However, Invercargill Mayor Nobby Clark guaranteed the project, which was one of the main focuses of the council this term, was still on track and under the $65 million budget.
Council’s programme director Lee Butcher wrote a report to councillors, giving an update on the projects delivered by the Project Management Office, which would be presented at finance and projects committee meeting on Tuesday.
He said as they progressed with the concept designs on the 1225 programme [museum] and other projects, the office noticed a trend in "cost plans" breaching or coming very close to their set budgets.
"When we interrogate this in detail, the two big stand-outs that present themselves are inflation on material and cost of living increases — labour, fuel, preliminaries and general.
"We have also started to look at these in fine detail and some contents are costing 20-plus percent more in 2023 than in 2021."
Mr Butcher said, however, that council was in a good position to pivot in design and be clear about costs and what levers could be pulled by the council to address cost risks.
Mr Clark told the Otago Daily Times he received a weekly update on Project 1225 — the museum project — and as far as he was aware they were still under the budget.
He acknowledged, as the budget was set a couple years ago, it was a tight one.
"You don’t have to be a rocket scientist to know that local costs have gone up, but we’re trying to stay within that limit."
The design team was not given a specific footprint for it, so they could scale back if necessary, he said.
"The beauty of doing that, if the cost tends to go in the wrong direction, then we can claw back some of the spaces that you had there.
"That doesn’t mean that you’re getting a whole small museum, is not that at all."
Mr Clark said that even if the project blew the budget, it would not mean the ratepayers would have to bear the costs.
There were many funders and other ways council could explore without increasing the rates, he said.
Selling some of the council’s land that is not being used was an example of that.
"It’s not a matter of saying, ‘Well, that’s all the money we’ve got.’
"It is really a juggling act."
Mr Clark said he saw some of the preliminary design of the museum and it was "breathtaking".
It would be presented officially at the next council meeting on August 22, he said.
