Soaring Asphalt Prices Are Forcing Tough Decisions on Region’s Paving Projects

Joe Williams

Joe Williams sat at the board table on Wednesday during a working session of Oktibbeha supervisors grappling with limited options — none of them particularly pleasant.

Initial estimates to pave 11 miles of Oktoc Road in his district were around $1.8 million. The low bid was just over $2.3 million, leaving a half-million gap between the amount the county had budgeted and what was needed for the job.

Rejecting the offer and trying again would likely result in an even higher price, as prices for asphalt and other road building materials are rising rapidly with no signs of slowing down.

“What if we did seven miles instead of all 11?” asked the District 5 supervisor.

But there were more problems.

The Mississippi Legislature in the 2022 session committed $1 million to the project to accompany contributions of just over $400,000 each from the Mississippi Office of State Aid Road Construction. and direct county funding. The legislation, as drafted, stated that all 11 miles had to be paved and the money spent by the end of 2023.

Williams asked about changing the law, which board attorney and state representative Rob Roberson said is possible but difficult.

After thinking about it, Williams concluded that if the legislation couldn’t change, “we’ll just let them get the funds back.”

Orlando Coach

District 2 supervisor Orlando Trainer, one of four supervisors in the work session, initially looked at Williams in disbelief. Then he decided to force Williams to pave the 11 miles and use the funds from his county bond allotment – ​​borrowed money backed by local taxes which each supervisor was given a presumed discretionary power of more than 1 $.3 million for paving projects in their district – to cover the difference.

Williams fought back fiercely.

“It should be my decision because it’s my district,” he shouted at Trainer. “…Don’t meddle in my business. Stay out of my district business. … There has been a feeling of jealousy on your part since we got the million dollars (from the legislature) for this road.

John Montgomery

District 1’s John Montgomery calmly “implied” Williams to reconsider, noting that if the county returned the money, it would hurt his chances of getting similar road funds in the future.

The trainer was sharper.

“We’re not going to sit here and let you, as Joe Williams, do this crazy thing and jeopardize the county,” he said.

The trainer’s motion died after District 3 Supervisor Marvell Howard pulled his second. Williams appeared to back down on the idea of ​​returning the statutory appropriations but never made it clear how he wanted to proceed.

The scene was extreme, Montgomery said after the meeting, but indicative of the decisions public officials across the Golden Triangle are forced to make regarding road improvements.

Fuel and asphalt

Oktoc Road isn’t the only project where bids have far exceeded estimates.

The low bid for five road improvements in the Howard District came in at $2.2 million in March, nearly double the $1.15 million county engineer Clyde Pritchard estimated at the end of last year for the project.

Clyde Prichard

Using that bid as a model, Pritchard estimated road improvements in the Montgomery District — paving work on six roads and a subdivision — at about $1.8 million. The low bid opened this month was over $2.4 million.

None of these are related to legislation, so the work can be adjusted according to available funds. But the Legislature also granted $1 million and $300,000 in state assistance to improve the Sturgis-Maben highway by the end of 2023. Pritchard said he was “reassessing” his original estimate of 1, $6 million for this project.

“If you’ve pulled numbers from projects we’ve helped the county with over the years, we’ve rarely missed an estimate,” Pritchard said. “Now we’re missing them by 30 or 40 percent.”

The price of asphalt, Pritchard said, is the main culprit, rising from $110 a ton late last year to $150 a ton and higher in recent months. Cement, which Oktibbeha County uses to stabilize its roads, is also lacking. When available, its price has jumped considerably.

Asphalt is linked to rising fuel costs in several ways. It is a petroleum-based product that is made in factories that run on petroleum, it costs more fuel to ship and apply.

Lowndes County is also feeling the pressure.

Hairston Travel

It is completing work on a $5 million road plan, which was bid based on lower material costs last year. But recent bids for an additional $2 million road plan this year have seen the same jump in asphalt – $150 a ton.

Highways Department Director Mike Aldridge said that means the desired 17 miles of upgrades must either drop to 10.2 miles or the county will have to increase the budget.

