With some tender calls yet to be made for Orangeville's water well upgrades, the latest cost estimate, at $16,158,735, is up just over $2 million from the estimate in a 2004 application for Ontario Small Town and Rural (OSTAR) funding.

And the town has no choice but to go ahead with the upgrades to its 'GUDI' wells, says Public Works Director Jack Tupling, who provided town council with an update on the project Monday night.

"As I said in my report, there really is no other option because if we don't [do the upgrades] we would be out of compliance with the Certificate of Approval," he said Tuesday. "The consequences of that would be serious."

He said the provincial government could take legal action against the Town if it doesn't comply with regulations passed under the Safe Drinking Water Act of 2002, enacted following the lethal contamination of Walkerton's water supply by polluted ground water.

Although the provincial government has provided a draft agreement to provide OSTAR funding toward the costly upgrades, Mr. Tupling's report to council disclosed that the funding amounts under the agreement are based on the earlier cost estimate of $14,137,000, of which $13,998,131 would be eligible for funding.

The upgrades are required by the Province so another incident such as the Walkerton water contamination doesn't occur again, anywhere.

The Ministry of Environment (MOE) had approved a hydrogeological study that was completed to determine the GUDI (Groundwater Under the Direct Influence of surface water) status of the town's wells and a new Certificate of Approval was issued in April 2004.

That certificate established what upgrades the wells needed to meet the new requirements.

An additional Certificate of Approval was given in January to extend the completion dates for the upgrades, which are to be started this year and finished by 2008.

Currently, R. J. Burnside and Associates Ltd. has completed the design work for Well 12 (the Transmetro Well west of Blind Line) and connecting the watermain on County Road 16.

Two tender calls have been made for this work: one to construct the watermain, which closes May 23, and the other to equip and connect the well (to close May 30).

Designs for upgrades at the remaining wells are under way and there will be three separate tenders, which will be issued over the next few months.

One will be advertised to close by the end of June, another to close in mid-July and one to close in mid-August.

"Some of these are going to have some fairly lengthy contract times, so no, the work won't all be done this year," said Mr. Tupling.

"We would expect that most of the outside work will certainly be finished this year - watermains and pipes in the ground, buildings constructed - but the inside electrical work is likely going to take some time because there is equipment that has to be ordered. Some of that has fairly long delivery times."

If these tender calls were to come in over budget, as did the one for the Mill Street bridge and road construction, the Town will be able to ask for additional funding, but only once the tenders have come in. "There is no commitment

or guarantee that we would get that funding," Mr. Tupling said. "Unlike the Mill Street bridge project, we have a legal obligation under the Certificate of Approval, which is issued by the ministry to make certain the upgrades to our system, and therefore I feel the Town will have to go ahead with the work and complete the upgrades."

Based on the 2004 cost estimate, the total eligible costs (construction, preliminary engineering and engineering) for the OSTAR funding is $13,998,131 and the maximum funding would be $9,334,553.94.

Mr. Tupling said the Town will finance the work if the tenders come in over budget, and it is an option the Town will have to look at if the circumstance arises.

A water-rate study that has been performed included an allowance for some of the upgrading cost but the project may need to be financed on a shorter term until the

funding is obtained from the two levels of government (federal and provincial).

The Town will now need studies to determine how much of the work may have to be financed and how the situation has changed from the earlier study to reflect more realistically what some of the actual costs may be, Mr. Tupling said.

"We're very confident with the work and so on that we're doing. At this particular time, the concern Public Works would have with regard to the tender prices is whether or not there is enough contractor capacity to actually do the work. In other words, are there enough competent contractors out there that are capable of doing this kind of work?" he said.

"That was the problem with the Mill Street bridge. The work itself was relatively straightforward, it's just that there aren't enough contractors do the work that's out there."

However, it is expected some of the costs may be recovered through development charges.

Another update will be made to council at its June 5 meeting, when the final OSTAR agreement is to be presented and a bylaw will need to be

passed authorizing the mayor and clerk to sign the agreement.

The new $16,158,735 cost estimate covers most, but not all of the work that may be required.

Mr. Tupling's report to council included a schedule describing the overall "work description."

In addition to the upgrades for the GUDI and non-GUDI wells, the final item listed calls for the Town to "drill new wells and connect new supplies to make up lost supply capacity plus related engineering."

The schedule notes that the project does not include any upgrading of the water distribution system, "or any works related to accommodating future growth and development or related engineering or project management."