More than $1.2 million will be spent to install water and sewer services to the South East Industrial Area (SEIA), even though an anchor tenant has not been fully confirmed yet.
During its July 22 regular meeting, city council voted 5-1 to have the engineering department proceed with finding a qualified contractor to perform the work for $1,213,951. This construction will focus on phase 1A in the 755-acre industrial area and will use funding from the provincial/federal Clean Water and Wastewater Fund (CWWF), which requires the project to be completed by March 31, 2020.
Coun. Brian Swanson was opposed. Coun. Chris Warren was absent.
Background
Canadian Protein Innovation Inc. was supposed to be the original anchor tenant, but that company defaulted on its purchase agreement, explained Jim Dixon, Moose Jaw’s economic development manager. The project’s design was shifted to service phase 1A, which would partially service SaskPower’s combined cycle gas power plant.
“SaskPower is now being deemed as the anchor tenant for the South East Industrial Park,” Dixon said.
Servicing and design of the SEIA was carried forward from 2016, while city council reduced the project’s cost this year to $1,478,657, he continued. This amount includes the CWWF funding of $1,155,825, plus the city’s portion of $322,832. With $297,900 going to Associated Engineering, this left $1,213,951 to service phase 1A.
City council approved agreements for the sale and servicing of the remainder of the municipal-owned land to Carpere Canada on July 8.
Council discussion
Swanson disagreed with spending money on the industrial park, saying it makes no sense since there is no anchor tenant yet. He also thought Carpere — a private developer — was supposed to cover all the costs of installing infrastructure in that area.
This funding came from a grant application the municipality applied for a few years ago, said Dixon. City administration does not want to risk losing it.
To have more than $1 million available and not spend it would be questionable, echoed city manager Jim Puffalt. Even if every tenant falls through at the industrial park, at least the municipality will have serviced land.
It would send a poor message if the municipality didn’t spend provincial money to help service a gas power generation station, he continued. SaskPower doesn’t have many options for generating baseload power. Coal is being phased out, while renewable resources are not reliable enough to generate continual power.
“Administration has worked pedal to the metal on this,” Puffalt added. “Federal funding is hard to come by. We have found a way to spend this money.”
Short-sighted to shut down
This money can’t be used for anything else but water and wastewater projects, said Mayor Fraser Tolmie. The window to spend this money is closing soon, so it has been assigned to the industrial park.
The land should have been serviced, prepared and sold already, but Canadian Protein Innovation’s default made the situation convoluted, he continued. However, the municipality has made great progress in this area, while it has built a solid relationship with SaskPower.
“As we said before, we going to continue to fight for this project. But throwing the baby out with bathwater and throwing $1 million away is not my idea of helping economic growth within our community. We need to get on this,” he added.
It would be short-sighted to shut down the project and give up more than $1 million in funding simply because the project might fall apart, said Coun. Heather Eby. She thought it was time to begin working in that area since construction season is short.
“This takes us one step closer to being ready for a tenant and I’m praying that tenant will be SaskPower,” she added.
“Hope and prayer does not meet the bar for public accountability,” Swanson shot back. “We talk about short-sighted, time will tell the tale on this one.”
The next regular council meeting is Aug. 12.
