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‘Single most expensive capital project in the CRD history’ coming under fire

$2B Greater Victoria water supply upgrade criticized for cost and need
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A project to improve water supply and keep up with demand has been announced, but Colwood Coun. Ian Ward has said that this is not needed as water usage rates have not increased at the same rate as population growth. (News Staff/Thomas Eley)

Wholesale water prices will skyrocket to $3.50 per cubic metre from 77 cents if a new Capital Regional District infrastructure project gets a green light, says Colwood Coun. Ian Ward.

The proposal would allow for $2 billion in infrastructure projects centred around Sooke Lake and the Regional Water Supply (RWS). According to the CRD, it would look to increase water supply.

But the numbers do not add up, said Ward. Water usage rates have not increased at the same rate as the population, he said, and water usage per capita has decreased over the last 28 years.

“Because of changes to the plumbing code and the introduction of low water use appliances,” he said. “This plan operates on the assumption that water usage will increase at a linear rate with regional growth.”

The plan by the CRD would use development cost charges (DCC) to raise the money, which are provincially approved charges applied to developments for various projects such as sewage, water or townhouse development.

Developers will bear the initial brunt of the water price increases, but would be more than likely to be passed onto residential taxpayers as this plan by the CRD would likely double the cost paid by developers, said Ward.

“The developer is going to pass on those costs,” Ward said. “So that’s going to end up on the cost of housing. People are going to pay for that one way or the other.”

At the Nov. 14 Colwood council meeting, during which the proposal was initially presented, Mayor Doug Kobayashi made it clear he was dissatisfied with the plan. He believed it would further increase the unaffordability of housing.

“The assumption is that water is a linear extrapolation and it goes linear. It is not doing that. It is doing the opposite,” the mayor said.

Kobayashi said this plan would effectively double DCCs and make it harder for young people trying to buy a house to afford to do so.

“I just look at this and feel that the kids nowadays will never get into homes. If you look at these DCC rates and it is the equivalent whole municipal DCC, you have to question how valid this is.”

According to Ward, there was minimal public consultation from the CRD with this project, with only 22 participants sharing comments or asking questions over a month – for a $2-billion project.

“Only 22 people across the entire CRD, not just Colwood or another municipality, but across the whole region,” said Ward.

The $2-billion price tag might be different from the total number, too, according to Ward, and that figure might balloon to $3 billion or higher by the end of 2035 when this project is scheduled to be completed.

“By the time this project is hitting completion, it’s not unrealistic to think that costs are not increased by a billion dollars but potentially doubled to $4 billion.”

While the CRD states, the projects are valued at $1.53 billion in 2022 dollars and $2.05 billion in inflated dollars to 2050 to account for future design and construction costs

The proposal outlines six separate projects that it would like to develop: the Sooke Lake Reservoir Northern Intake, Leech Watershed, Water Filtration Plant, Transmission Mains, Smith Hill Storage Tank and studies and modelling, with a combined cost of $1,444.4 million.

“It’s difficult to provide economic justification for the construction of a filtration plant at this time,” said Ward. “The water quality is very good. It meets all of the province’s primary and secondary practices and requirements in terms of drinking water quality,” he said.

That is clearly stated in the CRD 2022 master plan, Ward said.

If it goes ahead, this project will be among the largest ever put forward by the CRD, according to Ward.

“This is the single most expensive capital project in the CRD history. So to have an engagement process that only heard from 22 people, I think it’s obvious to me that it is flawed.”

There was more public engagement about the proposed project, according to Andy Orr, senior manager of corporate communications at the CRD.

The public engaged online through social media, Orr said in an email. Facebook posts reached 12,352 users, and Twitter posts had 837 impressions.

Even though water quality is good right now it is expected to decline due to climate change, mixing of other sources and more significant water fluctions, Orr said.

He said that if the DCC program does not advance, an increase of $3.60 per cubic metre would be even more likely.

Without this program and investments in the water supply, that water demand will exceed what is available for people to use, he said.

By not having DCCs in place for the Regional Water Supply Service, the infrastructure costs necessary to support new growth must be paid for by CRD residents through higher water bills, Orr said.

~This story has been updated with comment from the CRD.

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