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Murray Journal

New Murray fire station costs more due to tariffs, labor shortages

Oct 15, 2018 01:54PM ● By Jana Klopsch

Architect’s rendering of the new Murray Fire station #81. (Photo courtesy: Murray City)

By Shaun Delliskave | s.delliskave@mycityjournals.com

National politics and labor woes are responsible for an additional $1.25 million in costs for construction of a new firehouse. Bids came in higher than the expected budgeted amount due to tariffs that increased the cost of construction materials, especially steel, and a tight labor market.

The approval for a new firehouse to replace existing fire station #81 on 4800 South was made last year before steel tariffs were in place. The city bonded for this project earlier this year, but once bids were received, it was apparent that building costs are higher than original estimates.

During the Aug. 21 city council meeting, the council unanimously approved amending the city’s fiscal year budget to appropriate $1.25 million from the capital projects fund. This came on top of cost-cutting measures on the design of the firehouse that the council approved in a meeting of the Committee of the Whole on Aug. 4.

President Donald Trump announced steel tariffs in April, after the bond was approved. Steel prices jumped as high as 30 percent, impacting manufacturing and construction projects. Bids were received after engineers estimated the construction of the firehouse at around $5.5 million. The lowest bid on the project was $6.6 million—approximately $833,000 over the budgeted amount—just for construction.

Also driving the cost of construction higher is a tight labor market. The construction industry’s acute labor shortage is putting the squeeze on the industry, delaying project schedules and increasing costs. The national labor shortage affecting construction has been attributed to young adults avoiding skilled professions, such as carpentry and masonry, as well as a decline in skilled immigrant labor.

Other additional anticipated costs not included in the bid are: LEED certification, $100,000; Environmental cleanup, $237,000; Emergency alert system, $60,000; Furnishings and equipment, $100,000.

Administrative and Development Director Tim Tingey recommended $200,000 in cuts, including deleting carpet contracts, eliminating 10 Kilowatts of the solar panels, adjusting lighting fixtures, replacing metal panels, changing copper feeders, and changing cabinetry elements and ceramic tiles. 

“Environmental remediation costs could exceed the $237,000 estimated. A budget amendment is needed to remain at $1.25 million so that we do not come up short,” Tingey said. The site is a previous smelter and railroad location and may need extensive clean up. 

Tingey’s department goal was to continue working towards cost reductions with the possibility of reducing another $119,000. A 62-item list of cost cuts was presented to the council and mayor for consideration.

Mayor Blair Camp noted Fire Chief Jon Harris was “…willing to accept all cost reductions and even the possibility of eliminating the training tower by constructing it later.” The mayor discouraged that option. Camp said the process to provide a new fire station and practical training space for Murray firefighters had been delayed many years.

Firefighting training facilities are available in Sandy, Salt Lake City, and West Valley City. City Councilman Jim Brass thought firefighters traveling to and from other training centers would increase the use of vehicles. He thought some recommended changes might increase the cost of ownership because lower-quality items would need to be replaced more often. 

“If less expensive light fixtures are used, the cost of electricity increases. If certain metals are used, rust occurs sooner. If the concrete block was changed to steel, more maintenance would be required, and, overtime, steel would need replacing. It was more important to construct something that would last up to 50 years rather than stay within certain numbers to save a dollar here and there,” Brass recommended.

City Finance Director Danyce Steck reported sales tax revenue for the fiscal year ending June 30, 2018, had come in higher than anticipated. As a result, the transfer to the Capital Project Fund (CIP) would see an increase of $1.2 million, which could cover the fire station cost overage. Based on these figures, the council approved the budget request of $1.2 million, reducing the CIP ending balance to $4.2 million for the 2019–2020 fiscal year.