Costs escalate almost $4 million but Perth Council still approves $9.1 million water system upgrade

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Image from a 2013 report from R.V. Anderson advocating for the SAGR project

Perth town council has approved a $9.1 million contract with Louis Bray Construction to upgrade the town’s water system – at a cost almost $4 million greater than an engineering consultant’s original cost estimates.

The Submerged Attached Growth Reactor (SAGR) system at the Perth Lagoon has a contract value of $9,099,000 — $3,715,000 greater than a “conceptual cost estimate” developed in 2014 by R.V. Anderson Associates Limited (RVA) of Ottawa, The Perth Courier reports.

RVA representative Trevor Kealey said at the town council’s committee of the whole meeting on Aug. 1 that the reason for the discrepancy related to “slow and sporadic funding” and that in 2014, there were fewer opportunities, so “contractors (were) more competitive in pricing.”

In 2015, the town applied for funding from two different bodies, the FCM (Federation of Canadian Municipalities) and Ontario Community Infrastructure Fund (OCIF).

Since then, however, the picture has changed, with the current “construction cost estimate,” reported at $7.4 million – still significantly lower than the lowest bid.

Kealey told councillors that there are now more funding programs available “all with scheduling constraints.”

“Municipalities all have tight deadlines for construction,” he said.

This keeps contractors busy, resulting in less competitive pricing because of supply and demand and “general trends across the industry,” he told council.

Some councillors expressed dissatisfaction with the report.

Coun. Jim Boldt said that even if their report had been off by, say, a million dollars, he may have been able to live with it, But he said to the consultant, “you’re out by almost double the price.”

“It’s bothersome to everyone to see a price like that,” Kealey responded. “We made a lot of assumptions,” without the full details in hand, he said. “It doesn’t make us feel good either.”

Mayor John Fenik said that it was still good of Kealey to show up, accompanied by his co-worker Beth Hamley, knowing that he was not walking into a “very pleasant, loving, pat-on-the-back exchange.”

The mayor said that “the buck stops with me.”

“I’ll stand as mayor and shoulder that.” He then asked Kealey if he felt that “your company (feels) that there is any liability (on its part)?”

“No,” Kealey said. “The market has changed.”

Kealey said that he wants to see bids come in that land in the middle of the estimated range he has provided a client.

Ultimately, town council approved the contract with Bray.

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