The Boiler Files – Part 1

Research by Kevin Gelinas, Authored by Todd Williams and Wayne Lapaire

Turner Valley has a great community asset, the Dr. Lander Pool. It is a facility that gets used well by both local and regional families and people of nearly all age demographics. We strongly support the Town of Turner Valley operating the pool. Like most pools operated by municipalities, our pool is not a viable operation without the support of tax dollars. This is not unlike indoor ice rinks and recreation complexes in many locations. Repairs and upgrades to equipment and the facility in general will always be required. Citizens who provide taxes to pay the associated costs should be assured that their money is well spent.

This three part report deals with the replacement of the pool boiler that was completed in 2018. We raise a number of points that bring the expectation that money was well spent into question, specifically:

  1. Did Administration tell Council and the public the whole truth about the project in the Capital Project Update July 16, 2018?
  2. What was the procurement process used and why was the lowest bidder not chosen?
  3. Were all bidders treated in the same manner throughout the procurement process?
  4. Who was accountable for the faulty installation that caused a delay in the pool opening date for 2018?
  5. Why did the replacement of one boiler require a four boiler solution?

Background

January 22, 2018 Council approved money for a new boiler to heat the water in the pool. A presentation was made by Craig Beaton requesting $110,000.00 be drawn from the Pool Capital Reserve, General Capital Reserve or Amortization Reserve. The Request for Decision indicated that there was an urgent need for the approval so proper procurement could be completed and scheduled. March 10, 2018 was given as the “drop dead date”. If the replacement was not scheduled by then it would mean the pool would not be operational for the scheduled opening date for the season. Council approved and instructed administration to proceed.

Our interest was triggered by one of our residents with relevant knowledge. He was curious as to how a new pool boiler could cost as much as $110,000. His curiosity increased when he noted that there were 4 new roof vents on the pool mechanical room. To satisfy the curiosity, a written request was sent to the CAO June 19, 2018 for the list of installed equipment. The resident was told he would be required to submit a Freedom of Information and Privacy Protection (FOIP) request and pay the accompanying $25.00 fee. The Turner Valley Rate Payers Board supported the FOIP request. The information that follows is knowledge gained from that request which began on July 10, 2018.

Further relevant background is that the Town of Turner Valley has a formal policy (number MP.F.A.13.14) with the title Purchasing of Goods and Services that is intended to be compliant with the New West Partnership Trade Agreement (NWPTA). For this report to taxpayers, the part to note is that the policy clearly indicates that for purchases of goods and services at the amount that Council approved, a request for quotes needed to be issued on an electronic tendering system. At a minimum, we would expect that there would be an email trail or paperwork to document the Request For Quote (RFQ) process that is followed. This keeps the bidding fair for all parties involved and is intended to make sure that tax payers get the best value for the money. As stated in the NWPTA:

Generally, procuring entities must ensure that covered procurements meet four principles of:

  • Openness
  • Non-Discrimination
  • Non-Circumvention
  • Transparency

So how did the Town of Turner Valley comply with this procurement procedure when they purchased the goods and services for the new boiler?

The following is what was presented to Council on the July 16, 2018. It can be found on the Town of Turner Valley website.

  1. Dr. Landers Pool Boiler ($110,000.00)

Request for Quotes were distributed based on invite only and their pool industry experience rather than an open tender. 

Six (6) potential contractors were selected based on referral by the AARFP (Alberta Association of Recreational and Facility Personnel). These six contractors were invited to an on-site preview of the work.

A & S mechanical was chosen because their bid was deemed to be of best value. 

Western Matrix Systems  $98,000 with mid efficient boilers 

Reggin Technical    $137,999.00 with high efficient boilers

GM Mechanical   Declined

A & S Mechanical   $102,839.73 with high efficient boilers

Merv Maclean Mechanical  Failed to submit a quote

Botting & Associates   Declined

The information received from our FOIP request indicates that this report to Council is inaccurate and misleading. The following facts support this statement:

  1. Western Matrix Systems (WMS) quote was not delivered as part of the original FOIP requested documents, so we contacted the vendor directly to obtain the quote. They were happy to email a copy. What administration told Council and the public was that the quote was for Mid Efficiency Boilers and therefore was not acceptable. The actual quote shows that the $98,000.00 bid was for High Efficiency Boilers and in Red the $10,600.00 reduction for Mid Efficiency Boilers:

We respectfully submit the sum of: $ 98,000.00 Ninety Eight Thousand.00

(Taxes extra), as per scope of work discussion at site walkthrough.

