The new city hall project has been cancelled because the low bid was $10 million over what the city had budgeted, Mayor Laura Cabott announced late Thursday morning.
Revised – The new city hall project has been cancelled because the low bid was $10 million over what the city had budgeted, Mayor Laura Cabott announced late Thursday morning.
The decision was made this week, though council has been talking about the project since the three bids were received two weeks ago, the mayor explained.
She said the low bidder was informed of the cancellation Thursday morning.
“We are not comfortable moving forward with this project at this time,” Cabott told reporters in front of city hall.
She said the new city hall was to fulfill a number of objectives, like providing a larger space for employees located elsewhere, such as at the Municipal Services Building on Fourth Avenue.
There was a commitment to provide a transit hub at the new city hall, and public washrooms, she noted.
She said the reconstruction project was to include renovations and upgrades to the older part of city hall built in 1966 to improve items such as energy
efficiency.
All those objectives still need to be fulfilled, but how to go about that has not been determined, she said.
The mayor said council will now have to examine other options to fulfill the commitments.
The older part of city hall facing Second Avenue, she said, is not energy-efficient, and bleeds heat.
Some staff have put plastic over their windows, she pointed out.
Cabott said they’ll need to do a redesign of the project, which could begin this summer.
A renewed project will still have toa go through a review during discussions to establish the capital budget for next year, she explained.
The city has indicated the three bids received ranged from a low of $33 million to $39 million.
Bids were received from Ketza Construction of Whitehorse, JBL Construction of Calgary and Whitestone Construction.
The city said the low bid was submitted by JBL Construction.
The city had budgeted $26.2 million for the project, of which $22 million was the cost of the demolition required and the new construction.
Of the $22 million, $17.4 million was coming through federal funding programs.
The city would have been required to contribute $9 million from city reserves.
Had the city not cancelled, Cabott said, it would have been required to take an additional $10 million out of reserves, for a total contribution of $19
million.
The budget, for instance, had included $5 million for an energy upgrade and $1.3 million to upgrade the heating system.
Cabott said the federal funding was to expire in 2024 – but the good news is it has been extended to 2027.
The mayor noted there was both public support and opposition to the project.
Upgrades to the existing city hall are still required and will need to be addressed to bring the building back to standards, says a press release issued
Thursday regarding the cancellation.
It says some of the longstanding issues include the mechanical, heating, and electrical systems, which are near end-of-life and no longer operate efficiently.
Additionally, upgrades to items such as the roof and windows will need to be addressed to improve the building’s energy efficiency and reduce the city’s
greenhouse gas emissions, says the release.
Some of this work wasn’t done earlier because it was believed the building would be demolished, the mayor pointed out.
The city hall project was part of the city’s building consolidation initiative – originally devised almost a decade ago – that included the new fire hall off
Black Street and new Operations Building off of Range Road.
When the bids came in substantially over-budget, Coun. Ted Laking suggested council should put off the project until they could find a way to reduce the
cost.
Laking started raising concerns about the escalating cost back in December 2021, based on recent and past estimates of the project cost.
The project estimate in 2014 was $9.7 million, but it jumped to $18.9 million in 2019, he pointed out to his colleagues on council before Christmas.
He noted the estimate leaped again in 2020 to $20.8 million, and again last June to $24.7 million before arriving at the final estimate last fall of $26.2
million.
“This is great news for taxpayers,” Laking said in a statement issued later Thursday regarding the cancellation.
“There has been significant public concern from taxpayers about this project going over budget.
“Bringing their concerns to the forefront and giving them a voice is why I raised the issue of the project continuing to go significantly over-budget and
suggested it be cancelled several months ago.”