District of Houston file photo

Highway 16 undergrounding project to proceed

District will dip into reserves to cover increased costs

  • Mar. 24, 2021 12:00 a.m.

The District of Houston council has decided to finish the Hwy. 16 improvement project but at a cost that will exceed first estimates and require it to dip into its reserves.

New sidewalks, burying utility lines, adding pedestrian lighting and other features along the highway as it runs adjacent to the downtown core are considered part of the District’s long term plan for a more attractive and welcoming presence.

But the projected price tag to complete works begun last year has now increased by $904,00 to $2.128 million and this was presented to council this year as it considered its project and spending plans over the next years.

Rising costs were first identified last year when just one bid was received to place utility lines underground as work began on the sidewalk portion of the improvement project.

With that bid being $453,000 over the budgeted amount, the District shelved the underground project with a view to revisiting costs to proceed this year.

The plan as presented to council this year is to divide the remaining work into two parts with placing of utility lines underground from the Buck Creek Bridge to Butler being done this year along with required sidewalk and other planned improvements and the Poulton to Butler sidewalk portion of the overall project being done next year.

Of the estimated $2.128 million for what’s need for completion, $1.758 million would be for this year with next year’s Poulton to Butler sidewalk construction taking up the remaining $370,000. The money this year would come from District surpluses while the money for the sidewalk project would come from gas taxes collected by the federal government and then divvied up among local governments.

The projected increase was enough for chief administrative officer Gerald Pinchbeck to issue a caution to council in a lengthy memo outlining potential projects stretching from this year to 2025 as council considered a financial plan for 2021-2025.

A number of contemplated projects, including Hwy. 16, would draw down the District’s surpluses and reserves and while that would still leave the amount above minimum requirements, Pinchbeck noted they “would place the District in a much weaker financial position than it is in today.”

He recommended shelving this year’s Hwy16 project and the $1.758 million cost to complete it while acknowledging a key part of the District’s strategic plan would be incomplete.

“The proposed project has suffered significant scope creep and cost inflation due to a variety of factors,” Pinchbeck’s memo indicated.

The new project figure does include a 15 per cent contingency allowance for unanticipated costs and a 15 per cent allowance for project administration.

One complicating factor lies in the cost of placing BC Hydro, Telus and CityWest lines underground. The District has already conceded that it will pay for the full cost of placing the Telus and CityWest lines underground.

It’s a different matter when it comes to BC Hydro as the provincial crown corporation does have a program to cover 33 per cent of the cost of burying its lines. That amount is $312,696 but it is not provided as cash to the District. Instead it offsets the size of the total bill BC Hydro will send to the District.

Unlike original project projections in which BC Hydro would be cost sharing, the District will have to pay for the full $1.758 million cost.

In discussions between council members about the project and its projected costs, Mayor Shane Brienen did note that council can revisit its plans should bids received exceed estimates.

Houston Today