"Bumps on the road" -- City Councillors approve use of Legacy Dividends for McCarthy design work, but raise questions on path forward

Prince Rupert City Council members  received a report related to the City's plans for the McCarthy GM building for use of Public Works on Monday, the document coming with a request for the city to use Legacy Fund Dividend money towards the revised costs for what has become a somewhat controversial public works project for the city.  

The Report which you can review here, notes of a significant increase to the design work for the proposed repurposing, with 290,000 dollars of the new cost of 365,000 dollars to be covered by the Legacy dividend funding stream.

Councillor Nick Adey led of the conversation on the topic, noting how it had generated much opinion in the community, then providing for some history on the plans to provide some clarity for residents.

"So you would have to be living under a rock to not be aware that there's been a lot of opinions expressed about this issue. So I'd like to go back through it a little bit and by way of doing so get to a couple of questions that I hope will clarify the situation for the public.

So I was in the previous council that originally took the decision to pursue this. At the time there was a degree of urgency around the situation of the existing works yard and so there was some urgency to make a decision to move this particular option. To take over the McCarthy Building as a lease to own represented  as we understood it at the time, cost effectiveness and also speed in terms of solving the problem that we needed to solve.

At the time, it was not really a particularly difficult discussion to make, based on what we understood. 

Unfortunately nothing ever quite turns out the way you want it to, and so there were some bumps on the road, COVID happened we became aware of upgrades that we did not foresee and the pipe that sits on the table emerged as a pretty consuming issue for the city to put its energy into dealing with.

So as a result we got some delays,  there have been added costs and that I think is where the controversy comes from.

So what we have here before us is a decision which is to support an amendment which involves a cost that will be taken by Legacy. "

As for the current request, the Councillor asked what the city and its residents would get from passing the motion to move forward.

"With respect to this particular decision, what is it that we are going to get from passing this motion in terms of information that we need to move forward. 

And then at the end of the process, which I hope is going to be fairly soon. I think that the public needs to know whether after all is said and done is this still the most cost effective way for us to go about making sure that our city crews have a viable place to do their work"

Richard Pucci, the Director of Operations and Intergovernmental Relations then provided some further background on the setbacks and speaking towards the current request.

"Yes, we have had some setbacks, and you're correct COVID, us going full force on our infrastructural program and also we've had some staff turnover, two leads on the project have left and we've had them replaced now, so we're back on track"

To answer your question around the best value here, we earlier this year and end of last year coming into this year; before we came forward with a cost, we had a comparison completed to do a new build, versus renovation of the McCarthy Building to make sure that we were in the right place.

And that concluded that we are still in the right place that we, the renovations will still be cheaper than building so we are still on the right track with renovations to the McCarthy building moving forward and that's with property purchase included"

Towards what the city will get from the current request, Mr. Pucci noted that Council would receive guidance on a Guaranteed Maximum price of what the renovation would cost.

"So what we will get is a GMP cost. so it will be Guaranteed Maximum Price that we can move forward with so we know the exact cost of the renovation of the property"

Councillor Barry Cunningham noted that this was just a design proposal, then asking how Operations could know what a cost effective analysis when they don't know what the what the cost of the renovations are going to be.

Mr. Pucci provided a review the various elements that the city considers towards determining that pricing, noting that they have the comparison between the renovation over a new build.

"Using square areas, using a class D estimate, so what it is. it's just a wider range class estimate and then we narrow it down with the final design and we get a very, very specific price for it, for the renewal"

Mr. Cunningham then asked if they have any idea as to when the Operations Department would move into the facility, with Mr. Pucci observing that they envision a move in January of 2025 hopefully moving in over the Christmas break period.

City Manager Rob Buchan provided a bit of additional information on the issue and staff's expectations of the path forward for the initiative.

"Just to put a little more information on the response as to what does this decision achieve. It allows staff to proceed with actually having the work done. So it allows us to get to the point that, where the move in is accomplished by January.  So I think, that's something that everybody wants to see is some action and some completion on that site"

Councillor Cunningham followed up by asking towards the cost of the renovation and if it was in the 2024 budget.

CFO Bomben observed as to the process moving forward.

"Once we know how much the cost of the construction will be, as the report has pointed out; we will be coming forward to Council with recommendations on how to fund the next phase of the project which would be construction"

Councillor Cunningham then noted that it has not yet been budgeted, to which Ms. Bomben observed was because the staff did not know how much it was going to be.

Council then moved to adopt the motion. 

The full conversation on the topic can be reviewed from the City's Video starting just after the 42 minute mark.

More notes from the Monday Council Session can be reviewed through our Council Timeline Feature.