By Moses Leos III
As construction costs continue to rise, so do Kyle’s five road bond projects.
Several factors, including unexpected adjustment of utilities on Goforth Road, make up the estimated $2 million overrun for Kyle’s $36 million initiative.
According to Chief of Staff Jerry Hendrix, cost, primarily the rising cost of construction and material, has led to the overrun, despite a built-in 20 percent contingency.
“When this (project) was originally planned and designed, we were in the middle of the big economic downturn. Things were cheaper back then,” Hendrix said. “There was no way we could have anticipated the strength of the economy and how it came roaring back.”
The addition of five percent contingency to each of the five projects was one reason, according to City Engineer Leon Barba.
Increases in contingency saw the budgeted amount rise from $905,000 to $1.4 million. Barba said the city has “sharpened our pencils” on cost estimates, but added five percent for any unknowns.
“Those variables, we think we’ve identified those,” he said. “But we will find surprises out there.”
It was added to the overall contingency the city had for the project. Barba said the healthy contingencies were in place to “anticipate the cost.”
Barba said the city has started to “tighten up the numbers” as the projects edge closer to design. It’s allowed the city to gain an understanding of how much materials could be, and other factors.
By the time the city opens the bidding process for the Marketplace project in August, Barba said the city should get a barometer of what construction costs could be.
“We’ll get a good indication on where our numbers are going to be and how they’ll fall out,” he said. “It will provide a good photograph of how good or how bad it is here, depending on how you look at.”
One of the looming problems stem from utility adjustments that are on the horizon for the Goforth and Bunton projects. According to Barba, the city “underestimated” the total utility adjustments.
It’s one of the primary reasons why the city has delayed the Goforth project until January 2016.
Of that cost, roughly $182,000 is expected to go toward moving a 12-inch water line from County Line Water Supply Company. That line was found to be in an easement, which Barba said the city has to pay for.
The city is also relying on utility companies to complete their engineering and adjustments.
To mitigate the overrun, the city is starting to take a magnifying glass when it comes to costs for projects.
Reducing the scope of the projects is one option. The city could opt to postpone, delay or eliminate certain elements.
Other ideas include the city council using monies from other utility funds to pay for projects. One option could see the city use $1.076 million from the water and wastewater utility fund to pay for utility improvements underneath Burleson Street.
As the city works to get the project under budget, Hendrix stressed the city’s desire to get started.
“People want the roads to be done as quickly as possible. We are in the same boat,” he said. “We’re jumping through as many hoops as we can to get that done.”
