Rising Construction Costs Require Library Project Adjustments
Since voters approved the $172 million KCLS capital bond measure in 2004, the construction environment in the state has changed considerably. Costs associated with construction have risen 28% nationwide, forcing private and public entities throughout the Stateto re-evaluate construction projects to ensure the best use of financial resources. Although KCLS is aggressively pursuing cost-saving measures and will continue to fund projects at each community library, increasing construction costs make modifications necessary.
In September 2004, King County residents reaffirmed their commitment to outstanding community libraries by approving a $172 million capital bond to fund major upkeep and expansion of KCLS libraries. The election results strongly supported the KCLS Capital Improvement Plan (CIP), which was developed through extensive community outreach and involvement prior to the election. The CIP includes enhancements for all 43 KCLS libraries to meet community needs during the next decade, with bond proceeds designated for each library project. The project budgets were based on the best construction cost estimates possible, including calculating our projected costs at a higher rate of inflation (5%) than the annual rate at that time (3%).
Escalating Construction Costs
Since 2004, the costs of public and private projects throughout the Puget Sound Region have escalated, causing many entities to scale back on original construction plans. Contributing cost factors include the rising price of materials, such as concrete, steel, copper, aluminum, plastic and the fuel necessary for transportation. Booming regional growth and development, as well as competing demand for raw materials from other countries, have combined to fuel inflation. Recent estimates indicate costs will continue to rise by 6-10% annually during the next five years.
Mitigating Rising Costs
To help offset increased project costs and to minimize the impact on library projects, KCLS is aggressively pursuing several cost-saving measures. Original cost estimates for new library construction were $346 per square foot, but recent estimates have already escalated to $450 and higher per square foot. In order to take advantage of Washington State’s design-build contracting option for projects that cost more than $10 million, KCLS is bundling smaller projects together whenever possible. The design-build approach utilizes a single contractor for both the design and construction of projects, which is more efficient and cost-effective than traditional methods. Public-private partnership arrangements also are being pursued, which entail developing large properties with both a library and mixed-use, residential or retail development.
Committed to Preserving Funding
Despite rising construction costs, the KCLS Board of Trustees is committed to preserving the designated level of funding for each library project. The Board will review all construction projects, and equitably adjust the scope and budget of projects as required by changing circumstances to ensure fiscal responsibility.
Board Statement Regarding the Capital Improvement Plan Budget [link to the following info:]
In Resolution 2004-03, requesting the September 2004 election and approving bonds to finance the King County Library System’s ten-year Capital Plan, the KCLS Board of Trustees reserved the right to adjust the scope and budget of the various projects in the Capital Plan to be funded by such bonds to address local or State circumstances, such as project costs that exceed KCLS’ estimates due to rapidly increasing costs of construction. The KCLS Board intends to preserve the capacity to equitably address all of the projects voted on in the 2004 bond election.
APPROVED BY THE KCLS BOARD OF TRUSTEES DECEMBER 19, 2006