Rising Costs Throw Wrench Into Counties' Building Plans

Changes in construction plans are among the factors that affect building costs. An expansion of the courthouse renovations that Fairfax County officials sought after the price was set added almost $14 million to the cost. (Photos By Linda Davidson -- The Washington Post)

The surge in costs is forcing other localities to revise spending plans. Last week, Arlington County Manager Ron Carlee recommended deferral of $90 million in storm drainage, neighborhood conservation and traffic-calming projects. Prince William County officials said in February that part of a November bond referendum for road improvements -- including additional lanes for Routes 1 and 28 -- initially priced at $170 million will go to voters at $236 million.

"We are keeping the faith, but the faith has gotten more expensive," County Executive Craig S. Gerhart said.

The Fairfax Board of Supervisors, who broke ground on the Katherine K. Hanley Family Shelter on Sunday, approved $5.2 million for the project in September 2003. Today, the building, which will accommodate homeless families waiting for permanent housing when it opens on Route 29 in summer 2007, will cost $6.6 million.

That increase comes after the county trimmed 3,000 square feet from the design. Officials said the reductions, which cut the size of common living areas and eliminate private bathrooms -- the 20 families to be housed there will have to share -- won't affect the shelter's essential mission.

Materials cause most of the cost escalation. Driven by torrid urban and industrial growth in China and India, prices for structural steel are up 40 percent since early 2004, according to the Engineering News-Record, which monitors construction costs in 20 U.S. cities. Higher energy prices in the copper industry have increased the costs of water tubing and electrical wire. The Bureau of Labor Statistics reported that the cost of asphalt-paving mixture grew 15 percent between July and January.

Ken Simonson, chief economist for the Associated General Contractors of America in Arlington, said he is "pessimistic" that the outlook will improve this year. The average retail price of highway diesel fuel, used to run construction vehicles such as dump trucks and concrete mixers, is 26 percent higher than a year ago, the Energy Department reported recently.

"I do expect construction material costs will continue to rise more rapidly than the rate of inflation," Simonson said.

In his proposed budget for the fiscal year that begins July 1, Fairfax County Executive Anthony H. Griffin created a $12 million fund to cover anticipated increases for major construction contracts that will be awarded in the coming months, including those for the public safety-transportation center, a Virginia Railway Express parking garage at the Burke station and expansion of the Dolley Madison library in McLean. The value of these and other jobs is about $225 million, and Griffin said containing costs will "present a significant challenge."

To keep the new Oakton library on budget at $7.4 million, for example, county designers dropped a number of features: a skylight that was to run down the building's spine, a humidification system for patrons' comfort, central air conditioning in favor of self-contained rooftop units and electric heat in lieu of natural gas. Ground was broken April 6, with completion scheduled for fall 2007.

Market forces don't fully explain the rising expenses. Some county officials suspect, but can seldom prove, that contractors bid low and gradually raise prices through "change orders" after construction is underway.

In other instances, officials expanded the scope of work after the price was set. That was the case in the $115 million expansion and renovation of the Fairfax County courthouse. After the job was underway, officials decided to overhaul 25 courtrooms (16 for the Circuit Court and nine for the General District Court) with new lighting, furnishings and technological upgrades for about $13.7 million, or $550,000 a courtroom. The Hanley Center project was expanded to include a pedestrian trail connecting the shelter to Stringfellow Road and initial work on a transitional housing facility on the site.

Sometimes the nature or complexity of a project becomes apparent to government officials only after construction or renovation is underway. In 2004, the Montgomery County Council reluctantly approved a $3.3 million loan to the Strathmore Hall Foundation after engineers raised concerns about the quality of acoustics in the new concert venue. Restoration of the American Film Institute Silver Theatre, the art deco centerpiece of revitalized downtown Silver Spring, was expected to cost $18.6 million when the project went to bid. After workers found widespread water damage and the need for clay tile and a complicated paint job, the cost grew to $24.2 million.

"We know what a fire station is going to cost. We know what libraries cost. Then you get to a unique project," said Howard Guba, director of capital facilities for Fairfax's public works department.

The planned public safety-transportation operations center qualifies as special. In November 2002, voters approved $29 million in bonds toward construction of a two-story building to replace the county's 911 dispatch and emergency operations centers, now housed in an aging converted elementary school in Annandale. County officials described the figure as only a partial cost, although how partial was never clear.

The project was expanded to include state police dispatchers and the state Transportation Department's Smart Traffic monitoring. Improvements in technology and security, including redundant power systems, drove the costs to $135.5 million, to be paid by the county and the commonwealth.

Supervisor T. Dana Kauffman (D-Lee) said the period immediately after the Sept. 11 attacks was one of great uncertainty for local governments thrust into homeland security. The escalating costs of the safety center also reflect that confusion.

"It was a work in progress," he said.

Staff writer Amy Gardner contributed to this report.