EC County highway facility costs rise by more than $5M to total cost exceeding $32M

May 14—EAU CLAIRE — The new Eau Claire County highway facility will likely be far more expensive than initially anticipated.

The facility, set to be built on the south side of Eau Claire near U.S. 53 and Highway I, was expected to cost $26.60 million last November. Due to supply chain issues with materials like wood and steel as a result of the COVID-19 pandemic, though, the facility is now estimated to cost $32.75 million. Eau Claire County will have to cover most of that increase; it is estimated the county will need to spend an additional $5.47 million to complete the project.

During its meeting Thursday, the Eau Claire County Highway Building Committee approved a resolution making a budget amendment to the county's 2021 budget to reflect the new estimated cost of $32.75 million and directing the Highway Building Committee to search for funding sources to cover the cost increase. That resolution will be further considered during a joint meeting at 4:30 p.m. Monday between the Highway Building Committee and the Finance and Budget Committee. It would also require final approval Tuesday from the County Board.

"As a consequence of the pandemic, the supply chain of building materials has been interrupted and restricted, combined with a record number of new housing starts, causing a sharp increase in the cost of building materials such as wood, steel, wiring, plumbing supplies, and other materials that would be used in the construction of the highway facility," the resolution states. "Some materials have increased in cost approximately (two to four) times the cost of just a few months ago."

The budget amendment resolution only acknowledges that additional money is needed. It does not specify from where that additional money would come; that information would likely be included in a future resolution.

"The cost has gone up, and what we want to know from (County Board supervisors) is whether or not that is acceptable in their role as stewards of this project," County Administrator Kathryn Schauf said. "If you agree to moving forward with this, it means you agree to spending more money."

Supervisor Jerry Wilkie was the loan vote against the resolution Thursday because he anticipates the $5.47 million will likely come from another round of bonding, which he opposes. The County Board already approved bonding $24.35 million to pay for the highway facility as part of the county's 2021 budget.

Indeed, Schauf said additional bonding will likely be required to cover the $5.47 million since there is a low chance of paying those costs from grants, federal funding or reallocating money in the county's 2021 budget.

"The reality is if we do not find additional grant dollars or repurposed capital dollars, we will be required to go back and to bond additional dollars for this project," Schauf said. "The likelihood of finding additional capital dollars right now in our budget is very slim. I wouldn't count on that as being something that would come to fruition."

Schauf said the decision on the budget amendment resolution should be made soon so that the county has direction on its next steps. If the County Board approves the resolution, the county will start buying materials so the project can meet its deadlines. Currently, construction of the highway facility is scheduled to be completed in October 2022.

"We are at the point where we want to begin ordering the materials necessary because of the lead time," Schauf said. "If we're not able to do that, it's going to move this project out even further."

Another possibility is the County Board not approving the budget amendment and pausing the project in hopes that costs will decrease in the future.

"If the board doesn't want to go forward with the additional costs, we can suspend the project now and see if things improve," Schauf said.

If the County Board doesn't approve the budget amendment but wants the project to go forward, "we are eventually going to get to the point where we'll have serious issues budgetarily," Schauf said.

Schauf added that cutting costs to the existing highway facility plans would be inefficient and detrimental to its future operations.

"We cannot cut our way to success with this project," Schauf said.