Renfrew’s expansion of Ma-te-way Centre is $4.85 million over budget

·6 min read

Renfrew –The much-heralded Ma-Te-Way Activity Centre’s $21.5 million expansion project currently sits at $26 million and the $4.85 million overage can best be described as the Perfect Storm of unfortunate and unpredictable events that, one way or another, will leave ratepayers financially responsible.

When funding for the project was first announced in April 2021, a ceremony was held at the complex to review the agreement and scope of the project. It was being funded by all three levels of government, with $6.4 million coming from the federal government, $5.3 million from the provincial government, and $4.2 million being contributed by the town itself.

Kevin Hill, the town’s Parks and Recreation Director, has been council’s liaison between Buttcon, the Ottawa-based construction company that won the tender to oversee the construction project. He told council last week when Buttcon was awarded the construction management tender in June 2021, the company developed a timeline for construction to begin the first week of December with a projected completion date of early 2023.

“When the representatives from Buttcon first introduced the budget on June 22 as a Class D budget the new construction costs were set at $17,750,561, not including HST,” Hill said. “Along with other costs such as management fees, design and engineering work, additional design and other engineering work combined with a 10% contingency fund, we had an overall budget of $21,457,281.”

The new quote comes in at around $26 million, a number that stems from studies done on the project while it continues to be an active construction site.

“When we received a revised budget from Buttcon on August 18 of this year, the new construction costs had risen from $21 million to just over $26 million and the representatives from Buttcon will explain the differences during today’s meeting,” he said. The completion of the tennis courts will come in just above our budgeted amount of $550,000 and we are just awaiting a few more invoices for that aspect. Overall, we are left with a contingency reserve of $862,425.”

He said the switch from a Class B budget to a Class D budget resulted in the unfinanced Balance to Debenture of $8,964,181 to increase to $13,849,512.

CAO Robert Tremblay provided a list of options for council to consider and at the same time stressed the importance of the project.

“I want to remind council that the numbers are very important for the community and council, but it is important not to lose sight that this is more than just a second ice pad,” he said. “It’s a community hub and it’s important for the quality of life for those of us that live here but also to attract those that visit and it is important in terms of our overall growth strategy.

“We also have to keep in mind that construction took place during the middle of a pandemic where we are seeing generational inflationary pressures and also global supply issues so all these factors should be taken into account.”

He presented council with a list of options including:

1. Direct staff to formally request the $140,000 contribution from the Second Ice Pad Committee;

2. Authorize the treasurer to pursue temporary borrowing for the purposes of construction from Infrastructure Ontario;

3. Direct the treasurer to report back on funding options for the Tennis Courts as part of the 2023 budget process; and

4. Direct the CAO to prepare a request to the Government of Canada and Government of Ontario to advance grant funding for the project totalling $11,807,200.

Perfect Storm of Negative Factors

Michael Mercier, president and CEO of Buttcon East and Operations Manager Alexandre Fraser, explained the circumstances that caused the budget to balloon.

“One of the challenges of working today with the pandemic is the ability to stay organized and to ensure that funding is moving along and the funding element is absolutely critical to the success of a project”,” Mr. Mercier said. “There really is a war on the construction industry with the stress of competition for labour and it is vital to keep up to date on that.”

Mr. Alexandre outlined the many roadblocks that have proved to be costly and created delays for the work crews.

“As you all know we are deeply affected by the pandemic and world affairs resulting in shortages in the global supply system,” he said. “It really affected the construction industry in terms of availability of products and manpower. What we have done the last few months is constantly revise our work schedule based on current products in stock and trying to project when some items that were supposed to be used months ago will be available.”

Mr. Alexandre said some construction projects have risen by as much as 40 percent and it is very hard to control these costs at the local level.

Mr. Mercier said the original forecast was to have the project completed by Christmas 2022, but now it was pushed back to March 2023 and a number of factors led to the delay. He noted the pandemic had a tremendous impact. Most sites were completely shut down and when the economy opened up gradually, construction sites were among the last to re-open.

As well. a geotechnical report identified poor quality soil at the current site and it would not have been able to withstand the original steel bases ordered so new supplies were needed and that added a four-to-six-week delay.

“Then we had major labour strikes across the industry in May and that basically meant we were shut down for another four weeks,” Mr. Alexandre added. “All the major labour groups like carpenters, engineers and plumbers were all off the entire month as all the major collective agreements expired. Once they settled this, it took us well into June to remobilize the work site. Developers, builders and others were over the barrel and the trade unions said enough is enough and they had the upper hand.”

Reeve Peter Emon said it was almost a perfect storm of what could go wrong for any construction project.

“While attending AMO last week all the municipal leaders were talking about this issue,” he said. “If it is any comfort to my colleagues her, it is that this is a shared pain being felt by all 444 municipalities across the province who have started large capital projects. In Northern Ontario, some projects have tripled in cost.”

Council voted in favour of a resolution requesting staff to formally request the $140,000 pledged by the Second Ice Committee and to formally request the two upper levels of government to release the $11.7 million funding ahead of schedule to offset upcoming costs. A final aspect of the recommendation directed the finance department to produce a schedule of payments based on future loans through Infrastructure Ontario in order to complete the Ma-Te-Way expansion.

Bruce McIntyre, Local Journalism Initiative Reporter, The Eganville Leader