The cost to construct a new Whitefish City Hall and attached parking structure has ballooned to just over $16 million.

City Council on Tuesday approved the new total project cost, along with some cost-savings measures and budget changes that free up more tax-increment finance funds to pay for the project. The vote was 4-2 with councilors Frank Sweeney and Jen Frandsen voting in opposition of the new budget amount.

“I hope that value engineering is going to come in nice and we can find more savings,” Frandsen said of her vote.

Council specifically approved a new project cost of $16,041,549. This is $1,088,913 more than the previously approved $14.95 million budget set by council last June.

“It’s good to have a vote on the total project cost,” city manager Chuck Stearns said in his request to council for approval of the increased budget. “This sets a number limit that the architect, contractor and city manager can’t exceed without coming back to you. The components of all those numbers could keep moving — we might save in some areas or we might use contingency in others. It couldn’t exceed the $16 million until we came back to you, but it certainly could go down.”

City Council learned in December that an estimated $1.7 million budget shortfall was projected for the project, due mostly to rising prices for materials and labor. Stearns says the City Hall portion of the project is in line with cost projections, but the parking structure is driving the increases.

A cost-saving plan brought to council earlier this month would have reduced the funding gap to $850,000. Council, however, decided it wasn’t comfortable with all of the suggested cuts. After adding back in some design elements, the funding gap was left at $926,913. which is to be covered with additional spending of tax-increment funds. Those funds are separate from general property taxes.

Delaying planned improvements at Depot Park for the next two to three years frees up the cash need to cover the overages. It was a move Stearns called the “most viable option.” The city has a $10,000 grant to construct a gazebo in the park, so that would continue, but it would delay street, sidewalk and hardscaping work.

“The Park Board is resigned to the notion that there is a probable delay,” Councilor Richard Hildner said. “But the gazebo does need to go forward.”

Council voted on a number of budget line items included in the cost-savings plan. Some of the items split the council on what was worthy of spending money.

Council seemed ready to reject finishing the basement when a motion by Frandsen died for a lack of a second.

However, Frandsen argued for why spending the additional $28,000 was worth it, seemingly swaying council to add it back into the project.

“It’s difficult to complete the basement at the end when it’s filled with all the items in storage,” she said. “We need to finish it right now.”

On the questions of whether to keep canopies over the sidewalk along Baker Avenue, council again seem to follow Frandsen’s lead.

“It’s one place we shouldn’t be cutting corners,” Frandsen said. “I’d hate to have to go back and add tax dollars for that.”

Council split on whether to remove plans for the roof cornice detail on the building at an estimated savings of $32,000. In a 4-3 vote with Mayor John Muhlfeld breaking the tie removing the detail was approved.

“The cornice makes the building look attractive,” Sweeney argued. “The amount of savings doesn’t justify removing it.”

“This item [cornices] isn’t going to keep rain off my head,” Frandsen said, referencing the earlier vote to keep canopies on the building.

Council was unanimous in its vote to delay purchasing new furniture for the building, which had been estimated at a cost of $420,0000. Stearns said if there is leftover money at the end of the project that could be used to purchase new furniture.

A portion of the project that includes concrete and rebar has been sent out for rebidding to see if savings can be found.

Council also approved an amendment to its contract with Martel Construction that sets the guaranteed maximum price for work from Martel at $1.1 million. In addition, it also set the guaranteed maximum price amount specifically for the City Hall and parking structure construction cost at $13.6 million. This doesn’t include owner costs and other professional fees that make up the total project budget.

Sweeney took issue with the construction cost amount and was the only vote against it. He said he couldn’t understand why the $150,000 in contingency funds was included.

“I can’t support that,” he said. “That lets them think they can spend virtually at-will with that money. When we’ve moved to spending in excess of $16 million — I can’t support it under those circumstances at this time.”

Stearns said setting the guaranteed maximum price shifts some of the burden to the contractor to ensure the project comes in at that amount.

Items council voted on in the cost-savings plan:

• Finish the basement storage area and locker/bathrooms at a cost of $28,000.

• Remove the skylight in City Council chambers for a savings of $19,000.

• Keep canopies on Baker Avenue at a cost of $35,000.

• Remove the roof cornice design detail for a savings of $32,000.

• Use oversize brick on the eastside of the building instead of painted block at a cost of $4,000.

• Approved capitalizing three years of lease payments from the retail space to $162,000 into the project.

• Approved value engineering changes for a savings of $181,000.

• Approved using $200,000 from the ancillary costs budget for the construction.

• Cut $420,000 that had been budgeted for purchasing new furniture.

• Approved spending $28,000 on an independent engineer evaluation of the HVAC system.

• Rejected using resort tax funds for construction of sidewalks and street lights.

• Delay work on Depot Park to fund the shortfall with additional TIF funds.