Estimated costs for the full reconstruction of Jackson Street in downtown St. Paul recently doubled in price from $8.45 million to $16.5 million, leaving critics wondering how the city could be so far off in its projections.

A series of factors came together at just the wrong time just as construction prices were on the rise for the public sector, according to St. Paul Public Works officials.

Specifically, city officials attributed the additional cost to these factors:

The project went from eight blocks to nine.

Utility improvements were added to the project.

Because of the growing economy, construction costs rose by approximately 10 percent.

The original estimate was based on a 2012 rebuild of Fourth Street. But that project was much less complicated.

Although new bicycle lanes and pedestrian improvements are not the leading cost drivers, a one-block extension of the entire road project to connect the future downtown bike loop with the Sam Morgan Trail did add $1 million to the original expense projections.

“They added a million bucks because they went another block,” said St. Paul Public Works Director Kathy Lantry.

Nevertheless, the priciest part of the project is the street reconstruction itself, said City Council President Russ Stark, rather than the bike and pedestrian trail.

The method Public Works uses to estimate project costs is in flux, and initial estimates in 2013 lacked complete scoping or engineering reports that might have provided more accurate numbers. Full scoping reports include detailed goals, tasks, costs and deadlines, but those generally weren’t completed in full in the past before the city council approved project financing.

“In the past, the department did not fully scope projects for estimates, a practice that was in place for cost reasons,” said Public Works spokesman Joe Ellickson. “They didn’t allocate funding for preparing for projects that potentially wouldn’t get approved by policymakers in the future.”

Lantry, who became Public Works director in 2015, said the department has made some changes, and is already “doing a much better job scoping. We will likely move towards getting a better start on engineering. … But this whole thing about how things should be 100 percent engineered before we start a project? That’s just not the way things are done.”

The actual cost of rebuilding Jackson Street remains to be seen. Construction bids will be open by May and the work could get underway that month.

PROJECT COSTS

The Jackson Street rebuild will stretch a little more than a half mile, from Shepard Road to 11th Street.

The work is expected to take place across two May-to-November construction seasons, in 2016 and 2017, and will include new roadway, sidewalks, curbs, plantings and a protected two-way bikeway on the west side of the street.

Lantry has acknowledged that the initial $9 million budget projection in 2013 underestimated the complexity of rebuilding a busy downtown street from building face to building face. “It is a coordination between many utilities on a highly-used downtown street that has many entrances and exits on parking ramps,” she said. “There are critical entrance and exit points for businesses.”

To estimate costs, the street engineering team used the most recent and most comparable roadwork: the reconstruction of Fourth Street between Wabasha and Minnesota streets in 2012.

The Fourth Street repairs came in at about $750,000 per block, but “these streets were not apples to apples,” Ellickson said.

To that total, the department’s street engineering team added 33 percent to account for inflation and the more complex Jackson Street rebuild.

“At that point, our street engineering team estimated a price of $1 million per block for the project and added in an additional $450,000 for planning for the bike loop,” Ellickson said. “This provided a total estimate of $8.45 million for the Jackson Street project.”

PROJECT GROWS

But the project began to grow.

The road work was initially expected to span eight blocks, but the project increased by a block from Kellogg Boulevard to Shepard Road to include Jackson as the first leg of a downtown bicycle loop, according to city officials.

The goal was to connect the proposed bike loop with the Sam Morgan Trail and complete the full length of the bike corridor on Jackson Street in one swoop.

“From the original estimate, this would have added an additional $1 million to the project, taking the price from $8.45 million to $9.45 million,” Ellickson said.

Overall, the asphalt bike lanes total about 2 percent of the project. “Asphalt is relatively inexpensive compared to concrete, and if you didn’t have asphalt there, you’d have concrete,” Lantry said. “The cost driver on Jackson is not the bike lane. It’s an amenity we’re going to do as long as we’re doing the project.”

Then the city determined that it would be a good opportunity to update utilities on the street. The replacement of water mains, sewers and traffic signals account for about $5.5 million in costs, bringing the new total to $15 million. St. Paul Regional Water Services contributed $1 million.

And as the economy picked up from 2014 to 2015, contractors got choosier about their projects.

As a result, the city’s construction cost estimates recently went up another 10 percent for materials, labor and equipment.

“Increased construction costs – which municipalities around the region are seeing – account for an additional $1.5 million in costs, per our engineers and consultants estimates,” Ellickson said.

Jackson Street isn’t the only public works project facing rising costs and unexpected budget increases.

As contractors and subcontractors become more selective, fewer bids are coming in for government-driven work that firms call relatively complex or heavy on regulation and documentation requirements.

Similar budget challenges have faced the renovation of Robert Street in West St. Paul and Ramsey County’s demolition of the former West Publishing building and government center on Kellogg Boulevard.

Initially projected to cost $35 million, the rebuild of the Nicollet Mall in downtown Minneapolis drew a single bid from a general contractor, who asked for nearly $59 million to complete the project. The plans are being redesigned and will be put out to bid again.

St. Paul City Council member Rebecca Noecker, who represents downtown St. Paul, said she is confident that the Public Works Department will improve its cost projections for future projects.

The council met with Lantry on Feb. 17 and approved the revised Jackson Street budget, and then added additional funding when it convened as the Housing and Redevelopment Authority a week later.

“I think ‘satisfied’ is a hard word to use in this situation. I don’t think anybody looks at a 100 percent cost increase and says they’re satisfied,” Noecker said. “But I do accept the explanations that I heard. And I have 100 percent faith in Kathy Lantry as the new director, and the estimates were based on the way estimates were made before she took over.”