Questioning Post-Disaster Design Costs for the

Grand Bend Sewage Treatment Plant


 

This executive summary was delivered to the County of Lambton in December, 2015. We have yet to hear from the County regarding their consideration of the municipality’s submission.  OWCLA will continue to monitor this situation and report back to you. We are not prepared to accept the municipality’s submission as it is written.

 

To:      Clerk, Mayor and Council
From:  Jordy Speake, Ontario West Coast Landowners Association
Re:      Post Disaster Design Costs for the Grand Bend Area Sewage Treatment Facility Project Upgrade
Date:   April 27, 2016

The following is a summary of concerns and applicable questions related to the Grand Bend and Area Sewage Treatment Facility Project Upgrade based on the documents caused to be released to the taxpayers by the Lambton Shores council.

A. The minutes of the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, November 12, 2013, state under Item 6.1:

“Moved by: Board Member McRae                Seconded by: Board Member Dietrich

THAT the report from B. Kittmer, Director of Community Services, Lambton Shores, re: Report for Proposal Award for Engineering Design and Construction Administration services for the Grand Bend Area Sewage Treatment facility and PS-2 Upgrades; and,

THAT the Joint Sewage Board recommends to South Huron and Lambton Shores Council that the proposal for engineering design and construction administration services for the Grand Bend Area Sewage Treatment Facility and PS-2 Upgrades project submitted by Stantec Consulting be awarded at the bid price of $1,395,000; and,

THAT per the terms of the Transfer Order, the Joint Sewage Board authorizes the Municipality of Lambton Shores to enter into a standard Municipal Engineers’ Association services contract on behalf of the Board, subject to the necessary legal due diligence.

Carried”

B. The minutes of the regular Lambton Shores council meeting, November 21, 2013, state under Item 8.7 DCS Report No. 150-2013 Re: RFP Award – Engineering Design and Construction Administration Services for the Grand Bend Area Sewage Treatment Facility Upgrade:

“13-1121-17    Moved by: Councillor Underwood      Seconded by: Councillor Russell

THAT Report DCS 150-2013 regarding the “RFP Award – Engineering Design and Construction Administration Services for the Grand Bend Area Sewage Treatment Facility Upgrade” be received; and

THAT Council accept the recommendation from the Joint Board, and award the proposal for engineering design and construction administration services for the Grand Bend Area Sewage Treatment Facility upgrade project submitted by Stantec Consulting be awarded at the bid price of $1,395,000; and

THAT Council direct staff to negotiate a services contract with Stantec Consulting using the standard Municipal Engineers’ Association services contract, to be returned to a future Council meeting for acceptance.

Carried”

Was the above, Sections A and B, the negotiated service contract with Stantec Consulting brought to council as directed by resolution 13-1121-17?  If so, at which Lambton Shores council meeting was it brought forward?  Did council ever approve the service contract with Stantec Consulting?  If it was, what was the resolution number?

C. The minutes of the regular Lambton Shores council meeting, April 3, 2014, state under Item 10.9 Report DCS 22-2104 – Re: Grand Bend Joint Sewage Agreement:

“14-0403-31                Moved by: Councillor Russell             Seconded by: Councillor Underwood

THAT Report DCS 18-2014 regarding the “Grand Bend Joint Sewage Agreement” be received; and

THAT By-law 34-2014, being a by-law for Municipality of Lambton Shores to enter into an agreement with the Municipality of South Huron and the Municipality of Bluewater for the construction and operation of a tertiary mechanical treatment facility and upgraded main pumping station in the Village of Grand Bend be approved; and

THAT the Mayor and Clerk be authorized to execute all necessary agreement documents.

Carried”

Is the content of Report DCS 18-2014 identical to that of Report DCS 22-2014, and if they are, why are the subject and content of these two reports labelled by two different numerical identifiers?

Is the Municipality of Bluewater still considered to be a participant in the Joint Sewage Agreement as depicted by way of resolution 14-0403-31? If it is not, how has its status changed and has the Joint Sewage Agreement been amended to reflect any change in that status? If a change in status has occurred, when and through which Lambton Shores council resolution has that amendment been approved?

