Hamilton has struggled with road contractors for years, audit finds

A contractor flagged for poor-quality asphalt still managed to land 26 of 50 road-resurfacing jobs in Hamilton over seven years, winding up with $36 million worth of work.

And penalties for lacklustre results - including a $2,433 fine on a $3.4-million project in 2018 - aren't harsh enough to encourage better work, the city auditor finds.

Charles Brown told councillors Thursday that his office found that for many years, the city has experienced problems managing contractors and achieving the quality expected."

That's just one of many searing points of criticism in Brown's review of the municipality's effort to maintain and repair local roads between 2009 and now.

His office's Roads Value for Money Audit" not only dissects problems with quality assurance and bidding, but also finds fault with how the city evaluates road conditions, manages expenditures and selects projects.

A major thrust of Brown's report was that public works' $42-million-a-year program is geared almost entirely to rehabilitation and reconstruction," with only sporadic preventive efforts.

Such smaller interventions like crack sealing earlier in a road's life - better bang for your buck" - can help costlier work later on, he said.

But crack sealing only works on newer surfaces and many of Hamilton's roads have deteriorated to the point where it no longer makes sense economically.

Unfortunately, I think it's going to be a challenge and take many years to reverse this ship," Brown said.

In the past five years, the cost of road work was $203.7 million.

With this spending, it would take 240 years to cycle through the entire network, the audit report notes. Which we don't think is very realistic," Brown said.

But simply throwing more dollars at the massive public works file isn't the solution, either, he advised.

His office's 63-page report covers a number of issues:

• the city lacks a mature process" to track and report Hamilton's backlog of road work and needs to recalibrate its process to deliver effective decision support";

• public works doesn't use two crucial asphalt tests" to determine quality, which increases the city's exposure to poorly performing asphalt";

• rejectable samples" of asphalt from some contractors were as high as 68 per cent while the rate of acceptable" ones were as low as zero;

• the rate of borderline" samples over the years was concerning," and could reflect the fact that Hamilton is more tolerant of marginal performance";

• instead of contractors providing invoices, city staff generated progress payment certificates," a violation of the Construction Act;

• some contractors take their time to correct" deficiencies - in some cases an extraordinary amount of time" - despite warranty agreements;

• a small number of potholes are of a certain size that fall under provincial minimum maintenance standards and set time frames for repair, which means the vast majority" are left longer.

Dan McKinnon, general manager of public works, told The Spectator his department is alive to a number of these issues already" and working toward the report's 25 recommendations.

So we have started to put things in place to change things, but I think the audit as (Brown) presented it is going to provide a really good road map for us to move forward."

The recommendations are also wide-ranging:

• processes and methodologies for tracking and reporting the infrastructure gap" must be improved to offer more reliable information and effective support for decision-making";

• a more effective tool for reporting the state of road assets" with consistent criteria is needed;

• the roads program should develop a strategic plan to address its improvement opportunities, and to map out strategies for achieving long-term sustainability";

• measures to improve oversight to ensure that contractors will be held rigorously to account for substandard performance and to ensure quality deficiencies" are compensated and corrected are needed;

• the city needs strengthened" procedures for quality assurance" and testing procedures for asphalt mixes, cement and recycled materials.

Through its inquiry, Brown and his team found eight instances of large jobs that should have been subject to the city's tendering process divided into smaller contracts to duck under the $150,000 threshold of the more expedient roster system.

In one case, the bills for four purchase orders associated with one job was $546,640, a significant expenditure" that should have been subject to competitive bidding, Brown said.

To help solve quality-assurance issues under the bidding process, he recommended the city adopt a system akin to those of Ottawa and the Ministry of Transportation, for instance, that also gives weight to contractors' track record.

In those circumstances, the low bidder wouldn't necessarily win."

In an interview, McKinnon said he'd absolutely" like to implement such a blended tendering process.

We should be more open-minded about what other communities are doing," he said. We don't have to reinvent the wheel on this."

As it stands, the city can reject the lowest bid, but that could open the municipality up to legal action, he noted. The question is whether or not you can resist the claim if they decide to sue you about it."

McKinnon, who has been at the helm since 2018, also noted public works aims for more sophisticated asset management practices, in line with new provincial standards, to make better calls about infrastructure, including roads.

Councillors at Thursday's finance, audit and administration committee had mixed reactions to Brown's sweeping, years-long analysis.

Chad Collins asked why public works had abandoned crack sealing on roads, which was a regular practice before Hamilton amalgamated with the former towns in 2001.

It wasn't a recommendation. It just procedurally stopped," the longtime Ward 5 councillor said. I start to question some of the advice that we're getting from time to time."

McKinnon, who was previously water director, said he couldn't say what stopped that service given several public works personnel who dealt with roads had left in recent years. I just don't have the history on that."

The committee directed public works staff to report back on why the preventive measure was halted and what funding would be needed to reboot it in fall.

Brad Clark, who called the audit results disappointing," noting his upper Stoney Creek constituents have complained about the condition of local streets.

I'm seeing cracks and potholes, things that are developing on roads that are newly paved and that should not be happening."

John-Paul Danko said policies on paper can stipulate quality assurance, but contractors know they can get away with certain things" in certain municipalities.

Danko, who is a civil engineer, also suggested an audit of developers' road work in subdivisions. You have no idea of the poor quality."

But as far as city jobs go, political decisions play a role in whether preventive maintenance is part of the overall work plan, the west Mountain councillor said. You don't get a ribbon cutting for sealing cracks in roads."

Earlier this week, a majority backed Collins's motion to spend $30 million in expected federal funds equally among Hamilton's 15 wards to address road and sidewalk repairs.

During Thursday's discussion, Maureen Wilson reiterated her characterization of that decision as a political stunt ahead of the October 2022 municipal election, calling it a rush to spend" the money without considered analysis.

Then we're not going to get the best value for money and we're not going to be able to address those life-cycle costs, and we're going to perpetuate inefficiency."

In an interview, Collins said there's no suggestion" in Brown's report that we stop funding roads or cut back on roads. In fact, I think what the report highlighted was that there was a severe deficit."

Staff are expected to report back in six months and again by December 2022 on progress that has been made toward the audit's recommendations.

Teviah Moro is a Hamilton-based reporter at The Spectator. Reach him via email: tmoro@thespec.com