Capital Project Process2018-07-06T17:45:04+00:00


The NSSWD Capital Project Process

In order to undertake the building of a new DAF treatment facility on St. Mary Lake, the District has gone through a multi-year process, closely guided by the Ministry of Community, Sport and Cultural Development (the Ministry) according to the required elements of law as laid out in the Local Government Act and the Improvement District Handbook and in close consultation with other government Ministries and agencies. We have provided our ratepayers and islanders at large with many updates on the project and listened to suggestions for alternative designs and locations for the treatment plant from ratepayers. We have done our best to answer all questions directed to us in person and by email.

NSSWD trustees, management and staff have devoted thousands of hours of work towards the development of a facility that the Board of Trustees feel is the best option for their fellow ratepayers. It is a basic, no frills design with one amenity – a two piece washroom.

Following is an overview of the process we have followed to date, the reasons why, and where we’re going from here.


Island Health (then VIHA) mandated that NSSWD build a DAF treatment plant by 2011 on St. Mary Lake to meet its 4-3-2-1 Policy for surface water treatment.


As NSSWD was not in a position financially to build a treatment plant between 2008 and 2011, Island Heath extended its deadline to build as a condition of the District’s operating permit mandating NSSWD to have the new treatment facility up and running by January 1, 2016.

In the summer of 2011 the Board decided to commission an engineering firm specializing in water treatment plants to do a preliminary assessment of a new facility and what it would need. Anderson Civil Engineering, who have worked with the District on small projects, recommended Dayton and Knight. Dayton and Knight were contacted and they suggested the District also contact Kerr Wood Leidal (KWL). Due to other commitments Dayton and Knight bowed out of the process and KWL was engaged to do a preliminary analysis of a proposed treatment plant to be located on the property where the Duck Creek weir is located. The length of intake needed was found to be overly challenging and the District could not reach an agreement with the property owners to purchase the lot so this ceased to be an option. The District again focused their attention on the existing Tripp Road site and an assessment of the potential rock fall hazard. Thurber Engineering was engaged to review the site suitability and the potential rock-fall hazard.


The Board and management agreed the District should undertake the preliminary design for a DAF facility on St. Mary Lake in order to comply with Island Health’s mandate to build a DAF treatment facility. Discussion was held on whether or not to use a multiple bid process, which would be costly and time consuming, or to select an engineering firm the Board agreed was well experienced with small water treatment facility design projects. The majority of the Board felt the single source route was the most cost effective and efficient way for the District to proceed. Kerr Wood Leidal (KWL) was engaged to prepare a proposal for the preliminary design work for the St. Mary DAF facility.

On behalf of the Board, (then) Board Chair, Denis Russell (P.Eng), also sought advice from the Association of Professional Engineers and Geoscientists BC (APEGBC) on the process the District planned to use for selection of an engineering company. APEGBC was supportive of the District`s decision to engage a consultant with a proven track record in water treatment plant design rather than go the Request for Proposal route.

Through a series of discussions with the Board, management and operations personnel, a review of site constraints, regulatory requirements, operating considerations, an environmental assessment, a geotechnical report and assessment of other relevant information and data collected over the years, including lessons NSSWD learned from commissioning and operating two DAF plants for the CRD, KWL developed the initial design criteria for the facility, provided two options for a scope of work and costs for approval by the Board. The Board approved the initial design criteria, by a 4-1 majority decision, and elected to go with Option 1 of KWL’s proposal at their December 19, 2012 meeting. (The design criteria have remained a work in progress throughout the design process as additional information, such as the preliminary findings of the St. Mary Hydrology Report, has become available and initiated further change and cost savings.)
Designing A Water Treatment Plan Takes Expertise.
“As a trustee, you must make prudent, educated decisions on behalf of ratepayers.”

Marshall Heinekey – Chair, NSSWD Board of Trustees
July 2014 Ratepayer Newsletter


During 2013, KWL working in close consultation with district management, prepared the preliminary design for the proposed facility.

The draft preliminary design was received by the Board on December 16th, 2013.

In the fall, several financial institutions and the Ministry were approached to discuss financing options including interest rates and other associated fees. A financial institution, the Royal Bank of Canada (RBC), was agreed upon by the Board and management. An estimated range for a ratepayer surcharge was calculated.

Newsletters kept ratepayers informed of progress.


