Following the completion of the Georges P. Vanier seismic upgrades in October, the school district determined they had gone approximately $1,450,000 over budget.
The $33.1 million upgrade project started in 2016 and was completed in phases, including adding additional classrooms, specialized spaces such as a new auditorium and an Aboriginal education room, and relocating the library. The project also included upgrading the school’s mechanical and electrical systems that were nearly 50-years-old. Approximately $32.8 million for the project was provided by the Ministry of Education and around $1 million was from the school district.
According to SD71 secretary-treasurer Nicole Bittante, the school district did not realize they were over budget until the project was completed as they thought all expenditures had been accounted for.
“While this overspend was not identified until the project was completed, it was thought all along that the budget allowed for these expenditures,” said Bittante. “District staff were reconciling all of their amounts to the original budget. In the meantime, the original budget hadn’t been adjusted for various items. So it appeared during the term of the project that the project was on schedule and on budget.”
Bittante outlined the areas where the overspending happened, with the most significant portion being the GST.
“The original construction budget back in 2015 that was provided to the construction company did not include GST, however, the budget should have included the non-rebatable portion of GST,” she said. “There’s a portion that the district pays and then receives back in a rebate.”
The non-rebatable portion of GST was a cost to the district of approximately $477,000.
Other areas where there was overspending included a portion of the director of operations’ salary and some wages for a custodian which were not reduced from the construction budget, totaling $196,000.
In 2017, the gymnasium walls required repairs due to a safety concern, and while the Ministry provided $220,000 to address the issue, the fix still went $117,000 over budget.
The costs for the initial project planning, totaling approximately $152,000, were also not removed from the construction budget. Another $40,000 was listed as “other balancing factors,” and the project went an additional $465,000 over budget as this amount was not covered by the risk reserve.
“The $33 million included a $4 million risk reserve. It wasn’t guaranteed funding, it was an amount that was awarded through the ministry, but it was an amount that we had to apply for and there were criteria attached to it,” said Bittante. “I think the issue is that we, in our budget, gave the $4 million to the construction company and it was spent.”
The school district was only able to access approximately $3.5 million of the $4 million with the rest being a cost to the district.
Bittante clarified that the overspending was not a reflection of the contractor as they came in on budget. Their budget just should have been smaller.
“They came in on target with money that they were given, but we weren’t able to access all the funds.”
She adds that increased oversight will occur on all future capital projects to ensure any overspending is identified and taken care of immediately.
At Tuesday’s meeting, the SD71 school board voted in favour of transferring $1,450,000 of unrestricted operating surplus to cover the overspend.