Smiths Falls council is taking another look at the scope of its proposed new Public Works Operations Centre after several councillors raised concerns about the project’s $10.46-million price tag and the amount of debt the town would need to take on.
At a special committee of the whole meeting Aug. 31, council considered a staff recommendation to award the construction contract to Bircon Canada for $9.38 million, including the town’s net HST.
Bircon submitted the lowest of 11 compliant bids received for the project, with tender prices ranging from $9.216 million before HST to more than $15 million.
The construction contract is only part of the overall cost. The project budget also includes $264,866 for detailed design, contract administration and inspection by IDEA Inc., $400,000 for furnishings and a $415,000 contingency, bringing the total projected cost to $10.458 million.
The town expects to use about $1.29 million from an insurance settlement following the February 2025 fire at the existing Public Works garage, leaving approximately $9.17 million to be financed through debt.
Mayor Shawn Pankow told council that, using an interest rate of slightly more than four per cent and a 30-year financing term, the debt could result in payments of about $44,000 a month, or roughly $525,000 annually.
He estimated that could translate into approximately a 2.3 per cent tax increase in 2028.
Pankow said he supports replacing the existing facility but questioned whether all elements of the design are necessary.
He pointed to individual offices, furnishings and the proposed mechanic’s bay as areas council should examine before committing to the full cost.
“I think we absolutely have to do something,” Pankow said, noting the town cannot continue operating indefinitely from its current arrangement. “But if there’s ways of shaving that down, I would appreciate the opportunities, too.”
Coun. Steve Robinson said he was having difficulty supporting a project approaching $10 million and had hoped the final cost would come in closer to $7.5 million to $8 million.
He said council has an obligation to consider the financial pressures residents and businesses are already facing.
“Every additional million dollars we spend has consequences,” Robinson said. “Somebody’s got to pay for it.”
Robinson said he supports replacing the existing garage, but added that his eventual support for the project should not be interpreted as an endorsement of the price.
“I believe it’s a significant amount of money, and I believe taxpayers have every right to expect council to question a price of this magnitude,” he said.
Coun. Chris McGuire was more critical of the building design itself.
McGuire, who has been vocal about the price tag since the onset of discussions, said he accepts that the tender process produced competitive pricing for the project as designed, but questioned whether the town needs everything included in that design.
He pointed to 11 offices, two lunchroom areas, separate washroom facilities, a mechanic’s office and repair area.
“We’ve never had a plan to hire a mechanic, we’ve never had any kind of strategy to expand for this, yet it’s here,” McGuire said.
He suggested the town investigate shared workspaces or cubicles instead of individual offices, as well as whether some of the building’s operational areas could be consolidated.
“My problem comes down to how the building’s been designed,” he said.
McGuire said he would like the consultant to work through a value-engineering exercise to determine whether $1 million or more could be removed from the project without compromising essential elements.
Public Works and Utilities Director Paul McMunn defended the tender results, noting that the town received 11 compliant bids and several were clustered within a narrow range.
“This is what the market is saying this cost is,” he told council.
McMunn also cautioned against directly comparing the Smiths Falls project with Public Works facilities in neighbouring municipalities.
Several councillors referenced Montague Township’s newer facility and Perth’s planned Public Works building, but McMunn and IDEA Inc. representatives said the buildings differ significantly in construction type and layout.
Smiths Falls is proposing a steel and concrete facility with roughly 4,000 square feet of administrative space, while Montague has considerably less office space.
IDEA representatives told council administrative construction typically costs about $400 to $450 per square foot, compared with approximately $250 to $300 per square foot for garage or warehouse space.
The Smiths Falls facility would include about 18,610 square feet in the main building, as well as separate cold-storage space. The plans include offices, a boardroom, lunchrooms, service and repair areas, a wash bay, change rooms, showers and storage areas.
McMunn said the design was developed not only to replace the fire-damaged garage, but to address long-standing deficiencies and provide space for future municipal needs.
One possible reduction would be the separate cold-storage building, which staff estimated could represent about $700,000 of the project cost.
Councillors, however, showed little appetite for removing it.
Community Services Director Stephanie Clark told council the town is already facing a serious shortage of storage space and expects to take the deteriorating Ponderosa building out of service.
She said equipment is currently stored throughout town facilities and, in some cases, outside.
“We are in fairly dire need around it,” Clark said.
McMunn also defended the proposed wash bay, saying vehicles currently have to be washed in conditions that create ice and water problems during the winter.
He said the town’s heavy equipment is increasingly expensive to replace and proper washing is part of protecting that investment.
The mechanic’s bay could be reconsidered, he said, although a future municipal mechanic could potentially service Public Works, Utilities and Community Services vehicles, but not specialized vehicles like police and fire vehicles.
The proposed fuel depot could also be reviewed. McMunn said the town has seen fuel pricing roughly 10 per cent lower than retail through bulk purchasing and argued the depot could produce long-term operating savings.
The discussion eventually turned to how much could realistically be saved.
McMunn said small changes to finishes and furnishings could potentially save several hundred thousand dollars, but would not reduce the project to the $7.5-million range discussed earlier in the meeting.
To reach that level, he said, council would likely have to consider removing most or all of the administrative wing.
IDEA representatives also cautioned that major changes could require a significant redesign and potentially a new tender.
The consultant told council that smaller scope reductions could be negotiated with the lowest bidder, but major changes worth $1 million or $2 million would likely be better served by another competitive tender process.
That could delay construction until spring 2027.
Several councillors ultimately backed away from setting a specific savings target.
Coun. Peter McKenna said he wants staff to demonstrate that council has explored reasonable savings without undermining the integrity of the project.
“I think we’re really close here, but I think the price has to come down,” McKenna said.
Robinson said he was also no longer prepared to insist on a specific $7.5-million target after hearing the discussion.
Council agreed to give staff and the consultant another week to identify potential savings and return with options before a final decision is made.
Chair Dawn Quinn said the additional review would allow council to demonstrate it had examined the project carefully before committing taxpayers to the expense.
“You might look very, very hard and you might come back to this table and you might say, ‘We can’t find any savings. This is what we have to pay,’” Quinn said. “But at least we’ve looked at it.”
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