Tenders for the provincial building project have come in nearly 20 per cent over budget, forcing the municipality to re-examine its six-year capital budget yet again.

The town received four bids for the provincial building work, which includes construction of new facilities for family and children's social services, Parent Link and a new youth centre. Parent Link has been looking for a new home for some time, as they moved out of their previous home last month.

The town had estimated that the work would cost $725,000, however the lowest tender came in at $825,000.

The municipality had been hoping the current recession would keep building costs down.

The provincial building renovations are the second project to come in over budget this month, as tenders for the pedestrian underpass also came in about 20 per cent over budget.

Town Manager George Krefting said after talking with the architect, the mechanical operations – heating, ventilation, etc – are what pushed the bid over tender. Four different companies bid on the project, something Krefting notes as healthy.

Everything came in as expected, except in the mechanical area, Krefting said.
Despite the increased cost, Krefting said the provincial building renovation is still a good deal for the town.

If you look at it in its totality, we’re getting the space for $125 a square foot. Combined with the lease, that makes it cost effective.

Krefting estimates that building a new space for the facilities would likely cost between $500 and $600 per square foot. The new lease agreement with the province will cost the municipality $18,000 a year in rental fees. Currently, the town is paying $70,000 in rental fees to provide the same services.

If you look at the cost benefit, it’s still very attractive,” Krefting said. “This also gives us three times the space we currently have.”

The town is able to secure an inexpensive deal since it is essentially providing provincial programs such as FCSS and Parent Link.

The town manager said he's not overly concerned with the cost overruns at this point.

Mayor Richard Ireland said Jasper may need to take a second look at its capital projects in order to accommodate the cost overruns.

It's possible there could be a re-ordering of priorities. The provincial building project has administrative benefits, and since the project is already under way, it can’t be readily delayed,” Mayor Ireland said.

The town has already paid a 30 per cent premium on construction work, Mayor Ireland said.

The project is being paid for through the Alberta Infrastructure grant funding.