KANNAPOLIS — City Council may cut paving projects on 10 city streets due to the rising cost of road construction and inaccurate estimates for current projects.
Council members found out during their regular meeting Monday that engineers under-estimated the cost of the city’s most recent paving projects.
The problem, according to construction consultants: The large number of big-money interstate projects in the South, in North Carolina and in the Charlotte region have lured national road construction firms into the area. These bigger companies have bought many local construction firms — like Bost Construction and PAPCO in Rowan County, companies that used to make the lowest bids for local street projects.
“It’s cut down on some of the competition,” Jeff Moody, engineering consultant with Alley, Williams, Carmen and King, said. “We’ve just been seeing a rise in prices due to that” during the past two years, he added.
Moody’s firm designs city street projects, puts them out for bids, then recommends to council who should be awarded each project. The company also inspects the actual construction.
Moody’s company put together the initial estimate for the city’s current projects three years ago using about $228,000 in federal Community Development Block Grants issued to the city in 1997. Construction on street projects generally runs about two years behind the initial funding estimates due to acquisition and engineering requirements, Moody added.
In 1996, the firm estimated it would cost Kannapolis about $354,000 to improve water lines and pave approximately 3,655 feet of road on nine city streets: Ludwig, Roxie, Little and Lynden streets and Thomas, Seaford, South Juniper, Grace and Vale avenues.
Public works officials told council Monday the lowest bid for those projects came in at about $486,000 — $132,000 more than originally thought.
The low bidder, Rea Construction, is one of the larger firms that’s bought a local company, Moody said. Rea Construction — a Charlotte company working throughout the Carolinas — bought Bost Construction, in Rockwell, last October. Bost previously provided the lowest bid for a number of Kannapolis projects, Moody said.
Salisbury’s PAPCO, Piedmont Asphalt Paving Company, also sold out last fall to APAC, a larger paving firm owned by Ashland Oil. PAPCO founder Benny Lawson disagreed this morning that competition has eased in the paving industry.
If cities are paying more to pave streets, it’s most likely due to higher cost of crude oil, asphalt’s most expensive raw material, he said.
Although both Bost and PAPCO sold to larger firms last fall, three other companies have started since then, Lawson added.
After some discussion about the rising cost of street projects, council on Monday approved using the city’s 1998 Community Development Block Grants to pay for the 1997 projects.
This may mean the city will cut all or some of paving projects on the following streets: Due West, 10th and Horne streets, Edward Circle, Dixie Drive, Shady Circle and Moss, Graham, Poplar and Church avenues.
In other business, council also endorsed a planning department request for the state to designate a wide swath of the city as an Economic Development Zone.
If awarded — city planners involved in the project told council the chance for success is not very good — this designation would provide companies thousands of dollars in tax credits for new jobs and equipment.
The recommended development zone includes largely commercial areas west of Main Street in northern Kannapolis — including Fieldcrest Cannon plants and Cannon Village — and along both sides of South Cannon Boulevard from Universal Street to Cloverleaf Plaza.
The state program helps spur development in urban areas where at least 25 percent of the families live below the poverty line, roughly $15,000 annually per family.
City planner Michael Legg told council the area barely meets this requirement according figures provided by the 1989 U.S. Census. State officials may reject Kannapolis’ application because this area does not appear to be hit hard by poverty any longer, Legg said.
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