City maintenance facility project cost increases by 27.3%

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Jun. 25—Rising prices of materials have caused a 27.3% increase to the cost of the Manhattan city government's joint maintenance facility since December, administrators said.

The estimated cost in December 2020 was $17.6 million. The price is now $22.4 million, as of this week. The scope has not changed.

Public works director Rob Ott said since late 2020, the price of steel and other materials like wood, drywall and products made from glue have increased dramatically.

In December, the price of steel per ton was $685, Ott said. The current price is $1,787, he said. That's an increase of 160.8%.

Material costs have increased because of production problems from the pandemic combined with a surge in demand from a construction-related boom, the Associated Press reported in April.

Inflation also is a factor, Ott said.

On Friday, the Department of Commerce reported a 3.4% increase in core personal consumption expenditures, which reflects goods and services minus food and energy, from May 2020 to May 2021. This is the highest increase since April 1992 for a key inflation indicator for the Federal Reserve.

Since December, staff members have cut back on project costs by reducing the size of the facility's salt dome, removing drywall in some places and cutting back on the HVAC system air zones.

Manhattan city commissioners Tuesday unanimously approved a $143,600 design contract amendment for the facility. Ott informed commissioners about those cost increases during the meeting.

The city is consolidating city street/fleet, parks/forestry maintenance and water/wastewater operations with this new building.

The city will pay for the project with a 20-year general obligation bond with annual payments from wastewater, water and stormwater fees.

"The existing facilities are functionally obsolete for the size and operations of the city of Manhattan for today's best management standards in this profession," Ott said. "There are safety concerns today with layout and space restrictions for equipment and operations to be performed by the crews."

In February, commissioners approved annexing and rezoning land for the facility at 1201 Levee Drive. The property is on the Pottawatomie County side of Manhattan.

Ott said these new facilities will help recruit and retain employees for the city.

He said it is difficult to recruit employees because the current facilities are undersized, heating is poor and equipment needs repaired.

"Hence our ability (to) attract and retain is difficult when other employers in the community offer better working conditions for their employees than the city," Ott said.

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