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Council quiet on P3 cost breakdown

Staff assures half of $1.3 million can be used
1329sewage
$1.3 million to bury a P3? Photo by Maureen Provencal

Van Powel wants to know what council is going to do with the knowledge that it cost $1.3 million to pursue the now-abandoned public-private partnership for the sewage plant upgrade.

"What are the ramifications?" asked Powel this week.

"How does council feel about this amount of taxpayers’ money being really squandered since we still haven’t got a shovel in the ground (more than) two years later?

Council members were mum on the issue when the costs were presented in a staff report at Monday’s council meeting.

Only Councillor Nancy Wilhelm-Morden, who like Powel has been asking staff for a detailed cost breakdown, spoke to the issue briefly and that was to say she would reserve comments for the lessons learned session council has planned for September.

Contacted later about the $1.3 million cost Wilhelm-Morden said: "I have a lot of things to say about that but I’m going to say them behind closed doors."

Asked to comment on the costs after the meeting Mayor Ken Melamed said it was a high number but the good news is that staff believes 50 per cent of the work done will be transferable to the work now underway – work that will be done the traditional method with the municipality contracting out the design, getting companies to bid on the construction and then hiring a contractor, the so-called DBB (design-bid-build) approach.

That means the much-needed sewage plant upgrades, which should have been complete by 2005, will now be done by spring 2009, according to the revised timeline.

Every month of delay increases the budget by as much as $250,000, according to a municipal newspaper ad in early June, because of the escalating costs of construction.

Meanwhile the sewage odour continues to blanket Function Junction at the entrance to Whistler and some days, particularly the busiest days over Christmas, the resort is violating its environmental standards, discharging an excess of suspended solids into the Cheakamus River.

"It’s fair to say we would have preferred that it be completed already," said the mayor.

"(This timeline) still meets our desire to have it complete before the Olympics."

But at what cost?

Monday’s report to council did not include cost estimates of the project using the DBB route.

Whistler’s general manager of engineering and public works, Brian Barnett, said the DBB is millions of dollars more costly than what was expected.

Wilhelm-Morden took exception to that comment at the meeting, essentially saying there is no evidence to back it up.

The so-called "shadow bid" for the P3 is just an example, said the councillor, with no real numbers attached to it.

But purported cost savings in the range of 15 per cent was one of the reasons the previous council chose the P3 option, and why the current council initially chose to continue that path.

"In the information that we put out there was the suggestion, people could choose to believe it or not, that the DBO (design, build operate or P3) might save money and in rejecting the DBO, my take is the community was prepared to see this cost a little more money, if that’s the case," said Melamed.

"We won’t know because we can only choose one path."

Wilhelm-Morden also questioned the staff report that stated: "Given the over-heated construction market, construction cost estimates during the DBB detailed design phase could indicate that costs will exceed the RMOW affordability targets, based on the proposed effluent criteria."

The report goes on to state that to deal with the escalating costs, Whistler could phase the construction of some process capacity, which could lead to higher risk of effluent concentrations.

The June newspaper ad, paid for by the municipality, also warned of relaxed environmental standards if the P3 was rejected.

"Environmental standards might need to be more lenient, such as the concentration of suspended solids the plant discharges into the Cheakamus River."

But lax standards are not an option, according to the mayor.

"We’re not going to compromise environmental integrity or the odour control systems," said Melamed after the meeting. "We’re not going to compromise anywhere.

"The object is to control costs and be as responsible as we can."

Public pressure forced council to reexamine the P3 and last month they abandoned those plans after more than 10 per cent of registered voters made their opposition known under the alternative approval process.

The cost breakdown made public Monday night highlights where the money was spent on the P3 option.

Almost $350,000 was spent on Partnerships BC, the provincial government body that is mandated to investigate and, where appropriate, promote P3s in the province.

More than $100,000 was spent in various legal fees. The public communications consultants were given $56,000 and the alternative approval process, a legal requirement because the upgrades required the municipality to borrow money, cost $72,000.

Upon learning about the $1.3 million in expenses, Powel was looking for more answers, such as how much money was spent in staff wages.

He also suggests increased costs were due to the delay of pursuing the P3, a number which is not included in the expenses.

"This figure ($1.3 million) is appalling enough on its own," said Powel. "And I have some questions as to its accuracy. But what is conveniently missing is the dramatically increased cost of construction due to the delay the P3 folly caused. Remember, the muni said every month cost taxpayers $250,000. Well, it’s been 28 months – that’s $7 million. Enough to build the library. How’s that for fiscal responsibility?"