The North Vancouver School District will likely end up footing a bill for an extra $4 million towards the rebuilds of Argyle and Handsworth secondary schools.
The new bill is as a result of skyrocketing construction costs for the two projects, including both the costs of geotechnical issues and new steel and aluminum tariffs that have been slapped on steel being shipped from the U.S.
Construction costs are rising at a rate of between one and two per cent per month, Georgia Allison, SD44’s secretary-treasurer, recently told trustees – which are expected to add multiple millions to the costs of building the two new schools.
Currently those increased construction costs are not being funded by the province, Allison said. “We are working with the province with both Handsworth and Argyle,” she said.
Staff have been told the school district could be on the hook for between 20 and 50 per cent of the cost overruns, said Allison.
When the Argyle rebuild was announced by the then-Liberal government in June of 2016, the rebuild was pegged at $49.2 million, with $37.65 million coming from the province and the school district chipping in $11.56 million from proceeds of the sale of school properties.
In the two and a half years since then, however, cost estimates have ballooned. Start of construction on the project was delayed last year when school district officials learned none of the bids came in close to the budget target.
The school district was forced to go back to the province and ask for $12 million more for the Argyle rebuild, Allison said – which was granted. At the time, the school district was not required to kick in any more extra funding.
The estimated cost of the project now sits at $61 million.
But recent geotechnical problems encountered on the site could pump costs up even higher.
“We’re anticipating that costs up to $2 million may occur,” Allison said – which the school district will be responsible for paying.
The rebuild of Handsworth was announced in January 2018 by Education Minister Rob Fleming, at a cost of $62.3 million.
But both steel tariffs and other construction cost increases are likely to inflate that budget by about $7 million, said Allison.
To address that possibility, trustees recently voted to approve an amended budget that included transferring $4 million from surplus to the school district’s local capital budget for the current school year to fund ballooning budgets for both Argyle and Handsworth.
The news the school district would likely have to pick up the tab for the increased costs prompted some grumbling from trustees.
When the ministry announced the Handsworth rebuild, “Did they not say it was being fully funded? Do these costs not come under fully funded?” asked trustee Cyndi Gerlach.
Allison replied that the costs were unanticipated and the problem is not unique to North Vancouver, but is impacting capital projects in many other school districts.
“Projects are being stopped until conversations are had,” she said. “They are not treating us differently than any other school district.”