Beaverton city officials have come up with a way to cover escalating costs — now as much as $12 million over the original estimates — of the Public Safety Center they broke ground for on Sept. 17.
The option was presented Sept. 25 to the City Council, which will face a decision on the proposed supplemental bond in fall 2019.
The option is a special revenue bond of $10 million, backed by money from the city general fund, excluding property taxes. Voter approval is required for bonds repaid from property taxes.
The special bond would overlap by one year a similar bond of $7 million, which the city spent on improvements to the building that is now City Hall at 12725 S.W. Millikan Way. The earlier bond was issued in 2013 and is scheduled to end in 2020.
Mayor Denny Doyle said there are signs construction costs are cresting, so that a year from now, the gap may shrink between money available from the $35 million bond that voters approved for the project in 2016 and higher construction estimates.
"With the initial injection of money into this project, and with the costs for this building (City Hall) almost being done, this picks up at the right time," Councilor Marc San Soucie said. "It's about the same amount of money, and it does not seem like a significant change in how we are currently spending money to cover the gap. So far, it sounds OK."
According to Finance Director Patrick O'Claire, a new bond at an interest rate of 3.5 percent would cost the city $134,400 monthly over seven years, or $98,887 monthly if spread over 10 years.
O'Claire said he did not prepare alternatives to the special bond.
"I don't see that we have much choice in what we do," Councilor Cate Arnold said.
A groundbreaking ceremony took place Sept. 17 at the site on the southwest corner of Allen and Hall boulevards.
The project consists of a main building of 72,300 square feet, which will house police and emergency managers, and a vehicle and storage building of 2,600 square feet. Work is scheduled for completion in March 2020.
Police are now housed at the former City Hall at 4755 S.W. Griffith Drive. That building is unlikely to withstand a severe earthquake triggered by movement off the Oregon coast. Voters in 2014 rejected a bond to rebuild on that site.
A few months ago, Police Chief Jim Monger told the city Budget Committee that cost estimates from earlier this year have risen $6 million above the $35 million bond approved in 2016.
Police Capt. Eric Oathes, the project manager, told the council on Sept. 25 that new estimates revised in July could now reach up to $12 million — although part of that results from an increase in the project's contingency fund to 5 percent, up from 3 percent.
Among the materials Oathes said have shot up in cost since the original January 2016 estimates: Electrical system, 95 percent more per square foot; glass curtain wall, 67 percent; drywall partitions, 57 percent; brick masonry, 53 percent, and steel, 33 percent per ton.
Oathes said officials will have more definitive estimates at the end of October, when Skanska USA Building, the Portland contractor, can make final a guaranteed maximum price for the work.
Demolition has started on the former Beaverton Activities Building on the site. The city also will have to oversee cleanup of the former Shell station and a nearby spill site before actual construction starts early in 2019.