The Town of Creston has made the recommendation to increase the project budget for the Creston Emergency Services Building (CESB) from $5.4 million to $7 million, citing rising construction costs exacerbated by the COVID-19 pandemic as a significant factor in driving the surge in the budget.
FireWise Consulting Ltd. associate Ernie Polsom, who sits on the project’s Technical Building Advisory Committee (TBAC), said that the pandemic has “seriously disrupted” the work on the building, highlighting increased costs on building materials, such as lumber and steel, as well as mechanical systems and labour.
“The availability of materials has been severely affected, and there is no indication that this will be alleviated any time soon,” said Polsom. “Pre-COVID, the cost of lumber for the facility was estimated at $350,000 whereas now, the cost of lumber for the building is estimated to exceed $1 million. Clearly, changing the building envelope to utilizing products other than lumber will most certainly benefit this project.”
The recommendation by town council to increase the budget was made following a special closed committee of the whole meeting on Feb. 24, where it was established by councillors that the budget boost could be achieved by utilizing surplus and reserve funds, with no increases to borrowing or taxation.
The project’s initial budget was established in 2016, and after an October 2018 referendum, the town received voter permission to borrow a maximum of $4.5 million for the construction of the new fire and ambulance hall. It was around this time also when council committed to contributing $1.0 million from reserves towards the project.
A tender process was launched in November 2019, where five general contractors were invited to participate in the procedure. In January 2020, 2.14 acres of land located on Cook Street were purchased for $375,000 from Choice Properties Real Estate, which would serve as the location for the future emergency services building.
However, after two tender bids exceeded the funding available for the project in August 2020, town council made the decision to cancel the tender process. Council then made the recommendation to issue a request for proposal (RFP) for construction management services in October 2020, which was awarded to Kelowna’s Chandos Construction Ltd. earlier this month.
“After engaging in their own value engineering processes and evaluations with other construction professionals, Chandos has indicated that it is clear that there is extreme instability in today’s building market, with suppliers unable to guarantee prices for anything more than short durations,” said Michael Moore, the chief administrative officer (CAO) at the Town of Creston.
In addition to the impacts of COVID-19, Moore said that Chandos has advised the town that construction costs have increased by approximately 20 per cent since 2016.
“Unfortunately, this all means that the existing design for the CESB cannot be built within the 2016 approved budget of $5.4 million,” he said.
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