This time last year, as reflected in the 2020 budget, the Town of Qualicum Beach told us that they needed to spend $3.8 million dollars to complete all of the remaining Memorial Avenue Phase 3 projects, and that all work would be completed in 2020. The biggest chunk of the budget allocated for this project (around $2M) was for the proposed roundabout at the intersection of Memorial Avenue and Hwy 19A on the QB Waterfront, a hotly disputed project pushed by the Town, not by its citizens.
Now they tell us the “real” number is not $3.8 million, but $5.55 million — and the bulldozers haven’t even started construction on the roundabout yet.
We have not seen a fulsome explanation yet from Town Hall for this out-of-control, financial dumpster fire. Is this incompetence or corruption?
This $1.75 million additional levy on QB taxpayers will be a tough pill to swallow, particularly by businesses and working homeowners already struggling to cope financially during an indefinite pandemic. Given the Town’s handling of this project to date, it is entirely possible that this may not be the last budget increase that the Town imposes on taxpayers for this folly (which Merriam-Webster defines as a lack of good sense or normal prudence and foresight).
Let’s review this project, first by the numbers, then the back story, and ending (for now) with analysis of a tendering process that beggars belief.
Here’s what we know, based on financial reports published in 2020 by the Town of Qualicum Beach:
- 2020 Capital Budget for completion of the multi-year Memorial Avenue – Phase 3 project = $3,800,000.
- Spent during 2020 = only $1,850,000 (year-end projection as of October 31, 2020).
- There has been no accounting provided to the public by the Town for what of the remaining work got done, and what didn’t get done, in 2020.
- Our eyes tell us that construction of the roundabout was not started in 2020 as planned.
- One would expect that the unspent remainder of the $3.8M budget from 2020 ($1,950,000 if you’re keeping a tally) would be carried forward to pay for completion of the delayed project.
Then, BOOM, the jaw drops. The draft 2021 Town budget is now asking for $3,700,000 to complete the project. That’s a $1,750,000 increase to the budget established just 12 months ago. And now the project is forecasted to drag into 2022.
One of the strangest things we observed — it appears that all this seems not to have been noticed by the public when they were asked to comment on the draft budget at the December 9, 2020 Council meeting. Or maybe QB taxpayers just don’t care about this 10 year project sucking ever more money out of their pockets. All we can do is report what we know, and let our readers decide what to do with this information.
The back story
As we first reported on the Memorial Avenue/Hwy 19A roundabout project in June 2020, it is difficult to penetrate the fog around a mega-project that has at least six discrete components, spread over at least six years, with little to no public reporting of expenditures by task and type, or reporting of large project overruns (money and/or schedule), all normally expected in a transparent, accountable organization, whether in public or private sectors. In municipal government that means transparent to the public; accountable to the public. Were the Town Hall a private business, shareholders would be calling for a forensic audit of this project that appears to have gotten out-of-control.
In our June story we did highlight the considerable pushback about the necessity of the roundabout, captured well by earlier written comments from these two QB residents:
Wendy Maurer: “I seriously question the need for a roundabout at the bottom of Memorial Avenue at Highway 19A. I am the closest resident to that intersection and am well aware of the pedestrian and vehicle traffic at that corner… I still don’t know what problems the Town is trying to fix with this solution. .. The Town should clearly explain the rationale for this and share the base data, guarantee in writing that pedestrian safety will not be [adversely] affected by this design.”
John Wood: “I agree with Wendy Maurer. I, too, seriously question the need for a highway roundabout at the bottom of Memorial Avenue at Highway 19A. It is a simple T-intersection where a set of traffic lights would work very well, and would integrate with the existing pedestrian crosswalk.”
At the time, we conjectured that the roundabout was going to cost about another couple of million dollars. Blush, how optimistic of us. It now appears that the actual remaining spend could be between 4 and 5 million dollars. Dollars out of our pockets. The real question is: Did Town engineer Bob Weir and finance manager John Marsh know this in the spring of 2020? If Weir and Marsh didn’t know, readers are justified in questioning their competence. If they did know, but didn’t tell the public, readers are justified in questioning their ethics.
In three subsequent articles, we highlighted the steadfast unwillingness of Town Administration and Council to stem spending on discretionary capital projects like the roundabout. We exposed disinformation being peddled including that grant money would offset our taxpayer burden (nope), and that COVID-enabled bargains could be had if we started construction fast (wrong, see disturbing procurement process below).
Disturbing procurement process
The Town eventually got around to issuing an Invitation to Tender (aka RFP – Request for Proposals) in November 2020 for roundabout construction. We note several disturbing irregularities in this procurement process.
The Invitation to Tender document bears neither a date nor the Town’s logo. The tender process appears to have been completely delegated to Koers & Associates, the engineering firm that did the prior design work and created the work specifications for the project.
Tender documents supposedly were not available to prospective bidders until November 18, 2020, with responses due less than 5 weeks later, by 2 pm Tuesday, December 22, 2020. This is a tight turnaround for a multi-million dollar, technically complex works project in a sensitive environmental site.
