Regina’s city council members unanimously approved its portion of the funding for the Buffalo Pound Water Treatment Plant renewal project, on Wednesday.
The water treatment plant serves both Moose Jaw and a large portion of Regina.
The water treatment plant asked both cities to approve $60-million in funding, a requirement of the federal government who will cover the rest of the construction costs with the help of the provincial government.
Original story below:
The Buffalo Pound Water Treatment Plant CEO and president said the plant is “more than overdue” for upgrades and renovations.
Ryan Johnson said the plant in Stony Beach, Sask., is dealing with aging infrastructure and dated technology in its treatment process.
“The plant needs to be renewed to ensure that it will continue operation well into the future,” Johnson said.
He explained that water treatment plants are typically renovated every 25 to 30 years. The last major expansion completed at the plant was in 1989.
The plant supplies water to the city of Moose Jaw and a significant portion of Regina.
Johnson spoke at Regina’s executive committee meeting on Wednesday morning, saying the water treatment plant needs a maximum of $60 million from both cities.
Barry Lacey, executive director of financial strategy and sustainability for the city, explained that Regina owns 74 per cent of the plant, meaning it is responsible for funding $44.4 million of the $60 million.
The total project is estimated to cost around $253 million, including contingency and PST. This also includes $6.6 million for advisory services and $23.4 million for design.
Approximately $223 million of the cost is for construction. This cost is eligible for funding under the federal government’s Investing in Canada Infrastructure Program (ICIP).
The plant has applied for that funding. Under the program, the federal and provincial programs would cover approximately $163 million of the construction costs with the plant on the hook for the remaining $60 million.
The motion to negotiate financing to a maximum of $60 million was unanimously approved by the executive committee on Wednesday. Without the funding from both Regina and Moose Jaw, the plant would not be eligible for funding under the ICIP.
The final approval of the motion is expected to take place at the Feb. 24 Regina city council meeting.
Lacey further explained that since the City of Regina owns a major portion of the plant, the debt will be charged to the city regardless if funding is approved or not.
“The guarantee piece is really around to help Buffalo Pound secure the financing but more importantly to access good interest rates,” Lacey said.
He further explained that by having the loan guaranteed, Buffalo Pound takes on the city’s credit rating, which allows it access to a type of interest rate resulting in lower water rates for consumers.
Right now the renewal project is in its design phase. Johnson explained that stakeholders should see a guaranteed maximum price in June.
Once that happens and if the design meets expectations, a construction company will be awarded the contract. If design expectations are not met, the project will go out to market and be re-tendered.
“We should have a really good idea by the end of June what everything is going to be (and) what the cost will be,” Johnson said.
So far, Johnson said they’ve had very few issues with the design process.
Johnson said there has been minor work completed since the last expansion in 1989.
“As a result, we’re dealing with older water treatment technologies. We are dealing with a facility that is near the end of its life when it comes to certain elements within it,” he told Global News.
Johnson said over the last 10 years, maintenance and costs have increased significantly due to aging infrastructure.
“The plant won’t fail tomorrow morning if we don’t get the money, but over time we’re going to start seeing a continued increase in failures and maintenance issues,” he said.
Johnson further explained that these failures may get to the point where they are unfixable.
“Especially when we’re critical for two cities and the region we serve, we don’t have that option. We can’t fail. We have to continue going. We will do our best to make sure everything’s working the best we can, but there could be a potential that we’ll have some very serious issues that we may not be able to address properly.”
Johnson said demolition and construction could begin by late 2021 or early 2022. He told the executive committee that the renovated plant would be up and running by 2025.