US/Canada tariff dispute causes St. Paul wastewater project to go nearly $2M over budget

St. Paul’s upgrades to the wastewater treatment plant will go over the allotted $11 million budget by nearly two million.

Last year, the Town received a grant to cover half of the $11 million dollar project cost and would only be responsible for remaining expenses. These expenses were determined to be around $5.5 million. But at the Town Council meeting on Monday, CEO Kim Heyman explained that the project will cost more than anticipated.

“[The wastewater treatment project] has been affected by a couple of outside factors. The cost of the equipment that has been ordered came in over budget. This is due to the aluminum and steel tariffs put in place by the US.

“Secondly with the increase in water levels, the impact on the water systems in now in two lakes instead of one. Originally we just had to monitor Upper Therien; now Alberta Environment is making us test and monitor Lower Therien as well. This is leaving us with a projected budget shortfall of $1.7 million.”

The aluminum and steel tariffs were the result of an unprecedented trade dispute between Canada and the United States.

On May 31, 2018, the US announced tariffs of 25% on imports of Canadian steel and 10% on imports of Canadian aluminum. The Canadian government retaliated with similar trade-related taxes and expenses on US steel, aluminum, and more.

An ICIP (Investing in Canada Infrastructure Program) grant has already been applied for to cover the shortfall.

But since the grant is not guaranteed, the Town and Council may have to prepare to cover the additional $1.7 million in the event that the grant does not come through.

Funding Options

Heyman explained that the Town essentially has two options to cover the increase in cost. “We can either fund the shortfall through accumulated surplus, or we can take out a debenture,” she said.

She also recommended putting a borrowing bylaw in place sooner rather than later. This would allow the Town to act more swiftly and efficiently on either option, should that be necessary. To help ease the burden of the budget shortfall, the overall project is being reviewed to see if any cutbacks can be made.

Council made no firm decisions regarding the funding options or borrowing bylaw. Heyman will work with Town admin and staff to determine more exact costs and impacts surrounding either option.

The Upgrades

Last year, Jason Stusick from MPE Engineering Ltd. explained all of the required upgrades to the treatment plant. These include:

-Increasing the lift station capacity by adding a third pump
-Upgrades to the screening process
-Adding grit removal to improve downstream process operations and reduce maintenance requirements
-Incorporating phosphorus reduction
-Replacing old blowers for increased capacity and improved efficiency
-Replacing coarse diffusers with fine diffusers for increased oxygen transfer efficiency and improved energy efficiency
-Modify bioreactor for total nitrogen removal
-Add disc filtration for increased BOD solids removal
-Incorporating effluent disinfection via UV light
-Electrical and control systems upgrades
-Improvements to sludge management, by adding thickening, digestion, and dewatering
-The repurposing of sludge ponds for emergency storage
-Improvements to aerobic digestion of solids with a new tank and dedicated blowers
-Incorporating sludge dewatering systems for simple disposal

“When it’s done,” Stusick said, “you’re looking at around a 95% increase in water treatment quality and efficiency that will carry the town through at least the next 20 years.”