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Large price jump forces city to push feeder main project into 2024

The engineering department had planned to complete phase 1 of its 16th Avenue feeder main replacement project for $4,765,500, but the lowest tender bid was $6,901,073.69, which was more than $2 million — or 47.5 per cent — over budget.
City hall summer
City hall was built between 1912 and 1914. Photo by Jason G. Antonio

City hall is pushing most construction work on its 16th Avenue feeder main replacement project into 2024 because costs — including labour and materials — are nearly 50-per-cent more than budgeted.

The engineering department had planned to complete the project in two phases — this year and next — by upgrading related storm sewer and sanitary infrastructure and addressing some roads and sidewalks. It had estimated that the total budget for phase 1 would be $4,765,500, although an engineer’s estimate pegged the cost at $5,149,134.05.

After issuing requests for quotes, the department received bids from two contractors, with one offering to complete phase 1 for $9,618,389.65 and the second for $6,901,073.69. The city — on the recommendation of its consultant — selected the second bid.

After removing the consulting fees from the original budget estimate and removing the GST from the bid, the difference between the two is $2,122,214.51, or 47.5 per cent beyond the available construction budget.

Due to that increase, the engineering department notified its consultant and the bidders that it would not award the tender for phase 1. Instead, the city encouraged the consultant to finish the design for phase 2 by July so the municipality owned both designs and could determine the next steps to complete the project.

The engineering department is now considering its options for possibly phasing in some work this year on the 16th Avenue feeder main and the Coteau Street/South Hill (CS/SH) feeder main while also reviewing the 2024 cast iron replacement program, said director Bevan Harlton during the May 23 executive committee meeting. 

The department is currently designing in-house the CS/SH project, which will focus on moving from west to east from 12th Avenue Southwest to Eighth Avenue Southwest, he continued. There are several blocks of cast iron pipe along that stretch, so the department could combine those two projects for more efficiency. 

After engineering services finishes the designs for both projects, it will better understand their costs while knowing which initiative to prioritize, Harlton said. 

The money established for this year’s main project will likely be carried forward into next year, although the department could use that funding to complete some other work this year.

The main reason the bid cost for phase 1 is so high is that labour costs have risen, while concrete and asphalt prices have also jumped substantially, he added. In comparison, prices were more reasonable for the cast iron replacement program because the tender closed seven weeks earlier.

“Well, that’s quite the increase (of) 47.5 per cent. That kind of blows my mind a little bit … ,” said Coun. Crystal Froese, before asking whether the department would consider issuing tenders in the fall so projects are ready by the following spring.

“Yes, if we put things out in the fall, we would see cost savings (and competitive prices),” replied Harlton, noting the department hasn’t done that before because projects are contingent upon the budget, which council normally approves in December. 

The next executive committee meeting is Monday, June 12.  

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