Events Centre bill rises to $80.2 million

By JOHN MOORHOUSE Thursday, December 11, 2008 Penticton Herald:

More than $1.6 million in additional expenses have pushed the total cost of the South Okanagan Events Centre to almost $80.2 million. However, no further tax increases are anticipated, according to a new funding fact sheet for the project released by the City of Penticton. Much of the additional costs will be paid through a greater use of city casino money. The total price tag now amounts to $80,184,863 -- up from the $78.5-million estimate last March. Jack Kler, the city‘s director of corporate services, said Wednesday a number of factors impacted the cost. Higher than anticipated debt interest costs have added $500,000 onto the bill. Kler said even though interest rates have fallen in recent months, loan rates have not entirely followed suit. The rapid decline in the Canadian dollar has also increased the cost of fixtures, furniture and equipment, since many of these items are supplied by U.S. firms. The city has also purchased used basketball flooring for the facility at a cost of $58,000. This will enable the Events Centre to host teams such as the Harlem Globetrotters in April, as well as major dance competitions and other events. Kler said $500,000 was spent on consultants to audit the quality of construction to make sure the city is getting full value for its money. “The last thing we want is to it take over and realize it‘s not what we were expecting,” he said. “We did that strictly as an abundance of caution.”

This total bill also includes such “soft” costs as higher operating expenses while construction activity continues on-site. The additional costs will be picked up through casino funds. Kler said the city will use $16 million of its own casino revenues over 11 years, instead of $14 million over 10 years as previously proposed. On the plus-side, the city gained $700,000 in interest on provincial grants, held-back construction fees, and casino money already allocated to the project. While a final completion date for the Events Centre has still not been determined, the city has left the door open to further cost changes. “The projected final costs will be subject to resolution of any pending contractor and owner issues at the time of substantial performance (completion),” states the funding news release. The project includes $17.9 million for relocating sports fields from the Queens Park site, as well as $6.6 million in additional enhancements. The $3-million “wellness centre”, much of which was recently leased to the Okanagan Hockey School, accounts for almost half of the enhancements.
Other major items on the list include:
# Consulting/soft costs - $550,000
# Debt issue expenses - $500,000
# Bar/lounge improvements - $460,000
# Wood content - $455,000
# Score clock upgrade - $440,000
# Vees dressing room - $400,000
# Sport lighting/shades - $250,000

Mayor Dan Ashton, who had called for the funding update during his inaugural address last week, said Wednesday the information is meant to make all cost figures available to the public. “I want it black and white. I don‘t want any ambiguities,” he said. “As of the first of December, this is the best estimates to date of where it‘s going to be.” Ashton said city staff and project contractor Giffels Partnership Solutions are working to address the question of when the project will be completed. Considerable finishing work remains to be done on the Events Centre‘s smaller community rink. Ashton said he is satisfied with the cost figures to date, noting the previous council decided to make improvements as the project progressed. “We made some additional decisions for additional expenditures based on good business principles,” he said. “Am I happy with those? Yes, I am. They added a tremendous value to the centre.”