Dan Ebenal, Victoria News March 24, 2016
Money is the overriding issue in finding a solution to the Capital Region’s sewage treatment challenge. And the big fear for the region’s residents and their political representatives is seeing tax dollars flushed down the toilet.
That fear is well grounded in reality, with more than $65 million spent so far on the project, which remains in the preliminary design stage. Almost half of those funds ($27.79 million) are for land purchases – including $17 million for a Viewfield Road property no longer in the CRD’s plans for sewage treatment – while $12 million was spent to complete the Craigflower pump station in View Royal.
Those costs have caused trepidation about the estimated $1.05-billion cost for the preferred two-plant option at McLoughlin/Macaulay and Clover points.
“It’s a huge drain on the taxpayers’ pockets, and basically the numbers are in a bloody muddle,” said Stan Bartlett, with Grumpy Taxpayers of Greater Victoria.
Bartlett, a Victoria resident who chairs the group of several hundred taxpayers, said it’s the CRD’s responsibility to provide detailed and understandable numbers to the public.
“With the numbers being bandied about, are these sewage treatment costs soft numbers? Are they hard numbers? Are they outright guesses? That’s certainly the bottom line for us.”
Nailing down a firm number, however, is easier said than done. The consultants were asked to come up with cost estimates for the current proposal in a very short time frame – the Clover Point-McLoughlin option surfaced only a few days before the core area liquid waste management committee voted to move forward with that option. The hope around the board table is that the $1.05 billion cost can be reduced when submissions are invited from the private sector.
“I think we truly are looking at a worst-case scenario,” said Saanich Mayor Richard Atwell, vice-chair of the committee.
Bartlett argues the final costs could easily go the other way.
“It seems rarely do projects come in on budget, it’s the nature of the business. The Blue Bridge is an example of that,” he said, pointing to rising steel costs or a tumbling Canadian dollar as variables that cannot be controlled
Value for money a foreign concept
Brian Grover is among the local residents who have been closely following the issue in recent years. Grover, a civil engineer specializing in water resources, said residents are looking for value for their money.
“My impression is that up until very recent days, that’s been kind of a foreign concept for most of the policy-makers and their consultants,” he said. “My hope is that the (people) who are making a decision will be looking to get the best bang for the buck, meaning the highest necessary level of treatment at the lowest possible cost.”
Some directors believe the committee rejected a lower-cost option when they ruled out revisiting a lone plant at McLoughlin Point. Oak Bay Mayor Nils Jensen said that decision added $250 million to the project’s cost.
“This is a political compromise. If we left it to the economists and engineers, we would be looking at a single plant. There’s one plant to treat the sewage and another plant to treat the political sensibilities, and that’s not good public policy,” he said.
Other directors said measuring the current options against a lone McLoughlin plant is comparing apples to oranges, pointing to the dramatic decline in the Canadian dollar.
Victoria Coun. Ben Isitt was critical of the arbitrary nature of the decision based on “very flimsy financial information,” suggesting the committee was “growing the project scope to create windfall profits for the construction sector.”
While the cost to local taxpayers is far from settled, the commitments from senior levels of government have been established: $248 million from the B.C. government and another $253 million expected from Ottawa. Those funds represent about two-thirds of the cost of the original proposal for a plant at McLoughlin Point, but only account for about half of the current estimated costs.
While there may be other federal or provincial funds the project could tap into, Atwell said, he doesn’t expect the previously announced grants to be increased. “They don’t want to update it, they don’t want to provide any more. If they did, there would be no incentive to bring in any project at budget.”
It’s clear from the discussion around the table that taxpayers have made their concerns clear to their political representatives.
Saanich Coun. Judy Brownoff said she has received numerous comments and emails from her constituents, most of them focused on the financial implications.
“At the end of the day, this is about the cost to our taxpayers,” she said. “When you have a senior call you and she’s crying because she’s worried about the cost of this facility and she may lose her home – cost is the No. 1 issue to me.”
Where has your tax money gone?
Capital Region residents may have noticed a sewage levy on their water bills or property taxes for the past several years.
But the $30 million raised so far won’t be going towards the billion-dollar solution to the region’s sewage woes. That money has already been spent, along with another $7 million in temporary borrowing.
The Capital Regional District began ramping up to cover treatment costs in 2013, implementing a $5-million per year levy on commercial and residential users in the seven communities. That regional levy rose by $5 million a year, but was held at $15 million a year for 2016 with the project paused.
The CRD’s plan is for the public contribution to grow by $5 million to $20 million a year in 2017, with the levy reaching a peak of $35 million a year by 2020 and continue at that rate.
CRD staff estimate that $7 million to $8 million of the public contribution goes toward annual operating costs for the current system, with the other $10 million or so going towards consultants and engineers, as well as the public consultation process.
Estimates for the eventual sewage treatment costs in 2020 range from a low of a $352 average annual charge for Saanich residents to a high of $741 a year for those living in Colwood, with the funding apportioned based on population.
The estimates project the average annual household cost as $439 for Esquimalt, $570 for Oak Bay, $495 for Victoria, $415 for View Royal and $400 for Langford. Colwood is hoping to see a more equitable system for its taxpayers, given that 70 per cent of the community’s homes are connected to septic.
A complete breakdown of the more than $65 million spent on the project since 2006 was not provided by CRD staff, but the figure includes $27.79 million in land purchases.
A category listed as “other Seaterra program expenses” totalled $29 million, with no further explanation of where the costs were directed. Black Press is in the process of securing that information through a Freedom of Information request.
The project expenditures also include $1.9 million in legal fees, $260,000 in interim financing costs, $1 million for contract terminations – including $500,000 for former Seaterra program director Albert Sweetnam – and another $1 million for the Eastside and Westside select committee activities.
The cost of the two-plant option for Clover and McLoughlin/Macaulay points is currently estimated at $1.05 billOther directors said measuring the current options against a lone McLoughlin plant is comparing apples to oranges, pointing to the dramatic decline in the Canadian dollar.
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