West Kelowna city hall plan coming in over time and over budget

Construction of West Kelowna, B.C.’s future city hall building is over time and well over budget.

In a report to council, the city’s chief administrative officer, Paul Gipps, said everything from poor land and air quality to varying issues with trades involved raised the price of the project to $22.4 million, a 24 per cent increase from the $18 million projected in 2021.

“Some of the main issues encountered over the course of construction have been cost escalations from the pre-construction budget. This was exasperated (sic) by trades not holding or locking in pricing at the time of tender,” Gipps said.

“This was an unprecedented practice caused by the volatility of the market.”

Gipps also wrote that BC Hydro design and construction delays have been one of the “biggest risks to the schedule and cost of the project.”

“The routing indicated in the design was not feasible and design took an additional two to three months longer than anticipated,” Gipps said.

“The construction milestones have also been pushed and the routing change caused a very significant increase in costs over budget.”

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Also, Gipps also said the mass timber manufacturer, Structurlam, delayed material production by three months with very short notice before the initial deliveries were to be made. This caused major impacts to the schedule and cost of the project.

While all of these issues are making for a pricier and later project, Gipps offered assurances that the latest budget shouldn’t change and cost increases are not going to come at a cost to taxpayers.

For years the City of West Kelowna transferred and continues to transfer $700,000 annually into the city hall reserve to pay for its first city hall building.

The 2024 funding projection anticipates continued growth of the city hall reserve to an overall contribution of $8.71 million, as well as full use of the $11-million borrowing, drawing on the original $500,000 gas tax reserve component and $250,000 from the equipment reserve before additional proposed contributions.

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These additions include over $395,000 from the Parks Development Cost Charge reserve and an Operating Surplus reserve injection of $1.539 million to cover the balance of the shortfall.

The available balance in the Operating Surplus is currently calculated at $5.717 million, which Gipps described as “a reasonable amount of room to fund this allocation still leaving room for future contingencies if council wishes to endorse the proposal.”

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Removing $1.539 million from the operational surplus will result in a balance of $4.178 million.

The city is hoping to get occupancy by February 2024, and will at that time move over old furniture from the different sites to address one of the potential costs. It’s currently running out of a mix of temporary and permanent structures across a variety of sites.