The current waste water treatment plant in Kimberley needs to be replaced. City of Kimberley file

The current waste water treatment plant in Kimberley needs to be replaced. City of Kimberley file

Costs for a new waste water treatment plant in Kimberley keep rising

Important to remember the city only funds 27 per cent of costs, Mayor McCormick says

$95,220,375. That’s a big number. That’s also the latest total cost estimate on construction of a new waste water treatment plant for Kimberley.

The number was presented to Kimberley City Council on Monday, Jan. 24, 2022 by Chief Financial Officer Jim Hendricks, as the process to fund the project is really getting underway.

While acknowledging that it was a huge number, Mayor Don McCormick pointed out that it was important that people remember the city only pays a portion of that, about 27 per cent. That still comes to just under $25 million, but the rest would be paid by funding partners should the grant application be successful.

The new total is considerably higher than what was presented in a financial analysis last October, which was based on an estimate from July 2020. That cost was $62,570,000.

The latest estimate with a five per cent contingency is $79,501,641, based on construction beginning in January 2024. But, that doesn’t account for inflation if the project is delayed, nor is the contingency as large as is recommended. That would be 15 per cent. In addition, that is only the cost of on site for and does not include decommissioning the current plant and other work. That adds an additional $8 million.

Council passed a number of motions relating to the project on Monday evening, including that the borrowing be put to a referendum at this fall’s municipal election. Because there is an election scheduled this will not delay the project at all, and McCormick said given the amount being borrowed he would prefer direct voter support rather than the alternate approval process.

Council also decided to go the route of a parcel tax to fund the borrowing, as well as drawing $2.1 million from the reserve fund. The parcel tax will mean a tax increase of about 11 per cent, which is less than it would be for an increase in property taxes. The parcel tax is estimated at $277.14.

At the same time as paying for this borrowing kicks in, other parcel tax borrowing will be going down. The parcel tax on the Aquatic Centre will reduce by $40 annually for example.

“Construction of a new Waste Water Treatment Plant is a monumental undertaking from both a logistical and a financial perspective,” Hendricks said. “The magnitude of the associated cost requires a successful grant application to fund the majority of the project and the approval of long-term capital borrowing to fund most of the balance. If the planned grant application is denied, the project will be put on hold until another funding opportunity is announced by senior levels of government.”

“Projects like this are incredibly complicated, just the financial processes we have to go through,” McCormick said.

It was noted that if the funding is secured, this will be the largest capital project the city of Kimberley has ever undertaken.

READ: Grant opportunity now open for Kimberley’s waste water treatment plant replacement

READ: Kimberley Council discusses type of tax that could be used to fund waste water treatment plant replacement

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