Council brief: City prepares $7 million borrowing bylaw for sewage upgrades
The amount the City of Revelstoke plans to borrow to cover costs for the first phase of a proposed sewage treatment plant upgrade is doubling from $3.57 million to $7 million.
At its May 24, 2022 meeting, Revelstoke City Council gave third reading to a loan authorization bylaw that increased the proposed borrowing for the sewage treatment plant.
The cost of the sewage treatment plant was originally estimated at $13,593,000, but a new report estimates the cost to be $16,824,753.
In August 2021, the city received $9,824,753 in federal funding for the project through the Canada Infrastructure Program. The program covers up to 73% of the project cost.
At the May 24 meeting, when asked why the cost of the project had increased, the city’s engineering director, Steve Black, cited a number of reasons.
“The reason is is that given the timing of again the original grant submittal, COVID and all the other issues that are out there, the original submission was around [$]14.5 [million] for the total project cost,” Black said. “By ensuring that we have a little bit of flexibility in the borrow, that ensures that we don’t have to come back to council for additional funds, or rescinding this bylaw and coming forward with another one.
“At least we’re very hopeful that that is the case,” Black added, noting that additional borrowing would mean repeating the borrowing bylaw process.
Currently, the project is budgeted at $14.6 million in the city’s financial plan and will need to be increased.
The proposed $7 million borrowing bylaw will require review by provincial authorities.
Large debt borrowing bylaws also require voter assent. Finance staff indicated they plan to use the “alternative approval process,” which requires a threshold of 10% of registered voters to submit a response form opposing the proposed bylaw in order to block the proposed borrowing bylaw. If the threshold is not met, the borrowing proceeds. If it is successfully opposed, a municipality has other options, such as proceeding to a referendum, or revising the proposed borrowing.
At its May 24 meeting, council heard that it takes about six months to finalize borrowing for the project.
The project is currently in the request for qualification phase, which closes on May 27, 2022.
The first phase of the upgrade project is expected to start in 2022 and be complete in 2024.
In depth: Revelstoke sewage treatment plant upgrade update
This article was first published in the January 2022 print issue of Revelstoke Mountaineer Magazine. It is published online on revelstokemountaineer.com on May 24, 2022
There was significant progress on the Revelstoke Sewage Treatment Plant upgrade in 2021. Here’s the condensed version to bring you up to date on what’s happening.
There were several developments on plans to upgrade Revelstoke’s sewage treatment plant in 2021, and it should result in construction of an upgraded facility in the coming years.
The sewage treatment plant needs an update due to operational and capacity issues. It has had problems that led to terrible acute smell events that eroded quality of life for neighbourhood residents.
The most recent was in 2018, when eye-watering smell permeated as far as downtown. For months, neighbourhood residents endured horrible smells caused by the malfunctioning system. It had happened several times before that.
The lagoon system uses bacteria to break down waste through aerobic digestion; however, if the chemistry isn’t working properly, it can start digesting waste through anaerobic digestion, which produces the smelly gases.
What was wrong with the old sewage treatment plant?
Revelstoke Mountaineer Magazine has been following the story sewage treatment plant for years and can offer a general summary. First of all, the plant was completed in 1973 and was both old and no longer able to deal with capacity. An upgrade in the early 1990s updated the diffusers, which pump air into the pools to drive biological processes. The upgrade may have caused new issues as it affected churn in the pool, possibly leading to more sludge buildup that led to anaerobic events. In the past decade, the city has done a number of upgrades. One was a new filter on the headworks building that cut down on smell from the sewage pipes. The city also upgraded diffusers, added mixers, and adjusted the operations of the plant, such as trying new chemical formulations to boost digestion. Generally, since many different factors play into operations, city engineers have been reluctant to point to one thing as the cause or solution, but there hasn’t been an extreme smell event since 2018. Nevertheless, the system is at capacity, preventing further growth.
The planned upgraded plant
At the start of 2021, a select sewage committee had been meeting to develop plans to update the facility. Over meetings staring in January and into summer engineering staff and consultants presented reports and some decision points at Revelstoke city council meetings.
Plans for the new plant were developed in early 2018, and the process essentially adopted that plan.
Generally, the planned new treatment plant will use the existing location but add new technologies to help improve the system. There are many new details, including adding a lift station to redistribute sludge, increasing aeration capacity, new screening, adding a bioreactor unit, adding a new chlorine contact tank, installing sludge collection manifolds, and extending the outfall into the Illecillewaet River.
