibility and requires a strong commitment to the Terms of Reference. Task force members are required to: 7.1 Attend all regular scheduled meetings. Members are required to notify the Chair or the Secretary if they are unable to attend a meeting. 7.2 Review all information supplied to them. 7.3 Prepare information for use in the development of materials for the Task force. 7.4 Promote the role of the Task force. 7.5 Attend training as required to effectively perform their role as a task force member. 7.6 Task force Members are subject to The Municipal Conflict of Interest Act R.S.O, 1990, c.M50 and must disclose any direct or indirect pecuniary interest. The disclosure must be recorded in the minutes of the meeting. 8.0 Reports to Council: The Task force may advise and make recommendations to Council in accordance with its role. Reports may be submitted as follows: 8.1 Verbally by a Council representative. 8.2 Verbally by the Chair or the designated representative. 8.4 Written reports 428 ifourone 4 Eden Place Tillsonburg, ON N4G 5M7 T: (519) 409-0442 F: (519) 409-0642 info@ifourone.com www.ifourone.com ifourone | scope, schedule and responsibilites scope, schedule & responsibilities Phase 1 Preliminary Research and Discovery a. Clarify vision, strategies, goals and values b. Research stakeholder’s needs and perceptions c. Conduct marketing and competitive audits d. Evaluate existing brands and brand architecture e. Establish strategy and Methodology f. Determine the full and final in-depth scope of project Phase 2 Strategic Planning and Strategy Clarification a. Steering Committee invites and discussions b. Focus Groups, questionnaires, discussions c. Analysis of focus data d. Develop brand attributes, message, values from data e. Write brand and creative briefs f. Achieve brief agreement. Phase 3 Placebrand Design – Conceptualization a. Brainstorming and conceptualization b. Conception of visual identity c. Conception of taglines/slogans e. Explore applications f. Refinement and expansion of brand concepts g. Present three (3) placebrand concepts to BSC h. Achieve agreement i. Present three (3) refined placebrand concepts to Council Phase 4 Placebrand Design – Finalization a. Finalize placebrand design b. Prioritize and design applications (letterhead, business cards, corporate collateral) c. Develop standards and guidelines d. Design complete placebrand program e. Present finalized placebrand package to Committee f. Achieve agreement Phase 5 Placebrand Package Delivery a. Present finalized placebrand package to Council b. Delivery of finalized placebrand files and guidelines Lead ifourone ifourone ifourone i41/Town i41/Town i41/Town BSC i41/Town ifourone ifourone ifourone BSC ifourone ifourone ifourone ifourone ifourone ifourone BSC Council ifourone ifourone ifourone ifourone ifourone BSC Council ifourone Start Date End Date Sep 30 Sep 18 Sep 4 Jul 31 Jul 7 Sep 21 Sep 7 Aug 3 Jul 7 Jun 23 ifourone, i41: Christopher Kelly Town: Cephas Panchow, Colleen Pepper BSC: Brand Steering Committee Council: Tillsonburg Town Council 429 Appendix A Identity Overview  Traditional Tillsonburg identity  Used in 1980s and prior  Variation of Town logo with block style lettering  Unknown origin  Used on plaques during “It’s for Everyone” campaign  Tillsonburg Hydro Inc logo  Other variations of this frequently used  Font on Hydro Inc. varies  Most commonly used corporate logo during mid 1990s onward  Origin unknown, but deviates from Artfield Associates concept approved by Council in 1995 430 Appendix A  Logo frequently used on departmental clothing  Origin unknown; appears to have been developed by departments themselves  Developed in 2013  Used for ice logo and recreation facilities 431 Appendix A 432 Appendix A 433 Appendix A 434 Appendix A 435 Appendix A 436 Appendix A 437 STAFF REPORT FINANCE Report Title: 2016 Budget Strategic Priorities Report No.: FIN 15- 29 Author: Darrell Eddington Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: RECOMMENDATION: That Council receives report FIN 15- 29 2016 Budget Strategic Priorities as information. EXECUTIVE SUMMARY To obtain direction from Council on the 2016 proposed budget timeline. BACKGROUND Management will begin the 2016 budget and business plan process in September 2015. In advance of this process, Senior Management would request the following from Council: • A day long facility inspection and review, currently scheduled for August 20th 2015. • Following the inspection, a 2016 budget strategic priority setting discussion with Council. This meeting will aim to gather Council’s goals and priorities to be considered during the 2016 budget process. • A target range for the 2016 percentage budget increase that would be acceptable to Council. Senior Management recognizes that providing this target range may be difficult not knowing what the Town’s asset management plans and capital and operating priorities are for 2016, as well as not knowing what the funding challenges may be. However, this target range will be utilized by staff wherever possible to hopefully bring to Council an acceptable budget and business plans. 438 CONSULTATION/COMMUNICATION The 2016 Budget and Business Plan public meetings with Council are anticipated to begin in November 2015. Further details will be provided to Council and the public in September 2015. FINANCIAL IMPACT/FUNDING SOURCE N/A. Page 2 / 2 CAO 439 STAFF REPORT FINANCE Report Title: Information Technology Consulting Sole Source Purchasing Report No.: FIN 15- 30 Author: Darrell Eddington Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: RECOMMENDATION: THAT Council receives report FIN 15 - 30 Information Technology Consulting Sole Source Purchasing. And THAT Council approves sole source purchasing for information technology consulting services with Dell Canada Inc. at an estimated cost of $26,772 plus net HST. EXECUTIVE SUMMARY To obtain approval from Council to sole source information technology consulting services with Dell Canada Inc. BACKGROUND Council at the January 13, 2014 Council meeting approved the following resolution: Resolution No. 12: Moved By: Councillor Getty Seconded By: Councillor Rosehart THAT Council receives report FIN 14-02 Information Technology Systems Sole Source Purchasing. AND THAT Council approves sole source purchasing for information technology systems, through the County of Oxford, with Dell Canada. "Carried" In the 2015 Finance budget and business plan, Dell Canada Inc. has been identified and recommended by the County of Oxford IT department as the preferred and sole source provider for the Lotus Notes to Exchange conversion IT project. Dell Canada has been involved in the design and implementation of the Town’s systems architecture through the above resolution. Dell Canada has the knowledge, expertise and the unique tool (“Quest”) to accomplish a successful migration from Lotus Notes to Exchange. 440 The 2015 approved budget for this project is $50,000. There will be server costs of approximately $15,000 incurred. Staff had the attached Dell Canada Inc. proposal peer reviewed by Deloitte, the author of the Town’s IT strategic plan. Their comments were: The estimates look OK based on the size of their environment and required tasks in terms of work effort and other costs. The Quest tool for migration works very well. The Exchange teams that I have worked with in the past all used it exclusively and had good results even on much more complex environments than the Tillsonburg email system (15k-20k users). County IT staff has also reviewed the attached Dell Canada Inc. proposal. Their specific comments have been forwarded back to Dell Canada Inc. CONSULTATION/COMMUNICATION Consultation took place with Deloitte and County IT. FINANCIAL IMPACT/FUNDING SOURCE Project is anticipated to be within the approved budget. Page 2 / 2 CAO 441 Statement of work for: Town of Tillsonburg, ON Lotus Notes Migration to Exchange 2013 442 Page 2 of 12 Contents 1 INTRODUCTION ........................................................................ 3 2 TERM .................................................................................... 3 3 SUMMARY OF SERVICE ................................................................ 3 4 SCOPE OF SERVICE .................................................................... 3 4.1 Introduction ..................................................................................... 3 4.2 Detailed Description ........................................................................... 4 4.3 Customer Responsibilities .................................................................... 4 4.4 Assumptions ..................................................................................... 5 4.5 Out of Scope .................................................................................... 5 4.6 Schedule / Timeline / Milestones ........................................................... 6 4.7 Service Hours ................................................................................... 6 4.8 Deliverables ..................................................................................... 6 4.9 Personnel Skills and Qualifications.......................................................... 6 5 PRICING ................................................................................. 6 5.1 Purchase Order Amount ....................................................................... 7 5.2 Pricing Clauses: ................................................................................. 7 6 CHANGE MANAGEMENT PROCESS ................................................... 8 7 OTHER PROVISIONS ................................................................... 8 8 GENERAL ................................................................................ 9 9 SIGNATURES ............................................................................ 9 Appendix A Supported Sites ........................................................... 10 Appendix B Current Customer Environment Details .............................. 11 © Copyright 2015. Dell Canada Inc. All rights reserved. 443 Page 3 of 12 1 INTRODUCTION This Statement of Work (“SOW”) sets forth the Services (as defined herein) to be provided by Dell Canada Inc. (“Dell”) to Town of Tillsonburg, ON (“Customer”). The Services provided under this SOW are governed by and subject to the terms and conditions of the Commercial Terms of Sale, which is available at www.dell.ca/terms and in hardcopy upon request and is incorporated by reference in its entirety into this SOW, and the parties acknowledge having read and agree to be bound by such online terms, (the “Agreement”). The following appendices are attached hereto and incorporated by reference: ● Appendix A – Supported Sites. ● Appendix B - Current Customer Environment Details. 2 TERM The term of this SOW shall begin on the date of the last signature (“Effective Date”) as set forth in the Signature Section of this SOW and unless terminated in accordance with this SOW or the Agreement, shall expire on the date that Dell completes the provision of Services in accordance with this SOW provided, however, in the event the Customer has not engaged Dell to perform such Services and three (3) months have passed since the later of the Effective Date and Dell’s completion of the last requested Service-related deliverable, Dell may terminate this SOW by providing thirty (30) days prior written notice. Further, in the event the term of this SOW extends beyond one (1) year, Dell reserves the right to revisit the pricing on each anniversary of the Effective Date. 3 SUMMARY OF SERVICE Dell will provide the services as specifically described herein (the “Services”), which include the following: ● Lotus Notes Migration to Exchange 2013. 4 SCOPE OF SERVICE 4.1 Introduction The objective of the Services is to migrate the Customer’s existing Lotus Notes email system to an Exchange 2013 on-premises solution. 444 Page 4 of 12 4.2 Detailed Description Dell will perform the following migration services in connection with this engagement: ● Review the current AD and Lotus Domino (Notes) environments. ● Review the customer’s organizational policies. ● Configure the Exchange 2013 Server: ― The customer will install the server hardware, OS and appropriate patches. ● Build a Quest migration manager server to be used for co-existence. ● Configure the Quest Co-existence tool. ● Create and document a playbook for migrating the existing mailboxes from Lotus to Exchange. ● Migrate up to 10 test mailboxes from Lotus to Exchange. ― The customer will migrate all the remaining mailboxes beyond the pilot mailboxes. ● Knowledge transfer. ● As-Built documentation. 4.3 Customer Responsibilities Customer agrees generally to cooperate with Dell in its delivery of the Services. Customer agrees to the following responsibilities: 1) During the term of this SOW, Customer is responsible for promptly notifying Dell in writing of a) any changes Customer makes to its information technology environment that may impact Dell’s delivery of the Services; and b) if Customer becomes aware that any of the Assumptions set forth herein are incorrect. 2) Customer will maintain a backup of all data and programs on affected systems prior to Dell performing the Services and during the term of the SOW. Dell will have no liability for loss or recovery of data, programs or loss of use of system(s) arising out of or in connection with the Services provided under this SOW. 3) Prior to the start of this SOW, Customer will indicate to Dell in writing a person to be the single point of contact, according to project plan, to ensure that all tasks can be completed within the specified time period. All Services communications will be addressed to such point of contact (the “Customer Contact”). Failure to do so might result in an increase in project hours and/or length in schedule. 4) Customer agrees to make available suitable resources, space, personnel, documentation, and systems. 5) Customer will provide technical points-of-contact, who have a working knowledge of the enterprise components to be considered during the Services (“Technical Contacts”). Dell may request that meetings be scheduled with Technical Contacts. 6) Customer Contact will have the authority to act for Customer in all aspects of the Service including bringing issues to the attention of the appropriate persons within Customer’s organization and resolving conflicting requirements. 7) Customer Contact will ensure that any communication between Customer and Dell, including any scope-related questions or requests, are made through the appropriate Dell Project Manager. 8) Customer Contact will provide timely access to technical and business points of contact and required data/information for matters related to the scope of Service. 9) Customer Contact will ensure attendance by key Customer contacts at Customer meetings and deliverable presentations. 445 Page 5 of 12 10) Customer Contact will obtain and provide project requirements, information, data, decisions and approvals within one working day of the request, unless both parties agree to a different response time. 11) Customer may be responsible for developing or providing documentation, materials and assistance to Dell and agrees to do so in a timely manner. Dell shall not be responsible for any delays in completing its assigned tasks to the extent that they result from Customer’s failure to provide such timely documentation, materials and assistance. 12) Customer Contact will ensure the Services personnel have reasonable and safe access to the Project site, a safe working environment, an adequate office space, and parking as required. 13) Customer will inform Dell of all access issues and security measures, and provide access to all necessary hardware and facilities. 14) Customer is responsible for providing all hardware, software, internet access, and facilities for the successful completion of the Services. Facilities and power must meet Dell’s requirements for the products and Services purchased. 15) Customer will deploy Outlook to its users and configure all profiles. 16) Customer will procure all required security certificates for this engagement. 17) Customer will provision all required servers for Exchange 2013 (virtual) including operating systems and the most up-to-date OS patches. 4.4 Assumptions Dell has made the following specific assumptions while specifying the Services detailed in this SOW: 1) The provision of the Services does not include the development of any intellectual property created solely and specifically for the Customer under this SOW. 2) Customer will deploy outlook to the users and configure the profiles 3) Certificates are the responsibility of the customer to provide 4) Outlook 2010 is the minimum requirement for end users to connect to Exchange 2013 server infrastructure. 5) VMs and server OSes will be deployed and patched by the customer prior to engagement kickoff. 6) A single Exchange 2013 server will be used for this deployment as noted by the customer. 4.5 Out of Scope For the avoidance of doubt, the parties acknowledge that the following activities are not included in the scope of this SOW. 1) Any services, tasks or activities other than those specifically noted in this SOW. 2) Any Dell training or certification services not specifically described in this SOW. 3) Except as set forth herein, Dell is not responsible (including financial responsibility) for any Customer and/or third party personnel, hardware, software, equipment or other assets currently utilized in the Customer’s operating environment. 4) Decommission of Lotus server. 5) No design or documentation of a design will be provided for this project other than the As-built document and migration playbook document. Upon request by Customer, Dell will provide a proposal for such out of scope services pursuant to the Change Management Process as defined in Section 6. 446 Page 6 of 12 4.6 Schedule / Timeline / Milestones Dell anticipates the Services will be limited to 18 days conducted over a period of time not-to-exceed 18 contiguous business days. Once this Service has been scheduled, any changes to the schedule must occur at least 8 business days prior to the scheduled date. If Customer reschedules this service within 7 business days of the scheduled date, this may necessitate invoking the Change Control Process to determine the impact, if any, and any related price adjustments. 4.7 Service Hours Dell intends to provide the Services during the scheduled hours stated below (the “Service Hours”). This Service will be performed during normal business hours typically 8:00 a.m. to 5:00 p.m., Monday through Friday, Customer local time and will include travel time to and from the Customer location and excludes local holidays, unless other arrangements have been made in writing between Dell and Customer. 4.8 Deliverables The following is a list of tangible material provided as part of the Service performed by Dell for Customer under this SOW. 1) Migration Document a) Written document in PDF format which details the process of migrating data from Lotus Notes to Exchange 2013. 2) As-Built Document a) Written document in PDF format which details the settings used when building the Solution. 4.9 Personnel Skills and Qualifications Dell, will, at its sole discretion, determine the number of personnel and the appropriate skill sets necessary to complete the Services. 5 PRICING This section describes the methodology for determining invoice amounts (the “Charges”) for the Services provided under this SOW. Customer hereby agrees to pay the Charges in accordance with the Invoicing and Payment terms of the Agreement and as further supplemented within this SOW. Charges shall be as follows: 447 Page 7 of 12 5.1 Purchase Order Amount Except as otherwise provided below, the Total amount to be noted on the Purchase Order provided to Dell for this SOW is: CAD $26,772.00. If this SOW includes estimates, invoices will be based on actuals usage or expenses incurred. 5.1.1 Hourly Charges Dell will invoice Customer the applicable Hourly Charges in accordance with this SOW, irrespective of whether those charges were incurred prior to the Effective Date. The Hourly Charges will be invoiced on a monthly basis based upon the actual number of hours (subject to any applicable minimums) expended by Dell in the prior billing period multiplied by the applicable hourly rates as set forth in the table below: Hourly Service Rates Table (CAD) Resource Title Within Service Hours Outside Service Hours Estimated Hours Estimated Charge Migration from Lotus to Exchange $165.00 - 80 $13,200.00 Quest Consultant $240.30 - 40 $9,612.00 Project Management $165.00 - 24 $3,960.00 TOTAL HOURLY ESTIMATE $26,772.00 For Services performed based on hourly rates, estimates by resource are provided for planning purposes only. Estimated hourly allocations may be redistributed from one resource to another within the confines of the estimated total defined in this section without requiring customer pre-approval. 5.1.2 Expenses Customer will be responsible for Service related travel expenses including actual, reasonable and necessary travel and living expenses Dell reasonably incurs in connection with delivering the Services. Expenses are estimated at CAD $0.00 and will be invoiced by Dell based on actual expenses incurred. 5.2 Pricing Clauses: 1) Pricing – The terms of this SOW (including but not limited to the pricing) shall be valid for thirty (30) days following initial delivery date (“Initial Delivery Date”) of this SOW to Customer. In the event this SOW is executed by Customer and returned to Dell after such thirty (30) day period, Dell may, in its sole discretion, (i) accept the SOW on the stated terms or (ii) reject the SOW and provide Customer with a revised SOW setting forth any necessary updates to the terms of the previous SOW. 2) The price for the Service is based on Customer’s environment as disclosed to Dell. If the assumptions, Customer responsibilities and parameters within the scope of the Service used to develop the SOW are found to be incorrect or have changed, the parties agree to pursue resolution through the Change Management Process set forth in this SOW. 3) If any of the volumetric assumptions used in this SOW (including, time on task, locations, service consumption, and/or configuration factors and excluding estimated hours or expenses) relied upon by Dell vary by +/- five (5%) percent, Dell has the right to adjust the pricing to reflect such changes. 4) Taxes - All prices are in CAD and are exclusive of all applicable taxes. 448 Page 8 of 12 6 CHANGE MANAGEMENT PROCESS The Change Management Process (“Change Management Process”) is the process that governs changes to the scope of the Service during the Term of this SOW, as described below. The Change Management Process may be used to modify the Service described in this SOW, then, if required, a subsequent Contract Modification. Changes permitted to be made pursuant to this Change Management Process will be limited to changes to Section 3 (Summary of Service) and Section 4 (Scope of Service) and adjustments in Section 5 (Pricing) associated with changes to Sections 3 and 4 of this SOW. Either party may request a permitted change in the Scope of the Service by completing a Change Order Form at www.dell.com/servicecontracts/RFC The receiving party will review the proposed Change Order and will (i) approve it, (ii) agree to further investigation, or (iii) reject it. Changes agreed pursuant to the Change Management Process will not be effective until mutually executed by both parties. Any desired modifications to this SOW which are not permitted above in this Section 6, will require that a written amendment to this SOW or a new SOW be mutually executed by the parties. 7 OTHER PROVISIONS 1) Dell may use affiliates and subcontractors to perform Services. 2) Dell may perform all or part of the Services off-site at a Dell or other location. 3) Services may be performed outside the country in which Customer and/or Dell is located. From time to time, Dell may change the location where Services are performed and/or the party performing the Services; provided however, Dell shall remain responsible to Customer for the delivery of Services. 4) Customer acknowledges that Dell will request Customer’s participation in a Customer feedback survey. Additionally, Dell may approach Customer to serve as reference regarding Dell’s performance of the Services. If Customer agrees to be a reference, Customer and Dell will agree in writing to the terms of such reference. The Infrastructure Consulting References Program has been developed to facilitate the confidential conversations between Dell customers and prospective accounts. a) Customers are invited to join the program at the conclusion of their project for a period of one year. b) We will only share your contact information to a potential customer who is interested in contacting you for a discussion on your previous experiences. c) We limit usage of your reference to no more than once/month. d) We will not publish your name, organization, or any customer identifiable details based on participation in this program. 5) If a conflict arises between the terms of the Purchase Order, SOW and Agreement, the following order of precedence shall be followed: first, the SOW; second, the Agreement; and third, the Purchase Order (if any). Provided, however, in no event will any terms and conditions contained in any Purchase Order apply irrespective of whether such terms and conditions are in conflict with or merely ancillary to any terms and conditions in the SOW or Agreement. 