TAKING SHAPE. Construction continued at Gravenhurst Centennial Centre in January where the swimming pool portion of the project, and the project costs, were picking up momentum.
GRAVENHURST – A Toronto Star story published today alleges that the company hired to manage the Gravenhurst Centennial Centre expansion overcharged by $1.8 million through inflated and fictitious charges and by claiming illegitimate taxes.
The investigative story, on the front page of today’s edition of the Toronto Star, claims the builder siphoned almost $1.8 million of taxpayers’ money through the project by taking advantage of weak controls in the Conservative government’s economic stimulus program.
“Dalton Engineering and Construction Ltd. used a sophisticated kickback scheme to extract the money from cement, steel and other suppliers working on an expansion of the Gravenhurst Centennial Centre,” the Star wrote. “Dalton was paid a fixed-price fee to manage construction of a recreation centre with pool and hockey rink but secretly insisted on hefty kickbacks from many of its subcontractors. Kickbacks from subcontractors — as much as 10 per cent of their individual contracts — helped hike the cost of a project that started at $18.7 million and is now dangerously over budget at $21.8 million and not yet completed.”
The allegations come following a public meeting where Gravenhurst taxpayers expressed disgust over a recently proposed 10 per cent tax rate increase.
“I’m a pensioner and a 10 per cent increase in my taxes hurts,” said resident Doreen Philip during a late-March meeting. “How did we get here? I have a want list, too, but I can’t afford them.”
In January, Ravi Rajpal, Dalton’s vice-president of estimating, said the company was still working within the budget, increased by council in July after a $2.9-million deficit was reported.
Despite what appeared to be a $2.2-million discrepancy in the total budget for all contracts and the amount they were issued for, representatives of both the town and the Dalton Company contended the project remained within the amended budget.
The town had tacked on a total of $3.4 million, including a $500,000 contingency, to boost its original commitment to the project of $6.4 million to $9,841,461.
According to the Star’s story, town officials confirmed several aspects of the Star’s investigation but said most of the Star’s questions could not be answered because until very recently Dalton had all project documents. The town is hiring a “cost consultant” to investigate the allegations.
According to the Star, Dalton officials called the information “inaccurate” and “outdated or incomplete,” but a former project manager for the company told the Star he was fired for refusing to participate in the scheme.
A receptionist at the town's municipal office said the mayor and staff were in a meeting to discuss the issue Thursday morning and could not comment.
A receptionist at Dalton's Toronto office said staff there were also in a meeting an unavailable for comment Thursday.
Read the Toronto Star's story here.