Core taxpayers worried about cost overruns on $765-million sewage treatment bill
VICTORIA – It’s far too early for taxpayers to celebrate a less expensive version of a sewage plant at McLoughlin Point, according to Grumpy Taxpayer$ of Greater Victoria.
Including the $65-million or so spent to date, the most recent proposal by an expert panel that’s before the CRD board puts the price tag at approximately $765-million. That’s much less expensive than the $920-million for a plant at Rock Bay or the $1-billion for plants at Rock Bay and McLoughlin.
“The key word in the report is ‘approximately'”, says Stan Bartlett, chairperson of Grumpy Taxpayer$ of Greater Victoria. “Taxpayers could face significantly higher annual costs than the projected $146 to $344.”
“Why are the annual taxpayer costs much lower than past estimates?” says Bartlett. “Is it proven technology that’s recommended or unproven, risky cutting-edge technology? Has inflation been fully costed in the estimates?”
After years of delay and millions of dollars wasted, questions must be asked about how and why did we get to this point. It’s estimated that by the time the project is complete its “life cycle costs” will be $927-million (Core Area Wastewater Treatment Program, Business Case, Page 8).
The annual projections for taxpayers include costs for capital, operating and maintenance funding, all of which could change significantly, says Bartlett.
The panel experts acknowledge that the CRD faces various risks to starting and completing the project (any or several of which could drive up the bill for taxpayers). Among the risks:
- The seven municipalities impacted by the sewage treatment project will need to contribute $311-million. They are on the hook for any cost overruns for the mega project as senior government financial contributions are capped.
- The CRD also funds unforeseen increases in operating and maintenance costs over the life of the wastewater and biosolids treatment plants.
- Cost estimates from the report include studies but not the construction of a possible plant for the West Shore.
There are risks typical of any large construction project and it’s fairly common for mega projects to be 30 per cent or more over budget. Notwithstanding the total bill taxpayers may be facing for the sewage treatment, the project is federally mandated.
Debt is mounting. The CRD has committed to spending $30-million for social housing over the next five years and is considering an expenditure of $16-million to unify 9-1-1- and police emergency dispatch services in the region. At the end of 2015, CRD debt was already $425-million, plus another $150.9-million for the Capital Regional Hospital District.
References: Victoria Region Debt Clock, 2016