Inflation, supply costs drive North End Winnipeg police station price tag past $31M: report

The North End Winnipeg Police Service station will cost $6 million more than expected due to inflation and supply chain issues, according to a report from city staff.

The proposed project will take up about two hectares (4.9 acres) of the Old Ex Grounds, in the city's northwest.

It will replace the decrepit police station on Hartford Avenue, which has been plagued bypests such as rats,is too small for current needs and is out of date, the police service has said.

A report to the city's property and development committeeasks to approve a total budget of $31.7 million.

The original budget estimate from 2018 was $23.4 million, but that estimate was revised in 2020 to$25.7 million $6 million less than the latest figure.

Staff considered three construction companies for the project tender, according to the report, and settled on the lowest bid around $26 million, fromPenn-Co Construction.

But the report says before the tender closed,"anecdotal information provided by the project cost consultant" suggested construction costs have gone up by about 11 per cent in the past yeardue to "prevailing world economic conditions and issues such as supply chain disruption" that have hit the local market.

The report says similar conditionscould continue, which is why it recommends approving an extra $6 million on top of the $25.7 million estimate.

WATCH | Cost to replaceNorth End Winnipeg Police station skyrockets:

Cost to replace North End Winnipeg police station skyrockets

2 years ago

Duration 2:23

The North End Winnipeg Police Service station will cost $6 million more than expected due to inflation and supply chain issues, according to a report from city staff. The proposed project will take up about two hectares of the Old Ex Grounds, in the city's northwest.

The proposed $31.7 million price tag includes $1.6 million for acontingency fund to cover rising costs, according to the report.

Penn-Co's bid also included a plan to reduce the scope to "address ongoing project cost escalation concerns," but the plan isn't includedin the current report.

The report says staff and the Winnipeg Police Service support increasing the budgetto around$31 million.

During the committee meeting today, Coun. Kevin Klein (Charleswood-Tuxedo-Westwood) asked police chief Danny Smythif the building as planned is still needed, sincethree of the four current stations are currently closed to the public.

Smyth said it's important the building go forward as is since it's part of the service's "business continuity plan." Smyth explained that the new building is necessarybecause if something were to happen to one station, the other three areneeded to take on extra services.

"It was built in the 1940s. It was never intended to house as many people as it does now," Smyth said in the meeting.

"It's got a faulty roof that's not going to last another winter. We're taking a gamble every time we go through a winter cycle."

Smyth also said the $6 million is "purely" associated to the inflation costs for construction.

"These plans have been on the books in the city since 2003," he said.

"The $6 million dollars you're referring to are a direct result of inflation and costs. This project has been dragged out for five years now."

The service has cut down on the original scope of the project in the past to try and save costs.

The decision to approve the budget increase, which would award the construction contract, moves forward to the executive policy committee next week. Klein was opposed, but Coun. Cindy Gilroy (Daniel McIntyre) and Coun. Janice Lukes (Waverley West) voted in favour. Coun. Vivian Santos (Point Douglas) was absent.

Council as a whole has the final say on whether to approve the tender and the increased budget later this month.

The tender process is still open until Aug. 1, and the report states construction won't start until the city officially awardstheconstruction contract.

The city's property and development committee will discuss the budget increase at its meeting on Monday afternoon.