ERIN – After a few hiccups, the Town of Erin has finally secured a contractor to build its wastewater treatment plant.
On March 24, council directed staff to award the controversial project to North America Construction Ltd. for just under $114.5 million.
In August, all three contractors Erin had prequalified to submit bids to construct the plant didn’t making a submission before the closing deadline.
Town staff, along with project consultant WSP, prepared a revised pre-qualification bid that was posted to the town’s website and, on Dec. 7, council approved the pre-qualification of five contractors to submit bids for the project.
The deadline for the second attempt to re-tender was extended twice at the request of the contractors and the bid officially closed on March 18, with the town having received two bids.
Bids were received from North America Construction in the amount of $114,462,461 and Bennett Mechanical Installations for $118,589,800.
“The bid documents were carefully reviewed by our consultant and staff and were both found to meet the tender requirements,” said director of infrastructure services Nick Colucci
The report to council notes the amount is included in the town’s capital budget and is to be fully funded by developers as part of agreements signed.
Looking at price increases, councillor Rob Smith acknowledged the original quote was based on a pre-pandemic estimate in 2017.
“So really the 20 per cent that this project has increased … I don’t find that that out of line from 2017 dollars to today’s dollars because we’re really going into a second phase of a supply chain increase,” Smith explained.
“It seems like a lot, and I think a lot of people will look at it and go ‘my goodness this has increased a lot’ but it really hasn’t from 2017 if you look across the board in any general business.”
“With COVID, prices have increased across the board, we’re seeing this in all municipalities that there is an increase in what the bids were and what the estimates were pre-COVID,” said Michelle Albert of WSP Consulting.
“We don’t think this is out of line with what we’re seeing in other municipalities across Ontario.”
Councillor John Brennan noted there’s a lot of concerns from the public over what happens if the project doesn’t go through.
“I would expect that if we accept the bid and then for some reason whatever, we don’t go through with it, there will be some damages that we’re liable for,” he said.
“If something goes off the rails I want assurance that the taxpayers will not be on the hook for any money for the plant.”
Proposed design for the Erin wastewater treatment facility, prepared by WSP. (Erin council image)
Town lawyer Quinto Annibale explained the agreement with the developer is worded in a way that provides full security in favour of the municipality.
“In the event there’s lawsuits, the developers are required to fully indemnify the municipality, so the taxpayers won’t pay out of pocket,” he explained.
He added, “if the costs increase in any way for any reason then the developers are required to pay the actual cost of construction and top up their securities … that’s been the case here.”
“That’s just what I wanted to make sure was clear, that no matter what happens with the plant, there was no liability to the taxpayers for tax dollars going into this,” Brennan responded.
Annibale noted the town currently has $93 million in security funds: $43 million secured by the developers for the plant, $21 million secured by developers for the linear segment and approximately $29 million in the form of over contributions, which will be partially utilized to improve the existing infrastructure in the community.
“So when we update the schedules, we will very much have in mind the amount of money that’s required to subsidize the current residents for future hookup and that will be part of the discussion and part of the amendment to schedule D,” he explained, referring to a recent amendment proposed in the town’s official plan to address the construction of the plant.
“I know in many industries … that price increases are anywhere between 30 and 40 per cent, more than what prices were pre-COVID,” councillor Jamie Cheyne added.
“It’s unfortunate but everything seems to have gone up and we’ll just have to work through it with the developers.”
Smith asked if the town was any closer with the different levels of government pitching in money towards the project.
Mayor Allan Alls said the government is aware of the project but the town is still waiting on funding.
“I’m optimistic, but I can’t predict what they will do,” Alls said.
“There are other projects of course that they need to look at … so there’s lots of demand for money.”
