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Oregon Road Conditions & Cams Email Story to a Friend September 5, 2005 Contractor Robert Ulrey works on a new home on Spring Valley Road in west Medford. New homes are among the many projects that have been hit by spiraling costs. Mail Tribune / Jim Craven Improvement projects face soaring costs Inflationary pressures are forcing a struggle for additional money or decisions to scale back some local projects By DAMIAN MANN Mail Tribune Medford airport Director Bern Case was stunned when the bid for a parking lot and new entrance came in at $9 million recently. "I don’t like to see things come in at 53 percent over estimates," he said. Like other government projects, the renovation of the airport is being hit by inflationary pressures that are rising faster than anyone expected. For instance, the estimate for the new south Medford interchange jumped from $52 million in 2003 to about $75 million recently. The replacement for the Miles Field ballpark in south Medford spiked from $2.3 million to $5.3 million over three years. While other officials are scrambling to find extra money for their projects, Case said the airport wants to scale back the parking lot to bring it in line with the initial estimate of $5.9 million. Advertisement "We’re getting a message to our designers that we’re not looking for a Taj Mahal," he said. "We just need a place for people to park. It doesn’t have to be the experience of a lifetime." Instead of native stone gracing the entrance, Case said the airport could opt for concrete blocks. Instead of concrete surfaces in high traffic areas, there will be asphalt. And the asphalt parking lot might not be as thick as earlier estimates, requiring potentially more maintenance in the long run. Case said even at a lower price tag the entrance to the airport and the parking areas won’t look cheap. "It’s not going to be shabby," he said. Case isn’t alone in wrestling with estimates that don’t jibe with bids. Cory Crebbin, Medford public works director, said he has three major projects that have jumped from previous estimates. He expects rebuilding McAndrews Bridge over Bear Creek will cost close to $8.5 million, compared to earlier estimates of $5 million. The Crater Lake Avenue and McAndrews Road intersection will probably cost about $2.5 million compared to $700,000 estimated in 1996, he said. The Siskiyou Boulevard and Highland Drive roundabout, estimated to cost about $600,000 in 1996, will be about $1 million, he said. Crebbin attributed the higher price tags to sharp jumps in oil, which is used for making materials such as asphalt and affects the cost of transporting almost everything used at a construction site. Labor has increased, as have land prices, fueled by a strong local real estate market. The city will try to bid out projects during the off season to lower their costs. "We are trying to bid more projects in the winter," he said. "Summer is not a good time to find contractors." Government agencies aren’t the only ones saddled with higher prices. Randy Jones, president of the Home Builders Association of Jackson County, said costs have ratcheted up in the private sector as well. A typical new house now costs $200 to $225 a square foot, compared to $120 to $130 five years ago, a 60 percent or more increase, he said. Much of that increase is the result of land prices, which have jumped from $30,000 to $50,000 an acre to $200,000 or more in the same period, he said. "The single biggest run-up is the price of land," he said. Jones said purchasers of homes are also more demanding, asking for features such as granite counters, central vacuums and high-speed Internet wiring — all of which can add thousands of dollars to the price of a house. There are also increased regulatory and system development charges. "There are a whole bunch of costs that you don’t see, like sewer and storm drains and retention ponds," he said. Dave Midtlying, vice president of contracting for LTM Inc., said almost every aspect of the construction trade has increased in recent years. LTM, the largest civil contractor in the county, was the low bidder for the airport parking lot contract. Midtlying said his firm made suggestions to the airport about how it could cut costs on the project. But the higher price in this case added up to more than just hikes in materials and labor, he said. "Their eyes were a little bigger than their stomachs, so to speak," he said. "Now they’re using their heads to get a functional product." Just two years ago, government agencies enjoyed bids that came in at or below estimates. Dave Kanner, deputy county administrator, said it’s increasingly difficult to stay within budget on each new library branch being built using $38.9 million in voter-approved bonds. As the county planned for the last phase of libraries in Talent, Shady Cove, Phoenix and repairs to the Butte Falls branch, he used some of the savings from the first five libraries built to make up the expected difference. He has budgeted $5 million for these libraries. "I think that we will get everything done within budget," he said. "But I think it will be tight." Reach reporter Damian Mann at 776-4476, or e-mail Improvement projects face soaring costs ">[email protected] . Mail Tribune Home | Local News | Sports | Business | Obituaries | Life | Opinion AP News | Archives | Site Map | Community | Classified Copyright © 1997-2005 Mail Tribune, Inc. All rights reserved. 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