Town roads plan hits roadblock
HAMMONTON—The town’s 2021 Roads Program—which includes work on School House Lane and Vine Street from Central Avenue to Bellevue Avenue, and on Valley Avenue from Central Avenue to Broadway—has been stalled.
Mayor Stephen DiDonato said that the reason for the halt is financial.
“The numbers are coming back so high, as you heard us discuss in council, like double what we anticipated—and we already had added on 15 to 20 percent,” DiDonato said.
DiDonato said that contractors are being cautious with their bids because “they’re not sure where material is going.”
“Is it going up? Is it going down? Is it going to stabilize?” DiDonato said.
Public Works Manager Robert Vettese echoed DiDonato’s sentiments.
“It’s hard to say what next month’s going to bring, from a pricing standpoint; actually, it’s hard to say what next week’s going to bring from a pricing standpoint. The more you listen to predictions, it’s hard to put some kind of basis on those predictions. Who’s giving the correct prediction?” Vettese said.
Councilman Steven Furgione, who heads the Water and Sewer Committee, explained further.
“Every year there’s always an asphalt/materials adjustment price, which is based on the current oil price, so that’s not the issue. The issue was all of the underground work. We’re making a conscious effort now to video everything; if it’s bad, we’re going to replace underground. The cost of the pipe has skyrocketed. We even switched over to see if we could get a better price for PVC, and it’s still just outrageous for pipework right now, absolutely outrageous,” Furgione said.
DiDonato detailed the bid estimates.
“We got a price for School House Lane. We were anticipating $500,000 to $600,000. It came in right around $1 million. Now, they’re telling us Valley Avenue—which we have $310,000 in grant money and we were hoping for a number around $600,000 to $700,000—they’re saying $1.4 million. So, I don’t know how I could possibly look a taxpayer in the eye and say, ‘I made the right call for you,’ when I think this uncertainty—because that’s what they’re all going on: uncertainty—is going to go away quickly in the fall,” DiDonato said.
Frank Zuber, the town’s business administrator, said that these numbers vastly exceed the amount that had been projected in the town budget.
“It’s only an estimate—it’s not set in stone—but what I had in the capital budget program was $1 million for the road program,” Zuber said.
DiDonato noted that lumber—another construction material that had increased in price—has already started to “come down from its high.”
“It’s 40 to 50 percent down already. The pipe and everything else seems to have topped, and now it’s starting to come back down. But, what happens is, these supplies—because the distributors and wholesalers have the product—go up quickly but come down slowly because they’ve got to get money out of what they paid. Maybe they can take a little hit because they made money on the way up, but they’re not going to drop their pants, so to speak. Piping has gone up. Asphalt and concrete is going up, but not as much as pipe, plastic, metal pipe, steel pipe and wood has gone up, but they’ve gone up because of a lack of drivers and less help. These guys are making and selling less so they’re trying to get more money out of it,” DiDonato said.
These projects, DiDonato said, could not have started earlier in the year because “there were things that we could not control.”
“We had to wait for the design to get done for School House Lane. We had to wait to wait for some approval from NJ DOT [New Jersey Department of Transportation]; because of the grant dollars, they have to give their blessing,” DiDonato said, referring to the municipal aid grant that was announced on November 18, 2020.
Even had the designs been approved earlier, DiDonato said that “prices started escalating in April and May.
“These contractors all started bidding through the summer like this. I don’t think earlier would have been any different. The only way around it is if you would have done something maybe last winter, before the surge of the spring; you might have gotten numbers that were a little more attractive,” DiDonato said.
Vettese said that, because of these factors, it is unlikely that the road program will begin during the remainder of 2021.
“We’re probably going to hold off award, because everything is high and unpredictable right now, cost-wise, until material prices start to drop down or become a little more stable; apparently it’s hard even for suppliers to give a timeframe and an amount to the contractors so they can submit a bid,” Vettese said.
DiDonato confirmed Vettese’s assessment.
