Mayor, CED Director Discuss Inflation’s Impact On Anchorage Road Project
February 19, 2022 at 12:38 a.m.
By David [email protected]
At the Warsaw Board of Public Works and Safety meeting Friday, Community Economic and Development Director Jeremy Skinner presented two requests for acquisition of right-of-way parcels totaling $37,950. One was for a parcel from D Group Inc. for $35,320 and the other was from John A. Henricks LLC for $2,630.
Mayor Joe Thallemer asked if the right-of-way acquisition was permanent or just for during the period of construction. “Permanent,” Skinner said. Thallemer then asked when the project would be started.
“So, we’re probably looking at bidding it out late 2023. It’ll be 2024 construction,” Skinner said. He said they have 18 parcels that are not small parcels and there are lines of utility poles along both sides of Anchorage Road. “Because of all of that, we were scheduled for a 2023 construction season but (Indiana Department of Transportation) had requested us to hold back to 2024 because of the utility relocation and the parcels that we needed to acquire, so we accommodated that, which is why we’re moving it back to 2024.”
Anchorage Road is an 80/20 INDOT project, meaning INDOT is paying for 80% of the cost of the project.
Thallemer said, “We saw what happened with bid prices and understand that it’s probably going to continue. Do you have a comment on how INDOT seems to be viewing these escalating bid prices?”
Skinner responded, “In terms of anything that’s probably bid out in the next few years, they’re probably going to have to change some of their pricing. So, as INDOT bids out projects they can adjust. And engineers use those prices on projects to estimate future projects. So I think what you’re going to see, probably over the next six months to a year, is them taking those prices and adjusting on the cost estimate for the projects they’re going to bid out in the next year. So they’ll be a little bit different. So, whereas, right now, they’re coming in really high, I think over the next six months to a year you’re going to see projects come in where they’re estimated at again because they’re going to adjust those prices.”
Thallemer said that will impact the awards the city is given. INDOT grant awards are often given three to four years in advance of the project bidding, he said, and then asked, “You’re confident that those awards will be adjusted as well?”
“That I’m not. I’m not saying that,” Skinner said. He said when the city applies for an INDOT grant what typically happens is that escalation is built into the pricing. “So, I think it’s 5% per year.”
Thallemer asked if there was some price increase coverage already in the grant award, and Skinner said there was.
“The problem we have right now, obviously, is that escalation is far above the 5%,” Skinner said. “Those conversations will have to be had with INDOT on each individual project. They’re not going to award you any additional funds until they bid the project.”
Once the project is bid, there are conversations about the prices. INDOT may come back and say it’s not going to pay for the price increase or INDOT may pay for a percentage of it.
Thallemer said, “We’re going to have to have these conversations as we move forward on these projects, and not just road projects. Every project we do in the city, we’re facing this. It’s a realistic concern for the next several years anyway.”
Skinner said the real question is how long inflation will last.
In other business, the Board of Works approved:
• The new hire and change report as presented by Human Resource Director Jennifer Whitaker.
The report included Aaron Ott as the new city engineer as current city engineer James Emans is retiring. Ott’s start date is Feb. 23 and his biweekly pay will be $3,846.15.
• A contract with Baker Tilly for a 2022 comprehensive financial plan for a cost not to exceed $30,000.
• A $13,439.17 contract with Wessler Engineering Inc. for work on the CR 200S sewer expansion project, as requested by Utility Superintendent Brian Davison.
• A pay application of $61,958.93 for Insight Pipe Contracting LLC for sanitary sewer rehabilitation currently underway, as requested by Davison.
• A $13,000 contract with Wessler Engineering for Local Limits evaluation, as requested by Davison.
“Any time you have a major change or upgrade to your treatment facility, you should have what, in the industry, we call a headworks analysis. It’s kind of evaluating what’s coming into the plant and so we can pass those limits back out to the industries and our local sewer limits so that we’re able to meet our discharge limits as given to us from IDEM,” he said.
• A $25,900 contract with AGP-Neuros for a five-year plan asset management and maintenance service for the wastewater utility’s two turbo blowers, as requested by Davison.
• A rate sheet from John Kimpel & Associates for survey services provided to the city. Skinner said they use Kimpel & Associates for various surveying needs throughout the year.
• A road closure request from the Warsaw Breakfast Optimist Club for May 15 for the City of Lakes Car Show. The road closure will be from 7 a.m. to 7 p.m., with the event going from 10 a.m. to 4 p.m.
Brent Mock, representing the Optimists, said the road closures will include Center Street from Lake to High streets; Buffalo Street from Market to Main streets; and Indiana Street from Market to Main streets.
