TBM Water System Shock:

50% over budget

TBM Staff Report OPS 25.049 has just been issued, detailing a major $19,000,000 budget increase - or approximately 50% of the original estimate - for the Craigleith / Mill Street / Bay Street water systems project.

Given the huge financial impact the Town is facing, Scott Findlay of the BMRA Board met with Town Engineering Staff to better understand the issue and develop our position regarding how it should be addressed.

The key conclusions drawn from that discussion were:

1 Lack of Transparency, Timeliness, Accountability

Town Hall has been aware of this cost overrun for more than a month, but it was not raised as part of the 2026 Council budget discussion. It seems a difficult issue was simply not tabled and addressed.

2 We need a Capital Spending Response Plan

If this budget increase is validated and approved, there will be an extra $19 million demand on our capital funding, which is already challenged due to the dramatic decrease in new development in TBM, and much reduced Development Charge receipts.

The Town should review its capital plans for 2026, and determine where spending could be scaled back or delayed. Surely the reduced levels of residential construction activity give us some capital investment flexibility.

3 Our Water/Wastewater Systems need updating & expansion

While this budget increase is very concerning, the reality is that the system investment is necessary and should not be delayed.

We should not forget June 30^th when the Mill Street Pumping Station failed and sent raw sewage into the Beaver River.  Those in the impacted parts across the Town of Blue Mountains who experienced water damage and sewage back-ups during this and other recent major storms know this first hand.

 Our understanding is that 70% of the project spend is to update and rehabilitate the current, aging water systems. And we understand that once the Mill Street Pumping Station work got underway this summer, there was more corrective work determined to be required than originally estimated, which was a factor in driving costs up.  

The remaining 30% is to accommodate future growth - which may take longer to realize given current housing market conditions, but will inevitably occur.

4 The Provincial $25.4M contribution has Time Limits

The Provincial Government has committed $25.4 million in grant funding to support this project. That is greater than the Town's annual tax levy, to give it a sense of scale. As there is a March 2027 deadline for project completion to qualify for that grant, time is unfortunately of the essence. It is unreasonable to suggest that money should be foregone, given it would likely have to be replaced with Town borrowing.

Where does this leave us?

This seems to be a situation where the Town is, frustratingly, best served by proceeding with this work, despite the budget increase.

However, this does not mean we should all just accept this costly project overrun, turn the page and move on with business as usual. Significant cost overages seem to be a consistent element of our major capital initiatives.

That can't be seen as acceptable.

A thorough post mortem is a necessary exercise, if the Town's claims to be fiscally prudent are to be seen as credible.

We need answers

• what were the root causes?

• was there systemic failure, and are the necessary checks and balances in place to identify substantial project variances sooner?

• what does this mean for the Town's long term financial outlook?
  

  
  

Anything less would constitute failure by our Town's employees and Councillors in meeting their responsibilities to TBM residents.

Any Questions?