449 Page 9 of 12 8 GENERAL Dell shall not be responsible for any delay or failure to provide Service to the extent caused by: (1) failures by Customer to perform its responsibilities under this SOW; (2) materially inaccurate assumptions; (3) a defect, deficiency or failure with respect to Customer’s network, systems, software, data or other equipment; or (4) modifications to Customer’s network, systems, or other equipment made by a party other than Dell or its representatives. In the event that either party becomes aware of the occurrence of one or more of the foregoing events, they shall notify the other party accordingly. Notwithstanding such occurrence, Dell may, following discussion with Customer regarding the impact of such incident, continue to provide the Service and shall use commercially reasonable efforts to perform the Service under this SOW. Customer shall reimburse Dell for its reasonable additional costs of providing the Service and out of pocket expenses for such efforts and only to the extent attributable to the items defined above. 9 SIGNATURES Dell and Customer have caused this SOW to be signed and delivered by their duly authorized representatives. Town of Tillsonburg, ON By: ............................................. Printed: ............................................. Title: ............................................. Date: ............................................. Dell Canada Inc. By: ............................................ Printed: ............................................ Title: ............................................ Date: ............................................ Please note that for administrative purposes only, Services may not be scheduled or commenced until Dell receives a Customer’s purchase order that references this SOW. Upon receipt and acceptance of the Customer’s purchase order, a Dell Project Manager will contact you to begin Services scheduling. Any additional and/or conflicting terms and conditions stated on Customer’s purchase order shall be void and have no effect on this SOW. Please fax a copy of your purchase order and this signed SOW (with all pages in full) to Fax: (512) 283-7899, Attention: Dell - Intake Manager or e-mail us to: US_DPS_Project_Administration@Dell.com, RE: 10538984 / RFS-2015-14696. The purchase order amount should include estimated expenses, if they are billable. 450 Page 10 of 12 Appendix A Supported Sites The Services will be provided for the following supported sites during the term of this SOW. Additional supported sites may be included as mutually agreed using the Change Management process as defined in section 6. Supported Site Address City State Zip Qty Town of Tillsonburg 10 Lisgar Avenue Tillsonburg Ontario N4G 5A5 451 Page 11 of 12 Appendix B Current Customer Environment Details 110 users 125 mailboxes Lotus Notes 8.5 Six (6) servers spread across 3 or 4 live ones. ● Mailboxes are 237 at the moment. Some not current staff. ● 120 licenses for users now. ● Looking at Dell hardware with SAN. ● 2008 Active Directory now and could upgrade if necessary. Three (3) in place. ● BES server V5 is in place. ● No shared address books in Lotus. ● Domino data is being extracted to Laserfish. ● Monti tool from Microsoft 452 Page 12 of 12 Contact Summary Customer Town of Tillsonburg, ON Customer Number: 1339841 Contact Name: Darrell Eddington Phone: (519) 688-3009 Ext. 3251 Email: deddington@tillsonburg.ca Initial Delivery Date 07/6/2015 – v2 Document Author Name: Luis Garcia Title: Solutions Architect Organization: Global Solution Design Center Phone: (972) 577-7000 x 3324287 Email: Luis_E_Garcia@Dell.com Customer Billing Contact Name: Town of Tillsonburg, ON Address: 10 Lisgar Ave Tillsonburg ON N4G 5A5 Phone number: (519) 842-9200 Dell Segment Contact Name: Sohail Patel Phone: (416) 758-2339 Email: Sohail_Patel@Dell.com Locations where work will be performed 10 Lisgar Ave Tillsonburg ON N4G 5A5 Dell Opportunity Number 10538984 / RFS-2015-14696 453 STAFF REPORT OPERATIONS SERVICES Report Title: Loose Leaf Collection Program Report No.: OPS15-20 Author: Kevin De Leebeeck, P.Eng., Director of Operations Meeting Type: REGULAR COUNCIL Council Date: JULY 13, 2015 Attachments: LOOSE LEAF COLLECTION MAP LOOSE LEAF COLLECTION DRAFT WEBPAGE RECOMMENDATION: THAT Council receive Report OPS 15-20 Loose Leaf Collection Program; AND THAT Council direct staff to procure the leaf vacuum equipment in order to continue to provide loose leaf collection services. SUMMARY The Town of Tillsonburg Loose Leaf Collection Program typically begins in early November and runs for about 4 to 6 weeks. The current process utilizes four crew members, two trackless tractors (one with the leaf loader, the other with a rotatory angle broom), two single axle dump trucks and on occasion the front end loader. The program begins by collecting leaves in a designated area and systematically moves through the Town until each zone has been visited at least once, weather permitting. A map outlining the Loose Leaf Collection areas is provided Figure 1. The chart below identifies the tonnage and cost associated with the current program over the past couple of years. The 2015 Loose Leaf Collection Program budget is comprised of about $40,000 in labour and about $50,000 in fleet user charges. * Program Budget Year Tonnes Cost Collection Period 2015 - $ 89,500* Starting 1st wk of Nov (4-6 wks) 2014 216 $ 82,959 Nov. 3rd to Dec. 5th (5 wks) 2013 207 $ 82,116 Nov 4th to Dec. 6th (5 wks) Page 1 / 4 454 There are many other factors to consider with regards to the Loose Leaf Collection Program such as:  Safety • Leaves piled in any location are attractive places for children to play. Piles of leaves at a roadside location raise concerns of child safety. • Most fire hydrants are located close to roadsides and leaves piled in these locations can cause concerns with respect to fire protection. • Large leaf piles along roadways and near intersections create traffic safety concerns and sightline issues. • Wet leaves found on roadways can result in dangerous driving conditions and piling leaves at such locations exacerbates this condition.  Maintenance • Catchbasins can become plugged as a result of the build-up of leaves on the roadway requiring additional maintenance (staff time and financial costs) in order to prevent flooding/ponding on the roadway. • In the case of an early snowfall, leaves may become frozen or covered with snow on the roadway, making their collection difficult and impacting the Town’s snow clearing efforts.  Miscellaneous • There are aesthetic concerns that the Town looks cleaner without piles of leaves on the roadside. • The public becomes frustrated due to the fact that they raked all of their leaves to the curb/boulevard for pick-up, and in the meantime, the wind picks up and blows the leaves back onto their property and/or neighbours properties. • A concern with loose leaf collection is that past experience has seen an increase in the amount of contaminated leaf piles (i.e. rocks, pieces of metal, branches, sticks, brush, yard waste, and other debris) that cause damage to equipment and slow the collection program progress as well as raising safety concerns for crew members. The Transfer Station Yard Waste site is a resource currently available to all residents of Tillsonburg that addresses all of these issues. Possible alternatives to the additional service of the Loose Leaf Collection Program include:  Discontinuing the additional loose leaf collection service would result in a one-time capital savings of $45,000 in leaf loading equipment and an annual savings of approximately $12,000 in fleet user charges. This option would decrease the current level of service provided by the Works Department. Page 2 / 4 455  Contract out the Loose Leaf Collection Program under the guidance of the Works Department. This option has the advantage of not requiring a capital investment in equipment or impact upon the current service levels provided by the Works Department.  Continue providing the additional service of loose leaf collection and procure the leaf loading equipment in order to deliver the service. There are two methods of operation available under this option: • Leaf Loader Operation (current process) o As described above the leaf loader process requires four crew members and the use of two trackless tractors, one with the leaf loader attachment and the other with a rotatory angle broom for boulevard and roadway sweeping clean-up. o The leaf loader acts similar to a snow blower using augers and an impeller to blow the leaves into the dump truck. o Two singe axle dump trucks are rotated through once filled with loose leafs and emptied at a temporary storage site for later transport and disposal at the Salford Landfill. o Total equipment capital investment of approximately $45,000 with an expected useful life of about 10 years. • Leaf Vacuum Operation (proposed process) o The leaf vacuum process would still require the use of four crew members, but would eliminate the need for the two trackless tractors that would translate into about a $10,000 decrease in annual fleet user charges for this program. o This process would also reduce the amount of boulevard lawn damage caused by the trackless tractors. o A tow behind vacuum unit shreds leaves at a 10:1 to 15:1 ratio allowing more debris to be loaded in each truck making direct disposal to the Salford Landfill practical, eliminating the need for a temporary storage site. o Would require modifications to the dump body of two plow trucks to create a sealed enclosure. o Total equipment capital investment including the plow truck modifications is approximately $50,000 with an expected useful life of about 15 years. Both types of equipment for each respective method of operation are special purpose equipment for the sole purpose of loose leaf collection and do not have any other known applicable applications. Page 3 / 4 456 CONSULTATION/COMMUNICATION The crew members of the Works Department were consulted to review the delineation of zones and to identify improvements in the sequence of collection operations. As a result the collection zone map presentation has been updated and adjusted in an attempt to better communicate the Loose Leaf Collection program operations with the general public. Staff have also developed a new webpage dedicated to the Loose Leaf Collection Program (layout attached) that describes the level of service for loose leaf collection and provides a link to view the collection zone map. The webpage also includes a Frequently Asked Questions section to assist and help address common public concerns. Information regarding the Loose Leaf Collection program including the collection zone map will also be incorporated into the 2015 Fall Community Guide and through the Focus Ad in the Tillsonburg News. FINANCIAL IMPACT/FUNDING SOURCE The capital replacement of leaf loading equipment was identified in the 2015 Operations Business plan with a total project value of $45,000 from reserves. If Council elects to continue to provide loose leaf collection services operations staff recommend investing into the leaf vacuum method of operation. The additional $5,000 capital investment for the leaf vacuum can be accommodated by the under budget expenditures of fleet capital to date. Page 4 / 4 457 SPRUCE ST SIMCOE ST LINCOLN ST Q U A R T E R T O W N L I N E R D CONCESSION ST W CONCESSION ST E TOWNLINE RD P O T T E R 'S R D RIDGE BLVD M A P L E L N V I E N N A R D L O R R A I N E A V E VAN NORMAN DR B A L D W I N S T Q U E E N S T K I N G S T C L E A R V I E W D R J O H N P O U N D R D TRILLIUM DR PARK PL GLENDALE DR JAMES AVE W A L L E N S T BOBOLINK DR SOUTHRIDGE RD NORTH ST W NORTH ST E WILSON AVE B R O A D W A Y S T ESSELTINE DR W E S T O N R D LISGA R A V E R O L P H S T LIS G A R A VE D E M E Y E R E A V E B R O A D W A Y S T Q U A R T E R T O W N L I N E R D TOWN OF TILLSONBURG PUBLIC WORKS DIVISION PUBLIC WORKS DEPT. 20 SPRUCE ST, TILLSONBURG, ON, N4G 4Y5 TITLE: Collection Schedule Week 1 1A 1B Week 2 2A 2B Week3 3A 3B Week 4 4A 4B LOOSE LEAF COLLECTION PROGRAM ´ 458 LOOSE LEAF COLLECTION PROGRAM Each fall, Tillsonburg residents have several options for leaf disposal. The Town of Tillsonburg’s Loose Leaf Collection Program typically begins in late October or early November depending on the season and runs for about four to six weeks. The program systematically moves through the Town until each zone is visited at least once, weather permitting. For a detailed view of the designated collection areas please visit the Loose Leaf Collection Map. Please be aware that this program is weather dependent, and may be delayed or cancelled based on conditions. Residents are asked to rake their loose leaves as close to the curb as possible or to the edge of the roadway asphalt and not into roadside ditches. Please leave storm sewer grates uncovered and do not contaminate the loose leaf piles by placing any sticks, branches, brush or other debris in the loose leaf piles as they may damage equipment causing delays or cause injury to work crews. Remember that children are tempted to play in the leaves, so please ensure their safety by not allowing them to play in roadside leaf piles. Please note that contaminated leaf piles and bagged leaves will not be collected. Please ensure that your leaves are raked to the curb/roadside by 7 a.m. Monday morning before your zone is scheduled for collection and no earlier than seven days before your zone is scheduled for collection. Please remove any contaminated piles of leaves or leaves that have been put out after the collection program has completed your zone. FREQUENTLY ASKED QUESTIONS 1. When will you visit my collection zone? 2. I live on a collection zone boundary line, what is my collection zone? 3. What should I do if I miss my leaf collection? 4. Where can I dispose my other yard waste? 5. What happens if we have a snowstorm? 6. What if I live on a County Road? 7. What should I not do with my leaves? 459 1. When will you visit my collection zone? Crews will start in zone 1 and proceed to zone 2 (and so on) until every zone has been visited at least once. Typically each zone is completed within one week however the speed at which the crew can travel is controlled by leaf volumes and favourable weather. 2. I live on a collection zone boundary line, what is my collection zone? Collection zones have been aligned with the Town’s major roadways. The centerline of these roadways is the dividing line between adjacent collection zones. For example the centerline of Tillson Ave. divides the collection zones for 1A and 4A. 3. What should I do if I miss my leaf collection date? Leaves can be slowly added to your home compost. Although bulky at first they will break down and compost well over the winter into useful organic material that can be added to home landscaping projects. Mulching leaves with a lawn mower or other device will reduce the volume of the leaf pile for home storage or composting. Also by simply mowing your leaves, in a dry condition, right on the lawn will add the organic material directly to your lawns. You can also deliver your loose leaves or biodegradable bagged leaves to the Tillsonburg Transfer Station Yard Waste site located at 50 Newell Road for composting. 4. Where can I dispose my other yard waste? The Tillsonburg Transfer Station Yard Waste site also accepts brush and yard waste including sticks and twigs, branches less than 6 ft in length, stumps without the root ball, hedge and tree trimmings, grass cuttings, Halloween pumpkins, house and garden plants. Please note that rocks, topsoil and sod are not accepted materials. 5. What happens if we have a snowstorm? A heavy snow in combination with a long period of below freezing temperatures would end the program. 6. What if I live on a County Road? All residents living along County Roads within the municipal boundaries of the Town of Tillsonburg will receive the same loose leaf collection service. 7. What should I not do with my leaves? Please do not mix rocks, sticks, branches, brush or other debris and yard waste with your loose leaf piles. These materials pose safety risk to crew and can result in mechanical breakdowns and scheduling problems. Please do not place leaves over storm grates, on cul-de-sac islands, or near parked vehicles. To ensure the safety of children, do not allow them to play in roadside leaf piles. 460 STAFF REPORT OPERATIONS SERVICES Report Title: Results for RFP 15-006 Fire Rescue Apparatus Report No.: OPS15-21 Author: Dave Davis, Manager of Fleet Services Meeting Type: REGULAR COUNCIL Council Date: JULY 13, 2015 Attachments: NONE RECOMMENDATION: THAT Council receive Report OPS 15-21, Results for RFP 15-006 Fire Rescue Apparatus; AND THAT Council award RFP 15-006 to Carrier Centers Emergency Vehicles at a cost of $218,924.74 (net HST included). SUMMARY As per the 2015 Operations Business Plan and in accordance with the Purchasing Policy, a Request for Proposal (RFP) was developed in coordination with the Fire Chief and issued for the supply and delivery of a new light duty fire rescue unit. The RFP was available for download on the Town website and listed on Biddingo.com for access by all known fire apparatus dealers. In addition vendors were also contacted prior to the release of the RFP documents that the bid opportunity was forthcoming. The need to replace Unit #72, a 1995 Freightliner fire rescue apparatus, was identified after 20 years of active service and could no longer effectively meet the changing environment of firefighting. To improve the functionality and expand the scope of operations the replacement units design included increased safety features such as relocating the firefighting crew from inside the rescue body to inside the cab that has been roll-over tested and certified, using SCBA style safety seats rather than regular cab style seats, and locating storage compartments at the rear of the apparatus to alleviate traffic safety concerns. Page 1 / 2 461 The RFP closed on May 29th 2015 with only one bid received. The bid received met all RFP specifications and is significantly under the budgeted amount of $300,000 as summarized below: Budget $300,000 1) Carrier Centers Emergency Vehicles 218,924.74 FINANCIAL IMPACT/FUNDING SOURCE The 2015 approved budget for this replacement unit is $300,000 of debenture. The recommended RFP result of $218,924.74 (net HST included) plus other Town associated cost of approximately $2,500 for decal expenses and radio reinstallation is within the 2015 approved budget. The sale of the existing asset will take place through a government auction site once the replacement unit has been placed into active service. Page 2 / 2 462 STAFF REPORT RECREATION, CULTURE & PARKS Report Title: Tillsonburg Minor Soccer Club Variance Request Report No.: RCP 15-31 Author: Rick Cox, Director of Recreation, Culture & Parks Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: • Memo from Planning Staff • Map of Subject Property RECOMMENDATION: THAT Council receives Report RCP 15-31 - Tillsonburg Minor Soccer Club Variance Request for information; AND THAT Council does not consent to the Club’s request to approve the submission of an application for a minor variance. EXECUTIVE SUMMARY A delegation from the Tillsonburg Minor Soccer Club (TMSC) requested that Council authorize the submission of a minor variance application for the soccer park lands to accommodate the Club’s existing storage shed. Council directed Town staff to prepare a report regarding the matter. BACKGROUND TMSC placed an equipment storage shed on the soccer park a number of years ago without securing permission from the Town as landowners and without obtaining the proper building permit. The location of the shed is not compliant with the 7.5 metre setback required by the existing zoning and it is within a drainage easement. The construction of the shed is not compliant with building and fire code requirements for structures located close to property lines. Planning staff were asked to identify and comment on the minor variance process and the zoning by-law amendment process and which is more appropriate under the circumstances. Their memorandum is attached for information. As the landowner, Council must authorize the submission of an application for either a minor variance or a zoning amendment. Neither process will address the issue of encroachment on the drainage easement. Neither process will address the issue of building and fire code compliance. Both processes will engage adjacent landowner(s) and provide them with an opportunity to comment on the application. RCP 15-31 - Tillsonburg Minor Soccer Clu 1/2 463 Staff recommends that Council does not give approval for the submission of an application for a zoning amendment, with the result that TMSC must move the shed. The new location for the shed will require the Town’s consent as landowner, and also will require TMSC to secure the required building permit. CONSULTATION/COMMUNICATION Town staff from Recreation, Culture & Parks consulted with Planning staff and with Building & By-Law staff in the process of developing this report. TMSC was asked to provide information about the construction of the shed. Town staff provided Performance Communities Realty Inc. with an update on the request for approval to submit a minor variance. FINANCIAL IMPACT/FUNDING SOURCE There are fees payable to the town associated with the minor variance and zoning amendment processes. There would be a cost for the survey required as part of the process. If an application is submitted, these costs should be payable by the applicant, in this case TMSC. There will be a cost to remove and replace the shed if it cannot stay where it is. If TMSC has to bear this cost, there may be fewer resources available for them to assist with the cost of the wayward ball barrier. COMMUNITY STRATEGIC PLAN IMPACT N/A RCP 15-31 - Tillsonburg Minor Soccer Clu 2/2 464 Community and Strategic Planning P.O. Box 1614, 21 Reeve Street Woodstock Ontario N4S 7Y3 Phone: 519-539-9800 • Fax: 519-421-4712 Web site: www.oxfordcounty.ca MEMO DATE: July 3, 2015 TO: David Calder, CAO, Town of Tillsonburg FROM: Eric Gilbert, MCIP RPP, Development Planner RE: Tillsonburg Minor Soccer Club- Variance Request The Tillsonburg Minor Soccer Club appeared as a delegation to Council on June 22, and requested that the Town seek a minor variance on their behalf to recognize the location of an existing accessory building that was constructed within the required interior side yard width. The request was deferred to staff, and planning staff offer the following comments: The criteria for minor variances are set out in Section 45 (1) of the Planning Act. There are 4 tests that must all be satisfied for an application to be approved: • That the variance being sought is minor in nature; • That the variance is desirable for the appropriate development or use of the land; • That the variance being sought is consistent with the general intent and purpose of the Official Plan; • That the variance being sought is consistent with the general intent and purpose of the Zoning By-law. As part of the complete application, the following is a general description of the application process: • Owner of the land submits the minor variance, or authorizes the submission of the minor variance; • Application is deemed to be complete, and include all required information, including survey sketch from a land surveyor certifying the actual relief being sought; • Application is circulated to public agencies, including Town Departments and staff, County of Oxford, and utility companies; • Application is scheduled for a public meeting, notice is given to adjacent property owners within 60 m of the subject lands at least 10 days prior to the Public Meeting; • Community and Strategic Planning Office prepares Planning Report with recommendations; • Town Council sitting as Committee of Adjustment conducts a public hearing and considers the application; • Mandatory 20 day appeal period to allow for appeals to the Ontario Municipal Board. In this instance, as the construction has already occurred, Town policy is to charge $600 (in lieu of $350) for the minor variance application fee. As the lands are owned by the Town, and 465 leased to the Tillsonburg Minor Soccer Club, planning staff recommend that if Town Council decides to consider an application to recognize the existing deficiency, that Town Council authorize the Tillsonburg Minor Soccer Club to be the agent for the application. This practice is consistent with other planning applications in the past where the Town is the legal owner but another party leases or is proposing to purchase the land and is seeking to change or requiring relief of the Zoning By-law. Town staff have identified concerns with the placement of the accessory structure. The structure is partially located within a drainage easement which follows the eastern boundary of the property. Structures are not permitted to be located within easements; the existing building encroaches 2.6 m into the 3.0 m easement. As well, there are potential Ontario Building Code issues relating to construction close to the property line. The Ontario Building Code requires structures located this close to a property line to be constructed of non-combustible construction and non- combustible cladding with a possible requirement that the wall will need have a fire resistance rating. This is typical once the structure is located closer than 1.2m from the property line. The location of the building could also impede the ability to construct fencing on the Town- owned lands to provide a barrier between the soccer facility and the residential development that is proceeding. The purpose of interior side yards is to ensure that structures are located an appropriate distance from interior lot lines to ensure that adequate separation exists between buildings and property lines for lot grading and drainage, privacy, and maintenance of the building exterior. It may be difficult to maintain the exterior of the structure within the setback as proposed. The soccer clubhouse appears to meet the required 7.5 m interior side yard width. Given the above comments and given that the requested relief will permit the structure to be located 0.4 m (1.3 ft) in lieu of the required 7.5 m (24.6 ft), planning staff are of the opinion that the requested relief is likely not ‘minor in nature’. If Town Council decides to consider the application, Planning staff recommends that Town Council authorize the Tillsonburg Minor Soccer Club to submit a zoning by-law amendment application for consideration. A zoning by-law amendment is a more appropriate means to consider the requested relief from the Zoning By-law. The application process is similar to a minor variance, as noted below: • Owner of the land submits the zone change application, or authorizes the submission of the application; • Application is deemed to be complete, and include all required information, including survey sketch from a land surveyor certifying the actual relief being sought; • Application fee of $1150 is submitted; • Application is circulated to landowners within 120 m, public agencies, including Town Departments and staff, County of Oxford, and utility companies; • Application is scheduled for a public meeting, notice is given to adjacent property owners within 120 m of the subject lands at least 14 days prior to the Public Meeting; • Community and Strategic Planning Office prepares Planning Report with recommendations; • Town Council conducts a public hearing and considers the application; • Mandatory 20 day appeal period to allow for appeals to the Ontario Municipal Board. The above zoning approach removes the need to address the specific four tests of a minor variance, but issues surrounding maintenance, drainage, and Building Code spatial separation continue to be important with respect to supporting the location of the building. Town Council should be satisfied that these matters can be addressed prior to recognizing the existing building location. 