COLUMBIA — City officials are looking at ways to save money for a new parking garage on Short Street after construction bids came in higher than anticipated.
An estimate from Walker Parking Consultants had pegged the project at $8.5 million.
The City Council approved $11.5 million in funding for a parking garage on Short Street at its Monday meeting. The project will use $1.3 million from the city's designated loan fund, which allows departments to make internal loans from one another and pay them back with interest.
The fund currently has $4 million available for loans and $8.5 million in total fund balance, according to Lynn Cannon, assistant director for the Finance Department.
The garage will also receive $2 million from the parking retained earnings fund and $8.2 million from parking bond proceeds.
Cannon said the bonds sold at an interest rate of about 2.8 percent, which was lower than the anticipated 5 percent rate. The lower rate will help to decrease the overall cost.
The lower rate combined with money borrowed from the designated loan fund will allow the city to sustain the project at its current bid, Cannon said during the council meeting. An additional source of revenue would be needed to pay for any enhancements.
But, based on a report from the Public Works Department, the low bid for construction of the 410-space garage was $9.6 million.
In total, the six-story garage is expected to cost $12.3 million.
The low estimate from Walker Parking Consultants has been met with frustration from some city leaders.
Mayor Bob McDavid said he was disappointed that the estimate from consultants was lower than the actual bids, which ranged from $9.6 million to $12 million.
"I know it's not an exact science, but it's obviously important for a company like that to be close to the bid estimate," McDavid said.
During Monday's City Council meeting, McDavid said he probably would not have taken on this project a year ago if he knew it would end up costing $12 million. He said he expected the consultants to be monitoring the market rate.
Dave Ryan, director of operations for Walker Parking Consultants, spoke at the council meeting to explain the estimate.
Ryan said his agency worked with a general contractor to verify its estimate, but that some costs exceeded expectations.
The largest discrepancy was the consultant's estimate for precast concrete, which was $625,000 less than the actual bid from Killian Construction of approximately $2.3 million. Ryan said his consultants are working with the construction company to find opportunities to reduce costs.
Ryan said he is not certain how the discrepancy came to be, but when he spoke with a precast company, the company reported seeing an 8 percent price increase for materials in the past six months.
"Materials are trending up," Ryan told council members.
He also said the original estimate did not include some features for the garage such as an offsite storm sewer that will cost $65,000.
Assistant City Manager Tony St. Romaine said a variety of factors contributed to the low estimate, including increased petroleum prices used in construction materials such as steel and an underestimation of the cost of the brick-type veneer planned for the garage exterior.
It is more of an art than a science, St. Romaine said. In most cases bids are close to the estimates but they can be difficult to anticipate.
The current design for the garage has more architectural details than any other parking garage in Columbia, St. Romaine said. An important goal for this project has been to build a structure with "character," he said, rather than traditional concrete block garage.
"We want to have a facility that really blends in with and complements the existing environment," St. Romaine said. "That's why we're paying the price that we're having to pay."
The intention is for the garage to complement two adjacent construction projects: the DoubleTree hotel planned for Short Street and a mixed-use development by North Light LLC that would combine residential, office and retail spaces and connect to the garage.
He said some early cash flow projections for the new garage were based on the Fifth and Walnut streets garage housing only 50 to 60 percent of its total capacity. Now, the garage is 100 percent occupied, St. Romaine said, and the Short Street garage is sold out. There are more permit requests than spaces available, he said.
St. Romaine said he did not expect the Short Street garage to reach capacity for three to five years. He believes this unexpected revenue proves there is a high demand for downtown parking and will help cover the budget shortfall.
"Fortunately, we still have the ability to make it happen," he said.
The lowest bid for the project came from Killian Construction, also the contractor for the DoubleTree hotel.
St. Romaine said this should allow for more efficiency and control over the time frame of the construction.
Construction on the hotel should begin in early July with a 12- to 14-month construction schedule. St. Romaine said it would be best if construction on the garage, which is expected to have a similar 12-month construction schedule, begins at the same time.
Ultimately, the council will decide whether to sacrifice some architectural designs to save money. Council members will discuss the final details of the project, such as its size and appearance, during the pre-council meeting on July 2.
McDavid said he wants to take one final look and make sure nothing unnecessary will be put into the garage to guarantee as much value as possible for the price.
"If we're going to accept any change, we want to know its exact impact," McDavid said. "We want to make sure everything being paid for is necessary but we're not cutting anything important."
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