The price is wrong

A tight budget year just got tighter for the City of Prince Albert.

On Monday, Prince Albert City Council agreed to cover more than $350,000 in cost overruns from two upgrade projects after contractors discovered unexpected problems.

The decision left some city councillors fuming with how the projects were handled, and had Mayor Greg Dionne vowing the city would not go down this path again.

“That’s not acceptable,” Dionne said in an interview after the meeting. “That’s a poor way to do business and we’re going to hold people accountable in 2018.”

The more expensive of the two projects involves a sewer, storm and water main replacement program that will cost the city an extra $260,029. A report submitted by the Department of Public Works cites unavoidable delays during sewer main replacement work on River Street as the main culprit. According to the report, construction work needed to finish by the end of this year to allow for a new reservoir and pump house to be built in 2018.

Costs overruns from other budget projects, like a 2016 water main project and a plan to replace 10 fire hydrants, also had an impact.

The city plans to use funds from the Waterworks Improvement Reserve to fund the project. That reserve will have a projected deficit balance of $7,773,957 by the end of the year.

Dionne said he isn’t “ruthless” when it comes to stamping out cost overruns, but is concerned about how the numbers are adding up.

“If I would have known in the summer they were over (by) $260,000, I would have said, ‘don’t do this block,’” Dionne said when asked about the overall project. “We give them a budget, and to me, you’ve got to stay within that budget.”

A second project to install water and sewer lines at the Prince Albert landfill is $90,573 over budget, and once again unforeseen delays are the main cause for concern.

Public Works Director Amjah Khan said a pre-construction test revealed “no underground water conditions” at the site, but that changed during entry digging for a lift station. Contractors discovered “a lot of water” and were forced to divert it into a nearby leech pond at a cost of roughly $54,360.

Khan spent several minutes answering questions from concerned councillors about both projects. He maintained that all the delays were unavoidable.

“If it’s unforeseen items, we cannot predict them at the time of the tender,” he said. “That’s where these overages come from. These overages are just because of the groundwater conditions that we did not foresee in advance.”

Dionne wasn’t the only city council member upset by the revelation. Ward 4 Coun. Don Cody also took time to question whether the city got enough bang for their buck from their hired consultants.

“Engineering fees” are included in the cost overruns, since they are typically based on a percentage of construction cost, and will increase or decrease as the cost changes.

As with the groundwater issue, Khan maintained that consultants could not have identified the problems during the tender process.

With the city facing a budget crunch in the New Year, city council has decided to hold quarterly meetings to make sure future infrastructure projects do not meet a similar fate. Dionne also said the city could look at barring all future tenders from contractors who failed to stay on budget in the past.

Dionne said it’s up to the consultant to do their homework before tendering an offer. He doesn’t want the city held responsible if they can’t.

He also wants city administrators to be more proactive in bringing potential problems to council’s attention before they go over budget.

“If you hold people accountable and they know they’re accountable, they’ll do a better job on their bids,” he said.

@kerr_jas • jason.kerr@paherald.sk.ca

Thierman Financial