There is no question that Edmonton’s budget was already tight due to declining revenues and rising costs, some of them associated with the pandemic.
But now, two major capital projects are expected to go over budget.
The city works on two budgets: the operation covers recurring costs, such as staff salaries, utilities, and other bills, and the capital looks at the one-time costs: it buys things like a wider highway, a new LRT track, or a swimming pool. .
By 2022, at the end of a four-year budget cycle, capital dollars have largely been expressed in projects already underway, such as the conversion of the Yellowhead Trail Highway, the Valley Line LRT, and the expansion of Terwillegar Drive.
Now that the design work is complete for the Coronation Park Sports and Recreation Center, the council will get word on Monday that it is expected to cost much more than was initially predicted in 2014.
The budget was then set at $ 112 million; now it’s 34 percent higher at $ 150 million.
“That is mainly driven by inflation. The scope of that project has not materially changed since it was first conceptualized by the board, ”explained branch infrastructure and delivery manager Jason Meliefste.
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The new building in the Westmount area would connect to the existing area pool and include an exercise area, a walking track, gyms, programming rooms, games space, and a cycle track.
“I fully support this and will be advocating with my colleagues for the construction of this recreation center. I think it will serve a large part of the city, ”explained the Anirniq Coun neighborhood. Erin Rutherford.
Construction was scheduled to begin this year and finish in 2024. Rutherford says delaying it now would disappoint a lot of people.
“It’s basically shovel-ready. As long as we, as a council, decide to go ahead with this project, we will begin construction. “
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Another major project that is over budget and at a similar stage nearing the end of the design phase is the 50 Widening of streets and separation of trains.
The city has already started work on a diversion for vehicles and the diversion of sewer lines.
The project is not expected to be completed for another five years, but is already expected to be 41 percent over budget, having gone from $ 103 million to $ 145 million.
The reason? A big design change.
“At the time, we were imagining that that work could be done as an underpass,” said Meliefste.
He explained that with the relocation of utilities and the attempt to allow the nearby railroad to continue running around the construction, an overpass was actually needed.
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In a statement, Amarjeet Sohi, the mayor of Edmonton and a former federal transportation minister, said: “I am very concerned about the increase in the cost of this project, and I have contacted the administration for information on this cost overrun.”
“This rail crossing has been irritating to residents for decades, and I was proud to advocate for federal support for creating grade separation. I will continue to work hard to move this project forward, ”he said.
With provincial and federal dollars involved in the project, the city could request additional money.
“We are hopeful that there may be some interest at other levels of government to increase their funding, but it is too early and I cannot speak on their behalf,” Meliefste said.
If no savings can be found in other capital projects and no new grant funds come in, the city could choose to finance the surpluses from these two projects by increasing property taxes or taking on additional debt.
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But because of where the projects are in your work, either one could be on the cutting board.
Meliefste said the contracts have not been awarded in either case, although both are ready to start construction in just a few months.
“If we are looking at capital budgets, we will have to consider projects that have not yet started for those cost saving measures,” Rutherford said.
“Anything that has already been dug out of the ground, it is very difficult to stop that capital project once it has started. There are termination fees and penalties that almost make those options almost unviable. “
Meliefste says that at any given time, the city has about 275 capital projects underway. The latest financial review showed that more than 96 percent are on budget.
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