Minutes of a Special Informal InCamera Regional Council Meeting Town Office, th Ave S, Fort Nelson, BC Monday June 2, 2008.
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1 Council Present Mayor Morey Regional Councillor Gilbert Regional Councillor Sime Regional Councillor Middleton Staff Present Randy McLean, CAO Heather Cosman, CM Stacey Loe, DCM Tom Sprado, DR Council Absent Regional Councillor Allen Regional Councillor Unruh Regional Councillor Vigeant Also in Attendance Colin Griffith, Colin Griffith & Associates. 1. Call to Order The meeting commenced at 12:10 pm. Recreation Complex Project Review CAO McLean Started by stating, we are sick of this, it is a lot of work. Colin has detailed information from Ian. Mr. Griffith is working on information to take to citizens, putting in a presentable form for the public. Working feverishly to get all the information ready for next week s paper. Mr. Griffith then review sections 1 through 9 of the information package received by council. Section 1 Background information The Recreation Centre collapsed April 9 th, Regional Council appoints Dayton & Knight as the Engineering Prime Consultant for the Fort Nelson Recreation Complex. CJP Architects appointed as the Architectural Firm for the Recreation Centre development project. Sites examined were on the west side of the existing Recreation Complex or the existing area slab. Four options were examined West side of Recreation Center Tent with Artificial Ice West side of Recreation Center Tent with Natural Ice West wide of Recreation Center Kledo Offer Natural Ice Utilization of existing slab no building The preliminary cost estimate of the Recreation Complex is $4.2 million. Page 1 of 6
2 Section 2 Increasing the budget for the Second Ice Surface November 13 th, 2007 Mr. Rose Innes from Dayton & Knight presented a revised cost estimate and budget for the project totalling $7,031, Dayton and Knight provided detailed explanations for the increase in costs. This budget was in essence a budget for the Secondary Ice Surface. Section 3 Overall expenditures to May Reviewed global budget outlining: A- the Committed Expenditures to May, 2008 for the Recreation Complex and Second Ice Surface, B- Expenditures on demolition, security, etc of the Collapsed Arena, C- Expenditures on new Recreation Complex, D Expenditures required completing this Phase. Need to do an apple to apple comparison, what is the foot print of that building. Section 4 Establishing the actual costs of the second ice surface Total committed expenditures amount to $8,137, The budget for the Recreation Complex was not set up to separate costs for the Secondary Ice Surface from the overall Recreation Complex Budget. Section 5 Accounting for cost increases The cost increase is around $2.7 million dollars. The cost increase can be broken up into three main categories: 1. Quality Upgrades to the Facility which accounts for % of the cost increase 2. Under estimates or items not identified in original estimate - which accounts for 26.25% of the cost increase. 3. Weather and ground conditions which accounts for 17.25% of the cost increase. CAO McLean stated that part of the $429,000 increase could have been under estimates or items unidentified in the original scope. Regional Councillor Sime added that you can feed everyone all you want, but they are concentrating on the $4 million dollar figure. Mayor Morey stated that people are seeing the increase from $4 million dollars to $7 million dollars to $9 million dollars as a Page 2 of 6
3 mismanagement of funds and is being reinforced internally. The increase in costs cannot be completely quantified, and in general terms the cost increase is the result of a combination of factors and influences. Firstly, the original preliminary estimate was just that, a preliminary estimate, which then became portrayed as a firm and certain final budget figure, which was never the case. In conclusion and in general terms the cost increase was a result of : 1. The Design/ Build process itself. 2. The short time frame for completion of the project. 3. The upgrading of the facility from the original design concepts. 4. The unknown soil conditions 5. Weather conditions and delays in completing the project. 6. Underestimation of some of the costs. The construction of the building happened while the designing process was happening. Mayor Morey added that one of the issues is the $4.2 million to $7.1 million dollar increase, who made those decisions. No one did anything without approval from Randy McLean, Tom Sprado or Regional Council. Councillor Middleton stated that at the public meeting, we were told $7.1 million. The public had a hard time with that figure. The decisions were made for good reasons; I don t have any issues with the cost increase. I struggle with the $8.9 million, the cost keeps moving up and the public does not understand that. Section 6- Long Range Financial Plan Recreation Complex. In 2006 the Capital Needs Assessment was completed which included preliminary estimates for Recreation Facilities and all other infrastructure requirements for a 15 year period. The Capital Needs Assessment included: 1. A new Aquatic Center to be incorporated into the then existing Recreation Center at an estimated cost of $12,000, A new Convention, Gym/ Banquet, Tourism Facility to be incorporated into the then existing Recreation Center at an estimated cost of $13,000, A new Second Ice Surface with an estimated cost of $8,000,000 Page 3 of 6
