Bracebridge’s new arena, library and community center are going to cost much more than anyone expected and it’s left the Town scrambling to cut costs.
During the most recent Bracebridge general committee meeting councillors agreed to award a contract to Aquicon Construction Co. Ltd. at an upset limit of $58.9 for the construction of the new Muskoka Lumber Community Centre (MLCC).
The Aquicon bid, the lowest submitted, came in $22.2 million dollars more than the Town had anticipated. However, Council heard that following extensive negotiations since a $67 million bid was originally received in September, they had managed to slice $8 million off the cost.
The general committee also approved the entire capital budget, including project contingencies, for the MLCC at an upset limit of $75.3.
Council heard that when the tender closed on Sept. 9, three bids were received with all bids significantly higher than the expected target.
Ron Spina of Colliers Project Leaders sighted several reasons for the unexpectedly high bids. That included supply issues and an exorbitant increase in the cost of building materials. He said some of the materials that have been impacted include the cost of structural steel, which has gone up by somewhere between 40 and 50%, the cost of metal siding going up by as much as 50% and the cost of wood framing timber products increasing by as much as 300%.
He said they have no reason to believe costs will go down in the next few years.
Spina explained that it’s also a very busy construction market currently. He pointed to nine major arenas, swimming pool and community center builds currently underway in Ontario including new arenas in Peterborough, Whitby, King Township and Guelph.
In order to reduce the cost by $8 million, staff said a number of changes had to be made, including reducing the size of the fieldhouse and library slightly, reducing the amount of paving, removing the perimeter trail and reducing the amount of quality of selected interior finishes.
CAO Stephen Rettie said the process of altering the plans over the past several months has been a major endeavour.
“Nobody on any of our teams wanted to go through a process like this. We were forced into a situation that we never thought would have happened,” he explained. “We did the same thing you would do in your household if a project was going over budget and you needed to reprioritize some other things – just on a much bigger scale.”
Cindy O’Regan said the recreation department would retain approximately 90% of the programming that they wanted due to the changes. There will be some challenges coming from the revamped plan, she said, but they anticipate being able to adapt.
Library CEO Crystal Bergstrome said the Library would still be going from roughly 8,000 square feet to 20,000 square feet and they don’t foresee any problems with the changes.
There were serious concerns among the council over the impact the sudden cost increase would have on the tax base, and on the effect it might have on other projects like a proposed new hospital.
Coun. Mark Quemby was particularly concerned that most major projects of this nature are funded ⅓ each by the municipal, federal and provincial governments. Despite $16.9 million from the province, the federal government has yet to provide any funding.
Town treasurer Paul Judson said while they are committed to pursuing funding from all senior levels of government the Town is, “not assuming any further contribution from the federal government.”
Coun. Don Smith also had serious reservations.
“I have some concerns with the project as it is presently proposed and that’s primarily with the financial impact of the proposed contract on the ratepayers of Bracebridge and the constraints it will put on future capital projects,” he said. “What we are left with now is that the ratepayers of Bracebridge will have to fund $58 million of this project. It will put us into one of the highest debt levels in the province and I think we need to take a step back.”
Mayor Graydon Smith acknowledged that the Town was “slapped in the face with this news” of the increased pricetag. However, he said the Town has spent years putting itself in a position to deal with projects like this one.
“It’s not that we should do this at any cost but we need to look at all the factors in place. I have all the confidence in the world that if it wasn’t the right move our staff would come forward and tell us that it wasn’t the right move,” said Mayor Smith. “The concerns are real but I believe we have a path here.”
The motion was carried with Coun. Don Smith opposed. It must still be approved at the Wednesday evening council meeting.
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