Note: All districts must have Ministry pre-approval to begin a capital project that requires borrowing. To borrow funds the district must pass a borrowing bylaw that receives approval from its ratepayers as well as its board. (However, in some circumstances, such as an Order to Comply from another Ministry, the Inspector of Municipalities may waive the requirement for ratepayer approval.)

To receive ratepayer approval a district must use either the Alternative Approval Process (AAP) or hold a voting Referendum. The Ministry also requires that the maximum amount a district expects to borrow is the amount stated in the borrowing bylaw. Once pre-approval is received the District may begin the AAP or Referendum process in order to pass a borrowing bylaw to finance a project. At the discretion of its Board, a district may use its reserve funds for preliminary work, such as design, as it sees fit.

On January 14, 2014 the NSSWD Board officially requested permission from the Ministry of Community, Sport and Cultural Development to undertake a capital project which, at the time, was expected to cost up to $11 million. The district was required to provide:

An overview of what was to be built and why.
The initial cost estimate for the project as determined by the professional engineers hired to prepare the preliminary design. (The Ministry requires a cost estimate prepared and signed by a professional based on either a preliminary or detailed design.)
A projected revenue forecast showing how funds would be raised to finance the project and details of how ratepayers would be impacted by the costs.
Information on how the district planned to seek ratepayer approval – AAP or Referendum.
A Ratepayer Communication Plan, including copies of newsletters to date and a proposed awareness campaign.

At the April 23, 2014 Board meeting, Trustees revisited their prior decision not to proceed with the detailed design until ratepayer approval for borrowing was received. It was agreed that, due to the tight timeline, rather than hold up the project while moving through the AAP process it would be better to move forward with the detailed design and use some of the district’s reserve funds to pay for it. Ministry approval was not required as no borrowing of funds was needed. However, the Ministry was consulted by staff to ensure regulatory compliance. Ratepayer and Ministry approval of the borrowing bylaw must be received before the Qualified Bidding process can begin.

(Note: The design remains a work in progress as design changes have been incorporated throughout the design process to date. Including the downsizing of the plant capacity from 2,000,000 gallons per day to 943,000 gallons, a decision based on the preliminary results of the St. Mary Lake Hydrology report. The Board and management continue to work closely with KWL to achieve the maximum cost savings possible. All cost savings identified to-date are the direct result of design changes initiated due to the results of the Hydrology report.)

At the May 28, 2014 Board meeting ratepayers Jon Scott and Ron McKenzie petitioned the Board to consider their design idea from an un-named company for single story treatment facility with above-ground storage. The Board advised them their configuration had been considered and eliminated earlier in the process, but that they would take their suggestion under advisement.

Preliminary approval to commence the project and pass a borrowing bylaw via the AAP was granted by the Ministry on January 23, 2014 and, in-house, the AAP process began. The Ministry was consulted throughout the process. During the process the District was required to have a public awareness campaign that included advertisements in the newspapers and an open house at which ratepayers could view the plans and discuss the project with the Trustees. Awareness activities included:

A series of four advertisements/articles in both the Driftwood and the Island Tides.
An Open House with the plans on view and at which an overview of the proposed facility was given by the design engineer and questions about the project and project financing were asked of the engineer and Board members.
An on-going Open House at the District Office at which ratepayers could come in during office hours and view the drawings and ask questions of management, and, on request, arrange a one-on-one meeting with a Board member.
Advertisements regarding the AAP process in the Driftwood and Island Tides and via a direct mail piece to ratepayers.
Newsletters to all ratepayers explaining the project.
The creation of a website section dedicated to the project, including FAQs.

In the July 2014 special newsletter ratepayers are advised that the preliminary findings of the St. Mary Hydrology report would translate to cost savings due to the downsizing of plant capacity to our current license amount. While an interview with Board Chair Marshall Heinekey discussed the reasoning behind the Board’s decisions.
Q. Why did you elect to go with this process?

MH. This is the conventional and conservative route which we believe the majority of ratepayers would appreciate. In addition, the Detailed Design and a Fixed Price Contract are required to satisfy our lender. In any project, there is always a degree of uncertainty such as commodity prices, world or provincial economy and interest rates. A detailed design leaves as little as possible to uncertainty, defends against “scope creep” and provides bidders a level playing field.

