By Michael Bennett, Local Journalism Initiative Reporter, The Ridgetown Independent News
Chatham-Kent Council unanimously approved $6.1 million for constructing a new Public Works Garage despite its cost more than doubling over the last three years.
Council approved awarding a contract to Barrineti Construction Ltd. for $5,856,790 to construct the new garage at 65 Creek Road, just south of Park Ave. E. in Chatham, at its Feb. 6 meeting.
Another $184,000 is included in the $6.1-million price tag for other contingencies, but a portion or all of that amount could be recovered if not used.
Council originally approved the construction of the new garage at the cost of $2.75 million in 2020, as $750,000 from the sale of the former garage to Onbelay Automotive Inc. helped offset the total construction price of $3.75 million at that time.
Ryan Brown, Director of Public Works, said the price ballooned over the last three years because of various factors.
Brown said the municipality could not share utilities with the existing buildings at the Park Ave. Business Centre.
Rerouting Entegrus power and water lines, installing a new transformer plus a new Enbridge gas line added $172,000 to the price tag and $20,000 for an environmental assessment.
“The biggest driver of the cost increase, compared to the original estimates, is the ongoing inflation,” Brown told Council. Brown said the size and scope of the building have not changed since first planned in 2019.
Ward 3 East Kent Councillor Steve Pinsonneault questioned the $450,000 for architectural fees.
“I don’t believe those costs are out of line,” answered Brown, adding Council approved this cost in a separate report in March 2021. “With projects this size, if you look at the construction costs, up to 10 percent would be typical.”
Ward 3 East Kent Councillor John Wright asked why the project wasn’t started after Council approved the $2.75-million in 2020.
“Now it’s up to $6.1 million. Why wasn’t this done when we voted for it?” Wright asked.
Brown said two significant delays prevented construction from starting over the last two years.
“One, we were right at the cusp of the pandemic, and there was a shift in priorities trying to overcome all of the challenges that came with that in 2020,” Brown said.
He said the property had to be severed into different lots because the utilities had to be separated from the Park Ave. Business Centre.
“Approvals take a lot of time, and add on to that the design, the geotechnical work that had to be done on the site … two years went by pretty quickly,” Brown said.
Pre-approved funding includes $768,362 from the sale of the former garage and $117,636 transfer from reserves from that property plus a $2,632,400 transfer from the Multi-Purpose Sports Complex Reserve that Council approved on Dec. 14, 2020. The remaining $2,581,602 needed to finance the completion of the garage, as identified in the report presented to Council on Feb. 6, is coming from a transfer from AMP Bridges reserve.
Pinsonneault questioned the administration’s comment that pulling nearly $2.6 million won’t impact future bridge contracts.
Gord Quinton, Chatham-Kent’s Chief Financial Officer, said the additional expense came in too late to be financed through the 2023 budget process and will instead be funded from the 2024 Capital Budget.
“What we’re going to have to do is prioritize out of the 2024 Capital Budget funding to finish this off and push other projects off (the list) to repay the Bridge Reserve,” he said.
Quinton said the Bridge Reserve was chosen because it has the largest cash balance at present.
“Engineering is working away on 20 different projects across the municipality, but often those are two-year jobs, and we know there will be a cash balance at 2023 year-end, said Quinton. “So basically, we’re borrowing from it for one year and paying it back in next year’s Capital Budget,” Quinton explained.
“Don’t delay any of our bridges,” Pinsonneault quipped.
