Two major capital projects in Coquitlam will cost close to $1 million more than anticipated — overruns the city is blaming on changing conditions in the construction market.
Town Centre Park Plaza — the amphitheatre currently under construction on the eastern shore of Lafarge Lake — is now expected to cost $3.2 million, which is $500,000 more than what was outlined in the original budget.
And the cost for work at Rochester Park will increase $485,000, putting that final price tag at $4.84 million.
Perry Staniscia, the city’s manager of strategic initiatives, said the rising costs correlate with the falling Canadian dollar and increasing construction activity resulting from the booming real estate market.
“We did not anticipate the flurry of activity in the construction market right now,” he said, adding that park builders have been particularly in demand.
“This is just such a specialized market… There is a limited supply of contractors and they are all extremely busy.”
The Rochester Park project’s contingencies were maxed out last fall when geotechnical work found that the slopes and trails would require additional pilings. That increased the price of the trail network from $450,000 to $1 million but staff were still able to keep the project within budget.
For the amphitheatre, Staniscia said that the quick deadline for completion — the city wants it finished in time for the 55+ BC Games in September and Coquitlam’s 125th birthday celebrations — may have played a small factor in the price increase.
“There might be some escalation factor in the tenders that came in because of that,” he said. “The bulk of it, in our opinion, is because the contractors are so darn busy.”
Staff are making changes to the city’s procurement process as a result of these cost overruns.
Staniscia said that escalation contingencies — essentially additional room in the estimates — would be incorporated into future budgets and a quantity surveyor would be used to add additional assurances that cost estimates are accurate.
But even with the added steps during procurement, Mayor Richard Stewart said budgeting for projects is never going to be exact. He noted that because there is usually a significant amount of time between when council approves a project to when it is built, changes in the market will always be an issue.
“Most of the time, our estimates are bang on,” he said. “When you take the number of projects we have done in the last three years, I would say we are under [budget] more than we are over.”
Stewart noted that many of the park construction materials come from the United States, where the Canadian dollar does not go as far as it did in the past. The development boom in the region is also keeping specialized trades in demand.
“Municipalities across the region and businesses across the region are finding themselves with significant construction cost increases,” Stewart said. “It doesn’t come as a tremendous surprise to us.”
Council was unusually quiet when the report requesting additional funds for the two capital projects came up during Monday evening’s meeting, approving the additional spending with almost no discussion.
Disbursing the additional $485,000 for Rochester Park passed unanimously while councillors Dennis Marsden and Bonita Zarrillo voted against increasing the Town Centre Park Plaza budget by $500,000. The measure still passed with the support of the rest of council.
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