CENTERVILLE —Like many of its residents, Centerville City is experiencing the impact of inflation and supply change problems as it seeks to complete projects.

Recently, the city received two bids on a road project it had sent out to bid. The low bid came in more than $400,000 above the city engineer’s projections. This is becoming increasingly common, City Engineer Kevin Campbell told the city council June 21.

To come up with their estimate, the engineers add 10 percent to the previous year’s cost of a similar project, a practice that has worked well in the past, Campbell said.  

“For us to be another 20 percent above that, it gives you an idea of the prices that we’re seeing,” he said.  “A lot of it is concrete — there’s a shortage on cement. Some of those unit prices have doubled in the past year. So that’s what we’re up against.”

City staff considered postponing at least part of the project but concluded that with costs only increasing, it would not benefit the city to hold off, City Manager Brant Hanson said. Instead, the city will use some of its fund balance (essentially its savings) to pay the shortfall, he said. 

The project in question is a rebuild of London Road from Bonita Way to 400 East and Cottonwood Drive, along with an overlay of 400 West from 1125 North to Jennings Lane. Post Asphalt was the low bidder at $1,863,760; the other bid was from Staker Parson at $2,030,468. 

Post Asphalt was expected to begin work on the project July 5. The rebuild work included new asphalt, sidewalk and curb and gutter replacement, updated wheelchair ramps where needed and the replacement of concrete drive approaches. On the 400 West overlay, the asphalt was replaced, curb and gutter were replaced where needed and the road was restriped.

In the same discussion, Campbell told the city council that often the city has difficulty receiving even two bids for these types of projects. 

“We’re still seeing very few bidders,” he said. “We’re happy when we have two bids because then we can bring it before you folks, council and mayor, and show that we have two competitive bids. We’ve had times where we’ve only had one bid and we’ve had to go out to rebid several times to get a second bidder. Two to three is what we’re seeing on average.”

When a project has to be rebid, it only increases the cost to the city since the lone bidder is likely to increase its bid based on the lack of competition for the project, Campbell said. “It’s a game.”

Campbell said he expects prices will “flatten a little bit” but he doesn’t expect them to drop. While the city was able to find the extra funds to get this road rebuild done, increased costs may mean that the city will be able to pay for fewer projects in the future, he said. 

The city is also going to have to increase its budget for slurry to seal roads next year, due to cost increases, Hanson said. λ