Construction Market Pushing Public Costs Up

County supervisors regularly find themselves moving extra money into county construction projects that have run over budget—sometimes, small amounts that are easily covered from contingency funds, and sometimes, large sums that can delay or change county plans.

In June, the board’s finance committee got a quarterly update on county construction projects, finding at least three that need additional funding—work on the new courts complex parking garage in Leesburg, building the final link of Riverside Parkway, and constructing a trail between Round Hill and Franklin Park. The previous quarterly report mentioned seven projects of concern, including those three. One was Hal and Berni Hanson Regional Park—which was about $13 million short before county staff members scrambled to find more money through a combination of proffers, bonds, and contingency funds.

And the county has a busy schedule. According to those quarterly reports, since the beginning of this board’s term, the county has completed 59 construction projects, ranging from new seating at the Claude Moore Park pool to the construction of the Dulles South Multipurpose Center expansion, Kirkpatrick Fire and Rescue Station, Ashburn sheriff station, and major road projects.

To estimate the costs of those projects, according to Department of Transportation and Capital Infrastructure Deputy Director James Zeller, the county uses a number of state and national guidelines. Then there’s “the really important work” of figuring out what is unique about the site or road corridor in question.

“So that’s where one needs to account for site-specific constraints, challenges—anything from terrain to subsurface conditions, to how densely developed the corridor is, land acquisition costs, utilities,” Zeller said.

But then the county must solicit bids from construction firms, and sometimes even the lowest of those bids far exceed the county’s projections, putting a project over budget before construction begins.

Zeller, who worked for the Virginia Department of Transportation before coming to work for Loudoun, said the same is true all over. “The county isn’t the only one that’s been getting stung on this—it’s been happening to VDOT as well.”

In addition to building libraries, community centers, fire stations, and other amenities to keep up with Loudoun’s growing population, the county government has taken on the task of building roads—officially a state responsibility, but one which the General Assembly has underfunded for decades. Zeller oversees the county’s transportation projects.

It isn’t the only time Loudoun’s local taxpayers have had to pick up the tab because of the state. The Northern Virginia Transportation Authority, a major planner and funder of regional projects, in 2018 saw a chunk of its funding stripped away to send to Metro. The NVTA is expected to lose out on more than $100 million per year, affecting projects in Loudoun that were scheduled to get some of that money.

Meanwhile, on the ground, any number of factors can drive a project’s cost up, particularly relocating utilities, offsetting  or minimizing the impact to property owners, or accidentally cutting into unmarked fiber optic cables—which are thick in the ground in Loudoun, and some of which are used by the federal government.

“There are resources where you can identify the companies that have facilities, and then there are those that are on no database,” Zeller said. “And there have been times when we’ve had projects and like bam, you hit something … and before you know it, not exaggerating, a couple of black Suburbans will pull up and very authoritative-looking people come out and ask, what are you doing here?”

 “It really does seem to vary from project to project,” said Supervisor Matthew F. Letourneau (R-Dulles), who chairs the finance committee that receives reports on those projects and makes recommendations to the full Board of Supervisors on funding them as well as making some adjustments itself. “The only constant is that there almost always seems to be something.”

But both said the biggest factor driving construction costs for the county government is the region’s construction market.

“Not just locally, but regionally there are several what I would describe as mega-projects that are kind of sucking up all the energy and available labor and materials, supplies and equipment,” Zeller said. That includes, among other project, massive projects to widen I-66 and extend Metrorail.

“I think the one constant that you hear is that there is so much building activity going on, both in terms of actually building and in terms of road construction, that contractors just aren’t in need of the work,” Letourneau said. And sometimes, he said, working with the government isn’t the easiest thing to do.

“There’s just only so many construction workers, and all of their costs have gotten pushed higher as a result of this market and all of the activity,” Letourneau said. 

As a result, county staff members have had to sometimes rethink how they project costs.

“The board and the finance committee have really pushed staff to be more aggressive in their initial project estimates, and they have done some refinement of the way they’re estimating project costs,” Letourneau said. As supervisors and staff wrote the latest annual county budget, many projects saw their budgets increase.

“I think we’ve been better in assessing risks along corridors, and not just on the highway projects, but on parcels for facilities projects—what are the things that are out there that could cause the cost of a project to increase,” Zeller said.

Additionally, county procurement staff have made a concerted push to bring new contractors into the county’s competitive bidding, from further outside the Northern Virginia area.

And Zeller said although it’s early to tell, there may be signs of hope—recently the county has seen multiple firms closely competing for bids, at or under the expected cost.

“I don’t know if that’s kind of an anomaly, or it may be emerging signs that capacity is starting to manifest itself out in the market again,” Zeller said.

rgreene@loudounnow.com

3 thoughts on “Construction Market Pushing Public Costs Up

  • 2019-08-23 at 11:57 am
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    “It isn’t the only time Loudoun’s local taxpayers have had to pick up the tab because of the state. The Northern Virginia Transportation Authority, a major planner and funder of regional projects, in 2018 saw a chunk of its funding stripped away to send to Metro. The NVTA is expected to lose out on more than $100 million per year, affecting projects in Loudoun that were scheduled to get some of that money.”

    Thank you Loudoun democrat general assembly members, who enthusiastically voted to steal our NVTA money, which we paid for road improvements here in Loudoun, and fed it to the disaster that is METRO. Normal people know this act as fraud. We would be in jail had we done the very same thing.

    Under any other circumstance,

  • 2019-08-26 at 5:57 am
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    How much of our resources went into the firing range for the sheriff, what about the soccer stadium maybe we should look at the funding for the housing at Howard Hughes. Metro is off the charts and Randall as Vice Chair of the NVTA screwed the pooch to the tune of 100 million “a year”.

  • 2019-09-01 at 5:09 pm
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    Chris, Is it really “ONLY” the democratic legislators? Could they really steal our funds if the BOS had a leader (Chairman) that was willing to fight for Loudoun instead of looking for a photo op at every opportunity?

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