Earlier this spring, the Dane County Board of Supervisors hit a snag in the Jail Consolidation Project.
As the price of labor and materials skyrocketed with inflation, the price tag jumped to $16 million more than anticipated when the project was originally approved in 2019.
The final plan would build a new jail to close the aging jail in the City-County Building, and leave an option to close the outdated Ferris Huber Center down the road.
Yesterday, Dane County Executive Joe Parisi announced that the plan approved in March will now cost around $10 million more than that, bringing the total cost of the project to $176 million. That means the board will need to approve additional funding for the project for the second time this year.
Patrick Miles is the new Dane County Board Chair. He says that the new increase in price is not a total surprise.
“I think this is the case with most construction projects these days. The driving costs increasing are labor, through the increase in demand and as places are struggling to hire for so many construction projects right now, and then material costs have also gone up considerably,” Miles says.
Miles says that, while the Dane County Jail has definitely seen the biggest increase in price, it is not uncommon these days for the price of projects to jump up. Usually, when the county creates a budget for a project, such as the jail, they will include a buffer to account for any unexpected price increases.
“We don’t have anything quite on the same scale as we are talking about with the jail, but I know we’ve seen a number of change orders like some of the stuff going on at the landfill and the biogas facility. There’s been delays in getting materials, some of these things have been getting behind schedule because of supply chain issues,” Miles says.
The budget amendment to continue the Jail Consolidation Project must pass a three quarter vote on the board, and has to be approved by August 18 to keep the project on track.
The reason why the jail keeps seeing such larger price increases than other projects is simple: building a new jail is complex.
Chuck Hicklin is the Chief Financial Officer for Dane County. Hicklin says that, in his 20 years working for Dane County, he has never seen such an unpredictable market. He says that smaller projects, such as repaving roads with asphalt, have fewer moving pieces in play than a project such as a jail. Therefore, it is much easier for them to find more exact costs for the materials needed for the project.
But larger projects like the jail have many more interdependent materials. If any of those materials aren’t available, the whole project stalls. You can’t install a door locking mechanism without a door.
Hicklin says that when this happens, that affects not only the cost of materials, but also the cost of labor to wait around for those materials.
For example, Hicklin points to the new sheriff’s office in Stoughton, which was supposed to open last year.
“That project, they were supposed to move in last November, and the contractors were done, they were moving pretty well, but there were certain things, like light fixtures, that they couldn’t get. So we had to wait three months and move in three months late. The project was 99% done, but for those few things needed for occupancy, so we had to delay our move in,” Hicklin says.
This also means that contractors are less likely to bid on projects that come from a government agency. And the fewer contractors who bid on a project, the higher it’s going to cost.
“One thing that is unique with a public project is that you design the project, and then you bid the project. And when that bid comes in, the contractor is signing the contract for that amount. Period. Unless there’s a change in the scope, or they run into something they didn’t expect or we decide to change to do something cheaper, they are obligated to go at that fixed price,” Hicklin says.
Inflation is not just hitting the county either. Nearly every level of government is facing similar issues, Hicklin says. Earlier this week, the Capital Times reported that the price tag associated with the Madison Metro School District’s referendum construction would cost an additional $28 million, due largely in part to inflation.
When it went before voters back in 2020, that project was already expected to cost $317 million, and will help renovate all high schools in the district. Construction on that project is already underway.
Photo courtesy: WORT Flickr
