The Municipal District of Lesser Slave River is digging deeper into its capital reserves to finish the Smith Water Treatment Plant upgrades, approving an extra $545,130.43 for the project.
The additional funding brings the total estimated cost of the water plant overhaul to roughly $6.84 million. The funding shortfall sparked a lengthy debate in council chambers over how municipal projects are managed, bid on, and paid for.
The primary driver behind the rising cost is a mandatory 10-week shutdown of the facility required to complete the upgrades. To keep taps running in the community during the construction period, the municipality must haul in treated water every day. The logistical challenge of trucking in daily potable water is expected to cost the municipality between $200,000 and $400,000.
Because of the massive volume of water required to keep the residential system pressurized during the shutdown, the municipality will also be forced to temporarily close the bulk water truck fill stations in both Smith and Flatbush.
Beyond the water hauling expenses, the financial shortfall led to a debate over the municipality’s use of a Construction Management at Risk delivery model.
In a traditional tender model, an engineering firm designs the entire project, and contractors submit competing bids to build it. Under the new model, the construction manager is brought in early during the design phase to provide input, ultimately establishing a guaranteed maximum price for the build.
Councillor Brad Pearson questioned the change in methodology. He said he preferred the traditional tendering process to ensure the municipality was getting the lowest possible price through open market competition. Pearson noted that bringing a contractor in to help design a project and then giving them the contract without a traditional tender felt like a departure from standard practice.
“Why are we inventing the wheel with a new methodology?” Pearson asked.
Chief Administrative Officer Kevin Gannon defended the new model. He said the traditional tender process often leads to contractors submitting low bids just to win the job, only to hit the municipality with expensive change orders once construction begins.
Gannon said the new model absorbs that risk and guarantees the construction price will not increase further. He said if the municipality had gone with the traditional method, they would likely be asking council for even more money because of skyrocketing material costs and inflation.
“The entire idea of the CMAR is that we can get closer to an actual price because we are working with the contractor who would typically be building it,” Gannon said. The guaranteed maximum price protects the municipality from market fluctuations, he added.
Adding to the overall cost of the region’s utility upgrades, administration noted there will be an additional $226,000 in engineering oversight fees. This money will be paid to Associated Engineering to formally supervise the construction work at both the Smith water plant and the Canyon Creek water plant projects.
Despite the concerns over the delivery method and the rising price tag, council members agreed the upgrades are desperately needed to secure a reliable, long-term water supply for the community. The motion to proceed with the final phase of the project and approve the $545,130.43 from the general capital reserves was carried unanimously.
Armaan Khanna
Local Journalism Initiative Reporter