Palo Alto's ambitious plan to fix up the city's aged infrastructure and build a new bike bridge over U.S. Highway 101 is being strained by a sizzling construction market, which is adding millions of dollars to the price of each project and forcing local officials to lower their expectations.
Despite the obstacle, two priority projects on the city's infrastructure list moved forward Monday night, when the council voted to approve the construction contract to rebuild the 1948 fire station near Rinconada Park and to approve the environmental analysis for the new bike bridge at Adobe Creek.
In each case, council members voiced significant reservations about the cost increases. The budget for the fire station has gone up from $6.7 million, the amount in the city's 2014 Infrastructure Plan, to about $8.6 million (or $9.5 million, if you factor in the cost of staff salary and benefits).
Three council members were so concerned about the new cost estimate that they voted against the contract with Strawn Construction for the fire station project. Even though the item was on the council's "consent calendar," which is typically reserved for noncontroversial items, council members Greg Tanaka, Eric Filseth and Karen Holman all registered no votes.
In explaining his dissenting vote on Fire Station 3, Tanaka called the revision in the project budget a "substantial increase" and wondered if the project could be revised to save money. He noted that the current design includes amenities such as a pedestrian plaza, a bicycling queue area and public art -- features that could potentially be omitted.
"If we are 44 percent over budget, does it make sense for us to be incorporating niceties versus essentials?" Tanaka asked. "That's really the issue in my mind given that it's taxpayers dollars we're spending."
Filseth and Holman both concurred, with Filseth saying he was surprised that the contract appeared on the "consent calendar," given the magnitude of the increase.
Similar concerns cropped up during the council's long discussion about the new bike bridge, which officials plan to start building in 2019 and complete in 2020. Initially pegged at about $10 million, the project now has an expected price tag over $16 million, despite the council's decision last year to jettison the fanciest proposals for the new overpass in favor of a simpler and cheaper alternative.
On Monday night, it became apparent that even the cheaper alternative is going to cost far more than officials had anticipated. Vice Mayor Liz Kniss said she remembers a time when the expected cost for the new bridge was about $6 million and sought reassurance from Public Works staff that the estimate won't continue to climb.
"I'd like some reassurance on how we're going to be able to hold the line on spending on this bridge," Kniss said. "This is a bridge that the public really wants."
But city officials countered that they won't know what the final cost will be until the design is completed and they actually go out to bid on the project, which they expect to happen in about a year. Brad Eggleston, assistant director of Public Works, said the cost escalation that the entire region has experienced in the construction market accounts for almost all of the cost increases.
The council plans to have a separate discussion early next year about the changing cost projections and their implications for the city's infrastructure plan, which also includes two garages, a new police headquarters, the reconstruction of the Mitchell Park fire station and a host of bike projects.
Several council members, including Kniss and Councilwoman Karen Holman, suggested reaching out to tech companies in Mountain View's North Bayshore area to see if they'd be interested in contributing for a bike bridge project that would ostensibly benefit many of their employees (Google has already committed $1 million to the cause).
Councilman Greg Tanaka even suggested pursuing "branding opportunities" with the tech companies, a proposal that received a mixed reaction from colleagues who argued that a bridge to the Baylands is a particularly unsuitable place for billboards or other forms of corporate advertising.
"I feel that this would be important to be kind of creative in thinking about how to fund this project, how to make it happen," Tanaka said. "It seems we're getting closer and closer to funding and the amount of funding we need keeps going up and up. ... How do we bridge the gap?"
Councilman Tom DuBois was less inclined to pursue this approach, though he also agreed that the rising costs are a problem and that the city needs to reconsider the design of the bridge.
"We need to value-engineer it and take features out, rather than just keep the costs going up," DuBois said.