Sylvan Lake’s new recreation complex will come in $1 million over budget council found out recently.
The $37.7-million NexSource Centre was opened in March to much local enthusiasm.
Throughout construction, it was regularly reported that it was on schedule and on budget.
However, a detailed audit of the project showed that some early costs related to feasibility and design work and demolition did not get included in the overall budget. That early work cost about $477,000.
Another $575,000 in builder expenses was also overlooked.
In a report to council, town staff estimate the NexSource Centre and Aquatic Centre rehabilitation project face a $999,000 budget shortfall. That is equivalent to 2.65 per cent of the overall project budget.
NexSource includes two regulation size arenas, one topped with a three-lane running track, five-sheet curling rink, aquatic centre and a seniors centre have been included in the facility. Multi-purpose rooms, a new lounge and children’s play space round out amenities.
Town communications officer Joanne Gaudet said complicating the budgeting was that the project began with the community services department and was later transferred to public works.
There were also a number of staff changes during the course of the project.
The town is also anticipating revenues will fall about $334,000 short of original estimates.
To cover the costs, council voted to dip into $1.5 million in unused provincial Municipal Sustainability Initiative grant money. The town also has $5.5 million in a surplus account that could be used if needed.
“At the end of the day a million dollars is a big amount of money,” said Gaudet. “With the amount of work that went in, and looking at it today, how great it works and the quality that is there, we wouldn’t have changed a thing, I think.”
During construction when a surplus was expected, the decision was made to replace aging outside cladding on the Aquatic Centre and elsewhere at a cost of $450,000. Another $235,000 was invested in kitchen and concession equipment and $160,000 for audio-visual equipment.
“I don’t think anyone would have been satisfied keeping the existing cladding on the old structures.”
The town built the project with a thin 2.7 per cent — about $1 million — set aside as a contingency budget. Typically, a project of the NexSource’s size would carry a five to 10 per cent contingency to address unforeseen expenses.
In future, a bigger contingency will be required. Administration plans to come back to council with a financial policy requiring all capital projects to “carry a contingency amount in accordance with industry norms,” read the report to council.