Despite Some Questions Council Approves Major Change Order
In 1963 Monty Hall began his iconic television program Let’s Make A Deal where curtains were opened and contestants could win major prizes or dunners when it comes to the replacement of the new transmission line, pumps and other replacements and upgrades opening doors closed since 1955 haven't revealed any great prizes but have ended up costing the City some big dollars.
At the February 16th regular Council meeting the discussion was a request from Stantec Consulting for a change order to increase their compensation by $162,236.48 plus taxes for engineering services rendered on WW 16 or the installation of the new water transmission line and upgrades including new pumps, flouridation injector plus changes to facilitate the transmission line being connected to the new High Level Pumphouse.
The $162,236.48 plus taxes when added to the already allocated $ 275,866.37 plus taxes will see Stantec being paid $438,102.85 plus taxes.
Stantec’s request was made because of delays and unforeseen challenges discovered as the project has progressed. At the present time 94 percent of the engineering consulting budget has been spent with five months left until the project’s completion date in July.
All told the cost of the project is $26,663,408.86 after the previously approved change orders.
Council was told by Administration that the request fell well within the expected scope for the complicated project.
Director of Engineering Bevan Harlton told Council the request from Stantec put the consultant “at 10 percent which is about what you would expect in a contract of this size.”
“This has had a lot of moving parts and by my involvement at the bi-weekly construction meetings what we are seeing is situations that are typical to putting new infrastructure into old buildings and retro-fitting things to that nature,” Harlton said.
For example the existing pump houses at the Buffalo Water Treatment Plant are not being built new but new pumps are being installed in buildings with varying construction years.
“Through construction to date there has been a lot of change orders for the appropriate installation of the systems,” he said.
In 2020 there was $4.1 million in carried over budget that would mean the requested change order would not require new funding. The reason why the change order has to be approved by Council is that it exceeds City Manager Jim Puffalt’s authority to approve the expenditure without Council’s prior approval.
COUNCIL ASKS QUESTIONS
Councillor Jamey Logan asked if the requested amount was the standard overrun for a project of this magnitude.
“It seems like an awful lot of money to me and honestly as an extra,” Councillor Logan said, adding “I get that somethings are underground…but is this normal in this instance?”
Harland said the amount of money being asked by Stantec was a large amount but if he did not endorse the request he would not be asking Coouncil to approve the funds.
“It’s a big one, but it’s a big project,” he said.
About the budget Harland said the funds were there.
“So we are not asking for additional budget here, we are asking to spend money that is beyond our initial contract with Stantec.”
Councillor Doug Blanc said he understood Stantec’s request was within budget but it was something the City “should not be doing in the future.”
Requesting large dollars when a project is over half-way completed is something the City should watch carefully given a tender contract has been set, he said.
“I understand it is within budget but it certainly raises flags into the future,” Councillor Blanc said.
WHAT DOES A LETTER MEAN
Councillor Crystal Froese asked about the change order request in light of the written request by Stantec.
The portion of the request she quoted concerned the numerous change orders and delays happening in the project.
“Over the course of construction, the Contractor encountered construction challenges and schedule delays outside of the City’s and Stantec’s control. Several project elements are months behind schedule resulting in a significant amount of additional engineering support and resident time on site. To date there has been a 70% increase for resident engineering site observation time for Phase 1, which is not yet complete. Construction activities for Phases 2, 3, 4 and 5 have not yet started or have had very little progress to date,” the letter from Stantec stated.
“It sounds like a bit of red flag,” Councillor Froese said after reading the section.
Harlton replied “my comment to that it is a difficult project.”
Councillor Froese asked about the quality of communication between the City and Stantec and if that was having an effect on the project’s progession.
“…it sounds like there is a lot of miscommunication or a lot of things that are not actually being achieved when they are spoken about. Who has oversight over this?” she asked.
Harlton replied there had been not only a two and a half hour bi-weekly construction meeting he personally attended but the project manager with the contractor had daily contact with the City’s project manager.
“The communication channels from my vantage point have been open,” he said.
Harlton said the letter was not finger pointing by Stantec about impending major hidden expenditures to be revealed.
“This could be read as finger pointing between the owner, the consultant and the contractor. I am not seeing a lot of finger pointing I am seeing a lot of solutions and a lot of discussions on that,” he said.
“It is absolutely a difficult contract.”
“It is one of those ones where every time you open a door that door has not been open since 1955. It is just that there is a tonne of unexpected and unforeseen things to navigate in the field”
Councillor Froese said she read something into the report that may not have been there.
“This seemed like there was some communication issue here. But that is not necessarily the case,” she said.
Later in the discussion Froese would admit her questions were done on behalf of the citizens of Moose Jaw viewing on television and that the City had been caught on projects in the past.
“We have had issues in the past and I don’t want to dig up history but I have learnt from that we have to be paying attention all the time to these sorts of things,” Councillor Froese said later in the discussion.
Councillor Heather Eby said she did not see the same red flags that Councillor Froese did in the letter from Stantec.
“When I read that same part of the letter what I read was the contractor has encountered challenges and schedule delays outside the City’s and Stantec’s control which to me sounds pretty reasonable,” Councillor Eby said.
“It is a big amount of money but it is a big project. When I read this I read it with a different voice in my head I guess so I totally support it,” she said.
Mayor Fraser Tolmie said the letter from Stantec was proof the Engineering Department was being transparent to Council and the community.
Councillor Dawn Luhning however focused on another section of the letter from Stantec where they said 97 percent of the engineering consultant budget was spent and only 67 percent of the construction had been completed.
“Are we going to have something come up in two or three months that they are going to need more money again?…Do you think this is all they are going to need or are we going to get where we hit the limit in the budget?” Councillor Luhning asked Harlton.
Harlton responded the requested amount was consistent with the work done and where the project was at but he could not guarantee there would not be further requests to fund the project.
“I would expect the unexpected some more for this project. I can’t quantify what that will look like right now,” Harlton said.
Despite spending more on the Transmission Line Project Harlton said there would be additional savings on the WW 4 or High Service Pumphouse project yet to be realized.
Puffalt said that Administration had completed their due diligence before bringing the project to Council.
“Just because we have a budget we would have never spent it…we take great pride in coming in under budget. As you have seen from our financials last year if there is a way to save money we will find a way to save it,” he said, adding the savings were needed for “a gazillion other projects” the City needs to do.
Despite Puffalt’s reassurances Coucillor Luhning still had misgivings due to the Stantec letter.
“I will be interested to see how we come in with budget in this because with that letter I am wondering if there isn’t a little bit more coming in with what is actually going on,” she said.
In a unanimous 7 - 0 vote Council approved the change order paying Stantec Consulting an additional $162,236.48 plus taxes.