Interview with Marshall Heinekey – Chair, NSSWD Board of Trustees
July 2014 Ratepayer Newsletter

From February to May, a series of newspaper articles and ratepayer newsletters explained the reasons for the treatment plant, the type of equipment to be used, the maximum amount the district expected borrow, how the cost of the facility would impact ratepayers and the AAP procedure. Emphasis was placed on the fact that significant savings were expected to be found through the detailed design process. This website section was created to keep ratepayers informed.

The AAP process closed on May 30th and the request to pass Borrowing Bylaw #264 was defeated when 14% of ratepayers opposed its passing.

The Ministry then ordered the District to referendum within 80 days, ultimately on August 19th. More advertising and newsletters were done, the Open House at the office continued. A Returning Officer and his team were hired to conduct the referendum including advertising and conducting the advance polls and referendum day voting.

On July 25th, 2014 at the request of ratepayers Jon Scott and Ron McKenzie representatives from Stantec Engineering, business associates of Jon Scott, pitched their suggestion for a single storey design with above-ground storage to Board and management and suggested NSSWD terminate their relationship with KWL. They estimated their cost to be at least $7.5 million using a design-build contract. Their suggestions did not meet the criteria established during the preliminary design process. Their offer was declined by the Board, although they were advised they were welcome to submit an application as a qualified bidder when that process begins.

August 19, 2014 – Borrowing Bylaw 264 was defeated by two votes – 283 to 281 – representing a voter turnout of approximately 22%. The Ministry was advised of the results, as was Island Health. Island Health advised they would get back to the District within a couple of weeks with their decision on whether or not to Order the District to build. If ordered, the District could apply to the Inspector at the Ministry of Community, Sport and Cultural Development for a ruling on whether or not the District needed ratepayer approval to borrow the funds to meet Island Health’s Order.

At the August 27th, 2014 Board meeting the Board reviewed a request from Jon Scott to have Stantec re-present their design idea. The Board and staff again agreed that their suggestions had not taken into consideration many of the factors that have been studied as part of the pre-design process and did not meet the District’s needs either structurally or operationally. The Board declined Mr. Scott’s request and reconfirmed their confidence in KWL whose work on the detailed design was well underway.

November 2014 – As Island Health had not yet reached a decision on what to do, the Board informally agreed to again seek ratepayer approval for a borrowing bylaw in spring 2015. At that time the cost savings realized through the detailed design process would be available and the borrowing amount could be reduced.

December 2014 – Ratepayers are advised on this website that a spring referendum is coming. After consultation with the Ministry, a tentative referendum date of March 28th, 2015 was selected and approved by the Board.


The January newsletter provided ratepayers with a project update and announced that a referendum is coming.

The ongoing Open House at the office continued.

On January 26, 2015 the Board requested formal pre-approval from the Ministry to begin the referendum process again. The Ministry was again provided with information about the project, an updated cost estimate (currently $6.17 million for the plant, plus an estimated 10% for construction management [to be negotiated] and a 20% contingency) and brief communications plan. Pre-approval from the Ministry was received on January 28th.

January 28th, 2015 the first of a series of planned articles providing a progress report on district activities, including the status of the treatment facilitywas placed in the Driftwood.

The Detailed Design is expected in mid-February for review by the Board. Borrowing estimates based on the maximum amount needed, including a healthy contingency, will be calculated and communicated to ratepayers including the revised estimated surcharge. The tentative referendum date will be confirmed or changed by the end of February. After review of the detailed design to identify further cost savings, it is expected that the competitive bidding process for the actual construction of the project may provide additional savings. The competitive bidding process cannot begin until the Borrowing Bylaw is passed.

March 12th, 2015 – An Open House with Kerr Wood Leidal, the Board and management was held to discuss the detailed design and process (time and place to be confirmed). We look forward to the opportunity to discuss with our ratepayers the Borrowing Bylaw, the impact that the cost of the facility will have on them and the steps the District is undertaking to keep that cost down. It is also hoped that our upcoming donor campaign will raise a significant amount of funds to help offset borrowing costs.

March 28th, 2015 a second referendum was held and the District was successful 359 to 310 in gaining ratepayer approval of Borrowing Bylaw 264, enabling the District to move forward with the competitive bidding and construction phases of the project.

North Salt Spring Waterworks supplies water to approximately 55% of island residents as well as businesses, parks, schools, the hospital and two fire halls. Clean, safe drinking water is vital to our island’s residents and our primarily tourist-based economy. The Board feels strongly that the current design will meet ratepayers needs well into the future while providing the operational flexibility necessary when dealing with variable water quality such as that of St Mary Lake.