The City of Toronto is taking steps to improve its process for completing cost estimates for facilities management projects following an $80 million funding shortfall in the Union Station revitalization.
Going forward, city council approval of major capital projects will be required for each of four phases, from feasibility and conceptual design to tender and construction award, and their budgets. When possible, investigative testing including environmental assessments and historical research will need to be completed during the schematic design phase so it can be factored into the design budget. And, among further process improvements, staff will be required to report annually to city council on the status of major capital projects.
Councillor David Shiner, chair of the government management committee, asked the city’s chief corporate officer to report back on ways to prevent what happened with the Union Station revitalization from occurring again after he learned of the project’s funding shortfall through an October 2013 status update.
The project was initially projected for $670 million. It rose to $700 million for design need changes through the course of the project, and finally, after this latest request for a funding infusion, it has gone up to $780 million, he says.
“There was rationalization that was provided by staff for the problems,” Shiner says, “but that doesn’t justify telling taxpayers they have to spend more, so I asked for ways that we could provide complete cost estimates and understand the full financial ramifications of a project prior to us agreeing to do it.”
Richard Coveduck, director of facilities design and construction for the City of Toronto, says that the improvements largely reiterate an existing process.
“Most of the (city’s) small projects follow this process without some of the reporting back requirements,” Coveduck says.
Hundreds of state of good repair projects, which take less than three years to complete and range from a few hundred thousand dollars up to about $5 million, are completed annually without issue.
“What happens on the very large projects, Union Station being the prime example, is they tend to be totally unique,” he explains. “In the context of understanding these projects as part of the regular program, council and committees sometimes don’t have the full history, don’t have the full understanding of some of the constraints, because these projects actually bridge tenures and election periods.”
In the case of the Union Station revitalization, the previous city council approved the project part of the way through the design process (at approximately 60 per cent), before complete costs were known. This was done in order to meet deadlines tied to a funding contribution from the federal government. The report on process improvements requires the city to confirm funding availability and timing requirements before entering into joint venture projects, Coveduck notes, but staff are ultimately acting on the direction of city council.
The city has requested $20 million more from the federal government — a request that has already been rejected — and $15 million more from the Government of Ontario. In the meantime, the government management committee, and subsequently city council, has approved the full $80 million funding infusion on the condition that staff can deliver the rest of the project without further funding increases.
“I’m satisfied that (staff) made recommendations for change,” Shiner says, “I’ll only be satisfied with the process improvements when I see contracts go through under the new methodology.”
Michelle Ervin is the editor of Canadian Facility Management & Design.
