Nanaimo Regional District to Borrow Money to Pay for Whiskey Creek Water System Upgrades
The Whiskey Creek water service area is slated for a much-needed upgrade to meet Island Health’s deadline requirements.
The facility has been advised by Island Health to address water supply deficiencies since 2013. Whiskey Creek’s water supply system has been in need of improvement since 2012.
In 2021, the Regional District of Nanaimo (RDN) commissioned a new groundwater source, but due to lack of funds, a temporary overland haul water main and portable diesel electric generator as power source have been installed.
Island Health issued an operating license for the new groundwater source late last year, but it includes a requirement that the RDN install a permanent transmission waterline by Dec. 31, 2022.
In 2020, the RDN received a $931,000 grant for the project under the Investing in Canada – Rural and Northern Communities Infrastructure Program to pay for the conversion of the temporary system to a permanent operation.
The project was put out to tender and the RDN received two price offers. But they were well above the amount planned for the works.
To make up for the shortfall, RDN staff offered a short-term loan of $200,000 on behalf of landowners who are within the area served by the water system. In addition, staff suggested that $46,000 from the Whiskey Creek Water Service Area Capital Reserve be allocated to the project. This would allow the cost of the project to increase to $1,177,000.
Nearly 130 plots in the service area would be impacted by the loan. Once approved by the RDN Board of Directors, owners can expect to see their rates increase by approximately $350 to $375 per package over the next five years. The current amount of tax paid by residents is approximately $970.
Staff indicated that the permanent system will reduce operating costs because funds to pay for temporary equipment rental, fuel and bulk water purchase will be eliminated.
The Whiskey Creek area has had to endure high turbidity in its water supply from Crocker Creek, which often occurs during the rainy season. The situation worsened in 2020, leading the RDN to truck in water to keep the reservoir full.
Staff recommended awarding the construction contract to Tritech Group Ltd for a total value of $997,403.27 excluding GST.
The RDN Board of Directors has authorized borrowing of up to $200,000 along with additional funding of $46,000 to be drawn from the Whiskey Creek Water Service Area capital reserve.
Regional District of NanaimoWater