Maryville city officials are left with a $3.5 million gap after bids for the South Main Improvement Project came in over budget.
The low bid for the project came in at $14.7 million from Amino Brother Co, Inc. Other bids came in at $15.5 million and $17.5 million, respectively. The problem with these numbers, City Manager Greg McDanel said, is that the project was originally budgeted to cost $12 million. But that was before COVID-19.
The three construction companies in consideration are bidding higher than expected because materials like concrete, asphalt and piping cost 20% to 30% higher following the COVID-19 pandemic. Nationwide, similar projects were put on hold last year, and locally, many projects had been moved from summer 2020 construction dates to spring 2021.
Leading manufacturers of these construction products are located in Texas, where unexpected power outages in last month’s storm delayed production and disrupted livelihoods throughout the state. McDanel said local companies have even cited tariffs on China rising pipe packaging costs 50% to 60%.
While the initial budget being lower than received bids is common for large-scale projects, a pandemic year did not help matters. Since the South Main Improvement Project bids came back 23% over the city engineer’s original estimate, officials are now left with three options, McDanel said.
The city will attempt to find additional funding, either in house or through other state or federal agencies providing relief funds. Officials could also analyze the merits of a rebid process and the timing that would be involved, or look at changing the project’s scope to align with the original budget.
All three of those options are now being coordinated with the Missouri Department of Transportation and the Federal Highway Administration, both of which have provided oversight since day one when the city acquired BUILD grants in 2018.
“We could change the project scope by taking out decorative lighting or aesthetic features, and really focusing on functionality, but you can’t really chip away at a $3 million gap like that,” McDanel said. “You’re not going to make up that much ground.”
The project budget shows the city invested $2.6 million of in-house funds toward designs for the project, the Evergy Utility Agreement and administering construction and inspections. The city put an additional $778,825 toward the project from fiscal year 2021 funding flexibility.
The federal BUILD grant awarded to the city in 2018 came out to $10.5 million, or 60% of the total project cost after receiving the bids in March.
McDanel said a lot is in motion now, but he and other officials are working on a plan of action to provide to the city council. Exact details aren’t settled yet for public display.
“We do not anticipate construction prices going down any time soon,” McDanel said. “Hopefully federal agencies will understand that. Hopefully if there’s any funding or other sources — COVID relief — anything else that would be associated and applicable, that we would be highly considered since our project is ready.”
Since many funding requests come to agencies for projects that haven’t been designed or are concept projects, McDanel said Maryville could have an advantage with a “ready-to-go project.”
If funding is discovered and available, the city would go ahead with the project as soon as possible, McDanel said. Since the construction process is expected to take 15-18 months, time is a factor the city will have to consider.
The South Main Improvement Project is a massive overhaul planned for 1.5 miles of South Main Street. It will feature new access points to and from businesses, move overhead power lines underground, add new landscaping and other aesthetic features, provide pedestrian and bicycle paths, wayfinding signage, an updated sewer system, and a 5-foot sidewalk on the east side.
The project was designed to address functional and aesthetic improvements, issues brought on by the rapid development in the south corridor of Maryville.
Mayor Ben Lipiec said he has no major concerns with the $3 million gap between bids and the original budget, and that he believes city staff can adjust to the change.
“I remember as a kid who grew up in Maryville, reading and hearing about doing this project for a long time,” Lipiec said. “I think this adds a lot of benefits to a town that continues to grow and expand.”
The project has taken city officials years to develop and finalize, working with several agencies for funding and designs. The pre-construction process has already been coordinated with state and federal agencies, McDanel said, and various property owners on the corridor have reflected an urgency for the project to be complete.