“The phased approach utilizes features of the existing lagoon configuration to the extent possible by combining them with additional advanced technologies to upgrade certain aspects of treatment as part of the overall treatment strategy to meet specific regulatory objectives and population growth,” notes an engineering report.
The current timeline is for construction to happen in 18-24 months, with many preliminary steps happening before then.
What about the mechanical plant option?
The option of what’s often referred to here as a ‘mechanical’ plant was ruled out due in large part to cost, which city engineering director, Steve Black, estimated could run up to $100 million. In an interview, Black said a mechanical plant would need “four or five” new operations staff, making it cost-prohibitive, saying modernizing, expanding and using the existing system was economical and met capacity requirements.
One key detail is the plant is intended to be operated for about 20 years, which is a relatively short period, indicative of a lower-cost interim approach.
$9.8 million federal funding
In August, the federal government announced it was giving a $9.8 million grant towards the treatment plant. At the time, the cost of the plant was estimated to be $14.6 million.
Total increased $17 million budget
In November, city council approved the first step of a borrowing bylaw that will ask to borrow $7 million to augment the almost $10 million federal grant, bringing the total to $17 million. Originally, the city planned to borrow about $3.6 million and is now planning to borrow $7 million.
Black said the increased borrowing ask was in part to anticipate potential overruns, saying that the borrowing process is time-consuming and they didn’t want to come up short. “We anticipate the number will be less than that,” Black said of the final budget.
One concern he mentioned is construction cost inflation, which is generally much higher than consumer product price inflation. Pandemic-related increases to costs such as shipping have inflated construction costs by about 15% per year in the region, Black said. The longer one waits, the more expensive it becomes.
Federal environment discharge warning
We followed up on documents referenced in a city report and received a federal environment inspection report of the facility, and a February 2020 written warning from the Enforcement Branch of Environment and Climate Change Canada. It noted the treatment plant was in excess of its discharge limits for biochemical oxygen demand and total suspended solids. The report noted testing had recorded violations since 2015, including in 2016, 2017, 2018, and 2019. It also listed a series of potential escalating fines that could run into the millions.
Aside from the environmental concern, the situation is problematic for development. Revelstoke already has several large developments on the go that will increase volume. If the situation continued, fines and possibly restrictions on further development are a possibility.
However, in other correspondence Revelstoke Mountaineer Magazine received in response to our request, it appears that both the city and the federal government is focused on the upgraded sewage treatment plant as the solution to the issue.
Linking planning to Development Cost Charges
Who’s going to cover costs? The city’s Development Cost Charges (DCCs) are out of date, meaning that the cost of the replacement project, which was needed in part due to recent increases in sewage flow created by new development, is subsidized by existing ratepayers because new developments are underpaying what they should to support infrastructure costs.
The current council has promised to update the DCC bylaw, but in an update late in the year, completion of the bylaw may not be completed during this council term in 2022. (May 2022 update: The DCC bylaw update is now off the table for this council term.)
Black said a key part of establishing DCC rates for sewage infrastructure was completing plans that formalize the costs. During the process leading to the sewage treatment plant upgrade, the city’s engineering department completed its Stage 3 Liquid Waste Management Plan. The three-stage plan had been in development for over a decade, but was paused at late stage 2. Significant work was needed to complete the process.
Black said that work — the long-term planning — allows the long-term costs to be formalized and then used to calculate their portion of DCC fees.
What about consultation with affected neighbours?
The city is using a new digital engagement platform, Talk Revelstoke, but lags in marketing it, including consideration of stakeholder equity. A total of 61 people responded to a public engagement survey in 2021, a third of them Southside residents affected by smell. So, only about 20 neighbours provided feedback, which seems very low since it’s a huge neighbourhood issue for hundreds of people. The time allowed for engagement was short, likely due to time pressure vis-à-vis federal grants. Better consultation could have built confidence in the plan.
Background: A roundup of our recent stories on the problematic Revelstoke sewage treatment plant
January 2022: Revelstoke Sewage Treatment Plant upgrade update
August 2020: State of the smell: Our Q&A update on the Revelstoke sewage treatment plant
August 2019: $10 million Revelstoke sewage treatment plant grant fails
October 2018: We asked Revelstoke council candidates about debt financing for the smelly Southside sewage treatment plant
August 2018: Council supports grant application for sewage treatment plant upgrades
August 2018: Grant application for Revelstoke sewage treatment plant upgrade requires $3.6 million city commitment