The Regional District of Central Kootenay will pay the City of Nelson $18,000 for the time and money it spent developing a proposal for the two local governments to share space in the White Building.
The decision came during a closed session at last month’s board meeting but was made public in the draft minutes. It called for a payment of up to $20,000, although the city actually billed for less.
“We incurred a certain cost to put [the offer] together, and when it was declined, we felt it was appropriate to be reimbursed,” said Nelson mayor John Dooley.
Based on the city’s accounting, the payment does not cover its full expenditures. According to chief financial officer Colin McClure, hard costs for architect, design, and engineering fees came to just under $13,000 while another $14,120 was invested in staff time and benefits, not including about $200 in administrative overtime.
McClure said he prepared several billing scenarios, including one with just the hard costs, one with all costs, and the middle option of $18,000 which accounted for all “incremental costs” of producing the proposal. He said he was unaware at the time that the RDCK resolution authorized up to $20,000. The actual invoice included just over $5,000 in staff costs and the balance for architect’s fees ($10,000), design ($1,900) and engineering ($1,050).
“In the end the city has recovered the incremental cost of the proposal, which is fair and the city has been made whole — it could be considered that the full invoice would have created a profit over the incremental costs,” he said.
The regional district board rejected the offer 19-1 in January, which would have seen the RDCK leave its Lakeside Drive headquarters and move into the city-owned White Building at 310 Ward Street, now home to municipal and provincial government offices.
“I actually think it’s okay,” said chair John Kettle. “There was no harm, no foul. We never wanted Nelson to suffer.”
Kettle said “three or four” directors voted against the motion, but the minutes don’t identify them. “Some weren’t keen on the idea because they felt it would look like we’re bending over for Nelson,” he said. “I don’t look at it that way. From my standpoint, it’s politically palatable.”
Kettle also said he would “wear” any criticism for the move because he let the city make its initial presentation last fall: “I will take full responsibility for the goof-up that allowed this to happen. I need to be better at my job.”
Kettle said he agreed to hear the city’s delegation “as a courtesy” but should not have, because the regional district wasn’t considering moving, nor had it issued a request for proposals. The board subsequently asked the city to provide a more fleshed-out offer by the end of the year and staff worked over the Christmas holidays to complete the document, which was delivered January 6.
The board rejected it following a consultant’s evaluation that cost $1,543 and about an hour of closed-door discussions. The city, however, suggested the regional district’s analysis wasn’t thorough enough to make an informed decision.
Kettle agreed the payment could be seen as mending fences: “You might say that. Maybe a make-up call by a referee in a game. There can’t be disagreements carried over generation to generation.”
For his part, Dooley insisted there were no hard feelings. “I’ve been in local government long enough that I know it doesn’t work to carry grudges,” he said. “We work well together on many services and it’s important to keep that in focus. Sometimes things can get clouded by one issue. Overall I think the working relationship is quite good.”
The $18,000 will come from the regional district’s general administration fund, which all areas pay into. Kettle said it wouldn’t require any budget juggling.
The White Building proposal by the numbers
Amount the City of Nelson spent creating its White Building proposal: $12,997 in hard costs plus $14,120 in staff time and benefits
Amount the Regional District of Central Kootenay agreed to reimburse the city: up to $20,000
Amount the city actually billed for: $18,005 (including $5,000 in internal costs, plus $10,000 in architect's fees, $1,900 for design work, and $1,050 for engineering)
Amount the RDCK paid Omicron Canada to review the proposal: $1,543
Amount RDCK staff estimated a more thorough analysis would have cost: $25,000
Number of directors who voted against the proposal: 19
Number who voted in favour: 1
Amount the RDCK expects to spend on reconfiguring its current office: $400,000 to $600,000
Number of additional staff the reconfiguration is expected to accommodate: 8
Years the RDCK has been in its current building: 13.5