Greater Victoria sewage project overruns, if any, will fall to local taxpayers

By Cindy E. Harnett and Rob Shaw, Timescolonist.comJuly 17, 2012 7:13 AM

Local taxpayers are on the hook for any overruns for the region’s new secondary sewage treatment system, officials confirmed Monday after the federal and provincial governments announced the maximum amounts they’ll contribute. To cover the expected total bill of $782.7 million, the federal contribution will be up to $253.4 million, the provincial contribution is a maximum of $248 million and the Capital Regional District provides the balance, estimated at $281.3 million. Federal money will arrive before and during construction, but the province will wait until the system is running. Conservative MP James Moore announced the federal money at a news conference Monday at the Inn at Laurel Point. “The construction is beginning soon, work begins this year, the funding is now flowing and a partnership has been built,” Moore said.  The goal is to end the pumping of raw sewage into the waters around Victoria, Moore said. “Its time has come, and we’re taking action.” The provincial government made it clear that its contribution — based on 2010 cost estimates — will only be delivered when the project is up and running in 2017-18 or 2018-19. “We want to make sure we get to substantial completion before we start contributing,” said Oak Bay-Gordon Head Liberal MLA Ida Chong. “Basically you have to show your receipts ... and it has to be working,” said CRD chairman Geoff Young. The CRD is on the hook for land purchases, legal fees and annual operating costs of $14.5 million. The estimated property-tax burden for homeowners ranges from $100 to $500 a year, depending on the municipality and how much waste and wastewater it produces.If the project goes over-budget, the CRD has to pay the difference, said Jack Hull, the CRD’s general manager of integrated water services.

Saanich Mayor Frank Leonard said the funding caps by senior governments are justifiable. “I think it inspires discipline.” The system consists of three projects: the McLoughlin Point wastewater treatment plant in Esquimalt, a biosolids energy centre proposed for Saanich and piping-system upgrades. At McLoughlin Point, liquid will be extracted and discharged into the ocean through a new marine outfall on the same site. Leftover sludge will be piped 18 kilometres to a biosolids energy centre, proposed for Hartland landfill in Saanich. It will be built through a public-private partnership with support from P3 Canada Fund, a Crown corporation that assesses, provides consultation and makes recommendations on public-private partnerships. Biosolids are to be processed into a fuel for cement kilns in Vancouver, replacing coal. Ownership of the facility and accountability stays with the CRD. Denise Blackwell, chairwoman of the CRD’s liquid waste management committee, expects construction to start in 2013, generating 10,000 “person-years” of employment. The CRD is to debate whether municipalities will phase in the increased tax burden as part of property taxes or on water bills. Currently, sewage flows through metal screens before it is piped about a kilometre into the ocean.