The new waste water treatment system in Dawson City, Yukon, is still not meeting water quality tests ordered by the court and the town isn't taking over the $25 million facility until it does.

The contract called on the builder to operate the plant for one full year after it was completed. That year is up and Corix Construction was supposed to hand over the keys to Dawson City Mayor Wayne Potoroka Thursday.

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Dawson City, Yukon, Mayor Wayne Potoroka says the town won't be taking over the new sewage treatment facility until it meets water quality tests ordered by the court. (CBC)

"That's not happening because currently the plant itself is not running at optimum speed," said Potoroka.

The former sewage treatment plant created controversy when the city pleaded guilty to dumping inadequately treated sewage into the Yukon River. Dawson City has been under a court order to build a new facility since 2003.

Construction of the new plant got underway in 2009, but legal issues delayed completion.

The new plant has the two vertical shafts that go more than 90 metres deep and take the place of more commonly-used aboveground lagoons. Microbes and oxygen treat the waste in the shafts.

Yukon Government project leader Catherine Harwood said Corix will have to continue running the plant until the facility meets all court-ordered water quality tests.

"Corix is upholding their obligation to continue operating it until they have three months of compliance with the water licence," she said.

Harwood said the builder is experimenting with a fix adding chemicals to settling tanks.

Potoroka is concerned that could add to the municipality's maintenance costs but Harwood said so far those costs are in line.