City council approved increasing the budget for the new downtown pool, to be named the Canfor Leisure Pool, by $2.876 million on Monday night.
The move increases the project’s budget to $39.126 million – of which $28.376 million will by borrowed by the city, $10 million comes from a federal government grant and $750,000 was provided by the Regional District of Fraser-Fort George.
City voters approved borrowing up to $35 million for the project to replace the aging Four Seasons Leisure Pool in a 2017 referendum.
“We still will be borrowing $6.5 (million) to $7 million less than we asked the public to borrow,” city director of finance Kris Dalio said.
Construction of the project was delayed, to allow the city to apply for and ultimately receive the $10 million federal grant, Dalio added.
Blake McIntosh, city director of civic operations, said $1.7 million of the cost overrun is linked directly or indirectly to the structural steel for the building delivered to the site with deficient primer.
The other $1.1 million was linked to inflation in construction costs and unforeseen conditions, such as unsuitable soil and existing piping in the ground.
Leland Hanson, city manager of project delivery, said there was existing piping from the old arena located underground at the site, which all had to be removed. Hanson said the city did have test drilling done, but the tests didn’t reveal the issues until work began.
“You couldn’t find it by drilling,” Hanson said. “It’s a bit of a needle in a haystack.”
City manager Walter Babicz said the city is “consulting with our professional advisors” on how to recover the $1.7 million linked to the deficient primer. If some or all of that money is recovered, it would be used to reduce the amount of borrowing by the city.
Coun. Cori Ramsay said, given the initial cost estimates for the project were made in 2017 before the COVID-19 pandemic and surge in construction costs, the pool isn’t that far over budget.
“I know there is some negativity in the community about this project being over budget,” Ramsay said. “I do see us working hard. This budget overrun is really outside of things we can control.”
Statistics Canada estimated inflation in Canada at 6.7 per cent in March, Coun. Garth Frizzell said. The $1.1 million in costs not linked to the primer error, is less than one year’s inflation on $35 million, he said.
“With the unprecedented rise in construction costs… I think staff has done a really great job at keeping their eye on the bottom line,” Coun. Terri McConnachie said.
“The $1.1 million isn’t a tough pill to swallow, with five years between,” Sampson said. “I don’t support the $1.7 million. It’s not our error.”
Sampson put forward a motion to only approve increasing the project’s budget by $1.1 million, but the motion was defeated.
“Nobody likes the $1.7 (million),” Mayor Lyn Hall said. “(But) the $2.86 million is necessary to complete the project.”
NAMING DEAL APPROVED
City council unanimously approved selling the naming rights for the new pool to Canfor on Monday night.
Under the deal, Canfor will pay the city $75,000 per year for five years for the naming rights, with the option to extend the deal for another five years.
“They (Canfor) are a good employer and a good community partner,” Sampson said. “I think this is a fair deal for both sides.”
Ramsay said selling naming rights to civic facilities is one way to diversify the city’s revenue sources.
“This is a great news story,” Frizzell said. He praised the work of the city staff involved in bringing the deal to fruition.