$123.5M project includes $10M contingency, U.S. imports subject to tariff risk
Council has approved a $123.5-million (plus HST) contract for the expansion of the town’s water and wastewater treatment plants, with ASCO awarded the construction tender. The total includes a $10-million contingency for unforeseen costs. Stantec Consulting Ltd. will oversee construction administration and inspection at a cost of $9.5 million (plus HST).
The price tag came in higher than anticipated. Stantec attributed the increase to rising material costs, market volatility, and limited competition in some trades.
“We are planning on approaching the Canada Infrastructure Bank in order to get a preferred rate,” said chief administrative officer Diane Smithson.
The town has already secured a $35-million grant and is pursuing additional funding sources.
ASCO estimates about $14 million in components will need to be sourced from the United States, potentially exposing the project to tariffs.
“The bidders were instructed not to inflate their bids to account for an unknown tariff amount, which is in keeping with what other municipalities are doing with their tenders,” said Guy Bourgon, director of public works. “As a result, any tariff increases will be absorbed by the municipality.”
Council delayed awarding the contract at its May 6 committee of the whole meeting, opting to wait for the provincial budget and clarification on changes to Development Charges (DCs).
“I’m happy this council decided to defer for two weeks until we got all the information to make an educated decision for our citizens,” said Coun. Mark Hinton.
The province has since confirmed municipalities can continue collecting DCs, though payments may now be deferred until a unit is occupied. Previously, DCs were collected when a building permit was issued.
“We have enough coming in for our asset management of the underground system of water and wastewater pipes that we could make the payments on the debt and wait for the Development Charges to come in,” said town treasurer Trisa McConkey. “When we get the DCs, we pay back the reserve so we have the funds for the future.”
The town currently contributes $4 million annually to its water and wastewater reserve fund, used to support long-term infrastructure replacement. Staff say the DC payment delay is not expected to affect the town’s ability to service the new debt.
Construction is expected to begin this year. The wastewater plant is slated for completion by fall 2027, with the water treatment plant to follow in 2028.
“This is not a decision I particularly enjoy,” said Mayor Toby Randell. “We are going to alter our town because of this decision, forever. That’s important … I’m comfortable with being part of that group that has altered the community and believe some really great things are going to come because of it.”