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West Kelowna's fire hall project is continuing under budget, though the contingency fund is dwindling, according to an update from city staff.
"The city’s contingency has been reduced from $300,000 to $48,000 since council was last updated Jan. 28," a staff report headed to West Kelowna council Tuesday, reads.
"This will be carefully managed in the months ahead with a focus on maintaining the council-approved budget. Any unforeseen budget changes will be reported to council during future project updates."
A budget of $14.3 million has been set for the new 17,000-square-foot Fire Hall #32 in Lakeview Heights and changes in the contingency fund are said to be due to offsetting unexpected or increased costs.
"During the reporting period, the contractor provided several cash allowance estimates that were over budget and the team pushed back to obtain more favourable pricing."
Nonetheless, many cash allowances have been exhausted and, in some cases, have been insufficient resulting in impacts to the project contingency.
The reduced contingency is, however, mainly due to unforeseen costs to move BC Hydro power pole and overhead lines currently located in front of the fire hall.
Additional costs to complete this work is upwards of $200,000, the city report said.
Another unanticipated cost is related to new legislative requirements that mandate flushable toilets and hot water be in place for workers at job sites. These costs are anticipated to be an estimated $25,000 or more.
The city was also provided an updated appliance package that exceeds preliminary cash allowances. The impact is an additional $28,000.
"There are 19 small, medium and large cash allowances and change orders remaining to be fully priced and finalized," according to the report.
Cost overruns are a sensitive subject in West Kelowna. A new water treatment plant cost $25 million more than originally planned and the municipality’s first purpose-built city hall cost more than $24 million, $6.17 million over budget.
Mayor Gord Milsom and council urged the city to implement improved project management best practices and vowed improvements after the updated cost of city hall was made known.
“We have this wonderful, much-needed complex, which provides centralized government services and a bustling civic centre area for our community, yet it has been overshadowed by these overruns, and we must implement policies and best practices that will keep future projects on track," Mayor Gord Milsom said in a March media release.
The city is dedicated to budgeting using engineering standard protocols, such as fixed-price design/build or design/bid/build contracts and adequate contingency planning and budgeting.
That includes confirming scope before project startup; using industry standard project management best practices and trained professionals; establishing procedures for managing projects during unprecedented conditions such as high inflation, global supply chain disruptions and more frequent climate-related emergencies and regular reports to council and the public throughout the project.
The fire hall project consists of a three-level 17,000 square foot building with upgrades to the parking lot, playground, pickleball courts, sport court, public plaza, pathways, and accessibility.
