By Mark Squibb
October 6, 2023 Edition
Residents of Paradise are on the hook for an additional $2 million worth of consultant fees related to the ongoing construction of the new Lift Station No. 10.
Councillor Deborah Quilty explained Tuesday the prime consultant agreement used to award the work initially was a fixed price contract that did not reflect unit rates. The extra fees reflect additional work to date and an estimate of more extra work required to complete the construction.
“The cost represents the additional effort to design and manage a construction project of this size,” Quilty summarized, who added the fees represent less than 12 percent of the construction cost and that a similar local project completed five years ago had consultant fees equating to 28 percent of the construction cost.
That change comes with a price tag of $2,338,784, HST included, made payable to R.V. Anderson.
The original lift station suffered a blowout in 2019, spraying a neighbouring home in sewage and necessitating the trucking of sewage to the tune of about $50,000 a day.
Consultant R.V. Anderson presented council with three options – repair the lift station, upgrade it, or construct a new one.
Council opted for the third option, and while the original pre-tender estimate flagged the cost at $12.6 million and a secondary estimate accounting for inflation came in at $16.9 million, the actual bids came in much higher, with the lowest at some $23.6 million.
Councillors Larry Vaters and Glen Carew both voted against the motion to construct the new station due the exorbitant price increase, and suggested the Town consider alternative options. The remainder of council voted to continue on with construction, and the motion to construct the new station passed.
Since then, Paradise has received some $5 million in combined federal and provincial funding for the project, with the Town on the hook for the remainder of the project costs.
The $2.33 million in consultant fees approved this week is in addition to the $23.6 million price tag.
“I wasn’t made aware of the possibility of a significant increase in engineering fees until recently, and I also feel there were a number of opportunities to be informed of this potential including a lengthy discussion with staff, council, and R.V. Anderson held in December, 2022,” said the councillor, conceding that other than that, communication between staff and the committee has been excellent.
“While I voted ‘No,’ on the awarding of Lift Station 10 construction back in December 2022, for reasons I spelled out at that time, it remains imperative that all decisions require significant thought and analysis,” said Vaters. “The Lift Station 10 construction project was sanctioned by a majority vote of council, and now it is equally important to get it completed and functioning ASAP so that we can ensure that other important infrastructure projects are started and completed too.”
Vaters said the engineering fees are “legit, valid, and accurate,” and added it is the responsibility of council to “scrutinize every invoice.”
Any decision to not pay the fees would result in a potential stoppage of work and possible legal trouble, he said.
Councillor Carew felt similarly.
“This is a considerable amount of money being added to a project that was double the original cost estimate,” said Carew. “It pushes this project to just shy of $26 million dollars, with the understanding that there will most likely be change orders and cost overruns passed on to the Town by contractors, based on any escalating costs incurred.”
Carew noted the latest increase was never discussed, and the gravity of proceeding with the project still sits with him as it involved the biggest amount of money he has voted on since he joined council.
“This is somewhat of a ‘Sophie’s Choice’ moment for me,” said Carew. “If I vote ‘Yes,’ the residents are saddled with an additional, unbudgeted $2.33 million dollars on a project that is already two times the original cost estimate, and if I vote ‘No,’ and this memo is defeated, I understand, as councillor Vaters mentioned, there could be a far greater financial impact to residents. We’re already halfway through and we have to see it completed.”
Councillor Elizabeth Laurie said consultant fees are par for the course on construction projects, and threw her support behind the project.
“Any time that we are dealing with people’s toilets, it is a need and not a want,” said Laurie. “It was an easy decision for me to make last year, I didn’t contemplate too hard on it. It was a decision we needed to make.”
Laurie reiterated Quilty’s claim that a similar project racked up engineering fees totalling 28 percent of total construction costs, and allowed council “got off pretty good” in this instance given the size and magnitude of the project.
Laurie countered Vater’s claim that it is the responsibility of council to scrutinize the invoices arguing that is actually the responsibility of staff, who went through these particular invoices “with a fine-tooth comb. And as councillor Carew alluded to, we really don’t have a choice in the matter, because we’ll straddle our residents with a lawsuit otherwise. And that’s not how we operate here in the Town of Paradise.”
Quilty said while the item wasn’t on anybody’s wish list, she “wasn’t a bit surprised given the magnitude of the project.”
Quilty added the matter was “beat to death” in engineering committee meetings, and she had no hesitancy approving the change order.
“It’s a project that has to be finished,” said Quilty. “This work is moving along nicely, the work is being done. Hopefully we’ll see the end of it next year. And right now, we have to move forward. There’s no turning back on this project at this point and time.”
Deputy Mayor Kimberley Street said the decision has weighed heavily on all of council.
“I know the decision weighed heavy on me, because it’s a big-ticket item, the biggest I’ve seen on council,” she said.
Street said some 70 percent of residents rely on the lift station, and the decision to construct a new one, despite the high price tag, was the best decision for residents for many years to come.
Mayor Dan Bobbett noted the life expectancy of the new lift station will be 50 years.
Councillor Patrick Martin reiterated that engineering fees amounting to 12 precent of the project cost is normal for a project of this size, and construction is moving along on time.
“We call it a change notice or a change order, and I know that’s the terminology we’re using, but we knew it was coming,” said Martin. “A change order is something you didn’t know was coming. But we were aware this was coming. It’s unfortunate that it’s such a large amount, but it’s no different than a million-dollar project having an engineering fee of $120,000. It’s a much larger project, so the engineering fee is going to be a lot higher.”
Martin added that some years back, the Town hosted an event at the Double Ice Complex, and there was concern the toilets would not flush properly because of trouble with the lift station.
“We don’t want to go through that again,” said Martin. “We need to get this fixed, and we need to pay the bill, and like councillor Laurie said, it’s something that has to be done.”