West Kelowna commits to improved project management protocols considering City Hall cost report

Date of Issue: Tuesday, March 4, 2025

With City Hall construction completed at $6.17 million over budget, Mayor Gord Milsom and Council and the City of West Kelowna’s new Chief Administrative Officer Ron Bowles are directing the City to implement improved project management best practices.

Staff has completed a full accounting of the final as-built project cost for the whole City Hall/Library Building, and West Kelowna’s share is $24.17 million compared to an estimated $18 million in 2021, a difference of $6.17 million. Neither the original project budget, nor the cost overruns have resulted in tax increases, as Mayor and Council directed.

“West Kelowna Council is extremely disappointed at this news, and these kinds of cost overruns must not continue,” said Mayor Gord Milsom. “We have this wonderful, much-needed complex, which provides centralized government services and a bustling civic centre area for our community, yet it has been overshadowed by these overruns, and we must implement policies and best practices that will keep future projects on track.”

Bowles says staff will work with Council to establish policies and procedures that create controls for future projects, which will include but not be limited to:

• Budgeting using engineering standard protocols, such as fixed-price design/build or design/bid/build contracts and adequate contingency planning and budgeting.
• Confirming scope before project startup.
• Using industry standard project management best practices and trained professionals.
• Establishing procedures for managing projects during unprecedented conditions such as high inflation, global supply chain disruptions and more frequent climate-related emergencies.
• Regular reports to Council and the public throughout the project.

“I understand that many factors contributed to the overruns, and while we cannot change the past, we will deliver better in the future,” said Chief Administrator Ron Bowles. “We will press forward with the engineering, budgeting, reporting and other project management best practices that Council is directing us to deliver and implement a building process that’s predictable, efficient and transparent.”

ADDITIONAL BACKGROUND

• The Fire Hall #32 Replacement Project is already proceeding under a fixed-price design/build contract and quarterly reports to Council and the public are being provided.
• The Okanagan Regional Library’s (ORL) portion for the new West Kelowna Branch is $12.41 million, compared to $9 million in 2021, as per the ORL’s update on Oct. 27, 2024.
• West Kelowna’s $24.17 million portion of the cost for City Hall will be covered as follows:
  • City Hall Reserve Fund: $8.714 million
  • Long term borrowing: $11 million, which will be repaid using established future City Hall reserve contributions.
  • Federal Canada Community-Building Fund (via the City’s Gas Tax Reserve Fund): $500,000.
  • City’s Equipment Reserve Fund: $250,000.
  • City’s Parks Development Cost Charges Reserves: $395,342.
  • 2023 City of West Kelowna Operating Surplus: $1.54 million.
  • BC Growing Communities Fund (held in the City’s High Interest Savings): $1.77 million.

Fast Facts about the City Hall/Library Building

• The building is 23.3 metres (76 feet) high from the Library level to the top of the structure, which is the height of an average Douglas fir.
• The total area is 4,875 square metres (52,476 square feet) – the same size as more than three NHL ice sheets – with the library’s portion being approximately 1,394 sq. m. (15,000 sq. ft.).
• The structure was built using 333,850 kilograms (736,015 pounds) of mass timber, making it the largest mass timber building in the Okanagan.
• The total project cost was $36.58 million with a City of West Kelowna portion of $24.17 million and an ORL portion of $12.41 million.

Additional project information

Find the project timeline, dating back to pre-planning and analysis before the COVID-19 pandemic in Fall 2019 in the March 2025 Project Update, plus see photos and read past project reports at:

• westkelownacity.ca/cityhallandlibrary

The City Hall/Library Building is a legacy project that is designed to grow with together with the rapidly growing and modernizing community it serves:

• This multi-service facility delivers the centralized government services and the greater civic centre area for the Westside that were promised.
• Productivity and efficiency gains have been created with staff consolidated in this location.
• The City of West Kelowna, Okanagan Regional Library’s West Kelowna Branch, ICBC Driver Services Centre, the Member of Parliament (MP) and the Member of the Legislative Assembly Offices provide more than 50 services, programs and events out of the building, which is a vibrant and bustling civic centre complex for our community.
• The building is a catalyst for economic vitality and growth in the Westbank Centre area of West Kelowna and adjacent Westbank First Nation, our good neighbour.

Factors that contributed to cost escalations are:

• Scope changes including adding a library and other tenants, which added to design, development and construction costs.
• Long-duration global supply chain issues, which occurred during COVID-19, and high inflation, particularly in the construction industry, which persisted after the pandemic.
• Power supply design and construction delays were encountered as the initial design was not feasible and had to be corrected, adding unexpected time to the project.
• Delivery delays and the ultimate bankruptcy of the mass timber manufacturer, which added significant time and cost.
• Two wildfires and a Highway 97 landslide, north of Summerland, which impacted construction schedules.
• Several items that were initially de-scoped, such as landscaping, which had to be reconsidered to effectively and aesthetically complete the project.