City council voted unanimously tonight to award Ball Construction the $28.8 million contract to expand the Preston Memorial Auditorium despite a final cost that comes in 20 per cent over budget.
Ball's bid came in $1.5 million over the original budget for the project, which was set at just over $27.3 million in 2022.
Estimated additional costs of $4,207,650, however, are pushing the total budget to $33,112,172.
The expansion project includes the addition of an NHL-sized ice pad, seating, changing rooms, washrooms, multipurpose rooms and office space.
Council had already discussed three bids for the project during a closed meeting Nov. 7. Staff recommended going with Ball Construction, the lowest of three bidders, and council directed staff to look for ways to cut costs.
Tonight's decision during an open council meeting ratified that position.
"COVID has really done a job on the construction industry, unfortunately," Coun. Mike Devine said. "We started out at $28 million on this, now we're up to $33 (million),"
"With future projects like this, we're going to have to be careful. I mean this is quite a jump percentage wise, it's quite a jump from what we estimated.
"I understand we have to pay it and this is the route we're going but I would just caution in the future we need to be a little more careful," he said.
New Ward 1 Coun. Helen Shwery was the lone council member seeing the numbers for the first time and didn't want to take what was presented at face value.
She asked instead for a break down of fees not included in Ball's bid.
Project lead for recreation services Shane Taylor said he couldn't provide a full breakdown, but explained that the more than $4.2 million in additional "soft costs" include things like permitting fees, staffing costs, communications fees, a transformer, consultant fees and hiring project manager Colliers for about $350,000.
Colliers has been tasked with working with Ball Construction to achieve savings wherever feasible that don't substantially alter the building program or building performance from the project specifications.
Coun. Ross Earnshaw wanted to know the impact of taking on debt for the project since the city is coming close to its borrowing limit with this and other projects in the queue.
The additional $5 million needed for the job will be funded through debentures, including tax supported debt of $3.6 million and assessment growth debt of $1.4 million.
Chief financial officer Sheryl Ayres explained the city's own policy to limit debt spending.
It sets the limit at 10 per cent of source revenues and up to 15 per cent if the debt is growth related.
Including debt to fund the Preston Aud and the new sports complex, the city's debt capacity ratio will reach 13 per cent by 2027, she said.
"So we are getting close to that upper limit of the policy that's been put in place by council," she said.
But Ayres also noted how conservative the city's debt limit is compared the 25 per cent the province imposes.
The higher cost of the Preston Aud will add a 0.33 per cent increase on next year's tax levy; the equivalent of $5.54 for the average Cambridge household.
At the urging of the mayor, Ayres also explained how dividend payments from the city-owned utility Grandbridge Energy are invested into a reserve fund to offset some tax supported growth payments and to mitigate the impact on the tax levy.
Coun. Scott Hamilton agreed the tax levy increase wasn't enough to warrant a no vote on the project.
"If it's an extra $5 or $10 on a tax bill to get an NHL sized rink, to get the changerooms that the Rivulettes came in and asked us to provide them so many times," it's worth it, he said, noting how the cost "comes with tremendous benefits" that include investments in sports and putting Cambridge on the map for hockey.
"It's hard to put a dollar amount on these, five years from now, 10 years from now, 20 years from now in terms of what they're going to mean to our residents."
Mayor Jan Liggett agreed. She said building more opportunities for the community to get involved in sports and recreation is an upstream investment that helps ensure the next generation of children are kept physically and mentally active.
"It's not just what we're providing here in bricks and mortar, it's what we're doing for the future of our community as far as the children goes," she said.
Coun. Corey Kimpson pointed out how the expansion will also provide space for the Preston Heights Community Association and its youth programming.
"I'm excited to see everything that's going to be available and offered to our community with this," she said.
