Low DCC revenue, high bid force Sechelt to scale back road project

A shortfall in money from Development Cost Charges (DCCs) and higher than anticipated bids from contractors are forcing the District of Sechelt to scale back its plans to improve Trail Avenue.

The work, which was to include construction of a storm sewer trunk line and roadwork, including bicycle lanes, was budgeted at $6,997,900.

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A report presented to council Sept. 4 by manager of engineering services Sanath Bandara said a considerable portion of that budget was to come from DCCs, the money developers contribute for the public infrastructure upgrades that help support their projects.

That included $981,245 from road DCCs and $190,000 from drainage DCCs.

“However, due to the development slowdown, the anticipated DCCs were not received,” Bandara’s report said. He estimated the shortfall at $939,127.

The best bid for the project, from Maycon Construction, came in at around $8,283,347, including the cost of new streetlights and a contingency fund, an amount that would already have been over budget.

Bandara recommended reducing the scope of the project to focus on the section of Trail from Cowrie Street to Anchor Road, instead of Turnstone Drive as originally planned. Bandara said that would reduce the anticipated costs to $6,058,773.

Coun. Matt McLean said it was disappointing to have to consider changes to the project.  “We had a big opportunity here to create safe bike lanes from downtown all the way to Kinnikinnick [Park] between this and another project. It’s sad, but I guess that’s where we’re at.”

Mayor Darnelda Siegers also wanted to know if the project would still include adding lines for a potential reclaimed water supply, which Bandara said would be the case.

Coun. Alton Toth said he was concerned about an apparent trend toward project bids coming back higher than originally estimated by the consultants the district works with. 

Chief administrative officer Andrew Yeates responded that it’s standard practice to review outcomes with the consultants. “It’s a very volatile market… We’re in a mode right now where it’s not competitive so nobody’s trying very hard and we’re not getting many bids.”

With council’s approval to reduce the project scope and negotiate with Maycon, the anticipated start of construction is late October, with the work to be finished in July of 2020. Bandara said if other funding sources are found the remaining section from Anchor to Turnstone can be added as the work progresses or at a later date.

DCCs aren’t the only area where the district’s revenue stream is not meeting expectations so far in 2019.

The district’s financial update for the second quarter also noted a drop in “licence, permit and fee revenue,” which includes building permits, and “planning and engineering service agreement revenue.”

According to a release from the district, the decrease was anticipated and an amendment to the Financial Plan Bylaw would be coming forward to allow a transfer from the Development Equalization Reserve to offset the reduction in revenue.

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