Costs soar $67 million above levy to update fire stations

The price of renovating or replacing Seattle's neighborhood fire stations has shot up $67 million above what voters were told when they approved a $167 million levy two years ago.

Aides to Mayor Greg Nickels on Tuesday blamed about $46 million of the increase on dramatic and unforeseen inflation on construction-materials costs — a national trend being felt in the public and private sectors.

But $16 million of the increase is tied to flawed city estimates prepared before the 2003 levy went to voters, officials acknowledged.

The remaining $5 million is needed to adhere to environmentally friendly "green building" standards and new earthquake-safety requirements.

Deputy Mayor Tim Ceis said Nickels wants to proceed with all the projects on schedule without raising taxes during the remaining years of the nine-year levy. Construction on most of the stations is not scheduled to begin until next year.

"The mayor remains strongly committed to completing the entire levy" without delaying or trimming any of the projects, Ceis said.

The city could pay the bill by tapping regular tax revenues combined with some borrowing, said Dwight Dively, the city's finance director. Borrowing costs could push the final bill to as much as $78 million, according to a report released by the city Tuesday.

At least one City Council member said the city ought to consider cutting some of the fire-station projects.

"I would seriously consider scaling back some of the retrofits and some of the remodels," said Councilman Nick Licata, who chairs the council's Public Safety, Civil Rights & Arts Committee.

Most of the cost jumps were attributed, city officials said, to spikes in the price of raw construction materials such as steel, petroleum, natural gas and copper.

The levy forecast predicted such costs would rise about 3 percent a year. Instead, they've grown by 20 percent over the last two years, said Chris Potter, an analyst with the city Fleets and Facilities Department.

A construction-industry economist confirmed that trend is affecting projects nationally.

"Construction costs in general have gone up a good deal more than consumer inflation," said Ken Simonson, chief economist with the Associated General Contractors of America. "I've heard from many public agencies around the country that they've been shocked by how much construction prices have risen."

Simonson said prices, such as for natural gas and oil, have escalated recently due to Hurricane Katrina. But even before that, costs were going up due to a boom in domestic construction combined with a demand for raw materials from rapidly developing nations such as China.

The city's own flawed estimates only aggravated that problem. In putting together the levy, the city relied on comparisons with several suburban and rural fire districts, including Walla Walla and Issaquah, where construction costs are substantially cheaper than in Seattle.

While those estimates, prepared by private consultants, were examined by the mayor's staff and council in 2003, they nevertheless proved faulty, Ceis said. The city hired a different consultant to prepare the new numbers.

The 2003 fire-station levy will modernize or replace all but one of the city's 33 fire stations.

It also will pay for a new emergency-operations center and training facility and a new fireboat.

The levy will cost the owner of a $313,500 home an average of $73 a year through 2012.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com