SOMBA K'E/YELLOWKNIFE
During a discussion about potentially increasing costs for a refrigeration-machine replacement project at the Yellowknife Community Arena, Coun. Adrian Bell questioned city numbers on inflation costs, or the rate of which the cost of construction is expected to increase.
At the regular council meeting last week, Bell asked how city staff can justify a quote provided in his agenda package stating that the annual inflation rate for non-residential construction in the city is ten per cent, when Statistics Canada's website suggests the average across the country has hovered between one and two per cent in recent years.
Senior administrative officer Dennis Kefalas said he wished the latter numbers held true in the city, but that they've found the inflation rate sits between seven and ten per cent. He said the cost incurred to replace sewer and water pipes running beneath the Northlands Trailer park rose 70 per cent from the time the contract first came before council until the time it was signed, because of that local inflation figure.
On Tuesday Coun. Niels Konge, who owns and operates Konge Construction, said the city's numbers don't jive.
"I find that number a little hard to believe, but I mainly do residential. I don't do commercial jobs," he said.
"Labour certainly doesn't jump by ten per cent per year ... and I have not seen materials jump by ten per cent per year.
"The only other answer to that would be because of demand. But I find it hard to believe. I have a lot of issues with that whole thing."
Eric Sputek, owner of Hovat Construction, a company that carries on non-residential construction in the territory, said he doesn't agree with the city estimate either.
"There's a lot of factors that affect the price of projects, and the availability of people is a big part of that," he said. "When there's economic boom going on in other parts of the country we see booms in prices that might be ten per cent per year, but that would be on the very top end of things."
He said a number between two and four per cent would be more accurate.
"I'm not seeing ten per cent," he said, adding that he feels Bell's quote between one and two per cent is more accurate.
"I feel odd saying even four per cent ... When things are booming in Alberta and Saskatchewan and British Columbia, materials and suppliers and things like that become a premium ... I can't say that I can agree with ten per cent."
