SaskWater will continue to deliver potable water to the City of Warman for the next decade.
Warman City Council voted unanimously at its meeting on Monday, June 26 to agree to a new contract with SaskWater, the provincial crown corporation that owns the pipeline through which treated water from the City of Saskatoon is delivered to Warman. The new contract, which is retroactive to January 1, 2022, is set to expire on December 31, 2031. The previous agreement, originally signed in 2013, expired December 31, 2021, but continued to be in effect until a new deal was reached.
The new agreement’s 10-year term benefits the City of Warman, according to Warman Mayor Gary Philipchuk.
“SaskWater originally wanted a 20-year term, which is far too long,” said Philipchuk.
The city also stands to save millions of dollars in potential financial penalties as a result of the removal of ‘transition fees’ in the new contract. Under the old contract, if the city terminated the SaskWater service before the contract expired, it would be obliged to pay $300,000 per year to SaskWater for the remainder of the term.
“We are very pleased with the final agreement that our City Manager, Bob Smith, was able to negotiate with SaskWater,” said Philipchuk. “It gives us the flexibility we need to continue to grow by providing us with a secure source of potable water for the next decade, and removes the transition fee deterrent if we decide to go in another direction.”
Negotiations between the City of Warman, SaskWater, the City of Saskatoon and the Partnership for Growth (P4G) have been ongoing since prior to the expiration of the old agreement.
According to a City of Warman administration report tabled at the June 26, 2023 council meeting, SaskWater provided a draft potable water supply agreement to the City of Warman in October, 2021.
That 2021 draft agreement contained several changes from the original 2013 agreement, the most notable being the inclusion of the new ‘reseller’ rate established by the City of Saskatoon, the implementation of a supplier connection fee, and the setting out of a formula for the transition fee if the City of Warman were to discontinue the service from SaskWater. Further, the draft agreement, which was previously based on a five-year term, was changed to a longer-term contract of 20 years.
In February 2022, Warman City Council decided the draft agreement proposed by SaskWater was unacceptable, and directed its administration to try and negotiate a better deal.
In mid-June, 2023, following months of give-and-take discussions, a revised draft agreement from SaskWater specified a 10-year term, and removed the transition fee penalty. Warman Council felt its concerns had been dealt with and signed the deal.
“We wanted an agreement that would allow us to keep our options open moving forward,” said Philpchuk. “We didn’t want to be locked in to one service provider beyond a reasonable time frame.
“After ten years, we now have options, and we can potentially look at regional servicing with our neighbours. There may be opportunities for cost savings if we join together.”
Philipchuk said SaskWater has provided an important service to Warman over the decades. The 10-year term of the new contract allows the crown corporation to plan for the future as well.
“SaskWater’s pipeline supplying clean potable water has allowed us to grow as fast as we did,” said Philipchuk. “We want to be good partners with SaskWater, but at the same time we need to look to the future and explore the possibility of perhaps owning our own water treatment facility or partnering directly with the City of Saskatoon.”
He added the removal of the transition fee deterrent was also a critical factor in the city’s decision to sign the new deal.
“We need to look out for our residents,” said Philipchuk.