A six-storey building with 82 condos is currently under construction on the site of Sidney’s old fire hall. The sale of it and a nearby parking lot earned Sidney $8.98 million dollars. (Wolf Depner/News Staff).

Final cost for Sidney’s Community Safety Building still ‘trickling in’

Projected cost of $16.85 million may not be final figure

Sidney residents heard Tuesday the final cost of the new Community Safety Building may end up exceeding the current cost projection of $16.85 million – almost 70 per cent higher than the original budget.

This possibility emerged from a staff report by Andrew Hicik, Sidney’s director of corporate services, in which he said final costs for the new building are still “trickling in” and “any difference between the projected and actual total costs” of the building would appear in a final report yet to come.

It is not clear yet when the public will learn the final figure for the building housing the Sidney Volunteer Fire Department and BC Ambulance Service. It officially opened on July 1 near the Mary Winspear Centre following more than two years of construction and a decade of planning.

“The exact timing of the report is still not known, as outstanding CSB project billing will not be complete until the end of November,” said Randy Humble, Sidney’s chief administrative officer.

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Coun. Terri O’Keeffe said during Tuesday’s regular council meeting she hopes the pending staff report will address the causes behind what she called a “significant” cost over-run with an eye towards avoiding similar outcomes in the future.

“It would be good to know what happened here for a project to go so over budget,” she said. As Sidney prepares for other significant capital projects, it must draw the right lessons from this experience, she said.

A review of the project’s history broadly shows that design changes outside the control of Sidney, worker shortages and rising construction costs contributed to the cost escalation.

“At various stages of the project, staff reports clearly articulated to council the incremental cost overrun challenges, while at the same time requesting confirmation to proceed,” said Humble, when asked for comment about O’Keeffe’s concerns.

Humble said in a follow up email that other than dealing with minor deficiencies typical in a construction project of this magnitude, the building is complete.

The finances of the largest infrastructure project Sidney in years re-entered public view on Tuesday when council considered two related reports. The first revealed Sidney had completed the sale of the old fire hall and adjacent parking lots for almost $8.98 million, with $7 million going towards the CSB. (A six-storey building with 82 condos is currently under construction on the site).

Council then earmarked $900,000 of the remaining monies as funding for the remediation of the Reay Creek Dam; approved $30,000 to cover legal fees from the land sale; and set aside the remaining funds (some $1.012 million) to fund upcoming capital projects.

RELATED: Construction of Sidney’s new, $10m safety building is under way

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Council then signed off on the central recommendation of the second report to borrow the final $3 million of the $6 million borrowed to cover the difference between the CSB’s original budget and its current projected cost.

A bylaw caps Sidney’s borrowing for the project at $10 million and the final borrowed amount of $6 million has come in at what Hicik called the “lower end” of original projections between $5 and $8 million.

Councillors considered, but ultimately rejected, putting more of the remaining funds from the land sale towards the CSB, because the future savings from paying off more debt now would have been minimal.

“With nearly $2 million remaining, it may be tempting to allocate more of the proceeds to reducing the final borrowing amount for the CSB,” said Hicik. But this option would have been a short term solution against the backdrop of large upcoming capital projects. Some of these projects cannot go ahead without additional borrowing anyway and interest rates may become less favourable in the future, he said.


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