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Recommended 3 times. 3 Recommend
2010-02-06 at 14:48

Possible cost increase

By Jamie Smith, tbnewswatch.com
ROCK 94Listen to Mark and Dee Weekday mornings for the Classic Rock You Love, The New Rock You Needhttp://www.rock94.com

The city’s contribution to the first phase of Prince Arthur’s Landing may increase following a report Monday night.

Waterfront project manager Katherine Dugmore said council’s $14.6 million contribution to the first phase of waterfront development will need an additional $2.2 million because initial estimates were based on dollar figures from 2007.

Dugmore said the design adds more details as the project continues to develop.

"Knowing all the information that we now know and having information on the site we’re better able to project cost escalation into 2011," said Dugmore. "There are a number of things that we’ve done as a result of the detailed design process that have added to the cost."

The money will come out of funding already approved by council. Pending council’s approval, Dugmore said the $2.2 million would be taken from money intended for the new marina development, which is the project’s second phase.

Dugmore said new additions to the project, such as a festival storage building and pavillion, have also added to the cost. With money from senior levels of government and $5 million from other organizations, Dugmore said phase one of construction is already fully funded.

Dugmore will present council with two other options should it choose to deny the $2.2 million move. One option is to scale the first phase back to 2007 dollars, which would eliminate some of the original plans for the site. The second option is to reduce plans even further and defer other plans until a later date.

Dugmore said both options have disadvantages for the overall $66 million Marina Park plans.
"The risks not fulfilling the vision at this time are that you may never complete the project as it was originally envisioned or you will be in a position if you choose to do it at a later date that it will cost more because every year it costs more to do build the same thing," Dugmore said.

Dugmore will present a second report to council Monday updating the city on the first phase of development’s progression. She said with one-third of the project in tenders, or already being constructed, the five-year project being built in two is on schedule.

Because almost $30 million of the money has to be spent by next winter under the Infrastructure Stimulus Fund, Dugmore said the city has to move quickly complete the plan.

"Aside from the additional grey hairs everything is moving along very well," said Dugmore. "The intention really here is to advance as much of the project work as possible to utilize that 29.3 mil before March 2011."

Tenders will go out later this month for architectural work and landscaping said Dugmore with more expected in June. A public meeting is expected later this winter to show a consolidated plan between the city and private partners.

TbNewsWatch.com

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nim says:
Ms Dugmore's presentation to Council outlined why escalations were not projected back in 2007. It was because there were no approvals in place, detailed design and site investigations had yet to be done, and 2/3's of the funding had yet to be put into place. Funding was finally in place in the summer of 2009 and it wasn't until November 2009 that the MOE overturned the Friends' elevation request on the environmental assessment. She said that escalation costs cannot be estimated with any accuracy until a schedule for development is known and that is dependent on all approvals being finalized, the project being fully funded and sufficient detail design completed.

While it may be disappointing to some that there are increases in costs, the increase is not unreasonable given the time it has taken to resolve appeals made by the Friends of Marina Park and thus secure the necessary approvals.

You should all be glad that your jobs don't involve the general public questioning your credentials. I suspect few could weather such ridiculous and sometimes even malevolent criticism.
2010-02-11 at 17:55
captain says:
Can you people stop attacking the individual. I don't know her, but she is doing the job she is paid to do. If she is not the right person, that is the fault of the folks who hired her, not her's. But I do agree with many of the concerns raised, but here is my beef. IF as she says, this was in 2007 dollars, then why was the cost not projected to reflect 2010-2014 costs. Again, the bosses slipped on this point. Then when presented to the public, a more accurate assessment could have been made. My other issue has been mentioned before. $25 million for a new hospital and this city demanded a vote. $25 million for a park and we just spend it. Almost every person wanted enhancements to this park, but I don't believe most want these buildings. If they contractors don't walk away from this project, which is a very real possibility, then I hope in ten years I read in the paper that we hate having homes there. Then everyone person in the city will then say they were always against it. You won't find one person who said they were for it. These costs are not done yet.
2010-02-11 at 11:31
Rick says:
To The Beaver

This statement makes absolutely no sense what so ever.

After checking her background she I believe has no experience in managing a capital project with this scope of work.

Seriously she graduated in or around 2002 from the university of Guelph and held a position in the planning department with the city.

This would/should indicate the obvious, no relative experience.
2010-02-10 at 20:00
The Beaver.... says:
If Phase 1 has a 5 million dollar surplus then why does it need 2.2 million from Phase 2....lol
2010-02-09 at 21:00
TBinTO says:
realist, my point was that you were referencing a a small project she did TWENTY YEARS AGO...