2 466 July 2, 2015 This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not beaccurate, current, or otherwise reliable. This is not a plan of survey Legend 260 Notes NAD_1983_UTM_Zone_17N 13 Meters 467 STAFF REPORT RECREATION, CULTURE & PARKS Report Title: Tillsonburg Shrine Club Request for Fee Reduction Report No.: RCP 15-30 Author: Laurie Monk, Business Services Supervisor Meeting Type: COUNCIL MEETING Council Date: JULY 13, 2015 Attachments: EMAIL FROM SHRINE CLUB PRESIDENT RECOMMENDATION: THAT Council receives Report RCP 15-30 - Tillsonburg Shrine Club Request for Fee Reduction; AND THAT Council approves the 50% discounted fee for the Kinsmen Memorial Arena floor during the 2015 Shriner’s BBQ. EXECUTIVE SUMMARY The Tillsonburg Shrine Club has booked town facilities for many years at the Special Event Centre and Tillsonburg Community Centre. The Club has requested that Council consider a reduction in their rental cost for the event they have planned for September 9, 2015. BACKGROUND The Tillsonburg Shrine Club traditionally held their annual Pork BBQ fundraising event the 2nd Wednesday in September on the Memorial Arena Floor, moving to the Special Event Centre (TSEC) in 2003 for a 10 year period. After the TSEC was sold, they returned to the Tillsonburg Community Centre in 2013 and used the Colin Campbell Community Rink floor, but ice scheduling required them to shift the date into August. In the late spring of 2014, RCP staff requested that both the Agricultural Fair and the Pork BBQ shift to the Memorial Rink floor as a cost-savings measure for the Town. This change also makes it possible for the Shrine Club’s event to shift the timing back to their traditional 2nd Wednesday in September, however the Club wanted to wait until 2015 to make that change. As the Club has indicated in their attached request, they “will be holding [their] 57th annual BBQ this year at the Tillsonburg Community Centre.” Revenue generated from this event goes to Camp Trillium, Tillsonburg Hospital, The Learning Centre and Shriner’s Hospitals for Sick Children. RCP 15-30 - Tillsonburg Shrine Club Requ 1/2 468 The transitioning venues and changing dates over the past three years has been a challenge for the Club. This has impacted their main fundraising event to be “moderately successful in comparison to previous years”. The Club has assisted with compiling the following information to demonstrate the impact of the changes in date and location on the event: Year 2010 2011 2012 2013 2014 Revenue $36,200 $35,700 $29,150 $25,600 $25,900 Expenses $20,400 $18,169 $14,950 $16,200 $19,300 Proceeds $15,800 $17,600 $14,200 $9,400 $6,600 Attendance 860 930 800 632 538 Location TSEC TSEC TSEC TCC-CCCA TCC-KMA Date 9/8/2010 9/14/2010 9/12/2010 8/21/2013 8/19/2014 Rental Fee $1,689 $1,626 $2,047 $2,030 $2,030 It is hoped that returning to the historic Memorial Rink location and September timing will allow the Club to rebuild their event to past levels of success. CONSULTATION/COMMUNICATION The Tillsonburg Shrine Club have a contract for the rental of the Memorial Arena Floor on September 8, 2015 for set up of tables, chairs and supplies and September 9, 2015 for the main event. An email has been received by the Club president requesting a discounted rate. FINANCIAL IMPACT/FUNDING SOURCE The total rental rate for September 8 and 9, 2015 is $2,030.00 plus applicable HST. In reducing the rate by 50%, Town revenue decreases by $1,015.00. Revenue projections for 2015 will be adjusted accordingly. COMMUNITY STRATEGIC PLAN IMPACT N/A RCP 15-30 - Tillsonburg Shrine Club Requ 2/2 469 On Tuesday, June 23, 2015 3:48 PM, KIM GIBBARD <jkgibbard@rogers.com> wrote: Mr. Rick Cox, Director of Parks and Recreation As you know we will be holding our 57th annual BBQ this year on September 9 at the Tillsonburg Recreation Complex. Revenue from such an event is used towards assisting in areas such as: Camp Trillium, Tillsonburg Hospital, The Learning Centre, and Shriners Hospitals for Sick Children. This will be our third year that this event will be in this location and we wanted to thank you and Municipal staff for all of the assistance to make our event a success. Transitioning to the new location and change of dates over the past few years had made our main special event moderately successful in comparison to previous years. The Tillsonburg Shrine Club would like to request that one half of the fee for this years event in the amount of $1,169.89, be waived as we continue to search for solutions to maintain a successful event. Respectfully Submitted, Jason Gibbard Tillsonburg Shrine Club President Fw: Tillsonburg Shrine Club BBQ KIM GIBBARD to: rcox@tillsonburg.ca 06/23/2015 04:10 PM Hide Details From: KIM GIBBARD <jkgibbard@rogers.com> To: "rcox@tillsonburg.ca" <rcox@tillsonburg.ca>, Page 1 of 1 6/30/2015file:///C:/Users/rcox/AppData/Local/Temp/notes48DFC4/~web9650.htm 470 STAFF REPORT RECREATION, CULTURE & PARKS Title: Apr-Jun 2015 RCP Departmental Activity Reports Report No: RCP 15-29 Author: Rick Cox, Director of Recreation, Culture & Parks Meeting Type: COUNCIL MEETING Council/ Committee Date: APRIL 13, 2015 Attachments: • Apr-Jun 2015 Activity - Recreation Programs & Services • Apr-Jun 2015 Activity – Culture & Heritage • Apr-Jun 2015 Activity – Parks & Facilities RECOMMENDATION THAT Council receive Report RCP 15-29 – Apr-Jun 2015 RCP Departmental Activity Reports for information. EXECUTIVE SUMMARY Attached are activity reports from the Recreation Programs & Services Division, the Culture & Heritage Division and from the Parks & Facilities Division. These updates are provided for Council’s information. CONSULTATION/COMMUNICATION N/A FINANCIAL IMPACT/FUNDING SOURCE N/A COMMUNITY STRATEGIC PLAN (CSP) IMPACT Goal 1.2 of the CSP speaks of the need for Communication & Collaboration. By providing regular activity updates to Council, the Department is contributing to achieving this Goal. RCP 15-29 - Apr-Jun 2015 RCP Departmenta 1/1 471 F.A.R.E. Facts as of June 30, 2015 Total Families Approved – 45 Total Individuals approved – 139 Total Value - $20,850 STAFF REPORT RECREATION, CULTURE & PARKS Title: Apr-Jun 2015 Activity - Recreation Programs and Services Report No: RCP 15-29 Author: Janet McCurdy, Recreation Programs & Services Manager Meeting Type: COUNCIL MEETING Council/ Committee Date: JULY 13, 2015 Attachments: BUSINESS SERVICES TEAM The Business Services Team is responsible for: • administration; • customer service & reception; • advertising, merchandise & vending sales; • marketing; • program registration; and • facilities bookings & rentals. F.A.R.E. 2015 (Fee Assisted Recreational Experiences) To date in 2015, 45 families have been approved which accounts for 139 individuals. United Way provided $20,000 to be allocated and there was a carry-over of unused funding totaling $2,629.98 from 2014. Three families were ineligible due to one exceeding the LICO limit and two living outside Oxford County. Included in the F.A.R.E. program as part of the Town’s contribution is that approved individuals get admission to all indoor community swims and public skating as well as seasons passes to the Lake Lisgar Waterpark. In June, a services contract was concluded with Oxford County Human Services Department so that eligible individuals can receive subsidized access to Town-run summer camp programs. The Department is also a partner with the JumpStart program to provide further assistance to eligible individuals with obtaining equipment needed to participate in sport programming. These initiatives tie in with Guiding Principle 2-9 in the Department’s Strategic Master Plan: “Continue to explore ways with local partners in order to fill local gaps in programming through the balanced and inclusive provision of opportunities for residents….” Facility Rentals Buck & Does - Meetings have been arranged with customers who are hosting licensed events at the Community Centre. This has proved to be effective at ensuring that better compliance with AGCO regulations and the Municipal Alcohol Policy. Ball Diamond bookings- Tournaments booked this season totaled 9, which is the same as in 2014. Two additional seasonal users have been scheduled; Don Martin Ball School which is using both the Kiwanis and Sam Lamb diamonds and the London Bulls are using the Sam Lamb diamond. Water Park school rentals secured four new schools for this season. All dates available for school rentals were filled. Ice Bookings - The arena secured two independent Pro Edge Power leagues as new spring and summer seasonal users. Fall/Winter seasonal ice requests are continuing to be returned incomplete or not on time. With organizations seeking more ice time than last year, allocating ice time fairly is paramount. Staff hopes to RCP 15-29 - ATT 01 - Apr-Jun 2015 Activi 1/5 472 receive requests in a timely manner to allow for completing the schedule to meet the needs of all parties involved. Advertising There continues to be steady interest in advertising in the seasonal Recreation Guide. The Kiwanis and Annandale ball diamond fences now have a sign posted promoting advertising on the fences through the Department. This is generating interest as inquiries are answered regularly. Revenue secured through ball fence advertising is supporting the Annandale Diamond revitalization in the current Departmental Business Plan. Special Events Spring Home Show - The first Tillsonburg SpringFest show took place April 17-19 on the Community Arena Floor. All booth space was filled and a waiting list was implemented. The organizers were very pleased with the venue and public attendance for this first show and are already planning for the 2016 event. Turtlefest - A Roller Skating Day was organized as part of Turtlefest . Skate rentals were provided and 103 attended. The new “Smoke Free” regulations were implemented at Turtlefest through posters and signage. Ribfest and the Tillsonburg Agricultural Fair will also be required to be smoke free events. Canada Day - Fireworks have been ordered and event planning is going well. The Tillsonburg & District Historical Society are holding a music segment for Canada Day celebrations at Memorial Park to replace the former Festival of Music. Their purpose is to promote their summer-long “Music on the Lawn” performance series. Metis Rendezvous - Considerable time was spent meeting and planning for the Metis Rendezvous that was scheduled for this summer. Unfortunately, it was cancelled due to the organization’s involvement in the 2015 PanAm/ParaPanAm Games. Community Centre Revitalization & Community Meetings As part of the Strategic Master Plan, Guiding Principal #3-7, 9 & 10, “the town should undertake a business/planning and/or concept design process to investigate opportunities in which to modernize the facility in a manner that responds to the needs of current and future populations…”, the Parks & Recreation Advisory Committee initiated a community consultation process. The initial process included surveys being developed and posted on the town’s website and Facebook, as well as, hard copies made available. Five Community Meetings were hosted and facilitated by Town staff. Even though these meetings were poorly attended, those present offered constructive feedback pertaining to the relative importance of the squash courts, seniors centre, auditorium, fitness facility, arenas and indoor pool. LLWP Snack Bar The food supplier used in the past has been sold to a large company that no longer carries popular product items such as French fries and jumbo hot dogs. Finding companies that are willing to deliver to the water park with reasonable minimums has been difficult since this location is only open for 12 weeks. Looking ahead to the Next Quarter • Testing and implementation of Active software Version 8.0 • Continuing to review and interview applicants for F.A.R.E. funding and provide leisure counselling • Actively involved in Website Redesign with eSolutions • July events – Canada Day; London Canine Association Dog Show ; SPN Ball tournaments; Ribfest; • August events – SPN Ball tournament; Tillsonburg Agricultural Fair AQUATICS TEAM The Aquatics Team is responsible for: • swimming instruction; • indoor pool lifeguards; • waterpark lifeguards; • aquafit programming; • drowning prevention outreach programming; and • lifeguard competition and synchronized swimming teams. RCP 15-29 - ATT 01 - Apr-Jun 2015 Activi 2/5 473 Tillsonburg Represented at National and Provincial Aquatic Events The Canadian Pool Lifesaving Championships were held in Brantford June 13 & 14 and Tillsonburg was fortunate to have 5 staff attend the competition. Melanie Corbett placed first in the line throw. The Junior Lifeguard Games were held in Owen Sound and Tillsonburg placed 10th overall and some highlights include: • Fourth place in Girls 12/13 100metre Obstacle Swim; • Seventh place Boys 10/11 Throwing Accuracy; and • Tenth place in Girls 12/13 Throwing Accuracy. The Synchronized Swimming Team ended their competitive year at the Canada Games Aquatic Centre in London. The 11/12 Novice Duet placed fourth out of 17 teams and the 13 – 15 Novice Trio placed second out of 9 teams. Planning Cycle The Full Time Aquatics department completed a month by month planning record for all programs and services. The plan will be used to assist in future program planning and to utilize down time so that more can be achieved in a year. Lake Lisgar Waterpark Staff were able to open the Waterpark with very few problems this year. This could be attributed to the fact that everyone facility-wide worked together so well to ensure all aspects of the facility were up and running by the first rental on June 15th. There have been great turnouts for the weekend swims so far, especially on the Turtlefest opening weekend sponsored by Execulink and of course all the Fathers on June 21 were thrilled with their free admission in honour of their day. Training & Scheduling A large amount of training took place during this quarter for both full time and part time staff and although the training was excellent and staff is using their new skills it was a challenge to facilitate. There were many goals to achieve during this period and ensuring hours and schedules stayed balanced weekly was difficult at times. Goals Achieved: Train summer staff, yearly maintenance, cleaning and stocking of Lake Lisgar Waterpark, working with Board of Health and the Technical Standards & Safety Authority to achieve approval for opening Lake Lisgar Waterpark, attending yearly Swim to Survive, Swim Licensee, and Lifesaving Society Affiliate meeting’s, attend yearly Synchro Ontario affiliate meeting, submissions for brochure, summer schedule, monthly staff training with part time staff, fulfill Swim to Survive contracts with Thames Valley School Board, provide safety supervision for 2400 children at end of School Year Waterpark Rentals. Looking ahead to the Next Quarter • Advanced Leadership Courses: A priority focus has been put on Advanced Leadership for the next quarter. Courses have been set up to run in sequential order over a two month period to entice swimmers to become fully certified in a short period of Time. Registration numbers are proving that the promotions are working and the expectation is that the plan will produce qualified staff to fill the shortage anticipated for the fall. • Summer Programs/Lake Lisgar Waterpark: Swimming Lessons begin July 6 and will keep staff very busy for July and August. Staff is also planning special events for Lake Lisgar Waterpark that will hopefully attract more swimmers to the facility. These events will be advertised on the LLWP webpage as well as the Town’s Facebook page; • Indoor Pool Closure: The indoor pool will be closed for maintenance and repairs from August 22 – September 13. A communication plan is prepared to ensure everyone is aware of the closure. During this time if the weather is cooperating, the intent is to provide some programs at Lake Lisgar Waterpark during the mornings and evenings. RCP 15-29 - ATT 01 - Apr-Jun 2015 Activi 3/5 474 PROGRAMS TEAM The Programs Team is responsible for: • dry-land fitness instruction; • health club operations; • adult co-ed sport league programming; • youth sport programming; • summer camp programming; and • other recreation programming. Youth Programs Two new spring Youth programs were added to the Department’s offerings in May. The Girls Volleyball program had 110% registration (18 of 16 registrations). Two additional spaces were opened up in the program due to popularity. Additionally a new Speed Skating program ran for youth ages 8-13. This program obtained 11 registrations from off-season hockey and figure skating participants. This pre-teen age range is a primary target for the Programs Team to develop more programming for in order to develop physical fitness and self-esteem. The intention is to make both of these programs available again in the Spring of 2016. #Tburg Girls youth group was developed as a drop-in girls’ youth group for grades 7-8. The program incorporated guest presenters ranging from yoga instructors to makeup artists to a Pinterest crafts specialist. It was designed to provide opportunities for youth in the community to learn new skills and connect with their peers in an easy-going, supportive environment for $5.00 a night and always included a snack. After 4 weeks running, few youth attended and the program was discontinued. Adult Programs A new adult spring program was added to the schedule for June. The Friendly Badminton program secured 100% registration with a waitlist. This program runs Thursday evenings at Glendale High School and was supervised by a Health Club attendant who sets up and takes down the nets, takes attendance, and prepares friendly round robin play among players. There have been warm reviews on the structure and timing of this 9 week program. As of March 21st 2015 a new fitness pass program was developed allowing individuals to buy 5, 10 or 20 passes to attend any type of classes (yoga, boot camp, morning fitness etc), any time of the week with six months to use the passes. These passes gave fitness class attendees more flexibility to attend multiple types of classes whenever they want. This has proven effective for morning fitness and yoga attendees however the four new fitness classes for before/after work failed to sustain participants once Health Club members were required to pay an additional fee to attend the classes. (Note: these ‘new’ before/after work fitness classes were free to Health Club members for 8 weeks January-March to develop interest). It became apparent that those who want to attend the before/after work fitness classes are predominately members of the Health Club and most of these participants do not want to pay for both health club memberships and fitness class passes. Run The Runway The Programs Team developed the first annual Run the Tillsonburg Runway on June 18th, 2015. This community event allowed residents and local community members to run 5k or 10k at the Tillsonburg Airport between 7:00-9:00pm (dusk) with the air strip’s lights on. Children at the event were given the opportunity to run a free 800m Fun Run. Participants received water, fruit or an ice cream sandwich after their run. 45 participants registered. This was the first organized run created by the team, and the intent is to hold a 2nd Annual Run the Runway in 2016 with any proceeds raised being contributed to the Town’s F.A.R.E. program. The goal is to double the number of registrations to 100 for the 2016 event. Looking Ahead to the Next Quarter The next quarter will largely be focused upon the 3 summer camps provided by the Programs Team in July and August. Two of the three of these camps have been newly developed for 2015. RCP 15-29 - ATT 01 - Apr-Jun 2015 Activi 4/5 475 • The Youth Camp will be available for 8 weeks from July 6th – August 28th • The new Shooting-Stars Racquet Camp incorporates squash, tennis and badminton for the morning of the camp (taught by a tennis instructor) with the afternoon spent at Lake Lisgar Waterpark with the youth camp. This camp is available August 10th-14th and August 17th – 21st for ages 7-11. • The new Athletic Conditioning Camp will run as a 2 week camp, 3 mornings a week from August 24th – September 4th for youth ages 11-14 to get ‘back in shape’ for their Fall Sports. September will also see several new Youth and Fitness programs as well as the return of Friendly Badminton for Adults. RCP 15-29 - ATT 01 - Apr-Jun 2015 Activi 5/5 476 STAFF REPORT RECREATION, CULTURE & PARKS Title: Apr-Jun 2015 Activity – Culture and Heritage Report No: RCP 15-29 Author: Patricia Phelps, Culture & Heritage Manager/Curator Meeting Type: COUNCIL MEETING Council/ Committee Date: JULY 13, 2015 Attachments: ACTIVITY REPORT APR-JUN 2015 The second quarter continued to be a very active period for the Museum. This quarter saw the completion of the Lunch & Learn Lecture Series, the installation of a new exhibit Celebrate Our Flags in the Pratt gallery and the hiring of a new part-time staff member, Mr. Jason Pankratz, to replace Ms. Kristi Benger who resigned in April. Also, during this period two summer students joined the Museum staff team. Several small group tours and two motor coach tours visited during the quarter and the Museum was part of the London Free Press Shun Piker Tour, Doors Open Oxford and Turtlefest. ATTENDANCE UPDATE Second quarter attendance saw a marked increase over 2014 due to the London Free Press Shun Piker tour on Mother’s day. This annual event hosted by the London Free Press consists of a driving tour on back roads from London to the surrounding area. Interesting attractions are selected as stops “along the way.” The Museum and the Station Arts Centre were asked to participate as this year’s route came through Tillsonburg. Admission rates were waived for the day as this is a condition for inclusion on the tour. The Museum was open from 10 am to 5 pm with visitors lining up by 9 am, at one point the line stretched from the inside reception area out the door, down the ramp and across the parking lot. In total with visitors and volunteers 1,624 people came through the building on May 10. Another 1,186 people visited during Turtlefest on June 20, thus creating another all-time high attendance record – for the second quarter in a row. It is expected with these major events behind us, that the third and fourth quarters will be more in keeping with previous years. RCP 15-29 - ATT 02 - Apr-Jun 2015 Activi 1/2 477 2015 BUSINESS PLAN Planned exhibits, programs and events for the second