The price of building materials is wreaking havoc on municipal budgets

For example, a bridge north of Fergus, near Guelph, Ontario, needs to be replaced, but Center Wellington Township councilors voted to put the project on hold.

The bridge that spans the River Irvine on the First Line road was built in 1922 and was closed in July 2018 due to severe structural deteriorationcan we read in the municipal documents.

The municipality had put out a tender for the replacement of the bridge, but only one company responded and the estimated cost was much higher than what the municipality had budgeted.

According to Mayor Kelly Linton, it is disappointing to have received only one offer.

I hope [que les employés municipaux] will be able to relaunch the call for tenders as soon as possible. And I hope it was just an isolated casehe told The Canadian News.

I hope inflation will stabilize a bit. Then we can see better prices in the future, a little more competition Mr. Linton said.

Mr Linton fears prices will rise further, but the council rarely goes ahead with a project when there is only one bid.

Mr Linton says a number of reasons why the prices are so high have been given. The increase in the cost of materials is one of them.

In addition, some companies have difficulty finding workers. It may also explain why only one company is bidding on the project, he says.

What happens at Wellington Center is felt in Guelph as well.

Mayor Cam Guthrie said the city is considering putting some projects on hold, including construction of a bridge over Speedvale Avenue and a planned new recreation center in the south end of the city. The City had budgeted $80 million for the recreation center project. However, the lowest bid was just over $121 million.

Whether it’s a recreation center or a bridge or a road, if the costs are too high, we can’t just shrug our shoulders and say, “Oh, well, we’ll just move on”he told The Canadian News.

We need to do what is fiscally responsible, which is to pause and reassess how to move forward.

Guthrie, who is also chair of Ontario’s big-city mayors’ caucus, said he hears similar stories from his counterparts in the province.

This is something that municipalities are really starting to have trouble withhe said.

On Monday, the Township of Wellesley begins construction of a new recreation center in Linwood. By June 2021, the township had established a budget of $22 million, and the province had agreed to contribute $16.1 million.

An architect's sketch.

This is an artistic interpretation of what the entrance and public art display of a new recreation center in South Guelph might look like when completed.

Photo: Courtesy of the City of Guelph

In December 2021, the township approved a new budget of $27.2 million for the same project. Last week, Mayor Joe Nowak said the cost had already increased by another million dollars due to the cost of materials.

This was factored into our contingency and the contractor locked in pricing early in the design phaseMr. Nowak said.

Since the project received provincial funding, we have to move onMr. Nowak said, even as costs rise.

And when it comes to a federal or provincial grant, municipalities are also required to complete the work within a specified time frame, said Sue Foxton, Mayor of North Dumfries.

Municipalities are not allowed to run deficits, so these cost overruns must be covered somehow.

According to Guthrie, money set aside by councils, in what are called reserve funds, can sometimes be used to cover these cost increases.

We don’t want to have to [prendre cet argent chez] taxpayers. No municipality does, he said. Instead, they can turn to the federal or provincial governments for help.

Of course, we would like the higher levels of government to help us in this regard. And that’s something that, not only from the perspective of the mayor of Guelph, but also from the Big City Mayors’ Caucus of Ontario, we bring to the table of senior governments to try to help fund us.

Both Mr Guthrie and Mr Linton said that putting projects on hold poses the risk that the price will continue to rise and become more expensive.

I think we’re in kind of an inflationary bubble right now and we’re hoping that the tenders will come back and there will be some competition, which will bring the prices down to a level closer to that of our budgetdid he declare.

With information from The Canadian News

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