The District of Houston is finding out that no one is immune from rising inflation and increases in costs.
Although the District set a paving and road repair budget this year of $800,000, the only bid that came in, from Terus Construction, is $225,000 more than that amount for a total cost of $1.025 million.
Council could have cut back on the paving plans this year to fit its $800,000 budget but, as a memo from District operations director Mike Cooper pointed out in a memo, “same area coverage with increases in 2023 is estimated to cost $1.23 million, a 20 per cent increase in prices.”
Cooper recommended increasing the budget this year to meet the Terus price as completing “the proposed work in one season will take advantage of efficiencies by reducing mobilization costs and mitigating the increased cost due to expected price increases.”
He recommended taking the $225,000 from the $600,000 council has already agreed to spend on paving and roadwork in 2023. It’s money from a major provincial grant received in 2019 and 2020 for capital projects and from a federal program which it parcels out gas taxes it has collected.
“The amount budgeted for 2023 is to be funded from grant money that has already been received and therefore moving this expenditure [of $225,000] into 2022 has no negative effect on the overall paving program or finances,” Cooper said.
Council agreed with the recommendation and has instructed District staffers to urge the contractor to complete the work before late fall.
The council decision does mean, theoretically, and pending any subsequent council financing decision, there will be less money to spend on paving and road works in 2023 than first planned.
Hungerford, Butler Ave. from 11th to 14th and sections of Goold are on the list to see substantial asphalt work with Tweedie to 14th St. West and Middleton Road next in line.
There’s also to be patching on Bellicini Place and work from the Mountainview crosswalk to the highway.
And there will be $93,000 worth of curb and gutter work and sidewalk work on Hagman Crescent.
Depending upon the location, the asphalt work might consist of an overlay of an existing surface, grinding up an existing layer and replacing it or more extensive work such as adding a subsurface followed by paving.
The $800,000 the District has set aside at first is $200,000 than the original amount the District had planned to spend but was increased following a motion introduced by councillor Tom Euverman and subsequently passed at the April 19 council meeting.
The motion saw $100,000 taken from the District’s general reserves and $100,000 raised through a 5.026 per cent tax increase for the Class 4 rate paid by major industry to make up the $200,000.