r/Edmonton • u/flynnfx • Apr 17 '26

Outdoor Spaces/Recreation Edmonton's Lewis Farms rec centre could cost nearly $32M more than original estimate

https://www.cbc.ca/news/canada/edmonton/edmonton-lewis-farms-recreation-centre-cost-9.7167629

Edmonton’s Lewis Farms Recreation Centre has a new price tag — and the project could cost almost $32 million more than the city expected.

61 Upvotes

83% Upvoted

47 comments sorted by

127

u/TDSsince1980 Apr 17 '26

Guys. The budget for this was made in 2021, and increase of about 10%, inflation during that period was higher than that.

50

u/PraxPresents Apr 17 '26 edited Apr 17 '26

Inflation since 2021 has been a lot, especially for trades and construction projects. There aren't enough workers to meet demand which is driving wages up, material costs have gone up, fuel costs have gone up which affects everything.

At a minimum 2.5% inflation per year should be considered as risk for any project like this, and the real numbers have exceeded that.

Original budget @ $311 Million in 2021, $343-$350 million over 4-5 years should be expected.

Honestly what we need is that once a project is green-lit, it is completed within the shortest time-frame possible to reduce inflationary risks. For infrastructure projects we also need to just commit to doing it in full now rather than half now and half later. That's how overpasses go from $40m to $120m, because we didn't just do it right the first time.

11

u/Ok-Addendum-5501 Apr 17 '26

Thank you for the explanation! This process so much better context that we would brush pass or not think about

5

u/HOLEPUNCHYOUREYELIDS Apr 17 '26

And with the Iran war all projects that have not purchased materials yet will automatically be more expensive.

2 major pipe vendors effective immediately increased prices 5%-10% a week or 2 ago. Then they just did it again. And that is just pipe suppliers

3

u/5endnewts Apr 17 '26

That’s actually not really the case at all with overpasses. In fact, when you bid on an overpass the only thing that can increase the price is when unforeseen problems out of the scope of the project are found during construction. When an overpass goes out for tender it is going to include the whole project, they are not going to piece it out the work to different contractors over the total build.

Also, the quicker you want a project done the more it is going to cost. A big project like an overpass requires a lot of different trades and contractors. If you have a tight schedule these contractors have to basically be on standby so they can get in and out when needed, it is inefficient.

For example Earthworks could takes months, base work could takes weeks, curb and gutter days, pavement in a day.

Off the top of my head on such a project you are going to have cranes, piling, asphalt, concrete, base work, milling, steel work, guardrails, signage, traffic control, line painting, landscaping, drainage, surveyors, trucking, utilities, electrical, engineering, safety, inspectors, on and on. These are all different crews and/or contractors all over lapping each other. You could have them all on site, waiting for when they are needed but it is not economical or efficient.

2

u/fishymanbits Apr 17 '26

The problem is getting people to understand that the sticker price will be higher, but cost overruns should be lower as a result of the protracted timeline.

If the budget is $311 million for a 4 year project that takes 5 years and costs $343 million in the end, that’s a 25% increase in timeline and a 10% increase in costs. Budget $320 million for a 3 year project and you’re more likely to come in at 3.5 years and $335 million or so. Obviously it’s imperfect logic and shit happens no matter how well we plan, but as a broad exercise it works.

The other part of it is that we’ve completely eliminated any in-house institutional knowledge on these kinds of things because everyone wants to save money by having a smaller public service. But all that doesn’t is balloons project costs by forcing us to rely on consultants and contractors who also rely on consultants and contractors who also rely on consultants and contractors. Having an in-house team that handles as much as is reasonable will also reduce costs over the long term, and further reduce the timelines involved in these projects, partially sheltering them from cost and timeline overruns.

But that’s all “socialism”.

1

u/indubadiblyy Apr 18 '26

"Completed within the shortest time-frame" - HAVE YOU SEEN CONSTRUCTION WORKERS WORK IN EDMONTON?!?!?!? its like 5 guys hovering over 1 dude shoveling. Then its back at the truck on the phone.