To provide an automatic pool level control system – ADD $ 5,200.00

To provide a gas fired unit heater for mechanical room – ADD $ 3,600.00

To replace all existing butterfly valves with PVC valves – ADD $ 4,800.00

To replace existing mechanical room lights with new LED ADD $ 930.00

To use mid efficient boilers with copper heat exchangers – Deduct $ 10,600.00

To confirm the information a FOIP follow-up email request was made specifically for the Western Matrix Systems quote. On August 28, 2018 we received, via email, the same quote that had been delivered to the town. We found it interesting that in his email to us that accompanied the attached quote, Mr. Beaton felt compelled to add the following comment:

“Please note that Western Matrix provided a number of up sell items to influence the decision.”

So, in addition to misleading Council regarding the amount of the Western Matrix Systems quote, we were provided with a different reason why the quote was not considered, and this new reason was not in the Council presentation.

If WMS tried to “provide a number of up sell items” we feel that it might be a result of another procurement error made by Mr. Beaton. On February 8, 2018 Mr. Beaton sent an email message to Scott at WMS in which he gave away the budget amount. The email contains the following statement:

“I don’t have a scope of work really. ……… Since the capital project was quoted in the local paper, I will inform you that we have no more than $110,000 budget for this project”

So WMS knows Beaton has no scope of work but is willing to spend up to $110,000 and they add some items to the quote that they feel could be considered. The quote also states that the information is “as per scope of work discussion at site walkthrough.” It is very important to note that even with any additional items considered, the WMS bid still comes in lower than A&S who was awarded the contract. WMS included electrical in the bid whereas A&S did not. The electrical part of the installation was ultimately completed by Sheep River Electric who was paid separately by the town.

  1. According to the Administration report to Council a company named “Merv Maclean Mechanical” failed to submit a quote. An internet search for this firm name brings up a company named Low Cost Plumbing and Heating (LCPH) in Calgary. When we searched the company name in the documents received in our FOIP request we found an email dated March 1, 2018 with an attached quote from LCPH. The owner of LCPH is a man named Merv Maclean. He runs the business with his son Ethan. So, Council was again misled by stating that no quote was received. Somehow administration appeared to be confused between a bidding company, and the name of the company owner. How could such a mistake be made by competent staff?

So why did administration misrepresent this information to Town Council? They have the wrong name and state that there was no quote submitted. We thought that the quote might have been dismissed because it was submitted late. We requested the closing date for submitting quotes and Mr. Beaton provided the following in an email dated August 28, 2018.

Our question:

 If no RFQ or tender document was produced and sent to the respondents, then please provide proof of the closing date for submission of quotes.

Mr. Beaton’s Response

March 9th had been set as the closing date during the walk through verbally.

Therefore, the LCPH quote was not late. If the LCPH bid was not late, the quote should have been given proper consideration by administration. We found it very interesting to note what the price of the quote was.

They gave two apparently viable options:

  • High-Efficient Single Boiler for $62,000.00
  • High-Efficient Dual Boiler for $77,600.00

Compare this with the amount from the winning bidder which we received in an email sent by CAO Mr Sharpe on June 20, 2018. The email contained a computer screen shot (see below) apparently from the town financial software. It shows that the town paid $97,942.59 to A &S Mechanical for the 4 pool boilers and apparently $3,540.09 to Sheep River Electric for pool boiler supplies. Making a total of $101,482.68

For better viewing here is the link to the file on the media page. (click the link then double click the image for a larger view)

https://turnervalleyratepayers.ca/?attachment_id=354

So from the quotes discussed here, $62,000.00 appears to be the low bid. Tax payers paid a total of $101,500.00. That difference needs to be explained.

There is something else we feel the public needs explained. Why did Mr. Sharpe (our new CAO) on July 16, 2018 support the delivery of inaccurate and misleading information to Council and the public? As background to this question, consider the following timeline:

  1. June 19 – Taxpayer email to CAO requesting information about the replacement boiler installation
  2. June 20 – Mr. Sharpe emails a simple screen shot of accounts and for some reason additionally states that “these sorts of requests are too time consuming and not the best use of staff time.”
  3. July 10 – A resident submits a formal FOIP request for information.
  4. July 16 – Council and the Public are presented the questionable information for the pool boiler project in the Capital Project update.

From this timeline, it is obvious that the CAO knew that tax payers were concerned about the project. The written request for information was almost a month prior to the July 16 Council Meeting. This should have been plenty of time to dig into the situation to bring complete and accurate information forward to Council in an open and transparent manner.

This case can’t help but raise the question “How can the public trust any of the information that we are getting from this administration?”

The full documentation from our FOIP request can be found here: https://drive.google.com/open?id=1RGP1TUAhobA8IjDIOhlindA_jqteeiBc      Any duplicate documents are exactly how information was delivered to us from the Town of Turner Valley.

Part 2 will consider these two questions:

  • What was the procurement process used and why was the lowest bidder not chosen?
  • Were all bidders treated in the same manner throughout the procurement process?

Leave a Reply