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May 11, 2018, 8:59 am

Kelowna's Clean Drinking Water Project Proceeds

City of Kelowna

KELOWNA - Emil Anderson Construction (EAC) Inc. has been selected to construct the first phase of the Kelowna Integrated Water Plan. Work on the main transmission line in the South Mission is expected to begin in July.

Construction of the new drinking water system in South East Kelowna will be awarded contingent upon Council approval of a $22-million project budget amendment Monday, May 14. Additional funds are required to deliver the entire $86-million project which will see clean drinking water delivered to Southeast Kelowna and a reliable, resilient source of water for agriculture in the South Mission.

South East Kelowna Irrigation District’s portion of the overall project cost is $58.2 million of which 60 per cent is paid for by senior government grant funding. The largest cost of the SEKID portion, $51.4M, is for building the new drinking water distribution system in South East Kelowna which will separate drinking and irrigation water.

Upon approval, the budget amendment will allow the City to finance SEKID’s portion of the budget shortfall, $15.3 million. The City’s portion, $6 million, will be financed through Utility reserves.

“The $43.9 million grant is a significant benefit to SEKID ratepayers and will see clean drinking water delivered to all South East Kelowna residents as per Interior Health’s mandate ­— in some areas, 10 years earlier than planned,” says Richard King, SEKID Board Chair. 

The rise in project cost is due in part to the high volume of infrastructure projects across the province as well as the increased service demand requirements in some areas of South East Kelowna.
Allocation of project costs are attributed to either the City or SEKID based on the percentage of benefit received.

“In an additional effort to reduce the financial impact to SEKID ratepayers, the City altered the scope the project slightly and deferred some components,” said Alan Newcombe, Infrastructure Director. “Grant funding of $8.8 million originally for a main transmission line on KLO and associated expansion of reservoir capacity have been reallocated to cover some of the SEKID’s project costs.”

Details about the project costs could not be released until the project was awarded on April 27 due to confidential negotiations with the contractor.

The City of Kelowna and SEKID have been working on a transition plan over the past year to ensure a seamless transition of the district into the City Utility. As a legislative requirement of self-financing, SEKID will dissolve at the Province’s direction earlier than originally anticipated, probably by the end of May.

“Through this process, the Board has worked with the City to make the transition as smooth as possible for ratepayers.” says King. “Starting in July 1, a $32 monthly project levy will be implemented. In 2021, when ratepayers move to lower City domestic water rates, the fee will increase to approximately $40 per month, but the average domestic ratepayer should see total annual costs remain relatively stable.”

The integration of SEKID starts a new era that will see the City Utility also operating and delivering irrigation water to support agriculture. Staff is also proposing a number of actions for Council’s consideration that will support a smooth transition and ensure agriculture continues to have a strong voice when it comes to the delivery and security of irrigation water.

City of Kelowna employee Mike Gosselin, has joined staff at the SEKID office as the Transition Rural Irrigation Operations Manager and will work with staff to slowly amalgamate services with the City Utility through 2019.

In the short term, all operations, billing and customer service will be conducted as usual for SEKID ratepayers.

A direct mail-out has been sent to SEKID ratepayers with details about the financing strategy. Residents are invited to meet with City staff and the SEKID Board of Trustees at an Open House Thursday, May 17 from 3-7 p.m. at the East Kelowna Hall, 2704 East Kelowna Road.

For the information on the project, financing strategy or the Kelowna Integrated Water Supply Plan, visit kelowna.ca/water and e-subscribe for email updates.
 

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