By Stephen Dafoe
Morinville – A projected $870,000 cost overrun on the over time and over budget Civic Plaza renovation project was not the news Council wanted to hear from representatives of ONPA Architects and Synergy Projects Ltd., the architectural firm and contract management company hired by the Town to renovate the 30-year-old St. Germain Plaza.
After giving Council an update on the progress of the renovation project during the Feb. 28 meeting of Morinville Town Council, ONPA’s Rob Black hit Council between the eyes with the bad news.
“It has gone up from what we were projecting in September,” Black told councillors. “We’re at a point now where we are certain about the cost. We’re at the point where we can commit this job will be done for under $4 million.”
The news was not welcomed on a project originally projected to cost the community $2.5 million. That number was increased to $3.5 million after a more concrete estimate of the work was made last fall, and it was that number which Council pencilled into its 2012 budget. Last fall Council had been given the impression their $3.5 million figure would be high, leaving the community with additional monies to purchase new and needed equipment for the renovated facility. Now it appears that money could be as much as $500,000 short of the money needed to complete the project, and those figures do not include interior furnishings and equipment.
Black said there were many contributing factors to the approximately $870,000 in cost overruns between the last estimated figure and what the present reality is.
“These renovation projects are associated with a lot of risks,” Black told Council. “Some things go well, some things go bad. Because we did such a repurposing, a lot of things went ying that should have gone yang.”
Among ONPA and Synergy’s laundry list of items are $270,000 in structural work required to carry the load of additional space in the expanded building, structural support they assumed would be there but subsequently found would not.
ONPA and Synergy also determined the mechanical system they thought would do the job in the facility was not sufficient and that a more efficient system would be required costing an additional $255,000. The cost was defended on the grounds the enhanced system would cost less to operate and maintain, something Council scoffed at given the life expectancy of the renovated building is another 25 years.
Assumptions were also made with respect to the building’s electrical system. Reuse and redistribution of existing panels was later found not to be possible necessitating and additional $147,420 in spending.
An additional $50,000 in cost overruns are attributed to increased costs of the sub-trades who will be working on the remaining parts of the project. Black said subcontractors are not taking the low margins they were willing to take a few years ago, resulting in increased prices in the trades.
Miscellaneous items, including the need to install new roof curbs instead of reusing existing ones are scheduled to add another $145,000 to the project.
Despite needing an additional $870,000 to bring the project to completion, Black contends the costs are still good value for the community as they come in around $200 per square foot. “That’s still a good value,” Black said, adding such projects often come in around $350 a square foot. “It still represents good value to the tax payer.”
Council furious over late breaking news
Morinville Mayor Lloyd Bertschi was not buying the cost overruns Tuesday night and questioned why he and Council were not notified earlier.
“We were told to believe $2.8 million was a good solid number as late as when we passed our budget,” Bertschi said, adding while he understood the cost increases in the sub-trades, he was not prepared to accept the rest. “You had to know these numbers.”
The mayor questioned why Synergy should expect an increase in their management fee when the project was both over time and over budget. Bertschi said a 5 per cent margin on a $2.8 million project would result in a $140,000 management commission for Synergy. “Why should you get more dollars for a project going over time and over budget,” Bertschi asked, adding his belief Synergy did not deserve more money just because the project is costing more. “You shouldn’t get out of this without some skin in the game.”
Mayor Bertschi closed his comments by advising the architect and management company representatives to sort things out. “What we need is performance from you two,” Bertschi said, adding the situation would not sit well when word got out to other municipalities about how the Morinville renovation project had been managed.
Bertschi was not alone in taking ONPA and Synergy to task. Councillor Lisa Holmes questioned where the additional money was to come from and what the companies were going to do about the overages. “Where is this money supposed to come from,” she asked. “What assurances do you have that you’re going to be accountable on this. These things didn’t happen last week. They’ve been going on since we started. How are you going to be accountable for your portion of this fallout?”
Councillor Nicole Boutestein was less than impressed with what she saw as a lot of guess work on the renovation project. “How come more research wasn’t done and less assuming,” Boutestein asked.
Black told her and the rest of council the need to get the project going quickly meant a no risk approach in the construction management project was not possible; in order to have truly firm numbers, demolition would have been needed prior to investigating the scope of the job. As that was not the case, the project encountered issues as the work got underway and the actual condition of the building was revealed. “We brought our best knowledge base to the table on this,” Black said, adding ONPA and Synergy have both been around for a long time with a wealth of experience.
Councillor Ben Van de Walle expressed his concern project costs could rise even higher and sought assurances the price would not rise again. “Four million can go to $4.5 million,” Van de Walle said.
“We’re saying this project is not going to go to $4.5 million,” Black told Van de Walle. “It’s not going to go over $4 million. It’s going to go down from that figure.” Pressed for assurance there was zero chance of further cost overruns, Black could not guarantee it. “Zero is like saying never, but how about if I say 99.9999,” he said. “What can we do? There’s always risk.”
After the Feb. 28 meeting Mayor Bertschi told the media the additional $500,000 between Council’s $3.5 million budget for the renovations and the possible $4 million final price tag on the project could be paid for with unused Municipal Sustainability Initiative funding from the province. However, the mayor is anticipating Administration, who will be meeting with the architect and management company over the next couple of weeks, will take measures to reduce the cost overruns as much as possible.
Completion of the 19,500 square foot facility was originally anticipated to be late December, 2011. That target was subsequently changed to early January, then March, and most recently mid-May of this year.