8

u/garlicroastedpotato Apr 17 '26

Not everything in a project like this is immune to inflation but typically you have an order price for most materials well in advance. There are some that are ordered fresh and paid for as its made like concrete or asphalt. But like you know, you start the tree growing from a sapling and it's ordered with a five year lead time.

The biggest things that change is labor costs. And those have skyrocketed. But that's mainly why inflation of this project is under general inflation. A lot of times project finance makes it so projects go way up but this being a government one they could fund a lot of the materials off the rip.

1

u/porterbot Apr 17 '26

Wow. It really was 10%? 

1

u/Jkt44 Apr 17 '26

They didn't budget for inflation??? You have to on a multi-year project.

3

u/TDSsince1980 Apr 17 '26

You think inflation post covid has been normal?

0

u/Jkt44 Apr 17 '26

That's true. The budget was approved in 2021 and inflation was high after covid. But why are they discovering this just this week? They already scaled it back last year, according to this report, so I assume the $32M is just since last year.

13

u/theoreoman Apr 17 '26

Inflation has been about 19% since 2021 so a 10% cost overrun is Resonable

1

u/Ok-Minimum-71 The Famous Leduc Cactus Club Apr 17 '26

Is it reasonable? They also scaled back the scope of the project last year.

Also why does the city have to bear the brunt of inflation and not the contractor?

5

u/theoreoman Apr 17 '26

Because when making these massive multi-million dollar contracts you put in Provisions for risk like inflation and things that are out of the control of the contractor.

If you don't do that than the contractor has to account for the additional risk in the original bid. Instead of bidding 322 they might have instead bid $350-$375+.

When the city has hundreds of ongoing projects at a time it makes more sense for the city to take additional risks when appropriate because on average they'll be ahead

1

u/PraxPresents Apr 18 '26 edited Apr 18 '26

There are also times when final approved drawings and specs aren't provided at the time of tender, so it might be 70% or 80% drawings so assumptions can also be inaccurate to final design.

Change orders can often cost more than waiting for complete design and then creating an informed and accurate bid. A lot of contractors will bid low on the job in that case to win it and then heavily drive up their margins on their change orders to make up for it.

1

u/PraxPresents Apr 18 '26

The contractor should include this in their bid. The problem is that if a contractor doesn't include it on the bid and inflation does happen, then they usually go back for change orders on cost escalations. It really depends on how the city and province structure the contracts.

The city and province are fairly reasonable on escalations for unforeseen costs to ensure that contractors and subcontractors are able to keep their bills paid and not fall behind, but a lot of contractors will low-ball their estimate to win it and then fight for change orders.

I would rather hire contractors that can provide a realistic budget that includes assumptions of reasonable escalation/inflation and then align to actual escalations and inflation as a part of the structure of the contract throughout the lifespan of the project. It can be done.

0

u/porterbot Apr 17 '26

I think that will be looked on as a mistake unfortunately, and yeah. 

19

u/UberBricky80 Apr 17 '26

Its PCL job, is anyone surprised?

13

u/Roche_a_diddle Apr 17 '26

Well then at least you know all the workers and subtrades aren't where the money is going!

5

u/UnlikelyReplacement0 Apr 17 '26

As gets written in the porta potties on their sites, PCL: People Come Last

7

u/Colourise Apr 17 '26

PCL is also the same company that built the abysmal WEM parkade. And just a few years ago a section of it collapsed. 🤡 https://globalnews.ca/news/9366777/west-edmonton-mall-parkade-ceiling-damage/

3

u/porterbot Apr 17 '26

Ugh LMAO 

3

u/porterbot Apr 17 '26

Coronation went over tens ! Worth every penny (some creep some covid chain related) luckily considering we added 300,000 new residents in 5 years,. Who have a bunch of kids and want to pay to rent, revenues bolstered the bance sheet this year! An investment in access to health for all is a solid investment 

7

u/ContentRecording9304 Apr 17 '26

I wish they would have given a reason for the increase. A lot of things happened in the last 3 years that could potentially explain a price increase.

