A new report into the multi-million-dollar Ma-Te-Way Centre expansion project says the Town of Renfrew council failed to properly scrutinize the controversial and costly venture.
The expansion of the Ma-Te-Way Centre was originally expected to cost $18 million, but the final report prepared by WSCS Consulting into the decisions that led to the project’s cost overruns says the development has ballooned to $38.7 million and will leave Renfrew taxpayers footing the bill for decades.
Renfrew approved a process to replace the aging recreation centre to build the expanded Ma-Te-Way Centre, which included the addition of a second ice pad, a walking track, gymnasium, fitness centre and multicultural hub. The town obtained more than $11 million in grant funding from the federal and provincial governments in 2020 and awarded a construction contract in 2021.
The original budget was $18 million. The report states that the budget was unrealistic from the outset.
“Even though every tender and proposal came in over budget, the Town insisted on presenting it based upon its set budget as if to say that it did not believe the contractors or consultants. This was a major failing and likely resulting in the loss of $7M in potential grant funding. Even though estimates showed that the project would likely cost $23-25M, the Town submitted the grant application for $16M and received $11.8M in funding.”
The report says a lack of oversight by the town council and the project director led to flawed financial strategy and analysis.
“Council placed an unreasonable and ill-informed amount of confidence in the former Director of Parks and Recreation without understanding the implications at a time of organizational restructuring. Consequently, Council allowed the Director to make decisions with respect to design, scope, partnerships and construction tenders without approval or oversight. Weak internal controls allowed for inappropriate transactions to be approved, conflict of interest and Town policies, code of conduct and bylaws violated,” the report says.
“Council did not insist on regular written reporting, did not challenge the Director nor the Treasurer on key financial statements/presentations nor did it require variance and risk analysis be undertaken, leading to cost overruns. Presentations went so far as to imply there would be a ‘surplus’ created by debenture funds (a liability).”
The project is now 115 per cent over budget, according to the report, coming in at an estimated $38.7 million — another $3 million higher than figures provided in late 2023.
The report by WSCS Consulting says the price tag is an estimate, with the full costs not known as it’s not “fully complete and the facility is not fully occupied.” It also notes interest costs will add $15 million to the cost, and there is about $5 million in “unfunded expenses.”
“The Town’s taxpayers will be bearing the financial burden of this project for the next 30 years,” the report states, adding the cost overruns will need to be financed with debt and taxes.
“The Town will need a strategy to become open, transparent and accountable to its taxpayers and demonstrate it can and will make the changes needed to ensure that a failure of this nature never happens again.”
The report makes 46 recommendations, including implementing a project management model requiring monthly written reports to council, creating an audit committee and hiring a professional project manager for major projects.
“In short, some stakeholders wanted the Ma-te-Way Expansion to proceed and policies, processes and laws were ignored to make it happen without regard to what it would cost,” the report says.
In April, council voted to refer the third-party review into the expansion project to the Ontario Provincial Police.
On March 26, council voted 5-1 to call on Mayor Tom Sidney to resign, with council expressing concerns over the mayor’s handling of the expansion of the Ma-Te-Way Activity Centre. Sydney vowed to stay on the job. Before being elected mayor, Sidney spearheaded the expansion project for the Ma-Te-Way Activity Centre as chair of the recreation committee.
With files from CTV News Ottawa’s Josh Pringle