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Dec 2010 Faulder water update and newsletter


As you may know, the Faulder project has run into a couple of roadblocks since the summer:

  1. Summerland council stipulated some new conditions before agreeing to the deal, including a 15% premium over the water rate payable by District of Summerland residents
  2. The detailed design for the pipeline by Focus Engineering indicates that the cost of the pipeline is considerably more expensive than originally anticipated in the conceptual designs by Stantec Engineering (2010) and Associated Engineering (2008).  Specifically, the estimate cost of the pump station and booster has increased from $1,070,000 to $1,964,000.

The 15% surcharge was unanticipated; however, it did not change the economics of the deal in a significant way.  That is, the Summerland option was still the cheapest and least risky as of September, 2010.  The significant increase in the estimated cost of the waterline to Summerland is a different matter.  The net result is that the cost of the Summerland option has increased from an average ~$1,500 per year to ~$2,600 per year per Faulder household (see the two estimates).

We have identified four alternative courses of action:

  1. Stick with the Summerland plan at the increased average cost of ~$2,600/household/year.
  2. Reconsider the original option of a new well plus uranium treatment.  Nothing has changed regarding the reliablity of the aquifer.
  3. Reconsider the infiltration gallery/Ranney well adjacent to Trout Creek.  This entails significant environmental, political, and economic risk.
  4. Disband the Faulder Community Water system so that individual residents can provide their own water through private wells.

Alternative 4 arises due to the cost of the Summerland option.  The present value of $2,600/year for 20 years at 6% interest is approximately $30,000.  That is, residents should be indifferent between paying $30,000 today and paying $2,600 per year for the next 20 years.  The question Faulder residents have to ask is: Can I supply my own water (e.g., drill a new well) for less than $30,000? The cost savings in Alternative 4 arise from the fact that private wells are largely unregulated by the Province and Interior Heath.  As such, private well owners are not compelled to address the uranium problem.  Keep in mind of course that the unsolved uranium problem might lead to declines in property values.  Moreover, Alternative 4 does nothing to address aquifier risk and elminates the enconomies of scale achievable by a community water system.  These are things Faulder residents should consider when evaluating the alternatives.

We will be mailing out a newsletter with this information in the week before Christmas (click the image on the left for a draft version of the newsletter).  We will then meet after the holidays to discuss these alternatives in detail.  Please let me know if you have any questions or see the Faulder water page on the main RDOS website.



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