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Costly lesson for Centre Wellington council; Bridge, culvert tenders $1.4 million over budget estimates

by Mike Robinson

ELORA - Centre Wellington councillors received a tough and costly lesson with recent bridge and culvert prices far exceeding original estimates.

Council spent over an hour at special meeting on June 6 discussing a number of bridge and culvert projects that are a total of $1.46 million over budget.

“In a nutshell, we are seeing higher prices for some jobs this year,” said managing director of infrastructure services Colin Baker.

He later talked with council about potential strategies to get as many projects as possible completed this year.

Closed tenders/RFPs included:

- 2017 pavement management;

- the Victoria Street pedestrian bridge design and contract administration;

- Wellington Street watermain replacement; and

- Princess Street (Church Street to Grand River) reconstruction;

Other projects included:

- culvert replacement (32-WG) on the 3rd Line of former West Garafraxa Township;

- bridge replacement (9-WG) on the 7th Line, West Garafraxa; and

- bridge replacement (10-P) on the 4th Line, former Pilkington Township.

In addition, Baker said there is a large contract out for tender for a bridge (27-WG) on Sideroad 20, West Garafraxa. There is roadwork planned for Sideroad 20 as well, Baker said.

Plus, he added, the township is gearing up for tenders of other projects including:

- Victoria Street pedestrian bridge;

- Colborne Street reconstruction;

- Metcalfe Street parking lot expansion at the LCBO;

- West Mill Street reconstruction (phase 2);

- St. David Street bridge rehabilitation; and

- Gartshore Street reconstruction (Summerfields).

“In short, we still have a lot of tendering to go,” Baker said.

He explained that structures 32-WG, 9-WG, and 10-P were all approved in the 2017 budget. Since then considerable work was done to ensure the projects are completed this year.

What happened thereafter was discovery of a number of issues on certain projects that required redesigns (from culvert and bridge design to unsuitable soils and other factors).

32-WG culvert replacement  

Baker said six bids were received for this project “but we observed that it was significantly over budget.” The work was budgeted at $100,000 but bids came in at $239,901 - over budget by $139,901.

Bundled projects

The Wellington Drive watermain replacement and Princess Street reconstruction in Elora were “bundled” to increase interest among bidders and hopefully keep costs down. Yet just two bids were received.

Baker noted the portion of the work attributed to Wellington Drive will be less than budget estimates - a bid of $632,377 versus a budget of  $680,000. On the other side, work on Princess Street budgeted at $500,000 came in with a bid of $1,072,751 - over budget by $525,129.

Baker recommended the tender be cancelled due to total project cost exceeding available funds, minimal contractor interest, and potential impact to general capital reserves.

9-WG bridge replacement

This project was budgeted at $555,000 and bids came in at  $1,027,153 - over budget by $472,153.

“Again it was a significant overage compared to the budget,” said Baker.

10-P bridge replacement

This bridge was budgeted at $480,000 but bids came in at $804,227 - over budget by $324,227.

Baker said there were a number of assumptions built into the estimates.

He explained a standardized approach for bridge and culvert budget estimating was implemented for the 2017 capital budget. He added that when the original estimates were made, there had been no hydrogeological evaluation of the sites, no geotechnical information or preliminary designs.

He noted the Redside Dace issue was not on the municipality’s radar last year, but was picked up by the Ministry of Natural Resources and Forestry and Fisheries and Oceans Canada - which lists this species of minnow as an endangered species.

“It just adds another layer of permit requirements,” said Baker.

He offered various options to fund the shortfall such as using portions of OLG funds, cancelling certain projects and utilizing the Ontario Community Infrastructure Funds. He said this approach would leave some flexibility for these and future tenders yet to come in.

Baker said some lessons learned for the 2018 budget cycle include looking at bridge and culvert pricing based on 2017 unit values.

He said officials should also take into account larger structures may be needed to allow for higher stream flows.

Baker also recommended doing some of the preliminary studies in the year prior in order to have more accurate cost estimates.

Mayor Kelly Linton noted, “It’s not great news for us, but we appreciate you pulling the information together for us.”

Councillors were concerned with the projects significantly over budget.

Councillor Fred Morris stated “this is not just bad news, this is shocking news.”

Morris asked if the OLG funds had already been received by the township.

Managing director of corporate services Wes Snarr explained those funds would be from 2016 when revenues exceeded estimates.

Snarr said the estimate of total project cost over budget for all four of the subject tenders materially exceeds the approved capital budget.

This is partly because of a high volume of municipal and provincial road and bridge construction activity, driven in part by federal and provincial capital grants.

Linton said there are other municipalities seeing similar increases.

Baker said with the grant programs being released there is a lot of work available, and contractors have their plates full.

Councillor Mary Lloyd asked how many of the affected bridges are on the township’s bridge replacement plan.

Baker said all are on the list to be paid through the township’s dedicated capital levy - and listed to be done in 2017.

CAO Andrew Goldie said what is being recommended is moving ahead with some of the bridges, and looking at options for the rest.

Once those are dealt with, council can look at other funding options that may be available, including reallocation of gas taxes.

Councillor Don Fisher said with other tenders coming down the line, council will need to deal with the larger issue.

“We will need to make some choices,” said Fisher.

Goldie said the idea is to be able to provide council with the best information to make decisions.

Baker estimated tenders will be sent out this fall, with work expected to begin in early 2018.

“We are anticipating the timing ... will be ideal,” he said.

Councillors are now looking for a way to get estimates that will be closer to bids.

McElwain said based on the number of changes in tendering process over the past few years, he suggests some of the required studies be done prior to going to budget - “so we do not run into these unpleasant surprises.”

Baker said “there definitely will be a change in our process.”

Kitras suggested it no longer seems to matter whether the capital budget is passed before the operating budget - but rather that the prep work for the estimates is done in advance.

Goldie added that additional government regulations are also resulting in cost increases.

Councillor Mary Lloyd voiced concerned that a number of capital projects could end up in jeopardy as a result of severe underfunding in the budget process.

In the end council approved only two tenders:

- the replacement of structure 9-WG to MTM-2 Contracting Inc. of Milton in the amount of $943,340 excluding HST and inclusive of contingency allowance in the amount of $25,000; and

- replacement of culvert structure 32-WG to Reeves Construction Limited of Mount Forest in the amount of $227,890 excluding HST and inclusive of contingency allowance of $15,000.

Goldie stressed, “We are trying to find funds for all of these projects if we possibly can. We are just trying to be realistic with the funding reserves that we have.”

June 16, 2017

 
 

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