To put things in perspective, we’re getting a new underground parking lot for almost the same price as a brand, new swimming pool. That is, of course, if the downtown swimming pool doesn’t go over budget which, given recent city capital projects, is almost a given.
No, that thumping you heard earlier this week wasn’t the sound of that massive Site-C turbine rolling through town, it was the collective sound of jaws dropping across the city at the revelation the George Street parkade project is going to cost just over $34 million. The new swimming pool, which went to a vote to borrow and spend, will cost about $35 million … $42 million if you take into account how much was spent on buying the old Days Inn and demolishing it. By the way, council still hasn’t engaged the promised rigorous public debate about how to spend $10 million from the feds and the province granted for the new pool … taxpayers likely wanting the borrowing amount reduced and the design and engineering folks who get 10 per cent, likely wanting it to be a $52 million pool.
But that’s a story for another time.
Monday’s revelation that city staff knew full well the George Street parkade was over-budget and didn’t inform city council was shocking, to say the least. Kudos to Coun. Brian Skakun for pushing, and pushing, for a report on the over-spending otherwise the extra $22 million in costs on a $12.6 million project would have never come to light.
It was contained in a line item on the city capital plan budget months ago. If Skakun hadn’t raised the red flag, it would have stayed there. In an interesting side note, when this originally came to light last fall and council was grilling then city manager Kathleen Soltis about it, she very directly told them that this information was in the capital plan presented to the finance and audit committee and they should have read the report then. Smack. Ironically, or perhaps coincidentally, she and the city ‘parted ways’ shortly thereafter.
As shocking as the budget overrun is and as shocking as the city failing to understand that a major project downtown might involve other infrastructure upgrades, which is a big reason when the costs have ballooned, is the fact city staff committed, to the developer, to increase the project by $8 million when they didn’t have the authority to do so.
There has been lots of talk about one of the problems is the delegated authority for the city manager … how much they can spend without going back to council for approval. It used to be the city manager could spend up to $1 million on a capital project without going back to council. At the request of staff, council agreed to change that to five per cent of the city’s operating budget … or about $9 million. Under the old system, theoretically, the city manager could have approved 20 $1 million overruns on 20 projects. The new system was designed to put a cap on how much the manager could OK.
For the record, the city manager used the delegated authority to the tune of $6.7 million on this project … some for the actual construction and some for the extra infrastructure work that nobody foresaw.
The kicker, though, is that this was while the work was being done and money being committed for the parkade project. That led Coun. Terri McConnachie to ask, point blank, whether the change in the city manager’s delegated authority request was to cover staff’s tracks on already committing to an $8 million bump to the budget. You see, at that time, the city manager’s delegated authority was only $1 million and city staff had given the developer the go-ahead for another $8 million. She was told ‘no’ and was satisfied with the answer.
Staff was also asked what would have happened if council hadn’t changed the delegated authority and staff asked for the extra $8 million and council said ‘no.’
Well, it would have been a worse mess than it is now. The developer likely would have sued the city, construction would have come to a halt, and it likely would have cost taxpayers more money for an incomplete project.
That’s why there needs to be an external investigation of this issue and public disclosure of the results.