Contaminated soil has been detected at the City Hall/parking structure site in Whitefish, adding another wrinkle — and added cost — to a project that is already more than $1 million over budget.

Mike Cronquist, the owner’s representative for the project, told the Whitefish City Council Monday that about 50 to 60 cubic yards of contaminated soil have been found in the basement area at the construction site on the northeast corner of Second Street and Baker Avenue.

“I don’t think [the contamination] is exceedingly extensive, but I won’t say it’s minimal,” Cronquist said. “At this point we’re not entirely sure with the extent of it.”

City Manager Chuck Stearns said the source of the contamination likely was underground fuel storage tanks that were located across the street years ago when a gas station and convenience store operated there.

“There likely will be increased costs to dispose of the contaminated soil,” Stearns said.

The city has enlisted the expertise of Roger Noble of Applied Water Consulting, who is on site monitoring the situation.

Another concern at the construction site has been water “getting into the excavation,” Stearns said. It’s not known if it’s surface water or groundwater, but dealing with that may mean increased costs, he added.

Stearns further noted an underground tank that once supplied heating oil for the former City Hall, which stood on that corner for nearly 100 years, was found and needed to be removed. The change order for that was an additional $20,000 added to the overall project cost.

“The contingency [fund] continues to diminish,” Stearns acknowledged. “Hopefully once we get out of the ground those sorts of unknowns go away.”

On Jan. 19 the council reluctantly approved a new project cost of just over $16 million for the City Hall and parking structure. The previous budget of $14.95 million had been set by the council in June 2015.

When rising costs for labor and materials put the project roughly $1.7 million over budget late last year, the city embarked on a value engineering process to lessen the shortfall.

The council was presented with a cost-saving plan last month that would have reduced the funding gap to about $850,000, but the council didn’t embrace all of the suggested cuts. After adding back in some design elements, the shortfall was about $927,000, which will be covered with additional tax-increment revenue.

The city will delay some planned improvements at Depot Park to free up the money to cover the City Hall/parking structure shortfall.

During his report to the council, Cronquist said the aggregate piers have been installed.

“You might have noticed it’s been uncharacteristically quiet,” he said, referring to the noise level during the pier installation. “That will change a little bit as we settle into the normal construction din.”

Concrete work will continue over the next three to five weeks. A portion of the project that includes the concrete and rebar was rebid in an attempt to save the city some money, but Cronquist reported that all of the major concrete firms in the area declined to submit bids.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.