“I guess we’re happy to lock in that price, but damn it!” Lowndes Supervisory Board Chairman Trip Hairston told The Dispatch. “There’s going to be real pressure to try to do everything, but I don’t know how we’re going to approach that.”

Value Engineering

Phillips Contracting, a Columbus-based company founded in the 1950s, bids for as many as 150 jobs a year. This includes site development, utilities, industry, transportation, “essentially anything involving earth, concrete or asphalt work,” company chairman Blake Hill said.

Blake Hill

This year alone, Hill said, Phillips was the lowest bidder on projects worth $25 million that weren’t awarded because his bid exceeded the project’s budget.

“We’re trying to find ways to be more efficient, which will lower our production costs to try to keep our jobs affordable,” Hill said. “We are looking at more than ever…mainly the aspect of reducing fuel consumption.”

Phillips and Burns Dirt Construction, a civilian general contractor also based in Columbus, faces long lead times for materials, sometimes up to six months.

On public projects, where their offers are blocked once accepted, they estimate several months in advance what their real costs will be once the work begins.

“You have to guess what you’re going to have to pay for the material,” said Nic Parish, co-owner of Burns Dirt Construction and vice president of operations and construction. “If costs keep going up, bidding will keep going up.”

Even with the information they have, however, Parish said contractors can help engineers with better estimates.

Parish of Nice

“Engineers have consistently reviewed bids for similar projects over the past two years,” Parish said. “You can’t do this now. If engineers have good conversations with contractors to get a better idea of ​​real-time pricing, they can get those more accurate projections. »

Burns and Phillips will help clients with “value engineering” once a bid is awarded. Basically, a public body accepts a bid and then sits down with the engineer and contractors to split or reduce it. In this way, the bid price per tonne of asphalt, for example, is locked in, even if the works are reduced afterwards.

Parish said Burns Dirt currently only runs two public projects. The company is more interested in private developments – housing estates, apartment complexes and retail projects – where prices may be more fluid.

“You can negotiate prices with a private developer as you go, rather than being locked into a bid,” he said.

Economy of scale

A key, at least in Pritchard’s mind, to help drive down bid prices is to expand projects and increase contractor competition.

Historically, in Oktibbeha County, road projects for each district are tendered separately. These small projects attract a small number of bids, sometimes just one. If the county consolidates all of its road projects into one bid package, Pritchard said it could increase the pool of bidders.

“So instead of 10 or 12 miles, you have contractors bidding 50 miles,” he said. “More bidders means more competition. It’s also going to be a gamble, because you might end up with the same thing.

Sandra Sistrunk

Starkville is adopting this tactic, according to Ward 2 Alderman and Budget Chair Sandra Sistrunk. The city just authorized the borrowing of $10 million in a series of bonds that will be repaid over the next decade with Internet sales tax revenue. The first $5 million bond will be for citywide “collector, arterial and minor” roads. It may be next year before this project is tendered, which Sistrunk hopes will allow enough time for prices to “start to come back to reality”.

Likewise, Columbus City Engineer Kevin Stafford wants to talk with city councilors about how and when to tackle the city’s $3 million list of deferred paving.

“At the old prices, you could estimate it would cost $15,000 per 500 feet of a city block and $150,000 per mile for a two-lane road, but now your money will only extend to about two-thirds,” Stafford said. “So we have to have the conversation. Would you like to wait ? Do you want to have a bigger project? »

Kevin Stafford

Trainer, for his part, understands Pritchard’s position on wrapping the county’s road projects into one. It’s just not sure if the county has the capacity to oversee a large contractor on a multi-million dollar project. Moreover, he said he did not want to exclude local contractors from the process.

“We want to give smaller players the opportunity to participate,” Trainer said. “We have good local contractors who may not have the capacity to bond or borrow for larger projects. … I think it worked better for us by breaking down (the projects).

If there’s any light at the end of the tunnel for Pritchard, it’s looking to the past.

“It’s not the first time we’ve seen this,” he told supervisors during Wednesday’s working session. “It all went up in 2008, and within a year and a half or two years it started to come down. I don’t have a crystal ball, but it’s happened before.

Zack Plair is the editor of The Dispatch.

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