Price Break for Hart Highlands
Prince George, B.C.- There was good news for the Hart Highlands residents who have just had the sewer system installed. Each residence was expected to have to pay about $25000 for its share of the installation to the one hundred homes. The final bill for the project is in, and it is much lower than expected.The final bill was $1.558 million, about $800 thousand dollars below the original projection.
“This is a great news story” says Mayor Lyn Hall who reflected on the original meetings with the community when there were questions about the overall cost of the project. “We need to congratulate our staff” says Hall who says the savings will translate into “many, many thousands of dollars for each household.”
But Councillor Brian Skakun had concerns, calling on staff to be more accurate in their estimates for such projects “I would hate to see a project like this rejected by residents because the costs appeared out of reach, only to find they were really much lower than anticipated.”
Even with the reduced price, residents are facing costs of about $16 thousand dollars per household for the service, plus the costs to connect to the new line. But as one resident remarked, with that cost reduction “Santa came early.”
Good weather, excellent crews and no unexpected surprises are all credited with contributing to the cost savings on the project.
Comments
That’s a good news story. Glad to hear it.
Yet they accepted 1 bid for 4th avenue, and it was 500k more than they allocated… so instead of reviewing the numbers they just let it go. Lets hope, this city can figure it out one day.
PG101 I am all for the city crews doing their own work but let’s not forget about the downtown energy project, I think it came in 1.5m over the original budget.
Eagleone, remember this?:
“So the basement price is $24,200 per home, and then it goes up from there. This is an area that involves a 15% slope and we all know what happened with University Way in cost overruns. At the base price of $24,200 deferred at today’s interest rates for 20 years is $32,211… but we are at record low interest rates so the servicing cost is sure to go up as well. The price could easily go up by 50% or more when all is said and done.
At the end of the day this is only to bring the service to the street and not the full cost of having a home hooked up to it as well… that is extra and the cost of each individual home owner. Those not able to pay the extra $15,000 for the hook up, or those with no issues with their septic systems, will be given a grace period of a year before their local service area improvement payments come due whether the home is hooked up to city sewer or not.
So final cost is more like:
$32,211 deferred LSA Tax
$16,100 50% cost over runs
$15,000 service from city infrastructure to home
+ plus
$32,000 Interest rate risk as deferred cost (plus over run costs) is based on a 3% interest rate for the life of the deferred payment and the OECD says Canada’s rate should be closer to 8%.
So total cost is more than likely to come in at around $95,000 over a 20-year period, or $5000 a year… in addition to the regular city taxes and utility bills. “
And this?
“It is an open bid contract so the $2.4 million is only the estimated cost of the project. Any cost over runs, or increase in interest rates above 3% over the 20-year parcel tax levy is the risk of the home owners.
At the end of the day it will cost between $50,000 and $80,000 per property for connection ($15,000), and the tax levy for the street infrastructure. A step increase from the $200 every three years to have a septic tank pumped. For properties paying upwards of $3000 a year in property taxes as is this project is a huge tax burden that is not necessary for an area built on sand with excellent drainage.
Quiet a huge tax increase for a suspect 61% approval through a none transparent voting system. Being an open ended contract someone will be getting rich off this I suppose…. “
And This?
Furthermore, when one can work on a dedicated project they can keep costs down working efficiently.
If city crews are doing the job they still have to answer calls for water main breaks elsewhere in the city, and so its more of a make work project for the city in between their main priority, which will not be this project. This is where the cost over runs will pile up setting up and re setting up every time they return to the work site, and or pull equipment out for other city emergencies. yet they couldn’t find it in their hearts to at least give a guaranteed cost for the final bill….
There’s plenty more… but I think we all can see the trend.
As for Skakun’s comments, I can see his point to a certain extent however he was not at the meetings where it was said repeatedly that the staff’s estimate included contingency for unknowns and that they were confident barring these unknowns costs would not be that high.
Lets give credit where it’s due. Great job!
Ok Eagleone, one more……I couldn’t resist
“The city created a situation that created uncertainty in the value of these homes. It’s an open ended contract with no ceiling on it, was not tendered for a competitive bid, and is going to be done as a side job by the city crew when they don,t have other priorities to attend to.
Of course there will be massive cost over runs that will be added to the tax bill for decades to come. These properties will see there tax bill more than double.
Good deal for the rest of the city though as they have nothing in it, but get infrastructure they can tax and a city crew paid for over 6-months time.”
Lucky to have sold and dodged this bullet!!!
Let hope this city council sends the next phase of sewer to bids and puts an effort for the residents by searching for grants. The mayor and 5 councillors who are on the council again did nothing the last time for the residents except a few attended a meeting and leaned on the back wall.
Comments for this article are closed.