The City of Kimberley has reached a settlement with the contractor Copcan, who was the general contractor on the flume rehab project. A payment of $250,000 has been awarded to the contractor, which had been seeking $560,000 from the City.
This means the financials for the second phase of the flume project can now be put to bed. At the regular meeting of Council on Tuesday evening, Council approved that the budget for phase 2 be increased by $293,713 to be funded from the General Fund Operating Capital Reserve.
Of that $293,000, the biggest portion is the $250,000 to Copcan.
“Copcan was claiming $560,000 in extra charges,” said Mayor Don McCormick. “Most of that had to do with delays around the lower portion of phase 2 as a result of design issues. That amounted to about six weeks time. So, we went to arbitration and at the end agreed to settle for $250,000.”
Copcan had first submitted a request for $187,000 in compensation last November, but that grew to $560,000, McCormick says.
“It was $187,000 back in November but the clock just kept on ticking until substantial completion in mid-January. At the end of January, the amount was $560,000. We disagreed with that, clearly. So we chose to get a referee. He came back with the recommendation that if this were to go to court we would reasonably be responsible for $280,000, all related to design issues. So Copcan and the city agreed on $250,000.”
This brings the final cost of phase 2 to $3,732,895, $457,402 (13.96 per cent) over the original phase 2 project budget of $3,275,493. However, Council amended the original phase 2 budget in the 2015 capital budget, so this $293,713 technically represents an overrun of 8.54 per cent.
City staff had already prepared for a ruling that would see the city paying something to Copcan, so money from operating savings was set aside.
“Just because we are over budget does not mean there will be a tax increase,” said Coun. Albert Hoglund.
McCormick said that Council will be reporting back on all overages involved in the project. The first stage went some $2 million over budget and was a contentious issue in the 2014 municipal election.
“I think the main thing is don’t start till all your marbles are in a row,” Hoglund said. “Previous Council voted on going ahead without funding in place.”
“That probably is the single biggest thing,” McCormick said. “We are planning an official ceremony in the fall. Notwithstanding all the issues, the project is truly outstanding. We have an amazing amenity that has been created and we will celebrate that.”