The North Battleford sanitary sewer trunk main project is starting to resemble a Telemiracle telethon, much to the dismay of city officials.
The costs keep going 鈥渉igher鈥� and 鈥渉igher,鈥� with latest estimates pegging the project at over $3 million more than the initially-budgeted $13.6 million.
That bad news was revealed Monday as councillors decided on awarding the tender for the sewage force main and sewer trunk lining portion of the project.
Council awarded the tender to the lowest of three bidders, Hamm Construction Ltd. of Saskatoon, in an amount up to $8,928,500 including PST and not including GST.
This was on the recommendation of project engineer, AECOM Canada Ltd. That tender bid actually fell below the initial price estimates by about $122,000.
It was the costs for the rest of the project that produced the headaches for council on the evening.
According to the memo provided by Director of Operations Stewart Schafer to council, Contract 1 for the sewage pumping station is now estimated at $5,751,454, almost $2 million more than initial estimates.
Other costs include a contingency of $698,000 and engineering services cost of $1,068,095.
When other costs were added in , the total cost estimate came to $16,848,472, or 123.4 per cent of the original budget.
That is well above the $13.6 million initial estimate for the project during its funding application, and also well above the revised estimate of $15.1 million presented by Sean Bayer of KGS Group in January. That January estimate had been $1.5 million over budget.
A big driver of costs has been the province鈥檚 insistence on collecting PST on construction 鈥� something that wasn鈥檛 factored into the city鈥檚 original funding application to the federal and provincial governments. The latest estimate pegs the amount of PST at $953,688.
Council had tried, in vain, to convince the province to reconsider the PST portion. But even without it factored in, the project would still be over the initial budget by $2,238,254, according to Schafer鈥檚 memo.
In any event, the over $3 million overage was a concern for council. While the project is funded in one-thirds by the federal, provincial and municipal governments, ultimately it would be the city on the hook for the overage amount.
鈥淭hat raises some significant concern about the ability to fund the project, although I鈥檓 sure we鈥檒l find a way,鈥� said Councillor Kelli Hawtin. 鈥淭hat鈥檚 a significant overage for a project this size.鈥�
At council Monday, it was indicated that it was the sewage pumping station portion that is running over budget at the moment.
A bid has been submitted by Con-Tech for that portion of the contract at $5,751,454, well above the initial estimate of $3,810,000.
That tender has not yet been officially awarded and is still under evaluation by AECOM. Discussions are continuing to try and reduce the costs of that portion, and this portion will likely come back to the next council meeting.
City Manager Randy Patrick noted the city had already reduced the costs on the project by going with a pressurized system instead of a more expensive gravity-based approach, which would have been additional millions of dollars. Patrick noted there was also a possibility of reducing it by upwards of $500,000 on the sewage pumping station portion by negotiation.
As for the tender before council for the sewage force main and sewer trunk lining, Patrick said 鈥渨e鈥檙e getting last year鈥檚 prices on the pipes.鈥� Pipe costs were now running at something like 40 percent higher.
Hamm Construction Ltd. had bid based on previously purchased inventory for the pipes. If the city were to delay that tender, Patrick said, 鈥渨e are going to have a significant increase in the pipe costs itself. Either way, we can鈥檛 win on that.鈥�
Patrick also said they didn鈥檛 believe there were massive savings if they tried to re-engineer the project 鈥� 鈥渋t is engineered appropriately.鈥�
鈥淚 think we got as good a value as we are going to get on the design of this,鈥� Patrick said. Patrick also called the project an important one for the city and said the city would be able to fund the overage, although he added 鈥渨e don鈥檛 like the idea.鈥�
Patrick also noted other communities were seeing costs go up for their projects, citing one city whose project had gone up 15 percent. He suggested they were getting 鈥渃aught in a bit of a COVID mess.鈥�
鈥淥verall, we鈥檝e got the best value we can get out of this project,鈥� said Patrick.
In the end, Hawtin made clear she wasn鈥檛 interested in cutting the project to the bone.
鈥淟et鈥檚 try to cut costs, but let鈥檚 also try and have a job well done and a job that鈥檚 going to serve the needs of the city in the future,鈥� she said.
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