Cost rises for Hampton Road project

GROSSE POINTE WOODS — It’s going to cost Grosse Pointe Woods quite a bit more than officials initially anticipated to replace a water main and repave Hampton Road from Mack Avenue to Marter Road.

While the city had initially budgeted $1.8 million for the project, the lowest bid actually came in at around $2.4 million, or roughly $600,000 more, City Administrator Frank Schulte said.

A low bid from New Haven-based Pamar Enterprises Inc. to undertake the project for $2,324,642.75 was approved unanimously by the Woods City Council March 6. A $100,000 contingency brings the project up to an amount not to exceed $2,424,642.75. Pamar was one of four bidders.

City Councilman Thomas Vaughn asked what was driving the “very substantial cost increase.”

“That was due to the economic situation out there and few contractors qualified to do the work,” Schulte said.

City Engineer Ross Wilberding, of Anderson, Eckstein and Westrick Inc., also said the “economic climate” had caused the sharp increase.

“It’s consistent with what we’re seeing in the overall market,” Wilberding said.

He said they’re seeing projects come in at 15% to 20% higher than original engineering estimates. It’s a combination of high inflation, uncertainties in the supply chain and increases in labor costs, he said.

“The number of contractors out there is another factor,” Wilberding said. “The number of contractors has not kept up with (rising demand).”

To some extent, that’s connected to the loss of many construction firms after the Great Recession and housing market crash caused new construction to all but grind to a halt some 15 years ago.

“I’m not surprised by the cost,” longtime City Councilwoman Vicki Granger said.

Granger recalled a similar spike in infrastructure project costs for road construction and the like circa 2013 and 2014, as cities were emerging from the Great Recession of 2008 and starting to tackle projects that they’d put on hold in those lean years.

Because a large chunk of this project is the water main replacement, Schulte said the city is paying for 75% of the costs with water/sewer funds.

“The general fund won’t be too affected with the cost increase” as a result, Schulte said.

Because of the rise in the Hampton project cost, Schulte said the city has reduced the number of road projects it will be doing this summer. He said the city has also increased the budget for resurfacing Roslyn Road — a project that will be included in the 2023-24 fiscal year budget — by about $600,000.

Other than Cook Road — which might qualify for federal funding — Schulte said Roslyn and Hampton are the last two roads in the Woods that need to be rebuilt. Other roads just need patching and smaller maintenance jobs.

Vaughn praised city leaders for maintaining the roads so they rarely required a more costly redo like this one.

“You guys have done a really good job,” Vaughn said.

Granger said road maintenance has been something the city has long focused on.

“We have worked very hard over the years to be at this point,” Granger said. “I think we’re in a lot better shape than some of our surrounding communities.”