City Saves $1M on Latest Tenders
Long tender window, local bids lead to significant savings for taxpayers.
During budget deliberations council heard that one of the biggest expense for 2024 would be the long overdue replacement of the Eugene road bridge in Verner. Staff had budgeted $2M to replace this bridge.
Municipal estimates and the tender process has come under a lot of criticism over the last year. In 2023, the city awarded a contract for the Field Covered Rink for $1.138M ($400,000 over budget) while passing on a bid that appeared to be much lower. Questions also arose when the out-of-town contractor who was awarded the Field projects was also hired to install two small canopies at the Verner arena for $95,549.
The Field Covered Rink tender raised a number of questions about competitiveness. The tender was only open for a very short window (14 days) and when the bids were read on video, the enveloppes had already been opened, seemingly violating standard procedure.
This time when staff issued the tender for the Eugene Road bridge they allowed for a much more generous window of application (26 days).
This resulted in six submissions being made with the lowest being local contractor Ed Seguin & Sons coming in at $649,412. When the bids were shared on video at city hall, all enveloppes were appropriately opened on camera. Five other bids came in between $800,000 and $1.2M.
$1M saved from Municipal Budget
At last week’s meeting, council received info on other tenders that were awarded in the last month which shows serious issues with the city’s budgeting procedures.
A project on North-South road was budgeted to cost only $7,000 but the lowest bid came in at 10x that amount. A culvert replacement on Levac road was budgeted at $100,000 but will now cost $249,000. Almost every capital project tender came in with prices wildly higher than anticipated.
However the incredible savings on the Eugene Road bridge more than compensated for these miscalculations.
Overall, the city is set to save just under $1M from their capital budget in 2024.
In February, council finalized a 4.67% tax increase for this year. This newly discovered savings would be enough to completely eliminate this increase and leave the tax rates at 2023 levels (which were raised nearly 5% from 2022 already). Coupled with the fact that our region is ending a historically mild snow season resulting in additional cost savings to our snow removal budget, many are wondering if a back-to-back 5% tax increases are warranted.
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