Water for Life – New regional water systems

Important dates

Overview

Water for Life funding is available to regional commissions or groups of 2 or more municipalities for new regional water or wastewater systems.

Funding

Funding levels vary depending on the project type.

Table 1. Funding levels at a glance

Example:

Project type: A pipeline extension to 3 towns and one non-eligible industrial partner that needs 25% of the project capacity. Water is obtained from a 4th hub municipality.

Total project cost: $15 million:

• $10 million for the pipeline, consisting of:
  • $9 million: cost of the pipeline to serve the 3 municipalities
  • $1 million: Alberta Transportation has requested that the pipeline be built large enough for a future extension to a 4th municipality.
• $5 million for the capacity upgrade at the hub supplier water treatment plant
  • 60% of the plant upgrade is for the new customers

Project partners:

• 3 municipalities with a total official population of 7,000
  • Community A: 1,000
  • Community B: 2,300
  • Community C: 3,700
• Agricultural processing industry (non-eligible industrial partner) that uses 25% of project capacity
• Hub supplier’s population: 100,000

Table 2. The total grant for this project example is calculated as follows:

Eligibility

Eligible applicants

Funding under Water for Life is available to all regional commissions or groups of 2 or more municipalities (or eligible hamlets) that are eligible for funding under the Alberta Municipal Water/Wastewater Partnership (AMWWP):

• regional commissions
• groups of 2 or more eligible municipalities (or eligible hamlets) which include:
  • cities (under 45,000 population)
  • towns
  • villages
  • summer villages
  • rural municipalities
  • Metis Settlements
• municipal partnerships
• public-private ventures
• municipalities with contracted services to privately owned utilities

Eligible projects

Monitoring and control equipment

The capital costs of installing initial monitoring and control equipment needed to form an operational consortium (consisting of municipalities or commissions) for groups of municipal water and wastewater facilities is eligible for 90% in funding. Standalone systems that are eligible for funding under the Alberta Municipal Water/Wastewater Partnership are eligible for Water for Life Funding if 2 or more systems are linked.

New pipelines and treatment upgrade

The new pipeline system’s primary purpose must be for domestic (household) use. Municipalities that want to build pipelines for another primary purpose can contact Alberta Transportation for more information.

Alberta Transportation will evaluate project applications in conjunction with other ministries based on:

• project need
  • health issues
  • future water availability
• cost effectiveness of the proposed design compared to other alternatives, including user rates
• project benefits
• alignment with Water for Life principles and Alberta Environment and Parks Water for Life facility assessment
• funding availability
• appropriate staged construction scheduling and readiness to proceed

Funding for pipelines takes into account the area’s total water requirements, including industrial, rural residential, First Nation lands and other uses. Portions of new developments planned for the area may be eligible for assistance. Individual situations must be reviewed and approved by the department.

Feasibility studies

Feasibility studies to evaluate new regional systems may be funded at 100%. Feasibility studies must meet the following requirements:

• municipalities must receive approval for the study prior to seeking funding through this program
• municipalities must submit a copy of the terms of reference for the regional feasibility study to Alberta Transportation
• Alberta Transportation must approve the terms of reference
• applications for regional feasibility studies must include a copy of the selected consultant's proposal
• all studies will be managed by a steering committee of representatives from Alberta Transportation, Alberta Environment and Parks, and the municipalities

The consultant's work plan must include, but is not limited to, the following actions:

• collect and review all previous relevant studies
• review existing facilities and identify upgrades required for each member municipality's water supply and treatment system and/or wastewater treatment and disposal system for a 25-year design based on current standards
• identify regional servicing options to meet each member municipality's requirements for the 25-year horizon, based on current standards
  • the new regional system will need to demonstrate acceptable design life, per capita flows, industrial flow estimates and peaking factors
• identify environmental issues to be addressed, such as water licences, regulations, effluent standards, and water conservation strategy
• identify public health issues which are associated with each alternative.
• Provide current costs for the upgrades required on the individual systems and the regional options
  • cost of the hub supplier's upgrades should be included in the analysis
  • cost estimates should follow the cost estimate requirements
• provide a 25-year net-present-value (NPV) analysis/comparison between the stand-alone systems and the regional option(s)
  • NPV analysis must include annual operating and maintenance and capital construction costs using whole dollar costs
  • consideration will not be given for any provincial and/or federal grants in the analysis/comparisons
• provide recommendations for project implementation, including phased construction

