Quadra sewer project delayed as SRD pursues grant funding

A call out to contractors to extend sewer service on Quadra Island has been postponed to allow the Strathcona Regional District to pursue grant funding for the costly project.

At its April 13 meeting, regional district directors decided to apply to the New Building Canada Fund, which provides one-third funding from both the federal and provincial governments. The local government applying for the grant — in this case, the Strathcona Regional District — is expected to put up the same.

The move, however, will delay the project — which will connect 38 properties in Quathiaski Cove to the island’s sewer system — because projects are ineligible for the grant funding if they have already been awarded to a contractor or if construction has already begun.

“In order to apply for funding … the project tender process and construction schedule must be postponed,” said Victoria Smith, the regional district’s special projects and sustainability manager, who added that postponing the tender and original 2016 construction schedule comes with some risk.

Because staff were not able to confirm when it would be notified whether or not its grant application was successful, staff are estimating the project would have to be delayed until late spring or summer of 2017. Putting the project off until next year will likely have an impact on the existing users of the sewer system.

“If this project is delayed and the new users are not connected to the system until mid-2017, the rates for 2016 and 2017 will need to be recalculated under this new assumption,” Smith said. “However, we can expect that the 2016 rates will likely be higher for the existing users.”

On the other hand, the advantage to securing the grant funding would be that the regional district could save its Gas Tax Funds, which under the current funding plan are allocated towards the project to lower costs for affected property owners, for other Quadra Island projects.

Smith warned the board that the grant would be in lieu of the Gas Tax Funds, rather than a top up.

“To be clear, it does not necessarily mean that the property owner contribution would be reduced in the event we were successful,” Smith said. “Funding may or may not be sufficient to complete the project.”

Electoral Area C Alternate Dan MacKenzie, who filled in for Director Jim Abram at last week’s board meeting, said Abram’s preference was to go for the grant funding.

“Director Abram is strongly in favour of proceeding with this approach,” MacKenzie said. “He would strongly like to see this motion pass.”

The board accepted that.

“I want to see whatever is in their best interest,” said Campbell River Director Andy Adams.

Applying to the Build Canada Fund means another chapter in the long-running saga of the $800,000 project that was approved through a referendum in July of 2014.

The project has yet to get underway because a Request for Proposals process to recruit contractors to do the work returned bids that were all significantly over budget.

Smith said last week that tenders for construction must come in under $900,000 in order to meet the regional district’s budget but she added that current engineering estimates for 2017 are closer to $1.3 million — a 38 per cent difference.

In January, the board voted to re-issue the Request for Proposals, much to the dismay of Director Abram, who said he was of the understanding that the project would be directly awarded to a consortium of people on Quadra.

Abram said former regional district CAO Russ Hotsenpiller met with the consortium and things appeared to be moving forward.

“Everybody was led to believe this was totally workable,” Abram said at a board meeting on Jan. 28. “Those people were led to believe that this was going to happen, because of that they adjusted their schedules and we adjusted our schedules. We have inconvenienced people to a point of possible lost income. That’s called lawsuits.”

Tom Yates, corporate officer of the regional district, said a commitment to the consortium may have been mistakenly communicated. Yates said that bylaws require a competitive procurement process for projects of such magnitude as the sewer expansion.

That procurement process will now have to wait as grant funding is pursued. The regional district has until April 28 to apply to the Building Canada Fund.