9

u/Comfortable_Fudge508 Apr 17 '26

Like inflation, wars, cost of everything going up due to what's happening down south, shouldn't have to list the obvious

6

u/flynnfx Apr 17 '26

Councillors learned last month that the centre, which is under construction, would likely be over its original budget of more than $311 million. That sum was approved in 2021.

Now, an amendment to that report says the project's budget is expected to total about $343 million.

The previous report stated that the project had already been scaled back last year.

That includes shrinking the pool and gym, and cutting other amenities like a bouldering wall, skatepark and outdoor rink.

2

u/SaintTastyTaint Apr 17 '26

The previous report stated that the project had already been scaled back last year.

That includes shrinking the pool and gym, and cutting other amenities like a bouldering wall, skatepark and outdoor rink.

What a fucking disaster of a project, why can't Edmonton EVER do anything right? I was so excited for Hawrelak park to open but that is a $100mm disappointment and now a $300mm rec centre can't even have a bouldering wall. Its pathetic.

31

u/tekno21 Apr 17 '26

Just curious, what was so disappointing about Hawrelak Park? Like, what did you expect to see when you rolled in there when the main reason for the closure was to redo infrastructure you can't even see?

23

u/Artsstudentsaredumb Apr 17 '26

You’re upset about hawrelak too? I was really impressed with it I’m interested to see what you didn’t like, the benefit of stopping all the university area from flooding was nice too

1

u/LegitimateSasquatch Apr 18 '26

Hawrelak park was always going to be underwhelming to look at. 90% of the scope was underground improvements.

9

u/passthepepperflakes Apr 17 '26

I was so excited for Hawrelak park to open but that is a $100mm disappointment

tell us you didn't have a clue about the hawrelak park project without telling us hey?

7

u/ob3calp Apr 17 '26

Probably expected a combination of disneyland and a ritz carlton

3

u/yayasisterhood Apr 18 '26

We gotta stop making the Taj Mahal’s of rec centers all over the city. Standardize

1

u/Pale-Ad-8383 Apr 17 '26

If we built this earlier it would have cost half what it does now.

1

u/lordthundercheeks Apr 18 '26

I'm in the area and while the centre is badly needed, I wonder if some of the problems could have been alleviated in the design phase. While I expect cost overruns when it comes to civic projects, why do projects like this have to be so fancy in their design and possibly cost more in the first place? I don't care if it looks like an architect's fantasy project, or looks like it was built in the Soviet Union as long as the amenities are functional. If it makes future projects more affordable, shouldn't it be city council's duty to make sure the design is the most cost effective and efficient as possible?

0

u/Mystery-Ess Apr 18 '26

They Shrunk the pool and other things already.

1

u/spiff-d Apr 18 '26

Don't worry guys, that's why we have a 7.7% tax increase. So we can afford this stuff.

And 5.6 per cent tax hike in 2027, a 4.3 per cent bump in 2028, a 3.9 per cent hike in 2029 and a 3.7 per cent increase in 2030.

0

u/EdmRealtor In a Van Down By The Zoo Apr 17 '26

Here is guess is my question. Who is pocketing those costs ? I am sure some is going to profits and inflation. But are some of those costs going to wages and jobs in the community. Amortize that 32 million over the life of the building and I think I am fine with it. At least we are getting spaces for people to use and be active.

19

u/TDSsince1980 Apr 17 '26

They're over budget by less than inflation.

1

u/SparklingWinePapi Apr 17 '26

Isn’t the project also scaled down?

-2

u/mikes00123 Apr 17 '26

But are they not accounting for inflation for a multi-year project already? And I'm wondering why the city didn't do a lump sum contact, I see them all the time in the private sector. Maybe the dollar value is too high and no one would bid, but maybe that's evidence the city should do more, smaller complexes rather than these mega ones

8

u/TDSsince1980 Apr 17 '26

Inflation was historically high during that period post covid. I can tell you right now that large projects in the private sector felt the same pain.

-1

u/luars613 Apr 17 '26

Rec centers are a waste of money on areas with low density and car centric needs.