Mistakes were made and taxpayers are on the hook.

That was the admission Tuesday from city staff when councillors asked why renovations to the London Normal School are $2 million over budget.

"In some cases, I will say we missed some stuff and we should have caught it," said city treasurer Martin Hayward.

A long list of unanticipated costs have driven the London Normal School renovation over budget, including higher than estimated subcontractor bids, re-designs demanded by the Ontario Heritage Trust and repairs to a sewer connection.

"The sanitary sewer piece, that's something we should have spotted and we didn't," says Hayward.

City hall bought the property last year and will turn the greenspace into a park and lease the building to the YMCA.

Councillor Harold Usher said in hindsight buying a heritage building should have demanded greater scrutiny.

"I am disappointed that it has cost so much more but I can't say that I'm surprised," says Usher.

Other budget overages were more difficult to explain, such as why subcontracted work for mechanical, sprinklers, and electrical are $1 million more than predicted.

"I can't honestly explain to you why they came in so much higher other than there weren't many people who bid on the contracts," says Hayward.

A report in April said city staff had "detailed knowledge of the project gained through the design process and development of the detailed drawings and specification."

Based at least in part on that assurance, city council approved a construction contract back in April, but Tuesday it was learned that was before design concerns raised by the Ontario Heritage Trust had been resolved and before subcontracted work went out to tender.

"I would have preferred in April that you came to us with a report that said, 'Look, here's our preliminary idea of costs, but here are the factors that could increase the cost," says Councillor Phil Squire.

After receiving confidential legal advice about whether the contractor could be held responsible for the higher subcontracted costs, the committee instead recommended borrowing $2 million to keep the project on schedule.

"The [YMCA] is moving in in June of next year so we have to fulfill our obligations with that agreement," says Councillor Maureen Cassidy.

Borrowing the money will see taxpayers incur higher debt servicing costs until 2022.