quarter were completed. The latest exhibit in the Pratt Gallery – Celebrate Our Flags - opened in May and will run throughout the summer months. This exhibit, created in honor of the 50th Anniversary of the official Canadian Flag, highlights flags from the Museum‘s permanent collection and the stories they tell. The exhibit has been well received by the visiting public, with particular interest being generated by the Museum’s Olympic flag. This year marked the fifth Anniversary for Turtlefest and the Museum once again experienced a very active day that was enjoyed by the public. The live turtles from Turtle Haven Rescue Centre were again part of the activities on the Museum lawn and continued to be popular. New this year, the Museum added the construction of a 7 ton sand sculpture to the day’s events. Created throughout the day in the Museum parking lot, the sculpture was marveled at by all attending and became the centre of many Instagram photos, Facebook postings and tweets. The Museum’s Collection and Exhibit Specialist with the assistance of Museum volunteers catalogued 32 objects and 240 photographs in the quarter. The records for these donations were added to the new collection management database PastPerfect. The flag exhibit and a special display highlighting the Tillsonburg Livvies Basketball team were created and installed by the Collection and Exhibit Specialist during the period. Ms. Gibson also worked on the storage areas in the basement, organizing and cleaning these spaces, a job that has been past due. The Museum’s Culture & Heritage Program Coordinator organized a Culinary event during the quarter under the Culture Tillsonburg title. Partnering with Indigo Lounge which hosted the event, participants were treated to a demonstration and talk about how to make tasty & healthy alternatives to sugary smoothies, salads using non-GMO products and other health food tips. Following the demonstration and talk lunch was served. This marks the second Culture Tillsonburg event hosted this year. A wine tasting trip to the Niagara area is being planned for the fall. The Oxford Remembers – Oxford’s Own World War I project continues with the Culture & Heritage Manager/Curator chairing meetings hosted throughout the County. The major event for this quarter was the performance by Jason Wilson and the Soldiers of Song at the Otter Valley Playhouse for two evenings in May. Unfortunately, ticket sales were not fully realized with slightly over 50 % being sold. In hindsight, if the performance had been booked for only one evening, we would have sold out with people on a waiting list. The loss of ticket revenue will be noticed in the Museum’s second quarter financials. The unexpected loss of Robin Barker-James will affect the over-all Oxford project, as Robin had planned to host several activities at his history farm. These events may have to be replaced by events the Museum in order to honor our area’s commitment to the project. RCP 15-29 - ATT 02 - Apr-Jun 2015 Activi 2/2 478 STAFF REPORT RECREATION, CULTURE & PARKS Title: Apr-Jun 2015 Activity – Parks and Facilities Report No: RCP 15-29 Author: Corey Hill, Parks & Facilities Manager Meeting Type: COUNCIL MEETING Council/ Committee Date: JULY 13, 2015 Attachments: ACTIVITY REPORT APR-JUN 2015 The second quarter proved to be very busy for the Parks, Cemetery & Facilities teams. The quarter saw the opening of all town parks, the Lake Lisgar Water Park and contributions towards Turtlefest and the 2015 Home Show. In addition, the Parks & Cemetery side of the Department hired a new seasonal employee and 2 summer students. Special Events Spring Home Show - The Tillsonburg Springfest show took place April 17-19 on the Community Arena floor. To prepare for this event numerous tables and chairs were supplied and the ice surface had to be covered. There were also additional power outlets installed for vendors. Keep Tillsonburg Beautiful - The Keep Tillsonburg Beautiful event was held May 9 and included the planting of over 750 trees at the Annandale Baseball Diamonds. This even was supported by the Parks Department in assisting to prepare the site as well as participating in the actual planting. Turtlefest – Turtlefest was held over the June 19-21 weekend. This event requested extensive planning to coordinate the delivery of tables and chairs as well as garbage containers throughout the downtown as well as Memorial Park. In addition, Parks & Facilities staff was instrumental in installing, dismantling and reinstalling the stage for a variety of entertainment acts. Canada Day – Parks & Facilities staff were involved in supplying tables and chairs for the pancake breakfast, snow fencing for the fireworks area and garbage cans throughout Memorial Park. Spring/Summer Building Maintenance & Memorial Arena The Facilities staff initiated the start of spring/summer building maintenance program. In addition, the ice was removed from the Memorial Arena in preparation for the upcoming 2015 ball hockey season. Staff Training Staff participated in a variety of training initiatives including Health & Safety (level I & II), Basic Refrigeration Certification, Ball Diamond Maintenance & Best Practices Workshop, Refrigeration RB2 Certification, Smart Serve and Crisis Prevention Institute’s Prepare Training. Tree/Stump Removal Parks staff oversaw the removal of over 10 trees and 13 stumps from the Cemetery which enhanced the safety of the site while improving the aesthetics of the Cemetery. RCP 15-29 - ATT 03 - Apr-Jun 2015 Activi 1/2 479 New Flagpoles Parks staff procured and oversaw the installation of 2 new flagpoles at the Customer Service Centre. This allows for flags to be raised and lowered without the use of a man lift or bucket truck enhancing operational efficiencies. New Cemetery Irrigation System Parks staff procured and oversaw the installation of a new irrigation system at the Cemetery. This replaces a system that was outdated and inefficient. Carroll Trail Repairs Proactive trails inspection revealed that the retaining wall on the Carroll Trail was slipping at its base. Engineering Consultants were called in and the entire slope was deemed as eroding causing the wall to slowly fall away from its original position. A temporary measure was put in place to support the wall while a long term solution is being investigated. Facility Start-up/Openings Parks – All town parks were cleaned and prepared for opening to the public. Garbage cans were placed in the parks and flowerbeds were spruced up. Baseball Diamonds – The baseball diamonds were prepped and opened for the 2015 baseball season (slow pitch, Tillsonburg minor baseball and hardball). This included repairing fencing, dragging the fields, cleaning up garbage and cutting the grass. Lake Lisgar Water Park - Facilities staff were heavily involved in the opening of the water park. They assisted in the multiple inspections of the equipment at the park and prepared the water chemistry of the pool for public use. Grass cutting Contractors The 4 contractors responsible for cutting municipal grass attended a meeting to kick off the 2015 grass cutting season. Grass at all 5 zones are being maintained throughout the spring and summer. New Ballpark Sign A new KIWANIS BALLPARK sign was built and installed for the Kiwanis Baseball Diamond. This replaces old signage that was damaged beyond repair. The Kiwanis Club supplied the new sign. New Picnic Tables The Parks team built 20 new picnic tables and installed them at Coronation Park and the Annandale diamonds. Flower Campaign The Cemetery Operations ran yet another successful spring flower campaign. In total, 92 flowers (89 baskets and 3 wreaths) were sold for a total value of $9,080.00. This represents an approximately 7% increase over 2014’s totals. Memorials In this quarter 1 memorial bench and 1 memorial tree were sold. Staff also worked with Kolin Smith’s family and friends to put in place a grind bench at the Skate Park in memory of Kolin. Looking ahead to Next Quarter • July events – London Canine Association Dog Show, Ribfest • Indoor pool shut down for maintenance and repairs (August 22 - Sept 13) • Tillsonburg Agricultural Fair • Memorial Arena Start-up – (ice ready for Sept. 28) • Lake Lisgar Waterpark shutdown • Coronation Park catch basins, tile and concrete work will be completed • Playground enhancements/replacements to occur • Enhanced signage to be installed (no parking, no smoking etc) • New columbarium and walkways in Cemetery to be installed RCP 15-29 - ATT 03 - Apr-Jun 2015 Activi 2/2 480 = Attendance: Charles Baldwin, Paul DeCloet, Penny Esseltine, Corey Hill, Robert Marsden, Sue Saelens, Marian Smith, Brian Stephenson, Paul Wareing, Janet Wilkinson Regrets: Ken Butcher, Jeff Bunn, Rick Cox 1. Call to Order: The meeting was called to order at 9:00 a.m. by Robert Marsden. 2. Adoption of Agenda Moved By: P. DeCloet Seconded By: C. Baldwin Proposed Resolution THAT the Agenda as prepared for the Committee meeting of May 7, 2015 be adopted. Carried 3. Proposed Resolution Moved By: P. Esseltine Seconded By: S. Saelens THAT the Committee deviate from the Agenda to deal with two special items. Carried Item #1: St. Pauls United Church has requested permission to replace door on the manse which is a designated heritage building. Original door is not repairable. Proposed Resolution Moved By S. Saelens Seconded by C. Baldwin THAT the new door proposed by St. Pauls United Church for the manse be accepted. Carried. Item #2: Rotary Club has requested that sign be attached on the back of the cenotaph, in memory of Jim Sergeant, listing Tillsonburg soldiers killed in action in WWI and WWII. It would be a thin slab of marble paid for by the Rotary Club ($4,500) and would have a Rotary symbol on it as well. Proposed Resolution Moved by Janet Wilkinson Seconded by S. Saelens THAT this Committee approve the addition to the Cenotaph of the marble slab listing the names of soldiers killed in action in the two World Wars. Carried. 4. Disclosure of Pecuniary Interest: None 5. Approval of previous minutes Moved By: S. Saelens Seconded By: J. Wilkinson Proposed Resolution The Corporation of the Town of Tillsonburg Heritage, Beautification & Cemetery Advisory Committee May 7, 2015 9:00 a.m. Marwood Lounge Tillsonburg Community Centre Minutes 481 Council Meeting – Agenda - 2 - THAT the minutes for the April 2, 2015 meeting be approved. Carried 6. Presentations and Deputations: None 7. General Business and Reports: a) Terms of Reference and Mandate: P. Esseltine presented a draft of the Terms of Reference and Mandate for consideration by the committee Proposed Resolution Moved by P. Esseltine Seconded by: C. Baldwin THAT the Terms of Reference and Mandate as attached to these minutes be approved. Carried. b) Bear Street residence: Museum staff are researching the history of this residence for possible Heritage designation. J. Wilkinson advised that the Tillsonburg Hospital owns this property and it is slated for future demolition. c) By-law for decoration at Tillsonburg Cemetery: P. Esseltine presented a draft by-law for consideration by the committee Proposed Resolution Moved by J. Wilkinson Seconded by: P. Esseltine THAT the Draft by-law for decoration at Tillsonburg Cemetery as attached to these minutes be approved and forwarded to Council for consideration. Carried. The Chair thanked P. Esseltine for drafting the proposed Terms of Reference and Mandate and the draft by-law for Cemetery decoration. d) Tree By-law: The tree lists on the attached schedules need to be reviewed prior to recommending to Council. All committee members are asked to review the Schedules and bring comments and questions to next meeting or forward comments to Charles Baldwin at cmbaldwin@sympatico.ca or P. DeCloet at p.decloet@bell.net. This bylaw covers trees only on municipal property. e) Keep Tillsonburg Beautiful Plans: Everything is in place and ready for May 9 from 9:00 a.m. to 12:00 p.m. at the baseball fields at the east end of Concession St. E. f) Columbarium – it is expected that the new columbarium will arrive about mid-June. The existing columbarium has shifted due to the internal structure and it is expected that it will be more cost effective to replace instead of repairing it. 8. Correspondence: None 9. Other Business: a) C. Baldwin inquired about tree harvesting within the town. The Committee would like to advise the Town to not cut the Baldwin and Quarterline lot for timber. This is a natural area with walking paths and wild flowers and should be preserved as it is. 10. Next meeting: June 4, 2015 at 9:00 a.m. in the Marwood Lounge. 11. Adjournment Moved By: M. Smith Seconded By: C. Baldwin Proposed Resolution THAT the May 7, 2015 meeting be adjourned at 10:00 a.m. Carried 482 = Attendance: Henry Atkinson, Euclid Benoit, Andre Brisson, Valerie Durston, Geoffrey Lee, Rick Lee, John Prno, Donna Scanlan, Jeremy Stockmans, Chris Rosehart, Richard Van Maele, Staff: Cephas Panschow, Annette Murray Regrets: Mel Getty 1. Call to Order 2. Adoption of Agenda Moved By: R. VanMaele Seconded By: V. Durston Proposed Resolution “THAT the Agenda as prepared for the Committee meeting of June 15, 2015 be adopted.” Carried 3. Disclosure of Pecuniary Interest – None Declared 4. Approval of previous minutes Moved By: N/A Seconded By: N/A Proposed Resolution THAT the minutes for the meeting be approved. 5. Presentations and Deputations - None 6. General Business and Reports New Business (a) Committee Orientation Clerk was not able to attend this meeting so staff reviewed the Terms of Reference. Clerk will attend next meeting to provide an in depth overview. The Corporation of the Town of Tillsonburg Airport Advisory Committee 15/06/2015 5:00PM Tillsonburg Regional Airport Board Room 244411 Airport Rd South-West Oxford MINUTES 483 Council Meeting – Agenda - 2 - (b) Elections for Chair, Vice-Chair and Secretary positions Election for Chair Moved By: Henry Atkinson Seconded By: Richard VanMaele That Euclid Benoit be nominated for the chair position Carried Election for Vice-Chair Moved By: Donna Scanlan Seconded By: Valerie Durston That Jeremy Stockmans be nominated for the vice-chair position Carried Election for Secretary Moved By: Richard VanMaele Seconded By: Euclid Benoit That John Prno be nominated for the secretary position Carried (c) Airport Overview Staff provided an overview presentation of the airport expansion, strategic direction (2010 Feasibility Study) and Master Planning maps. More detailed information on the Master Plan update and process will be brought forward at a future meeting. Airport Tenant Policy Staff provided an overview of the draft tenant policy. This policy is being brought forward to assist Airport Management in establishing airport use guidelines and is in response to issues that have arisen in the past. If the rules aren’t established and communicated to tenants, it isn’t reasonable to expect tenants to act in a certain manner. It is hoped that the policy, once approved, will enable more proactive management of tenant issues.  Concern over vehicular traffic on active taxiways and vehicles blocking passage for aircraft. 484 Council Meeting – Agenda - 3 -  Airport speed limits are thought to be 20 Km/h airside and 30 Km/h groundside. Can these signs be posted? Vehicles are not insured airside but at present there are no alternative routes to access hangars.  How is the airport policy going to be enforced? What powers do airport staff have to ensure compliance, especially for repeat violators?  All violations should be noted with a proper procedure for tracking and notifying offenders. Are fines possible?  Suggestion for Circuit procedures: could add “if no conflict”  Needs to be better communication of planned events to all airport tenants to ensure that they are aware of the events and to assist with their own plans.  Special events should be requested in writing long before event date.  Request was made that cars not park close to CHAA Hangar One as that is airside and they often block the way for aircraft passing by. C. Panschow to circulate tenant policy to committee for further review with comments to be provided to the chair by June 26, 2015. Next steps include public consultation session for airport tenants/users once committee finalizes it and then brought forward to Council for approval. Chair may need to meet with larger tenants to discuss issues that have arisen in past and reasons for the policy. 7. Correspondence 8. Other Business Round table:  The trees at end of runway 26 are getting taller and are starting to be a concern. Can anything be done to reduce the displaced threshold? Staff to bring in map for next meeting to show possible tree cutting and where the displaced thresholds would be.  When will threshold 02 be fixed and has farmer been talked to about damages created by his equipment; staff advised that they have been working hard to try and get threshold 02 back in order but there has been too much rain to fix it properly. Also the farmer has been notified in writing about where he cannot drive.  Discussion on grass cutting and equipment available to staff; members agreed that equipment is inadequate for amount of grass to be cut. More information on options for outsourcing or new equipment should be brought forward. 485 Council Meeting – Agenda - 4 -  Mayor Molnar indicated that he was very supportive of the Airport Advisory Committee being re-instated as the Airport is an important community asset that serves a wide region. He thanked members for demonstrating skill sets and their time and efforts.  Staff inquired as to thoughts on painting directional arrows on the apron to assist with aircraft movement around and to the fuelling area. Committee’s thoughts were that arrows would not be appropriate as aircraft will approach pump differently depending on wind direction. Perhaps painted lines are an option. Staff will investigate Transport Canada regulations for approved measurements. 9. Next meeting Thursday, July 2 2015 at 5:00PM 10. Adjournment Moved By: E. Benoit Proposed Resolution THAT the meeting be adjourned at 6:30 PM. 486 Page | 1 TOWN OF TILLSONBURG DEVELOPMENT COMMITTEE MINUTES DATE: Tuesday, April 14, 2015 TIME: 7:30 AM LOCATION: 10 Lisgar Ave – Board Room, Customer Service Centre Committee Members in Attendance: Mike Bossy, Councillor Jim Hayes, Kirby Heckford, Jesse Goossens, Andrew Burns, Mayor Stephen Molnar, Ashton Nembhard, John Veldman, Scott McLean, Lisa Gilvesy, Melissa Verspeeten, Cedric Tomico (arrived 7:56am) Staff Present: David Calder, Cephas Panschow, Lana Lund Regrets: Randy Thornton, Steve Spanjers 1) Call to Order Meeting was called to order at 7:32 AM. 2) Adoption of Agenda J. Goossens – 1st K. Heckford – 2nd “Carried” 3) Disclosure of Pecuniary Interest None CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 487 Page | 2 4) Adoption of Minutes of March 10, 2015 S. McLean – 1st J. Veldman – 2nd “That the Minutes of March 10, 2015 be approved, with the following amendment: • Item 6(a) – Chamber Awards – M. Verspeeten’s name to be deleted from paragraph 6. “Carried” 5) Standing Items: a) Community Strategic Plan Staff are moving forward with the implementation of the Plan and will be coming back to this Committee. Progress is being moved forward by the Deputy Clerk. The next report will include information about where we are with the Plan and what has been accomplished. M. Bossy inquired about the public engagement guidelines. C. Panschow to provide copies for inclusion in the committee binders. b) Post-Secondary Education A meeting with Fanshawe, the Town and Chamber was held on March 26. Next step is to do a needs survey of local employers. Staff and the chamber will be the lead on this and have met to initiate this process. Once a draft survey has been developed, it will be circulated to this Committee by email. Target date to commence the survey is mid May. M. Bossy suggested researching and utilizing any government programs that may be available to assist with this. c) Tillsonburg Hydro Inc. The CAO reported that the new AGM for Tillsonburg Hydro Inc, Mark Rosehart, has now started. He will be invited to attend a meeting. 6) Economic Development Update a) Chamber Award Recommendations The Committee discussed the recommendations brought forward by the awards subcommittee and the rationale for making the recommendation. K. Heckford – 1st J. Hayes – 2nd “That Marwood Metal Fabrication Limited be selected for the Tillsonburg Economic Development New Industrial Investment Award through the Tillsonburg District Chamber of Commerce based on their significant investment in hot stamping CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 488 Page | 3 technology to meet global automotive industry demands, new job creation, and patent awarded for the process" “Carried” K. Heckford – 1st A. Burns – 2nd “That Boston Pizza Tillsonburg be selected for the Tillsonburg Economic Development New Commercial Investment Award through the Tillsonburg District Chamber of Commerce based on their $1 M net investment in the Downtown core, the addition of a National brand to the downtown, net new job growth, and their decision to utilize local suppliers in the renovation of their facility." “Carried” b) 2015 Economic Development Work Plan Review The Development Commissioner reviewed the 2015 Work Plan for Economic Development as previously presented to the (former) Committee in December. The Committee discussed the “shovel ready” nature of the Hwy 3 Business Park and the need to move it forward so that we are as, or more, competitive than neighboring communities. Discussion about the preparation of conceptual drawings to help market the Town’s industrial properties. Suggestion was to prepare these drawings for the Clearview Drive property first as it is fully ‘shovel ready’. Any proceeds from a sale of the Clearview Dr property could be put towards the development of the Hwy 3 Business Park. L. Gilvesy enquired if the vacant land inventory was up-to-date and active. Staff confirmed that it was. Committee brought up clusters and the importance of agriculture in the area and as a driver of economic activity within the Town. Request for staff to consider how agricultural products can drive value added activity in Tillsonburg. This would be similar to how the Aylmer Ethanol plant located here due to proximity to corn inputs. Suggested to leverage industrial, agricultural and other sectors requirements to support post-secondary education needs. Development Commissioner reported that further to the Town rejoining the Southwestern Ontario Marketing Alliance, staff have attended 2 meetings and the board has been open to change and to meeting Tillsonburg’s request. Overall, SOMA needs to be able to leverage leads better and to see tangible results. c) Update on SCOR Copies of the annual report were provided for information. CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 489 Page | 4 7) Liaison Updates a) Departmental Reports (Building, Economic Development, Marketing) Development Commissioner updated the Committee on Q1, i.e. files opened, files closed, prospecting activities, outcalls, client visits. He noted that he is now tracking his time more closely, 15 minute blocks rather than 30. A brief report on new and relocating businesses in the downtown was provided. b) Tillsonburg District Chamber of Commerce Discussion on the integration of the Town, BIA and Chamber strategic plans. The strategic plans for the Town, Chamber and BIA overlap in some areas and increased collaboration could mean improved results and less duplication. A Committee will need to be struck to get things going. A. Burns commented on the potential for OMAFRA to facilitate. Staff will follow-up with OMAFRA to discuss what they offer specifically, and will report back. c) Downtown Business Improvement Association C. Tomico reported. He has been appointed Chair for the new term. At their last meeting, the BIA had a lengthy strategic plan discussion, and also talked about bringing in OMAFRA. They will await further discussion between the Town, Chamber and BIA on a joint strategic plan. The Promotions Committee has been focusing on Turtlefest, which is planned for June 19 and 20. 2014 was the first year the event turned a profit, approximately $9,000. This year the Committee is looking at sponsorships, to make a bigger ‘5 year anniversary’ event. C. Tomico provided a Façade Improvement update. They have sent out the official call for applications for the first quarter. The ‘keep our downtown clean’ initiative is scheduled and should be starting in a week or so. The BIA has partnered with Community Living to provide work for local citizens while maintaining the cleanliness of the downtown. d) Tillsonburg District Real Estate Board Information was circulated. At this point, listings and units sold are down somewhat. There is a Board meeting scheduled for tomorrow. Town’s Marketing & Communications Officer is attending to talk about how to get realtors involved with Discover Tillsonburg. Chair Bossy noted that he would like Melissa to be a liaison between the Real Estate Board and this Committee, facilitating information to go both ways. CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 490 Page | 5 e) Physician Recruitment L. Gilvesy indicated that she had participated in an Oxford wide physician recruitment committee in the past, but unsure as to current status of the group. She will touch base with Dr Rowland. Mayor Molnar noted that the local Physician Recruitment Committee is being revitalized, with the first official meeting scheduled for April 22, to discuss such things as Terms of Reference, funding, partnerships, etc. There will be more to report in May, depending on what transpires at the April 22 meeting. 