Budget Overruns at new Williams Lake Fire Hall will have no impact on 2011 Budget

From the City of Williams Lake:

A cost overrun of $528,034 on the new fire hall will have no impact on the
2011 budget, City Council members heard at their Committee of the Whole
meeting Tuesday evening.

An initial $300,000 budget deficit was addressed by City Council in the
2010 budget, and the additional $228,000 in expenditures of the summer of 2010
for landscaping and other site finishing requirements were absorbed in the 2010
Operations budget with savings in other operational accounts.

“Taxes will not be increased to cover these regrettable overruns,” says
Mayor Kerry Cook. “The 2011 budget will not be impacted in any way, and
council is considering recommendations to safeguard against this happening in the
future.”

Those recommendations are:

1. For a project of significant value or complexity, utilize a Principle
Contractor model whereby the contractor assumes responsibility and risk for
excess costs other than those approved by the City through change orders;

2. In the event a Project Management model is utilized, the City should
retain all financial administration responsibilities. Project Management should be
limited to oversight and coordination of construction activities;

3. In the event that staff are aware of expected cost-overruns, Council must
be informed prior to further work commencing so that appropriate budget
authorizations can be provided by Council; and

4. Establish a project oversight committee with Council representative for all projects of significant value or complexity as a common practice, with monthly reports to council.

A report from Director of Protective Services Randy Isfeld details how, in November 2009, a City Oversight Committee heard for the first time – after nine months of weekly meetings with the project contractor in which the project was described as on time and on budget – that the fire hall was over budget, primarily due to contaminated soil and remediation issues at the fire hall site in the spring of 2009.

“When the soil issues arose in the spring, the Oversight Committee was told the extra costs would be handled within the existing budget,” says Councillor Tom Barr, who served on the Oversight Committee with the Chief Administrative Officer, General Manager of Planning and Operations, General Manager of Corporate Services, and the Director of Protective Services. “We were told months later that that was not the case.”

The fire hall, which became operational in December 2009 and officially opened in June 2010, is expected to serve the City’s needs for the next 30 years. It features a new bay for all of the department’s apparatus, a training room that also serves as the city’s Emergency Operations Centre if needed, showers for firefighters, and room for expansion.