City council has given the green light to go ahead with building Nanaimo’s new Fire Station No. 1 at a cost of $20 million. (City of Nanaimo image)

Cost to build new Nanaimo Fire Station No. 1 jumps $3 million

Potential effects of pandemic on labour and supply chain blamed for project budget hike

Nanaimo is getting its new fire station, but it will cost $3 million more than originally budgeted.

Nanaimo city council voted unanimously to approve construction of the new Fire Station No. 1 at the corner of Fitwilliam and Milton streets and to add $3 million to the project’s budget at a finance and audit committee meeting Wednesday, June 17.

The increase pushes the budget to complete the building to $20 million or about 18 per cent more than the 2017 estimate.

“This is not the result we’d hoped for in the tender, however, I would say that the market has spoken and we’ve seen the market’s mind. We have a very solid price,” said Bill Sims, general manager of engineering and public works, at the meeting.

Potential effects of COVID-19 on construction costs are cited for the increase.

Contractors bidding on the project were instructed by city staff to allow for possible COVID-19 effects that could continue through to the project’s completion, which could force labour costs higher, lower labour productivity and impact schedules and materials and delivery costs through supply chain disruptions.

“The bidders have factored this into their bid prices,” said Mark Bullen, of Capex Projects Advisory, the city’s representative on the fire station project.

There were other factors affecting the budget. The new facility to fulfill all its functions needed to have it floor space increased by 37 per cent to 23,260 square feet, but designers and planners found ways to cut costs to come within the original budget, one of which is to have the new fire station be completed in the parking lot behind the existing fire station before it is demolished, eliminating the need for a temporary fire station during construction. Such savings brought the overall cost per square foot for the new fire hall project to $860 per sq.ft. The actual construction cost is $660 per sq.ft.

“Despite escalation and despite the pandemic, the total cost per square metre … is actually a full 14 per cent less than the original estimate, which really speaks to the really significant efforts of the design team as well as the fire and rescue service who’ve signed to a facility that meets their needs. It’s functional. It’s basic. It’s efficient. There are really no nice-to-haves or optional extras in the scope of this project,” Bullen said.

Karen Fry, Nanaimo Fire Rescue chief, confirmed for council during the meeting that the new fire station will “suffice for future growth” and will have extra space and multi-purpose rooms to be used as a training centre and there is space for up to six to eight people in the dispatch centre as it is expanded.

To get the money, the city’s 2020-2024 financial plan in year three, 2022, will be amended by $3 million to $6,740,269 from $3,740,269. Up to $1.5 million will be drawn from the asset management reserve with the remaining $1.5 million to come from the general capital reserve.

The $3 million budget add-on – Bullen referred to it as a “modest but reasonable” contingency – should cover anticipated costs overages, depending on how the pandemic plays out in the coming months and years. Further total shutdowns will delay the project and drive up costs. If the pandemic winds down so could costs.

Bullen said with other building projects he is dealing with that also have multiple trades working closely together, often in confined spaces, he is hearing reports of worker productivity being impacted by 10 to 15 per cent.

“In terms of the impact of COVID-19 on the project, our cost consultant advises that had the pandemic not occurred we would still likely have been on target to deliver the project within the $17-million budget,” Bullen said.

Alternatives to going ahead with the project called for cancelling the tender and revising the design or for the finance and audit committee to cancel the tender and reconsider building the project as an integrated responder facility that could include fire, police, ambulance and social housing services.

Committee members agreed with city staff that delays would only mean even higher construction costs down the road.

“This is a time, as they say, to fish or cut bait,” Krog said. “This is a necessary project, it’s been approved, public safety is involved, both for the people who work there and the people that it services and I am happily going to support this project because, conscious of the fact that $3 million is $3 million, nothing is certain in the future … and we can only make decisions on the basis of the information we have and based on the information we have, I’m satisfied that this needs to proceed.”
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