Potential Design, Build, Finance, Operate Model Would See Ownership of Facility, Final Rate-Setting Remain with City
PRINCE RUPERT, NOVEMBER 22nd, 2022 – As the City continues to work on developing engineered designs for a new water treatment facility, escalating cost estimates have prompted the municipality to look at alternative means of financing and operating the project. There is also a need to ensure there is adequate capacity available to staff the facility, given the specific nature of certifications required for treatment operations.
Given these challenges, the City has identified the use of a Municipally Controlled Corporation as a potential path for delivering water treatment services. Once more is understood about available options and costs, a presentation will be made to Council and direction will be given as to how to proceed with public engagement.
“It’s very important to Council that the water itself, our watersheds, and the actual facility that treats the water will continue to be owned by the City,” said Mayor Herb Pond. “Additionally, if this model is selected, City Council would still give final approval of utility rates. Right now though, the City is just conducting early work to determine the feasibility of bringing an operator on-side to build and operate the facility.”
As part of early work to determine the viability of the model, the City issued a Request for Expressions of Interest (RFEOI) in the Fall to gather information about what potential operators would be available to partner with, and can now form a business case for Council determine how to proceed.
Although different variations of public/private partnership models exist, the City’s proposal is to use a Municipally Controlled Corporation (MCC) because this particular model retains all control and ownership with the municipality. The City will also work with a CUPE operator, who will be required to adopt the City’s Union agreement.
Since the City’s original application to fund water treatment was made in 2018, the City now anticipates a shortfall in funding of between $12 Million - $18 Million. With a Design, Build, Finance, Operation and Maintain (DBFOM) approach, the overall responsibilities for designing, building, financing, operating, and maintaining are bundled together and transferred to a third party. As participants in the eventual operations of a facility, DBFOM models incentivize engineers and contractors to be as efficient as possible in the use of public funds. The service contract will also require the private entity to take responsibility for staffing the facility, which due to BC-wide shortages in qualified water treatment operators, has otherwise been identified as a risk to the City’s planned expansion of service.
Next steps for the City will include additional work from staff to develop a potential model and present their findings to Council.
Veronika Stewart, Communications Manager
City of Prince Rupert
Office: (250) 627 0976
Cell: (778) 884 6285