Costs rising for major infrastructure as City’s Public Work Operations Centre now $55M

The City passed multiple borrowing bylaws to help cover the escalating costs of this construction project. Image: City of Cold Lake. The original renderings from S2 Architecture about how the new Public Works shop will look once finished. 

The realities of building major capital projects is dawning on the City of Cold Lake, who saw a staggering cost estimate of what the new Public Works Operations Centre will cost with current tendering – a whopping $23 million more than they budgeted for. 

This brand new building has long been planned for in Cold Lake over successive councils, but now sits at a price tag hovering towards $55 million, with still uncertainty whether tariffs could affect the sticker price even more.  

“The cost escalation is massive in today’s world, and so this is going to be the big handcuffing that a lot of municipalities in Canada now have to realize,” Mayor Craig Copeland said on The Morning After. 

“How do you do these major projects based on your cash flow? We’re going to the debt market. That’s the only way we can do things in Cold Lake.”

Long discussion

Background

The project’s sodturning was held back in October 2023 on 69th Avenue near the Cold Lake Museums, with the investment meant to centralize all aspects of the City’s public works into one shop.

Current facilities were overcrowded and couldn’t handle the growing equipment fleet the City uses for maintenance.

The scope of the building is set to cover 50,000 square foot. Located on 40 acres of land, the designs included four fleet maintenance bays, four transit bays, seven shops for departments, a wash bay, stormwater pond, and 70 parking stalls.

Last Tuesday, city council received a project update with the latest financials, as the deal has stood still as new costs were factored into the puzzle.

Having set aside $32 million over the last 10 years for the project, some 2026 capital dollars must be allocated over, along with the Local Government Fiscal Framework program from the province, multiple debentures (loans), and some grants they hope to succeed with.

“The City of Cold Lake has tendered out much of the subtrades in regards to the Public Works Operation Centre that is being procured under construction management program, so the the final cost of the bill doesn’t come till later on, but we’re deep enough into there that we’ve received a bunch of feedback,” explained CAO Kevin Nagoya during the meeting, describing how GenCol is the main construction manager.

Council passed motions on two borrowing bylaws, $3.5 million towards the Stormwater Management Pond number 133A, and an additional $5 million towards the overall project.

This will total $23 million in loans since the first debenture in 2022.

The strategy of taking on debentures isn’t new to Cold Lake, as many projects, including the Energy Centre, Lakeshore Drive, and Wastewater Treatment Plant, to name a few, are funded in this way.

If construction begins now following this motion, the building could be up in 2027.

“We’ve really kind of handcuffed the next council for the first year of their term, unfortunately, because we’re using 2026 funding that’s going to come from two different funding envelopes. But this is going to be the future, unless something is significantly going to change and the province is going to give municipalities more money,” said Copeland. 

“The province and the Feds don’t actually give municipalities a lot of money. Now the province would argue and say, ‘Oh, we give you a lot,’ but in the grand scheme of things, when you look at how much dollars per capita the province gives and the Feds give, it’s pretty minimal compared to what we’ve got to collect from the taxpayer to run the municipality. So this is going to be the challenge going forward, not only for Cold Lake, but for all the municipalities. 

“We collect about $23 million I think it is in property tax from the residents and downtown commercial. You top that on with the money that we do get from ID 49 which is around $12 or 13 mil [sic]. You can do the math, so you got about $35 million coming in, and of that 35 million, only about eight, I think it is, is for capital. The rest is operating your municipality.”