A new water treatment facility near the Trans-Canada Highway (above) and city's river valley power plant is about 10 per cent over budget after delays in getting regulatory approval, according to city officials.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
The city’s construction of a long-planned water treatment facility is taking longer to construct and will be more costly to build than first estimated, council heard this week.
The plant was begun last year after years of putting off the project, but a budget estimate of nearly $30 million will require an additional $3.85 million to complete after delays caused in part by waiting for provincial authorities to approve construction.
That did not sit well with several councillors who argued the plant is being built to meet provincial water treatment standards and said the province should be charged the difference.
“I don’t think we should roll over and play dead on this,” said Coun. Robert Dumanowski, who suggested the city should simply halt construction until a new costing agreement could be struck.
However, council passed a motion by an 8-1 margin to use infrastructure reserve cash to complete the project.
The plant is needed to meet new Alberta Environment standards discharge rules for putting water back in the river, essentially cleaning it before it is put through the city’s system for local use.
“This was thrust upon us by the province, and we’ve done our best to differ it (over time),” said Coun. Darren Hirsch. “There is a real difference between inflation and construction inflation.”
Engineering staff reported that an original contingency of 5 per cent has already been eaten up by inflation over time and high inflation in the construction sector recently.
The need for the facility was known more than a decade ago, and finally planned in 2015 at an expected cost of $26.6 million. That was to be covered fully by a general infrastructure grant from the province, but an additional $3 million in debt financing was needed for engineering costs, bringing the total expected cost to $29.9 million.
Work was also delayed last summer when crews uncovered an historic Indigenous campsite at the site during excavation and work was delayed as archeologists were brought in to assess the site.
That cost $500,000, plus $200,000 in additional costs of storing material during the delay.
A further $500,000 in indirect costs were not in the initial budget.
Since 2017 however, steel prices rose by 70 per cent and concrete doubled along to “significant” hikes on other materials like copper, according to city tendering officials, who said some costs are being avoided as the city is the general contractor on the project.
However, large changes are not recommended at this time. And completion is still required by 2025.
