Taking over SEKID to cost an additional $22 million

The City of Kelowna’s takeover of a water system will cost $22 million more than expected.

Total costs for joining the South East Kelowna Irrigation District to the municipal water system have soared to $86 million from $63.7 million.

A busy construction season across B.C. is blamed for the big increase, as well as changes to a plan approved just last year.

“The rise in project cost is due in part to the high volume of infrastructure projects across the province as well as the increased service demand requirements in some areas of Southeast Kelowna,” reads part of a project update.

The huge jump in project costs would have saddled SEKID ratepayers with an extra annual cost of $1,900 for 20 years.

However, the revised plan calls for the city to loan $15 million to SEKID ratepayers, with the money to be repaid over 20 years. The other $6 million required to cover the shortfall will be taken directly from the city utility reserves.

City council will be asked Monday to approve the new financing plan.

“Details about the project costs could not be released until the project contract was finalized and awarded on April 27 due to confidential negotiations with the project contractor,” the update states.

In 2017, the city got a $44-million grant to amalgamate SEKID with the municipal system. The city system serves just over half of Kelowna’s 130,000 residents, while SEKID serves about 8,000 people.

The city has long had an interest in taking over the independent water systems that serve Kelowna residents. The chief reason is to ensure everyone has access to high-quality water and that months-long boil-water advisories common in some areas of Kelowna can be eliminated.

“This is about creating a citywide

system so people in all of our community have clean and safe drinking water at the best, lowestcost solution,” Mayor Colin Basran said when the city’s takeover of SEKID was announced in February 2017.

Despite entreaties from the city to join the municipal system, the other major water providers — Rutland Waterworks, Black Mountain and Glenmore Ellison — are determined to maintain their independence.

“There is nothing that the city can do better than us,” Gerry Zarr, chairman of Rutland Waterworks, said last year, explaining why system operators oppose amalgamation with the municipal water system.

“We just look after water. We don’t look after a bunch of other things. I just feel that we can provide a better service than the city could provide to our ratepayers,” Zarr said.