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Buffalo Pound Water Treatment Plant renewal project expected to cost additional $72.8M

Buffalo Pound Water Treatment Plant renewal project expected to cost additional $72.8M

The COVID-19 pandemic, climate change, “global logistics bottlenecks,” and the conflict in Ukraine have all contributed to the increased cost of the project.

Buffalo Pound Water Treatment Plant is seen here in June 2015.
Buffalo Pound Water Treatment Plant is seen here in June 2015. Photo by TROY FLEECE /Regina Leader-Post

Regina residents can expect to see a one-time, two per cent increase to their water utility rate after the price tag for the Buffalo Pound Water Treatment Plant (BPWTP) renewal project went up $72.8 million.

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“The observed increase in price is largely attributed to the impacts of the COVID19 pandemic, climate change, global logistics bottlenecks, and now by conflict in Ukraine,” said a report presented during a city council meeting Wednesday.

The initial total cost estimate for the project was $252.8 million. In June 2021, the city announced that the federal government was investing up to $89.13 million through the Investing in Canada Infrastructure Program (ICIP) and up to $74.26 million was to be provided by the Government of Saskatchewan. Last year, the City of Regina also approved up to $60 million to go toward the project.

Overall, the total cost of the project is estimated at $325.6 million, and BPWTP has asked the cities of Regina and Moose Jaw to approve up to an additional $55 million in financing, with Regina’s 74 per cent share equalling $40.7 million. BPWTP has said it wouldn’t draw on that loan before 2024.

“While we did pursue the availability of additional Investing in Canada Infrastructure Program funding, we ultimately were informed that more funding through this program would not be available to us,” Judith May, a member of the BPWTP board of directors, told council on Wednesday.

Buffalo Pound lake just outside of Moose Jaw is seen here in June 2015.
Buffalo Pound lake just outside of Moose Jaw is seen here in June 2015. Photo by TROY FLEECE /Regina Leader-Post

May said they also did a review “in an effort to reduce costs without reducing the projects scope,” which did not find any new savings.

The issue was discussed in private session during an executive committee meeting last week. Wednesday’s public discussion was brief and the recommendation from administration — to approve borrowing of the $40.7 million from the City of Regina — was approved unanimously by council.

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Concerned about the burden of the utility rate increase on taxpayers, Coun. Lori Bresciani (Ward 4) asked when and how the increase to the utility rate would be applied.

“We have the opportunity to determine how we’ll implement that two per cent increase. Do we do it in a lump sum? Do we phase it in over a couple of years?” Barry Lacey, executive director of financial strategy and sustainability for the city, said Wednesday. “The 2023-24 budget will be the opportune time to make recommendations to council on how best to implement that increase.”

Administration noted in its report that if the additional financing was not approved, ICIP funding would be put at risk and there is potential that the project could not go ahead.

While the overall project cost increasing by $72.8 million, BPWTC will use the remainder of its reserves to fund the rest of the increase at a total of $16.6 million. It has also secured a bank loan for a total of $60 million toward the project costs.

Commissioned in 1955, the plant supplies potable water to more than 260,000 residents in Regina, Moose Jaw and other communities in the region — almost a quarter of Saskatchewan’s population. The renewal project will include upgrades to the main treatment plant, pump stations and reservoirs, touching almost all areas of the facility. Some areas will be demolished, some new construction will occur and other parts of the plant will be gutted for significant renovations.

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When the first round of financing was approved, plant president and CEO, Ryan Johnson said construction was expected to begin in early 2022. On Wednesday, he said shovels would be in the ground in the first week of June.

jackerman@postmedia.com

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