8) Roundtable Councillor Hayes noted his disappointed in learning that Ascent Solutions is laying off employees. The Committee was advised that Siemens is looking for a general manager from the local area. They just recently had another significant contract awarded. K. Heckford commented on two new gas stations. J. Goossens noted the importance of motivating young people back to Tillsonburg. Discussion was held about this and Jessee was tasked with bringing forth a report containing expectations and a pitch to bring professionals back to Tillsonburg. Note was made that we are also short on skilled trades. A. Burns noted the Ontario Chamber of Commerce Conference is scheduled for the end of April. Mayor Molnar provided updates from the April 13 Council Meeting. J. Veldman suggested that the Town consider a rear façade improvement program that would help to revitalize the alleyways. Staff provided an update on Certainteed Insulation (formerly Ottawa Fibre). Certainteed is still planning to start up the Tillsonburg facility, which is virtually brand new and world class. One of the key drivers is the number of US housing starts. Although the Canadian housing market is strong in terms of total units, the mix of units has changed to housing types (condos) that require less drywall, and hence, insulation. It takes some time to get plant operational so once they make a decision to move forward, it will still be up to a year before they are at full production. Ashton Nembhard invited everyone to the ethanol plant in Aylmer. They are currently investing about 25 million in the plant. They just received an interest CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 491 Page | 6 free loan to support the investment. Anyone interested, was asked to contact him. K. Heckford suggested going as a group. C. Tomico reported that he attended the London Home Show last weekend. It was well attended, and he alone was aware of two really good leads. Cedric also noted that he is looking for advice on ‘shopping local’. Some of the local businesses are saying they are not getting support. Retailers say there is no shopping. Cedric is looking for advice on how to improve, as the BIA Board. A. Burns suggested an online shopping site, shop Tillsonburg local retail site. L. Gilvesy reported the local hospital is awaiting approval of new development. 9) Date of Next meeting – Tuesday, May 12, 2015 @ 7:30 AM at the Customer Service Centre Board Room 10) Adjournment at 9:10 AM J. Hayes moved that the meeting be adjourned at 9:10 AM. Next meeting items – Item Interest to Committee Targeted Meeting Date Tillsonburg Hydro Inc. Introduction and Discussion with new CEO/GM May 12 Departmental Reports (Building Department) Maintain information on building activity May 12 New Plan of Subdivision Overview; Recreation/Culture & Parks Planning Items Streamlining approvals and maintaining/improving business friendly environment May 12 SouthWestern Integrated Fibre Technology (SWIFT) SWEA is working with the Western Ontario Wardens’ Caucus (WOWC) to build an ultra high-speed fibre optic regional broadband network for everyone in Western Ontario. June 9? CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 492 Page | 1 TOWN OF TILLSONBURG DEVELOPMENT COMMITTEE MINUTES DATE: Tuesday, May 12, 2015 TIME: 7:30 AM LOCATION: 10 Lisgar Ave – Board Room, Customer Service Centre Committee Members in Attendance: Mike Bossy, Andrew Burns, Councillor Jim Hayes, Lisa Gilvesy, Jesse Goossens, Kirby Heckford, Mayor Stephen Molnar, Steve Spanjers, Randy Thornton, Cedric Tomico, John Veldman Staff Present: David Calder, Cephas Panschow, Rick Cox (8:40 – 9:10 AM), Eric Gilbert (8:15 – 8:40 PM, Mark Rosehart (9 – 9:30 AM) Regrets: Scott McLean, Lana Lund, Ashton Nembhard, Melissa Verspeeten 1) Call to Order Meeting was called to order at 7:30 AM. 2) Adoption of Agenda J. Hayes – 1st J Veldman – 2nd “Carried” 3) Disclosure of Pecuniary Interest None 4) Adoption of Minutes of April 14, 2015 A. Burns – 1st L. Gilvesy – 2nd “That the Minutes of April 14, 2015 be approved” “Carried” CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 493 Page | 2 5) Standing Items: a) Community Strategic Plan Committee was advised that draft Master Trails Plan had been presented to Council and feedback from the community is being received. Some concern over certain areas identified for possible future trails, especially in close proximity to the high school. Development Commission provided information on the Your Career Path 101, which was an all-day career fair event at Glendale High School. A similar event was led by Marwood in the past, but this year’s event was a joint effort between local Employment Services at the Multi-Service Centre and Community Employment Services Woodstock. Most importantly, it was led by the high school principal. A number of organizations and companies (both manufacturing and other sectors) were present at the expo in the gym. A speaker specializing in human behavior was brought in to present to students and parents on how to think about career choices in terms of each individuals unique set of skills/abilities. Overall, the event was a success and a debriefing meeting will be held shortly. At this time, it is hoped that it will continue as an annual event. Discussion regarding how teaching methods are rote and do not address all styles. Suggestion made that there are alternative human resource analysis tools that help identify an individual’s conative (conative drives how one acts on those thoughts and feelings) strengths and perhaps there is an opportunity to partner with business/industry to fund participation by all local students and thereby create a competitive advantage for Tillsonburg students. One tool helps identify career choices one should NOT pursue and the Chair will research and bring forward information. Website redevelopment is proceeding and a consultant is expected to be selected shortly. A Town Hall meeting to update the community on the completion of Strategic Plan objectives will be scheduled for September 2015. A Town Hall Steering Committee has been established to consider the Town’s space requirements and options and is open for membership from the public. b) Post-Secondary Education In terms of funding, just a reminder to consider any programs that may be relevant. The Rural Economic Development program is an example of one that could be useful. A draft of the educational survey was circulated to the committee for review. Suggestion to add in additional question on skilled trades like welding. M. Bossy suggested researching and utilizing any government programs that may be available to assist with this. c) Tillsonburg Hydro Inc – Introduction of new CEO/GM Mark Rosehart was introduced as the new CEO/General Manager of THI. He originally started with the PUC in the water division in 1978 and came back in 1987 for 13 years with last position being Manager of Customer Service and Information Systems. CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 494 Page | 3 THI and the PUC have a strong heritage of innovation and being leading edge as evidenced by:  One of the first utilities to use computers;  One of first utilities to implement time of use demand pricing (DDM was first customer) and demand management;  Served as a case study for other utilities in the Province;  Risk Management;  Supportive of economic development/investment opportunities; He was involved in helping to improve the utility’s load factor from 64% to 75%. When he left, the load factor was around 76-79%. The load factor is currently at 70%, but this may be due to other factors. Overall, the community can be proud of what has been accomplished in the past, including the shared service model with the Town, as well as in the last 13 years of deregulation. Has been reviewing challenges by looking at past and then benchmarking to where they are today. In the process of reviewing where THI is and then where it needs to go. It is a challenging environment in terms of the overall utility sector and he has asked Council for support in getting to sustainability. Also working on the strategic plan for THI and will be focusing on stabilization for 2016. As per the Memorandum between the Town and THI, compliance is the CAO’s responsibility and he is assisting the CAO in those duties. The THI Board oversees risks, but does not have direct control of budget and staff resources. There is a long history of the utility supporting investment and economic development objectives and he believes that this needs to continue and that the economic development objectives should be part of the utility’s planning. An announcement regarding a local industry support program in conjunction with the Chamber of Commerce will be released shortly. Bottom line is that THI was the number one PUC in its day and he believes that we have that tradition and heritage to uphold. Tillsonburg and THI were led by very visionary leaders in the past and we need to strive to continue that leadership. Councillor Hayes indicated that he was very pleased with the THI presentation at Council last night. 6) Economic Development Update a) SouthWestern Integrated Fibre Technology (SWIFT) Initiative Research project on successes and failures was completed in 2014 and the business plan is currently underway. A request for funding support from local municipalities has been fairly successful, but not at the Federal and Provincial level yet. This initiative is being led by the Western Ontario Warden’s Caucus and there is a request for some preliminary funding from the counties, including Oxford at their next meeting, for a more detailed analysis. CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 495 Page | 4 b) 253 Broadway Committee advised that investor has retained architectural, planning, and engineering services and are working with Town staff to obtain approvals in advance of the end of May conditional date. 7) New Business a) Official Plan Review – Agricultural Policy County Planner provided an overview of the County’s Official Plan and the new guidelines for expanded uses within agricultural/rural areas released by the Ontario Ministry of Agriculture, Food & Rural Affairs (OMAFRA). The Premier has challenged the Agri-Food sectors to double its annual growth rate and create 120,000 jobs by the year 2020. Based on this, OMAFRA has drafted these guidelines to support business and job growth in rural areas. Discussion regarding the already permissive environment for agricultural users and the potential impact of permitting more intensive uses in rural areas. Will this impact small and medium sized urban areas where growth will no longer be directed? Next steps are: (1) Report to County Council re comment submission to Province (May 13), (2) County Council workshop on Agricultural/Natural Heritage policies (June 2015) and (3) release draft policies and initiate broader public consultation (e.g. AAC, agencies, public). This is early in the process so time for review/consultation. County has an agricultural advisory committee and have been in discussions with Oxford Federation of Agriculture. b) New Plan of Subdivision Overview: Recreation, Culture & Parks Planning Items Director of RCP provided an overview of the following documents for review/comments from the Committee:  Town of Tillsonburg Land Use Policies as detailed in the County of Oxford Official Plan Section 8.6 Leisure Resources Basically an update of information that will be included in the next Official Plan review. The desire for a Tillsonburg Dam and Reservoir on the Big Otter Creek on the east side of Tillsonburg extending into Norwich Township has been removed as it was not deemed realistic. Updates to Parkettes, Pathway/Bicycle facilities, Parkland Dedication and Cash in Lieu of Parkland sections.  Bylaw for Parkland Dedication or Cash in Lieu of Parkland CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 496 Page | 5 No specific bylaw for this although the clause in the current Zoning Bylaw has been expanded into this specific policy that will be brought to Council for approval. Potential for this to have a bigger impact on proposed developments in the future although the policy is based on best practices from other municipalities. Committee asked to review and provide comments and will be brought forward at the next meeting. Director noted that Committee made recommendation about engaging snowmobile club and draft Trails Master Plan discussion was held with the club with feedback. 8) Liaison Updates a) Departmental Reports (Building, Economic Development, Marketing) None b) Tillsonburg District Chamber of Commerce Discussion on the integration of the Town, BIA and Chamber strategic plans. Development Commissioner reported that he had conversations with Kim Deklein from OMAFRA who basically clarified that: (1) She had indicated at the CED 101 session that the Town, Chamber and BIA should collaborate to ensure that overlapping areas in our respective strategies are not being pursued in isolation and that, where feasible, overlapping areas of interest be led by one organization to reduce duplication. (2) This type of collaborative approach is something that OMAFRA is interested in funding and if Tillsonburg were to move forward with it, they would view it as a pilot type project to be duplicated by other jurisdictions; and, (3) OMAFRA would facilitate this initial meeting and/or support it being led locally. Next step is for staff to arrange a meeting with Mayor, Chamber President, BIA Chair and respective staff persons, including Chamber representative J. Goossens. Agenda items should include discussion of any additional representatives needed. c) Downtown Business Improvement Association No scheduled meetings since last Development Committee meeting. Additional facades in downtown have been completed, which means that the property owner can receive their grant. Some complaints about garbage in the laneways and Town is monitoring and communicating with property owners. There was a significant problem last summer with tenants putting garbage out without bag tags (posted signs), but some issue with being “strictly” enforced. Salvation Army rear lot has been cleaned up with support from the Town. CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 497 Page | 6 d) Tillsonburg District Real Estate Board Listings (up 8% YTD) and sales (recovered to down just 8%) have really come back with the warm weather.  New school will result in house swapping as people move within the new school district  Downtown commercial market will see transition of Chaser’s to Bowling Alley and start of work on 146 Broadway section.  Bill’s Pizza will be closing as a deal with the new owners was not able to be reached  Nick Paris is owner of The Corner Griddle.  87 Broadway (former Anastacia’s) building has a firm buyer  Construction on the manse A.Burns inquired as to how new people to the Town could become connected and engaged. BIA has discussed a similar arrangement with the welcome wagon and for a fee the Welcome Wagon would put together a basket. This would be a good way to engage citizens and ensure that they remain connected to our community. Possible sources of new residents are the real estate board, home builders, etc. All new residents have to come to the Town’s Customer Service Centre so is there an opportunity to advertise/connect there? Consider inviting all new residents to a connection/engagement event. Can the Discover Tillsonburg initiative be expanded to include something along these lines? e) Physician Recruitment L. Gilvesy will be attending a meeting in the near future. Physicians/Specialists that are leaving are being replaced, but physician shortage is still present and Tillsonburg may lose its underserviced designation, which will affect access to Provincial incentives for physicians. Mayor advised that he believes this issue is too important not to action. 9) Roundtable Can Town investigate Walmart rumours and report back? 10) Date of Next meeting – Tuesday, June 9, 2015 @ 7:30 AM at the Customer Service Centre Board Room 11) Adjournment at 9:30 AM Councilor J. Hayes moved that the meeting be adjourned at 9:30 AM. CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 498 Page | 7 Next meeting items – Item Interest to Committee Targeted Meeting Date Departmental Reports (Building Department) Maintain information on building activity June 9 Comments due on Recreation, Culture & Parks Planning Items  Official Plan Section 8.6 Leisure Resources  Parkland Dedication Policy/Bylaw Investment Friendliness June 9 CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: www.tillsonburg.ca 499 = Agenda item Discussion Outcome 1 Call to order 7:25am 2 Attendance Present: Chair, Mel Getty Donna Scanlan Paul DeCloet James Payne Susan Labanich Dace Zvanitajs Penny Esseltine Janet McCurdy, Recreation and Program Manager Rick Cox, Director of Recreation, Culture & Parks Becky Turrill, Secretary Regrets: Vice Chair, Bob McCormick Mike Cerna Don Baxter 3 Adoption of the Agenda On Motion made by D. Zvanitajs, seconded by P. Esseltine and Carried that the agenda for the Parks & Recreation Committee meeting of May 5, 2015 be adopted 4 Disclosure of Pecuniary Interest None 5 Approval of Minutes On Motion made by P. DeCloet, seconded by D. Scanlan and carried that the Minutes as prepared for the Parks & Recreation Committee Meeting of April 7, 2015 be adopted 6 Outstanding Business Parking in Parks The Corporation of the Town of Tillsonburg Parks & Recreation Committee Tuesday May 5, 2015 7:30am Marwood Lounge 45 Hardy Ave, Tillsonburg, ON Minutes 500 Parks and Rec Committee – Minutes - 2 - 6 con’t • Trottier Park is a priority due to traffic and being on a corner – suggestions were given and discussed Staff to report back with options for the August meeting 7 Presentations and Deputations Memorial Gardens Update 8 General Business and Reports Trails Master Plan Open House Update – April 16 • Meeting went well, some neighbours are not happy with the plan • Report to Council in the fall Community Centre Public Meeting • Dates have been selected – May 21, May 28, June 4 & June 11 – each meeting will run from 7-9pm at the Tillsonburg Community Centre B. Turrill to book room at TCC to host public meetings Memorial Park & Lake Lisgar Master Plan – what can we do now? • Mark trail crossing on streets • Signage at entrances of Memorial Park and on Broadway. On motion duly made by Donna Scanlan, seconded by James Payne and carried it was RESOLVED that Parks and Recreation Committee request to Town Council to obtain permission to use County Property (Corner of Christy & Broadway) to advertise Memorial Park and Tillsonburg Community Centre Sports Hall of Fame Add to next Agenda 9 Correspondence E-mail received Mel to forward e-mail to be included in agenda for next meeting 10 Other Business • Keep Tillsonburg Beautiful Day – May 9 At Annandale Ball Diamonds, 9:00am Parks & Rec Committee members invited to attend 11 Next Meeting Tuesday June 2, 2015 12 Adjournment On Motion made by D. Zvanitajs, seconded by J. Payne and carried the meeting was adjourned at 9:05am 501 Parks and Rec Committee – Minutes - 3 - 502 CULTURAL ADVISORY COMMITTEE MEETING Wednesday May 6, 2015 Annex Meeting Room – Town of Tillsonburg Corporate Office 5 pm CALL TO ORDER: 5 pm by the chair, Deb Beard MEMBERS PRESENT: Deb Beard, Josiane DeCloet, Erin Getty, Ann Loker, Patricia Phelps (staff liaison) MEMBERS ABSENT/REGRETS: Brian Stephenson (absent) DISCLOSURE OF PECUNIARY INTEREST OR THE GENERAL NATURE THEREOF None declared ADOPTION OF MINUTES FROM PREVIOUS MEETING Motion: RESOLVED THAT the Minutes as prepared for the Cultural Advisory Committee Meeting of Wednesday, April 1, 2015 be adopted – moved by Ann Loker, seconded by Josiane DeCloet - carried BUSINESS ARISING OUT OF THE MINUTES From minutes of April 1, 2015: Request that Final Report financial statement from the Family Day Committee be resubmitted to clearly show the grant funding received from the Tillsonburg Cultural Advisory Committee. Staff liaison received updated financial statement as requested, copy included in file ADOPTION OF AGENDA Motion: RESOLVED THAT the Agenda as prepared for the Cultural Advisory Committee Meeting of May 6, 2015 be adopted – moved by Erin Getty, seconded by Josiane DeCloet - carried DELEGATIONS/PRESENTATIONS/DEPUTATIONS - None CORRESPONDENCE -None GENERAL BUSINESS AND REPORTS Two applications for funding presented by the staff liaison for consideration by the committee 1. Request from the Tillsonburg & District Historical Society for a grant in the amount of $200 to assist with the Canada Day Concert that the Society is hosting in Memorial Park on July 1, 2015 prior to the evening fireworks Discussion ensued around grant application resulting in a directive to the staff liaison to contact the Historical Society to confirm the start and end time of the concert and to find out the name of those group(s) that would be performing. Once this information has been received the staff liaison is to forward the reply to the committee for an email vote. After discussion/directive the following motion was made 503 MOTION: That upon confirmation of the performers and the length of the concert has been given and accepted through an email vote, the grant of $200 to the Tillsonburg and District Historical Society is approved. Made by Erin Getty, seconded by Josiane DeCloet – carried Further directive to staff liaison by Chair of Committee – That upon a favorable reply to the committee questions and a positive email vote, that the staff liaison start the necessary paperwork and Council request process to award the funding. 2. Request from the Tillsonburg Tri-County Agricultural Society for a grant in the amount of $2,500 to assist with children’s activities at the fair including hiring an illusionist Discussion ensued around the application resulting in the following motion and directive MOTION: To request that the Tillsonburg Tri-County Agricultural Society resubmit their application. Clarifying the information submitted and including additional information, as per the application guidelines, in the areas of; Project/Event Description, Total Costs for Project/Event and Other Sources of Funding Received. Made by Erin Getty, seconded by Josiane DeCloet – carried Directive: that the staff liaison contact the Tillsonburg Tri-County Agricultural Society to notify them of the request for clarification and additional information in regard to their application. OTHER BUSINESS Chair, Deb Beard, reported that she had invited Mary-Anne Murphy, Coordinator of the Tillsonburg Cultural Improvement Alliance, to the June meeting to provide the Committee with an update on the activities of the TCIA NEXT MEETING DATE Wednesday, June 3 – 5 pm Annex Meeting Room – Corporate Offices, Town of Tillsonburg Motion to Adjourn – Erin Getty ADJOURMENT 6:01 pm 504 THE AGREEMENT effective as of the 1st day of July, 2015. B E T W E E N : HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the Minister of Economic Development, Employment and Infrastructure (the “Province”) - and - The Corporation of the Town of Tillsonburg (the “Recipient”) BACKGROUND: The Province has implemented the Program. Eligible applicants under the Program are entitled to receive reimbursements for Eligible Costs incurred under the Program subject to the terms and conditions contained in this Agreement. The Recipient is an applicant under the Program and wishes to apply for reimbursements of Eligible Costs under the Program and the Province wishes to provide such reimbursements subject to the terms and conditions contained in this Agreement. CONSIDERATION: In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, the Parties agree as follows: ARTICLE 1 INTERPRETATION AND DEFINITIONS 1.1 Interpretation. For the purposes of interpretation: (a) words in the singular include the plural and vice-versa; (b) words in one gender include all genders; (c) the background and the headings do not form part of the Agreement; they are for reference only and shall not affect the interpretation of the Agreement; (d) any reference to dollars or currency shall be to Canadian dollars and currency; and (e) “include”, “includes” and “including” shall not denote an exhaustive list. 505 Page 2 of 37 1.2 Definitions. In the Agreement, the following terms shall have the following meanings: “Agreement” means this agreement entered into between the Province and the Recipient and includes all of the schedules listed in section 27.1 and any amending agreement entered into pursuant to section 34.2. “Application to Certify Deadline Date” means the first anniversary of the Effective Date. “Application to Certify” means the application form developed by the Province that the Recipient is required to complete to apply for a Site Certification. "BPSAA" means the Broader Public Sector Accountability Act, 2010 (Ontario), including any directives issued pursuant to that Act. “Budget” means the budget attached to the Agreement as a part of Schedule “A”. “Business Day” means any day other than a Saturday, Sunday or a statutory holiday in the Province of Ontario. “Certification Date” means the date on which the Site obtains a Site Certification confirmation from the Province. “Certification Instructions and Requirements” has the meaning ascribed to it in Schedule “A”. “Effective Date” means the date set out at the top of the Agreement. “Eligible Costs” has the meaning ascribed to it in Schedule “F” under the heading “Eligible Costs and Reimbursement”. “Event of Default” has the meaning ascribed to it in section 14.1. “Expiry Date” means the earliest of: (i) the second anniversary of the Certification Date; (ii) when the Site is sold in accordance with the terms and conditions of the Agreement; or, (iii) four years after the Effective Date. “Force Majeure” has the meaning ascribed to it in Article 25. “Funds” means the money the Province provides to the Recipient pursuant to the Agreement. “Indemnified Parties” means her Majesty the Queen in right of Ontario, her ministers, agents, appointees and employees. “Intellectual Property” means any intellectual, industrial or other proprietary right of any type in any form protected or protectable under the laws of Canada, any foreign country, or any political subdivision of any country, including, without limitation, any intellectual, industrial or proprietary rights protected or protectable 506 Page 3 of 37 by legislation, by common law or at equity. “Maximum Funds” means the amount calculated as fifty percent (50%) of the Eligible Costs incurred by the Recipient for purposes of obtaining the Site Certification, up to a maximum amount of Twenty Five Thousand Dollars ($25,000.00). “Notice” means any communication given or required to be given pursuant to the Agreement. “Notice Period” means the period of time within which the Recipient is required to remedy an Event of Default, and includes any such period or periods of time by which the Province considers it reasonable to extend that time. “Parties” means the Province and the Recipient. “Party” means either the Province or the Recipient. “Pre-screening Application” has the meaning ascribed to it in Schedule “A”. “Program” has the meaning ascribed to it in Schedule “A”. “Project” means the undertaking described in Schedule “A”. “Releasees” means her Majesty the Queen in right of Ontario, her ministers, agents, appointees and employees. “Reports” means the reports described in Schedule “B”. “Site” means the property municipally known as 20 Clearview Drive, Tillsonburg, Ontario, more particularly described in Schedule “G”. “Site Certification” means a certification by the Province that the Site satisfies the requirements to be certified under the Program. “Timelines” means the timelines relating to the Project as set out in Schedule “A”. ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS 2.1 General. The Recipient represents, warrants and covenants that: (a) it is, and shall continue to be for the term of the Agreement, a validly existing legal entity with full power to fulfill its obligations under the Agreement; (b) it has, and shall continue to have for the term of the Agreement, the experience and expertise necessary to carry out the Project; 507 Page 4 of 37 (c) unless otherwise provided for in the Agreement, any information the Recipient provided to the Province in support of its request for funds (including information relating to any eligibility requirements) was true and complete at the time the Recipient provided it and shall continue to be true and complete for the term of the Agreement; and (d) it is, and shall continue to be for the term of the Agreement or until such time as the Site is sold or otherwise transferred by the Recipient, the registered owner of the Site. 2.2 Execution of Agreement. The Recipient represents and warrants that: (a) it has the full power and authority to enter into the Agreement; and (b) it has taken all necessary actions to authorize the execution of the Agreement. 2.3 Governance. The Recipient represents, warrants and covenants that it has, and shall maintain, in writing, for the period during which the Agreement is in effect: (a) a code of conduct and ethical responsibilities for all persons at all levels of the Recipient’s organization; (b) procedures to ensure the ongoing effective functioning of the Recipient; (c) decision-making mechanisms; (d) procedures to provide for the prudent and effective management of the Funds; (e) procedures to enable the successful completion of the Project; (f) procedures to enable the timely identification of risks to the completion of the Project and strategies to address the identified risks; (g) procedures to enable the preparation and delivery of all Reports required pursuant to Article 7; and (h) procedures to deal with such other matters as the Recipient considers necessary to ensure that the Recipient carries out its obligations under the Agreement. 2.4 Supporting Documentation. Upon request, the Recipient shall provide the Province with proof of the matters referred to in this Article 2. ARTICLE 2.1 MINIMUM ELIGIBILITY REQUIREMENTS 2.1.1 Minimum Eligibility Requirements. For greater certainty and without limiting other requirements for certification under the Program, the Site must satisfy the 508 Page 5 of 37 minimum eligibility requirements set out in Schedule “F” in order to be considered for Site Certification. ARTICLE 3 TERM OF THE AGREEMENT 3.1 Term. The term of the Agreement shall commence on the Effective Date and shall expire on the Expiry Date unless terminated earlier pursuant to Article 12, Article 13 or Article 14. ARTICLE 4 FUNDS AND CARRYING OUT THE PROJECT 4.1 Funds Provided. The Province shall: (a) provide the Recipient up to the Maximum Funds for the purpose of reimbursing the Recipient for Eligible Costs; (b) provide the Funds to the Recipient on or before the sixtieth (60th) day following the Certification Date; and (c) deposit the Funds into an account designated by the Recipient provided that the account: (i) resides at a Canadian financial institution; and (ii) is in the name of the Recipient. 4.2 Limitation on Payment of Funds. Despite section 4.1: (a) the Province is not obligated to provide any Funds to the Recipient until the Recipient provides the insurance certificate or other proof as provided for in section 11.2; (b) the Province is not obligated to, and will not, provide any Funds unless, in the Province’s sole opinion, the Site has satisfied the requirements for certification under the Program, including, without limiting the generality of the foregoing, that the Site satisfies the minimum eligibility requirements set out in Schedule “F”; (c) The Province is not obligated to reimburse any Eligible Costs for which supporting invoices have not been submitted to the Province within 30 days of the Certification Date; and (d) if, pursuant to the provisions of the Financial Administration Act (Ontario), the Province does not receive the necessary appropriation from the Ontario Legislature for payment under the Agreement, the Province is not obligated to make any such payment, and, as a consequence, the Province may: (i) reduce the amount of the Funds and, in consultation with the 509 Page 6 of 37 Recipient, change the Project; or (ii) terminate the Agreement pursuant to section 13.1. 4.3 Use of Funds and Project. The Recipient shall: (a) carry out the Project: (i) in accordance with the terms and conditions of the Agreement; and (ii) in compliance with all federal and provincial laws and regulations, all municipal by-laws, and any other orders, rules and by-laws related to any aspect of the Project; (b) use the Funds only for the purpose of paying for Eligible Costs; and (c) spend the Funds only in accordance with the Budget. 4.4 No Changes. The Recipient shall not make any changes to the Project, the Timelines and/or the Budget without the prior written consent of the Province. 4.5 Maximum Funds. The Recipient acknowledges that the Funds available to it pursuant to the Agreement shall not exceed the Maximum Funds. 4.6 Rebates, Credits and Refunds. The Recipient acknowledges that the amount of Funds available to it pursuant to the Agreement is based on the actual costs to the Recipient, less any costs (including taxes) for which the Recipient has received, will receive, or is eligible to receive, a rebate, credit or refund. 4.7 Availability of Site for Sale/Lease. The Recipient agrees to keep the Site available for sale or lease until the Expiry Date. 4.8 Intellectual Property. The Recipient agrees that all Province Intellectual Property and every other right, title and interest in and to all concepts, techniques, ideas, information and materials, however recorded, (including images and data) provided by the Province to the Recipient shall remain the sole property of Her Majesty the Queen in right of Ontario. ARTICLE 5 ACQUISITION OF GOODS AND SERVICES, AND DISPOSAL OF ASSETS 5.1 Acquisition. Subject to section 31.1, if the Recipient acquires supplies, equipment or services with the Funds, it shall do so through a process that promotes the best value for money. 5.2 Disposal. The Recipient shall not, without the Province’s prior written consent, sell, lease or otherwise dispose of any asset purchased with the Funds or for which Funds were provided, the cost of which exceeded $15,000 at the time of purchase. 510 Page 7 of 37 ARTICLE 6 CONFLICT OF INTEREST 6.1 No Conflict of Interest. The Recipient shall carry out the Project and use the Funds without an actual, potential or perceived conflict of interest. 6.2 Conflict of Interest Includes. For the purposes of this Article, a conflict of interest includes any circumstances where: (a) the Recipient; or (b) any person who has the capacity to influence the Recipient’s decisions, has outside commitments, relationships or financial interests that could, or could be seen to, interfere with the Recipient’s objective, unbiased and impartial judgment relating to the Project and the use of the Funds. 6.3 Disclosure to Province. The Recipient shall: (a) disclose to the Province, without delay, any situation that a reasonable person would interpret as either an actual, potential or perceived conflict of interest; and (b) comply with any terms and conditions that the Province may prescribe as a result of the disclosure. ARTICLE 7 REPORTING, ACCOUNTING AND REVIEW 7.1 Preparation and Submission. The Recipient shall: (a) submit to the Province at the address provided in section 17.1, all Reports in accordance with the timelines and content requirements set out in Schedule “B”, or in a form as specified by the Province from time to time; (b) submit to the Province at the address provided in section 17.1, any other reports as may be requested by the Province in accordance with the timelines and content requirements specified by the Province; (c) ensure that all Reports and other reports are completed to the satisfaction of the Province; (d) ensure that all Reports and other reports are signed on behalf of the Recipient by an authorized signing officer; (e) deliver to the Province, on or before the Application to Certify Deadline Date, a fully completed Application to Certify, together with all documents required under such application; and 511 Page 8 of 37 (f) promptly notify the Province in writing of any event or circumstance that may adversely affect the Site’s eligibility for Site Certification. 7.2 Record Maintenance. The Recipient shall keep and maintain: (a) all financial records (including invoices) relating to the Funds or otherwise to the Project in a manner consistent with generally accepted accounting principles; and (b) all non-financial documents and records relating to the Funds or otherwise to the Project. 7.3 Inspection. The Province, its authorized representatives or an independent auditor identified by the Province may, at its own expense, upon three Business Days’ Notice to the Recipient and during normal business hours, visit and inspect the Site, and enter upon the Recipient’s premises to review the progress of the Project and the Recipient’s expenditure of the Funds and, for these purposes, the Province, its authorized representatives or an independent auditor identified by the Province may, among other things: (a) inspect and copy the records and documents referred to in section 7.2; and (b) conduct an audit or investigation of the Recipient in respect of the expenditure of the Funds and/or the Project. 7.4 Disclosure. To assist in respect of the rights set out in section 7.3, the Recipient shall disclose any information requested by the Province, its authorized representatives or an independent auditor identified by the Province, and shall do so in a form requested by the Province, its authorized representatives or an independent auditor identified by the Province, as the case may be. 7.5 No Control of Records. No provision of the Agreement shall be construed so as to give the Province any control whatsoever over the Recipient’s records. 7.6 Auditor General. For greater certainty, the Province’s rights under this Article are in addition to any rights provided to the Auditor General pursuant to section 9.2 of the Auditor General Act (Ontario). 7.7 Use of Site Information. The Recipient hereby authorizes and consents to the Province using any information provided by the Recipient in connection with the Program as the Province deems appropriate, including for purposes of promoting the Site and/or the Program to potential purchasers as a part of international marketing materials or on the Province’s websites. ARTICLE 8 CREDIT 8.1 Acknowledge Support. Unless otherwise directed by the Province, the Recipient shall, in a form approved by the Province, acknowledge the support of the Province in any publication of any kind, written or oral, relating to the Project. 512 Page 9 of 37 8.2 Publication. The Recipient shall indicate, in any of its publications, of any kind, written or oral, relating to the Project, that the views expressed in the publication are the views of the Recipient and do not necessarily reflect those of the Province. ARTICLE 9 FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY 9.1 FIPPA. The Recipient acknowledges that the Province is bound by the Freedom of Information and Protection of Privacy Act (Ontario) and that any information provided to the Province in connection with the Project or otherwise in connection with the Agreement may be subject to disclosure in accordance with that Act. ARTICLE 10 INDEMNITY AND RELEASE 10.1 Indemnification. The Recipient hereby agrees to indemnify and hold harmless the Indemnified Parties from and against any and all liability, loss, costs, damages and expenses (including legal, expert and consultant fees), causes of action, actions, claims, demands, lawsuits or other proceedings, by whomever made, sustained, incurred, brought or prosecuted, in any way arising out of or in connection with (i) the Project, (ii) any sale, transfer, lease or other transaction relating to the Site, or (iii) otherwise in connection with the Agreement, unless solely caused by the negligence or wilful misconduct of the Province. 10.2 Release. The Recipient: (a) on behalf of itself, its successors and assigns, releases and forever discharges the Releasees from any and all actions, causes of action, claims and demands for damages, indemnity, costs, interest and loss or injury of every nature and kind howsoever arising which the Recipient now has, may have had or may hereafter have arising from or in any way related to (i) the Project, (ii) any sale, transfer, lease or other transaction relating to the Site, (iii) the Program, or (iv) otherwise in connection with the Agreement; (b) agrees not to make any claim or take any proceeding in connection with any of the claims released against any other person or corporation who might claim contribution or indemnity from the Releasees by virtue of the claim or proceeding; and (c) understands and agrees that any consideration paid by the Releasees in connection with this release is deemed to be no admission whatever of liability or responsibility on the part of the Releasees and that any such liability or responsibility is denied. ARTICLE 11 INSURANCE 513 Page 10 of 37 11.1 Recipient’s Insurance. The Recipient represents and warrants that it has, and shall maintain for the term of the Agreement, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all the necessary and appropriate insurance that a prudent person carrying out a project similar to the Project would maintain, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage, to an inclusive limit of not less than two million dollars ($2,000,000) per occurrence. The policy shall include the following: (a) the Indemnified Parties as additional insureds with respect to liability arising in the course of performance of the Recipient’s obligations under, or otherwise in connection with, the Agreement; (b) a cross-liability clause; (c) contractual liability coverage; and (d) a 30 day written notice of cancellation, termination or material change. 11.2 Proof of Insurance. The Recipient shall provide the Province with certificates of insurance, or other proof as may be requested by the Province, that confirms the insurance coverage as provided for in section 11.1. Upon the request of the Province, the Recipient shall make available to the Province a copy of each insurance policy. ARTICLE 12 TERMINATION ON NOTICE 12.1 Termination on Notice. The Province may terminate the Agreement at any time upon giving at least 30 days Notice to the Recipient. 12.2 Consequences of Termination on Notice by the Province. If the Province terminates the Agreement pursuant to section 12.1, the Province may, at its sole discretion: (a) cancel all instalments of Funds; and/or (b) demand the repayment of any Funds remaining in the possession or under the control of the Recipient. ARTICLE 13 TERMINATION WHERE NO APPROPRIATION 13.1 Termination Where No Appropriation. If, as provided for in section 4.2(c), the Province does not receive the necessary appropriation from the Ontario Legislature for any payment the Province is to make pursuant to the Agreement, the Province may terminate the Agreement immediately by giving Notice to the Recipient. 514 Page 11 of 37 13.2 Consequences of Termination Where No Appropriation. If the Province terminates the Agreement pursuant to section 13.1, the Province may, at its sole discretion: (a) cancel all further instalments of Funds; and/or (b) demand the repayment of any Funds remaining in the possession or under the control of the Recipient. ARTICLE 14 EVENT OF DEFAULT, CORRECTIVE ACTION AND TERMINATION FOR DEFAULT 14.1 Events of Default. Each of the following events shall constitute an Event of Default: (a) in the opinion of the Province, the Recipient breaches any representation, warranty, covenant or other material term of the Agreement, including failing to do any of the following in accordance with the terms and conditions of the Agreement: (i) carry out the Project; (ii) use or spend Funds; and/or (iii) provide, in accordance with section 7.1, Reports or such other reports as may have been requested pursuant to section 7.1(b); (b) the Recipient’s operations, property or its organizational structure, changes such that it no longer meets one or more of the applicable eligibility requirements of the Program under which the Province provides the Funds; (c) the Recipient makes an assignment, proposal, compromise, or arrangement for the benefit of creditors, or is petitioned into bankruptcy, or files for the appointment of a receiver; (d) the Recipient ceases to operate; (e) an event of Force Majeure that continues for a period of 60 days or more; (f) if any representation, warranty or other information, including in any application material, provided by the Recipient to Ontario in connection with this Agreement and/or for purposes of obtaining a Site Certification shall be or become materially untrue in any respect; (g) the Recipient fails to deliver to the Province any Reports required under this Agreement as outlined in Schedule “B”; (h) if the Recipient uses the Site Certification designation or seal for a purpose other than as authorized by the Province under the applicable guidelines, a copy of which will be provided; and 515 Page 12 of 37 (i) the Recipient applies for a re-zoning of the Site that would allow for non- industrial uses, including but not limited to, residential, commercial, institutional or recreational uses. 14.2 Consequences of Events of Default and Corrective Action. If an Event of Default occurs, the Province may, at any time, take one or more of the following actions: (a) initiate any action the Province considers necessary in order to facilitate the successful continuation or completion of the Project; (b) provide the Recipient with an opportunity to remedy the Event of Default; (c) suspend the payment of Funds for such period as the Province determines appropriate; (d) reduce the amount of the Funds; (e) cancel all further installments of Funds; (f) demand the repayment of any Funds remaining in the possession or under the control of the Recipient; (g) demand the repayment of an amount equal to any Funds the Recipient used, but did not use in accordance with the Agreement; (h) demand the repayment of an amount equal to any Funds the Province provided to the Recipient; (i) terminate the Agreement at any time, including immediately, upon giving Notice to the Recipient; and/or (j) cancel and revoke the Site Certification and the Recipient’s right to use the Program seal. 14.3 Opportunity to Remedy. If, in accordance with section 14.2(b), the Province provides the Recipient with an opportunity to remedy the Event of Default, the Province shall provide Notice to the Recipient of: (a) the particulars of the Event of Default; and (b) the Notice Period. 14.4 Recipient not Remedying. If the Province has provided the Recipient with an opportunity to remedy the Event of Default pursuant to section 14.2(b), and: (a) the Recipient does not remedy the Event of Default within the Notice Period; (b) it becomes apparent to the Province that the Recipient cannot completely 516 Page 13 of 37 remedy the Event of Default within the Notice Period; or (c) the Recipient is not proceeding to remedy the Event of Default in a way that is satisfactory to the Province, the Province may extend the Notice Period, or initiate any one or more of the actions provided for in sections 14.2(a), (c), (d), (e), (f), (g), (h), (i) and (j). 14.5 When Termination Effective. Termination under this Article shall take effect as set out in the Notice. ARTICLE 15 FUNDS UPON EXPIRY 15.1 Funds Upon Expiry. The Recipient shall, upon expiry of the Agreement, return to the Province any Funds remaining in its possession or under its control. ARTICLE 16 REPAYMENT 16.1 Debt Due. If: (a) the Province demands the payment of any Funds or any other money from the Recipient; or (b) the Recipient owes any Funds or any other money to the Province, whether or not their return or repayment has been demanded by the Province, such Funds or other money shall be deemed to be a debt due and owing to the Province by the Recipient, and the Recipient shall pay or return the amount to the Province immediately, unless the Province directs otherwise. 16.2 Interest Rate. The Province may charge the Recipient interest on any money owing by the Recipient at the then current interest rate charged by the Province of Ontario on accounts receivable. 16.3 Payment of Money to Province. The Recipient shall pay any money owing to the Province by cheque payable to the “Ontario Minister of Finance” and mailed to the Province at the address provided in section 17.1. ARTICLE 17 NOTICE 17.1 Notice in Writing and Addressed. Notice shall be in writing and shall be delivered by email, postage-prepaid mail, personal delivery or fax, and shall be addressed to the Province and the Recipient respectively as set out below, or as either Party later designates to the other by Notice: To the Province: To the Recipient: 517 Page 14 of 37 Ministry of Economic Development, Employment and Infrastructure 56 Wellesley St. W, 7th Floor Toronto, ON M7A 2E7 Attention: Investment Ready: Certified Site Program, Advanced Manufacturing Branch Fax: 416-326-9654 Email: investmentready@ontario.ca The Corporation of the Town of Tillsonburg 200 Broadway Street, Unit 204 Tillsonburg, ON N4G 5A7 Attention: Cephas Panschow Fax: (519) 842-9431 Email:cpanschow@tillsonburg.ca 17.2 Notice Given. Notice shall be deemed to have been received: (a) in the case of postage-prepaid mail, seven days after a Party mails the Notice; or (c) in the case of email, personal delivery or fax, at the time the other Party receives the Notice. 17.3 Postal Disruption. Despite section 17.2(a), in the event of a postal disruption: (a) Notice by postage-prepaid mail shall not be deemed to be received; and (b) the Party giving Notice shall provide Notice by email, personal delivery or by fax. ARTICLE 18 CONSENT BY PROVINCE 18.1 Consent. The Province may impose any terms and/or conditions on any consent the Province may grant pursuant to the Agreement. ARTICLE 19 SEVERABILITY OF PROVISIONS 19.1 Invalidity or Unenforceability of Any Provision. The invalidity or unenforceability of any provision of the Agreement shall not affect the validity or enforceability of any other provision of the Agreement. Any invalid or unenforceable provision shall be deemed to be severed. ARTICLE 20 WAIVER 20.1 Waivers in Writing. If a Party fails to comply with any term of the Agreement, that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions in Article 17. Any waiver must refer to a specific failure to comply and shall not have the effect of waiving any subsequent failures to comply. ARTICLE 21 INDEPENDENT PARTIES 518 Page 15 of 37 21.1 Parties Independent. The Recipient acknowledges that it is not an agent, joint venturer, partner or employee of the Province, and the Recipient shall not take any actions that could establish or imply such a relationship. ARTICLE 22 ASSIGNMENT OF AGREEMENT OR FUNDS 22.1 No Assignment. The Recipient shall not assign any part of the Agreement or the Funds without the prior written consent of the Province. 