An email forwarded by former city manager Kathleen Soltis to Mayor Lyn Hall on July 4, 2018, warned that the city's parkade project at Sixth Avenue and George Street would be significantly over budget.
The email, released to The Citizen on Friday through a Freedom of Information request, originally came from Frank Quinn of A & T Project Development Inc., the Park House condominium developer.
Quinn emailed then-city general manager of planning and development Ian Wells on July 3, 2018, to let him know the project budget was in trouble.
"Ian, Call when you have a moment. We have been taking our drawings to market to price the parkade and we are seeing very large overruns from the rough budget discussed," Quinn wrote. "The sophisticated engineering around water control,tanking,pumps and membrane are part of it but the trump tariffs on steel;unavailability of trades in pg and a general inability to obtain materials is really affecting numbers. Not only does it affect your cost of the parkade but it makes our formula for paying for parking so high that our units won't sell. Jeff is putting together numbers for you now and will have them before he visits this week . We will find a solution to this."
Wells forwarded the email, titled Parkade cost overruns, to Soltis on July 4, 2018, at 1:30 p.m.
At 1:54 p.m. that day, Soltis forwarded the email to city director of finance Kris Dalio, Wells and an email listed as "Mayor."
"Heads-up. We'll keep you informed as we know more," Soltis wrote.
Roughly an hour later, at 2:59 p.m. on July 4, 2018, A & T Project Development Inc. president Jeff Arnold emailed Wells and city manager of development services Deanna Wasnik an updated budget for the project, showing the estimated cost at $19.98 million.
In his email, Arnold said the majority of the tenders for the parkade project – excluding mechanical, electrical, fire suppression and membrane roofing – had been completed.
"Our original preliminary budget based on very limited information and pre design was for 266 Underground stalls and 68 surface stalls the project is now 289 Underground stalls and 62 surface stalls an increase of $1,520,343.30 including our 5%.," Arnold wrote. "We have had some unforeseen items or items that have come up that were not typical to what we had expected of the parkade. These items are building in 2 phases vrs. 1 phase, tanking of the foundation including a raft slab, Sheet piles in lieu of shotcrete, dewatering of site and miscellaneous ( demo of structures, oil tanks, upgraded overhead doors, generator etc.) These items total approximately $ 2,321,708.55 The other factor that has come into play is Trump tariffs, extremely busy and volatile construction market with a shortage of skilled labour and increase in construction costs that amount to an overrun of $2,947,334.97."
Arnold's email included a spreadsheet, which offered a detailed breakdown of the revised budget with changes indicated in red. The spreadsheet shows the original budget of nearly $12,716,000, and a total budget of $19,985,900.22.
Items highlighted in the budget Arnold sent to the city ranged from more then $1.35 million for sheet piling to $1,683.72 for additional products for sump pumps.
"Our group is extremely stressed over this, grinding on every aspect and have been working tirelessly on trying to be as efficient as possible to try and find savings," Arnold wrote in his email. "For most part we have been getting 2-4 prices per category of trade.
I have enclosed our detailed budget for our review on Friday and we are all about assisting in solutions on where we can. Lots to talk about."
Wells forwarded Arnold's email with the detailed cost breakdown to Soltis and Dalio at 3:27 p.m. on July 4, 2018. Ten minutes later, Dalio replied to Wells and Soltis, saying "This warrants a revisit in the prioritization of our current and future capital projects."
Wells replied to Dalio and Soltis seconds later to say, "I agree."
There is no indication in the emails provided by the city if Soltis did, in fact, follow up with Hall about the cost overruns.
On March 11, 2019, – 314 days after the city received the updated project budget from Arnold – council approved the amended city financial plan by adding the parkade project. Council was asked to approve the initial, preliminary budget of $12.6 million.
On Sept. 24, 2019, Arnold emailed Wells another updated budget, this time showing the project budget had grown to $22.64 million.
On Nov. 19, 2019, the city's finance and audit committee which includes Hall and councillors Garth Frizzell, Frank Everitt and Cori Ramsay, received an update on the city's capital projects, including the parkade. The committee was told the total spending on the parkade project, as of Nov. 5, 2019, was at $16.37 million.
Then on Aug. 31, 2020, city council was asked to approve the city's annual report, which showed the total spending to date on the parkade at more than $17.96 million. It was that report, which prompted Coun. Brian Skakun to put forward a motion asking for a report on the budget status of the parkade project.
It was only on Dec. 7, when council received a report from Wells – by that time the acting deputy city manager after the departure of Soltis – that the full extent of the cost overrun of the project was revealed.
The final cost of the project came to $34.16 million – $22.46 million for the parkade, $597,138 to connect the parkade to the city's district energy system, and $11.1 million for water and sewer upgrades in the area, and other off-site works. The budget for the utility upgrades associated to the project was approved by city council on March 11, 2019.
Hall did not reply to multiple requests for an interview Monday.
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