The city’s planned Project Renaissance redevelopment features new housing and four new parks.

A divided Dunwoody City Council approved spending an extra $65,000 to cover unanticipated costs in the Georgetown Park project, but dramatically reduced a proposed contingency fund to cover future cost overruns.

“We have prided ourselves on budgeting costs high and revenues low. In this case we didn’t,” Councilman Denis Shortal said before the vote on Aug. 26. We’ve learned a hard lesson here. We’ve got what I consider ‘cost creep.’”

The council voted 5-2, with members Adrian Bonser and Lynn Deutsch voting no, to provide the money to pay for the work at Georgetown Park, part of the city’s portion of the $35 million redevelopment effort known as Project Renaissance.

But the council would only approve an additional $10,000 in contingency funds available to pay future cost overruns. City staff members had asked that the council budget $120,000, so the contingency could be much higher.

Council members said they wanted the lower contingency fund so they would be informed about any future additions to the contract. “I’d rather you came back to us and say, ‘We can see another $20,000 problem,’” Councilman Terry Nall said.

The original budget for the park construction was set at $1.67 million, plus a $50,000 contingency. Most of the $65,000 in additional costs covers unforeseen construction expenses, such as the need to replace poor soil at the construction site, or makes up for mistakes in preliminary construction plans, city staff members said.

“The changes recommended are costs we would have had [to pay] if they had been discovered earlier,” City Manager Warren Hutmacher said. “The cost of the project really hasn’t gone up. We’re just finding out about the costs.”

Hutmacher said “the main crux of the error” was that the city originally budgeted too small a contingency fund for the project. The park was the city’s first large construction project, other than paving, which he said has more controllable costs. “If we had properly set the contingency, I would not be standing before you today,” he said.

Hutmacher apologized to the council for not catching the problems earlier.

When completed, Project Renaissance will include housing, parks and a multi-use trail on 35 acres off of North Shallowford Road. The project includes a 16-acre parcel the city purchased in 2011, and a 19-acre property the city is purchasing in a multi-year transaction, Parks and Recreation Manager Brent Walker wrote in a memo to the council.

”A significant portion of the unanticipated additional costs ($42,500) are related to site conditions. Of the site condition issues, $35,000 is to replace unsuitable soils under foundations and drive areas to ensure the long-term integrity of the structures,” Walker said in his memo. “Although staff reviewed soil borings to assess soil conditions, staff did not catch all the areas that ultimately had unsuitable soil.”

But some council members remained unconvinced. Deutsch said that if the mistakes had been caught earlier in the construction process, the city could have balanced the budget by cutting or delaying some items to be included in the park, such as the bocce court.

“If all of this has been discovered earlier, we might not have spent so much on everything else,” Deutsch said.