Additional criteria

• Environmental requirements may be taken into account as well as efficiencies in management and operational practices.
• Municipalities are required to carry out projects on a contract basis.
• All services, material and equipment used on funded projects must be from the private sector.
• Municipalities are encouraged to support Alberta companies supplying goods and services to the waterworks and wastewater industry.
• The applicant must demonstrate that the regional project option is cost-effective and can be economically justified compared to other facility solutions.

Optional application information

• Provide full lifecycle costs of the project (include initial capital costs, maintenance and operating costs).
• Asset management planning information.
• Identify any innovative construction material or water/wastewater techniques that will reduce construction and operating costs.

Eligible costs

The grant can cover the following costs:

• construction costs
• right-of-way acquisition and/or land costs, including expropriation costs
• relocation and adjustment of associated utilities
• engineering costs
• survey fees
• legal fees
• advertising for tenders
• other costs (such as audit fees)

Municipalities should contact Alberta Transportation to determine eligibility of other related costs.

Ineligible costs

The grant will not cover the following costs:

• municipal labour and equipment
• administration costs, such as municipal employee and council member salaries and office administration costs
• GST
• water licence costs

How to apply

Step 1. Select project

Municipalities should contact Alberta Transportation prior to applying to discuss the eligibility of proposed projects.

The municipal council must make a motion to apply for funding for the project.

Step 2. Complete the application package

Alberta Transportation will work with the municipality to review the scope of work and the cost-effectiveness of the project.

Regional Directors and Infrastructure Managers in Alberta Transportation’s regional offices are available to provide advice to the municipality during the preparation of the project proposal.

Include the following documents in the application package:

• a letter to the Regional Director in the Alberta Transportation Regional Office (PDF, 148 KB) from each member municipality or the regional commission requesting funding
• request for funding
• project description
• project rationale (design criteria)
• proposed implementation schedule
• detailed cost estimates following the cost estimate requirements
• outline of how the municipal share of project costs will be funded (if applicable)
• proposed rates and the impact on the cost for services for each member municipality
• rate base for water and wastewater service and the extent of metering for each member municipality
• method of procurement
• asset management planning information (where applicable)
• outline any innovative construction materials used or techniques

The municipality must enter the project information in the Municipal Grants Management Application.

Step 3. Submit the application package

Submit the application package in person or by mail to your local Alberta Transportation Regional Office (PDF, 148 KB).

Find your region by checking the Municipalities, Locations and Corresponding Alberta Transportation Regions list (PDF, 608 KB).

After you apply

Applicants will be notified in writing of the project's eligibility for funding.

Project approval is conditional upon funding availability and the suitability of the project.

Applications will be evaluated based on:

• project size
• design
• staging
• need
• cost-effectiveness
• municipal population (actual and projected)

The following will also be considered:

• date the application is submitted
• type of project, prioritized as follows:
  • Priority 1: health-related improvements involving upgrading water treatment or water supply facilities
  • Priority 2: environmental protection improvements related to wastewater treatment projects affecting the environment
  • Priority 3: system and development related improvements, such as safety, fire protection and operational improvements

Step 4. Sign memorandum of agreement

Alberta Transportation, in consultation with the municipality, will select a payment method for each approved project. Larger, more complex projects will require a formal agreement with the municipality.

Alberta Transportation will develop a memorandum of agreement outlining its responsibilities and the municipality’s responsibilities. The agreement will include a grant calculation chart and grant payments schedule.

The mayor or reeve and chief administrative officer must sign 2 copies of the agreement on behalf of the municipality. The signed copies must be witnessed or sealed and then returned to the department for execution.

