Tofino hopes to break ground on a wastewater treatment plant this fall, though what the facility will look like and how much it will cost are still being flushed out.
With Greater Victoria’s new $775 million sewage plant officially coming online last month, Tofino now carries the unfortunate distinction of being the only community on Vancouver Island to discharge raw sewage into the ocean.
Both Tofino and Victoria were given a deadline of Dec. 31, 2020, to treat their sewage and while the latter now has an operational facility and the former hasn’t yet broken ground on one, Tofino’s CAO Bob MacPherson said the arrival of Victoria’s facility doesn’t make Tofino’s pursuit any more urgent.
“This is urgent regardless of what’s happening down island. This is a priority for council to get done in a responsible way and that’s what we’re working toward,” MacPherson told the Westerly News. “One positive thing about Victoria being up and operating now is some of the expertise that was committed to making the Victoria project happen may have a little bit of time available to work with Tofino and help us find a way through this project.”
Tofino seemed to have a solid path towards starting construction back in 2019 when it received $40 million in funding from the provincial and federal governments. The district’s consultants had estimated that the facility Tofino had mapped out would cost $54 million and the town’s municipal council approved borrowing the remaining $14 million to cover the cost.
That cost estimate proved woefully inaccurate however as the two bids the district received to build the project came in over $84 million, forcing Tofino back to the drawing board to see if more funding could be found, or a cheaper facility could be built.
MacPherson said the district brought in a procurement advisor who specializes in challenging capital projects and has expertise in finding realistic and significant savings.
“We weren’t talking about, ‘Can we trim a million dollars off?’ It’s, ‘Can we trim ten or tens of millions of dollars off the project,’” MacPherson said. “The feedback that we got through that process was, ‘Yes we can.’”
Trusting that procurement advisor’s advice to get through a situation muddied by a significantly undervalued cost estimate presented by another consultant could raise local eyebrows, but MacPherson said the district needs to continue to put trust in available expertise.
“I don’t want to throw shade on any consultants at all. I think everyone has given this their absolute best effort and have provided us with good advice,” he said. “We need to continue to rely on people who have construction experience that we just don’t have and can’t have internally at this point…While the advice and feedback that we get has been imperfect, I think we need to take the lessons that we’ve all learned, consultants and (district) staff, and take that information and try to fold it into the decisions that we’re making in the future quite skillfully.”
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He said the district reached out to the provincial government prior to October’s election to suggest that Tofino would likely still need more funding for the project, but wanted to see how far it could bring the project’s cost down before making that ask.
“We said to the province, ‘We’re going to need more money. We don’t know how much more, but we want to hit the pause button on how much more funding we need and we want to do what we think is responsible for the universal taxpayer and see if there’s a way that we could deliver the same results through different methods,’” he said.
He said the procurement advisor’s work has largely wrapped up and the district is now working with engineers and construction companies to hammer out the sweet spot between the right project and the right price, adding the district needs to avoid cutting so much of the cost that it winds up with a lemon.
“You can buy a really cheap car, but if you’re doing lots of maintenance on it every month and it’s really inefficient with fuel, you didn’t really save any money on buying a cheap car,” he said. “It would be really easy to knock all kinds of stuff off the bottom from this project that would result in a higher operating cost that the district would have to endure for the next 60 years.”
He suggested the operating costs need to be kept in check because while the district is still holding $40 million in grant funding, the operating costs will be brunted by local taxpayers.
“The work that we are going to do over the next few months will be looking at what can realistically be changed with the project that doesn’t affect our ability to comply with regulation once the plant is operational and we want to make sure we’re not making capital funding decisions that will impact operational funding decisions in an excessively negative way for the future,” he said. “We wouldn’t trim a million dollars off the capital of this project if it resulted in an additional $100,000 a year in operating costs. The math just doesn’t work on that over the life of this project for 60 years or so…On top of that, the operating costs are entirely borne locally and that’s a challenge. That’s very different from capital costs which are shared with the provincial and federal government.”
He said a cost estimate for the revised project is not yet known, noting the town’s council has approved borrowing up to $16 million for the project and is unwilling to go any higher.
“Even if it was lawful to borrow, it’s just not something that Tofino would be able to afford. It would be a tremendous burden on taxpayers in this little municipality,” he said.
“That’s, I think, fair to say more than a lot of our taxpayers wish that we were going to borrow. Going beyond that is just something we can’t do.”
He added that the district is also unable to borrow more legally.
“The District of Tofino finds itself trapped between two regulations, one of which says you must treat your sewage and the other of which says you’re not allowed to borrow the money that you would need to build the facility to treat the sewage,” he said. “It’s one of those really difficult problems where you do one thing and you break one law and you do another thing and you break a different law. So, we’re trying to find our way through that quagmire now.”
He said the district is currently working with the two companies that submitted bids last summer as well as its legal team to ensure transparency with the construction community in case any other companies decide they want to participate as well.
“We’re working through that process now and we will soon be determining whether it’s those two contractors or others will be allowed into the process,” he said.
“What they are doing for us now is trying to set up a process that will be fair to both parties and, ultimately, we would choose one of them…They would end up submitting a proposal to us and how we select between them, that’s to be determined.”
He added working with the private sector to produce and operate a facility hasn’t been ruled out, but is not an option the district is aggressively chasing.
“Nothing is off the table at this point,” he said. “It’s not a door that’s closed, but it’s not one that’s being actively pursued at this point.”
He noted that if a private company was to take on the job, that company would make the investment with an eye on potential profits, which would likely be captured through rates.
He said the district hopes to break ground this fall, noting the facility is expected to take roughly two years to complete.
Despite the district blowing past its Dec. 31, 2020, deadline to treat its sewage, MacPherson said the district has been in fluid conversations with the provincial and federal governments and believes there will be no penalties as long as work is ongoing.
“What we are given to believe is that as long as we are working to advance the ball on this, there will be understanding,” he said. “If we had decided that we’re not doing this and we’re not advancing the ball, I think we’d be hearing a different response than we’ve heard.”