Council has a lot of questions to answer when it comes to the blown budget of the new pool.
Sitting at $3 million over budget for this project, there are serious questions surrounding due diligence.
The first nearly $1 million was a result of the condition of the site itself. When construction began, it was discovered the ground was not compact enough, which resulted in additional site preparation. Another $950,000 in operation costs came due to the delay caused by the additional groundwork.
Another significant cost over run came from the need for additional steel because the blueprints for the site were incomplete.
Suzanne Gaida, who is the town’s project manager for the pool, said blueprints for projects of this scale are typically 95 to 98 per cent complete. The drawings for the pool project were less than that, though she could not say how much less because she is still waiting on confirmation.
That however makes up a significant portion of the cost of the some 600 change orders that have been issued for the pool that have totalled $700,000.
An improperly prepared construction site and incomplete blueprints point to some serious problems with oversight on this project.
Now council will consider making a policy change in terms of how the town budgets for capital projects that would see a five per cent contingency built into every capital project.
For the pool, which was originally pegged at $45 million, a five per cent contingency would have padded the budget to $47.25 million.
There are pros and cons to built-in contingencies when it comes to projects being built with tax dollars. First it reduces the risk of a project going over the approved budget, which means it would not threaten funds for other projects. Second, from a public optics point of view, if the project hits the expected build cost it appears to come in under budget.
On the con side is the fact that governments have a tendency to spend at least every dollar budgeted, whether it is needed or not.
In this case, the five per cent contingency would not have kept the pool in budget. The town would still be in an over-budget situation due to the overruns on the project, but it would only be out by $750,000 and not $3 million.
While $750,000 over budget sounds better than millions, it doesn’t change the fact that the pool would still be $3 million over its actual cost of construction.
It also would not change the fact that some serious mistakes were made that ultimately resulted in the cost going up by more than six per cent. Council should consider better oversight to keep costs in check instead of policies that simply pad budgets.
