Renfrew’s Ma-te-way Centre is $4.85M over budget

It is common during an election cycle for an issue to be elevated so that it becomes the “ballot box question,” and for some of the current councillors who are letting their name stand for re-election in this year’s October municipal election, they will likely encounter some irate residents demanding answers as to why they will be on the hook for an additional $4.85 million overage on the construction costs of the town’s primary recreation centre.

The much heralded Ma-Te-Way Activity Centre’s $21.5 million expansion project currently sits at $26 million and members of council will more than likely list a series of circumstances and events far beyond anyone’s control and what can best be described as the 'perfect storm'.

The onset of COVID and the devastation it created in the North American economy contributed to a series of unpredictable events that, one way or another, will leave ratepayers financially responsible.

When funding for the project was first announced in April 2021, a ceremony was held at Ma-Te-Way to review the agreement and scope of the project. It is funded by all three levels of government, with $6.4-million coming from the federal government, $5.3-million from the provincial government, and $4.2-million being contributed by the town itself. 

The $11.7 million funding agreement was met with widespread praise as it enabled town staff to finally address the recreational needs of the community and gave the green light to plans that had been placed back on the shelf several times due to a lack financial support from the federal and provincial governments.

The agreement also states the town is financially responsible for any budget overages

Kevin Hill, the town’s parks and recreation director, explained the process leading up to December 2021 when the first shovel hit the ground.

He said when Buttcon was awarded the construction management tender in June 2021, the company developed a timeline for construction to begin the first week of December with a projected completion date of early 2023.

“When the representatives from Buttcon first introduced the budget on June 22 as a Class D budget, the new construction costs were set at $17,750,561, not including HST,” Hill said. “Along with other costs such as management fees, design and engineering work, additional design and other engineering work combined with a 10% contingency fund, we had an overall budget of $21,457,281.”

He said the first estimate, which was devised through blueprints and diagrams for the new facilities, came out to just over $21 million. The new quote came in at $26 million, a number that stems from studies done on the project while it continues to be an active construction site.

“When we received a revised budget from Buttcon on August 18 of this year, the new construction costs had risen from $21 million to just over $26 million. Overall, we are left with a contingency reserve of $862,425,” he added. 

He said the switch from a Class B budget to a Class D budget resulted in the unfinanced Balance to Debenture of $8,964,181 to increase of $13,849,512.

Chief administrative officer (CAO) Robert Tremblay reminded council the importance of the project along with some recommendations for council to address the looming debt.

“I want to remind council that the numbers are very important for the community and council but it is important not to lose sight that this is more than just a second ice pad,” he said. “It’s a community hub and it’s important for the quality of life for those of us that live here but also to attract those that visit and it is important in terms of our overall growth strategy.

“We also have to keep in mind that construction took place during the middle of a pandemic where we are seeing generational inflationary pressures and also global supply issues so all these factors should be taken into account.”

Among the recommendations to deal with the overage were:

• 1. Direct staff to formally request the $140,000 contribution from the Second Ice Pad Committee
• 2. Authorize the treasurer to pursue temporary borrowing for the purposes of construction from Infrastructure Ontario
• 3. Direct the treasurer to report back on funding options for the tennis courts as part of the 2023 budget process 
• 4. Direct the CAO to prepare a request to the federal and provincial governments to advance grant funding for the project totalling $11,807,200.

Michael Mercier, president and chief executive officer (CEO) of Buttcon East and Operations Manager Alexandre Fraser reviewed the challenges presented over the last year that affected the budget.

Mercier said the Canadian construction industry was feeling pressure from all directions and suggested “there really is a war on the construction industry with the stress of competition for labour and it is vital to keep up do date on that.”

Alexandre outlined the many roadblocks that have proven costly and created delays for the work crews.

“As you all know we are deeply affected by the pandemic and world affairs resulting in shortages in the global supply system,” he said. “It really affected the construction industry in terms of availability of products and manpower. What we have done the last few months is constantly revise our work schedule based on current products in stock and trying to project when some items that were supposed to be used months ago will be available.”

Alexandre noted the pandemic and its effect on the actual labour supply resulted in most sites across the area completely shutting down and when the economy gradually re-opened, construction sites were among the last to re-open.

Another factor emerged when a secondary geotechnical report identified poor quality soil at the current site. The report noted the building would not have been able to withstand the original steel bases ordered, so new supplies were needed and that added a four to six week delay.

“Then we had major labour strikes across the industry in May and that shut us down for another four weeks,” Alexandre added. “All major labour groups like carpenters, engineers and plumbers didn’t work the entire month as all the major collective agreements expired. Once they settled this, it took us well into June to remobilize the work site. Developers, builders and others were over the barrel and the trade unions said enough is enough and they had the upper hand.”

Council voted in favour of a resolution requesting staff to formally request the $140,000 pledged by the Second Ice Committee and to formally request the two upper levels of government to release the $11.7 million funding ahead of schedule to offset upcoming costs.

Mayor Don Eady and council directed the finance department to produce a schedule of payments based on future loans through Infrastructure Ontario in order to complete the Ma-Te-Way expansion.