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Posted on Apr 2, 2015

Bids on new city building are over budget

Construction bids on the city’s new municipal complex have come back nearly $1.8 million over the project’s estimated budget.

The city last year budgeted about $3.7 million for the project, which includes both new construction and the renovation of the current facilities that the police department and city administration offices operate out of on B Street Southwest.

The city received four bids on the project; the lowest bid is more than $5.4 million, Mayor Jim Hemberry told city councilmen at their spring retreat on Tuesday. That’s about 50 percent higher than was estimated, Hemberry said.

The city is paying for the project with money from its capital fund, which is funded in part by sales tax dollars. Hemberry suggested moving $1.8 million from the city’s current expense fund to make up for the difference in the project’s estimate and the low bid.

In doing so, the city still would be in good shape because sales tax dollars are generating more money than expected this year, Hemberry said. The city budget projects $2 million in sales tax revenue to be generated this year; however, $1.6 million already has been generated after three months, Hemberry said.

So, at the end of the year, the city still would have $4.2 million in its current expense fund, he said.
This means the project’s added expense will not cost taxpayers additional money and the city’s other funds will not be impacted, the mayor said.

Hemberry suspects the bids came in high because the estimated costs on the project were calculated two years ago when the building was designed. Breaking the bid down, he also suspects the $2.7 million estimate for the new police department was on target; however, the added costs probably come from the unknowns in renovating the city hall portion of the project, he said.

The project is expected to be done in three phases. A new law enforcement facility will be constructed in the first phase. Existing structures adjacent to the current police department will be demolished.

Phase two includes the remodeling of the old library adjacent to the current city administration building. Existing city offices then will be remodeled into an evidence and training room for the police department in the project’s third phase.

The city council, at its regular Tuesday meeting next week, will discuss how it wants to move forward on the project. Options include throwing out the bids and bidding the police station and city hall as separate projects, looking at demolishing the existing structures and building new, or sticking with the lowest bid and starting the project, which is already two years in the planning.

Much work and money already has been put into coming up with a new design, said Ariel Belino, city engineer.

“The bottom line is the longer we wait, the prices are just going up,” Belino said.

“We’ve waited a long time for this to happen and I think we need to start moving on it,” agreed Councilman Tom Harris.

The unexpected costs could impact two other upcoming capital projects the city is working on. Hemberry warned the council that those projects’ completion dates may be pushed back a year. Those projects are:

  • The city expects to purchase a piece of property this year on which to build a recreation center. The city has budgeted for the purchase of the land and design of that facility; however, it may put off building it by a year, with completion not coming until at least 2017, Hemberry said. The city has a piece of property in mind and is waiting on an appraisal of the property. Councilmen may discuss the potential purchase in closed session on Tuesday.
  • The city also has a design in mind for a public safety facility that would be built on the north side of the railroad tracks, off of Central Avenue and near the city’s public works department. The facility would include four bays and sleeping quarters for a firefighter. That project was not budgeted for this year.

The city council meets at 7 p.m. Tuesday at city hall.

 

— By Jill FitzSimmons, editor@qvpr.com

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