The price tag for Ottawa’s new central library has shot up $ 131 million – an increase of nearly 75 percent – to $ 306 million, leaving the city on the hook for another $ 65 million, according to a report released Thursday.
Known as Ādisōke, an Anishinaabemowin phrase meaning storytelling, the new super-library is a joint project between the Ottawa Public Library and the Federal Library and Archives Canada (LAC), where the costs are spread over approx. 60-40.
The building will stand – some excavations and land clearing have already begun – on Albert Street at the east end of LeBreton Flats.
The cost of the project was to be set at $ 175 million, with the federal government paying $ 71 million. The city would then pick up the remaining $ 104 million plus an additional $ 18 million for the 200-seat underground garage.
When the two listed bidders submitted their proposals last month, each of them was very overbudgeted. PCL Construction had the lowest bid of $ 334 million with the price tag on the garage $ 10 million more than expected.
The city’s portion of the project has now increased by $ 64 million to $ 168 million. And according to the report, an additional $ 1.2 million will be required to fit food and beverages in the new library.
That means the city must find more than $ 65 million to keep the project alive, an issue it will discuss at a special finance and economic development committee meeting on Oct. 19.
The Treasury Board has already approved the increased costs for the federal part of the project.
City staff recommend that the city borrow an additional $ 36 million because the extra debt falls within the council’s self-imposed ceiling of 7.5 percent of the tax revenue that goes to debt service.
The library would contribute $ 28 million: $ 16 million would come from the library’s own surplus fund (it has saved millions over the last 18 months due to COVID-19 restrictions) and $ 12 million would come from a development fee fund that pays to expand public libraries.
The city would also borrow an additional $ 10 million to pay for the overrun costs for the parking garage. The underground garage is paid for by parking fees.
The end date has also been postponed by another year – again. The original completion date was in 2023, but it has now been moved to 2026, provided the council approves the extra money for the project.
Construction inflation blamed: report
The report blames the giant leap in the project’s budget on rising construction costs.
In 2016, when it estimated the cost of the library, the city’s purchasing staff included a 10% “escalation preparedness”, but it has now ballooned by 55 percentage points, according to the report.
“Actually observed construction inflation in Ottawa, as outlined by Statistics Canada for midpoint construction, is currently above 65 percent, as has been confirmed by a third-party volume meter,” the report said.
The report further states that COVID-19 increases costs due to material shortages, supply chain pressures, impact on labor and “an overheated market.”