GILROY
– China’s steel-buying habits have added about $2 million to the
estimated cost of Gilroy’s new police station, a consultant told
City Council members Monday night.
GILROY – China’s steel-buying habits have added about $2 million to the estimated cost of Gilroy’s new police station, a consultant told City Council members Monday night.
China is buying steel and raw materials in quantities that are jolting the international market, consultant Bill Little said during an evening study session with city police, planning and engineering staff. Other countries are responding with their own “buying frenzies,” he added.
As a result, Little said, the price of structural steel has jumped more than 31 percent in the past four months. Reinforced steel has gone up even more – 61 percent. Little said he’s looked at suppliers all over the country, and the story is the same.
Costs of cement and other construction materials also are rising, Little said, but the $2 million jump in predicted construction costs to the Gilroy Police Department’s new home came mostly from steel.
All told, the city is now preparing for a $28 million bottom line for the new station. In December, the estimate was between $26 million and $27 million.
Councilmembers responded by pushing the project out to bid as soon as possible.
“If we wait on this, it’s only going to go up,” Mayor Al Pinheiro told his fellow Council members. “Going on what I’ve seen so far, the next trip is going to be $30 million, $32 million.”
“The proof will be in the bid,” City Administrator Jay Baksa told them. “Let’s bid it and see.”
President George W. Bush lifted a tariff on imported steel in December. The move was expected to drive prices down, but the Chinese buying binge has created the opposite effect, Gannet News Service reported in mid-March.
New industry in China is creating a need for more steel. The Chinese gross domestic product jumped 11 percent last year, according to USA Today.
Little had recommended waiting to ask for bids until July or August, when local steel buyers expect prices to plateau. Nevertheless, at Councilman Craig Gartman’s initiative, the Council informally told staff to seek bids as soon as possible – probably three to four weeks from now, Baksa said.
The city has enough money from impact fees it has collected from developers. These funds are specifically reserved for police capital improvements and cannot be used for anything else unless Council were to restructure its entire capital budget system, according to Bill Headley, the city’s development manager for facilities and parks.
None of the seven Councilmen had anything to say against Gartman’s plan by the end of the hour-long session, but the discussion opened with nothing resembling consensus as some Councilmen revisited old, lingering questions.
Roland Velasco touched a nerve when he asked about Morgan Hill’s new police station, which is expected to cost $9.45 million – about a third of Gilroy’s. The neighboring city bought a new, never-occupied structure which is currently being remodeled.
“How is Morgan Hill able to do this?” Velasco asked. “What are they doing that we’re not doing?”
This touched off a flurry of responses, the strongest from Councilman Russ Valiquette.
“I’ve had it up to here with hearing about Morgan Hill,” Valiquette said. He argued that Gilroy’s new station would be designed to last for the next 30 years, while Morgan Hill’s might last 10. Gilroy has spent about $6 million on its police station in the past 40 years while Morgan Hill has occupied four buildings in that time period, he said.
Assistant Police Chief Lanny Brown said he and city staff looked at moving the GPD into an existing building, but “every time we analyzed it … it was always more expensive to go in and make one of those old buildings work.”
He also said Morgan Hill’s police department “isn’t as robust as ours.”
Velasco backed off from his question before the discussion it sparked died down.
“The bottom line is, I think we do need to move forward with this,” he said. “This is our vision. … We’ll let history decide if we’re right or wrong.”
Meanwhile, Councilman Charles Morales said it was time to revisit the idea of neighborhood police precincts rather than one central station. Baksa quickly dismissed this, saying it would be more expensive and impractical for a city as small as Gilroy. Police Chief Gregg Giusiana added that even San Jose, a city of a million people, still uses a central police station.
The city’s cost projection is much more conservative now than the last time around, Headley said. When the city put the police station out to bid a year ago, the lowest bid came in at $8 million more than expected.
Sticker-shocked, the Council last summer told police and engineers to trim things critics called luxuries. Now there is no indoor running track, no second level of underground parking and no clock tower, although plans still allow for a clock tower in the future, Little said. A roundabout on Hanna Street is still included.
The redesign saved $6 million, but the resulting year-long delay allowed construction costs to creep up. At this point, every month of delay means a significant cost increase, according to Brown, who has spearheaded the project for the GPD.
“The longer you wait, you build a far lesser building for the same cost as it was … a year ago,” Brown said. “It is in the best interest, in responsibility to the public dollar, to get this thing bid and built as soon as possible.”
In spring 2003, city officials expected to break ground on the new station this month and open it in the coming December.
The new police department is only the first phase in the Gilroy Civic Center Master Plan, which will include the new public library, City Hall expansion and renovation, Senior Center expansion, Wheeler Community Center expansion and other Civic Center campus improvements. City Hall may well take advantage of the 19,000 square feet of space in the current police station once police vacate it, Headley said.
