“These are not optional things… they’re required, they’re needed and they’re not cheap.”
Coun. Tim Lavery offered this comment prior to voting with council in giving the City of Salmon Arm Zone 2 Pump Station Loan Authorization Bylaw three readings, and in support of using the alternative approval process to seek elector assent to borrow $4,226,855 to construct a new pump station in Canoe.
Discussed by council during December’s budget deliberations, the city’s 2024 budget reflects the long-term borrowing amount for the needed replacement project, estimated to cost $5.34 million.
A staff report to council explains the 54-year-old piece of infrastructure, located near the railway tracks at Canoe Beach, was assessed as a “very high risk” due to its age.
City chief financial officer Chelsea Van de Cappelle explained the project would be funded through water development cost charges, gas tax funding and long-term borrowing. She estimated repayment would amount to $265,625 a year, “and that’s financing over 30 years at an estimated rate of 4.41 per cent.”
“Assuming we’re starting the project by middle of 2024 to the end of 2024, we’re looking at a fairly nominal amount of interest for 2024, and potentially significant in 2025,” said Van de Cappelle.
Once the project is complete, the city will transfer the outstanding balance to long-term borrowing, reads the report. Staff anticipate this will occur in the fall of 2025 or spring 2026, “and therefore will impact the 2025 budget.”
For repayment, staff recommended it be done by increasing the water frontage parcel tax. This option, explained Van de Cappelle, would “result in the lowest cost ($22.20 a year) and is distributed to all with access to the system and not just users.”
An amendment to the Water Frontage Parcel Tax Bylaw will be brought to a future council meeting.
Providing additional background on the Zone 2 station, engineering and public works director Rob Niewenhuizen said it is critical to getting water to not only Zone 2, but zones 3 through 5, being the industrial park.
“So essentially, that pump station pumps to all of the upper reservoirs within our community, said Niewenhuizen, who noted another benefit of the replacement project, which would see the Zone 2 pump station moved closer to the city’s water treatment plant.
“During the construction of the water treatment plant there was actually some elevation errors and we lost a bit of head elevation in our clear water tanks,” said Niewenhuizen. “So by moving the pump station, we’ll actually gain that back and that means we’ll have additional storage space for clean… treated water.”
Mayor Alan Harrison commended Lavery for stressing the importance of the project, and why the city would use the alternative approval process instead of going to referendum.
“This is a 54-year old pump station and if we don’t replace it, there’s going to be a lot of places that could not have water so we don’t want to go there,” said Harrison.
Read more: Salmon Arm council budget meetings lead to 5.59 per cent tax increase
Read more: Salmon Arm looks to borrow $2.3 million for ‘essential’ water infrastructure project
