A headline in a recent Statesman Journal story didn't tell the entire truth about a cost overrun on the $61.8 million police facility Salem voters approved in a May 2017 bond measure election.
The headline, "Salem officials seek extra $2 million as police HQ construction costs rise," makes it sound as if construction cost inflation is the reason City officials are wanting $2 million to be allocated from urban renewal funds to fund additional police facility costs.
But there already was $4.5 million in the police facility budget earmarked for 9.2% worth of cost escalation due to construction inflation. So the additional money being requested seems to show that cost overruns are the problem, not an increase in construction costs, which appear to have risen less than 10% since the bond measure was passed.
Above is a chart I shared in a February 2017 blog post that shows cost figures for the $63.9 million police facility plan, which the City Council reduced to $61.8 million. (The chart also shows an alternative plan proposed by Salem Community Vision.)
As noted above, in the $63.9 million plan 9.18% was budgeted for escalation, meaning construction inflation. This totaled $4,503,000. There also was a 9% contingency line item of $4,907,000.
So $9,410,000 was set aside for construction cost increases and unforeseen contingencies. It sure seems this should have been enough, so why are City officals asking for $2 million on top of the $9,410,000?
I don't have the $61.8 million budget. That's 3.3% less than the original $63.9 million budget. If the escalation and contingency line items were reduced proportionately, there still would be $9.1 million set aside for construction inflation and unforeseen expenses.
So again, why ask for $2 million more?
Members of the City Council need to dig into the rationale being given for the $2 million request. The Statesman Journal story says, somewhat confusingly, since this is at odds with the headline:
As city officials try to make the place more useful to locals, the largest chunk of the July request — $1,197,000 — is poised to pay for a big community room at the station. Other expenses include public restrooms ($398,000), a plaza ($250,000) and artwork ($240,000), bringing the grand total to $2.085 million.
But the description of Measure 24-420, the $61.8 million bond measure, in the May 2017 Voter Pamphlet says that a "community meeting space" was already included in the budget.
So since a community room already was in the budget, seemingly with associated restrooms, let's go back to construction cost inflation as the reason for the police facility cost overrun.
The chart above shows the three line items, A, B, C, that constitute construction costs: Building construction, parking structure construction, and site and demolition construction. In the original $63.9 million budget, these items totaled $40,021,000. If those line items were reduced proportionately, they would have totaled $38,700,000 in the $61.8 million budget.
A Statesman Journal editorial in today's paper, "City seeking extra $2 million to build new police facility is disappointing," says that construction costs now are estimated to be $57 million. This can't be true, since they were only $40 million in the original budget, and it's hard to believe that construction costs have inflated by over 40% in a year and a half or so.
I can't help observing that I and others who were opposed to an overpriced and overlarge police facility argued that about 100,000 square feet would be plenty. City officials argued, "No, experts say we need at least 115,000 square feet!"
Well, now it appears that the experts were wrong and we were right. Here's an excerpt from the Statesman Journal story:
"Taking increasing costs into consideration, the size of the police facility is also being slimmed down from about 115,000 square feet to about 104,000 square feet, without major program sacrifices, Dannen said."
It's good to see that City officials have realized that the Police Department can be fine with a 104,000 square foot building. However, I agree with the Statesman Journal editorial board that using $2 million in urban renewal funds to fill a supposed budget gap isn't a wise idea.
Urban renewal dollars are taxpayer-funded dollars. Voters didn't approve the bond measure with a caveat that it was OK to take an additional couple million from the URA fund.
It should bother residents that if the Urban Renewal Agency Board approves the additional $2 million, there will be fewer funds for other riverfront projects. The Riverfront-Downtown area has about a $4 million budget.
Isn't that money supposed to be used for street improvements, and loans and grants for others who want to improve their land or buildings and rid areas of blight?
Answer, "yes," according to the City of Salem's own web site.
Using $2 million of Urban Renewal funds for cost overruns on a police facility doesn't remove blight, improve property values, or leverage private investment. It just bails the City of Salem out of a failure to budget properly for police facility construction.
The Salem Breakfast on Bikes blogger has a much better idea: eliminate structured parking on the police facility site entirely. Here's an excerpt from "Save $2M? Ditch the costly structured parking!"
Still, the City should consider further cutting the structured parking and using nearby surface lots or the Marion Parkade. At $25,000 to $50,000 a stall, there's a good amount of savings there for space and structure that just sits with car storage.
The Statesman Journal story says that City officials already are planning to reduce the number of structured parking spaces from 100 to 70.
Here's an idea: reduce them to zero.
The budget above shows that 100 stalls were estimated to cost $2,645,000, or $26,450 per stall. So eliminating the 70 planned structured parking spaces would save about $1,850,000, eliminating the need to use $2 million in urban renewal funds.
My understanding is that there's enough room on the site for surface parking. The main rationale I heard for structured parking was that officers going on patrol could exit directly from the second floor of the police facility to their cars, thereby eliminating the need to haul a heavy "duty bag" downstairs (and upstairs, on a return trip).
Is this enough reason to take $2 million from urban renewal funds? The City Council will have to decide. I'm with the Breakfast on Bikes blogger in saying, no.