Wednesday, January 04, 2006

Richter Report – January 4, 2006 – Over Budget & Out of Control (Part2of3)

Over-Budget & Out-of-Control: Diary of the Township Grandstand Project – Part 2

The Background / History (Second of a 3 part series)

On December 21, 2005, with relatively little discussion or debate, the new Township Council blithely approved another million dollar injection to a project that continues to escalate dramatically in costs. This latest million dollars was over and above the extra million dollars injected by the last council in November 2004. The result: a project that was budgeted to cost $3.0 million is now costing $5.2 million AND the Township of Langley taxpayers have been bearing the full burden of all these budget overruns.

Don’t or can’t believe this? Well, thanks to the wonders of modern technology and Township records available through the TOL website, the following is a detailed chronology of the very sad saga of the MAP grandstand project, out of control.

At the October 30, 2000 Regular Council Meeting, Township Council approved a motion that the City and Township of Langley make a joint application under the Federal/Provincial Infrastructure Program to construct a grandstand at the Municipal Athletic Park (MAP).

Over the next 3 years, this project concept went back and forth between the City, the Township, various committees and the Province. Finally, on June 16, 2003, there was a Report to Council which identified that the estimated budget for completion of the grandstand facility would be $3,063,748.

At the Regular Meeting on August 25, 2003, Council approved the MAP Grandstand as the Township’s #1 “Municipal Recreation and Community” Infrastructure Project at an estimated cost of $3,060,000 (to be cost-shared 1/3 federal, 1/3 provincial and 1/3 municipal). Staff was directed to make application for these funds.

At the Special Meeting of April 5, 2004, Council reiterated its position that the MAP Grandstand was a priority for funding from the provincial/federal infrastructure program (community projects) and on June 14, 2004, a letter was received in the Special Meeting from the Canada/British Columbia Infrastructure Program confirming approval of funding in the amount of $2,000,000 for the Langley Grandstand Project.

So, the money’s all there – a done deal, right? Wrong. This is where the story starts to get really good.

At the September 15, 2004 Joint City/Township Parks and Recreation Committee, members were advised that the grandstand must be finished by 2006 to take advantage of the $2.0 Million federal/provincial funding. The grandstand had originally been scheduled for a 2007 completion.

At the November 17, 2004 Joint City/Township Parks & Recreation Committee, members were advised that the cost of construction would be “considerably higher” but that staff were looking at ways to reduce costs or rescope the project.

Then, at the November 29, 2004 Special Council Meeting, Township Council authorized early release of funds for the grandstand with a total budget envelop of $4.0 million (inclusive of all external costs) and that the Township’s contributions for this project would be limited to $1.58 Million.

On February 14, 2005, Council authorized the selection of an architect at a cost not to exceed $253,320 + GST for design, construction documents and construction administration services.

At the April 13, 2005 Township Parks and Recreation Commission meeting, members were advised that the grandstand was scheduled for completion by February 2006.

At the May 9, 2005 Special Meeting, Council received an update on the grandstand project which identified that the grandstand would consist of 2363 seats and only ½ a roof as a full roof would cost an additional $700,000. Only putting on ½ a roof would keep the project costs below the $4.0 million budget but the construction manager would strive to reduce costs to accommodate a full roof. Construction was scheduled to start mid-May 2005. Council asked staff to find other funding opportunities.

From May until December 2005, all was quiet on the grandstand front. There were no other formal reports to Council until the budget meeting of the new council on December 21, 2005. At this Special Meeting of Council, a budget line appeared on page 153 asking Council to pre-approve an additional $1.2 Million for the MAP Grandstand as “the project is underway and required further commitments to finish by the end of May 2006”. Huh? Where did this come from? Whatever happened to the Nov/04 resolution to limit the Township’s contributions for this project to $1.58 Million? (This $1.2 Million is in addition to the $1.58 Million limit).

An amendment motion from Councillors Bateman and Fox authorized that the requested grandstand pre-approval be made but limited to 80% of the $1.2 Million or $960,000. This was carried with only myself opposed.

As I recall, Council’s logic was that the additional 20% (of the new $1.2 Million) should be provided by Langley City. [Now, we can’t even get Langley City to pay for the 7 man-years of policing service they receive from the Township (at a cost of about $700,000+ per year). So, I don’t know why we’d think they’d be willing to cough up $240,000 for this budget overrun that they didn’t authorize].

Besides the real issue here is not that the City should pay 20%, it’s the fact that there has been such a significant budget overrun in the first place. A project that was estimated to cost $3.0 Million two years ago is now sitting at $5.2 Million. Of this, the Township taxpayers are on the hook for $3.0 million instead of $800,000 (80% of the original 1/3 municipal cost).

I am more than a little concerned about the dramatic budget escalations we’ve seen over the past few years in Township capital projects. In my opinion, they are just not sustainable. So what can we do to stop this from happening again? (Unfortunately, recall isn’t an option.)

Coming Tomorrow: Part 3 - Solutions (Third & Final of a 3 part series)

(Part 1) (Part 2) (Part 3) to see 3 part series

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