Water improvement project will cost more than thought
Greater than expected funding from provincial and federal goverments will keep taxpayers off the hook
Amajor water improvement project in Lake Country will cost $1.3 million more than originally projected. But ratepayers won’t be on the hook for the extra cost because of greater-than-expected provincial and federal funding.
Town council is expected Tuesday to approve a new budget of $8.3 million, compared to the $7 million already budgeted.
The project involves switching large sections of the town over to water from Okanagan Lake instead of drawing from creeks to the east of Lake Country. It involves a new booster station, reservoir upgrades and new pipes.
Costs have risen because of unforeseen complexities in the design process, town staff say.
But another reason is said to be a surge in infrastructure projects across the Okanagan, which has kept contractors busy and pushed up the bid price for new undertakings.
“The amount of construction work has increased across the province and specifically in the Okanagan,” Brett deWynter, a consultant who oversaw the bid process, writes in a report to town council.
“With each party within the construction team adding some nominal cost to reflect their increased workload, the result is an overall project cost increase of 15 per cent,” deWynter says.
Staff recommend the construction job be awarded to Penticton-based Wildstone Construction and Engineering Ltd, which submitted the lowest of seven bids. It was $30,000 less than the tender from construction giant Maple Reinders.
There is some “risk” in choosing Wildstone, deWynter says, given the company’s relatively small size.
“Nevertheless, this project is about 20 per cent of the annual Wildstone workload and corporately they have completed larger projects in the past,” deWynter says.
“Given this, we feel the project can be completed by Wildstone.”
Although project costs have risen from what was planned, there should be no impact on town finances. That’s because the original budget was based on the project receiving $4.3 million in provincial funding, but a grant of $5.8 million was actually received.
“Fortunately, the district did receive more grant funding from senior government than anticipated and the additional capital funding request is not expected to have negative implications on the district’s long-term infrastructure capital plan,” says Kiel Wilkie, a town engineering technician.