D. The minutes of the regular Lambton Shores council meeting, April 3, 2014, state under Item 10.10 Report DCS 23-2014 – Re: Project Update – Grand Bend Sewage Treatment Facility Upgrades

Sewage Treatment Facility Upgrades

Design, Drawings & Specifications:

Stantec reports significant progress in this area:

    • Process, approximately 95% completed
    • Structural, approximately 90% completed
    • Architectural approximately 90% completed
    • Mechanical, approximately 90% completed
    • Electrical, approximately 80% completed

In addition, Stantec has identified this project as their preferred project to achieve the Envision environmental standard. Envision is an environmental rating system similar to LEED that documents sustainable design features for infrastructure. The standard is widely used in the United States, however it has yet to be used for a project in Canada. To achieve an Envision certification a project must achieve 60 credits in 5 categories: Quality of Life, Leadership, Resource Allocation, Natural World, and Climate and Risk.

Approvals

Stantec and municipal staff met with MOE representatives in December, 2013 for the purposes of pre-consulting prior to approvals submissions. Stantec is currently drafting the necessary Environmental Compliance Approvals (ECA) documentation with a goal of submission to the MOE within the next three weeks. MOE approvals are required before construction work can begin.

South Huron staff have forwarded the necessary site plan approvals information to Stantec and Lambton Shores, and staff from both municipalities and the consultant have met to review the details of site plan approvals. As the administering municipality Lambton Shores will be the formal applicant for the site plan agreement. This agreement will be presented to Council for approval once the final draft has been agreed upon.

Tender

Stantec reports that the project is on target for an April tender release. Staff expect (sic) to have draft tender documents to review within the next two weeks.

14-0403-32     Moved by: Councillor Cook                Seconded by: Councillor Russell

THAT Report DCS 19-2014 regarding a “Project Update – Grand Bend Sewage Treatment Facility Upgrades” be received and filed for information.

Carried”

Is the content of Report DCS 19 -2014 identical to that of Report DCS 23-2014, and if they are, why are the subject and content of these two reports labelled by two different numerical identifiers?

According to Report DCS 23-2014 the design, drawings and specifications stage of the project was significantly completed. To achieve Envision certification three of the five categories where credit scores are considered are: Quality of Life, Natural World and Climate and Risk. In light of the fact that the Envision wastewater treatment system is widely used in the United States where severe weather has become the norm it raises the question as to whether post disaster design features were given consideration by the consultant and/or municipal staff at this stage of the project. If not, why not? Are post disaster design features for this type of facility expected under the Ontario Building Code? Would such be considered as a normal inclusion in the design for a “standard Municipal Engineers’ Association services contract”? If not, why not?

Were post disaster design features for this facility ever discussed with Ministry of the Environment (MOE) staff by the consultant and/or municipal staff? If not, why not?

Were post disaster design features for this facility seen as a requirement or even given consideration for environmental compliance approvals? If not, why not?

What was the date that staff presented the site plan agreement to the Lambton Shores council for approval? What is the number of the Lambton Shores council resolution that approved the site plan agreement?

E. The minutes of the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, June 23, 2014, state under Item 7.1 “Report from B. Kittmer, Director of Community Services, Lambton Shores, re: Recommendation for Tender Award

“B. Kittmer presented his report, being a summary of tender results for the upgrades the Grand Bend Sewatge (sic) Treatment Facility, in accordance with Section 9 of the Joint Operating Agreement.

The respective Councils have approved the release of the tender for the Grand Bend sewage3 treatment facility upgrades project (sic).

The Stantec report on the tenders was reviewed. There were no questions from the Board at this time.

Moved:                        Board Member Weber

Seconded:                   Board Member Dietrich

THAT the report from B. Kittmer, Director of Community Services, Lambton Shores, re: Recommendation for Tender Award; and

THAT the Grand Bend Area Sewage Board recommends to South Huron and Lambton Shores Municipal Councils that the tender from K&L Construction Ontario Limited be accepted at the tender price of $16,687,727.00, including contingency and HST; and

THAT as per Section 9 of the Joint Operating Agreement, the Municipality of Lambton Shores be authorized to enter into the construction contract  with K&L Construciton (sic) Ontario Limited upon acceptance of the tender by South Huron and Lambton Shores Municipal Councils.

Carried.”

Prior to the passing of the motion of the staff recommendation to award the tender was there any representation from the municipality of Bluewater at the table? If not, why not? Why did the vote proceed on this issue if a partner was not present at the time of the vote? Prior to the vote being taken was the municipality of Bluewater a viable partner in the Joint Operating Agreement? If not, when did that status change and when were the municipalities of South Huron and Lambton Shores advised? When did the councils of South Huron and Lambton Shores, by way of which resolutions, approve a change in status for the municipality of Bluewater as it relates to this agreement? Is the amended Joint Operating Agreement available on the Lambton Shores municipal website? Was the approval authority for the Building Canada Fund advised of this change in the agreement and when? How did the approval authority for the BCF respond to this change in the agreement? Is the documentation that noted the change in status for the municipality of Bluewater available on the Lambton Shores municipal website? How can members of the public access this information?

