Too good to be true
By Chad Ingram
If something seems too good to be true, it probably is.
In the lead-up to Minden Hills council’s approval of the arena project in February, councillors who were skeptical about it and opposed to proceeding, along with members of the public, were assured again and again that project – a $13-million leviathan, the largest capital project in the township’s history – would not, could not, go over budget.
The reason for that, supposedly, was the way the project is being managed, which is through an integrated project delivery format, something more common in the U.S. than it is in Canada.
Of course, most large capital projects go over budget, and, despite the apparently revolutionary way in which this one is being delivered, the Minden Hills arena project is going over budget too.
Councillors heard last week that, while there is still just more than $205,000 currently sitting in a contingency fund for the project, it’s forecasted that it will end with a $67,000 deficit. Under the delivery model, tendering for the sub-trades is overseen by the joint project delivery team, which is the construction company and architectural firm who designed and are building the facility.
An additional $250,000 in contingency funding was requested and approved by council, $67,000 of that essentially to cover the projected overrun, and an additional $183,000 to finish the project. That contingency fund, under the integrated project delivery model, is referred to as a “profit pool,” the idea being that, if anything is left over at the end of the project, it is to be split between the project delivery team and the municipality. Supposedly it means risk is shared and should provide incentive for the project delivery team to find savings through tendering along the way, those savings being put back into the profit pool.
Now, regular readers of this publication may recall that, in July, with the contingency fund, or profit pool, sitting at nearly $300,000, the township agreed to “release” $80,000 of it. Half of that money went to the township, which was put back into the project, and half, $40,000, went jointly to the construction company and architectural firm. The joint project delivery team was “comfortable” doing that, community services director Mark Coleman told council at the time.
Comfortable. How nice for them.
Apparently that comfort was premature, since last week they came back to council, hat in hand, asking for and receiving an extra quarter-million dollars. That’s fundamentally problematic and something that, as a Minden Hills taxpayer, I find absolutely infuriating. What’s more, is that should all of that new contingency not be spent, half will go back to the township, half to the joint project delivery team.
That’s not to mention the additional $305,000 it will cost the township for “value-added items” at the facility, things like window shades and furniture for the lobby, as well as the paving of the balance of the parking lot.
Council has yet to vote on that expenditure, and should consider how necessary any of those items are at this time. Last week Mayor Brent Devolin said the project could still come in at its $12.5-million budget, if aspects such as landscaping were put off, and these are the types of things that council needs to start doing now.
Enough public money has been spent on this project. More than enough. Too much. Stop throwing money down this hole. The building is going get finished. Anything additional that is not required for accessibility should be put off for now, perhaps to be paid for in future years through grants, surpluses, etc.
The focus now should not be finishing the project. The focus now should be mitigating the financial pain.