The Blue Mountains council is contemplating the possibility of hiring a third party firm to conduct an independent audit into the situation surrounding an infrastructure cost overrun of more than $19 million.
At its meeting on March 9, council passed a resolution directing staff to bring a report back in the near future outlining what options are available for a third-party review of a significant budget escalation for three major sewage infrastructure projects.
The resolution came in response to a delegation from local residents Tom Maloney and Paul Reale requesting that council appoint a third party to investigate and review the situation.
The issue dominated the morning portion of the council meeting and featured the formal delegation speaking to council and multiple members of council addressing the issue during public comments.
In late 2025, council was informed by staff that the budget for three major infrastructure projects – the Craigleith sewage lift station upgrade, the Bay Street upgrade and sewage forcemain project and the Mill Street pumping station upgrade – had escalated by more than $19 million.
The revelation of the cost overrun on the three projects, which were bundled into one project budget, has resulted in multiple actions by council to determine what happened and how to prevent such a situation from occurring in the future. After finding out about the budget escalation, council passed a series of resolutions asking for staff to follow up with explanations.
Additionally, council authorized spending $150,000 for a value engineering examination of the Mill Street portion of the project. The exercise has been completed and staff plan to deliver a report on its findings on March 30. CAO Adam Smith is also planning a report at the March 17 committee of the whole meeting that will address council’s questions about the situation.
Maloney and Reale urged council to go one step further with a formal audit by a third-party firm that would report directly to council.
“The town’s residents expect their tax dollars to be used responsibly and efficiently,” said Maloney. “We need a fix and we need it now.”
Reale told council that they have estimated that such an audit would cost the town $100,00 to $150,000. A similar price tag as the recent value engineering exercise. He said it is important to look at all angles to figure out what went wrong and fix any problems.
“There are systemic issues. There seems to be something that held back information,” said Reale.
Members of council expressed interest in the outside audit suggestion, but held off making an immediate decision. Procedurally, council can’t make spending decisions from a delegation. Instead, council passed a resolution asking for a staff report about the concept to come after the upcoming staff reports are presented.
“We need to find out how much (the audit) is going to be and what budget it’s going to come out of,” said Coun. Shawn McKinlay.
Coun. Alex Maxwell said council must get to the bottom of the situation to put the whole issue to rest.
“We don’t seem to be getting any conclusion on it,” he said. “We need to get this solved for the taxpayers and the public.”
Coun. Paula Hope said the past few months, since the overrun was reported have been “a very frustrating time for all of us.”
“We all share your chagrin, your pain and your anger with this,” said Hope.
By Chris Fell, Local Journalism Initiative Reporter
Original Published on Mar 10, 2026 at 08:38
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