On Monday, council will be asked to increase the city's 2020 capital budget to reflect $8.58 million in project overspending last year.
Completion of the new George Street parkade contributed $5.1 million of those costs, including roughly $533,500 to connect the parkade to the Downtown Renewable Energy System, city director of finance Kris Dalio wrote is his report to council. However, the city had 44 other unbudgeted or overbudget projects in 2020, ranging from five cents overbudget to $1.06 million in unbudgeted spending to compete the new firehall (see full list here).
"The amendments detailed in Appendix A will address all the expenditures in the calendar year of 2020," Dalio wrote. "However, some amounts will continue to come in for 2021 to finish a few of the projects."
Council is also being asked to increase the 2021 capital budget by $1.35 million, to cover additional costs linked to completing the parkade, firehall, Bob Harkins library branch entrance and downtown utility relocation projects.
The biggest expense for 2021 is $938,058 to address deficiencies, and pay for landscaping, furniture and fixtures at the new firehall, located on Massey Drive, Dalio wrote. A further $268,659 is needed to address deficiencies, do landscaping and deal with end-of-project costs at the library.
The report calls for an additional $100,000 to install sidewalks along Queensway and in front of the new daycare being built at the George Street Parkade location, along with installation of curbs, gutters and street lights in the area. And the city still has $45,000 in outstanding invoices associated with the parkade project itself, Dalio wrote.
The $8.58 million in project overspending in 2020 is offset by 23 projects which came in a combined $1.17 million underbudget, and a city operating surplus of nearly $1.1 million, Dalio wrote. The result is a net budget increase of almost $6.32 million for 2020.
Acting city manager Walter Babicz could have approved the $6.32 million using his delegated authority under the city finance guidelines that were in effect in 2020, however the matter has been brought to council for approval.
On Nov. 23, after city council discovered former city manager Kathleen Soltis had used her delegated authority to approve millions in cost overruns on the George Street Parkade project, council voted to change the city manager's authority. Those changes didn't come into effect until Jan. 1 this year.
Under the previous rules, the city manager could approve cumulative budget amendments up to five per cent of the city's total operating budget, Dalio wrote. Since the city's 2020 operating budget was $165.69 million, the city manager could have approved up to $8.28 million in cumulative budget changes.
Under the new rules, Babicz can only approve a maximum of five per cent increase to any given capital project budget, to a maximum of $100,000.
PROJECT MANAGEMENT REVIEW PROPOSED
Also on Monday night, Babicz is seeking council approval to spend $180,000 to hire external consultants to review the city's capital project management practices and policies.
"The proposed Organizational Capital Project Management Review objective is to collectively gain an improved understanding of the City’s capital project lifecycle management and practices," Babicz wrote in his report to council. "Results of this review would include a City of Prince George Organizational Capital Project Management Policy & Framework and a road map of prioritized improvement opportunity recommendations."
The city started an internal review of project management in 2019, based on international standards and guidelines developed by the Project Management Institute. The standards developed by the global non-for-profit professional association were endorsed by the B.C. Auditor General for Local Government, which produced a reference guide to the standards for elected officials in December.
The proposed external review would include a review of the current state of the city's project management; a look at best practices and review of other communities' practices; a list of recommendations; proposed changes project management policy and procedures; and a new manual and training for city staff, Babicz wrote.
The goal is to complete the review in 2021, he added.
"The range of assets to manage and deliver in a local government setting are diverse and vast, and capital projects range in type, magnitude, cost, time, complexity, and frequency of occurrence," Babicz wrote. "To gain an improved understanding of the City’s capital project lifecycle management and practices, the proposed Organizational Capital Project Management Review scope and budget have been provided for Council’s consideration and approval."
