Morinville council was furious this week after an architect revealed that ongoing town hall renovations are almost $1 million dollars over budget — with the possibility of more red ink to come.
Robert Black of ONPA Architects dropped this bombshell on council Tuesday night during an update on renovations to St. Germain Plaza, home to the town's main office and library. The building has been closed for renovations since last summer.
The renovations, headed by ONPA and St. Albert's Synergy Projects Ltd., are meant to replace the building's heating system, expand its library and offices, and spruce up its exterior. These changes were originally projected to cost $2.8 million, according to Mayor Lloyd Bertschi, and were budgeted for $3.5 million.
But numerous cost overruns have added some $867,420 to the project, said Black, and there could be more price hikes to come.
"We will be bringing in the project for under $4 million," he said.
The changes have also put the work further behind schedule. Originally set for completion Dec. 31, 2011, the renovations were knocked back to the end of March when the town decided to add more rooms to the building. Now, Black said, builders won't be done until May 15.
Councillors were livid. As recently as Jan. 24, they had been told that the project was within budget and on schedule.
Council was told as late as last December that $2.8 million was a good, solid number, said Mayor Lloyd Bertschi.
"We had no idea that there were $600,000 to $700,000 in structural, mechanical and electrical [costs] … we knew nothing of it."
Bertschi could recall only one capital project in the last 10 years of town history that went over budget.
"This is absolutely unacceptable," he said.
Costly predictions
A subdued Black gave council a rundown of some of the reasons for the price hike. When the town added two additions to the building after construction started, crews had hoped that the building would be strong enough the way it was to support them. It wasn't, so they've had to do $270,000 in reinforcements to the frame and foundation.
Crews also decided to go with a more efficient heating system, he continued. It costs $255,000 more, but should reduce the town's heating costs. Electrical panels had to be replaced for $147,420. High labour demand added another $50,000. Asbestos, fireproofing and other items accounted for another $145,000.
The building will now cost about $200 per square foot, Black said. "It still represents good value for the taxpayer," he said, as a comparable new building might cost $350 a square foot.
Crews could have spotted these costs had they done a more detailed analysis in November, Black said, and should have gone with a $4 million estimate from the start.
"We brought our best knowledge base to the table on this," he said. "This doesn't happen often."
Council wants answers
Coun. Lisa Holmes was one of many councillors who wanted to know why they were finding out about these expenses so late in the game.
"These things didn't happen last week," she said. "How are you going to be accountable for your portion of this fallout?"
Council may have to find an extra $500,000 to cover this overage, noted Coun. Nicole Boutestein.
"Are you going to take a cut in your commission?" she asked.
When Black implied that his firm would have to work for free to cover these costs from its commission, Bertschi snapped: "[With] the kind of management you've had on this budget, you think you shouldn't be working for free?"
This was a nice looking building with a surplus in its budget as of last summer, said Coun. Paul Krauskopf.
"What assurances are we going to have that this is going to be a quality building and we're not going to end up with crap?" he asked.
Crews could have kept the project at $2.8 million, Black said, but that would have meant a worse building.
"We're not going to be cheapening up this building without you guys approving it," he said.
Still, Black said he could not guarantee that the project would stay under $4 million.
"I'm not hiding anything here, but who in the world can guarantee zero risk?" he said. "What I can tell you truthfully is that we've got the risk really under control at this point."
Bertschi scoffed at that.
"Now that the horse is out of the barn, now we're going to close the barn door!" he said.
Council may have to tap its Municipal Sustainability Initiative funds to pay for this overage, Bertschi said in an interview. Administration was just as surprised by this news as council, he added.
"What I want to know is who signed off on these quarter of a million overages?" he said. "They messed up big here."
