Are construction projects costing too much?

Review shows $1 million in cost overruns; most jobs under budget
By: Jon Brines, Placer Herald Correspondent
-A +A

As the City of Rocklin begins a multi-year, multi-million dollar capital improvement plan, the Placer Herald reviewed construction projects started or completed in 2011 and found the city paid contractors more than $1 million over the winning bid on two-thirds of the projects.
With nearly $8 million worth of projects funded by various sources, including state and federal funding, the city came in $526,405 under budget overall.
The cost overruns resulted as city staff approved change orders for items that put the cost of the project over the original winning bid amount.
While the city has the prerogative to make changes because of unforeseen complications during the project, some approved overages could be considered questionable.
One of the most common explanations for change orders on 13 projects reviewed was “unsuitable soils” discovered during construction. A statement released by city officials during the review said the city engineer was prepared for this change.
"When doing road reconstruction projects the potential for encountering unsuitable soils or shallow utilities, especially in the older parts of town, is high,” the city statement read in part. “The city must rely heavily on staff’s judgment out in the field.”
In one case, the city approved a $1,861 change after the “subcontractor hit rock” while trenching a conduit on last summer’s parking lot improvement project at Finn Hall. Apparently, the contractor on this job did not use a rock saw.
The Placer Herald reviewed the original bid specifications, which specifically required the use of a rock saw. While it appears to be an unnecessary expense, the city blames other factors for putting the project over budget by $51,405.
City officials point to the cost of “base compaction” for stabilizing the ground because the parking lot “bridges the pre-existing abandoned quarry.”
In the $186,737 remodel of the century-old City Hall building on Rocklin Road, the city approved an additional $11,000 because the “front door did not meet ADA requirements.”
That change had not been included in the original bid specification, according to the change order.
Some changes added value to the project, according to city officials.
The $271,847 Rocklin Event Center Outdoor Event area improvements project included an approved $8,327 change for front landscaping and two retractable screens with remotes for a sunset-facing room, which were added after the competitive bid was awarded.
The city defended the change as an “opportunity” to affect the desired outcome for finished room.
“A change order was generated to address a glare issue within the Sunset Room, thus resolving an issue and making the Sunset Room/Outdoor Event area more attractive and functional to renters,” the statement read in part.
The city said many change orders are impossible to anticipate.
On a $8,419 change order for a project at Johnson-Springview Park for restroom and ballpark upgrades, the city added an ice machine, sink and the plumbing to a snack bar.
Those amenities were not in the original bid specification, but city officials were required to add them after the Placer County Health Department expanded their regulations to include simple snack bars in parks.
“This change in the regulatory oversight required us to issue a change order to comply with those regulations, which essentially swept our snack bar into the same regulations as restaurants,” the statement read in part.
On average the total amount of change orders was 13 percent of the final cost of the construction project.
According to the American Public Works Association some California counties typically use 10 percent and lean toward 5 percent. However, the city officials indicated the city was under the accepted standard.
Paul Cavaghan, owner of Rocklin-based C & C Construction, said Rocklin is keeping costs low on day-to-ay construction projects.
“Rocklin was wise and frugal with their money, Stockton wasn’t,” Cavaghan said. “I bid jobs where there wasn’t a whole lot in it for the company, but it keeps people busy.”
As many California cities are halting public works programs following the state’s slashing of redevelopment funds, Rocklin is preparing to pour $33.8 million into freeway interchanges, roundabouts and road resurfacing over the next five years.
More than $7 million of the capital improvement plan is unfunded, meaning the city doesn’t know how it will pay for projects.
The city points out the capital improvement plan was reviewed by city management, City Council members and was subject to public review/hearing.
Residents will have another opportunity to weigh-in on each project as each comes up for bid over the next five years.
City’s $526,405 in construction savings

Projects Under Budget:
Old Library Improvements: $10,652
Sierra College Blvd Widening: $184,454
Safe Routes to School: $295,876
City Hall Remodel: $182
Granite Drive Library Remodel: $19,386
Rocklin Event Ctr Parking lot: $763
Rocklin Event Ctr Remodel: $18,024
Wildcat Blvd Traffic Signal: $9,111
Johnson-Springview Park Upgrades: $17,737
Argonaut Ave. Reconstruction: $76,288

Projects Over Budget:
Street Light Induction Project: $85,949
Finn Hall Parking Lot: $20,119

Source: City of Rocklin