22.2 Agreement to Extend. All rights and obligations contained in the Agreement shall extend to and be binding on the Parties’ respective heirs, executors, administrators, successors and permitted assigns. ARTICLE 23 GOVERNING LAW 23.1 Governing Law. The Agreement and the rights, obligations and relations of the Parties shall be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada. Any actions or proceedings arising in connection with the Agreement shall be conducted in Ontario. ARTICLE 24 FURTHER ASSURANCES 24.1 Agreement into Effect. The Recipient shall do or cause to be done all acts or things necessary to implement and carry into effect the terms and conditions of the Agreement to their full extent. ARTICLE 25 CIRCUMSTANCES BEYOND THE CONTROL OF EITHER PARTY 25.1 Force Majeure Means. Subject to section 25.3, Force Majeure means an event that: (a) is beyond the reasonable control of a Party; and (b) makes a Party’s performance of its obligations under the Agreement impossible, or so impracticable as reasonably to be considered impossible in the circumstances. 25.2 Force Majeure Includes. Force Majeure includes: (a) infectious diseases, war, riots and civil disorder; (b) storms, floods and earthquakes; (c) lawful act by a public authority; and 519 Page 16 of 37 (d) strikes, lockouts and other labour actions, if such events meet the test set out in section 25.1. 25.3 Force Majeure Shall Not Include. Force Majeure shall not include: (a) any event that is caused by the negligence or intentional action of a Party or such Party’s agents or employees; or (b) any event that a diligent Party could reasonably have been expected to: (i) take into account at the time of the execution of the Agreement; and (ii) avoid or overcome in the carrying out of its obligations under the Agreement. 25.4 Failure to Fulfil Obligations. Subject to section 14.1(e), the failure of either Party to fulfil any of its obligations under the Agreement shall not be considered to be a breach of, or Event of Default under, the Agreement to the extent that such failure to fulfill the obligation arose from an event of Force Majeure, if the Party affected by such an event has taken all reasonable precautions, due care and reasonable alternative measures, all with the objective of carrying out the terms and conditions of the Agreement. ARTICLE 26 SURVIVAL 26.1 Survival. The provisions in Article 1, any other applicable definitions, sections 4.7, 4.8, 5.2, 7.1 (to the extent that the Recipient has not provided the Reports or other reports as may be requested by the Province to the satisfaction of the Province), 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, Articles 8 and 10, sections 12.2, 13.2, 14.1, 14.2(d), (e), (f), (g), (h) and (j), Articles 15, 16, 17, 19, 23, 26, 27, 29, 30 and 34, and all applicable cross-referenced provisions and schedules shall continue in full force and effect for a period of seven years from the date of expiry or termination of the Agreement. ARTICLE 27 SCHEDULES 27.1 Schedules. The Agreement includes the following schedules: (a) Schedule “A” - Project Description, Timelines and Budget; (b) Schedule “B” – Reporting Requirements; (c) Schedule “C” – Summary of Eligible Costs Table; (d) Schedule “D” – 10 Month Certification Process Update; (e) Schedule “E” – Semi-Annual Status Update Template; 520 Page 17 of 37 (f) Schedule “F” – Certification Instructions and Requirements; (g) Schedule “G” – Legal Description of Site. ARTICLE 28 COUNTERPARTS 28.1 Counterparts. The Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. ARTICLE 29 JOINT AND SEVERAL LIABILITY 29.1 Joint and Several Liability. Where the Recipient is comprised of more than one entity, all such entities shall be jointly and severally liable to the Province for the fulfillment of the obligations of the Recipient under the Agreement. ARTICLE 30 RIGHTS AND REMEDIES CUMULATIVE 30.1 Rights and Remedies Cumulative. The rights and remedies of the Province under the Agreement are cumulative and are in addition to, and not in substitution for, any of its rights and remedies provided by law or in equity. ARTICLE 31 BPSAA 31.1 BPSAA. For the purposes of clarity, if the Recipient is subject to the BPSAA and there is a conflict between any of the requirements of the Agreement and the requirements of the BPSAA, the BPSAA shall prevail. ARTICLE 32 FAILURE TO COMPLY WITH OTHER AGREEMENTS 32.1 Other Agreements. If the Recipient: (a) has failed to comply (a “Failure”) with any term, condition or obligation under any other agreement with Her Majesty the Queen in right of Ontario or a Crown agency; (b) has been provided with notice of such Failure in accordance with the requirements of such other agreement; (c) has, if applicable, failed to rectify such Failure in accordance with the requirements of such other agreement; and (d) such Failure is continuing, 521 Page 18 of 37 the Province may suspend the payment of Funds for such period as the Province determines appropriate. ARTICLE 33 INDEPENDENT LEGAL ADVICE 33.1 Independent legal advice. The Recipient acknowledges that the Province has provided the Recipient with a reasonable opportunity to obtain independent legal advice with respect to the Agreement, and that either: (a) the Recipient has obtained such independent legal advice prior to executing the Agreement, or; (b) the Recipient has willingly chosen not to obtain such advice and to execute the Agreement without having obtained such advice. ARTICLE 34 ENTIRE AGREEMENT 34.1 Entire Agreement. The Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained in the Agreement and supersedes all prior oral or written representations and agreements. 34.2 Modification of Agreement. The Agreement may only be amended by a written agreement duly executed by the Parties. [Remainder of page intentionally left blank. Signature page follows.] 522 Page 19 of 37 The Parties have executed the Agreement on the dates set out below. HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the Minister of Economic Development, Employment and Infrastructure ____________________ ______________ Name: Trevor Dauphinee Date Title: Director, Advanced Manufacturing Branch The Corporation of the Town of Tillsonburg ______________ Date ___________________ Name: Stephen Molnar Title: Mayor ______________ Date __________________Name: Donna Wilson Title: Town Clerk I/We have authority to bind the Recipient. 523 Page 20 of 37 SCHEDULE “A” PROJECT DESCRIPTION AND TIMELINES Background The Province has implemented the “Investment Ready: Certified Site Program” (the “Program”), which is a discretionary, non-entitlement program with limited funding. The purpose of the Program is to promote an inventory of sites that meet a set of minimum requirements as outlined in the document titled “Investment Ready: Certified Site Program – Certification Instructions and Requirements” (“Certification Instructions and Requirements”), a copy of which is attached in Schedule “F”. A Site Certification indicates that a landowner/applicant has provided the Province with the site related information described in Schedule “F” and has otherwise satisfied the requirements of the Program. The Province will collect such site related information from landowners/applicants and assemble it into a consistent and easy to use format. While the Province will make such site related information available to prospective purchasers, lessors and others for information purposes, the Province will not be guaranteeing the quality, accuracy, completeness or timeliness of any such information nor providing any representations or warranties regarding such information or a given site. Prospective purchasers and lessors will need to conduct their own usual due diligence and make such enquiries as they deem necessary before purchasing or leasing a given site. Eligible applicants under the Program will self-select sites to be brought forward to the Province for certification under the Program and submit a pre-screening application (“Pre-screening Application”). Once the Pre-screening Application is reviewed and a site is accepted into the Program, applicants will be required to successfully complete all Program requirements including all due diligence assessments. Once a site has completed the certification process, supporting documentation for certification costs would be submitted for the Province’s review. Applicants whose site is certified under the Program could be entitled to receive reimbursements of up to 50% of the eligible costs, with such reimbursements being capped at $25,000 per site. Project Description The project (the “Project”) consists of the process and activities undertaken by the Recipient to complete and deliver all Program requirements to obtain a Site Certification. The Project includes activities that confirm the availability and suitability of the Site for economic development purposes and all related due diligence. Timelines The section references below correspond to the sections listed in the Certification Instructions and Requirements under the heading “Certification Requirements”. 524 Page 21 of 37 Requirement Expected Date of Completion A.1: Truthful Representation A.2. Property Identification A.3. Title A.4. Property Characteristics / Surrounding Uses A.5. Developable Area A.6. Planning A.7. Transportation A.8. Servicing A.9. Environmental Site Assessments A.10. Archaeological Assessment A.11. Species at Risk Assessment A.12. Built Culture Heritage Landscapes A.13. Environmental Assessment A.14. Documentation Review Submit Application and Documentation Budget Forecast $ (Forecast) Supplier Name (if known) Sources of Funding Own Source Revenue NA Ontario Grant NA Other: NA Total Revenue Eligible Costs Title Opinion Title Insurance Survey Report Environmental Site Assessments Environmental Assessment Archaeological Species at Risk Technical Heritage Reports Documentation Review Digital Mapping Project Manager Fees (if required) Ineligible Costs Total Costs Note: The following costs are ineligible: (i) costs incurred prior to the Effective Date; and, (ii) costs for which no supporting invoice has been submitted within thirty calendar days of the Certification Date. See Schedule “F” for more details. 525 Page 22 of 37 SCHEDULE “B” REPORTING REQUIREMENTS The following table outlines the Reporting Requirements associated with the Project. Requirement Deadline Documentation Required 10 Month Certification Process Update On or before the 300th day following the Effective Date 1 copy of Schedule D Application to Certify Application to Certify Deadline Date 1 hard and electronic (USB or CD) copy of the Application to Certify and all Certification Requirements. 1 electronic (email) copy of the Application to Certify form. Semi-Annual Status Update for the period commencing on the Certification Date and ending on the earlier of: (a) the 180th day following the Certification Date; or, (b) the Expiry Date. The earlier of: (a) the 180th day following the Certification Date; or, (b) the Expiry Date. 1 copy of Schedule E Semi-Annual Status Update for the period commencing on the 181st day following the Certification Date and ending on the earlier of: (a) the first anniversary of the Certification Date; or, (b) the Expiry Date. The earlier of: (a) the first anniversary date of the Certification Date; or, (b) the Expiry Date. 1 copy of Schedule E Semi-Annual Status Update for the period commencing on the first anniversary of the Certification Date and ending on the earlier of: (a) the 180th day following the first anniversary of the Certification Date; or, (b) the Expiry Date. The earlier of: (a) the 180th day following the first anniversary of the Certification Date; or, (b) the Expiry Date. 1 copy of Schedule E Semi-Annual Status Update for the period commencing on the 181st day following the first anniversary of the Certification Date to the Expiry Date Expiry Date 1 copy of Schedule E All hard copy materials should be submitted to: Investment Ready: Certified Site Program Advanced Manufacturing Branch Ministry of Economic Development, Employment and Infrastructure 7th Floor, 56 Wellesley St. W. Toronto, ON M7A 2E7 All electronic materials should be submitted to investmentready@ontario.ca. 526 Page 23 of 37 SCHEDULE “C” SUMMARY OF ELIGIBLE COSTS TABLE I, , [name and title] of the Recipient, on behalf of the Recipient, do hereby certify that the following costs are eligible costs according to Schedule “F”. Eligible Cost Supplier Name Date of Invoice Invoice Amount Eligible Cost Amount Reimburse Amount (50%) Invoice Included (Y/N) Title Opinion Title Insurance Survey Report Environmental Site Assessment Environmental Assessment Archaeological Species at Risk Technical Heritage Documentation Review Digital Mapping Project Manager Fees* Total Note: The following costs are ineligible: (i) costs incurred prior to the Effective Date; and, (ii) costs for which no supporting invoice has been submitted within thirty calendar days of the Certification Date. See Schedule “F” for more details. *Up to a maximum “Total Amount” of $5000. IN WITNESS WHEREOF the undersigned has hereunto signed these presents this  day of , 201. Per: c/s [insert name and title of officer of Recipient] 527 Page 24 of 37 SCHEDULE “D” TEN MONTH CERTIFICATION PROCESS UPDATE DATE: TO: Ministry of Economic Development, Employment and Infrastructure Investment Ready: Certified Site Program 7th Floor, 56 Wellesley St. W. Toronto, ON M7A 2E7 Attention: RE: Agreement between Her Majesty the Queen in Right of Ontario as represented by the Ministry of Economic Development, Employment and Infrastructure (the “Province”) and  (the “Recipient”) dated  (the “Agreement”) Using the below table, for each criteria, please indicate whether all necessary assessments and supporting documentation have been completed, are in process or have not yet been initiated. For those criteria categories that have not been completed, provide details about the process, expected timelines or concerns with meeting deadlines. The section references below correspond to the sections listed in the Certification Instructions and Requirements under the heading “Certification Requirements”. Documentation Criteria Complete In Process Not Yet Initiated Details A.1: Truthful Representation A.2. Property Identification A.3. Title A.4. Property Characteristics and Surrounding Uses A.5. Developable Area A.6. Planning A.7. Transportation A.8. Servicing A.9. Environmental Site Assessments A.10. Archaeological Assessment A.11. Species at Risk Assessment A.12. Built Heritage and Culture Heritage Landscapes 528 Page 25 of 37 A.13. Environmental Assessment A.14. Documentation Review I, , [name and title] of the Recipient, on behalf of the Recipient, do hereby certify as follows: 1. the Recipient has satisfied all of the milestones and deliverables that are required to be met to date under the Agreement and is otherwise in compliance with all of the terms and conditions of the Agreement; 2. there have been no changes to date that would cause any of the information provided in the Pre-screening Application to be materially untrue or inaccurate and which would adversely affect the Recipient’s ability to obtain a Site Certification for the Site; and 3. there have been no changes to the condition of the Site that would make it ineligible for the Program or a Site Certification. IN WITNESS WHEREOF the undersigned has hereunto signed these presents this  day of , 201. Per: c/s [insert name and title of officer of Recipient] 529 Page 26 of 37 SCHEDULE “E” SEMI-ANNUAL STATUS UPDATE TEMPLATE DATE: TO: Ministry of Economic Development, Employment and Infrastructure Investment Ready: Certified Site Program 7th Floor, 56 Wellesley St. W. Toronto, ON M7A 2E7 Attention: RE: Agreement between Her Majesty the Queen in Right of Ontario as represented by the Ministry of Economic Development, Employment and Infrastructure (the “Province”) and  (the “Recipient”) dated  (the “Agreement”) Except as otherwise defined herein, all capitalized terms shall have the meanings given to them in the Agreement. I, , [name and title] of the Recipient, on behalf of the Recipient, do hereby certify as follows: 1. No event or circumstance has occurred that may adversely affect the Site’s eligibility for Site Certification. 2. The information provided in the Application to Certify and in the documents submitted in connection with such application continues to be true and accurate as at the date hereof. 3. The Site continues to satisfy the minimum eligibility requirements and certification requirements contained in Schedule “F”. 4. The Site has not been sold, leased or otherwise transferred and remains available for sale or lease in accordance with section 4.7 to the Agreement. 5. On and as of the date hereof, no Event of Default, whether or not Ontario has been given notice thereof, has occurred and is continuing. 6. I have reviewed the activities of the Recipient with a view of determining whether the Recipient has observed each of the covenants and conditions in the Agreement up to the date of this semi-annual update. I confirm that to the best of my knowledge and belief the Recipient has observed each of the covenants and conditions. [Note: include up to end of Term.] 7. For the Period dated ● [certification date or date of last semi-annual status update] to ● [today’s date] there have been: ● [number of] site visits by potential investors or site selectors on the site; ● [number of] enquires made about the prospective purchase of the site. 530 Page 27 of 37 8. For the Period dated ● [certification date or date of last semi-annual status update] to ● [today’s date], the following marketing or promotional materials have been developed (Please list all): a. ● b. ● These marketing or promotional materials follow the terms and conditions contained in the Guidelines for the Appropriate Use for the Program’s Official Seal, and copies of such material have been enclosed. IN WITNESS WHEREOF the undersigned has hereunto signed these presents this  day of , 201. Per: c/s [insert name and title of officer of Recipient] 531 Page 28 of 37 SCHEDULE “F” CERTIFICATION INSTRUCTIONS AND REQUIREMENTS Program Objective The Ontario Certified Site Program is a province-wide investment attraction program, the purpose of which is to promote an inventory of sites that meet a set of minimum requirements as outlined below. The program was designed by Deloitte Consulting, an internationally recognized leader in site selection. Information provided under the program is intended to include items most commonly required by those making site selection decisions for foreign direct investment and expansion projects. A site with an Investment Ready: Certified Site designation is intended to be attractive to potential investors and purchasers because it reduces some of the unknowns associated with development by providing detailed information about the availability, utilities servicing, access and environmental concerns. Providing this information can lead to faster site selection decisions and investment transactions. The benefits of this designation include the development of specialized marketing materials that are promoted to the site selection community, as well as a profile on the property on www.lnvestlnOntario.com and at key global investment attraction trade shows. Through this program, the Province of Ontario collects site related information from the land owner/applicant and assembles it into a consistent and easy to use format. Please note that the Province of Ontario will not represent or warrant the accuracy or completeness of the Application to Certify and any other information submitted by the applicant, owner or by third parties which may be made available to any agents, prospective purchasers or other parties. Purpose of Pre-screening The Pre-Screening application is the first step in the site certification process. Pre-screening Applications are used to determine eligibility for entry to the program. The purpose of the Pre-screening Application is to obtain general information about the site and determine whether mandatory eligibility and site requirements are met. Sites that meet the mandatory requirements identified in the pre-screening process will be eligible for acceptance into the certification program. Pre-screening will occur through a series of rounds with specific application deadlines. The number of eligible sites accepted into the program will depend on the number of applications received and availability of funding for eligible reimbursements. The fulfillment of minimum requirements does not guarantee acceptance into the program. Other information included in this application (e.g. site size, level of completed utilities servicing, proximity to transportation network, regional distribution, etc.) will be used to identify those sites that will be accepted into the program. 532 Page 29 of 37 Eligible applicants will be required to enter into a funding agreement with the Province of Ontario to be eligible for reimbursement of certain expenses (to a maximum of $25,000). Grant funding for reimbursements is through a discretionary fund and is subject to availability. An applicant will not be entitled to any grant funds if the site does not meet the requirements to achieve certification. In a case where a site is accepted through the application process, but funding is not available or the applicant/ landowner is unable to enter into a funding agreement, the applicant/owner will be given the option to either proceed with the certification process without receiving reimbursement or to reapply in a subsequent Pre-screening Application round. The Province of Ontario will endeavour to notify applicants of acceptance into the certification program within 45 days of the Pre-screening Application deadline. Minimum Eligibility Requirements The mandatory requirements that must be met for a site to be eligible for the certification program are identified below: Site Ownership The program is open to public and privately owned land. Property owner(s) must be willing to enter into a funding agreement with the Province to receive reimbursement through the grant program. Applicant Eligibility Applications must be submitted jointly by either municipalities or Economic Development Organizations (EDOs) and the owner(s) of the site. Applicants are limited to submitting two (2) sites for certification reimbursement per year. Commitment to Make the Property Available for Sale/Lease The property owner(s) must agree to make the property available for sale or lease for a period of two (2) years following the date of certification. Minimum Property Size The site must consist of at least four (4) hectares (ten (10) acres) of contiguous developable area. If the site is an assemblage of multiple properties, the properties must be contiguous and have the same registered owner on title. Existing Public Road Access The property must have existing road access from a public right-of-way or have plans to be able to extend road access within six (6) months of becoming certified. Official Plan and Zoning The property must be located within an urban or rural area designated for employment uses or industrial development in an in-effect municipal Official Plan and zoned to permit a range of industrial uses. Servicing and Utilities The property must either be serviced by existing water and wastewater systems, natural gas (for sites in municipalities with existing natural gas service), utilities and telecommunications or, alternatively, will be serviced within six (6) months of becoming certified. Major Development Constraints The property must be free of development constraints that could reasonably impact the developable area or range of industrial or other employment uses on the property. Potential constraints include restrictions on title, identified flood zones and the presence of significant natural environmental features or easements and existing Rights-of-Way. 533 Page 30 of 37 Pre-screening Application Letter confirming acceptance to program Yes No Letter indicating not accepted Submission of Application to Certify & Required Documentation Audit and Reimbursement of 50% of eligible expenses up to $25,000 Pre-screening Round Site Certification Audit & Reimbursement of Eligible Expenses Yes No Owner or applicant funds / undertakes certification requirements The Application to Certify and supporting documentation must be submitted within one (1) year. Letter confirming Certification Property owner enters into funding agreement with Province of Ontario The Ministry will endeavor to confirm site eligibility within forty-five (45) days following the closing of Pre-screening round. Reimbursement is contingent on achieving Certification. If a site is not successfully certified, the Ministry may grant an extension to the applicant(s) for the completion of additional due diligence/site remediation. Applicants can undertake additional due diligence/site remediation and resubmit for Certification approval Site remains certified for 2 years following date of Certification Certification Process The certification process is summarized in the following diagram: 534 Page 31 of 37 Certification Requirements The information below identifies and provides a brief description of information required to receive a Certified Site designation Certain studies identified in the requirements may be accepted if they were already completed prior to the certification process provided that they were undertaken within a reasonable timeframe, the subject or study area of the report encompasses the property in its entirety and there have been no significant changes to the property since the time of the report. The following studies, if already completed, may be accepted: Environmental Site Assessments, Archaeological Assessments, Species at Risk Assessments, Technical Heritage Reports and Environmental Assessments. Studies should be submitted with the Pre-screening Application form and applicants will be notified if they satisfy the necessary requirements. Note that Environmental Site Assessments should be no older than 6-9 months. Criteria Description of Requirements Documentation Required A.1 Truthful Representation • Signed letter from the applicant/property owner confirming that all materials are understood to be truthful and that there are no other known encumbrances affecting the property beyond those identified in the certification materials. • Signed form letter from applicant and owner (if different from applicant). A.2 Property Identification • Maps providing clear identification of property features, boundary and surrounding uses. • Context map illustrating location relative to regional transportation network, including rail, airports and ports. • Identification of closest sensitive land uses (residential or institutional) to the site as defined in Guideline D-6 Compatibility Between Industrial Facilities and Sensitive Land Uses (Ontario Ministry of the Environment, 1995). • Digital context map illustrating site location relative to regional transportation network. • Digital topographic map with environmental features for site and vicinity. • Digital orthophotography (20cm, orthorectified photography) for site and vicinity. A.3 Title • Provide results of a title search showing a clear title of the property. • Title Search Opinion prepared by a solicitor and/or Title Insurance. A.4 Property Characteristics and Surrounding Uses • Provide Plan of Survey and accompanying report (if applicable) outlining: legal description, address and property dimensions; location of all existing improvements; type and location of land related encumbrances or interests on property title; and surrounding uses. • Surveyor’s Real Property Report prepared by a licenced Ontario Land Surveyor. 