TCIP Cost Estimating Process
Construction Costs
When estimating construction costs, Pasco County uses the FDOT planning estimates as our starting point. Based on past history and actual bids, we utilize 85% of FDOT costs for County road projects. FDOT prepares a table of Construction Costs (copy attached) that has multiple columns for each segment type. We use 85% of the subtotal (4th cost column) which includes the cost from their long range estimates (LRE) + maintenance of traffic (MOT) + mobilization. We do not use their other cost components but use our own based on actual experience. The FDOT LRE cost includes the basic components of a road including bike lanes, multi use paths, medians, lighting, earthwork and drainage. When a road has additional components, such as a bridge or wildlife crossing, those must be priced out separately, based on cost history and experience with actual expenses.
We used the Construction Cost Table dated April 2006 when preparing the FY06/07 CIP. We have just received the update dated October 2006 and we will be using those costs for the interim CIP update we will be conducting in January 2007. When costs are being estimated by a developer they should use the most current costs available, or refer to the Pasco County Construction Cost Index.
Design
Design costs are generally calculated as a function of the construction estimate. We have historically utilized 12% of construction costs (before CEI and contingency). For the budget prepared in July 2006 and adopted for FY 06/07, we utilized 8% for projects not yet awarded, and actual award amount where possible for design costs. Because the cost of design does not escalate directly proportionate to construction costs, we have been reviewing the design award amounts vs. current construction cost amounts. We believe the cost of design is now closer to 5% based on actual award amounts. We will be using 5% for the interim CIP update we will be conducting in January 2007.
Route Study costs are estimated at $40,000 per mile based on past experience and the need to include drainage and pond sites in the studies.
Acquisition
Right-of-way costs are estimated by the type of land to be acquired. First we estimate the amount of right-of-way width and length required vs. that already deeded to the County and that which is preserved under the right-of-way preservation tables. Then we calculate the acreage needed for drainage facilities. In the early stages of a project we use estimated acreage and whether that acreage is expected to be low ($60k/acre), medium ($100k/acre) or high ($$300k/acre) in value. In determining which category to use we look at the zoning and current use of the property. Once we receive right-way-materials (90% design plans), we try to further fine tune right-of-way estimates based on number of residential and commercial parcels, existing structures, and whether we will need full or partial takes, and whether there will be business damages, etc.
Additional Costs
There are three other cost components used in completing the final cost estimate, based on construction cost estimates, CEI, Contingency and Inflation. Construction Engineering and Inspection (CEI) costs are the costs for construction project management and inspection. In past years, CEI has been estimated at 7-10%. Because CEI costs do not escalate directly proportionate to construction costs, we have been struggling with what amount to use. We have been evaluating our actual use of the chief project manager and inspectors in the field and been reviewing our use of consultants to perform CEI services. We now estimate the cost of CEI as approximately 3% of construction based on current conditions. We will be using 3% for the interim CIP update we will be conducting in January 2007.
Contingency costs are intended to cover the costs of changes in the field during construction and other unanticipated costs. Under the old spreadsheet system we assigned a different contingency amount (10%+) by project. We believe that contingency is appropriate at 10% of construction costs and we will be using 10% for the interim CIP update we will be conducting in January 2007.
The final cost factor used in the TCIP estimating process is time value of money (inflation). When we prepared the FY06/07 budget we used the most current cost estimates available to us. At the same time as we were preparing the TCIP we were also working with Tindale-Oliver & Associates (TOA) to update the impact fee study. They were also reviewing cost estimates in Pasco and in District 7. Based on their analysis, costs have escalated 300% since their last update in 2004. TOA has recommend in their Study (Appendix G) that the County review costs annually and use an index of 3.3% annually based on the FDOT Price Index as a baseline planning guide. Based on that recommendation staff has now added the time value of money back into the calculations. We will be using 3.3% inflation on construction for the interim CIP update we will be conducting in January 2007.
In summary, the CIP budget is based on “planning” estimates. We have refined our planning estimate process and we are comfortable that our new planning estimates show a good correlation between estimates and actual bid prices received this year. We compared the revised SR54 project estimate (based on April 2006 FDOT) to the bids received and they were all consistent. Additionally our construction cost index prices (copy attached) were reviewed by Tindale-Oliver & Assoc. during the Study update and they found them consistent with current market conditions. Market conditions have been extremely volatile for the past two years and we are trying to create a system (database) that allows us to prepare more accurate estimates and respond to changing market conditions. We use planning estimates for the budget process. Once a road is completely designed and permitted and ready to go to construction, we have the design engineer prepare an engineer’s estimate. This is a more accurate “estimate” based on unit costs that still uses FDOT as a guide. However, we never truly know the cost of a road until we solicit and award the construction bid.