Midland council has passed a $585,000 increase to a $5-million aeration system project for the town’s wastewater treatment centre.
Through an environment and infrastructure department report, the topic was introduced by Mayor Bill Gordon as “an unfortunate but obvious overbudget at a recent special council meeting.
Engineering manager Mitch Sobil explained to council that despite the project going to tender and receiving four bids, the lowest bid was a fair market price.
“The need for the project is driven by both the existing deficiencies and future growth,” said Sobil. “Our 2021 wastewater master plan identified oxygen deficiencies in our aeration system and there was a need to improve that regardless of growth, as well as we are preparing for growth with this project."
"This project is phased and scaled in a way that we can add modules onto it in the future to upsize our aeration capabilities as future development comes on board.”
Council had previously approved the total budget of $4.9 million for the project, and the proposed increase would bring the total to $5.5 million with approved funding to come from external debt financing.
“Delaying the project though – if we were to wait until the 2025 budget or simply not approve it, it doesn’t eliminate the need, it kicks it down the road and makes it worse. Things only get more expensive, as well the plant operating costs will only continue to go up because of the inefficiencies,” Sobil noted.
In the absence of CFO Lindsay Barron at the meeting, Coun. Bill Meridis posed finance questions toward Sobil with his first aimed at a budgeted construction contingency cost of $135,000 in the report, and that if unspent the money would return to reserves or the possibility of going toward a tax savings which Sobil explained it couldn’t.
“The $135,000 contingency is there so that we can efficiently make decisions as the project goes,” said Sobil, adding, “we don’t approve spending on it unless it’s absolutely needed to keep the project moving forward.
“The other thing we have to consider with this project is, this is a wastewater rate supported project, it’s not a tax rate. The debt financing and ongoing loan repayments, or even the capital side of it, is coming from the wastewater rates and wastewater reserves. It doesn’t have any rollover to the tax supported side, it’s completely separate,” Sobil pointed out.
When asked by Meridis if other financing considerations had been looked at with the interest to return to the town’s coffers, Sobil explained that the financing decisions would be made upon Barron’s return and could be considered along with cash flow, reserves, and other priorities.
Sobil also noted that starting the project as fast as possible was his goal, following a question by Coun. Catherine MacDonald. Although a procurement time frame would lock prices for the low bid in a 90-day window, Sobil stated “from a project management standpoint, we need to move as quickly as possible.”
“There’s certain works that we need to get done before winter time to be in the ground before things have frozen; cold weather with concrete work to do,” said Sobil. “At the same time, there’s certain work that’s a benefit to do in the winter time because the loads at the plant are lower and we can run it at a different efficiency.
“If I had a month to spare, you’d probably see me in September instead of a special council meeting, but time is of the essence and that’s why we’re here today,” Sobil said.
The project upgrade increase was approved by council to be debt financed with annual debt payments paid by wastewater user rates. Notably, Gordon stumbled through the wording of the motion and missed saying that 30 per cent of the project would be paid through development charges as was written in the recommendations, but the motion was approved nonetheless.
The wastewater aeration upgrades project report is available in the council agenda on the town of Midland website.
Council meetings are held every third Wednesday, and can be viewed on Rogers TV cable channel 53 when available, or through the livestream on the Rogers TV website. Archives of council meetings are available through Rogers TV and on the Town of Midland’s YouTube channel.