Point to some projects she's done recently and I may be swayed over to your side -- if they happen to be disasters.
2010-02-09 at 16:40
saynotonegativity says:
In 2007, figures given were cost estimates, while 2010, after tendering has been completed, the new amount represents actual costs. Not bad estimations. In a project of this magnitude, cost increases can and should be expected. There were also a couple added items to the project that helped increase the over all cost of this project.
2010-02-09 at 10:58
Rick says:
To: residentj

I do, I do meet the criteria to question Katherine Dugmore's qualifications and experience.

That is why I posed the comment that I did.
2010-02-09 at 9:00 AM
RBosch says:
So, after sitting through the presentations to Council tonight, the moving of money from phase 2 to phase 1 is absolutely the logical thing to do. It allows phase 1 to be completed on time and also be able to qualify for all matching funds. What do you nay sayers and pessimists think of the $5M plus surplus that phase 1 has, or did any of you bother to listen to the presntations?
2010-02-09 at 01:04
The Beaver.... says:
...The city purposely kept their cost estimates down to avoid an EA... That line says it all,and that line will cost us a lot of money in time to come.
2010-02-08 at 20:45
B2 says:
WOW! A 15 percent increase ALREADY!

And they've barely scratched the surface of the ground.

As noted by others, extra costs are inevitable, particularly on projects that involve governments. Yes, they could, and often do, have contingency funds but if they were brought to the fore initially, the public would not have approved the project in the first place.
Now that money is being taken out of "money intended for the new marina development, which is the project’s second phase", What will happen to the "second phase"?

The quicker that a "Final" plan is developed, approved and tendered, the more accurate will be the costs.
2010-02-08 at 20:14
RHL says:

As far as I know, the only numbers that have been officially counted are:
11 For.
7,000 Against.
Is this the democracy that you are referring to?
2010-02-08 at 19:08
SomeGuy says:
Did any one honestly think that the costs for any public works project would come at or under budget when it takes years to complete something like this?

In 2007 how where we to know 3 years down the road what exactly everything would now. Sure you can take an educated guess but a guess is till a guess.
2010-02-08 at 17:11
baor says:
I wonder how many people here slagged FOMP who are up in arms now? I find it hard to believe that any sane adult person could possibly be surpised here. All projects of this magnatude have increases or adjustments. We're not talking of building a small house here.
2010-02-08 at 16:37
abetterTbay. says:
I love the fact we live in a country where we have the democratic right, and means, to disagree. But, to be detrimental to a project of this magnitude and the communities reputation infringes on the rights of the majority of Thunder Bay's citizens.

2010-02-08 at 16:15
panzerIV says:
Thank you hurricanejeck and i believe those questions were posted to me. Re-designing happens on every project it is usually a very small thing to make the area flow better or look better. Its usually a very minimal changes to the master plan but can add a small cost increase to change such plans. So hopefully that answers that question for you, and who dropped the ball well the original price is developed on the costs of the materials of the time. With the exception of technology, prices continue to go up and so will the total cost. Like an earlier post that i made it might be smarter for the city in the future to add a couple numbers to the cost so they don't have to ask for more later on. Also, FOMP has cost the city money there is no way to get around that. The OMB hearing cost them 19,000 dollars, should be about the same for the city. They delayed the start up phase by months with there EA question which lead to the tenders just sitting costing the city money. Are they responsible for the 2.2 million short fall? NO, they aren't but they are responsible for at least 20,000 dollars of tax payers money.
2010-02-08 at 14:55
commonsense says:
To "ABetter TBay"
To blame the FOMP group because the City expected no objection to their plan is ludicrous. We should be happy to live in a country where we have the democratic right, and means, to disagree. Not every country has that. The City erred in PRESUMING they would get all their approvals rubber-stamped, the way they do at COuncil meetings. There were processes that had to be followed. This project is being rushed, from 5 years down to 2. Therein lies your problem. Everything is being done in a rush, at the Waterfront, the Court House, without proper preparatory planning. Planning ahead instead of trying to "re-mediate the problem" after would have been wise. The city purposely kept their cost estimates down to avoid an EA. Lots of things were "excluded". How much of the extra costs are as a result of additional developer requests? You know we are paying for all the servicing and in-fill, then handing this land over for a song. We'll be lucky if there's anything left for us, once the newest site plan is revealed later in the winter.
2010-02-08 at 13:25
HR&J says:
Hey abetterTbay, quit flogging FOMP. FOMP or not, we all could have predicted all this jargon anyway. Everyone maybe should have listened to FOMP to start with and we wouldn't have all this. Kudos to RHL too as we already had an unmolested beautiful place, now its too late already...well, maybe NOT! Cities devastated by the A-bomb recovered.
2010-02-08 at 11:59
Dar says:
I guess the city of thunder bay hires project managers based on their "accomplishments" as a gardener.
Where do i sign up for the next project , i got a few pictures of my garden.
2010-02-08 at 11:27
Steven says:
Incompetence should be a word that is throw around.

