An extra $6.2 million is being given to a massive project to redevelop the city-owned long-term care facility.
While the extra cash was approved, councillors grilled the project manager and questioned if the city should be footing the bill for costs associated with an architect design error and the construction manager forgetting to include an element of the design in their costing.
Two items related to the Golden Manor redevelopment project were at Timmins council on Tuesday (June 18). The post-contract contingency budget was increased by $6.2 million — to bring the overall allowance from 3.4 per cent to 10 per cent of the budget — and Health Care Relocation was awarded the $297,000 contract for the operational readiness and reaction for the facility's residents.
The relocation contract was part of the overall project budget and is not additional spending. It came in slightly under the $300,000 earmarked for it.
The approved budget for the construction project is $110 million, which includes soft and hard costs as well as the furniture, fixtures and equipment. It does not include interest. Right now, the anticipated cost to finish the project is $114.7 million.
BTY is the city's project manager for the redevelopment. Simon Branch was at this week's council meeting for his quarterly update and, at council's request, broke down the rationale for each of the five reasons the contingency needs a boost.
The reasons given for the top-up are the cost of adding a retaining wall, the cost of consumables overrun, change pricing sensitivity, scope gaps, and delay costs.
Coun. Steve Black asked Branch to explain why each item is a cost to the city as opposed to a cost to the construction manager or another party.
The biggest portion of the cost is a retaining wall that wasn't part of the original design. It's on the west side of the building.
For the retaining wall, it's listed as a cost to the city because the construction manager doesn't own the design and the addition means more materials and labour costs.
"They are to be reimbursed for that because that's not the that's not the scope of work they base their original price on," said Branch.
After Branch confirmed the costs are a result of an error in the architect's design, Black said he'd save questions on that for another day.
To explain cost consumables, Booth said that the construction manager contract has elements that are reimbursed at cost.
"And what happens at the outset is they develop a construction manager budget to tell you how much they think is going to cost," he said.
He used scaffolding as an example. It's paid for out of the construction manager's budget and there's a monthly rental bill for it.
"Now, if we don't end up using all the cost that the construction manager said it would then they don't charge anymore, and ... the owner gets to share those savings. If, however, it goes over that amount, then they are reimbursed only for the cost that went over that amount," said Branch.
Living allowance is impacting the cost sensitivity element, he explained.
With Timmins' geographic location, Branch said living expenses are a factor. When there are changes to the work schedule, the living costs are paid in addition to the usual costs such as labour and materials.
The delay he used as an example is the connection plates between panels of the steel structure. A special piece needs to be included and Branch said it's typically designed by whoever designs the precast panels.
"But it was not carried in their work and in the cost that they gave us for the scope. So when it came up as to who has was going to produce this it was now going to be an extra," he said. T
The piece was always in the design. Branch said it "wasn't picked up when it was procured."
"That one I struggle because that's a construction manager error. It's not our error. It's not the designer's error," said Black.
For the cost of delays, Branch said if the delay is out of the construction manager's control, then they don't bear the cost.
If the city decides to dispute any of the extra costs, CAO Dave Landers said approving the extra contingency costs "wouldn't prejudice any claim that that the city feels it should launch at any point."
He noted that a 10 per cent contingency is normal.
As a rule of thumb, Branch said that 30 per cent of a project's risk in the ground in the early stages of a project.
Along with adding retaining wall, organics are being dug up at the site and underground storage tanks were found on the south edge of the building.
"As you move out of the ground and the structure becomes defined ... it becomes less nebulous in a certain sense, and the risk starts to trail off. It's not to say that there won't be other changes. But the magnitude of cost carried with it is nothing like you're seeing with that retaining wall cost," said Branch.
Approved in 2023, the new facility is being on the northwest side of the existing property. It's increasing the number of long-term care beds to 192. The manor is currently licensed for 177 beds, but is only operating 173 due to requirements since COVID-19 restricting the number of residents per room to two people.
The Golden Manor's base funding from the province is $20.53 per bed. By meeting the Aug. 31, 2023, construction start, that cash went up to around $50 per bed.
