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Council seeking legal review of over-budget George Street Parkade project

Mayor Lyn Hall speaks to reporters regarding the cost overruns on the George Street Parkade project.

Ask more questions. That’s one of the lessons learned from the George St. parkade fiasco, says Mayor Lyn Hall.

The city has been rocked by revelations over the past few months that the George Street parkade project, originally budgeted for $12.6 million will likely end up costing city taxpayers $34 million – $22 million on the project itself and the rest for necessary but unaccounted for infrastructure upgrades. It was revealed at the city’s last council meeting that senior staff were aware of the cost overruns and kept that information from council.

“As we reflect on the information that’s come to light in recent days and weeks, it’s obvious that there were serious and unacceptable shortcomings in project structure and processes, oversight and information sharing on the parkade project,” Hall said during media conference Monday afternoon. “Bottom line: risk was not managed adequately. We certainly understand the people of Prince George are extremely concerned and angry with what’s happened. You have every right to be.”

He admitted that mistakes were made at “virtually every turn on this project,” and that people want someone to blame.

“It would be easy to point fingers without having all of the information,” Hall said. “We’re not going to do that. We are committed, however, to understanding all the facts around what went wrong on this project, and ensuring that accountability is based on facts and evidence.”

Hall said the city initiated a thorough review of the parkade project to understand what happened, how it happened, and what its options are. If necessary, that will include putting in place new structures and policies to prevent the same thing from happening again.

“It’s extremely important to understand that we need to follow due process to get you the answers you deserve,” Hall said. “That may take time. So, we’re asking for your patience.”

He said it’s simply too early in the process to say whether the outcome of the review could result in disciplinary actions.

Some of what the city has already done include:

  • Council has reduced the city manager’s delegated authority to amend project budgets to five per cent of the project budget, up to a maximum of $100,000 per project.
  • Council will review budget amendments that have been approved under that authority once every three months.
  • Administration will soon recommend council consider approving engaging external project management for the advisement services for the downtown YMCA daycare construction project starting this spring.
  • We will consider engaging external project management services for other impending significant capital projects.
  • Administration will recommend that Council approve conducting an external review of the city’s capital project management processes and develop a new project management framework to provide consistency in how projects are delivered.

Council has passed a resolution directing the acting city manager to pursue options for an internal or external auditor to review future capital projects. It is seeking a legal review of the parkade project to fully understand where it went wrong and why, and to provide recommendations for processes to minimize the risk of something like this happening again.

The city is also seeking a legal review of its current delegated authority, including the revised Sustainable Finance Guidelines. And it is also developing a whistleblower policy that ensures all city employees and elected officials have a clear, confidential roadmap to bring their concerns forward.

Hall said changing the delegated authority … the amount the city manager can spend without going to council … is a big part of the solution. When the budget overruns first surfaced, the city manager’s delegated authority was up to $1 million. However, that was changed to five per cent of the city’s operating budget, or about $9 million. When the parkade project overruns surfaced, council changed it back to five per cent of a project budget up to $100,000, in addition council will receive notice every three months of when the authority has been used.

“That’s substantial,” said Hall. “We know they’re going to come to us.”

So, is it still a good project for the city?

“For me, development was key in moving our city in a number of ways, whether it be through employment, peer development of our community, having investors and developers in the private sector recognize what an opportunity there is,” he said, pointing to the items such as new hotels being built, the new pool and firehall, student housing. “… It was part of the redevelopment of downtown but more importantly centered on economic development for the entire city.”

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