Paying for contracted services

Annual streets paving contracts are a major annual expense for many Ohio cities. Compared to cities with similar populations, Marietta’s spending on its yearly paving contract is about average, although the city typically only receives a bid from one local paving contractor

The city of Marietta will spend $529,366 for its annual streets paving contract this year. That’s up from $455,254 for the 2013 asphalt paving program contract, with paving contractor Shelly & Sands being the sole bidder both years.

It’s been the same story for the last several years, according to city engineer Joe Tucker.

“We always prefer to get more than one bid for our paving contracts which would assure competitive pricing,” he said. “But distance matters when you’re dealing with asphalt, so it often depends on where the batch plants are located.”

All of the local asphalt batch plants are owned by Shelly & Sands, which submitted the $529,366 bid for the 2014 citywide paving program, which was 8.6 percent above the original engineer’s estimate. But because the bid was within an allowable 10 percent of the initial estimate, it was considered an acceptable bid.

“It’s also a little frustrating when we had a $2 million-plus intersection project (Seventh, Pike and Greene streets), and still only received one bid (from Shelly & Sands),” Tucker said. “Especially since asphalt is a small percentage of that project’s construction cost. It seems like other companies could have submitted bids and sub-contracted with Shelly & Sands for the asphalt.”

The city of Washington Courthouse, population 14,192, in Fayette County, faces a similar issue, according to service director Jim Heath.

“We only had one bid for the paving contract this year,” he said. “Last year we had more than one bid, but the same contractor who won the bid this year, Cox Paving of Washington Courthouse, usually gets the job because they have access to the asphalt.”

Heath said the city is paying $315,000 for its 2014 paving program, which will include all or partial paving of six streets and pavement patching in other areas.

“We get a list of our worst streets each year and then see how many we can afford to do,” he said. “We’re paying $75 a ton for asphalt and $1.30 a square yard for milling.”

Maumee, population 14,286, in Lucas County, near Toledo, paid $610,527 for its streets paving contract in 2013, and $603,051 in 2012, according to assistant finance director Amber Rathburn.

Matt Miles, assistant supervisor of operations for the city of Maumee, said an estimate for the 2014 paving program had not yet been determined.

“There’s no average cost for the paving program. Normally we just look at city council’s budget for the year, then go out and look at the streets and try to get as many done as we can,” he said. “But we may have to go over budget this year because the harsh winter caused a lot of potholes and other damage.”

Miles noted that Maumee has some streets surfaced with concrete, while others are asphalt, which has an impact on the final contract cost.

“And the cost of asphalt has gone through the roof,” he said.

Miles said Maumee normally receives multiple bids for the annual paving contract.

“I’ve had as many as four in some years. Usually the bids are pretty close to the engineer’s estimate,” he said. “But if we only received one bid every year I’m sure we would have to pay more. There’s just no incentive for a company to compete for the contract.”

The city of Lyndhurst, population 14,001, in Cuyahoga County will spend nearly twice as much as Marietta on its 2014 paving program.

“We do conduct a paving program every year, and the contract is awarded in two parts-for asphalt and for concrete streets,” said finance director Mary Kovalchik. “The total for this year’s annual paving contract is $1,016,595.”

She did not specify how many companies submitted bids for the contract, which was advertised in March.

According to records published on its website, the city of Willowick, population 14,171, in Lake County, has budgeted $500,000 for streets resurfacing in 2014. In 2013 the city paid $416,387, and in 2012 the actual paving contract cost was $418,000.

Tucker noted the total amount budgeted for Marietta’s 2014 paving program was $562,000, which includes contingency funding for potential change orders that may crop up during the project.

“But $400,000 of that expense has been covered by grant funding from the Ohio Public Works Commission in recent years,” he said. “We get a lot more work done on all of our paving projects by leveraging grant monies with our limited city funds.”

Tucker said the city’s share of the paving program cost includes $35,000 from Marietta’s annual Community Development Block Grant entitlement, $60,000 from permissive sales tax funds, and $45,000 from the city streets fund account.

This year’s paving of 16 city streets will begin this month with installation of Americans with Disabilities Act-compliant curb ramps. The mandated paving completion date is Sept. 19.