On the flipside, when the city doesn’t open tenders to the private
sector, there are no competing offers and, thus, the need to be com-petitive
Other potential risks for private sector companies on successful
• Negotiated contracts include a specific date for a project’s
completion. If that date is not met, the contractor is required to
pay a penalty. Other fines come into play if the completed work
doesn’t meet paving specifications in the contract.
• Private contractors normally operate with 14-hour shifts. City
crews often don’t run that long.
• Private contractors assume all costs when their crew is idle
during weather delays, etc. The city would assume no lost costs.
“The city is playing by an entirely different set of rules and they
can do that because there’s no risk attached,” said Lipp. “Or if you
look at it the other way, the risk is entirely on the taxpayers. There
are a lot of things the average taxpayer isn’t aware of.”
Added MacKay: “One of the problems that happens when you
have bureaucrats taking over this sort of process is they don’t deal
with that risk threshold,” he said. “If you’re a businessperson and you
consistently miss on your bids, you’re going to lose not just your job,
you’re going to lose your whole business.”
Further adding to the frustration of the SHCA is the City of Regina
operating its own asphalt plant. It is the only municipality in the prov-ince
with such a luxury. The city sells its recycled material like crushed
concrete and crushed asphalt concrete below industry rates at about
$6 less per tonne, which includes a 20-per-cent markup.
Revenue generated from the reselling of materials has helped
to soften the blow when the city learned it would receive less
funding from the provincial government this year – nearly a
“If the city is truly looking at finding efficiencies, it would be bet-ter
served in doing multi-year tendering to the market, decommis-sioning
its asphalt plant and start putting out work for supply and
installation as opposed to trying to do it themselves,” said Lipp.
Regina city councillor Andrew Stevens sees no issue in the city
operating its own asphalt plant and believes it’s actually a benefit
“I was surprised by the SHCA’s response that we shouldn’t be
doing that,” Stevens told the Regina Leader-Post in a recent article.
“I think that any resident would encourage the city to raise revenue
that isn’t through property taxes … The city should be generating
revenue and should be finding new ways to generate revenue that
isn’t property taxes.”
Stevens also questioned the logic of a city not competing with pri-vate
“Should all of our HR and payroll be outsourced because it com-petes
with private industry?” said Stevens. “Considering what peo-ple
say about roads in Saskatchewan, this is what we do and you will
be hard-pressed to find anyone who suggests we do it less effective-ly.
What the city does is a very effective means of delivering services
and that is partially through this plant.”
Lipp says there has been a lack of transparency with the city and
associated costs for projects. She says if the city would reveal pric-ing
for the work it does and provide evidence that it can deliver a
32 Think BIG | Quarter 4 2017 | saskheavy.ca