Shocking

Wellington water tower bid approved

Shovels aren’t even in the ground yet, and the cost of a new water tower in Wellington is already nearly $1 million over budget. Last Tuesday, Council awarded the contract for the construction of the new water tower and bulk water station to Landmark Structures Co. in the amount of $9 million, which is $992,772 over the approved capital budget.

The tender was circulated late last year, with a closing date of February 9, 2022. Only one bid was received from Landmark Structures Co. in the amount of $10,070,000.00 plus HST, to build just the water tower, which was well over the allocated capital budget. Project Manager Garrett Osborne explained that in total, staff made 26 changes and the bid price was reduced by $1,352,600.00 to $8,717,400.00 plus HST. The revised bid price is $992,772 over the total project budget when combined with the non-construction costs and including a construction contingency.

“We did look at areas where we could reduce the cost. We achieved that in mainly two ways. One way was to revise the construction methods.” Osborne explained that the foundation design has been changed to better suit the bedrock in the area. This also led to cost savings. As well, savings will be found by changing the handling of materials on site. “It was determined that there is some low level contaminants on that site. What we are proposing to do is use some of the excavated material instead of paying to truck it offsite to a receiving site to be processed, we will be reusing some of it on site as a noise and visual berm,” said Osborne.

Other savings were found by ditching the epoxy coating that was going to be added to the concrete floors, and not painting the interior cinder block walls. “The design we have revised is something we are more than comfortable constructing and operating,” said Osborne.

In 2020, a Master Servicing Plan for the village estimated the new water tower build would cost approximately $6.7 million. A far stretch from the submitted $10 million bid, and even the revised $8.7 million bid. Osborne explained to Council that the project has been evolving since that plan was first put in place, and the COVID-19 pandemic has also had an effect on materials. “As far as the estimated capital constructing cost, as we have worked through the design and tendering process that has somewhat evolved as we have been designing and global circumstances have come into effect,” said Osborne. “We do believe we have received fair market value for this water tower,” he added.

Councillor Ernie Margetson had trouble wrapping his head around the increased costs. “It’s a pretty significant increase, even looking at the rate of inflation. It’s quite shocking actually,” he said.

Osborne explained that staff thought it was a positive thing that Landmark bid on the project as there are very few companies that construct them. “It was not unexpected to receive one bid. Landmark Structures is very highly regarded in the water tower industry.”

The budget deficit will be funded by long-term debt. The County has adopted an area-specific development charge for the Wellington urban serviced area and it says $6,311,270.25 will be recovered through development charges.

Councillor John Hirsch was nervous of accepting only one bid on the project. “I am certainly uncomfortable any time we get in this situation, especially for this much money,” said Hirsch. “You’ve adequately explained that this a case where if this is what you want you pretty much have to buy it from Landmark, so I would like to commend staff on what I think are creative measures to bring the cost down from the original quote.”

Staff also revised the completion date by pushing it back six months to the following spring. By doing so, the builder offered a $368,600 credit, saying the extension removes the risk to the contractor of unforeseeable construction delays or cool fall temperatures by allowing the temperature- sensitive tank coatings to take place in the spring if needed. This raises other questions. Notably, what global and material costs could be incurred by pushing the completion date, and bigger yet, what effect it has on the long line of developers who are waiting to get their projects started.

Construction of the new water tower and bulk water filling station will commence in the spring of 2022 and substantial completion is scheduled for May 31, 2023. The total cost of the project, including design, landscaping, inspection and administrative costs is $10,179,468.