WELLINGTON NORTH – Council here has deferred awarding a $1.26-million contract for its asphalt program to the Murray Group until the numbers are in for a Highway 89 (Queen Street East) project tender.
Highway 89 in Mount Forest is a rough stretch of road in need of reconstruction.
Last year, in response to a successful Connecting Links Program application by the township, the province agreed to fund $1.42 million of what was then anticipated to be a $2.14-million project.
According to township operations director Matt Aston, the project would see the Queen Street East road resurfaced after underground water, sanitary pipes and storm sewer are replaced.
The money hasn’t yet been released by the province. The township would submit reports and achieve set benchmarks and the province would respond by incrementally releasing funds.
As for the remaining $720,000 the township would be on the hook for – that figure could change drastically because of inflated material and energy costs.
Other projects are already coming in over-budget, causing council to heed a warning of future underestimates by backing away from signing on the dotted line for a recent asphalt program tender.
In this year’s budget, $930,500 is allotted for nine asphalt projects, but the least expensive tender for those projects (submitted by Murray Group Ltd.) has put the real number at $1.29 million, tax included – an increase of $360,393 (almost 40 per cent).
Staff approached council on March 7 for an additional $490,500 for this year’s asphalt program, with dollars proposed to come from the Capital Infrastructure Reinvestment Fund ($300,000) and 2022 Ontario Community Infrastructure Fund dollars ($190,500).
The request for more money also factors in $30,000 for pulverizing and $100,000 for additional gravel.
Explaining the ask, Aston said the cost of asphalt has risen from a February 2021 cost of $617 per tonne, to $917 per tonne as of February this year – an increase of almost 50%.
“Township staff feel this asphalt tender is a good indication that construction costs for 2022 will be higher [than] estimated,” stated a March 7 report to council.
Unreliable market prices
Councillor Sherry Burke asked if other, already-approved projects will require additional requests for money, and said she is “astonished” by the year-over-year increase.
Councillor Dan Yake questioned how volatile prices would affect the cost of the Highway 89 project.
Aston told council the asphalt program usually comes in under budget, adding the township hadn’t seen such an increase before.
“We’ll know next week by this time, but it might be a really big number too … that’s kinda scary,” Aston responded, in part.
Mayor Andy Lennox questioned if, by awarding the asphalt contract that Monday, the township would be impeding itself from responding to an over-budget Highway 89 tender.
“Any dollars that come out of the pot are dollars that we’re not going to be able to spend on Queen Street if we award them today,” Aston said, suggesting the project as a top priority.
With time remaining to respond to the asphalt tender and the Queen Street East project tender closing on March 14, Aston suggested deferring the awarding of the contract to give staff time to understand the financial demands between the two projects.
Staff and council also discussed freeing some dollars by removing a project or two within the asphalt tender, if need be. Aston said doing so would not jeopardize the quote provided.
“If we’ve got a few weeks to be able to do that, then it’ll give staff some time to look at the numbers and get back to us and let us know what they think,” Yake said, putting forward a motion to defer, which passed.
Staff are aiming to have a recommendation on the Queen Street East project on March 21.
