How much will it cost?
The tender process for the Fire Hall construction project reached a key milestone with the ITB stage, or Invitation to Bid, closing on February 16th, 2016. Four compliant bids were received by the CVRD with Island West Coast Developments (IWCD) from Nanaimo being the lowest bid at $2,175,526 and Yellowridge Construction from the mainland being the highest at $2,545,500. Overall, the three lowest bids were from Vancouver Island and all were within $215,000, which suggests it was a close bidding process.
In the later stages of the design process, the Cost Consultant provided a building construction cost estimate of $1,850,000 for the project and therefore the CVRD proposed a $1.9 million figure for the construction of the fire hall in the 2016 financial plan. As all the bids were over this budgeted figure, the architects SUA were tasked to determine the key contributing factors in the higher construction costs. After a discussion with the four construction companies involved in the bidding process and with the Cost Consultant, SUA determined the higher costs were attributed to the areas of drywall, mechanical and electrical systems, largely due to the recent drop in the value of the Canadian dollar. Further cost increases regarding the civil worksare attributed to increased competition for local trades with other local capital projects.
In consultation with CVRD staff and the HIFR design committee, SUA Architects met with Island West Coast Developments to engage in a building construction cost review process. Through this process, it was determined that there are cost savings in some areas of building construction and further costs in areas such as permits, administration, communication, potable water system, and project management.
Therefore, CVRD staff proposed the following recommendation to the Hornby Island Fire Hall Select Committee and to the CVRD Board: "THAT as a result of a competitive procurement process, a contract be awarded to Island West Coast Developments Ltd. for the Hornby Island fire hall construction project in an amount up to $2,175,526 plus applicable taxes pending final adoption of the financial plan bylaw at the March 24, 2016 board meeting.
How will it be paid for?
The project costs will be paid for by the taxpayers of Hornby Island and supplemented by available funding grants from other levels of government. Based on the current contract cost of $2,175,526 million, $230,000 in grants will come from the Community Works Fund (Gas-Tax), $1.6 million will be borrowed from the Municipal Finance Authority at a low interest for 20 years, and the balance of project costs will come from Hornby Island fire protection service capital works reserves. These reserves were initially budgeted for other Hornby Island fire services projects such as a training facility for the fire hall in 2017, however, it was determined that these reserves were required for the fire hall project to move forward. Note that the $1.6 million loan received electoral assent through a referendum in 2015.
What are the expenses to date?
The table below shows the expenses of the fire hall project from 2008 to present. Funds for these expenses are supplied by the Hornby Island fire protection service budget. This table will be updated periodically as the project continues. If you have any questions or require further information contact us through email.
|Hornby Island Fire Hall
Invoices processed to September 25, 2017
|Management & Supervision during construction ‐ contractor
(CVRD management salaries are not directly attributed to the capital project)
|Cost of items removed from/outside of the construction contract:|
|Well drilling and installation||$29,493.35|
|Construction expenses processed to September 25, 2017:|
|Construction costs paid to Island West Coast Developments||$2,059,356.63|
|Cost of remedial actions||-|
|Construction ‐ other vendors||$20,506.34|
|Projected financing costs:||$320,000.00|
|Interest as per 2017‐2021 Financial Plan is budgeted at a 4% conservative interest rate over a 20 year term.|
|The actual interest rate and term will be determined at the completion of the project when we enter into long term debt. Current Municipal Finance Authority indicative interest rate for a 20 year term is 3.48%.|
|Annual principal and interest for the firehall project has been budgeted in 2017‐2021 at $123,545 per year.|