Residents could pay an extra $58 to $68.50 bimonthly on their utility bills in the future, based on how city council chooses to pay for the lagoon expansion.
Faced with two options to expand the city’s lagoon, council eliminated one possibility and chose to proceed with a second design option once it was determined what quantities of water — if any — will come from the new wastewater treatment plant.
Council approved the recommendation at its Aug. 2 workshop meeting. Council will officially accept or reject the choice at its Aug. 15 regular meeting.
Council discussion
Councillors and city administration met recently with the Water Security Agency (WSA) and Associated Engineering to discuss the two proposals for the lagoon expansion, said public works manager Andrew Fahlman.
Most of the discussion focused upon the second option of aeration treatment and storage cell for reduced storage. Fahlman explained this option is new to Saskatchewan, as it would continually release effluent during the summer.
WSA was receptive to this option, but hesitant about Melville having only 150 days of storage for its sewage, said Fahlman. WSA was more comfortable with the option expanding storage to 180 days.
To increase storage by 30 days would cost an additional $2.5 million.
“We release effluent twice a year,” Fahlman said. “With this, we would release continuously through the summer months. It wouldn’t happen right off the bat, as we would be doing a lot of testing of the effluent quality to make sure we’re reaching our ammonia levels and … the new (government) standards.”
The new water treatment plant is in the second phase pilot study stage and it is unknown where the excess discharge water will go until the lagoon’s design phase occurs, said Fahlman. SaskWater believes it will know more about the disposal method of untreated water in early 2017.
Associated Engineering has recommended waiting for the plant’s design to be finished before moving forward with the engineering design for the lagoon expansion. Fahlman concurred with this suggestion and also recommended eliminating the first option.
During the meeting, administration asked if WSA would re-consider the mandatory lagoon expansion if the municipality got its inflow and infiltration under control, said Fahlman. WSA said no, considering the city has had many warnings for years and has done nothing until recently to address this issue.
The city has applied to the Build Canada Fund for extra funding, said Fahlman. There are also other smaller grants available. Management is remaining vigilant for other grant possibilities.
“I encourage every councillor to talk to our MLA and hopefully we can get more money,” joked Fahlman.
Coun. Vince Thiessen wondered if 180 days would be sufficient for the Water Security Agency. He noted controlling the smell of ammonia is a sticking point with WSA.
Water Security Agency is OK with 180 days, Fahlman noted. More capacity will be available at the lagoon once the municipality gets its infiltration under control. Aeration is recommended for treating effluent for ammonia.
The city needs to deal with its ammonia treatment because treating the ammonia affects the city’s future, said Coun. Brian Hicke. Melville could get by without treating the ammonia, but WSA wouldn’t allow the municipality to open up a new sub-division or new areas in town since it wouldn’t have the lagoon capacity.
With option 2, staff would require additional training, explained assistant public works manager Chris Bruce. Both Fahlman and Bruce would upgrade their training so they are prepared. Extra testing will be needed with an expanded lagoon.
They want at least five employees with enhanced training so holidays can be covered, he continued. It would cost $2,500 to send employees away for one week for additional training.
“Some staff may struggle,” he added, “but for the most part they should be OK taking the training.”
Council then accepted Fahlman’s recommendation to proceed with the engineering design for option 2 once it has been determined what quantities, if any, will be coming from the new water treatment plant.
Financing the project
Option 2 would cost $8.35 million, with an additional $91,000 for operations and maintenance costs in the first year, plus future operations and maintenance costs of $218,000, explained city treasurer Lynsey Swanson.
If the city financed 100 per cent of the project’s capital costs on a 20-year amortization period, the municipality would need $608,000 to cover the principal and interest payments, presuming a four-per-cent interest rate.
Factoring in the $218,000, the city would have to generate an additional $826,000 in revenue each year, said Swanson. There are roughly 2,010 commercial and residential properties receiving sewer services.
The city would have to raise $411 per household per year to cover the payments on the loan and operational costs. This would equal $68.50 bimonthly.
If the city obtained a 30-year amortization period loan on the $8.35 million, the principal and capital payments per year would be $479,000, presuming a four-per-cent interest rate.
With the $218,000 in operations costs, the municipality would need to generate an additional $697,000 in revenue each year. This would equal $347 per househould per year or $58 bimonthly.
“Note that the consumption of residents and commercial is different,” added Swanson, “and would result in different effects on an average bill.”
The design of the new lagoon will begin in early 2017. Fahlman expects construction to start in 2018 and be completed in six months.
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