qathet Regional District’s (qRD) board of directors will consider approving a further expenditure of up to $2.5 million to complete construction of the new resource-recovery centre. This would bring the total project cost to $25,148,242.
At the September 4 meeting of the regional district’s finance committee, manager of asset management and strategic initiatives Arnold Schwabe said staff had spent a lot of time putting together an expansive report for the board, with the help of the finance department. Schwabe said there were extra components of the project that were unforeseen.
“We are where we are today at about 11 per cent over our expected budget, which is somewhere around $2.5 million,” said Schwabe.
According to the report, the final revised project estimate would take the project to completion, including all facilities, utilities to the site, completion of the access road, an organics trailer and forklift, computers, networking, furnishings and commissioning.
City of Powell River director Cindy Elliott asked how close to being certain the estimate was, so the final figure does not come in higher.
Schwabe said there was some contingency built into the figure.
“We are finding things every day, such as there should be concrete bollards where people have found that they have issues with driving around the site, and we’ve added some buffers,” said Schwabe. “We know there are some other things that will come up.
“’This number we are putting forward accounts for everything we’ve done to date. We have occupancy on most of the site, so we are at the point where we are just cleaning up some small items.”
Electoral Area D (Texada Island) director Sandy McCormick asked if the $25 million figure was the capital cost of the project.
Schwabe said that will be the final capital cost. He said the operating budget and costs will be different.
McCormick asked what the financing cost of the project would be, including the interest that will be paid over 30 years.
Manager of financial services Linda Greenan said it was calculated that there would be about $20 million in interest over the 30 years of borrowing, along with the $25 million capital cost. McCormick said that meant about a $45 million cost to taxpayers.
Greenan said that of the $25 million, there had been grants received to help defray some of the costs to local taxpayers. She said the local taxpayer contribution to the capital cost was $14.1 million.
Electoral Area A director Jason Lennox said his constituents have severe concerns around escalating costs.
Financing options
Directors were given two options for financing the additional funds required. The first option was to fund the requested $2.5 million completely from borrowing. The second option was to fund from a combination of borrowing and using a contribution from the regional district’s Canada Community-Building Fund grant money. Electoral Area B director Mark Gisborne proposed the first option.
Gisborne said he would love to support the second option, but the city isn’t willing to commit any of its community-building fund to the resource-recovery centre project.
“If the electoral areas are going to commit community works funds to this project, then I would like to see the municipality be willing to discuss it with us,” said Gisborne. “Option one is the only way forward.”
McCormick said she supported the recommendation for option one, even though it was an added cost to the taxpayer.
Electoral Area E director and financial committee chair Andrew Fall said no one around the board table or staff was happy having to contemplate this scale of increase.
“It’s difficult for everybody,” said Fall. “I really appreciate the information that staff brought forward. It’s really a tough thing. A lot of the factors were out of our control – inflation, especially in the construction industry.
“One of the things we should keep in mind is even though we are having this eye-watering level that some taxpayers may not be too happy with, we don’t know what the alternative might have been. If we hadn’t done this at all, we would have been beholden to private contractors for waste management and we don’t know what the costs would have been like.”
Fall said in the long run, his belief is that the regional district will be happy to have this service.
The finance committee voted to recommend that the board fund the project completely from borrowing the $2.5 million, with Elliott and city director George Doubt opposed, instead supporting option two.
Join the Peak's email list for the top headlines right in your inbox Monday to Friday.
.jpg;w=120;h=80;mode=crop)