City discussing rapid transit station’s tab

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This article was published 24/01/2018 (2807 days ago), so information in it may no longer be current.

More than two years after it officially opened, city administrators are recommending shelling out an extra $1,349,866 to pay for the Jubilee rapid transit station — money that’s owed to the developers and the arbitrators who investigated cost overruns.

The recommendation, along with a short history of the station’s original budget and miscellaneous costs, is presented in a report available on the City of Winnipeg website. It will be discussed at an infrastructure renewal and public works committee meeting at city hall next week. 

The budget bloat wasn’t a shock, according to public works chairman Coun. Marty Morantz, as he’s been aware of the arbitration underway for some time. Overall, he called the deal “a very good agreement and a good outcome for taxpayers.”

Developer Gem Equities Inc. agreed to pay 57 per cent of the costs to build the Winnipeg Transit station, while the city was on the hook for 43 per cent. The original estimated building cost was $3.9 million — with the city’s portion being $1.67 million — but it wound up totalling $8.8 million, according to the developer.

The city would have owed $3.8 million to Gem had negotiators not whittled the number down to $648,866, Morantz said. The arbitration, requested by Gem in 2016, cost the city another $721,000.

Morantz said he would support the request to increase the station’s budget, but ultimately council must ratify the move through a vote.

“I don’t want to pre-suppose how people will vote because that’s what the process is, but I’ll be supporting the report at committee,” he said. “The reality is we have an arbitration order, which would be legally binding anyway. So the money is owing.”

Coun. Jeff Browaty (North Kildonan) sits on the public works committee and expects the city to “vigorously work towards recuperating these costs,” which he’ll ask about at the meeting next week.

“While I’m happy to see the arbitration lead to a total project cost far less that the $8.8 million claimed by GEM, it’s disappointing the process required hundreds of thousands of dollars in arbitration-related costs to reach a resolution,” Browaty said.

Browaty said, from his understanding, Gem’s cost overruns stemmed from construction delays. According to the public works report, the project got underway in October 2014.

A Winnipeg Transit spokesperson did not return a request for comment about why the work was delayed before deadline Wednesday.

The report states the southwest rapid transit corridor reserve (stage 1) still has an available forecasted balance of $2.5 million. So the request for extra funding for the Jubilee station would reduce the balance to $1.2 million, “which has been set aside in the event that it is required for property settlements for stage 1.”

The Jubilee station opened to the public June 21, 2015. Construction on the Pembina Highway underpass is being done as part of the second phase of the southwest rapid transit corridor project.

jessica.botelho@freepress.mb.ca

Twitter: @_jessbu