Contrary to standard public sector procurement policy, the tenders were not opened and announced in public. The Town chose to blame COVID-19 stating “Based on the current BC Ministry of Health recommendations to limit gatherings, these quotes will not be opened in public.” Meanwhile, the Town has no problem conducting mandatory Public Hearings on land use issues using Zoom, which easily could have, and should have, been used to achieve the longstanding minimum transparency expected of government procurement officials when opening public tenders.
However, the most troubling aspect of this procurement process is the compressed time between tender closing date and announcement of the selected vendor.
In the RFP document, the Town stated, “The proposed project superintendent, subcontractors, schedule of completion, size of workforce, proposed equipment, previous experience, and submission of suitable references from other municipalities on other similar size and type of projects will all be considered in the review and acceptance of the Tender. Social Value scoring will also affect the evaluation of Tenders on this project. The lowest or any Tender will not necessarily be accepted.” That of course is in addition to the detailed analysis of each proposal required to be done by Kevin Dougan and his staff at Koers to ensure that each and every technical engineering specification was covered by the proponent. To do otherwise is to simply invite a cascade of Engineering Changes, and expense and work delays, later in the project.
As mentioned above, tenders closed at 2 p.m. on Tuesday, December 22, 2020.
Q: How long did it take Koers and Town staff to review all three tenders, assess the specific components of each bid based on criteria above, recommend a preferred bidder, prepare documentation to support a request to Council to approve the recommendation — and to explain how the project could possibly proceed without having approved funding?
A: NINETEEN HOURS, from 2:00 p.m. Dec 22 to 9:00 a.m. Dec 23, when Council met and in a 10 minute meeting approved both the recommended bidder and the project itself, even though it did not have either an approved budget or public understanding and consent to the sudden increase in complexity and cost, including the requirement for an additional $1.75 million of taxpayer money.
That’s 19 hours by the clock, if these folks pulled an all-nighter. It was actually only FOUR working hours between tender close and winner announced. Readers will be excused if that doesn’t quite pass your smell test.
So, we went from Council wanting to get ‘er done in summer 2020 (to take advantage of the expected bargain bids from contractors), to not even issuing a tender until late November 2020, and then the sticker shock of needing another $1.75 million on top of the $3.8 million 2020 budget that was supposed to see the project to completion.
In an October 2020 article, we reported that, based on the Town’s August 31, 2020 Financial Report, apart from the postponement of discretionary projects that were only going ahead if grants were received (e.g. Airport improvements), the explanation provided by the Finance department’s Genelle Conn in her August report for the remaining $3.5 million reduction in expected 2020 capital expenditures is “the result of factors including the timing of permit approvals from the Province, availability of contractors, and restrictions from the Province regarding when we were able to perform work on the waterfront”. Nobody had bothered to consider these “factors” before August 2020?
It is now obvious that the Town was sitting on some undisclosed critical information related to provincial constraints on the roundabout — information that an open, ethical and transparent municipal government ought to have shared with its citizens and taxpayers.
The design surprise — now we’re getting some kind of elevated roundabout structure?
Without apologizing for his completely blown estimate about the cost and timing of the roundabout (remember the good old days when it was only going to cost about two million and be finished by June 2020), Town engineer Bob Weir, at the December 23, 2020 Council meeting, attempted to explain away the financial mess by saying, “The scope of the project got quite complicated. It was dictated by the Province that no road structure be extended past the natural boundary at the waterfront, at the seawall.” Well, duhhh. Weir continues, “So, it involves quite a complicated cantilevered structure to support a minor extension of the roundabout over the seawall. So that’s what has increased the price …” So tell us Bob, who is responsible for missing that tiny million dollar detail? Council didn’t even ask the question.
Sorry Bob, but that’s not the real cause of the sudden increase in price. It is unlikely that the province suddenly made up a new rule. Either the designers of the roundabout forgot to consult the province, or they actually did understand, months earlier, that there was a major design issue that would require a “complicated cantilevered structure” at huge additional expense. And they all kept quiet about it, until December 2020.
Evidence would suggest that the engineers have known for a long time about the design complexity of jamming a roundabout up against the shoreline. The proposals from all three bidders were above $3 million and presumably met the well-understood provincial requirements.
One axiom of project management is that whenever technical complexity increases, so does risk. A prudent project manager then makes sure the planned contingency, both in terms of budget and timeline, are increased. Hence, the $200,000 contingency that Weir and Marsh have baked into the project seems inadequate. Can someone tell us where Copcan, the winning bidder, has built a comparable cantilevered roundabout adjacent to the sea? On-budget and on-time?
This is exactly the kind of f**d-up municipal capital project that could benefit from a performance audit by BC’s Auditor General for Local Government (AGLG). However, we regret to report that the AGLG, led by Gordon Ruth, has recently been shut down by the current provincial government, without any hint of what oversight might be made available in the future. One commendable legacy of the AGLG is their recently published adaptation for local government of the Project Management Body of Knowledge (PMBOK) Guide, intended as a primer for municipal Council members.
Are Qualicum Beach residents and taxpayers content with being treated as suckers with deep pockets? Until shown otherwise, Town Administration and Council will probably continue to assume so.