Treatment plant at issue
A Regina resident is concerned that the growing costs of overhauling the city’s sewage treatment plant will affect the city’s debt load.
According to a project update report forwarded to city council Monday, upgrading the waste water treatment plant is expected to cost $207 million in 2015 dollars — up from an earlier projection of $200 million after inflation.
Speaking before council Monday, Chad Novak, who unsuccessfully ran for mayor in October’s election, questioned the city’s ability to handle the $120 million to $130 million worth of utility debt needed to pay for the project.
“An obvious concern is what if the inflation goes even higher, and the debt required is higher than our current debt ceiling?” Novak said. “Assuming we still need to spend the $207 million-plus on the (waste water treatment plant), which of our capital projects are going to take priority?”
Senior city staff have also warned council of the “substantial” debt required to complete the upgrades, which are needed by 2016 to meet stricter provincial environmental standards around treating waste water.
“The allocation of city debt to this project will constrain the city’s ability to borrow for other major capital projects based on current borrowing limits and where existing debt is currently committed,” the report said. “As a result, the city’s debt will need to be closely and strategically managed in the coming years.”
Speaking to reporters following Monday’s meeting, Mayor Michael Fougere said council is heeding that call. He added residents’ higher utility rates, which have been increasing by nine per cent over the past four years, will help offset the utility debt.
“There will be debt, no question about that, but we’ve also asked for more debt from the (provincial) municipal board, and we’re well within our range,” Fougere said.
“So, not too concerned right now about that.
“Our view is to watch that, be always mindful of the debt load that we do have. But this is a must have for our city, and there’s no issue with respect to financing that whatsoever. It won’t be a problem.”
Construction is to begin in 2014 and is expected to be mostly finished by late 2016.
Coun. Mike O’Donnell indicated Monday that the Federation of Canadian Municipalities is to ask Ottawa for financial support upgrading sewage treatment plants as part of negotiations for a renewed infrastructure funding agreement.
The city’s waste water treatment plant permit, issued earlier this year by the provincial Ministry of Environment, is contingent on overhauling the facility west of Regina. City staff indicate the new provincial standards will better protect downstream fish habitat from toxic pathogens and nitrogen. The upgrades are to also reduce algae in the Wascana Creek and Qu’Appelle River system.
According to the staff report, the overhaul will also meet the demands of a growing population.
“An upgraded (waste water treatment plant) is an important piece of the city’s infrastructure portfolio to ensure that future capacity demands can be met, due to economic and population growth,” the report said.
The new plant is to be built to handle a Regina population of 258,000. That figure is based on about 3,000 new residents per year up to the year 2035. The upgraded facility is to be able to treat 22 million more litres of waste water per day.