Wellington County has reaped the benefits this year of getting its budget done in January.
Roads committee chairman Joanne Ross-Zuj told council on April 28 the county saved $1.6-million on road building tenders awarded in April and she attributed those savings to early tender calls.
Manager of purchasing and risk management Mark Bolzon told the roads committee in a report sent to council, “the tenders for most projects have come in well below the budgeted amounts. A total of $1.6-million will be transferred to the roads capital reserve as a result of these awards.”
Bolzon presented council with three tenders awarded in April, with the budget amount and the winning bid:
– deck replacement of the Elora Gorge bridge on County Road 7, $175,000, with the tender let at $81,297 to Engineered Concrete Ltd., of Kitchener;
– replacement of a bridge on County Road 12, with a budget of $730,000 and a tender award of $264,461 to Exterra Construction Inc., of Kitchener; and
– replacement of another bridge on County Road 12, budgeted at $780,000, let for $299,218 to W.G. Kelly Construction, of Mitchell.
Bolzon added that in addition to those savings, there would be revisions to cover such things as engineering, contingencies, county staff and equipment.
He explained why an early budget deadline helped save the money. The reasons are:
– county council passed the budget in January, which allowed the tendering process to be accelerated. Contractors are normally interested in securing some contracts early in the year in order to get their workforce operational and to secure cash flow;
– tender closings were staged over a five work-day period. Contractors who are unsuccessful with early tenders will often bid more aggressively on later ones;
– most of the infrastructure projects are, or will soon be wrapping up, and there are many contractors looking for work and bidding on county projects;
– the above points also apply to material suppliers and subcontractors; and
– prices have increased over the last few years as various funding programs were introduced. As those programs are phased out, fewer jobs are available and prices tend to drop and stabilize as competition increases.
Bolzon also recommended the county immediately take advantage of the price decreases by moving ahead roads projects that had been scheduled for the future.
He said that paving on County Road 14, scheduled for 2013, and County Road 19, set for 2012, are extensions of two paving projects already tendered and he recommended those now be done this year.
The County Road 14 project runs from Line 8 to Line 10, has an estimate of $800,000; and the County Road 19 project, from Fergus to Belwood, 1.5km from the 2nd Line to the 3rd Line has a proposed budget of $600,000.
Bolzon explained that using the unit prices from the initial projects on those roads and extending them to new, logical end points, would use about $1.4-million of the $1.6-million that was transferred to the roads capital reserve.
Council was unanimous in allowing the transfers and extra road work, and authorized staff to negotiate contract extensions with the approved contractors for that additional work.
