Ontario Construction News staff writer
Orillia council has approved another $650,000 for construction of a new West Street recreation centre, a $55-million project.
This is the third price bump in less than two years and several councillors expressed their frustration, calling the request for additional funds “unfortunate” and noting several delays.
“When does it come to the point where we’re tapped out and we say we can’t give any more to the contingency?” Councillor Rob Kloostra asked at Monday’s budget committee meeting.
Councillors were frustrated by the request, calling it “unfortunate”, noting the cost issues and several delays.
At the launch of construction there was a $2-million contingency fund established – four per cent of the estimated cost although a minimum 5 per cent contingency is recommended for large-scale capital projects – more for a project like this one which is being built on a brownfield.
In summer 2018 council added $850,000 to the contingency for extra costs associated with site conditions and in January 2019 council added $975,000.
Last week’s additional funding raises that contingency above 8 per cent of the project cost.
Ray Merkley, the city’s director of parks, recreation and culture told council this should be the final request.
“We’re very close to the end of the project,” Merkley said during a virtual budget committee meeting on May 4. “The number of surprises should be very few if any. We certainly anticipate this will be the final request.”
As of mid-April, staff reported over $3.1 million of the $3.28 million contingency had been spent, leaving $153,000.
“If we don’t support this, the recreation centre is not going to open,” Councillor Mason Ainsworth said. “I really do hope this is the last time.”
Approximately $260,000 in outstanding items have been identified for potential Change Orders and staff is hopeful some money will be recovered.
“There are a couple of site work items that our consultants believe are the responsibility of the contractor which may require mediation or settlement,” noted the report.
COVID-19 has also impacted the project – including uncertainty with the provincial and municipal emergency declarations in place.
“During the Emergency Declaration materials and supplies, particularly custom work, has become harder to source and has longer delivery times. This will likely impact costing for some items.”
Also in the report: There are Consultant prolongation expenses of approximately $255,000. By contract the Architect is allowed to bill for professional fees beyond a 26-month construction period identified in the original agreement. While this expense may be able to be charged back to the contractor due to delays it will initially be charged to the project. This will likely be an area of dispute with the Contactor.
“There are a couple of site work items that our consultants believe are the responsibility of the contractor which may require mediation or settlement.”