Centre Wellington council approved a $21.3-million tender to expand the Elora sewage treatment plant and modify the Clyde Street pumping station.
The decision, made at the special July 9 council meeting, approved the $21,359,000 bid by Wellington Construction Contractors of Palmerston, which was one of six firms to bid on the project.
The report from Centre Wellington’s chief financial officer Wes Snarr and Christine Furlong of Triton Engineering noted the original tender document included additional provisional items as requested by staff during the design phase of the project, but were beyond the original scope of the project.
Mayor Joanne Ross-Zuj explained the report outlined the costs and provided justification for the expenses.
Early on the question was raised as to why the recommended quote was for $21,359,000 yet another portion of the report provided a revised estimate of $23,707,000.
Snarr said the reduced cost was a result of the deduction of some of the provisional items in the tender. He explained the township may, at its discretion, include or eliminate any of those items in the award of tender.
Councillor Fred Morris said it appeared in the report the intent was to remove some of the provisional items.
“That is the recommendation,” Snarr responded.
Morris then asked “If we are spending this much money, how important were the provisional items, and why are we taking them out?”
Snarr said a number of items were requested by staff during the design phase.
“They were all beyond the original scope of the project,” he said. He added there was discussion with the affected staff, who support removal of those items.
Snarr used the example of the proposed washrooms at the Clyde Street pumping station. The public washrooms for O’Brien Park [at the Clyde Street pumping station] would have added $184,000 to the project.
Snarr said the item was discussed with the parks and recreation director. The impact of removing that part of the project is the department would continue to provide a portable washroom on site.
Morris clarified his original comment.
“If these items were important enough to add, what is the justification now for taking them out – other than price?” Morris asked.
Furlong explained most of the larger value items such as the construction of a standby power garage complex at the treatment plant included bays for pickup trucks and storage. That part of the project was included as an afterthought by township staff, she said.
What was originally envisioned was simply putting in a standby diesel generator in an enclosure to reduce sound to the outside, but with no thought to having a garage. Staff said it would nice to have a place to park the trucks.
“But is it a want or a need?” asked Furlong.
She said there was common knowledge a number of the items added might be dropped if the costs were too high, which is why they were listed as provisional items. Essentially it came down to “if the project comes in over budget, is this item something we can trim?”
By having it included in the tender bid, council would automatically know how much money deleting the item would save, rather than negotiating after the fact, Furlong said.
She stressed the treatment plant would still have a standby generator, it just would not be located within a building. The sound reducing enclosure would be supplied by the generator manufacturer, Furlong said.
“It will have the same sound attenuation as the building would have,” but it creates a $362,000 savings, she explained.
She noted part of the design for the garage required the ability for the generator to function properly – which created a ripple effect in the costs.
Councillor Walt Visser asked if the additional costs would have been covered under the township’s development charges.
Snarr said the financial impact of removing the provisional items was to drop overall costs of the project by $988,000. He then explained just over 79 per cent of the project is growth related and could be recovered from development charges.
“In this project, for every dollar spent, 79 cents is recovered through development charges,” Snarr said.
He added including all the provisional items would require borrowing that additional amount or finding it from reserves.
Furlong noted provisional items including replacement the two existing secondary clarifier mechanisms (approximately $380,000) and providing a retractable bar screen in the wet well of the Clyde Street sewage pumping station (cost adder $300,000) remain in the project tender.
Visser asked whether removing the provisional items now, will affect future operations.
“Will there be a tax increase two or three years down the line to buy these things anyway?”
Furlong said she was uncertain of the status of the building of a new works yard in Fergus.
She said the question might be whether equipment needed to be stored at the Elora sewage treatment plant or whether it could stored elsewhere.
Councillor Morris said councillors were trying to understand how essential the provisional items were.
Councillor Mary Lloyd was concerned that in 2010, the project cost was roughly $16.5 million, now it is closer to $23 million. “It is almost one third higher than what we were originally anticipating.”
Lloyd added that even though $988,000 was being removed from the project cost, “it is still considerably higher than what we were communicating to our constituents.”
She added that this might sort out “the Elora situation”, there are other subdivision projects proposed elsewhere in the township.
Lloyd then asked what the lifespan was for the Fergus sewage treatment plant.
Mayor Ross-Zuj said it is much like a moving target.
“It never gets cheaper, it just keeps moving. Our growth committee is well aware with what [projects] we have coming online and the impact to Fergus.”
She also agreed at some point the municipality will have to make that next step.
Furlong said the last reserve capacity estimate for the Elora plant was down to 381 units.
Township planner Brett Salmon said “we’re a long way from reaching the capacity at Fergus.”
He estimated the reserve capacity there is roughly 1,200 units.
Visser said that “in Fergus we’ve a lot more progressive and in 1992 replaced the old plant completely, then in 2002 there was an expansion.”
Furlong agreed there is considerably more reserve capacity in Fergus which will be able to handle a lot of the proposed development coming.
Lloyd remained concerned about the reserves with the amount of development proposed.
Earlier that night, council had heard updated information on a proposed 178 unit subdivision along the Beatty Line.
She said there was the potential of yet another sewage treatment plant being constructed.
Furlong said any decision on how the capacity is utilized should be looked at through a servicing plan.
She agreed Elora and Fergus are close together, and if the infrastructure was in place, at some point extra sewage could travel to the community with the most capacity.
Furlong used the example of the township water system.
For years the water systems of Elora and Fergus were separate, but following the building of the Wellington Terrace, water mains were extended and joined the two systems.
Salmon explained subdivisions with draft approval are already factored into reserve capacity calculations.
He noted the Sorbara proposal [which could include up to 1,200 homes] has not reached the draft approval stage.
But Salmon added that development charges are being collected knowing that there is ongoing work.
Visser stressed that even when the Sorbara subdivision comes online, it would not be building 1,200 units all at once.
“It would be phased in.”
Ross-Zuj ratepayers will want to know how exactly the sewage treatment plant will be paid for.
Snarr said “there is no impact on taxation.”
Roughly 79 per cent of the costs will be covered through development charges.
However, he added that additional annual debt payments may result in one or more capital projects being deferred.
Morris said that “even though there is no impact on taxation, there is an impact somewhere.”
He was concerned that capital projects could be deferred, especially since those project are not named, or how long the projects could be deferred.
Councillor Kelly Linton asked what the options really were.
He said council is choosing the least expensive tender and removing items not considered critical.
Visser added that Centre Wellington is under a Ministerial Order to deal with its sewage treatment plant.
Morris agreed that council was too far down the road on this to back out.
“Let’s just not go down the road blindfolded,” he said.
“This decision has impact somewhere and when those impacts appear in the future, let’s not be surprised by them.”
Council approved the tender.
