City hall expects to save $350,000 on the joint-use school project by letting the school boards handle the procurement, contract administration and construction of all infrastructure within phases 5 and 6A of the Westheath subdivision.
Specifically, this approach would decrease the city’s construction investment by 10 per cent, or $250,000, and reduce the time the design engineer and engineering department director spend on the project by 50 per cent and 25 per cent, respectively, for $100,000 in savings.
City council initially approved several motions in December to allow the rezoning and subdivision of Westheath. One motion included completing a municipal reserve lease agreement and development and service agreement between the municipality and Prairie South School Division and Holy Trinity Catholic School Division.
Since then, city administration has worked with the school divisions to develop a plan to efficiently handle the school’s required servicing, a council report explained.
The parties created a new phase 6A — it surrounds the school property — and determined there could be savings by having the divisions complete the city’s obligated construction requirements on both phases simultaneously and then invoice the city afterward.
City administration presented two updated agreements during council’s March 27 regular meeting.
Council voted 4-2 to approve the updated agreements, allow the school divisions to sole-source the work to contractors Colliers, V3 and KGS for the civil works procurement and contract administration processes of $290,533 — the city’s share is $164,473 — and take $2.5 million from the 2024 Westheath capital project account and use it this year.
Councillors Kim Robinson and Dawn Luhning were opposed.
New agreements
The municipality was initially responsible for servicing each lot and the divisions were responsible for completing most of phase 5’s construction this year, a council report said.
This updated approach is similar to the agreement between the city and SaskPower for the latter’s Great Plains Power Station, where the municipality billed the Crown corporation for its share of the underground infrastructure work.
The additional work in phase 6A will create an extra 16 residential lots for a total of 52 that the city hopes to start selling in 2024.
The city’s $2.5 million contribution will come from the 2024 capital account because there is no additional funding in the land development reserve unless council wants to use the parking reserve, offsite levy reserve or raw land reserve, or borrow the money, the report continued.
This reserve would provide the cash flow for this year’s Westheath construction, but the project’s longer-term funding will come from sales revenue of the extra lots. The city estimates gross sales revenue will be $5 million and net — or overall — revenue could be $3,201,500.
Councillors’ concerns
City council spoke months ago about how it shouldn’t develop property if it didn’t have the money, but this new approach seems to contradict that, said Robinson.
“I don’t think it’s a surprise that I didn’t support this school. I think we’re making a huge mistake putting it out there (in the southwest corner),” he continued. “I also have this consternation because we’ve had other opportunities that we’ve begged off because we’ve said we didn’t have the money to do it … .
“But further, we’re making more and more developments as far away from the downtown core as we can,” Robinson added. “It just doesn’t make a lot of sense to me.”
One paragraph in the report that concerned Luhning was how the school divisions would be responsible for most of the costs; something about that didn’t sit well with her.
Meanwhile, she wanted city administration to prove — and confirm — that the city would save money even though it was building roads on the outskirts of town and had to sell 52 lots to recoup the investment money.
“I can’t vote in favour of it … ,” Luhning added. “There’s costs that we’ll incur that maybe we shouldn’t incur. I don’t believe we’re going to save money on this over time.”
Project support
There is very little development in Westheath right now, with only three multi-family and two single-detached homes, Coun. Jamey Logan pointed out, which is one reason — along with several others — he supported this new development.
Moreover, Logan was OK with moving the funding to 2023 since council faced a “pay now or pay later” situation anyway. He also thought there was a low risk that council wouldn’t recoup the $2.5 million investment.
There were only a few houses in the Sunningdale neighbourhood when that school was built, but that area exploded in growth afterward, said Coun. Heather Eby. Based on that example, she thought the city could sell the 52 lots and hoped those sales occurred soon after they were completed.
The next regular council meeting is Monday, April 10.
