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Canmore dips into reserves for Cougar Creek flood mitigation project

"We have to use the reserves now in order to achieve the timelines that benefit our community and then we have to do some really hard work in the upcoming budget."
The site of the Cougar Creek flood mitigation project in July. RMO FILE PHOTO.

CANMORE – The Town of Canmore will chip in an additional $8.3 million of the needed $29.1 million to complete the Cougar Creek flood mitigation project in 2024.

The bulk of the money – $5.3 million – will come from the municipality’s asset replacement and rehabilitation reserve, while $2 million is coming from the general municipal capital reserve and the remaining $1 million from the flood mitigation structure maintenance reserve.

Council has also directed Town staff to continue to look for potential grant funding to help reduce the amount spent from municipal reserves on the mitigation project, which was needed following the 2013 floods that led to millions of dollars in damage and the evacuation of Canmore residents. The CP railway tracks were washed out in one location and the Trans-Canada Highway was also cut off.

“We have good momentum on the site. We have a clear path to completion for 2024. For the first time in two years, we’re moving the significant uncertainty that’s hung over this project,” said Andy Esarte, the Town’s manager of engineering. “There’s this big gap in funding, big pressure on reserves as a result of the provincial grant, but we’ll be working to mitigate and manage that.”

While the immediate funding will come from reserves, Town staff will return at upcoming budget deliberations with recommendations on projects that could be cancelled or delayed to make up the gap.

Coun. Tanya Foubert said she was concerned about using reserves, but ultimately felt it was the best option for getting the project completed.

“I think we can’t avoid using the reserves. We have to use the reserves now in order to achieve the timelines that benefit our community and then we have to do some really hard work in the upcoming budget,” she said. “That’s going to be tough because there’s a lot of priorities and I think projects we’d all like to see happen.”

Council toured the site with staff from the Town and Ironclad on Aug. 30 to see the work that had been completed and what was still to come.

A budget increase of $29.1 million to $78.1 million had been approved by council in July for the flood mitigation project. The Town had $4.1 million in interest from past provincial funding, with $25 million to be made up elsewhere. The province committed $16.7 million in grant funding in August, leaving the Town on the hook for the remainder.

“This is the maximum grant amount currently available,” a staff report to council stated, while noting unanticipated expenses may lead to cancelling or delaying other capital projects in the 2024 budget.

Mayor Sean Krausert acknowledged the difficulty in approving the significant financial ask, as well as being hopeful for additional funding from higher levels of government, but that community safety was paramount.

“It’s not easy when a project’s cost grows too much,” he said. “It’s not easy, but I do recognize this is the best path forward in the circumstances we find ourselves.”

Coun. Wade Graham said there were projects he’d like to see move forward that could be impacted, but that it was key to have the flood mitigation finished.

“I’m very cognizant of our position with reserves and the financial burden this will put on future projects I’d very much like to see go forward,” he said. “The position we’ve been put in is an unenviable one. I'm glad capital projects is going to be cut since our reserves need to be in place. … It’s unfortunate it is costing $25 million more, but here we are.”

Prior to the council approval, the asset replacement and rehabilitation reserve had $13.5 million, with $6.5 million in the general municipal capital reserve and $1.3 million for flood mitigation structure maintenance.

The Town plans to apply for funding under the federal government’s Climate Change Adaptation Program before the Sept. 22 deadline.

The Cougar Creek flood mitigation project was originally approved by council in 2015 for $37.1 million. The budget increased to $49 million in 2017, with funding coming from provincial and federal grants to help with design and culvert improvements. The Town was on the hook for $4 million, while the province provided $21.3 million and the federal government $14.4 million.

However, following significant delays from late 2021 to early 2023 and the project two-and-a-half years behind schedule, the Town of Canmore ended its contract with Flatiron Constructors Canada Ltd..

The Town and Flatiron went through a formal dispute process that had about a dozen facilitated sessions, with technical items being resolved but the delays were left unanswered. A without-cause end to the contract was ultimately negotiated.

Several flood mitigation projects are ongoing or upcoming, but Cougar Creek remains the largest and most important due to its proximity to residents and businesses.

The project was meant to be finished in 2021, with landscaping and reclamation finished in 2022. However, the completion date has continually been pushed back and is now estimated for either 2024 or 2025.

The province approved the mitigation project in 2020 for $48 million after the Natural Resources Conservation Board (NRCB) gave its stamp of approval in 2018 and the OK to a revised project application in 2019.

The tender was awarded to Calgary-based Flatiron for $32.8 million in 2020 and several local sub-contractors were part of the project.

Ironclad was awarded a $5.29 million contract earlier this year to complete embankment foundation work, with half of the $2 million contingency spend, according to the staff report, adding it was “felt to be the most difficult and important for the project.”

The staff report noted Ironclad’s work did “substantial completion of the project” that achieved targets set for the work including some construction to help with high rainfall, embankment foundation, drilling and grouting.

Significant headway has been made on flood mitigation aspects such as embankment backfill, drilling and blasting of the spillway and key trenches, rock bolting and scaling of the abutments and spillway and sheet pile installation and concrete work since Ironclad was brought onto the job, according to the report.

There is a possibility the project will be completed in late 2024, but the staff report added a backup schedule has been completed by Ironclad in case a 2025 completion is more realistic.

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