4 The Total 2006 estimate was $33,000, CAO Mclean spoke with Neufeld on May 28/08 and he said we need special funding. We need to determine a strategy for that. Regional Councillor Sime stated that people do no want to hear about the bigger picture or bigger complex. You should concentrate on the Secondary Ice Surface. CAO McLean added that this shows we have a source of money. Mr. Griffith stated that we are here to provide information, you people need to make the final decision. There is a lot of complexity to this project and some people want to know. We are throwing numbers at the public and it is confusing them. If you had these handouts people would take them, leave and make there own conclusions. If you thrown out too many figures people are going to get mad. Mr. Griffith continued, let us finish, and then you people can decide. We are trying to show sources of infrastructure funding. If insurance rebuilds, it would be a real novel, they would low ball as much as possible. Right now code upgrades are being placed on you. They are required to provide a replacement building. If insurance was to rebuilding we would not have to tender. Regional Councillor Sime added that, to redesign, we need to know what is upfront. Mayor Morey added that an argument could be made that insurance company could argue the original foundation. Cost overruns, how do we know they will honour that? Mr. Griffith replied that is the insurance company s policy to rebuild what was there, you have to design the building. Mayor Morey declared that the intent of our resolution was just that. Regional Councillor Sime enquired to how much a rebuild would be. Mr. Griffith replied that the amount would be determined by the Page 4 of 6
5 tenderer. Mayor Morey stated that another level of conversation is, we need to deal with who our engineering firm will be. Mr. Griffith mentioned that we have all your conversations in writing so you can develop a strategic approach. Mayor Morey stated that a cash settlement is depreciated cost. Mr. Griffith added that not only do you need to make all the decisions but you need to know all the implications of each decision. If June 28 th Fails, you have to have an alternative plan. The meeting continued with a review of Schedule 1 Story boards are presented: Stage Fair Share Infrastructure Grants. Stage Capital Needs assessment. Stage 3 April 2007 Recreation Complex Collapses Stage 4 June 2007 Looking at Recreation Complex options. Stage 5 - July 2007 Decision to design and build a New Recreation Complex Stage 6 July to November design and costing of the New Complex is proceeding Stage 7 January 2008 The final design and cost estimate for the New Complex is presented. Stage 8 February to March Floor plans and Building Profiles. Stage 9 June to November Phase 1 through 5 Stage 10 June December Capital Needs Assessment Stage Project Timelines and Options, What is Regional Council s Plan? Regional Councillor Middleton stated that Council s own members have fed the frenzy. Mayor Morey stated that those who wanted a referendum got it. Problem I am having is the $4.2 to $7.1 million dollar increase. Why were those expenditures made when Council was not aware? These are the flagships of the gross mis-management of the project. Mr. Griffith added that council approved the preliminary cost estimate. CAO Mclean stated that the reason is because the tenders did not Page 5 of 6
6 come in until October/ November. Mr. Griffith continued stating that Recreation Centers are never universally supported by a community because only 10% of the public uses them. Fort Nelson is not going to have facilities without tax payer support. Mayor Morey enquired as to if when the Capital Needs Assessment was first received, was it taken to Chamber? Minutes from meeting will need to be checked. Noon Meeting at the Recreation Center, those present from Regional Council agreed and informally recommended that the presentation be given by CAO McLean and Colin Griffith present to citizens on Thursday at the Public Meeting. Regional Councillor Gilbert asked if they could get a comparison of the two presentations. DRS Sprado stated that no other places had to deal with new building regulations. First Supplement will go in next weeks paper. 3. Adjournment Mayor Morey Adjourned the meeting at 7:43 pm. CERTIFIED a true and correct copy of the June 2, 2008 minutes of the Special Informal Regional Council meeting. Mayor Morey Heather Cosman, Corporate Manager Adopted on: August 11, 2008 Page 6 of 6
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