Contracts can contain clauses to protect from cost overages. Most municipalities use them to at least split the cost increases with the builder, depending on why they happen. For instance Burlington is currently getting over $2 million back from the builder as costs went over and they were forced to pay more, and then get 50% of those costs back later.

Not putting these types of clauses in is simply allowing builders/developers to jack the price later. They can always come up with a reason.

Its just like when your car is getting repaired: There are clauses that say the cost must be within a certain amount of the estimate, or you don't have to pay. If its good enough for your car, you think our city would use it for something as big as this!

Oh well. Too late now, we've already signed, and the money will just keep heading out the door.

Don't get me wrong, I like that something is getting done, I just don't like getting killed on it because of bad contract wording by the city.
2010-02-08 at 9:00 AM
storm says:
Well Katherine DugMore, HOw quickly we slide into More Dung
2010-02-08 at 9:00 AM
abetterTbay. says:
Friends of Marina Park should take some of the responsibility for these cost over runs, Delays and OMB hearings come at an extra cost to the project and to the tax payer.

2010-02-08 at 07:33
hurricanejeck says:
panzer, your a sharp cookie,I like your posts.
given this large cost over-run so early, I fear it's not going to be the only one. posted werte two reasons for it, re-design and 2007 projections. I still haven't heard who is re-desigining and who else dropped the ball on the figurer, it can't be one sided.
remember that the City is allowing this project (taxes and such) after giving up this property inexpensively, the developer is in it for the return. sharp bean counters always try to get the other party to pay.
I look foward to reading your response.
and somebody please post a favorable line as to the development so far.

residentj, I like the fact that you want to pay my share, anybody else?
2010-02-08 at 01:46
HR&J says:
I'm getting so sick of the yada yada yada about rising costs of every project that this city of ours budgets for. Why aren't costs projected over the years it takes to complete the project. All the over priced studies done through the years are never correct as there is always rising costs....soooo project the costs over the time the project takes to complete....its easy, take in an average cost of living increase, add all the increases that the construction companys pay their employees and quit adding chrome trim....and you should know well in advance what the final costs should be. Make sense?...It should if you would all get your act together.
2010-02-08 at MIDNIGHT
commonsense says:
the point is, they stuck to the 2007 estimates, and even in 2009 submitted those figures to the MOE to avoid an EA bump-up. Now, when the ACTUAL costs are known, they want more of OUR money. Let's see this revised site plan they've been working so hard with the developer to obtain. what else have they given away? I imagine the next thing to go will be the War Memorial. It's awfully close to the former" Market" building, now turned "commercial" building. The city required them to provide parking, and said they would be willing to lease more land to them. I guess that'll be what we give up next. Explain again WHY taxpayers are paying to create land, AND service the park only to sell to a developer to build a commercial building?
TBinTO How do you know Ms. Dugmore was formerly employed at SENES? Please provide reference. THx.
2010-02-08 at MIDNIGHT
realist says:
Hey TBinTO thanks for helping to prove my point. "This is a great little garden, I cut through this spot almost daily. Sometimes I have lunch here. A great transformation of what was once an ugly and empty lot."

I'm willing to bet anyone with the ability to plant a few shrubs and some flowers could also throw down some mulch and turn a single lot into a green space. I'll submit this wasn't the most ambitious of projects.

Also how many of these condos are pre-sold? Isn't that what most developers do before breaking ground? Then again most private developers don't have governments footing the bill for them.

Not one penny of government money should have been used to support the private interests that have ponied up to the trough and are now gorging on taxpayer dollars.

