CORNWALL – A Cornwall councillor has “serious concerns” a multi-million dollar municipal works yard redevelopment project is out of financial control right out of the gate.
“There’s been quite a shift…I have some serious concerns here,” Justin Towndale told fellow councillors and staff at Monday night’s council meeting as council received an update on the project. “(It’s) really becoming full of cost overruns.”
The original redevelopment of the municipal works yard between Ontario Street and Lemay Street was $26.3 million with a $5.3 million contingency fund – basically 20 per cent of the project budgeted for unforeseen circumstances – for a total of $31.6 million.
According to Towndale’s calculations, that entire contingency has been spent in the first two years of the 10 year project and the new budget is $31.9 million.
Construction started last year and is slated to continue through 2027. The city has been going to the bank to pay for it.
For example, some of those overruns include the salt storage building that was supposed to be $1 million but ended up costing $4 million, site servicing and parking lot work that was supposed to be $654,000 but ended up being $1.9 million, and a noise wall budgeted at $350,000 but ended up costing taxpayers $818,000.
“There are other items here that are in the $4 million range and $3 million range…and based on what we’re seeing in the first two years for cost overruns, I’m concerned this trend will continue without a contingency in place,” Towndale said.
Acting Municipal Works General Manager Bill de Wit says some costs have increased because work to be done years down the road was done now due to efficiencies. “Overall, we’re hoping to keep within that $32 million budget.” De Wit added that some contingency has been “built in” to other numbers in the project.
“That doesn’t justify the entire increase in cost,” Towndale responded.
Towndale was also bothered by the report because it didn’t have comparative numbers – he had to hunt the numbers down himself and build a spreadsheet over the weekend – leading to the discovery of all the variances.
De Wit said they are hoping the “massive amount of expenditures” are going to be in “the front end” of the project. “We’re hoping that this is the bulk of it. I can’t say it won’t happen in the future.”
Towndale got his fellow councillors on side to demand yearly reports from administration on the multi-million dollar project.
Speaking with Cornwall Newswatch following the meeting, Towndale felt staff didn’t allay his concerns. “Honestly, not yet. I’m await for the report that will be forthcoming. These are huge costs and what do you do now? There’s eight more years left on this project…what happens with further cost overruns down the road? What kind of burden does this put on the city in future years?”
In addition to the overruns, budget items like a $450,000 design for an office building in 2027 were never included in the budget but have been moved up to 2020, Towndale claims. “That’s about a half million dollars that was left out.”
“We have to pay attention to this project. While we need to do it, it seems the cost overruns are huge.”
“There’s a more serious underlying issue here that could be a nasty surprise down the road for a future council and the city as a whole. The public should definitely be made aware of this because this is now a major financial issue. Five million dollars is nothing to sneeze at.”