Hamilton arena reno cost more, took longer due to lack of oversight: Report

A newly released report has found that a lack of oversight and risk management led to significant delays and huge cost overruns in the renovation of Hamilton’s J.L. Grightmire Arena.

In a report released on Thursday (April 21), Hamilton’s city auditor provided some insight into some of the issues the project ran into and some recommendations as to how to prevent similar situations from happening again.

According to the report, the renovation project, which was initiated in 2016, was budgeted at $7 million and was scheduled to take place from September 2017 to September 2018.

In the end, the J.L. Grightmire’s renovation ended up costing the city $8.4 million (a 20 per cent cost overrun) and took an additional year to complete (the arena officially reopened to the public in September 2019).

The significant overruns and issues with the contractor prompted Hamilton City Council to seek out an audit to figure out where things went wrong.

Key findings from the Grightmire Arena audit determined:

• The level of oversight and timeline of actions in overseeing the work of the contractor were insufficient and not commensurate with the level of risk for the project
• There was a lack of a risk-based project management strategy and processes in place across the board to manage a high-risk capital project like Grightmire Arena
• The project was not managed strictly in accordance with the terms and conditions of the contract
• A vendor performance management process is needed to mitigate the circumstances of poor contractor performance
• Public criticism and negative exposure of the project was caused, in part, by a lack of timely and upfront communication with City Council and the public

“It is clear there were a number of compounding factors that led to the failure of the Grightmire Arena project in not achieving its intended outcome,” said Charles Brown, the City of Hamilton’s auditor.

“Identifying, understanding and learning from these findings will help the City move forward in a positive, effective and efficient way to avoid similar pitfalls in future capital projects.”

To that end, the City has been urged to reconsider its processes and approach to managing and sourcing capital projects. The auditor provided the following recommendations that the CIty has said it will adopt:

• Staff should manage capital projects with a risk management strategy and tactful, forthright communication
• Staff should make every effort to manage project requirements in accordance with the terms and conditions of the contract
• Staff should ensure proper vendor management and procurement policies are followed
• Staff should seek legal support and decisions that could be optimized in the best interest of the City
• Staff should work more closely to ensure effective deployment and oversight of external consultants
• Staff should review its process for approving settlements that exceed a predetermined threshold to ensure appropriate due diligence is being exercised

More information on the auditor’s findings and the report itself can be viewed on the City’s website.