F. The minutes of the regular Lambton Shores council meeting, July 3, 2014, state under Item 11.8 Report DCS 54-2014 – Re: Grand Bend Sewage Treatment Facility Upgrade Project – Tender Award

“A recorded vote was held on the following motion:

14-0703-24     Moved By: Councillor Underwood                  Seconded By: Councillor Cook

THAT DCS 54-2014 regarding the tender award for the Grand Bend Sewage Treatment Facility upgrades project be received; and

THAT the tender from K&L Construction (Ontario) Limited be accepted at the tender price of $16,687,727.00 (including contingency and HST); and

THAT the Mayor and Clerk be authorized to sign by-Law (sic) number 73-2014, being a by-law to accept the tender from K&L Construction (Ontario) Limited, contingent upon the Municipality of South Huron’s acceptance of the low tender.

Those members of Council in favour:

Mayor Weber, Deputy Mayor Davis-Dagg, Councillor Underwood, Councillor McRae and Councillor Cook.

Those members of Council opposed:

Councillor Maguire, Councillor Bonesteel, Councillor Scott and Councillor Russell.

Carried”

At any time were post disaster design features for the facility upgrade included in the tender process before it was awarded to K&L Construction? If not, why not? Was the project ever re-tendered following the inclusion of post disaster design features for the facility upgrade? If not, why not?

G. The minutes of the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, November 13, 2014, state under Item 5 Old Business- Discussion Re: Contingency Team

“Staff noted that there are many checks and balances in place, and the contingency funds are only for unexpected issues that may arise”.

The minutes state under Item 6.3 Report No. DCS 78-2014 Re: Project Update – Grand Bend Sewage Treatment Facility and Main Pumping Station Upgrades

BACKGROUND

Sewage Treatment Facility

Design

This component of the sewage treatment facility upgrade is complete.

FINANCIAL IMPACT

The project remains within the approved budget.

Sewage Treatment Facility Component: The approved budget for this component of the project is $16,687,727.00 which includes a $2,000,000 contingency and HST.

As noted above, the supply costs for the pre-engineered building have increased due to the requirement for the building to meet the “post disaster” design standard of the Ontario Building Code. The cost increase is forecasted to be $194,250 and will be funded from the approved project contingency of $2,000,000. This is an eligible cost for the 2/3 BCF funding, and the net cost to the partner municipalities is estimated to be $64,750.”

If, as the above report states, the building costs escalated to meet the “post disaster” design requirements of the Ontario Building Code (OBC), why were these costs not included in the tender given that they were a requirement of the OBC? Staff indicated to the Board that there were “checks and balances in place” and that contingency funds were “only for unexpected issues that may arise”. Why was the requirement for a ‘pre-engineered building’ to be post disaster designed, as required by the OBC, considered to be an appropriate expense for contingency fund use? If post disaster design is a requirement of the OBC, why was it considered by the municipality to be an ‘unexpected’ cost after the tender process had already been closed and the tender awarded?

This project has incurred significant costs over the years because of council and board changes that have had significant impact on the design and functionality of the originally proposed facility. These costs have been covered by the Building Canada Fund (BCF). Subsequently, the downsizing and re-design of the facility has also lowered the amount that the municipalities can claim under the BCF agreement and the BCF has been notified of this change in the agreement by the lead municipality. Is there a public accounting of expenses for this project to date, since the original BCF agreement was signed, that supports the estimated cost to the partner municipalities of $64,750 for the post disaster features? Where is the public able to access this accounting?

H. The minutes of the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, March 20, 2015, state under Item 6.3 Report DCS 11-2015 re; Project Update – Grand Bend Sewage Tratment (sic) Facility and Main Pumping Station Upgrades

BACKGROUND

Sewage Treatment Facility Upgrade

Design

This component of the sewage treatment facility upgrade is complete.

Tender

The tendering process for this project was completed on Tuesday, June 10, 2014 with a low tender submitted by K&L Construction Ltd. The Joint Board received the tender results at their June 23, 2014 meeting and recommended to South Huron and Lambton Shores’ Councils that the tender from K&L Construction Ltd. be accepted at the tender price of $16,687,727.00 (including HST and contingency).

The Municipality of Lambton Shores accepted the K&L tender on July 3, 2014. The Municipality of South Huron accepted the K&L tender on July 17, 2014.

Approvals

All approvals have been received for this component of the project to proceed.

FINANCIAL IMPACT

The project remains within the approved budget.

