I substituted for Paul Dechene at a media briefing conducted by Mayor Michael Fougere this morning at City Hall on plans the city has to proceed with a massive upgrade to its wastewater treatment plant. The upgrade is being driven by changes to federal and provincial regulations governing the quality of treated water released by towns and cities in the country, plus also the aging state of our current treatment plant and the growing needs of our city.
The new regulations are set to take effect on Dec. 31, 2016, so the city is operating on a tight timeline. But the reality is that the current quality of our effluent, which is laden with nitrogen, is imperilling the health of surrounding lakes and rivers, along with communities located on those water bodies downstream of Regina, and we need to address this issue.
When the initial discussion began around a new wastewater treament facility a few years ago the projected cost was in the $150 million range. Today, the mayor revealed that the estimated cost would be $224.3 million. That includes a 15 per cent buffer to account for inflation during the construction period.
For several years the city has been putting money away courtesy of annual nine per cent boosts in water and sewer rates. To cover the cost of plant construction and operation, though, the city is considering a public-private partnership that would include the design, construction, operation and maintenance of the wastewater plant over a 30-year period. At least, that’s the recommendation contained in a report that will be going to Executive Committee on Feb. 13.
In addition to its own contribution, and private investment, the city also hopes to access $50 million from federal sources for infrastructure support.
“It is important to note that with this proposal the city will always own and control this facility,” Fougere said at the briefing. “We will also protect our employees who will keep their jobs [under the P3 arrangement] and receive advance training to operate this state of the art facility. We’re hopeful that the federal government will accept our application. We’re meeting their environmental standards, and they’re talking about P3s being a model for the future for infrastructure, and it would be irresponsible of us not to look at that model to lower the exposure of taxpayers’ dollars.”
From the answers that were provided at today’s briefing, it seems that city employees at the treatment plant will still be covered by the existing collective agreement through successor rights contained in the Trade Union Act, but they will be employed by the private sector operator whose capital contribution to the construction and operation of the plant will be in the neighbourhood of $118 million. Through a mix of debt financing and revenue generation, like the possible sale of processed wastewater to a new potash mine that might be built near Regina in the next few years, the city will pay back the private investor over a 30 year period. It’s also important to note that the city is still facing the need to invest $1 billion plus to repair and replace aging water and sewer infrastructure thoughout the city.
Here’s a link to the report that will be going to Executive Committee next Wednesday.