Monday night’s City Council went exactly as rehearsed. Ms. Dugmore asked Council to OK spending in excess of $1.1M on the developer’s property. Tender 15. Council said Sure. Nothing new there. I have seen it many times before.
There was one piece of information that I did find interesting and it came out of the mouth of Ms. Dugmore. Evidently, when the winning bid on a tender comes in below the estimate, the difference is placed in a savings account. Not spent. A person may believe money in that account would then be put to use covering tenders where the winning bids came in over the estimate. That person would be wrong. Tenders that come in over 20% over the estimate can go through a “stripping” process where materials and elements are adjusted, deferred, eliminated completely or eliminated and added to the parks budget in 2011. The entire tender can also be differed to some later date. All these methods free up money. A lot of money evidently.
Prime examples are Tender 5 and Tender 6 The successful bidder for Tender 5 was $2M over the City’s estimates. Tender 6 came in around 100% over the tender estimate.
In the end, City Administration cut $1M of stuff out of that Tender 5. What stuff? Lots of stuff. Stuff that was important enough to be included in the project in the first place. Good stuff. That eliminated stuff plus a $1M taken out of contingency funds brought the tender costs into line with the estimate. I would have thought, with over $1M sitting around in the budget gathering dust , nothing would have been cut out of that tender. But they did cut. Tender 6 was differed. Not awarded. Until when? Who knows.
Monday night, Ms Dugmore said the $1.1M plus will come from savings realized on other tenders that came under budget,noting the city plans to stick to its original $47.5 million budget. Thunder Bay has about $1.13 million in unallocated funding for the project. $1.13M in unallocated funding , $1M in cuts to public facilities in Tender 5 and $1.1M plus cost for private facilities in Tender 15. Obviously, there was enough money to complete all of the public facilities in Tender 5. Enough money to avoid all the cuts that were made, but then there would be no money left to spend on the work required for site remediation on the developers property and that just could not happen.
Lets review. If tenders come in under estimates, that money is saved. That saved money, is not being spent on the tenders that are exceeding the estimates thus avoiding the need to make cuts to the public portions of the development. Cuts to the public portions of the development that are IN the budget. That money is instead spent on the private portion of the project. An item that is NOT in the budget.
Who is really running this project? Who is this development really for?