New $75M West Kelowna water treatment will only cost users $34 more annually on tax bill | iNFOnews | Thompson-Okanagan's News Source

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Kelowna News

New $75M West Kelowna water treatment will only cost users $34 more annually on tax bill

A treatment plant for water from the Rose Valley reservoir in West Kelowna will cost users a mere $34 extra per year.
Image Credit: SUBMITTED / City of West Kelowna

On the surface it may look like West Kelowna’s Rose Valley water treatment plant has skyrocketed in price while residents are being forced to foot a large part of the bill.

But by plunging in a little deeper into the numbers we find 8,500 property owners are being asked to chip in $34 a year more than what they’re paying now to get the state-of-the art plant they so badly need.

That need is demonstrated by the fact the people who will be getting water from the new plant faced 890 days of water quality advisories in a 918-day period from 2018 to June 2020, West Kelowna Mayor Gord Milsom told

That compares to only 13 days in the same time period for those on the much newer Powers Creek system. Most of those, Milsom said, were caused by construction projects where contractors damaged pipes.

So, while the rationale for the treatment plant is clear, the financing is not so simple.

Originally, the City applied for federal and provincial infrastructure grant based on a project estimated to cost about $55 million. It’s now projected to cost $75 million with users being asked to cover about one third of that cost.

Even so, the $55 million was just too high a proposal for a city of West Kelowna's size.

“The province said you have to cut back your ask,” Allen Fillion, the City’s general manager of engineering and public works, said.

The project was cut back to $49.4 million and the grants were approved with senior government paying $41 million with the City on the hook for $8.4 million. That was in 2017 and the price has gone up steadily since.

At first, in order to lower their ask, the City removed a proposal to interconnect the new plant with the Pritchard, West Kelowna and Sunnyside water systems. Those have now been added back into the project at a cost of $7 million.

The City also hoped to put the plant on land owned by the province but that fell through. Not only did the land purchase add almost $1 million to the project but it’s further away from the Rose Valley reservoir and needs a lot of blasting and levelling. That’s expected to cost another $7.5 million.

That would boost the cost to about $64.5 million.

But, there’s more.

The land is at a lower elevation than the provincial land would have been. That means water from the plant has to be pumped up to a new reservoir in order for customers to be fed by gravity.

City officials would not give a cost estimate for that since it has yet to go to tender.

Construction costs have also gone up since 2017 and contingency funds have been factored in.

So, where does that leave the 8,500 residential and business customers?

A few years ago those users had their water bills increased by $116 per year to start building a contingency fund to replace the plant. That fund, along with contributions from new construction, is expected to pay for the City’s $8.4 million share the original project grant.

The current proposal is to increase the $116 by $16 per year for the next two years so it hits $150 a year in 2022 when the plant starts operating. That’s the $34 increase that is necessary to pay the remaining $23.5 million needed to complete the project.

The City is in the middle of a 30-day Subject to Petition Against process to approve borrowing that money over 25 years. That will go ahead unless 50 per cent of the users representing 50 per cent of the property value send in petitions objecting.

While the initial $116 was just added to their annual tax bills, this process is needed in order to legally authorize the long term borrowing.

In reality, if it’s approved, it’s actually going to cost each property $150 year.

But, even that may drop after 2022 when the plant is expected to open.

The City is applying for more grants to connect to the other water systems. There is some hope the plant will cost less than expected, or there could be more development than expected, which would mean less money would need to be borrowed.

Then city council could lower the annual payment amount or reduce the number of years on the loan.

What is clear, however, is the project is going ahead. If this plan doesn’t work, the money could be borrowed over five years without user permission, which would cost them $600 a year.

The Subject to Petition Against process guarantees the cost will not go above  $23.5 million.

But what if the cost projections are wrong and costs go over that amount?

“We’re pretty confident,” Milsom said. “The design consultants and project managers are very experienced. The detailed design is done now. There shouldn’t be any surprises ahead of us.”

His CAO is even more confident.

“We’re not wrong,” Paul Gipps said. “We can do this.”

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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