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Continued: Cost of public works projects rise along with the economy

Pederson said that representatives of a large Twin Cities contractor told her they were having problems getting enough trucking for some jobs. Many truck companies are owned by small independent companies, she said, some of which are working in western North Dakota on oil-related projects.

“They took their manpower and their equipment out there, and not all of them came back,” Pederson said.

Flexibility good for finances

Fridley public works Director Jim Kosluchar said being flexible in this construction environment pays off. Disappointed that a sidewalk project that was supposed to be finished this year got few bids, the city shifted the completion date to next summer and extended the bidding deadline. More contractors bid and the city awarded the contract for about 20 percent less than the estimate.

Cities that have decided to proceed with projects despite bids that are higher than expected can usually cope by spending contingency funds attached to those projects, Pederson said. She said cities will adjust their cost estimates, just as they did when prices were sinking in 2008 as the economy tanked.

“We will be adjusting our budgets and looking at where we think bidding will be going over the next three years,” she said. “We tweak these a bit every year.”

 

Mary Jane Smetanka • 612-673-7380

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