Council to consider moving ahead with final phase of sewage plant upgrade before securing expected federal cash

City council will consider approving $115 million toward the final phase of the North End sewage treatment plant upgrade, while civic staff warn sewer rates would soar $200 higher per year if more federal funding isn’t provided.

However, several politicians say a response from Ottawa to the city’s request for more money is expected soon.

A water and waste report asks council to waive a condition that the city finalize funding agreements with the provincial and federal governments for the mega-project before awarding the money for a contractor to complete the $115-million development phase agreement for the final project.

The third and final nutrient removal facilities phase is expected to cost $1.57 billion, bringing the total cost of the entire upgrade to $3.1 billion.

The city has asked the senior governments to provide $500 million each for Phase 3, and the province has publicly promised to do so.

“(Federal) funding confirmation has not been received but the city understands that decisions… will be made soon,” writes Cynthia Wiebe, manager of engineering services, in the report.

If the money doesn’t come through, city council would be asked to raise water and sewer rates to cover the $500-million gap, the report says.

In that “unlikely scenario,” the average household of four would pay about $200 more per year between 2027 and 2032, city spokeswoman Lisa Marquardson said in an email.

“While we remain confident that we will secure federal funding for this important project, we are obligated to provide Winnipeg ratepayers with a transparent view of (the) potential rate impact if funding were not secured,” wrote Marquardson.

Mayor Scott Gillingham said the city is “very, very close” to securing federal funding for the project, so he supports waiving the requirement that a deal be finalized before the next contract is awarded.

“I’m so confident that we are going to secure that funding, that I’m certainly willing to approve this $115-million contract,” said Gillingham.

The mayor said the need to avoid steep hikes to residents’ sewer bills is a key reason the city has spent years lobbying senior governments to help pay for the project.

“I’ve been doing this for the people of Winnipeg so we can keep the rates affordable. (We’ve) committed to freezing water and sewer rates for 2027, if we can get, or once we get, confirmation on the federal funding,” he said.

Coun. Ross Eadie, chairman of city council’s water and waste committee, agreed that the prospect of federal funding appears “quite good.” He said council members have no desire to implement steep utility rate hikes.

“Everybody knows people are struggling financially but the reality is this (project) has to be done. The city can’t avoid doing it,” said Eadie (Mynarski).

The third phase of the sewage upgrade will greatly reduce algae-promoting pollution that flows out of the plant and increase sewage-treatment capacity, which the city report says is “urgently needed.”

Terry Duguid, the federal MP for Winnipeg South, said his government also wants to avoid the potential rate hike.

“If the three levels of government don’t come together in an important way to share the load of the costs of this third phase… there will be a very significant impact on ratepayers, which none of us want. There (are) very active discussions on Phase 3 and the discussions are going very well.… I think there’s going to be a positive result,” said Duguid, in an interview.

He did not commit to a firm timeline for a federal response but noted Ottawa has a track record of supporting the project so far.

During a press conference Wednesday, he said details of an agreement are being discussed.

“I’m very, very optimistic that it’ll be a priority of all three governments as they come together to bring $1.5 billion to the table to complete Phase 3… I think we’re expecting news in the not-too-distant future,” he said.

Coun. Brian Mayes said he’s concerned potential water rates have been estimated to publicly pressure other governments to help pay for the mega project, causing confusion for residents.

“It’s great if we get the funding.… But the rates are just going up, down and sideways. It’s just a political football,” said Mayes (St. Vital), a former chairman of city council’s water and waste committee.

The councillor said he believes the Public Utilities Board may be better suited to approve Winnipeg water and sewer rates than the city is, based on fluctuating rate estimates the city released in recent years. The PUB already sets rates for other Manitoba municipalities.

If council approves the staff recommendations, the $115-million development phase contract would be awarded to Kiewit Construction Services. That work will help design the project and determine its cost, scope, schedule and risks.

If the company and city reach an agreement through that process, the same contractor would become the project’s design builder.

joyanne.pursaga@freepress.mb.ca

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