There were warning signs more than a year ago that the London Normal School might run over budget, a CTV News investigation uncovered.
This week, council approved borrowing $2 million to keep the project on schedule. But could the extra costs have been avoided?
According to a July 2014 tender document, contractors asked specifically who would be responsible for a cost overrun because design information and trade pricing had not been provided by city hall staff.
This past Tuesday, Coun. Harold Usher said he hoped staff would do a review of this project to determine what exactly went wrong.
CTV News has done its own review of the project tender documents and uncovered a red flag raised by contractors a year before work started.
Contractors asked, "If the budget of $6,825,000 is incorrect for the scope of work you wish to undertake, whom is liable for the overrun cost? Form 1 of the bid submission is implying that the contractor is responsible...without being privy to any design information or trade pricing."
But rather than clarify whether the contractor or city hall would be responsible, city staff instead reassured that the scope of work would be tailored to fit the budget.
"The intent of this RFP (Request for Proposal) is to hire a construction manager/general contractor to work in conjunction with the consultants to provide a design that will be constructed for the budget allocated to this project," it said in the RFP addendum from city staff.
But that didn't happen. The design and trade pricing weren't available until May and July of this year, which account for much of the $2 million overrun.
Coun. Phil Squire feels staff should have paid greater attention to the concern raised by the contractors.
“I am not surprised that an experienced contractor would raise those concerns because the key to any project is the scope of the project…and what the tenders are going to come in at,” he said.
According to the dates on the documents, city hall provided that answer to the cost overrun question four days before Tonda Construction signed the form which included a total guaranteed maximum price of $6.85 million.
Attempts to speak with the city treasurer Friday were unsuccessful.
The contractor has agreed to cover $34,000 additional dollars of the overage - less than two per cent of the total amount. Taxpayers will borrow the rest.
Squire says council was between a rock and a hard place, or specifically a construction contract and a lease agreement with the YMCA starting June 1, 2016.
“If we went down that road of litigation, sure we might ultimately be successful, but we would be losing all that lease money that we could have got in the interim,” Squire said.
Based on the lease agreement with the YMCA and the additional $2 million that will be borrowed, the project won't cover its cost until 2022.