“Similar to every other year we’ve done that,” Mock said.
At the Warsaw Board of Public Works and Safety meeting Friday, Community Economic and Development Director Jeremy Skinner presented two requests for acquisition of right-of-way parcels totaling $37,950. One was for a parcel from D Group Inc. for $35,320 and the other was from John A. Henricks LLC for $2,630.
Mayor Joe Thallemer asked if the right-of-way acquisition was permanent or just for during the period of construction. “Permanent,” Skinner said. Thallemer then asked when the project would be started.
“So, we’re probably looking at bidding it out late 2023. It’ll be 2024 construction,” Skinner said. He said they have 18 parcels that are not small parcels and there are lines of utility poles along both sides of Anchorage Road. “Because of all of that, we were scheduled for a 2023 construction season but (Indiana Department of Transportation) had requested us to hold back to 2024 because of the utility relocation and the parcels that we needed to acquire, so we accommodated that, which is why we’re moving it back to 2024.”
Anchorage Road is an 80/20 INDOT project, meaning INDOT is paying for 80% of the cost of the project.
Thallemer said, “We saw what happened with bid prices and understand that it’s probably going to continue. Do you have a comment on how INDOT seems to be viewing these escalating bid prices?”
Skinner responded, “In terms of anything that’s probably bid out in the next few years, they’re probably going to have to change some of their pricing. So, as INDOT bids out projects they can adjust. And engineers use those prices on projects to estimate future projects. So I think what you’re going to see, probably over the next six months to a year, is them taking those prices and adjusting on the cost estimate for the projects they’re going to bid out in the next year. So they’ll be a little bit different. So, whereas, right now, they’re coming in really high, I think over the next six months to a year you’re going to see projects come in where they’re estimated at again because they’re going to adjust those prices.”
Thallemer said that will impact the awards the city is given. INDOT grant awards are often given three to four years in advance of the project bidding, he said, and then asked, “You’re confident that those awards will be adjusted as well?”
“That I’m not. I’m not saying that,” Skinner said. He said when the city applies for an INDOT grant what typically happens is that escalation is built into the pricing. “So, I think it’s 5% per year.”
Thallemer asked if there was some price increase coverage already in the grant award, and Skinner said there was.
“The problem we have right now, obviously, is that escalation is far above the 5%,” Skinner said. “Those conversations will have to be had with INDOT on each individual project. They’re not going to award you any additional funds until they bid the project.”
Once the project is bid, there are conversations about the prices. INDOT may come back and say it’s not going to pay for the price increase or INDOT may pay for a percentage of it.
Thallemer said, “We’re going to have to have these conversations as we move forward on these projects, and not just road projects. Every project we do in the city, we’re facing this. It’s a realistic concern for the next several years anyway.”
Skinner said the real question is how long inflation will last.
In other business, the Board of Works approved:
• The new hire and change report as presented by Human Resource Director Jennifer Whitaker.
The report included Aaron Ott as the new city engineer as current city engineer James Emans is retiring. Ott’s start date is Feb. 23 and his biweekly pay will be $3,846.15.
• A contract with Baker Tilly for a 2022 comprehensive financial plan for a cost not to exceed $30,000.
• A $13,439.17 contract with Wessler Engineering Inc. for work on the CR 200S sewer expansion project, as requested by Utility Superintendent Brian Davison.
• A pay application of $61,958.93 for Insight Pipe Contracting LLC for sanitary sewer rehabilitation currently underway, as requested by Davison.
• A $13,000 contract with Wessler Engineering for Local Limits evaluation, as requested by Davison.
“Any time you have a major change or upgrade to your treatment facility, you should have what, in the industry, we call a headworks analysis. It’s kind of evaluating what’s coming into the plant and so we can pass those limits back out to the industries and our local sewer limits so that we’re able to meet our discharge limits as given to us from IDEM,” he said.
• A $25,900 contract with AGP-Neuros for a five-year plan asset management and maintenance service for the wastewater utility’s two turbo blowers, as requested by Davison.
• A rate sheet from John Kimpel & Associates for survey services provided to the city. Skinner said they use Kimpel & Associates for various surveying needs throughout the year.
• A road closure request from the Warsaw Breakfast Optimist Club for May 15 for the City of Lakes Car Show. The road closure will be from 7 a.m. to 7 p.m., with the event going from 10 a.m. to 4 p.m.
Brent Mock, representing the Optimists, said the road closures will include Center Street from Lake to High streets; Buffalo Street from Market to Main streets; and Indiana Street from Market to Main streets.
“Similar to every other year we’ve done that,” Mock said.
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