City awards $9-million water plant contract

By JOHN MOORHOUSE Penticton Herald:

Penticton water rates are expected to increase by another 15 per cent next year, following the awarding of a $9-million contract for the expansion of the city‘s water treatment plant.Council voted unanimously Monday to award a $9,083,000 contract (including GST) to Greyback Construction of Penticton which had submitted the lowest of five tenders. When engineering and equipment costs are added, the total bill amounts to almost $10.2 million. Len Robson, the city‘s public works manager, said the project will see the treatment plant‘s capacity increase from the current 60 million litres a day to 85 million litres - enough to adequately supply the community for the next 20 years. In addition to upgrading the plant adjacent to Penticton Creek near the top end of Penticton Avenue, the project includes a new booster station and reservoir on Ridgedale Avenue. Robson said the need for the plant is just as much for current residents as for future development. He pointed to the hot summer of 2003 when daily water consumption peaked at 54 million litres - just 10 per cent below the system‘s existing capacity.

There are fears if water use exceeds the system‘s capacity, part of the city‘s fire hydrant system could be affected. More stringent water sprinkling restrictions would also be enacted. The plant currently utilizes about 70 per cent Okanagan Lake water and 30 per cent water from Penticton Creek. The expansion will see it utilize more creek water, but there should be none of the sludge removal problems which have plagued the new Summerland treatment plant. Robson explained a different process will be used, involving a centrifuge device at the treatment plant. The removed sludge will be taken to the Campbell Mountain landfill, rather than directed to the sewage treatment plant as at present.

The city plans to borrow $7.9 million for the project. Debt payments will be made through increased water rates, which climbed by 15 per cent this year and are expected to rise by another 15 per cent in 2009-10. This is on top of a 21.5 per cent rate hike in 2007, although more than half of that increase was earmarked for construction of a new water line along Naramata Road. Average residential rates are currently about $320 a year. Development cost charge revenues will also be utilized, starting next year. No senior government grants have been awarded for the project. Councillors Dan Ashton and John Vassilaki questioned some of the financial impacts of the project, but voted in favour of awarding the contract. Vassilaki described the water rate increase as a “huge hit” on top of other tax increases and wondered whether the project could be delayed by a year or two. However, other councillors said construction costs could increase significantly in the future, noting the project currently attracted considerable attention. The highest tender received on the contract amounted to more than $11.8 million. Coun. Rory McIvor said it would be foolish for council to delay the project. “You don‘t save anything. You end up costing the community more,” McIvor said. Mayor Jake Kimberley said residents can lower their water bill by reducing consumption. Robson noted planning for the project has been ongoing for the past three years. Construction is expected to start in December, with the bulk of the work completed by next May.