To meet its $24-million multiplex sports centre construction budget, the city would need to take out several planned features.

They are:

• running track and windows;

• arena dividing wall;

• soccer boards, a seating area and change rooms for the two gymnasiums;

• soccer turf;

• elevator equipment;

• a multipurpose room wood floor, dividing wall and millwork;

• the leisure ice and concrete floor;

• new windows to the aquatic centre;

• fixed seating in the NHL arena; and

• items to make the building more energy-efficiant.

Three options to deal with the potential $3.9-million cost overrun were presented to city council at a noon meeting Thursday. One of the presenters was Tony Zedda of Kobayashi and Zedda Design Group, which worked on the design led by Barr Ryder Architects of Edmonton.

All three options keep the building at the standards needed to host the 2007 Canada Winter Games.

When the bids on the construction were open last week, the lowest of the four was $27.9 million, not including the GST, which municipalities don't have to pay.

Mayor Ernie Bourassa said he was surprised to learn at the meeting that the bid was actually $3.9 million more than the city had originally budgeted.

Wayne Tuck, the manager of engineering services, explained the originally reported cost overrun of $3.5 million between the city's budget and the lowest bid from Ketza Construction and Monad Construction is actually $3.9 million because the bid included some items to be priced separately, such as the running track.

In an interview Thursday afternoon, the mayor said he wants to see the city and territory come up with extra cash to pay for the items.

The last thing he wants to do is cut out a feature from the facility to save on capital costs only to have to raise taxes later because the city isn't getting the amount of revenue it needs to operate the sports facility.

'That would be stupid on our part,' he said.

He believes the city and territory will both need to come up with funding.

Community Services Minister Glenn Hart will be away next week on vacation. Bourassa said the city will spend the time looking at how it wants to proceed with the project.

City officials will then likely meet with Hart the following week. In an interview with the Star earlier this week, Hart was non-committal on the prospects of additional territorial funding for the multiplex.

After the meeting, the minister said, 'I think, as you can probably see, council's got to have more discussion on which way it plans to go. I'd say this is very early.'

Zedda's co-presenter Thursday was Piers McDonald of Touch the North, another consultant on the design. He's also the president of the 2007 Canada Winter Host Society.

Two Barr Ryder officials joined the meeting via conference call.

Zedda explained approximately $1 million in the cost overrun came from a dramatic increase in steel prices.

Another $2 million in the additional cost was attributed to some revision in the project work for things like having a temporary administration building.

An additional $350,000 in the bid stems from the risk the contractor takes in completing the site work, steel piling and concrete work.

Other higher costs came from a more competitive price for sub-trades in mechanical and electrical prices as well as no submitted pricing from other ice plant suppliers.

The first option saw the various features listed above cut out of the project. The second option would see the city make up the extra money.

Through a two-per-cent-tax increase, the city could raise $3.9 million.

Bourassa doesn't believe the city will be raising the extra funds through another tax boost. The city has already raised taxes by two per cent this year to pay for operational expenses. It's planning to raise taxes another two per cent each year for the next two years to cover operating expenses as well.

The mayor noted the city has reserves for expenses like the multiplex.

The city could also take $1.7 million out of the capital reserve, which would in turn mean a $60,000- to $70,000-loss in interest, it was noted.

Another option would be seeking money from the territorial and federal governments.

The city has signed funding agreements for the building with both levels of government. As part of its bid to host the Games, the city stipulated the federal government would have to put $20 million toward infrastructure. The territory has agreed to provide $8 million for the project.

The agreements stipulate the city is responsible for any cost overruns.

Bourassa pointed out the city likely won't be asking the federal government for more money to make up the shortfall. Ottawa isn't likely to hand over more funds for the multiplex and, if it did, it wouldn't be done by the April 4 deadline to award the bid.

'Both of us are going to have to (come up with money),' he said of the city and territorial government.

Hart said he's fairly certain Ottawa won't be providing 'another drop of cash.

'So that pretty much leaves it in our hands right now,' he said.

The third option would be a combination of the first two. Through building reductions, the city would save $855,000 on the project.

That would see the city waive its requirement for a building permit, defer paving the parking lot, reduce parking, defer energy-efficiency items and do an ice plant retrofit.

The city could also delete the arena dividing wall, soccer boards of one of the gyms, panels and certain mechanical and electrical features to save another $845,900.

It could then access $349,900 from its capital reserve fund and request $2 million from the territory.

Over the next week, the city will work on coming up with its exact plan of action to deal with the cost overrun.

'I think we have to go back and do more analysis,' Bourassa said.

Hart said he will likely then sit down with city officials to discuss possibilities.

'I think they're going to have to make some sacrifices in some areas,' he said. 'With regards to some of the pieces, I think they're going to have to really take a strong look at what their own reserves are.'

Once there's more detail to work with, Hart said, the government will probably be in a better position to discuss the dilemma with the city.

Hart noted dealing with the problem may take a combination of all three options presented.

'I don't think there's going to be one correct answer,' he said.

The proposal would see the structure built so that certain parts like the leisure ice could be brought in later.

While that may cost more down the road, Hart noted, the city may have the money available later.

'In essence, I think what we have to do is that, you know, we are a partner in this thing and, obviously, we have to have a look,' he said.

Bourassa said council won't be discussing the matter this Monday at its meeting as originally planned because it needs time to come up with a solution.

Although the city doesn't normally have council meetings on the fifth Monday of the month, Bourassa said there will be a special council meeting on March 29 to vote on the construction bid.