Reality Check: How did RADTIP bids come in about $20 million over budget?

Construction in the River Arts District is ramping up, but, there won't be as much to the project as originally planned. That's because bids came in about $20 million over budget. (Photo credit: WLOS staff) 

Construction in the River Arts District is ramping up, but, as we've reported, there won't be as much to the project right now as originally planned. That's because bids came in about $20 million over budget.

The city blames rising construction costs. Contractors said it's a matter of supply and demand. They said there's a lot of work available right now and only so many contractors.

"The amount of work in Asheville right now is very plentiful," H&M Constructors president Brett Cannady said.

One of the business' projects is constructing an academic building at Warren Wilson College. Cannady said his company can only do as much work as it has workers.

"There's a scarcity of labor," said Cannady.

The bidding

For the River Arts District Transportation Improvement Project (RADTIP), contractors had an opportunity in May to bid on 12 projects.

"With the current budget, we are not able to build out all the originally planned Tiger VI projects," Asheville Strategic Development director Stephanie Monson Dahl said at the June 27 City Council meeting.

That's when the public learned which projects would and wouldn't be funded. In December 2016, the city hired a construction manager at risk. Part of that job includes recruiting bidders.

"That's when your project either finishes in or near budget, or, if you don't get the bidders to the table, it can finish way over budget," said Cannady, who has experience as a CMAR.

After the CMAR's initial estimate in late 2016, City Council approved an extra $6 million for RADTIP. In May 2017, the bids came in $20 million over that.

"The size of the overrun was a bit of a surprise," Asheville vice mayor Gwen Wisler said.

"It's a shock. But, during boom times, which we're experiencing, construction costs often go up," Asheville City Council member Cecil Bothwell said.

Once a project is bid, the city needs at least three bidders to open the envelopes. Initially, none of the 12 projects received at least three bidders. So, the projects were rebid. When a project is rebid, the three bid requirement goes away. On the rebid, only two of the 12 projects had more than two bidders.

"If you've got three or four bidders in each bid package, you're probably going to get better pricing than if only one or two show up," said Cannady.

Project changes

To receive $14.6 million from a federal grant, the city needed to break ground by Aug. 1. City management said because the officials worked quickly to alter the project to get it back under budget, they picked projects behind closed doors. The council members News 13 spoke with don't believe there is anybody who should be held accountable.

"I don't think that there was any wrong doing, per say. What we have asked the city staff to do is to alter our procedures so that City Council is informed on a more routine basis," said Wisler.

"I don't see who would be held accountable. The staff accepted estimates from competent people," said Bothwell.

They say none of the projects left out have been canceled. However, they're unfunded.

The city hired Beverly-Grant and Barnhill to be the CMAR.

Several contractors said they expect construction costs to go up even more because of work needed across the country, like in Houston and in Puerto Rico, for hurricane recovery.

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