'Town lacked the required skills,' for arena project, North Rustico consultant finds

The cost of building the new Eliyahu Wellness Centre Canada Games Place in North Rustico, on P.E.I.'s North Shore, was underestimated right from the start, a consultant hired by the town has concluded.

And the situation only got worse as plans for a larger facility were developed, according to an executive summary of the report by the consultant MNP, dated Oct. 4 and now posted to the town's web site.

"The town lacked the required skills and experience to execute a project of this magnitude," the report concluded.

The provincial and federal governments also came in for criticism. As project funders, the report said, they should have reviewed the capabilities of the town — both administratively and financially — to complete the facility.

The town has blamed the COVID pandemic for the cost of the project rising from $9.9 million to $23 million, citing supply-chain issues, labour shortages and inflation.

But the MNP report said those issues accounted for no more than $3 million of the extra costs.

The initial estimate for the arena left out key items, such as a Zamboni and financing costs, and other costs were significantly underestimated, the report says.

Then, after the initial budget was approved, new plans were drawn up that made the facility 64 per cent larger than had been outlined in the 2019 feasibility study for the project.

The expansion was planned to accommodate speedskating events for the 2023 Canada Games and provide a new home for the Mount Academy, a private preparatory and athletic school.

That happened in the "absence of a governance plan to clarify roles and responsibilities, accountability, delegation of authority, documentation requirements, and communication expectations," the report authors wrote.

"We did not find evidence that this likely funding shortfall was clearly communicated to Council in 2020 in terms of scale and quantification. Instead, close to $6.6 million of construction tenders were issued and awarded, contractually committing the town to begin a project that it had not yet secured full funding for."

The business plan was not updated to assess the sustainability of a larger facility, the report adds.

In March of 2021, the town approved a motion to pay its portion of eligible costs tied to the facility, presumed to be $4.8 million. Representatives of the town and province decided at that time not to apply for additional federal funding, which meant that the town's funding obligation was actually $9.9 million.

Last month, the province authorized a $3.5-million, five-year loan to the town to help cover those costs.