Infrastructure price tag and potential cost overruns loom large for taxpayers

Rossland Council has taken a step toward turning the Columbia/Washington infrastructure project into another financial fiasco like the Ophir Reservoir project. The project is based on the assumption that a maximum of $6 million will have to be borrowed to pay for the work. Questions arise whether that will be enough money and what will we get for it?

Rossland Council has taken a step toward turning the Columbia/Washington infrastructure project into another financial fiasco like the Ophir Reservoir project. The project is based on the assumption that a maximum of $6 million will have to be borrowed to pay for the work. Questions arise whether that will be enough money and what will we get for it?

Council just approved the submission of an application for a $400,000 grant to help pay for the upgrade of the 1960s-era sewer line along Washington and Plewman Way. This part of the project is estimated to cost $648,000. While such a grant might seem like a good thing, it’s the details in the application that raise concerns.

The grant application suggests upgrading the sewer along Plewman and Washington to handle the expected increased flows from Red Mountain. This is a change in the scope of the project and technically is probably a good idea. However, the increased costs for this change have not been included in the revised estimate. Based on the unit costs used in the report, there could be a cost increase of about $115,000 just for the larger pipe alone.

If the sewer line along Plewman/Washington is upgraded to accommodate flows from Red Mountain, then Development Cost Charges (DCCs) collected from the developers at Red should be used to help pay for the upgrade. Based on the estimated number of housing units that will ultimately be connected to this portion of the sewer line, DCCs should pay almost 85 per cent of the cost of the upgrade. The grant application should have been used to help pay for other infrastructure projects that benefit residents not developers.

There has been no indication that DCCs will be used to finance even part of this project. Given the obvious need for such financing, one wonders why Council has delayed implementing the increased DCCs recommended by the consultant almost three years ago. The consultant estimated that replacing the sewer line from only Columbia to First on Washington would cost $398,000 and that DCCs should pay 100 per cent of the cost. Why aren’t DCCs being used to pay for the whole upgrade?

The grant application also includes an estimate of $343,000 to repave Washington. No provision for repaving was included in the original $6-million estimate. The new estimate only includes the cost of replacing about 80 per cent of the existing asphalt and is based on an asphalt thickness that does not meet engineering requirements. A more realistic estimate for repaving Washington might be in the order of $635,000.

The $6-million estimate includes an allowance of 45 per cent for contingency and engineering for the Washington portion of the project. An allowance of only 30 per cent is provided for the Columbia portion. If a 45-per-cent contingency/engineering allowance is made for the Columbia portion, it would increase the potential cost by another $340,000.

Even without these extra costs, if the city has to borrow the full $6 million, it will mean an increase in residential taxes of about 17 per cent for the next 15 years.

Two potential elements of the project that were touted as primary reasons for undertaking the work, and that have received considerable publicity, are the removal of roof drains from the sanitary sewer and the “streetscaping” of Columbia Avenue. Neither of these elements are included in the $6-million cost estimate. If they are done in the future, it will be at additional cost.

Council has embarked on a major project without adequately identifying all the potential costs or explaining where all the money to pay for it will come from. Based on the information made available to date, it appears taxpayers will be burdened with major costs for a long time to come.

Laurie Charlton

Rossland City Councillor

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