High street repair costs could delay San Jose pavement projects
When San Jose residents voted to tax themselves several times in the last few years for transportation projects, they thought it was to fix up potholes and smooth out bumpy streets across town.
Now, higher-than-expected labor and material costs mean the money isn’t going to go as far as residents or city officials hoped when it comes to fixing up San Jose’s roads this summer.
According to several Department of Transportation memos set to come before the City Council for approval in the next couple of weeks, even the lowest construction bids are coming in more than 30 percent higher than the city estimated for some projects.
For one job, the city estimated that surface sealing around 58 miles of streets — a far less costly option than resurfacing a street entirely — would cost around $6.4 million. The lowest bid, from VSS International out of West Sacramento, came in nearly 35 percent over that, at about $8.6 million. The highest bid, from Intermountain Slurry Seal in Elk Grove, came in at more than $10.3 million, some 61 percent over the estimate.
The low bid last year for a type of repair know as microsurfacing came in at $190 per ton. This year, the low bid was $344 per ton, an 81 percent increase.
Bids for other projects have come back high, too. The sole bid on a contract to make sure ramps are accessible for people with disabilities came in almost 28 percent higher than the city anticipated, while the sole bid for a rubberized slurry seal project came in more than 20 percent higher than expected.
“Although DOT recommends awarding the contract,” transportation director John Ristow wrote in a memo suggesting the city go with VSS International, “the high cost of the contract could delay DOT from moving forward with other pavement projects.”
In other words, the city could now decide to reduce the number of streets set to be repaved.
That frustrates council members like Johnny Khamis.
“I’m worried,” said the councilman, who represents parts of southern San Jose.
According to Ristow, the main reason for the rise in cost on sealing items is higher prices on asphalt and oil. A change in the state’s Department of Industrial Relations prevailing wage requirements is also a factor. In Northern California, the average prevailing wage for asphalt and slurry seal workers has risen 36 percent year to year, from around $31 an hour in 2018 to around $42 in 2019. The cost of striping streets has also gone up because of a high demand for such services in the area.
“I am concerned about the rise in the state’s mandated wage increases for labor,” Khamis said. “If labor mandates from the state keep rising this fast…it’s not going to allow us to pay for roads like we projected.”
Ristow said in his memo that the transportation department is considering keeping the striping work in house to limit costs, along with deferring some street sealing to next year.