Another example of Meredith’s flawed accounting


by admin on June 7, 2009

The Editor,

Two weeks ago, in a Letter I applied the cost of the Chelsea Library on a square foot basis to the Meredith Centre square footage, which gave a cost for construction of $13.9 million. 

This did not account for the higher cost per square foot the centre is sure to result in, given its complexity compared to the library, which is mainly a shell of a building with little internal infrastructure and a mostly pre-existing foundation.

 So this week we will compare it to the proposed Wakefield community centre, which at 1,377 square meters is expected to cost $5.6 million.  Now the Meredith Centre is 4,320 square meters. That is more than three times the area of the proposed Wakefield Centre for less than twice the cost ($9.8 million according to the Chelsea Foundation and municipality).  Something is not right here.  So if we proportionally apply the cost per square meter for the Wakefield centre to the area of the Meredith Centre we would end up with a cost of $17.6 million for the Meredith Centre.  It would require borrowing at least an additional $7.8 million on the taxpayers tab which amortized over five years at five per cent would cost taxpayers an additional $6 million in interest for a cost of $13.8 million. 

Recall, the municipality has said that every dollar borrowed costs taxpayers $1.77 when interest is included.  If we add this to the $4.7 million already planned (borrowing the $2.7 million plus interest) we end up with a total cost to taxpayers of $18.5 million.  Divide this by 2,500 households and the cost per household is $7,400. 

So using construction cost per area (square meters) for both the library example and the proposed Wakefield community centre, demonstrates that the proposed cost of the Meredith Centre is grossly underestimated. All I am doing is presenting the math. Chelsea residents can decide whether they believe the municipality and Chelsea Foundation. I for one believe the math. And by the way, the Wakefield approach to funding the centre does not involve any municipal borrowing.

Bob Milko