Step 5. Select construction basis

Work on the funded project must be done on a contract basis.

Work undertaken with municipal forces (equipment and labour) is not eligible under the program.

When renting equipment for construction on a day labour basis, the rental rates for equipment must not exceed the current year rental rates as published in the Alberta Roadbuilders and Heavy Construction Association’s Equipment Rental Rates and Membership Roster.

The municipality must advertise tenders for projects undertaken on a contract basis.

Step 6. Accept lowest bid

Alberta Transportation follows the principle of awarding work to the lowest bona fide bidder.

Municipalities are required to do the same and award work to the lowest bona fide bidder when tendering projects funded by the department.

If the municipality accepts a higher bid without prior approval from the department, the municipality will jeopardize the grant funding for its project.

If the municipality believes there are exceptional circumstances where the lowest bid is unacceptable, it must submit a written report to Alberta Transportation requesting approval to award to other than the low bidder.

The report must clearly explain the municipality’s reasons for the recommendation and provide details of all tenders received. The department will review the report and advise the municipality how it will impact the grant funding.

The municipality must provide the following information before receiving payment:

• a summary of tenders
• price schedule of the selected tender
• estimated construction start date
• project costs to date

Step 7. Conduct work

The municipality is responsible for:

• financing the entire cost of the project
• getting all necessary permits, licences, authorities, property easements and lands
  • municipal water and wastewater projects are subject to the provisions of the Environmental Protection and Enhancement Act. Before receiving any funding, the municipality must contact Alberta Environment and Parks to get approvals
• retaining competent engineering expertise as required to meet provincially acceptable design, construction and environmental standards
• building the project at sole risk in accordance with the project's plans and specifications
• assuming all liability for damage claims related to the project

Step 8. Receive advance payment(s)

After Alberta Transportation has reviewed the project status it may provide the municipality with an advance payment which is a portion of the estimated grant.

Depending on the program’s cash flow and the status of project, the amount and timing of funding payments may vary.

The timing of the payments can be structured to flow with the construction of the project as determined during the approval process.

The final payment is then issued upon completion and verification of costs.

Step 9. Deposit funds in separate account

Funds received from Alberta Transportation that exceed current expenditures must be invested in a separate account.

The interest earned from these funds must be applied to reduce the total project costs, excluding GST.

Project revenue earned through the investment of these funds will be deducted from project costs before the grant calculation is made.

Contact Alberta Transportation for more information on this interest policy.

Step 10. Notify when project is 80% complete

The municipality must keep Alberta Transportation regularly informed of the project’s progress.

Before receiving additional payment, the municipality must notify the department in writing of costs incurred to date when the project is nearly 80% complete.

Other advance payments may be available over the course of the project, depending on project size and funding availability.

Step 11. Complete work

Once the municipality is satisfied that the project is complete, it must notify Alberta Transportation and prepare its submission for final payment.

The department may either inspect the project work or ask the municipality to provide evidence that a professional engineer completed an inspection.

Step 12. Submit final payment claim form

The municipality must submit the following information to Alberta Transportation to receive the final grant payment after the project is complete:

• final payment claim form with project invoices and revenues
  • construction and engineering costs must be itemized separately
• summary of details of interim financing charges, if applicable
• details of interest earned on the project
• confirmation, on municipal letterhead, that the project is complete

The municipality must advise the department of any cost changes that occurred.

Step 13. Receive final payment

Alberta Transportation will review the final claim before making the final payment to the municipality.

The department may audit projects that receive grant funding.

Reporting

Revisions

The municipality must notify Alberta Transportation of project cost or scope changes as soon as possible.

The department will review the information and may approve funding and scope changes that fall within the eligibility limits. Scope changes and cost increases will be considered new projects and may be eligible for future grants.

Grant recipients

Recent recipients

2018 Water for Life grant recipients

Past recipients

Water for Life grants to municipalities - 2015 to 2018
Water for Life grants to municipalities - 2004 to 2015