Voters will have the final say on whether Abbotsford and Mission move forward on a P3 (public private partnership) deal for the new Stave Lake water supply and treatment project.
It was announced at a joint council meeting on Thursday night that if both councils approve a P3 recommendation, a referendum would be held during the municipal elections in November. A P3 deal could result in as much as $70 million in federal government funding towards the system, which is now estimated at $300 million – $50 million for the intake/pump station, $130 million for the water treatment plant, $105 million worth of pipeline construction and $15 million for reservoir construction.
“It’s an increase of about $100 million from the original estimate,” said Tracy Kyle, Abbotsford’s director of water and solid waste.
She explained the increase was partially due to the need for an underground tunnel to connect the intake with the pump station, to avoid disturbing known archeological sites and address concerns raised by First Nations.
Stave Lake’s water is needed to meet the demands of both Abbotsford and Mission. It would become the cities’ fourth source of water. Presently the two communities are serviced by Norrish Creek, Cannel Lake and 19 groundwater wells. These three water sources will continue to be maintained and run publicly.
“Our main water source will still be Norrish Creek. Stave Lake will just supplement it,” said Abbotsford Mayor George Peary, adding if approved, only Stave Lake would fall under the P3 umbrella.
Chris Baisley, from the consulting firm of Deloitte & Touche, explained the P3 business case to members of both councils.
He is recommending a hybrid-P3 application involving both the design-build-operate (DBO) model and the design-build-finance-operate (DBFO) model. As the names suggest, one model has a private entity design, build and operate the water system, in this case under a 25-year term, while the other also includes private financing.
The hybrid idea would see the intake and pump station, water treatment plant and the reservoir expansion fall under the DBFO model while the transmission mains (piping) would be DBO.
The inclusion of private financing creates a long-term warranty, which ensures the pump station and treatment plant run smoothly over the 25-year period. However, the piping, once in the ground, does not need the benefit of a warranty, said Baisley.
The hybrid plan should fit under the guidelines of PPP Canada, which may provide a grant up to 25 per cent of the total cost.
Both councils will discuss and vote on the P3 recommendation during their next meetings on April 4. The public will have the opportunity to provide input at that time.
If councils both agree to move forward, the referendum will be a two-part question – one regarding borrowing money to pay for the capital costs, and the other asking for approval of the financial terms of the P3 agreement. Both communities would have to approve the referendum for the project to move forward.