The proposed Ross Street underpass. (City of Salmon Arm illustration)

The proposed Ross Street underpass. (City of Salmon Arm illustration)

Council awards contract for Ross Street underpass

Project costs rise to $20 million, city scrambles to cover $5 million shortfall

After many years in the making, the city has awarded the contract for construction of the Ross Street Underpass – but not without some ‘miraculous’ final-stage scrambling.

At the June 28 city council meeting, council awarded the tender to a Surrey-based contractor, Kingston Construction Ltd., which provided the lowest price – $14.8 million – among five pre-qualified contractors.

City staff noted that Kingston has committed to subcontract to many local companies, including Webb Contracting Ltd., Okanagan Aggregates, Harris Rebar, Landmark Solutions Ltd., Grizzly Curb and Concrete, and All-Phase Electric.

Although the tender came in at $14.8 million, which is under the $15.2 million the city budgeted for the project, the city’s total cost was then $5 million over budget with additional work included. Staff reported the high bids were due to large increases in cost of construction materials.

The beyond-the-bid $5 million included costs such as engineering services, CP (railway) works and a seven per cent contingency, bringing the total cost to $20.2 million.

In 2018, the city went to referendum and secured taxpayers’ approval to borrow $5.3 million for the then-estimated $12.4 million project, but no further borrowing is permitted.

However, in the eight weeks following the closing date for the bids, the city was able to come up with the $5 million shortfall. That was done by reallocating city funds, receiving an additional $1.5 million from CP Rail, and securing grants from the provincial and federal governments. CP is now contributing $3 million total.

Page 61 of the city’s June 28 council agenda lists details on sources of the additional funding.

Read more: ELECTION 2018: Majority of voters give the nod to underpass spending

Read more: Projected cost of Salmon Arm’s Ross Street underpass goes up by $3.5 million

When thanking senior staff for their work, Mayor Alan Harrison called it “quite miraculous” for a small community to come up with $5 million in eight weeks. 

Council thanked staff profusely for all their work.

Coun. Kevin Flynn also thanked the mayor, and said he thinks a community should be permitted to borrow more when costs increase substantially.

“I think the community spoke very loudly and clearly that they wanted this project done. I think the process though is flawed; when you go to referendum, it’s sometimes three to four to five years for construction, and clearly, if anybody’s seen the cost of building anything now, costs have gone up significantly.”

Flynn said covering the shortfall seems to have been split between the city’s community works fund, the provincial active transportation grant and an additional CP contribution.

“I think CP really needs to be thanked for coming to the table as well with additional funds. It’s not exactly a third, a third, a third, but it truly is a partnership.”

Coun. Louise Wallace Richmond pointed out that the $5 million accessed in the final eight weeks is less than the funds spent preparing the project over the past decade.

“And so we are quite literally, signing the papers and getting the job done and for that I am extremely grateful to senior staff as well as our partners. It’s going to change the way we live and work in the downtown core, so let’s get it done.”

Read more: Salmon Arm’s Ross Street underpass to go to tender but not without risk

Read more: Underpass in Salmon Arm expected to go to tender within two weeks

Read more: Window closes in July for Salmon Arm to award Ross Street Underpass project

Coun. Tim Lavery also expressed appreciation, saying he doesn’t think the public realizes how much work staff and senior management have put into the underpass project over the years, including former chief administrative officer Carl Bannister.

Coun. Debbie Cannon referred to the stress she saw on the faces of a few people when it was reported how over-budget the project was. She said staff and the mayor, as well as councillors with connections to government ministers, are to be thanked, as is CP.

Harrison emphasized that with the five tender submissions, it’s clear the quoted price is competitive in today’s conditions. However, he added, the project is just about 25 per cent or $5 million more than budgeted.

He said it’s not surprising, given the current cost of construction materials, but if council doesn’t vote to proceed, it’s unlikely such an opportunity will arise again for many years.

Harrison thanked council, specifically Couns. Chad Eliason and Sylvia Lindgren, “for helping open up avenues of opportunity, mostly through relationships.”

He expressed gratitude for Shuswap MLA Greg Kyllo for working hard behind the scenes and across party lines. He also thanked B.C. Transportation Minister Rob Fleming, “who brought forward a million dollars over two years.”

He thanked transportation ministry staff, CP staff and former CAO Carl Bannister. He thanked city engineer Jenn Wilson and director of engineering and public works, Rob Niewenhuizen, who he said carried the project for the past two or three years.

Like other council members, Harrison supported the awarding of the tender, calling it “a huge leap forward.”

The city issued a news release regarding the contract on June 29.

Some construction is expected to start this summer, mostly on the north side of the tracks.
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Salmon Arm council