Just wait and see, I'm willing to bet this project comes in 30-40% over budget and the citizens of Thunder Bay will be on the hook for these "unseen" overages.
2010-02-08 at MIDNIGHT
residentj says:
Budgeting for these projects are based on preliminary estimates. I don't find it surprising that actual conditions or changes due to detailed designs have resulted in a request for more money to be spent in this phase.
It seems that some are recklessly throwing around words such as incompetence just to prove....well, I'm not sure exactly. What is it you're trying to prove? A request for more money for this phase doesn't bother me one bit. It is not unusual or a sign a of incompetence.
2010-02-07 at 23:09
TBinTO says:
realist you said about Katherine Dugmore:

Here is one of the projects that qualified her to develope Thunder Bay's waterfront... Enjoy the garden she designed in Toronto...


This is a great little garden, I cut through this spot almost daily. Sometimes I have lunch here. A great transformation of what was once an ugly and empty lot.

This garden was created MANY YEARS AGO... before many other similar projects were implemented throughout the city... I'm sure she's learned a thing or two since completing that project.

She's obviously a forward thinking and creative individual who cares about public space.
2010-02-07 at 20:41
The Beaver.... says:
residentj....for your information a cost overrun on a project that just got underway is not acceptable and it shows incompetence of those in charge..however in the public domain we just go and charge it to the tax Payer that is on the hook and expect him to pay up for this incompetence and yes many of us do have the qualification to run a project far bigger then this one.
2010-02-07 at 19:03
panzerIV says:
Hurricanejeck the developer has already taken a 5 million dollar price tag of the city's hands. The city was original responsible to develop the art center in a meeting at the auditorium they said that they would pay for the costs of this building. So the developer has already taken costs of the cities hand so no it shouldn't be the responsibility of the developer. Yes, beaver the condo's need 60% of the roomed to be rented out or sold before the idea is given to anyone else. They wouldn't put the money up if they didn't know that they would be getting it back. So there will be condo's and resident i completely agree with you. The ends justify the means in this case if you believe it or not. I'm sure that people had complaints about the city doing the same thing 30 years ago.
2010-02-07 at 6:00 PM
oldnorthernguy says:
"COST ESCALATION INTO 2011" --- OMG !

Hey Beaver why do you think selling condos near train tracks will be difficult ?








Tbnewswatch.com

2010-02-07 at 16:11
ranger says:
Let the bleeding begin. They haven't even been operating for a fiscal year and they are at the trough already, and it will not be the last time. I will be surprised if the project is even completed. Faith in completion on time and on budget is naive.
2010-02-07 at 15:21
hurricanejeck says:
Ok, so the figures are based on 2007, I get that. But are the developers contribution of $$ also based in 2007 financial state? Am I wrong in thinking they, the investor, not the City cover this cost? I'm still cautious about who is making these design changes, the Investors or the City?
As an aside, how is the progress going? smooth? I haven't heard anything positive to suggest a bright future.
2010-02-07 at 15:13
The Beaver.... says:
"Knowing all the information that we now know and having information on the site we’re better able to project cost escalation into 2011," said Dugmore.
That is a sentence just Incorporated in to the general plan...and it will be used for a long time to come
2010-02-07 at 14:14
The Beaver.... says:
Jane...you are so right FOMP seen this coming all along simply because of the experience in their lives.The Beaver has been in major Construction management for a lifetime,and he was constantly degraded by people like Pancer and Bosch and others.
The ra--ra--ra group lead by Hobbs did not have a clue as to what was entailed here..all they could do is shout ra ra and belittle everybody else.I will make one more prediction..if the Condo developer does not pre-sell at least 60% of all the condos planned there will be no Condos.
2010-02-07 at 14:06
residentJ says:
Many of these comments are sadly misinformed, some malicious. Questioning someone's experience is fair. On that note, how much experience do those providing comments have in critiquing a major capital project such as this? How many have the expertise in the relevant fields, such as construction management, accounting, management, master planning? I sure wish those who make comments would take the time to become educated on the scope of the project. It is very clear -- when you understand the scope of the project -- that it will be beneficial to Thunder Bay and such minor changes to costs are normal in this type of project. If you reread the article, you'll notice part of it is because of extra projects added to enhance the park experience, not cost overruns.
2010-02-07 at 13:57
Jaded says:
I wish I could say I was surprised, but I'm not.
2010-02-07 at NOON
JaneQPublic says:
I remember all those comments from the "pro-progress"folks slamming FOMP and slamming those people who expressed concerns about this project. Where are you now? Hope you don't mind your taxes going up because this is just the beginning . And because the money will probably come from the new marina ,the tax paying citizens on the wait list will just have to wait longer.Although I am saying I told you so ,I am not enjoying doing so .Like many others I realized this day would happen and more like it will come .
2010-02-07 at 11:41
panzerIV says:
commonsence this fence was designed to reduce the noise throughout the park caused by trains, cars and others noises coming from the outside. Sound is not a flat 'object' per say and a chain link fence does not catch the noise. This because of its design catches the noise and stops most of it from going into the park. It should also help the people that live in the condo's across the street if they don't want to listen to the blues or what not. Though i would tell people exactly what its purpose is.
2010-02-07 at 10:43
Kidknapp says:
This is just another example of incompetence! This city needs to stop thinking they know what they're doing and get more experienced people in these important positions! They also need to wake up and stop their out of control spending!
2010-02-07 at 10:07
Ur Kiddingme says:
Well here come the "Naysayers" Ee knew it would cost more. Fortunately our administration is "monitoring" the costsand they just think it will cost more. Wqith our fiscally responsible budget we can afford a lot more. Wake up Thunder Bay. City council & the upper echelons of Admin should seriously be looked at. Not run out of town but made to live here would be a good start.
2010-02-07 at 08:54
The Beaver.... says:
The risks not fulfilling the vision at this time are that you may never complete the project as it was originally envisioned or you will be in a position if you choose to do it at a later date that it will cost more because every year it costs more to do build the same thing," Dugmore said.
...This is a Project that should have never been startet...
2010-02-07 at 08:41
tsb says:
The two per cent inflation figure is an average. It could very well be 15% in the construction field. I could say something pointlessly negative here but I won't.
2010-02-07 at 02:21
realist says:
Looks like Katherine Dugmore worked for - a company that specializes in Energy, Nuclear and Environmental Sciences before coming to Thunder Bay.

