In light of significantly over-budget bids and generally rising costs, city staff is looking to pause or change some council-approved capital projects for the next couple of years, though it’s not yet clear what those will be.
A recommendation to that effect is heading to council’s committee of the whole meeting for discussion on April 4. Any decision made that day would need to be ratified by council at the end of the month before it becomes official.
“Costs are increasing beyond revenue available in some, but not all cases, and the city needs to continue to deliver services and maintain infrastructure in this uncertain environment,” states the staff report. “Given the limits on both staff capacity and total capital funding, not all needed capital work can be delivered in the desired or optimal time frame.”
The report and recommendation come after bids for the South End Community Centre (SECC) came in significantly over the council-approved budget of $80 million earlier this month. The lowest of three bids was for $121,201,000.
“This has far exceeded the expected range of inflation over the period under assessment and therefore procurement process was cancelled, and staff are now evaluating options available,” the report notes of the SECC specifically. “Staff will review all opportunities that may include de-scoping, phasing approach, amenity priorities, risk sharing, additional funding, alternative partnerships and other opportunities.
“Additionally, in the coming weeks, staff will meet consulting staff and request conversations with bidders to re-evaluate all options.”
Such rising capital costs “will mean a number of planned projects will be deferred,” it adds, speaking generally. “This may also mean growth-related projects are not able to be moved forward at the same pace, and therefore may impact growth timing in the city.”
Including projects carried over from last year, there’s currently $576.9 million worth of capital projects on the books for 2022. In approving its first multi-year budget last fall, council endorsed another $143.7 million in capital projects for 2023.
Of that, the report explains, $87.8 million is already committed through construction contracts.
Any reprioritization that occurs would be done within the overall funding envelope previously approved by council, with any delayed projects included in 2024 and beyond city budgets.
If approved, the recommendation would see priority given to infrastructure renewal projects determined to be of the highest level of risk if not done, as well as effects with time-limited grant funding, projects with partners or stakeholders, growth-related endeavours and initiatives believed to reduce costs over time.
