Massive budget increase for Monarch water tower demo

Posted on August 5, 2020 by Sunny South News

By Nikki Jamieson
Sunny South News

Lethbridge County council approved additional funds for for a demolition project in Monarch.

During their regular July 23 meeting, Lethbridge County council received a request for a budget increase for the Monarch Water Tower demolition.

In 2018, upgrades were completed for the Monarch Water Reservoir and Pump Station project, and the old water tower was disconnected and taken offline. During 2019 budget deliberations, the old water tower was was presented as a Utility Capital Project, with the vacant land to be subdivided into five lots, serviced and eventually sold as residential properties.In the county’s 2020 Budget, demolition for the water tower’s demolition was budgeted at $100,000 from the Utility Reserve. However, the estimated cost for it has come in now at $255,000, more than double the original budget.

“At the time, when I did come up with the budget, it was based on a quote that we received when the original facility was going up in Monarch. I believe that quote might have been a little bit shy at the time, as MPE (Engineering) and myself and Craig (Praskach, supervisor of utility services, looked at the project a little bit further, we found that the scope was a little bit greater than we have anticipated,” said Devon Thiele, infrastructure manager for the county. “There’s some work that had to be done ahead of time, there was no drawings for the water tower so MPE had to go ahead and recreate the water tower, put together a bid package together, so there was quite a bit of work on their end to actually get it ready for tendering.”

Thiele noted that once the county services and sells the lots, they would likely break even on the project.

Thiele recommended that council approve an additional $155,000 for the Monarch Water Tower Demolition, for a total project cost of $255,000, funded from the Utility Reserve. The cost to create the five new lots is separate from this project.

One alternative to this would be to complete all the works but fund the shortfall from savings on other projects, as the Utility Capital Reserve balance would not be reduced any further, however, Thiele said a utility project like this should be funded through the Utility Reserve, as well there will be less grant carry over for future projects. Another alternative would be to only complete the demolition and leave the site works for Public Works, which would reduce capital costs by approximately $77,000, but Thiele said that typically, operations doesn’t contribute to a Capital Project.

Reeve Lorne Hickey asked what the vacant lot situation was like in the hamlet. Larry Randle, director of community services for the county, said that according to the Monarch Growth Study, in the fall of 2017, there was 17 vacant titles of residential land within the hamlet that could accommodate new housing, although it did not say if they were serviced. Thiele added he understood that there was plenty of capacity available for servicing lots. Coun. Morris Zeinstra said he was “puzzled” by the way administration went about the project, and asked why the county did not just put a tender up for demolition. Thiele said there was some aspects to the demolition he was not comfortable overseeing.

“There are a lot of safety requirements, the site is somewhat surrounded by residential homes, it’s a large tower,” said Thiele. “I wanted the professionals to be able to put together a specification package for the contractor that details exactly what they need to do. As well, I didn’t have any drawings of the tower, so the contractor can accurately bid on the project. Those details that the engineer puts in it, give the contractor the ability to give a much more accurate bid, when they are bidding on a project, and it narrows the scope, so we get the best price possible.”

The more vague the project, the more risk is involved, and with risk, Thiele said, the cost increases.

Zeinstra disagreed with Thiele’s reasoning, and said he believed it could have been handled differently and said it was “probably overdone”. County CAO Ann Mitchell said that as they don’t have an engineer on staff, sometimes they have to contract out this type of work.

“I believe this is more cost effective. I have been in municipalities where we have had an engineer on staff, and contracting out is normally cheaper,” said Mitchell. Coun. Tory Campbell noted that when this project has last came to council, there was an attitude of “let’s take care of this, let’s get it done”, and he still held that opinion, noting they were fortunate to have a reserve fund that can withstand the extra fund withdrawal.

Council passed a motion to approve an additional $155,000 for the Monarch Water Tower Demolition for a total project cost of $255,000 funded from the Utility Reserve, in a split 6-1 vote, with Zeinstra being the sole vote against.