July 24, 2013

Fire hall could cost an additional $85,000

As published in The Erin Advocate

Cost overruns are pushing the price of Hillsburgh’s new fire hall to new heights, with the Fire Chief requesting additional funds up to $85,000 at a council meeting last week and warning of “potential litigation” in a dispute over some of the extra costs.

The original budget was $2.1 million for construction, plus $80,000 for furnishings and other equipment. Council had already debated and approved previous increases of $150,000 and $40,000, plus an additional $327,335 in the 2013 budget.

The latest request from Chief Dan Callaghan would bring the total cost to $2,782,335, an overall increase of $602,335, or 27.6%.

Approval of the additional amount was initially deferred until after councillors could examine the issue in a closed session, but they ran out of time last week. The discussion took place at a continuation of the council meeting on Monday this week, and the funding up to $85,000 was approved in the open session.

“We need to figure out how to do this better in the future,” said Councillor John Brennan. “On 2.1 million dollars, it is a significant amount to go over. The unforeseen stuff, [i.e. soil contamination] there’s not much you can do about that, but maybe we can learn some lessons.”

The new building, including an ambulance bay, is to have its grand opening on August 17, during Hillsburgh’s Spirit of the Hills Family Fun Day.

An update report from Director of Finance Sharon Marshall shows that about $32,000 of the new $85,000 request includes additional furnishings, signage, blinds, phones and radio equipment. Some of the interior work is being done on a volunteer basis by firefighters.

The report also shows an unidentified portion of about $53,000, which was to be reviewed in closed session because it involved potential litigation.

“This $85,000 could be significantly reduced once the review and dispute are resolved,” Marshall said later. She expects the final amount would be funded by additional debt.

Mayor Lou Maieron criticized the staff report as having not enough detail, and said there are “serious issues” with a such a large overrun.

Callaghan last week said the situation is “fluid” as invoices come in, with the amount for furnishings going up by $4,000 in the few days from when the council agenda was published to the time of the meeting.

“They are getting a final grip on their numbers and passing them on to us, so we can pass them on to you,” he said. “Here’s the simple fact too, Mr. Mayor – the lowest bid is not always the best bid. Because the lowest bid invites cost overruns. They make their extras on the extras for the building. They come in low and then hit us hard, and they are trying to hit us very hard.”

In 2011, Councillor Jose Wintersinger asked that monthly reports be made to council on the progress of construction of the new fire hall, but her motion was defeated. At that time, she said she could not justify the acceptance of cost overruns that are brought to the attention of council when it was too late to do anything about them.

CAO Kathryn Ironmonger declined to name the party with which the Town may have a dispute. The main companies involved with the project are Somfay Masri Architects and PM Contracting, the consultant overseeing construction.