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Independent review of downtown parkade project released

A report by SSA Quantity Surveyors Ltd. says that the final construction cost of the 2019 downtown parkade project was just four per cent over budget.

According to the report, reasonable construction costs were $21.6 million. The final construction cost for the parkade is $22,458,437, or approximately four per cent more than the probable and reasonable cost estimated by SSA Quantity Surveyors.

The report only addresses the actual cost of the parkade, not the ancillary costs associated with the project including $597,138 to connect the parkade to the city’s district energy system, and $11.1 million for water and sewer upgrades in the area, and other off-site works, which were not budgeted for.

The project was originally budgeted at $12.6 million and ballooned to $34.16 million. The increased costs only came to light at the insistence of Coun. Brian Skakun, who pressed for a review of the project. A legal review of the project revealed that the original contract signed by the city in early 2018 was not vetted by city staff or council.

According to the city, the $12.6 million budget was based on preliminary designs and projected cost estimates in the summer of 2017.

According to a statement issued by the city, with several construction projects in the area (pool, housing and parkade) there was a necessity to remove asphalt to access services for those projects. The city took advantage of these projects to find cost efficiencies in the much needed replacement of aging infrastructure and provide a connection to the Downtown Energy System. The underground infrastructure in this area had outlived its useful life and needed replacement to address capacity needs downtown.  

The total for the infrastructure projects was $11,705,050. Those projects include:

  • Replacement and re-routing of the 60 year-old storm water piping system
  • Re-routing and upgrading of the sanitary sewer
  • Installation of a new sewer line across Queensway Street and along Lower Patricia Boulevard to provide additional capacity for future development
  • Replacement of an old water main on 7th Avenue adjacent to City Hall. The previous water main had been rated by the City to be at a very high risk for failure owing to its advanced age and its cast iron construction.

As a result of some of the concerns with this project, council directed the following changes in city processes and policies:  

  1. Council reduced the city manager’s delegated authority to amend project budgets to five per cent of the project budget, to a maximum of $100,000 per project.
  2. Budget amendments approved under the above authority are reviewed by council each quarter.
  3. An external project management company was engaged for the YMCA daycare project.
  4. The city is exploring external project management services for other impending significant capital projects, especially when internal capacity/expertise is limited or not available.
  5. A professional company is engaged to review the city’s current capital project management processes and develop a project management framework and polices providing consistency in how projects are delivered. The capital project manual will be complete in early 2022.
  6. When the new project management processes have been established the city will pursue options for an internal or external audit of future capital projects.
  7. Council retained Young Anderson, Barristers and Solicitors to fully understand where the parkade project went wrong and why, and to provide recommendations for processes to minimize the risk of something like this happening again. The legal review was publicly released on June 4, 2021 to provide direct public access to the information.
  8. A whistle blower policy was adopted to ensure all city employees and elected officials have clear, confidential roadmap to bring their concerns forward.
  9. An Organizational Capital Project Management Policy was adopted to establish corporate direction for effective governance and control over various classes of capital projects by applying the City’s Organizational Capital Project Management (OCPM) framework to ensure appropriate capital project management approaches are consistently used.

A quantity surveyor conducts a comprehensive project review to determine if the reasonable costs of constructing the project was within the range of the actual costs of constructing it. In light of the results of the report, the city has been advised a full audit of the project, both from an administrative and a financial standpoint, is not warranted.

The SSA Quantity Surveyors Ltd report is posted to the City’s website. The George Street Parkade Review page was created as a central library of all information and documents associated with the project for the community to access.

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