‘How do we explain that?’ Price of planned work on I-77, SC 160 has more than doubled

The interchange improvement on I-77 between Baxter and Kingsley in Fort Mill just got a whole lot more expensive — again. That casts concern not just there, but for other large interstate projects in Rock Hill.

For the second time in less than two years, a new cost estimate for Exit 85 at S.C. 160 increased by more than $20 million. David Hooper, administrator with the Rock Hill-Fort Mill Area Transportation Study, said Friday afternoon he learned earlier in the week about the new estimate from the South Carolina Department of Transportation.

The new estimate puts the total project at more than $115 million. The almost $24 million uptick comes about 18 months after a similar hike in the projected cost. And just ahead of significant project milestones like right-of-way acquisition and construction bidding. Construction bids this fall could lead to work by summer 2024.

“When you’ve got a $49 million increase in less than two years on an existing project, that’s a significant cost shift,” Hooper said.

How much is the increase?

At more than $115 million, the project would cost more than double what the earliest estimates envisioned for interchange work. But some of that cost increase has a pretty obvious explanation.

“What we’re doing here is a completely different animal,” said project manager Berry Mattox with SCDOT. “This was always the more expensive of the options.”

In 2014 transportation officials proposed a new diverging diamond configuration at the S.C. 160 interchange, similar to the one just to the north at the Gold Hill interchange. An estimate in the $40 million range led to a state infrastructure bank approval in summer 2020 for $42 million. York County would add money, too.

An alternative analysis and public input led SCDOT away from the diamond. Now, plans involve a directional interchange with flyover bridges.

“They had to get a more innovative configuration,” Hooper said. “And that pushed the price tag up.”

The roughly $50 million estimate went to about $72 million with the different design. The new estimate also added work on S.C. 160 near the interchange that wasn’t part of the infrastructure bank approval.

“Now you’re adding on a mile worth of six-lane widening (along S.C. 160),” said Patrick Hamilton, who heads York County’s Pennies for Progress program.

Still, even with the new design Mattox told area officials early last year that interchange and widening costs were up in a “huge departure” from earlier estimates. The projection then was about $93 million.

For perspective, $23 million was the listed cost of a five-lane widening of Sutton Road, Spratt Street and Fort Mill Parkway from I-77 to the parkway’s railroad overpass on the 2017 Pennies for Progress ballot. It’s not a perfect comparison as road work costs typically increase with time. The last Pennies campaign budgeted $50 million — roughly the cost of the past two budget increases at the S.C. 160 interchange — to repave more than 80 miles of roadway countywide.

“(The latest increase) is a big number,” Mattox said. “There’s no way to sugar coat that.”

Why are costs so high?

About $6 million of the price hike comes from increased asphalt and asphalt binder costs. Labor costs are higher. Other raw materials increased significantly in the past year, Mattox said.

“There’s a lot of concrete and steel,” Mattox said. “We have three very large bridges.”

The cost to move Comporium fiber optic cable, at $2 million, is the highest Mattox said he’s ever seen. There’s a $6 million cost to move water utilities with York County and Fort Mill. State law requires up to 4.5% of construction costs to go to water and sewer utilities. Which gets at another issue, that higher material and labor costs drive up costs elsewhere.

“It’s death by a thousand cuts,” Mattox said. “Everything, incrementally, is going up.”

Mobilization, subcontractor mobilization, traffic control, utility staking, insurance rates and other factors are estimated as percentages of a total project cost. So does the risk element.

“Risk is going to follow the cost,” Mattox said. “Because again, the contractor has to bond the entire job. The bigger the number is, then the risk does increase.”

Will costs impact other work?

Money to make up the cost increase will come from the state allowing RFATS to borrow against its current or future funds.

“We also have other projects,” said Rock Hill Mayor John Gettys, an RFATS policy committee member.

There’s ongoing work on interchanges at Carowinds Boulevard in Fort Mill and Cherry/Celanese roads in Rock Hill. There’s the new exit originally set to serve the Carolina Panthers headquarters development, though it largely comes from a different pot of state money. There’s work envisioned at Exit 77 in Rock Hill.

RFATS also has non-interstate projects like the $100 million or more of improvements needed along U.S. 521 in Indian Land and a recently completed corridor study for S.C. 49 in Lake Wylie. Hooper said there will be an impact on other projects. He said he’s hopeful if the state will allow RFATS to borrow against the federal funds it receives from a little further into the future than is normal, the timing of those projects won’t be delayed.

Hooper said it’s important that RFATS plans major money for interchanges when other federal funding groups don’t, and that York County’s voter-approved Pennies for Progress has funded or helped create about $1 billion in non-federal road money since 1997 that largely went to state roads.

“We’d like to get more of a sense of partnership from SCDOT in Columbia,” Hooper said. “We’re putting a lot of money on the state system. We’re doing our part.”

Whether RFATS can borrow more from future years, or more of what’s expected to increase based on population upticks in the 2020 Census, coming up with an extra $23 million will have consequences.

“Obviously this is going to impact our future opportunities,” said York County Councilman Tom Audette, who chairs the RFATS policy committee.

Can these increases be avoided?

Catawba Indian Nation Chief Bill Harris, also on the RFATS policy committee, said road funding issues are highly complicated but drivers throughout the region likely don’t understand why. For many, Harris said, the price isn’t the top concern.

“They don’t care,” Harris said. “All they care about is, I’m sitting in my car. And I’m not moving.”

Fort Mill mayor and RFATS policy committee member Guynn Savage agrees drivers want to know when the work will be done, but said there’s also a responsibility for elected officials to explain cost increases to the public. Especially when a project has nearly doubled in cost for the same design.

“We rolled out of COVID, eggs went sky high,” Savage said. “I get it. People don’t want to work for the same price. I get it. But the project...we have been working on this for years.”

Gettys said someone messed up when a project starts at about $50 million and is now more than doubled. Gettys also noted the last increase, before this week, already had a $10 million contingency baked into it.

“What I think we did is we set a budget 10 years ago, and then we went out and designed something else and didn’t worry about the budget,” Gettys said. “... How do we explain that?”

Part of that answer comes in the more complicated design. The directional interchange offers better traffic flow than the diverging diamond. Mattox said road requirements don’t allow large projects if designers can’t show significant traffic improvement, and that sometimes means going more expensive.

“They want to see it be good money thrown at a problem that it’s actually fixing,” Mattox said.

Rock Hill city council and RFATS policy committee member Jim Reno recalled the early 2020 public meeting where options were discussed, and wonders whether enough emphasis was placed on the cost differences.

“They overwhelmingly liked the most expensive option,” Reno said of public response. “Did they really know what they’re getting into?”

Early Pennies campaigns faced significant cost and time overruns, and major changes were made to bring the program in-house and improve estimates. Policy committee members wonder if there are ways SCDOT can streamline its process to avoid surprises like the recent one. Audette said missing the mark this badly, it makes sense to look at how projects are operated to see if there’s a more realistic approach.

“I’d rather be straightforward on the upfront than have stuff like this happen,” Audette said.

As for the S.C. 160 interchange, plans remain to head toward construction bidding in a matter of months.

“We can see the finish line from here,” Mattox said, “but there’s still a couple of miles to go.”