/Validation phase exceeds approved cost

Validation phase exceeds approved cost

By Chad Ingram

Published Feb. 5 2019

The cost for the “validation phase”of the Minden arena project has exceeded the amount Minden Hillscouncil approved for it by a wide margin.

During a special meeting of council onJan. 31 councillors received an update on the project someexpressing dismay at the size of the financial overage for itsinitial phase and ultimately refused to approve those additionalcosts.

In September the previous Minden Hillscouncil approved $140000 for the completion of the validation phasewhich is a series of engineering assessments. In July oflast year the previous council essentially approved in principleawarding the project – which is now proposed to include theconstruction of a new arena and gymnasium which would be attached tothe current community centre building – to Ottawa's McDonaldBrothers Construction which was the sole company to bid on theproject. The contract for the job which would cost $12.5 millionplus HST has not yet been signed and council is scheduled to voteon whether to authorize the contract during a Feb. 14 meeting.

In December community servicesdirector Mark Coleman brought a report to council saying theforecasted cost for the validation phase had risen to $252000 andcouncillors approved up to an additional $140000 – so a totalspending ceiling of $280000 – for that phase of the project.

During the Jan. 31 meeting it wasrevealed that cost has risen again.

“That number has been revised”Coleman told councillors adding that “Part of this isforecasting part of it's actuals.”

The revised number was more than$323000 exceeding the December estimate by nearly $71000. On topof that additional legal and meeting costs – including conferencecalls and lunches – have brought the total combined forecast forthe validation phase to $35300 Coleman's report indicated.

During the Jan. 31 meeting Colemanturned things over to Paul McDonald president of McDonald BrothersConstruction to explain the cost increase.

“It's a variable” McDonald said ofthe estimate for the validation phase. “It's a function of a dozenengineering firms individuals ourselves . . . looking at what we'reasking of them to put this report together.”

The scope of the project has also grownsomewhat since a gymnasium large enough to host a high-school-levelbasketball game is now included in the proposed design. The proposedgymnasium presented during a December public meeting on the projectwas smaller than a school-sized gymnasium something that drewcriticism from the community.

“This cost increase is primarily aresult of the building design evolution” Coleman's report read.

“That value is an approximation”McDonald said adding that in the original request for proposalsdocument his company had responded to it was indicated thevalidation phase could cost as much as $400000. “It's not like apurchase order.”

“It comes as a surprise” MayorBrent Devolin said of the new figure. “I guess I would have likedto have advanced knowledge when we approved the number we did thatthere was a variable there. Unlike the rest of the project where Ithink we've been working really hard to screw those variables downall over the place this kind of comes out of left field. So it's . .. it's perplexing.”

McDonald re-emphasized the estimate forthe validation phase which includes a series of sub-consultants isan approximation.

“There is no little line in all ofthe sub-consultants' fee proposals where you can really ascertainexactly that validation portion” he said.

“The number we gave you it includesall of that fee you're not paying more here” said PatrickBrousseau of McDonald Brothers referring to the project's totalcost which has not been approved by council. “I understand thepredicament. It's a little more than what you had authorized and weapologize for that. But the investment that you've made now you'rebenefitting from it because I have less contingency . . . we're notburning that money.”

“So to put that in simple layman'sterms the exercise in drilling deeper you remove risk” Devolinsaid.

Councillor Bob Carter expressedsignificant dismay that the costs for the validation phase wereexceeding what had been approved by council.

“In December we had a meeting wehad some actual costs up to that point and we came and we were askedto approve another $140000” Carter said in reference to council'sraising of the spending ceiling up to $280000. He noted the updatedforecasted cost for the validation phase exceeded the Decemberestimate by 50 per cent.

“That's a 50 per cent overage inabout six weeks” Carter said. “I understand your explanationand I don't give a damn about original budgets and what thingsoriginally cost. You know we were asked for $140000 to get to apoint and we made it very very clear that that was the amount ofmoney that we were going to be spending. And now we're 50 per centover.”

“I wasn't privy to what happened atcouncil” McDonald said indicating perhaps there'd been somemiscommunication.

“We here in the council I believeare here to give guidance to the operational people so I'm notlooking to you for the explanation” Carter said to McDonald. “Wegave this to the operational people and that's where I have thebiggest concern.”

“In fairness to the operationalpeople they came to me and asked for this” McDonald replied. “Ithink the miscommunication lies with me personally.”

Councillor Jennifer Hughey said sheshared Carter's concerns.

“I just wanted to echo some of whatCouncillor Carter said” Hughey told the room. “I think hementioned quotes like 'level of comfort.' You know there's a certainlevel of comfort that we as council have to have in you and in ourright to bring this forward to us . . . when maybe we're at a $10000overage versus a $70000 overage because that really creates alevel of uncertainty in general.

“I've been thinking . . . as themayor said this is the biggest capital project we've been faced[with] and so my uncertainty lies a little bit now with you guysright?” Hughey said to the McDonald reps and Coleman. “BecauseI'm trusting you to come forward to us with numbers that arecorrect.”

“This is massive right?” Hugheycontinued. “So we expect maybe a higher level of informationrelayed. So I just want to put it out there on the record that forme it's not really about if we build this arena it's when but it'salso about how and how this process is done and for me that's themost important part.”

Chief administrative officer LorrieBlanchard told council that in order for them to be at the pointwhere they had enough information to make a decision all the workthat has been completed needed to be completed.

“I don't disagree with you exceptthat it's one thing to have work done that's necessary and it's onething to have work done that's approved” Carter said. “Theprinciple is once we approve something that is what should be doneor there has to be some new approval.”

In a recorded vote councillors voteduniformly not to approve the additional costs for the validationphase.

Earlier in the meeting councillorsreceived a presentation on the updated proposed facility design fromMario Pistone of Parkin Architects that included a tour through athree-dimensional rendering. Council is scheduled to vote on whetherit will proceed with the awarding of the contract during a Feb. 14meeting.