Over Budget Out-of-Control: Diary of the Township Grandstand Project Part 1 to 3
Over-Budget & Out-of-Control: Diary of the Township Grandstand Project – Part 1
The Issue (First of a 3 part series)
On December 21, 2005, all members of the new Township Council (except for me) voted to pre-approve 80% of an additional $1.2 Million for the McLeod Athletic Park Grandstand project. This means that Township taxpayers are now paying 300% more than originally budgeted for their share of this project. It’s beginning to sound a lot like RAV….
Originally budgeted to cost $3.0 Million, the tally for the new open air grandstand with changing rooms now stands at $5.2 Million. Of the original $3.0 Million, $2.0 Million was contributed by the federal and provincial governments. The remaining $1 Million was to be cost-shared 80%/20% between the Township and City. However, Langley Township Taxpayers have gone from paying the planned initial budget total of $800,000 to now paying $3,000,000 because we’ve been picking up the tab for all the cost overruns.
This is a whopping 300% over-budget for the Township portion of the grandstand capital project. So when you eventually sit down in it, enjoy the seat as it will have cost you in the Township about $1270 a seat when it initially was budgeted to cost you just $339 a seat. When you pay your home taxes this July, you should calculate if your taxes paid for the equivalent of 1, 2 or 3 of the 2363 seats.
The Grandstand is in great company because adjacent to it in the same park is the new field house building that started out at an estimated $500,000 cost and ended up 70% over budget at $854,000. But that’s another story.
So when you drive by 56th Avenue and 216th street, look to the North West and you will see our McLeod Athletic Park (MAP) just east of Langley Secondary School with the artificial turf soccer field and running track. Facing this is the new gold plated Grandstand and changing rooms structure being built as we speak.
Compare the $5.2 Million value of this open air Grandstand construction cost which had no land costs included to the $6.1 Million purchase price of our new Municipal Hall - a 4 storey enclosed building which included the costly land as well! On the positive side, at least the new grandstand will have a roof.
Don’t or can’t believe all this? Stay tuned.
KIM RICHTER
Coming Tomorrow: Part 2 - The Background/ History (Second of a 3 part series)
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.)
KIM RICHTER
Coming Tomorrow: Part 3 - Solutions (Third & Final of a 3 part series)
Over-Budget & Out-of-Control: Diary of the Township Grandstand Project – Part 3
Solutions (Third & final of a 3 part series)
A project that was estimated to cost $3.0 Million two years ago is now costing $5.2 Million. Of this, Township taxpayers are on the hook for $3.0 million instead of their original $800,000 share – a 300% increase. So what can we do to stop financial disasters like this from happening again?
Here are my suggestions. (Any others would be welcome and are obviously needed).
1) Council should be prepared to say “NO” to budget increase requests and, if necessary, stop projects immediately without hesitation. Council should not be seduced into ever-increasing budgets.
2) A budget should be sacred and consequences clear. This new culture must prevail.
3) Council must be always assured of securing firm fixed prices under all circumstances in future and not be coerced into entering design-build contracts, especially in very active and inflationary construction times, and never on large and unique projects.
4) Contracts with co-sponsors should clearly state that all parties share all costs and cost overruns.
5) In light of this and other recent dramatic cost increases, Council should severely curtail and restrict new projects for the next few years until the Olympic construction boom cools down. We don’t have to build everything today. We can wait for more favourable cost periods.
6) A separate level of independent cost surveyor reporting to the Council should be employed on large and unique projects.
7) Finally, we should strike a joint public-township task force to investigate this specific project and all similar capital projects in the Township. In addition to a senior Township administrator and a member of Council, this task force should be comprised of competent, capable and independent individuals experienced in construction, contracts, design and cost accounting. They should be charged with reporting causes for overruns on budgets, and recommending policies & procedures for courses of action to prevent and eliminate overruns in the future.
Township taxpayers cannot be expected to continually suffer increases in tax rates to pay for over-budget spending. The gravy train must end.