Sewage Treatment Facility Component: The approved budget for this component of the project is $16,687,727.00 which includes a $2,000,000 contingency and HST.

At this point in time the only significant change to the project is to pre-engineered building (sic) to meet the requirement for the building to meet the “post disaster” design standard of the Ontario Building Code. This change was reported to the Board at the November 13, 2014 meeting.”

Why was the projected cost increase for the project of $194,250, to meet the post disaster design requirements of the OBC, not included in this report?

I. The minutes of the regular Lambton Shores council meeting, April 14, 2015, state under Item 11.1 Minutes of the Grand Bend Area Joint Sewage Board Meeting held March 20, 2015

15-0414-09 Moved by: Councillor Rupke                   Seconded by: Councillor Maguire

THAT the minutes of the Grand Bend Area Joint Sewage Board meeting held the 20th day of March, 2015 be received for information.

Carried”

Why didn’t Lambton Shores’ council representatives of the Joint Sewage Board address the issue of post disaster design standards and the resulting additional costs? Why did they not bring this important information to the attention of their colleagues on council, especially given the fact that Lambton Shores is the designated lead municipality for this project?

J. The minutes of the regular Lambton Shores council meeting, May 5, 2015, state under Item 7.4 Elvio Zaghi, MBA, P.Eng. – Project Manager with Stantec Consulting- Re: Update on the Grand Bend & Area Sewage Treatment Facility Project

“Elvio Zaghi, MBA, P. Eng., Project Manager with Stantec Consulting conducted a PowerPoint presentation on the Grand Bend Area Sewage Treatment Facility outlining the status of the project, key features, information on the Envision program and the next steps to be taken in completing this facility.”

On pg. 27 of Mr. Zaghi’s PowerPoint presentation it is stated that:

“Key Project Features:

    • Tender price under budget
    • Fast-Track Design in 6 Months
    • Creativity, Innovation, & New Technology
    • Maximize use of existing lagoons
    • Focused on Environmental Sustainability”

Mr. Zaghi’s presentation states on pg. 28 that construction is 30% complete. The information is presented as:

“building foundation is complete

building structure is complete

building exterior masonry is underway

bioreactor tank underway

major equipment in delivery”

On pg. 29 of Mr. Zaghi’s presentation it states:

“Success Factors to Save $s

    1. Lagoons – make most use of them to shave peak flows, dispose sludge etc.
    2. Pre-engineered Building – less steel, faster to erect, future expandability
    3. Reduced Concrete – round tanks, common wall construction, self-contained major equipment
    4. Disk Filter Technology – compact, self contained (sic) – no concrete, modular, expandable
    5. Affordable Green Features – wetland, recycled materials, energy efficient equipment”

If a pre-engineered building uses fewer materials as the presentation suggests, what materials are required for post disaster design that would amount to almost $200,000? Is this amount considered to be a ‘success’ factor to save dollars?

There is no apparent record of council formally accepting this presentation. Does a resolution exist where council formally accepted this presentation? What is the number of that resolution?

K. The agenda for the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, June 12, 2015, states under Item 7.1 Report DCS 46-2015 re; Project Update – Grand Bend Sewage Treatment Facility and Main Pumping Station Upgrades

RECOMMENDATION

That Report DCS 46-2015 regarding a “Project Update – Grand Bend Sewage Treatment Facility and Main Pumping Station Upgrades” be received and filed for information.”

In Report DCS 46-2015, under FINANCIAL IMPACT, it is stated that “the first significant change is the design requirement for the pre-engineered building to meet the “post-disaster” design standard of the Ontario Building Code. This change was reported to the Board at the November 13, 2014 meeting. All but two of the changes orders associated with the post-disaster design modifications are listed below. Still outstanding is the increased cost of the electrical sub-trade which is currently being negotiated. Also outstanding is the increased cost of the engineering effort expended by Stantec.”

The costs for the post disaster design component of the facility are listed at a staggering $455,613.00. This is a far cry from the November 2014 forecast of $194,250.

Why is the difference between the forecasted amount for post disaster design stated in November 2014 and reaffirmed in March 2015 not accounted for in this report when the new cost is so much greater?

L. The minutes of the Grand Bend Area Joint Sewage Board (GBAJSB) meeting June 12, 2015, state under Item 7.1 Report DCS 46-2015 re; Grand Bend Sewage Treatment Facility Upgrades

Moved by: Board Member Frayne

Seconded by: Board Member Cook

THAT DCS Report 46-2015 regarding a “Project Update – Grand Bend Sewage Treatment Facility and Main Pumping Station Upgrades” be received and filed for information.

