Expansion to Calgary’s composting facility sees costs balloon 75%

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Expansion to Calgary’s composting facility sees costs balloon 75%
WATCH: A major expansion to Calgary's composting facility will cost millions of dollars more than originally anticipated. As Adam MacVicar reports, city officials say there's several factors behind the inflating costs, but the expansion is necessary. – Nov 30, 2023

A major expansion to Calgary’s composting facility is expected to cost nearly $40 million more than anticipated close to two years after the project’s initial approval.

The expansion was approved by city councillors in February 2022, which will provide an additional 60,000 metric tons per year of processing capacity for residential food and yard waste from single-family homes.

An original budget of $50 million was allocated for the facility’s expansion. City officials said it was based on a “high-level conceptual estimate needed to begin detailed design for the project.”

However, costs have risen by $38.3 million since the project’s initial approval.

City officials attributed the cost overruns to increases in commodity pricing, a labour shortage, resource competition and inflationary pressures. They said costs also changed after a more “detailed design scope.”

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“Obviously it’s a lot more of a technical project than when you compare it to roads, so it is unfortunate,” Ward 12 Coun. Evan Spencer told Global News. “Compounded by three years of high inflation, it doesn’t feel like a good news story for Calgarians when projects like that come in with escalation on it like that.”

During adjustments to the four-year budget last week, a request for funding to cover the cost overruns was approved by city council.

According to the city, the increased budget for the composting facility expansion won’t impact property taxes or utility rates.

“The additional capital budget will be funded from a combination of sources, including federal grants and self-supported debt,” the budget’s line item on the matter said. “Payback of the self-supported debt will be over 25 years from the Green Cart Program monthly charge.”

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The current composting facility opened in 2017 and is now processing volumes above its capacity of 100,000 metric tons of food and yard waste per year.

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The city said the facility expansion is needed to “alleviate current and future capacity challenges,” as the city continues to grow.

“Is this a stop-gap measure or is this building out capacity for years to come?” Ward 11 Coun. Kourtney Penner said. “We know if we delay, costs just end up going up. It always ends up costing more in the long run so I think doing the investment now and up front for a city that’s growing is a really worthwhile thing to do.”

In addition to increasing facility capacity by 60 per cent, the renovations are also expected to include an anerobic digestion module that will turn food and yard waste into renewable natural gas.

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The city also sells the compost in bulk to companies like landscape soil blenders with the proceeds used to help “reduce the processing cost and lower the Green Cart program fee.”

Spencer said the expansion will also help address an ongoing odour issue in southeast communities he represents, one that has been exacerbated by the facility running over-capacity.

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“This is going to allow the facility to put out a more mature product,” Spencer said. “It’s also got a financial model on it where we’re going to be able to capture that biogas and sell it, so there’s also that dynamic of it.”

However, some Calgarians questioned the need to expand the facility just five years after the original began operations.

“It’s not that old,” Steve Heinricks told Global News. “You would’ve thought that would’ve been thought through the few years ago they did it, if they wanted to expand it that quick.”

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Others were shocked with the cost escalation, and the timing of the budget request to city council.

“It’s ridiculous that every time you turn around, they’re finding” Karen Dorscher said. “It’s ridiculous.”

Cognizant of the cost escalations, councillors said the good news behind the expanded facility is that Calgarians are embracing the composting program more than originally anticipated.

“Having a facility which can produce compost that we then return into the market is really critical from a supply chain perspective, and our overall goals of having a green society,” Penner said.

The city anticipates construction will begin on the facility’s expansion in the spring of next year.

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