M E M O R A N D U M

TO: Peter Loukes, Director of Operations

FROM: Ernie Ting, Manager of Infrastructure- Waterworks

COPY TO: Jerry Klaus, General Manager of Waterworks

DATE: June 21, 2007

SUBJECT: LiquiForce Sewer Service Inc. – Baythorn Drive Sewer Back-up

LiquiForce Sewer Services Inc. has worked for the Town since 1994. They have been awarded several contracts (sewer rehabilitation) in the past as the lowest bidder through the process of contract tendering. In all the contracts that they have performed, staffs were satisfied with their performance. All contracts were performed without any incident of sewer back-up caused by work they are performing or performed.

In 1995, LiquiForce was awarded a new tendered contract for sanitary sewer rehabilitation. This contract consist of repairs and rehabilitation of sanitary sewers to maintain, extend the life and removal of blockages such as calcite, roots, grease and debris to prevent sewer back-up. The contract was extended in 2006 based the previous year’s cost and very satisfactory performance.

In December of 2006, a sewer backup occurred in several homes at Baythorn Drive in Thornhill. Investigation by the Town has identified the caused of the sewer back-up was due to the work being performed by LiquiForce located four sections of sanitary sewer downstream. LiquiForce has admitted full liability on this incident.

The homes investigated for sewer back-up at Baythorn Drive are #121, #123, #124, #125, #126. All the homes sustained minor or no damage with the exception of #125. Town investigation on #125 the following day of the indicated about 2-3 inches of back-up in the basement and all things have been carted already outside the house. Town and LiquiForce had no success in gaining access the house #126.

All homeowners were given information and advised to file a claim as necessary to the Town’s Clerk’s Department regarding this incident. Clerk’s Department and Town insurer were advised to forward the claim to LiquiForce who claims full liability on this incident. Two claims (#123 and #125) have been filed through the Clerk’s Department on this incident. #123 Baythorn Drive claim has been settled. Documentation of damages claim from #125 Baythorn Drive has not been submitted and waiting for settlement of the claim.

The incident of sewer backup in Baythorn Drive caused by LiquiForce performance of work is the only incident since LiquiForce started working in Markham in 1995. Liquiforce has performed work on over 300 km. of sewers and performed hundreds of structural spot repairs in various sizes and locations. Waterworks staff are quite satisfied with LiquiForce performance and response to ours and customers needs. The Baythorn incident is an isolated incident and further steps have been taken so that a similar incident will not happen.

Should you have any concern, please call me at ext. 3650.