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Budget for water system nearly doubled to more than $6 million

City council approved this week a near doubling of the budget for construction of a new water system for Western Acres. Originally estimated to cost slightly less than $3.39 million, council added $2.95 million on Monday night for a total cost of $6.
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City council approved this week a near doubling of the budget for construction of a new water system for Western Acres.

Originally estimated to cost slightly less than $3.39 million, council added $2.95 million on Monday night for a total cost of $6.34 million, after learning the lowest of three bids for the work came in at $5.13 million.

The project calls for a new higher capacity water source well, to replace an undersized and aging pump station and reservoir and increased reservoir capacity in the name of fire protection and emergency backup power.

Engineering and public works general manager Dave Dyer attributed the jump to three reasons:

- The original budget was prepared in 2014 when the Canadian dollar was worth 91 cents U.S. It's since dropped to 76 cents and the pump station mechanical and electrical systems are made south of the border;

- The reservoir is made of reinforced concrete and the cost of steel has dramatically increased over the last year. The original estimate was based largely on the cost of a 2005 project - the last time a reservoir was built in the city, Dyer added.

- Construction costs have generally increased for pump stations and concrete structures in the region due to higher costs for trades in the north and a skilled labour shortage.

The entire bill will be paid out of the water capital expenditure reserve. Because the money won't be borrowed, the city is not obligated to take the project through an alternate approval process.

But four other projects on the books will be delayed for a couple of years. Three of them are in the Hart and one in College Heights.

Dyer said he doubts the cost of those projects will also rise as well.

"The ones we're deferring are linear water main projects which haven't seen that dramatic increase," he said. "It's the stations and the structures that are having a higher problem right now and we don't build those as often as water mains. We tend to have better numbers on the water mains so I'm not as concerned."

Most council members agreed there is little choice but to approve the increase.

"I'm really concerned about not proceeding," Coun. Murry Krause said. "We could vote no on principle but at the end of the day we still need to provide proper fire coverage and clean water and all those things that everybody insists on."

Saying he was "really not comfortable with almost doubling the budget," Coun. Brian Skakun was the lone councillor to vote against the increase.

The existing system dates back to the 1960s and was "never sufficient to accommodate the domestic demand of a full build out of the Western Acres subdivision," Dyer said in a report to council. "After over 50 years, there remain over 20 lots in the existing subdivision that are vacant due to the lack of water supply."

The budget also covers the cost of land acquisition, groundwater hydrogeological services, drilling of a second new well, detailed engineering design and construction period services and decommissioning of the existing well.