Here is one of the projects that qualified her to develope Thunder Bay's waterfront... Enjoy the garden she designed in Toronto...
2010-02-07 at 01:16
commonsense says:
I wonder if the recently approved (design) $650,000 fence is one of the areas causing a cost over run. This fence is overkill, and seriously affects the view in and out of the park. You can only see through it when looking almost straight on. You can see the old chain link fence at the edges; you can see through it no problem.
Tbnewswatch.com

2010-02-06 at 23:54
panzerIV says:
I support this project but i also support the people's wishes to keep a project on budget and on time. Well at this point they're doing half the job right. I think that the way that the city current does projects makes it so that they always get the dumb end of the stick. They use the lowest possible number and display this to the citizens to make it look like its gonna be a cheap number. If they add an extra 2-3 million in the cost then when the project is done they might come under budget and look a lot smarter. It also gets rid of them having to ask for more money in the future when the prices change.
2010-02-06 at 23:39
Rick says:
I would also like to add, what is Katherine Dugmore's experience in this field, could we be informed of the other multi-million dollar projects listed on her CV that she has managed.?
2010-02-06 at 23:01
portland39 says:
progress isn't cheap
2010-02-06 at 22:29
The Beaver.... says:
The ink is not even dry...and the sucking has started already.If no one knew in late 2008 that the dollars were based om 2007 then somebody should be run out of town.Relax folks this is only the beginning.
2010-02-06 at 19:14
Rick says:
Put on your dancing shoes and let the boondoggle begin.

This is typical of Capital Projects in Thunder Bay, they have a rich history of constantly being over budget and never on schedule, this one is merely follwing suit.
2010-02-06 at 6:00 PM
hurricanejeck says:
how about option three!
let the private investors pay the tab....
2010-02-06 at 6:00 PM
SomeGuy says:
Lets pull some more money out of TBayTel and then sell the naming rights to the park to Shaw, problem solved...
2010-02-06 at 6:00 PM
pawn says:
We all knew this would happen.
Perhaps the extra costs should be paid from personal funds by Bentz, Peterson and the rest of this council that spends our taxed money with reckless abandon.
2010-02-06 at 17:42
thebard says:
1) Inflation has been running at around 2% per annum for 2 years. How come we have a 15% increase ?

2) I am not a fan of FOMP, but they warned all along that the project was bigger than the city's estimate. Congratulations you have turned them into prophets.



2010-02-06 at 17:06
AJ147 says:
And so began the much awaited & eagerly anticipated screwing over of the ratepayer.
2010-02-06 at 15:52
elvis2010 says:
Let the cost increases begin! I doubt this will be the last time you hear "Possible cost increase" for this money pit/waste of tax dollars!
2010-02-06 at 15:10
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