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Medford fire stations put on hold

The Medford City Council on Thursday night put the brakes on building three new fire stations while it comes to grips with a $3.4 million shortfall.

At the same time, the council agreed to continue construction on the new police headquarters despite a $1.7 million cost overrun. The council received verbal agreements from the contractor, Adroit Construction Co. of Ashland, that it would to try to find ways to reduce the shortfall.

“This is not the end of the road,” said Tom Walker with Adroit. “We will figure out what we can live with and what we can live without.”

The council didn’t seem to have much appetite to borrow money from internal accounts or from the open market to pay $5 million in cost overruns. An improved police parking garage façade that would have cost $900,000 appeared to be off the table.

Councilor Eli Matthews said the council decided to raise fees without voter approval to pay for $32 million in bonds to pay for the three fire stations and police headquarters, and he didn’t think the city should pay any more than it promised taxpayers.

“We need to come in with the price we agreed on,” he said. “It’s unacceptable that we’re $5 million more on this project.”

Councilor Chris Corcoran said, “I’m in favor of putting a stop sign up in front of everything.”

Last week, the council discovered there was a shortfall on both the police and fire projects.

The fire stations' “guaranteed maximum price” now is $14 million, about 32 percent over bond proceeds of $10.6 million, creating an almost $3.4 million shortfall.

A groundbreaking ceremony for the new fire stations scheduled for Sept. 9 has been put on hold.

The “guaranteed maximum price” for the police station was given as $23.75 million, about 8 percent over the $22 million in bond proceeds available to pay for the project. That leaves about a $1.7 million shortfall — not including an extra $900,000 for the parking garage facade.

Adroit said much of the increase in costs over estimates made earlier this year came from higher bids from subcontractors — as much as 30 percent higher.

The cost per square foot for the police station came in at $281, which was in line with earlier estimates, but the city decided to increase the overall square footage of the building as well as increase the size of the parking garage. Foundation and steel work on the police station began before the city knew what the bids would be on the remaining work.

The replacement for Fire Station 2, which is at the corner of Eighth and Lincoln streets in west Medford, came in with the highest square foot cost of $386. The two other fire stations, which are bigger in size, came in around $300 a square foot.

Walker said he thought the city might do better if it rebid Fire Station 2 at a later date when subcontractors aren’t as busy as during the summer.

Councilor Clay Bearnson said he wanted assurances that the “guaranteed maximum price” was going to be adhered to going forward.

Greg McKown, the city’s project manager, said the price should hold but said the council would need to increase the contract amount with Adroit because it now exceeded a previous agreement.

Councilor Kevin Stine said that by going forward with the police station and absorbing the cost overruns, the city will have less money for the three fire stations.

“We’re cutting the fire stations out from under them,” he said.

Councilor Dick Gordon was critical of the assurances the council has received up until last week that the projects were coming in within budget.

“On time and under budget — I really think the city should drop that saying,” he said.

Medford resident Kurt Chapman criticized the council for not paying better attention to the budget on these projects, urging them to stop the process.

“You guys really stepped in it,” he said. “You need to cut the frills out.”

He said the council was reckless and irresponsible in the way it hiked utility fees to pay for the projects, but he urged the council to live up to its commitments.

“Cutting one fire station won’t be the proper answer,” he said.

Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.