“Damn the torpedoes - full steam ahead!”
That was the battle cry attributed to Rear Admiral David Farragut during the Naval battle of Mobile Bay, Alabama, between the North and the Confederacy during the Civil War, back when underwater mines were called torpedoes.
So what has this got to do with the George Street Parkade? Well, actually quite a bit.
I will use the letter from Ian Wells, acting deputy city manager, to city council on Nov. 26 to explain.
The original budget for the parkade in 2017 was $12.6 million. This figure was based on a quantity surveyor's estimate. A quantity surveyor (QS) is a construction industry professional with expert knowledge on construction costs and contracts.
In February 2018, due to engineering concerns regarding fluctuating ground water levels, the design for the parkade was changed .
In July 2018, the developer provided the city with an updated cost estimate for the parkade. The developer advised that the new estimated price was $20 million and contacted the city to determine how it wished to proceed. Administration confirmed with the developer that the city wished to proceed with the parkade.
“Damn the torpedoes - full speed ahead!”
If we stopped the project, there would be significant consequences, and if we went forward there would be major consequences, the perfect catch-22, I would say,
So we ended up with an approximately $22.5 million dollar project, a $9.9 million overrun.
The city now has to find money somewhere to pay for this huge overrun. This will mean cancelling some capital projects, delaying others, cost cutting, short term borrowing, etc.
There were some positives because of the design change. The number of underground parking stalls increased from 266 to 289 and the surface stalls were reduced from 68 to 62. In addition, the total land area of 2.5 acres was now available. This apparently allowed sufficient space to accommodate 85 new childcare spaces that would be built on this site.
There were other cost overruns that are outlined in the Wells letter but this is basically the gist of the situation.
So what’s the solution to see this does not happen again?
The B.C. Liberals brought in what was called the Auditor General for Local Government (AGLG) to allow auditing of municipalities and to help them with capital projects, among other things. This office did a number of audits and we can reference the audit of the Township of Langley Water Project to get a clear view on how audits were done.
Alas, when the NDP got elected, they decided to get rid of this office. Seems municipalities don't like to be audited by the province. In any event, the office will be closed at the end of this year.
What the AGLG did while it was operating was to issue a number of reports, which they called AGLG Perspectives Series Accessible Tools. One we can and should use for a template is Audit Topic 3 - Tool 1 (April, 2014) called Oversight of Capital Project Planning and Procurement. These tools were sent to all municipalities in B.C. and I suspect we have them on file at Prince George City Hall.
This report gives in full detail every step that should be taken to ensure there are very little surprise overruns. Specifically, it deals with the role of council/board members in capital project planning and procurement, as well as decision making in capital project planning and procurement.
We don't need to reinvent the wheel. All we need to do is to follow these specific guidelines to ensure we are following best practices.
I strongly recommend all city councillors and senior administration get up to speed on these processes and to implement them for all future capital projects.
