As the City of Quesnel’s new Public Works facility nears completion, a few outstanding items have increased the cost of the project.
This is one of the updates from the most recent Financial Sustainability and Audit Committee (FSAC) meeting chaired by Coun. Scott Elliott, shared with council Dec. 1.
Elliott says the salt and sand building, fencing and other security and information technology have increased costs for the project, while some shelving, desks and other furniture will still need to be purchased.
“The 2021 capital budget has $350,000 in it to address these costs,” he said. “This will be funded from the Public Works Relocation Reserve and savings from the interest savings because of the timing of the Public Works project. In addition, any carry-forward from the original $13-million budget will be added to this capital budget once the amount is known at the end of the year.”
The need for a new Public Works facility was identified in 2002, and the city purchased a 2.9-hectare parcel of land on Sword Avenue for a new Public Works yard.
The city held a referendum during the 2018 municipal election to ask residents for approval on a loan authorization bylaw, and that bylaw passed, allowing the city to borrow up to $8,500,000 for the replacement of the Public Works facility.
The original budget of $10,975,000 was approved in 2019 to come from debt, the city’s capital reinvestment reserve, the Public Works reserve and general capital.
In early January 2020, council amended the budget to $13 million, with the additional $2,025,000 coming from the city’s water and sewer surpluses, the water and sewer capital budgets and the Public Works reserve.
Mayor Bob Simpson says the overage is “minuscule” relative to the project’s $13-million budget.
“If you actually look at that project through the lens of COVID-19, of price escalation on all supplies, it doesn’t matter what it is, and the issues we had on adjusting the front end of that project because it started right at the height of the early COVID-19, the actual overage on that project will be minuscule,” he said. “We’ll do a full report on that piece.”
City manager Byron Johnson says the salt and sand building had been scheduled for a later year, but staff decided it was better to push ahead with that project now because they had the contractors and builders onsite ready to go.
“While it’s incrementally more money on the capital, the Public Works debt for this year was reduced by that amount or by a similar amount,” he added.
READ MORE: New design and higher budget approved for Quesnel’s Public Works facility
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FSAC had its first look at the 2021-2025 capital budget at its Nov. 24 meeting.
“The capital budget for 2021 is estimated at $12.1 million,” Elliott told council. “At this point, the carry-forwards from the 2020 budget are not included, but council will have an opportunity to see those in the near future.”
At this time, casino funds that the city receives annually will be replaced by an allocation from the COVID-19 Safe Restart Grant, which council approved at its Nov. 17 meeting. The Billy Barker Casino has been closed since March due to COVID-19.
“We will continue to discuss the challenges surrounding the landfill requirements, building improvements and replacements and the fire hall renovations or replacement,” said Elliott.
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Elliott says as the city looks to replace or renovate the downtown fire hall, there is the possibility of grant funding for a renovation. If council decides replacement is the right direction, the best timing for this referendum may be the October 2022 election.
Simpson says the city has just received word of a grant that is available that could potentially be used.
“We’re in pretty good shape to have done the work we have done,” said Simpson. “Now we have to do a little more work to look at the grant specifications and decide if a reno is going to work for us before we put a grant in because I believe the grant is restricted to renovations; it’s not a new-build grant — it’s to renovate existing buildings that are associated with local governments, First Nations and emergency management.”
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The landfill is an area of focus for council, and Elliott says FSAC and council members are all aware there are “significant costs in the future for the landfill.” These include expansion costs, methane capture costs and the liability for closure costs.
“Currently, we are not contributing to these costs,” said Elliott “Due to the current low rates, the landfill liability is expected to increase a significant amount this year. This will start to show as an accumulated operating deficit for the city’s financial statements since the city has not fully funded this liability and the liability will be bigger than the surpluses the city has in various funds. Other provinces require that this liability to be fully funded.”
At the end of 2019, the city has put aside $1.4 million for the landfill liability, which is currently estimated at $4.3 million for the city’s portion, explained Elliott.
“No regular contributions are being put forwards towards the liability,” he said. “It is expected that closure would be a phased process, with the first major spending of approximately $1.5 million in the late 2020s, early 2030s, and then similar costs every 10 years or so until the more substantial closure costs when the landfill is full — 2089 if the berm and expansion proceed.”
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In looking at the West Quesnel Land Stability (WQLS) project to deal with ongoing ground movement, Elliott says there will be ongoing capital and maintenance costs for this project, but these costs are not known at this point. One idea the FSAC is recommending is a WQLS Reserve so that whenever the WQLS operating budget is under-budget, the extra funds are put into the reserve to be used towards capital or for a year when the maintenance costs go over-budget or capital funds are required.
Council agreed and voted that on an annual basis beginning with 2020, any unused budgeted operating funds for the WQLS project will be put into the WQLS Reserve for future capital and operating requirements.
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At the Dec. 1 meeting, council also voted that funds be included in the 2021 operating budget to complete a 20-year asset management plan for the city’s buildings and that this plan include the anticipated future funding requirements and consider options to reduce the city’s greenhouse gas emissions.
Kari Bolton, the city’s director of corporate and financial services, says city staff has found out there is a Federation of Canadian Municipalities grant available for these types of projects that opens up in January, so staff will be looking into that as they go forward with this asset management plan.
Bolton added the cost of this type of plan depends on how much detail the city wants to go into, but it could be largely funded by grants and Gas Tax Funds.
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