535 Page 32 of 37 Criteria Description of Requirements Documentation Required A.5 Developable Area • Estimate of the developable area of the site, including supporting base map illustrating the parcel boundaries and developable area of the property after deductions including any setback/buffer requirements, including: floodplains, watercourses, woodlots and environmental features, easements, rights-of-way, or other encumbrances. • Topographic map showing environmental features and identifying the developable portion of the property. A.6 Planning • Provide details regarding the Official Plan designation/policies and zoning provisions, including range of permitted uses and setback requirements. • Identify zoning for adjacent properties. • Official Plan and Zoning By-law Excerpts, including relevant Official Plan schedules and zoning maps illustrating zoning for the subject property and adjacent properties. A.7 Transportation • Confirm existing access or plans to extend existing roads to access the site. • Confirm proximity to a major highway interchange. • Identification of property relative to rail lines, airport and port facilities. • Road classification or street maps illustrating existing transportation network, and if applicable, right-of-way widths and nature/timing of any proposed transportation improvements. • Regional map identifying closest rail, intermodal facilities, port and/or airports (where applicable). A.8 Servicing • Confirmation from the municipality and utilities providers regarding the presence of existing services or, where the site is not serviced, the timing, funding responsibilities and cost of extending services to the site. Services include the following infrastructure and utilities: o Water o Wastewater/sewer o Electricity o Natural gas o Telecommunications • Letters from the municipality and utilities providers that confirm the following: o Presence of existing services; o Excess capacity of existing services; o The timing and impact of any planned upgrades; and, o Where the extension of services is required to service the site, written confirmation that the site can be serviced within 6 months of the date of certification, that the timing is known or under control of the applicant or land owner, as well as an estimate of any cost to the landowner. • Infrastructure/utilities map(s) showing existing infrastructure for utilities and any proposed extensions • Letters from Service Providers. 536 Page 33 of 37 Criteria Description of Requirements Documentation Required A.9 Environmental Site Assessments • Qualified person must make statements and provide certifications about the environmental condition of the property, including verifying that the soil, ground water and sediment as required • Recently completed or updated Phase 1 Environmental Site Assessment and, if necessary, a Phase 2 Environmental Site Assessment conducted by a Qualified Person as defined in Part II of Ontario Regulation 153/04. • Verification that the Record of Site Condition has been filed to the Environmental Site Registry by the Ministry of the Environment, if applicable. A.10 Archaeological Assessment • Completion of all necessary stages of archaeological assessment (1-4). Only where sites are recommended for further assessment will Stage 3 and possibly Stage 4 be required. • Stage 1-4 Archaeological Assessment reports (as necessary). Assessments must be conducted by an archaeologist licensed in accordance with Part VI of the Ontario Heritage Act. • A copy of the letter(s) from the Ministry of Tourism, Culture and Sport to the licensed archaeologist confirming that all necessary archaeological assessment reports have been entered into the Register. A.11 Species at Risk • If a federally or provincially protected species or habitat is suspected to be associated with a site, then the appropriate assessments (with consideration given to timing/seasonality) should be undertaken. • If it is determined that a Species at Risk Assessment is not necessary, a written confirmation letter from a qualified environmental professional shall be required. • Species at Risk Assessment prepared by a qualified environmental professional indicating if and which species at risk are present. • Letter from the Ministry of Natural Resources confirming that the assessment has been reviewed. 537 Page 34 of 37 Criteria Description of Requirements Documentation Required A.12 Built Heritage and Cultural Heritage Landscapes • If the property is designated under the Ontario Heritage Act or listed on a municipal heritage register, completion of any required technical heritage studies as part of planning approvals. • If the property is owned or controlled by the Provincial government, assurance that the applicable provisions of the Standards and Guidelines for Conservation of Provincial Heritage Properties (2010) have been met. • If the property contains a former federal heritage building, a best effort demonstration to preserved the heritage character should have been made. • If it is determined that a Built Heritage and/or Cultural Heritage Landscape report is not necessary, a written confirmation letter from a municipal employee shall be required. • Technical heritage reports (if requested by the municipality). • Copy of any heritage permits or documents from Council providing consent for alterations. • Cultural Heritage Evaluation Report (CHER), or other technical heritage report, if one was completed as part of the EA process or a planning process authorized by legislation. • Strategic Conservation Plan, if the CHER identifies the property as a provincial heritage property legislation. • Copy of the Letter from the Minister Tourism Culture and Sport granting consent for disposition (transfer out of provincial control). • Written confirmation from the Federal Heritage Review Office that the requirements for disposal have been met. A.13 Environmental Assessment, if applicable • Confirmation of approvals under applicable environmental assessment processes required to facilitate the proposed undertaking, including sale/ lease of the property. • Statement of Completion, Ministry of Environment Minister's or Director's Decision Letter or a Notice of Approval. A.14 Documentation Review • Confirmation that: o All information and documentation required as part of this program are submitted; and o Studies and documentation meet the requirements of the certification process and demonstrate they were prepared by the required professionals and their findings support the certification of the site based on the criteria outlined and the purpose and stated objective of the Investment Ready Certified Site Program. • Letter from licenced Engineer, Surveyor or Registered Professional Planner and/or • Letter from a Real Estate Lawyer. 538 Page 35 of 37 Purpose of the Application to Certify The information collected in the application is a requirement for certification designation and will be used in developing marketing materials that will be distributed to site selection firms and/or investors seeking location opportunities in Ontario. It is desirable that applicants provide clear and detailed information, as this document may be sent in response to investment enquires. Application Submission Submit one (1) hard copy and (1) electronic copy (USB or CD) of the application and supporting documents to: Ministry of Economic Development, Employment and Infrastructure Advanced Manufacturing Branch Investment Ready: Certified Site Program 56 Wellesley St. W., 7th Floor Toronto ON M7A 2E7 In addition, email one (1) copy of the application form to investmentready@ontario.ca. Upon review of the application and certification documentation, applicants will be notified of certification. A site will remain certified for two (2) years, provided the condition of the site does not change. Eligible Costs and Reimbursement A maximum grant of 50% of eligible costs, up to $25,000 per application, will be paid as a reimbursement of eligible costs provided the following conditions have been met: • Applications have been accepted into the program through the Pre-screening Application process; • Sites have met all certification requirements and have been successfully certified; and • The Property Owner has entered into and agreed to the terms of a funding agreement with the Province of Ontario. To receive reimbursement, invoices for each eligible cost are required and must be submitted within thirty calendar days of the Certification Date. The invoices must be accompanied by a Summary of Eligible Costs Table (provided in the funding agreement). The grant will be paid in accordance with the terms and conditions of a funding agreement satisfactory to the Province of Ontario. Eligible expenditures must be directly related to the project and be actual cash outlays to third parties that are documented through paid invoices and proofs of payment. Eligible costs include assessments and documentation prepared by qualified professionals for the following services: • Title opinion. • Surveyor’s Real Property Report. • Environmental Site Assessments. • Environmental Assessments. 539 Page 36 of 37 • Archaeological Assessments. • Species at Risk Assessment. • Technical Heritage Reports. • Documentation Review. • Production of digital mapping and municipal documents (Official Plans, Zoning By- laws, etc.). • Management of the application process by a third party project manager (a maximum of 10% of eligible costs up to $5,000). Ineligible costs include: • Infrastructure or capital costs related to bringing the site up to eligibility. • Costs incurred prior to the Effective Date as outlined in the funding agreement with the Province of Ontario. • Costs incurred by an Ontario Ministry, Agency or Crown Corporation. • Travel costs incurred by the applicants\property owner as a result of the preparation of the application. • Ongoing operational expenses including labour costs, eg. salaries, wages, including those of staff working on the certification application. • Costs not incurred in Ontario, except when the only supplier(s) of services are outside of Ontario. • Entertainment expenses, meals or alcoholic beverages. • In kind contributions. • Costs, including taxes, for which the applicant(s) has received, will receive or is eligible to receive a rebate, credit or refund. Contact Us Program staff and OPS regional economic development staff are available to answer your questions. Contact the Investment Ready: Certified Site Program office at 1-855-585-0475 or at investmentready@ontario.ca. Visit our website at www.ontario.ca/certifiedsite for more information. 540 Page 37 of 37 SCHEDULE “G” LEGAL DESCRIPTION OF SITE PIN NO. 00035-0343 (LT) PT LT 2-3 CON 5 NTR MIDDLETON, PT 1 PLAN 41R8497; TOWN OF TILLSONBURG PIN NO. 00035-0344 (LT) PT LT 2-3 CON 5 NTR MIDDLETON PT 1 & 2, 41R3421 & PT 5 & 6, 41R3691 EXCEPT PT 2, 41R5307, EXCEPT PT 1, 41R5366, EXCEPT PT 1 & 2, 41R5504 & EXCEPT PT 1, 41R8497; DESCRIPTION MAY NOT BE ACCEPTABLE IN FUTURE; TOWN OF TILLSONBURG 541 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 3928 A BY-LAW to enter into an agreement with Her Majesty The Queen In Right Of Ontario as represented by the Minister of Economic Development, Employment and Infrastructure. WHEREAS the Government of Ontario has created the Ontario Governments Certified Site Program to provide eligible applicants under the program to receive reimbursements for eligible costs incurred under the Program. WHEREAS The Town of Tillsonburg is desirous of entering into an Agreement with Her Majesty The Queen In Right Of Ontario for the Certified Site Program. THEREFORE the Council of the Town of Tillsonburg enacts as follows: 1. THAT the agreement attached hereto forms part of this by-law; 2. THAT the Mayor and Clerk be hereby authorized to execute the attached agreement on behalf of the Corporation of the Town of Tillsonburg. READ A FIRST AND SECOND TIME THIS 13 th DAY OF July, 2015. READ A THIRD AND FINAL TIME AND PASSED THIS 13th DAY OF July, 2015. _____________________________ Mayor – Stephen Molnar _____________________________ Town Clerk – Donna Wilson 542 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 3925 A By-Law to amend Zoning By-Law Number 3295, as amended. WHEREAS the Municipal Council of the Corporation of the Town of Tillsonburg deems it advisable to amend By-Law Number 3295, as amended. THEREFORE, the Municipal Council of the Corporation of the Town of Tillsonburg, enacts as follows: 1. That Schedule "A" to By-Law Number 3295, as amended, is hereby amended by changing to ‘R1-16’ the zone symbol of the lands so designated ‘R1-16’ on Schedule “A” attached hereto. 2. That Section 6.5 to By-Law Number 3295, as amended is hereby further amended by adding the following subsection at the end thereof: “6.5.16 LOCATION: EAST SIDE OF OLD VIENNA ROAD, PART BLOCK A, PLAN 966, R1-16 (Key Map 29) 6.5.16.1 Notwithstanding any provisions of this By-Law to the contrary, no person shall within any R1-16 Zone use any lot, or erect, alter, or use any building or structure for any purpose except the following: all uses permitted in Table 6.1. 6.5.16.2 Notwithstanding any provisions of this By-Law to the contrary, no person shall within any R1-16 Zone use any lot, or erect, alter, or use any building or structure for any purpose except in accordance with the following provisions: 6.5.16.2.1 Notwithstanding any provisions of this By-Law to the contrary, within any R1-16 Zone, the provisions of Section 5.30.2 (Environmental Protection 2 Overlay and Fish Habitat) shall not apply. 6.5.16.3 That all of the provisions of the R1 Zone in Section 6.2 of this By-Law, as amended, shall apply; and further, that all other provisions of this By-Law, as amended, that are consistent with the provisions herein shall continue to apply mutatis mutandis.” 3. This By-Law comes into force in accordance with Sections 34(21) and (30) of the Planning Act, R.S.O. 1990, as amended. 543 The Corporation of the Town of Tillsonburg By-law Number 3925 Page 2 READ a first and second time this 13th day of July, 2015. READ a third time and finally passed this 13th day of July, 2015. Mayor – Stephen Molnar Clerk – Donna Wilson 544 N .W . A N G L E B L O C K A , P L A N 9 6 6 P L A N 9 6 6 N 6 0 °1 0 '0 0 "E 1 8 .5 3 N 1 3 °2 7 '5 0 "E 2 4 .5 0 N 2 0 °0 1 '2 0 "E 3 6 .0 8 N52°36'37"W 52.69 N 2 0 ° 2 8 ' 0 0 " W 5 4 . 7 4 B L O C K A O L D V I E N N A R D S C H EDU L E "A" PT BLOCK A, PLAN 966TOWN OF TILLSONBURG AREA OF ZONE CHANGE TO R1-16 NOTE: ALL DIMENSIONS IN METRES THIS IS SCHEDULE "A" MAYOR CLERK TO BY-LAW No. ________________, PASSED THE __________ DAY OF ____________, 2015 5 0 5 10 152.5 METRES TO BY-LAW No.© 545 ZN 7-15-04 TOWN OF TILLSONBURG BY-LAW NUMBER 3925 EXPLANATORY NOTE The purpose of By-Law Number 3925 is to rezone the subject property from ‘Low Density Residential Type 1 Zone (R1)’ to ‘Special Low Density Residential Type 1 Zone (R1-16)’ to permit the development of a single detached dwelling within the Environmental Protection 2 Overlay. The subject property is legally described as Part Block A, Plan 966, Town of Tillsonburg. The subject property is located on the east side of Old Vienna Road, lying between Van Street and Simcoe Street. The lands are municipally known as 30 Old Vienna Road, Tillsonburg. The Municipal Council, after conducting the public hearing necessary to consider any comments to the proposed zone change application, approved By-Law Number 3925. The public hearing was held on July 13, 2015. Any person wishing further information relative to Zoning By-Law Number 3925 may contact the undersigned: Ms. Donna Wilson Clerk Town of Tillsonburg 200 Broadway, 2nd Floor Town Centre Mall Tillsonburg, ON N4G 5A7 Telephone: 842-9200 File: ZN 7-15-04 (John Veldman) Report No: 2015-148 546 Big Otter C r e e k LINCOLN ST V I E N N A R D H A R V E Y S T OXFORD ST O A K S T SIMCOE ST C A T A L L E Y L O N D O N S T E P I N E A V E EARLE ST ELEANOR CRT T I L L S O N A V E BALL ALLEY STUBBS CRT J O H N P O U N D R D VAN ST VERNA DR B L O O M E R S T T I L L S O N S T C E D A R S T B R O A D W A Y O L D V I E N N A R D E L M S T KEY MAP LANDS TO WHICH BYLAW ____________ APPLIES © 50 0 50 100 15025 METRES 547 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 3926 A By-Law to Designate a Certain Area of Land within the Town of Tillsonburg as a Site Plan Control Area affecting property described as Part Block A, Plan 977, Tillsonburg in the Name of John Veldman. WHEREAS the Municipal Council of the Corporation of the Town of Tillsonburg is empowered to enact this By-Law, by virtue of the provisions of Section 41 of the Planning Act, R.S.O. 1990, c.P.13, as amended; AND WHEREAS this By-Law conforms to the Oxford County Official Plan. NOW THEREFORE the Municipal Council of the Corporation of the Town of Tillsonburg hereby enacts as follows: 1. That all development located on the said lands as identified on attached ‘Schedule A” shall be subject to and in accordance with a development agreement, if required, pursuant to Section 41 of the Planning Act, R.S.O. 1990, c.P.13, as amended; 2. That notwithstanding By-law 3515, the development of a single detached dwelling on lands identified on attached ‘Schedule A’ shall be subject to site plan control. 3. That the effective date of this By-Law shall be the date of final passage thereof. READ a first and second time this 13th day of July, 2015. READ a third time and finally passed this 13th day of July, 2015. Mayor – Stephen Molnar Clerk – Donna Wilson 548 N.W. ANGLE BLOCK A, PL A N 9 6 6 P L A N 9 6 6 N60°10'00"E 1 8 . 5 3 N13 ° 2 7 ' 5 0 " E 2 4 . 5 0 N20° 0 1 ' 2 0 " E 3 6 . 0 8 N5 2 ° 3 6 ' 3 7 " W 5 2 . 6 9 N 2 0 ° 2 8 ' 0 0 " W 5 4 . 7 4 B L O C K A O L D V I E N N A R D SCHEDULE "A" PT BLOCK A, PLAN 966TOWN OF TILLSONBURG SUBJECT LANDS NOTE: ALL DIMENSIONS IN METRES THIS IS SCHEDULE "A" MAYOR CLERK TO BY-LAW No. ________________, PASSED THE __________ DAY OF ____________, 2015 5 0 5 10 152.5 METRES TO BY-LAW No.©3926 3926 549 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 3927 BEING A BY-LAW to confirm the proceedings of Council at its meeting held on the 13th day of July, 2015 WHEREAS Section 5 (1) of the Municipal Act, 2001, as amended, provides that the powers of a municipal corporation shall be exercised by its council; AND WHEREAS Section 5 (3) of the Municipal Act, 2001, as amended, provides that municipal powers shall be exercised by by-law; AND WHEREAS it is deemed expedient that the proceedings of the Council of the Town of Tillsonburg at this meeting be confirmed and adopted by by-law; NOW THEREFORE THE MUNICIPAL COUNCIL OF THE CORPORATION OF THE TOWN OF TILLSONBURG ENACTS AS FOLLOWS: 1. All actions of the Council of The Corporation of the Town of Tillsonburg at its meeting held on July 13, 2015, with respect to every report, motion, by-law, or other action passed and taken by the Council, including the exercise of natural person powers, are hereby adopted, ratified and confirmed as if all such proceedings were expressly embodied in this or a separate by-law. 2. The Mayor and Clerk are authorized and directed to do all the things necessary to give effect to the action of the Council of The Corporation of the Town of Tillsonburg referred to in the preceding section. 3. The Mayor and the Clerk are authorized and directed to execute all documents necessary in that behalf and to affix thereto the seal of The Corporation of the Town of Tillsonburg. 4. This By-Law shall come into full force and effect on the day of passing. READ A FIRST AND SECOND TIME THIS 13th DAY OF July, 2015. READ A THIRD AND FINAL TIME AND PASSED THIS 13th DAY OF July, 2015. _____________________________ Mayor – Stephen Molnar ______________________________ Town Clerk – Donna Wilson 550 THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 3924 A By-Law to amend Zoning By-Law Number 3295, as amended. WHEREAS the Municipal Council of the Corporation of the Town of Tillsonburg deems it advisable to amend By-Law Number 3295, as amended. THEREFORE, the Municipal Council of the Corporation of the Town of Tillsonburg, enacts as follows: 1. That Schedule "A" to By-Law Number 3295, as amended, is hereby amended by changing to ‘R2’ the zone symbol of the lands so designated ‘R2’ on Schedule “A” attached hereto. 2. This By-Law comes into force in accordance with Sections 34(21) and (30) of the Planning Act, R.S.O. 1990, as amended. READ a first and second time this 13th day of July, 2015. READ a third time and finally passed this 13th day of July, 2015. Mayor – Stephen Molnar Clerk – Donna Wilson 551 A L L E Y L O T 2 8 N 1 0 °5 3 '4 0 "W 3 9 .8 1 N 1 1 °0 2 '0 0 "W 3 9 .8 1 N78°37'10"E 39.93 N78°37'10"E 40.03 T I L L S O N A V E BARKER ST L O T 2 7 P L A N 5 0 0 S C H EDU L E "A" LOTS 27 AND 28, PLAN 500TOWN OF TILLSONBURG AREA OF ZONE CHANGE TO R2 NOTE: ALL DIMENSIONS IN METRES THIS IS SCHEDULE "A" MAYOR CLERK TO BY-LAW No. ________________, PASSED THE __________ DAY OF ____________, 2015 5 0 5 10 152.5 METRES TO BY-LAW No.© 552 ZN 7-15-03 TOWN OF TILLSONBURG BY-LAW NUMBER 3924 EXPLANATORY NOTE The purpose of By-Law Number 3924 is to rezone the subject property from ‘Neighbourhood Commercial Zone (NC)’ to ‘Low Density Residential Type 2 Zone (R2)’ to permit the duplex conversion of the existing single detached dwelling. The subject property is legally described as Lots 27 & 28, Plan 500, Town of Tillsonburg. The subject property is located on the north east corner of the Tillson Ave / Barker Street intersection. The lands are municipally known as 304 Tillson Ave, Tillsonburg. The Municipal Council, after conducting the public hearing necessary to consider any comments to the proposed zone change application, approved By-Law Number 3924. The public hearing was held on July 13, 2015. Any person wishing further information relative to Zoning By-Law Number 3924 may contact the undersigned: Ms. Donna Wilson Clerk Town of Tillsonburg 200 Broadway, 2nd Floor Town Centre Mall Tillsonburg, ON N4G 5A7 Telephone: 842-9200 File: ZN 7-15-03 (Krystal & Michael West) Report No: 2015-147 553 C A N A D I A N P A C I F I C R A I L W A Y BARKER ST T I L L S O N A V E CLARKE ST E M A G N O L I A D R W E L L I N G T O N S T CHARLES ST NORTH ST E NELSON ST BOND ST CLARKE ST W LISGARAVE HERFORD STSANDY CRT LINDSAY ST KEY MAP LANDS TO WHICH BYLAW ____________ APPLIES © 50 0 50 100 15025 METRES 554