Despite going nearly a million dollars over budget, Sylvan Lake mayor Sean McIntyre says the NexSource Centre project would not look any different today had council received an accurate financial picture throughout the course of development.

“We made the decision to go forward with things like cladding the outside of the building so it had a uniform presentation, install the kitchen and concession equipment, to install audio-visual components, and those aren’t decisions we would have made differently had we had the information we have today,” McIntyre said.

“We’re still very pleased with the facility. The money (that) was spent, was spent where it needed to be. We ended up with a facility that will suit the community well and we’re very happy with the end product. We just would have liked to know of the shortfall sooner.”

The total cost of the NexSource construction, as well as rehabilitation of the aquatic centre is now expected to be $38.75 million.

The $999,000 shortfall will be covered by reallocating funds from the Municipal Sustainability Initiative (MSI), a provincial grant program used to help pay for infrastructure.

MSI dollars will come from projects this year that were under budget. Future capital plans will not be affected, said Dave Brand, public works director. They will also be used to cover a $334,000 revenue shortfall from the sale of 4908 50 Avenue.

Last night, town council heard that two administrative errors resulted in the cost overruns and went undiscovered until staff performed an internal audit of project expenses.

Money had been spent on design and feasibility studies, as well as demolition, but was not reflected in later financial reports when the NexSource Centre was named under a different project number. As a result, when the project manager and finance manager came on board, they were unaware that money, $477,737.05, was already spent.

As well, reimbursable expenses – those for labour and materials that the general contractor purchases -- were mistakenly included in the overall construction costs of the $37.7 million budgeted. However, those costs were to be added to the invoice instead, $575,567 in total.

A report from town staff, made public at last night’s council meeting, states the kitchen and audio-visual equipment was approved by council on the presumption that the project was under budget.

As council makes decisions based on information from staff, Brand said administration has taken steps to ensure these mistakes do not happen again.

“We take administrative errors very seriously. It’s a very serious breach for us, from our perspective,” Brand said.

In the future, when a capital project is assigned a number, that will be its number until completion, eliminating expense transfers from one project to another.

“The second that we recommend going forward with is implementation of a formal policy with respect to contingency on large capital projects, which would then allow more buffer space on these large capital projects should we … find things are more expensive than we originally planned," Brand said.

McIntyre said he was disappointed to learn about the errors but was pleased with administration’s transparency with the budget shortfall and what led to it and steps taken to address them.