By Dori Modney (@Dori_Modney on Twitter)

Council agrees to additional funding for project $2.9 Million over budget

Jul 9, 2018 | 5:15 PM

LETHBRIDGE —  Several City Councillors were not happy with the position they were in, when asked to allocate more money for the downtown Transit Terminal and Regional Park N’ Ride. The project, in the early stages of construction at the corner of 5th Avenue and 7th Street south, was hit with a final bid overage of $2.9 Million.
 
Only Counillor Joe Mauro voted down the request for additional funding. Several of the councillors who weren’t happy with the request, held their noses and voted to find the money.
 
The project was approved by Council in July of 2016, on the understanding that shared funding could be accessed from the Green Trip lll and the Public Transportation Infrastructure Fund (PTIF). According to the city, the structure is expected to not only provide a transit terminal, but also parking for those who use local and regional transit.
 
The City did receive significant grant funding for most of the cost: Green Trip lll  = $10,107,000; PTIF Grant  = $2,027,000; Interest on Borrowing = 3,630,000; and Offstreet Parking Reserves = $1,246,000: for a grand total of $17,010,000.
 
Bidding on the first three elements of the project began in the fall of 2017 and all came in within budget.
 
The city saved money on the project by utilizing a building design already in use in Red Deer. However, it didn’t factor in design features needed to accommodate city buses or the city’s Downtown Area Redevelopment Plan, which brought the final tender to $2.9 Million over budget.
 
Because construction is already underway, and the project design is already minimalistic, reducing he size of the project would risk losing the grant funding.
 
Mayor Chris Spearman says what they are seeing is higher commodity prices for aluminum, steel and concrete.
 
“That’s obviously the repercussions from, ‘one’, the economy recovering and ‘two’, the possible impact of the trade situation between Canada and the United States and rising prices for construction material.”
 
However, during the presentation by Facility Services Manager, Conrad Westerson, it was noted that almost $1 million of the $2.9 would encompass “aesthetics” to accommodate the Downtown Area Redevelopment Plan, requirements for certain brick work, vegetation and shrubbery.
 
Westerson said there were a number of other things that were required to meet the Downtown Area Redevelopment Plan, “Some of it had to do with how the building line up with sidewalks and the number of issues we had to deal with to redesign the sidewalks around that area but, there was also $1 Million that it came in over based on the current market volatility was.”
 
As to why some of the issues not looked into before the tenders went out, Westerson said, “Well, we did the best that we could to understand what the needs were and when we put the tender our, it was on the cusp of being on budget and we were comfortable with it at that time but, when it came back in, the understanding was that it was over-budget, based on the items identified.”
 
Westerson noted, “Sitting in my chair, I’m just as frustrated as they (Councillors) are.”
 
“The choice for City Council was – do we reject the tender and go back out to tender and risk even higher prices and construction delays, and possibly risk the $12 Million that we’ve received from the provincial and federal governments, if the project isn’t completed on schedule?” said Spearman.
 
Spearman admits they were sorry to see a project come in over the estimated budget, but they are looking for sources of income that won’t increase taxation.
 
The City has saved money on allocation for buses under the Green Trip Funding and will be seeking permission to use $1,534,000 in unused funds for the Downtown Park n’ Ride project, along with $1,366,000 from the Federal Gas Tax Fund (FGTF), to offset the cost overrun.
 
Mayor Spearman noted that the overage, in part, is to conform to the Downtown Area Redevelopment Plan, which all private businesses must comply with. “So, the City of Lethbridge has been part and approved the DARP, then we certainly would comply with the same things we would impose on private industry.”
 
While there was no motion to the effect, Councillors noted the possible need to re-evaluate the DARP and take a second look at expectations which may be too onerous on downtown development.
 
Spearman sees it as a valid suggestion but, a tricky balance.
 
 “We have talked to the business community to have an on-going dialogue, administration meets regularly with the chamber of commerce and we’ve said to the construction industry that we want to talk to them on a regular basis but, how do we get investment in the downtown and how do we make sure everything is not just bare-bones minimum – how do we make sure Lethbridge remains a beautiful city and an attractive city – we see other communtities putting an emphasis on aesthetics to make sure they are welcoming and I think Lethbridge needs to do the same.”