The City of Guelph owns properties that are contaminated because of the historic use of the land, including landfills that are now closed and industrial activities prior to City-ownership. Although the contamination at each site is different, it’s closely monitored to ensure risks are managed according to the Ministry of the Environment, Conservation and Parks’ requirements.
As part of the 2015 audited Financial Statements, the City was required to value the liability related to cleaning up the contamination on inactive sites. At that time, the City began allocating a portion of the annual capital funding to address this long-term liability over time. The current estimated valuation of this liability is $24 million, about $6 million better than in 2015 given the work done on those sites through that period.
The capital projects used to monitor and complete the environmental cleanup activities are part of the Contaminated Sites Program of Work under Sustaining our Future in the capital budget. The 2022 and 2023 capital funding transfer from the tax-supported budget is $2.5 million and $500,000 from each of Wastewater and Water Services capital reserve funds, for total annual funding of $3.5 million annually.
The outcome of this investment will be sites that are returned to a useable status with risks to the surrounding environment or people minimized or eliminated. In some cases, these sites may be redeveloped for active uses such as residential or Institutional/Commercial/Industrial (ICI). The goal of this strategy is to bring the liability down to less than $5 million over the next 10 to 25 years.
In addition to the sites currently identified as inactive, there are active sites for which there may be contamination issues or other financial obligations associated with the retirement of assets currently in use. The City is currently working to identify its Asset Retirement Obligations (ARO) as defined by the Public Sector Accounting Standards PS 3280, which must be implemented for the City’s 2023 financial statements. Staff will report to Council closer to implementation with more information about the liability impact and any change to the current funding strategy. This new accounting standard applies to both active and inactive land, buildings and equipment, and for this reason, it is likely that the City’s liability will increase from the current non-active property disclosure. Work will be done to identify these potential costs as plans to replace existing facilities are completed; the most significant assets known at this time are 45 and 50 Municipal Street (Operations and Parks Operations) and 50 Wyndham Street South (Guelph Fire headquarters).