Rose Valley Water Plant - $20 Million Over Budget

[kgcayenne]

Something interesting to think about that just arrived (more to come after a review - stay tuned):

Here is how I look at the cost for the RVWTP; compare the costs to other Cities as follows;

20200924 Cost per Citizen.jpg

I understand that we have two water treatment plants but did anyone consider the costs involved? We will be more than double the capital cost of other water treatment plants and double the operational costs. Was there a better way to look at this whole issue? I realize it is too late now but we need to look at broader pictures when spending our money on such large projects. The City Council does not seem to care that we are $20 Million (which was the cost of the 12 year old Powers Creek Filtration Plant) over the original quoted price.

How many pipelines, watermains and associated interconnects were in those projects, and what were the land acquisition costs?

[ag2wk]

Another excerpt from a received copy of a long email to the City

How about the March 30, 2017 City media For Immediate Release stating: “the Rose Valley Reservoir, Council was presented options at its meeting Tuesday, March 28 for funding the City’s portion ($12.5 million) of the $53.5 million construction. Council agreed to use internal funds (reserves, Development Cost Charges, Capital Expenditure Charges) and short term borrowing of $1.63 million for its portion of construction costs.” - Is there any wonder why people are upset with a potential $23.5 Million in borrowing being thrust upon us without notice! Where is the rationale for this additional borrowing? Where is the money going?

[ag2wk]

Its a budget folks, it should be high

If it was done by a so-called "professional " estimator it should be damn near spot on.
Any untrained idiot can provide an unrealistic guesstimate.

Another excerpt from a received copy of a long email to the City

The City Engineers have been working with Consulting water plant experts, AECOM Canada Ltd. since 2017. This plant should have been shelf ready long ago with a new budget estimate, if necessary, released to the users who are paying the bill. Everyone would have understood a 10% cost overrun even over the City’s 15% contingency, but a 40% $20 million surprise is just plain careless by the people in charge.

[dogspoiler]

Relax people, save some rage for the next increase.

[ag2wk]

Another excerpt from a received copy of a long email to the City

Are the decommissioning costs included in the 75 Million or are we going to pay more capital to remove the three Okanagan Lake intakes? Can the intakes somehow be turned over to use it for agriculture thus reducing a little bit of cost for the RVWTP and possibly save us the decommissioning costs? What is the decommissioning cost and when is that coming at us?

One estimate has us paying another $4.5 million to decommission the three existing Okanagan Lake Intakes on top of all the other costs for the RVWTP. The Capital Costs have increased, Operational Costs are apparently going to increase, Debt Servicing may increase greatly when interest rate renewals come in ten years, & now another $4.5 Million for decommissioning the old intakes. It’s a good thing we citizen users are made of money.

Speaking of Agriculture water rates ... is everyone aware that we residents are subsidizing the water rates for anyone who is classified as agriculture. Agriculture consumes, approximately, 24% of the total water produced per year but only pays for 2% of this consumption cost. This is costing residential users, approximately, an additional $2 million per year in extra user fees.

[ag2wk]

Another thought from a received copy of a long email to the City

There are so many questions as to how the City is spending our money - Are they spending wisely or have they adopted a get the job done at all cost attitude? - The taxpayers/users need to be confident that the City is planning, documenting, and carefully spending our money and, hopefully, saving us money that can be spent on other needed water projects. (Yes I am grateful for grants but that is our tax dollars as well and should not be a cause to be wasteful with budget money). Because of lack of transparent timely reporting and seeing previous project(s) cost and contingencies going well over budget, we do not feel very confident just now. Now the RVWTP is way over other such plants and what we were told was going to be the budget.

This Council is definately NOT transparent.

[Steve-O]

received copy of a long email to the City

That's your source? Seems legit .

[Yasch93]

ag2wk, did it ever cross your mind that possibly the original estimate was way too low? Based on the track record of previous council and management, it is quite likely that they would have come in substantially over the original estimate. Maybe this City Manager and council actually have it right this time?
It is very apparent that you don't like the answers you seem to have been getting from the city. If you are getting the answers, not sure how you can continue to say they are not being transparent. Although you have thrown around a lot of accusations, you also haven't shared any of the answers you have received. Just because you think you know better they aren't being transparent?

[cv23]

If government estimators presented a realistic and somewhat accurate budgets NOTHING would ever get done as all large projects would be considered far to expensive to proceed with. By presenting grossly inaccurate and under cost estimates the projects are approved and government is left with no option but to approve all the supposed "extras" once the project has been started. This is how large government projects work as these projects never come in on or even near the original budget presented.

[ag2wk]

ag2wk, did it ever cross your mind that possibly the original estimate was way too low? ..... not sure how you can continue to say they are not being transparent.

“Possibly the Original estimate was way too low”? Yes that did cross my mind which is why I researched the cost of other water plants in other Okanagan Cities. If the final cost comes in at their current estimate of $75 million, the RVWTP Users will be paying a capital cost of almost four times other city plants. If you combine the Rose Valley and Powers Creek plants the Users will be paying double the cost of capital as in other Cities. The previous Council mishandled the project by delaying it for so long. The Current Council perhaps purchased the wrong land which may be part of the additional cost. We do not know because they are not being transparent. All they have to do is provide the original budget in comparison to the current estimated budget. It may put a stop to the discussion of it being 40% over the original budget as we will then be able to see where our money is going.

“they are not being transparent” If you have a copy of the two RVWTP budgets mentioned above, please provide it here so we can see for ourselves. (The City will not provide - Not transparent) If you can find a ten year capital budget, please produce it here. (The City only has a projected 2020 - 2024 Financial Plan - Prior to this Council we could anticipate with a Ten Year plan (The City will not provide - Not transparent) The City used to produce quarterly divisional detail report statistics, including the RCMP. Since this Council; no such quarterly reports. (The City has not provided - Not transparent). Apparently there are human resource issues with forcing people out. The City has never address this change of staffing and the payouts involved. (Not transparent). Mayor Milsom during the March 25/19 RVWTP land acquisition stated; “there may be an increase in the cost of construction” and “possibly an increase in operating costs” https://www.castanet.net/news/West-Kelowna/252393/New-water-plant-secure (No information on the “may” and “possibly” so Not transparent) There was a substantial discussion about involving the public at last night’s Council meeting. Why would they have such a discussion? We the people of West Kelowna are paying the bills so we should have an easy ability to legally find out everything that is going on with our City and how they are spending our money and/or acting on our behalf.

[common_sense_guy]

ya that"s why they make bad decisions, cause there is no city hall.

I'm not surprised you think that.

You didn't realize that was sarcasm did you