Inflation Puts MN Fire Station Project $440K Over Budget

Jul. 5—ST. PETER — St. Peter's fire station project is set to break ground this month, as the City Council navigates through inflation and supply chain challenges.

The long-awaited project to replace the city's outdated fire hall was about $440,000 over budget as of late June, according to an update at the Council's most recent meeting on June 27. The new fire station at Broadway Avenue and Sunrise Drive would more than triple the size of the old fire hall, built in 1929.

Voters in November approved using a 0.5% sales tax over as many as 40 years to fund what was at the time an estimated $9.1 million project. The city can't collect sales tax beyond the $9.1 million, except to pay interest or the costs of issuing bonds.

A "reasonable amount of inflation" was factored into the project's cost estimate, said City Administrator Todd Prafke, but economic circumstances pushed inflation beyond what was expected.

"The intervening timeline has changed, a substantial change in the economy far from what we projected," he said.

While $440,000 isn't a small amount, the additional cost could be spread out over 30 years to lessen the burden on taxpayers. A $440,000 overage spread out over 30 years would equal about $14,667 per year, or a little more than $1 per year per resident in St. Peter.

Despite the overage, Prafke said the city is planning a July groundbreaking ahead of a project completion about a year later.

"The timeline continues to be to really start in July or early August and completion in August to September 2023," he said.

St. Peter has company among municipalities in dealing with cost overages brought on by inflation and/or supply chain slowdowns. And individuals and families across the country are feeling similar pinches while pursuing home improvement projects.

Knowing the project is over budget, St. Peter Council members made a cost-saving decision at their June 27 meeting related to the fire station's garage doors.

The choice was between six combinations of door styles to have on the fire station's front and back, with a wide range of costs between the options.

Council members chose to have fold, or "accordion" style doors, on the front of the building, and sectional — the roll-up doors seen on most home garages — on the back of the building. The idea is that fold doors will give firefighters a faster exit when responding to a call, followed by roll-up doors when there's less urgency to enter the station upon their return.

A combination of all fold doors on both sides could've added roughly $300,000 to the project cost on the high end of estimates. Instead, the decision resulted in savings.

"Being sensitive to the budget constraints that you have, this option provides for about a $15,000 or $16,000 savings," Prafke said during the meeting.

Council member Keri Johnson asked if any supply chain issues could risk delaying when the city could get the doors.

Jeremy Hatlevig, of construction management company RW Carlstrom, said the different styles of doors have different lead times, but supply chain delays shouldn't be an issue because they wouldn't be installed until spring 2023.

"We have adequate time to award, get those things in the pipeline and get them by next spring when we need them," he said.

Follow Brian Arola @BrianArola

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