KIM RICHTER
The Issue (First of a 3 part series)
On December 21, 2005, all members of the new Township Council (except for me) voted to pre-approve 80% of an additional $1.2 Million for the McLeod Athletic Park Grandstand project. This means that Township taxpayers are now paying 300% more than originally budgeted for their share of this project. It’s beginning to sound a lot like RAV….
Originally budgeted to cost $3.0 Million, the tally for the new open air grandstand with changing rooms now stands at $5.2 Million. Of the original $3.0 Million, $2.0 Million was contributed by the federal and provincial governments. The remaining $1 Million was to be cost-shared 80%/20% between the Township and City. However, Langley Township Taxpayers have gone from paying the planned initial budget total of $800,000 to now paying $3,000,000 because we’ve been picking up the tab for all the cost overruns.
This is a whopping 300% over-budget for the Township portion of the grandstand capital project. So when you eventually sit down in it, enjoy the seat as it will have cost you in the Township about $1270 a seat when it initially was budgeted to cost you just $339 a seat. When you pay your home taxes this July, you should calculate if your taxes paid for the equivalent of 1, 2 or 3 of the 2363 seats.
The Grandstand is in great company because adjacent to it in the same park is the new field house building that started out at an estimated $500,000 cost and ended up 70% over budget at $854,000. But that’s another story.
So when you drive by 56th Avenue and 216th street, look to the North West and you will see our McLeod Athletic Park (MAP) just east of Langley Secondary School with the artificial turf soccer field and running track. Facing this is the new gold plated Grandstand and changing rooms structure being built as we speak.
Compare the $5.2 Million value of this open air Grandstand construction cost which had no land costs included to the $6.1 Million purchase price of our new Municipal Hall - a 4 storey enclosed building which included the costly land as well! On the positive side, at least the new grandstand will have a roof.
Don’t or can’t believe all this? Stay tuned.
KIM RICHTER
Coming Tomorrow: Part 2 - The Background/ History (Second of a 3 part series)
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.)
KIM RICHTER
Coming Tomorrow: Part 3 - Solutions (Third & Final of a 3 part series)
Over-Budget & Out-of-Control: Diary of the Township Grandstand Project – Part 3
Solutions (Third & final of a 3 part series)
A project that was estimated to cost $3.0 Million two years ago is now costing $5.2 Million. Of this, Township taxpayers are on the hook for $3.0 million instead of their original $800,000 share – a 300% increase. So what can we do to stop financial disasters like this from happening again?
Here are my suggestions. (Any others would be welcome and are obviously needed).
1) Council should be prepared to say “NO” to budget increase requests and, if necessary, stop projects immediately without hesitation. Council should not be seduced into ever-increasing budgets.
2) A budget should be sacred and consequences clear. This new culture must prevail.
3) Council must be always assured of securing firm fixed prices under all circumstances in future and not be coerced into entering design-build contracts, especially in very active and inflationary construction times, and never on large and unique projects.
4) Contracts with co-sponsors should clearly state that all parties share all costs and cost overruns.
5) In light of this and other recent dramatic cost increases, Council should severely curtail and restrict new projects for the next few years until the Olympic construction boom cools down. We don’t have to build everything today. We can wait for more favourable cost periods.
6) A separate level of independent cost surveyor reporting to the Council should be employed on large and unique projects.
7) Finally, we should strike a joint public-township task force to investigate this specific project and all similar capital projects in the Township. In addition to a senior Township administrator and a member of Council, this task force should be comprised of competent, capable and independent individuals experienced in construction, contracts, design and cost accounting. They should be charged with reporting causes for overruns on budgets, and recommending policies & procedures for courses of action to prevent and eliminate overruns in the future.
Township taxpayers cannot be expected to continually suffer increases in tax rates to pay for over-budget spending. The gravy train must end.
KIM RICHTER
posted by Kim Richter | 4:25 PM
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