“As much as I want to do a road program this year, it may be prudent to do a larger program next year, and you might get almost twice done for the same amount of dollars ... I think the prudent thing to do is to sit on the sidelines for a couple of months, go out to bid maybe December to January when it’s wintertime, and people are saying ‘Hey, I’m a little hungry now and there’s not much in the pipeline,’ and things are starting to stabilize. I think we’re get more for the taxpayers’ dollar in the spring than we will in the summer or fall of ’21,” DiDonato said.
“I don’t like to delay projects, but we can’t go spending money like that, either. We’ve got to hope things settle down a bit ... I know we’re going to try to go out for bid again, probably late in the fall, hopefully get better prices by then and then start the road program early—maybe as soon as the weather breaks in March or April. That’ll be the plan. But, we’re going to have to see: is this the new norm, or will things settle a bit? Lumber is starting to come back, so I’m hoping that everything else comes back as well at some point in time, but we’re going to have to go a few months and see how things develop,” Furgione said.
Zuber noted that the town is also hoping for an economy of scale benefit when the roads once more go out to bid.
“We’re going to put School House Lane and Valley together and see if we can get a lower bid if it’s a bigger project ... It’s just crazy to go out now to spend that kind of money. Hopefully, material and stuff will go down in the next couple of months,” Zuber said.
The temporary halt of the program, Zuber had, will have no deleterious effect on local taxpayers.
“The only thing we put in the budget was down-payment money, which is five percent of whatever they decide to do,” Zuber said.
That down-payment money, DiDonato said, will go back into the town’s surplus.
“Then, we’ll have to take it out of surplus and put it back in the budget next year. There’s no harm, no foul there,” DiDonato said.
Furgione said that construction costs have negatively impacted other infrastructure projects, including the replacement of several water lines.
“We’re looking to put out a lot of that waterline replacement work, probably at the very end of this year or very early next year. I’m hoping that the prices, again, stabilize, because we have multiple projects we want to roll out next year to use the infrastructure money to do them. This includes the waterline on Route 54, the relocation of the water line on Seagrove Avenue, the waterline on First Road. That’s all dependent on material prices. We’re also up against it a little bit; I believe the infrastructure money has to be used by 2024, so we want to get these projects moving so we can take advantage of federal funding. At the same time, they’ve got to fall somewhat within the budget that our engineers set,” Furgione said.
The federal funding to which Furgione referred is the $1,368,767.64 the town of Hammonton is set to receive from the American Rescue Plan, which was announced on March 10. Zuber said that Robert Scharle, Hammonton’s Chief Financial Officer, has still not received “all the parameters on that.”
“We’re still waiting to hear final parameters on what we can use that money on. Most likely, we would probably use that money for anything for infrastructure because we wouldn’t have to go out to bond, so that would save the town a lot of money. Hopefully, we can use that funding—but we’re not sure yet,” Zuber said.
Another project that has been temporarily put on hold is the construction of the Boyer Avenue Pump Station. Furgione said that it took close to three years to put that project to bid “for those five or six homes to install the sewer line.”
“We didn’t get a bid. None. Zero. We had the engineer all up all the contractors and poll them. One contractor already got a big job, and they just couldn’t handle the work. A couple of the other contractors didn’t want to take the risk of putting a bid in because the pipe prices are so volatile right now. It’s actually out for re-bid right now; it’s coming due in a couple of weeks, then we’ll see ... We’re in a spot now where we can get the work done, but I’ve got to get a bidder. I’ve got to get a bidder on board to see where we are first, then we can evaluate it,” Furgione said.
Furgione said that, given the current financial climate, it is unfortunate that the projects cannot proceed.
“On the one hand, the interest rates are crazy low, so now is the time to do these projects if you have the cash flow to do them. On the other hand, a 10 or 15 percent increase on material, I get, but we’re talking some of these prices are 50 or 60 percent higher than they were a year ago. That’s very hard to justify. As much as we need to get the work done, you can’t just go and spend money foolishly or we’re going to dig ourselves in a hole we can’t get out of,” Furgione said.
“We just have to watch the market, because we’ve got to get more for the dollar. We’ve got to stretch the taxpayers’ dollar, otherwise we’re going to do very small projects and spend very dearly for them,” DiDonato said.