INNISFAIL – Town council has approved an infrastructure construction contract for a residential area that is worth more than half a million dollars.
And town councillors have questioned the anticipated total project cost for the project on 45th Street Close that comes in at more than $200,000 over the budgeted amount of $418,000.
“That's a 50 per cent cost overrun on the original budget. It seems to me that's awfully high,” said Coun. Don Harrison at council’s regular meeting on March 13.
Steven Kennedy, the town’s director of operations, replied that much of the higher cost was due to an unexplained higher servicing cost.
Kennedy said the cost was equivalent to the pricing on the 46th Avenue project, adding both were being done by the same contractor.
“The pricing is comparable to that street, so we feel we do have competitive bidding here,” said Kennedy.
Coun. Gavin Bates wanted to know if the higher-than-expected contract cost reflects what the town should expect in the future.
“I think for a time during COVID we had a lot of bargains on this type of work, and I'm wondering if that's what we should expect in the future,” said Bates.
Kennedy responded by saying his department would “definitely” do a comparison this year on costing.
“We try and do our estimating based on the medium, not on the low bid. So, when we go into our estimating for next year, we won't be using low bidding prices and we'll be using that medium,” said Kennedy, adding pricing varies “significantly” from contractors.“This one was actually fairly competitive with a range of about $250,000 difference from low to high.
“If you looked at 46th Avenue, we had about a million dollars difference between low and high,” he said. “It is quite difficult to estimate nowadays. I do believe we have a handful of contractors that really come back and give us really competitive bidding.”
As for the work being done on the 45th Street Close project, Kennedy told council it is covering an area about 119 metres in length; the equivalent of about one block.
He said through his report the existing water main is asbestos cement and the sanitary main is clay tile and has required regular flushing for maintenance.
He told council the road surface ranked highly for replacement on the road assessment that was completed in 2022.
Council was told the project design includes replacement of the water and sanitary mains and services to the property line.
Kennedy said the roadway will meet the standard design with all curbs and sidewalk being replaced. He said the paving will be completed in 2024.
His report said the total project cost is coming in at $639,754, which includes engineering and testing, as well as for construction and contingency.
Kennedy recommended to council to approve the construction contract bid of $534,975.50 from Carbon Earthworks Ltd., which was the lowest of seven total bids.
Council approved his recommendation unanimously. The cost will be funded from the town’s Utilities Stabilization Reserve.