Carried”

Why didn’t the Lambton Shores members of the Board question the reason for the increased  costs of the post disaster design between November 2014 and June 2015, given that as an acknowledged requirement by the OBC it should have been included in the tender process?  Why did no Board member of Lambton Shores’ council go on record stating their concerns over this matter and its apparent anomalies?

M. The minutes of the regular Lambton Shores council meeting, November 24, 2015, state under Item 10.7 Robert Pattison – Re: Bi-Municipal Joint Sewer Board – Grand Bend and Area Sewage Treatment Facility

“15-1124-10    Moved By: Deputy Mayor Cook

Seconded By: Councillor Rupke

THAT the correspondence from Robert Pattison regarding questions pertaining to the Grand Bend Sewage Treatment Plant be referred to the Joint Sewage Board

Carried”

This detailed five page letter to Lambton Shores council, dated October 30, 2015, questions the manner with which the post disaster design issue regarding the Grand Bend and Area Sewage Treatment Facility had been handled. It concludes, “Municipal corporations must make every effort to ensure the taxpayer is not burdened with unnecessary costs — especially when these costs are preventable. In conclusion, I am asking both South Huron and Lambton Shores Councils to make claims to their respective insurance companies to receive funds that will compensate the municipal corporations for losses incurred because of a change of mind to meet the requirements of the Ontario Building Code, a change that should have been included in the design in the first place.”

Under Section 9 (h) of the Joint Operating Agreement Lambton Shores council was within their rights to send this letter of complaint to the Joint Sewer Board for their consideration and action.

N. The agenda for the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, December 11, 2015, states under Item 5.1 Robert Pattison – Re: Questions Regarding the Grand Bend and Area Sewage Treatment Facility

“RECOMMENDATION:

That correspondence from Robert Pattison regarding questions concerning the Grand Bend Area Joint Sewage Board be received. “

O. The minutes for the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, December 11, 2015, state under Item 5.1 Robert Pattison – Re: Questions Regarding the Grand Bend and Area Sewage Treatment Facility

Correspondence

5.1 Robert Pattison – Re: Questions Regarding the Grand Bend and Area Sewage Treatment Facility (pages 6-10)

GBJSB 15-1211-03    Moved by: Board Member Maguire    Seconded by: Board Member Rupke

THAT correspondence from Robert Pattison regarding questions concerning the Grand Bend Joint Sewage Board be received.

Carried”

It should be noted that questions in the letter did not pertain to the operation of the Joint Sewage Board; rather, the contents were questioning the issue of how post disaster design for the sewage treatment facility was being handled.

It is apparent that the Joint Sewage Board, in particular, the Lambton Shores council representatives, made no comment on the contents of this letter. Given the information contained therein and the fiduciary responsibility of members of council as required under the Municipal Act, why did that occur?

P. The agenda for the Grand Bend Area Joint Sewage Board (GBAJSB) meeting, March 18, 2016, states under Item 5.2 Report DCS 15-2016 –Project Update – Grand Bend Sewage Treatment Facility and Main Pumping Station Upgrades

“RECOMMENDATION

That Report DCS 15-2016 regarding a “Project Update – Grand Bend Sewage Treatment Facility and Main Pumping Station Upgrades” be received and filed for information.”

The report contains no new information about the costs for the post disaster design, yet it states that “the facility is fully operating with upgraded equipment. Minor deficiencies are being rectified and maintenance holdbacks will be retained until all deficiencies are corrected.”

Report No. DCS 75-2015 lists the costs to date for post disaster design of the facility at $696,594.07. This amount is substantially different than the original forecast of $194,250. What are the reasons for the difference? What costs are still outstanding given that the March 31, 2016 deadline for invoice submissions by the municipality to the BCF for payment consideration has passed?

We are asking that Lambton Shores’ council adhere to sections 224 (a), (d), (d.1) and (e) of the Ontario Municipal Act, and therefore reveal the true costs of the post disaster design for the Grand Bend and Area Sewage Treatment Facility project upgrade to the public as well as reconcile the chronology of events that have contributed to the over-run in costs. Additionally, we are asking that the Lambton Shores’ council make application to the municipality’s corporate insurance company, under an errors and omissions rationale, for the increase in costs for this project due to the post disaster design addendum. Why are ratepayers being burdened with this cost?

 

We ask that you respond to our concerns in a transparent and expeditious manner. We can be contacted through our mailing address: Box 345, Thedford PO, Thedford, ON N0M 2N0 or via email: owcla@hay.net.

 

Respectfully submitted,

Jordy Speake,
Ontario West Coast Landowners Association