The Cost of Construction Growth

Johnny Carson often used a classic setup for jokes.

He would open with, “Boy, was it hot today!” Then he would wait for the audience to respond with, “How hot was it?”  Then he would deliver the punchline by starting with, “It was so hot…”

It was a dark humor that had this particular setup crossed my mind after the latest CIP 2013 update from WCPSS Assistant Superintendent for Facilities Joe Desormeaux.  It would go something like this: “Boy, constructions costs are high!”  The audience responds, “How high are they?”

The alarming punchline?  A word of warning:  it’s NOT funny.  “Construction costs are so high, we’re going to build two fewer schools than we originally planned!”

We warned you.  It’s not funny.

Desormeaux informed the WCPSS Board of Education that rising construction costs have exceeded the cost estimates made back in 2012 for CIP 2013.

It’s not really a head-scratcher that costs increase over time.  Projections of costs were built in 2012 for multiple years in advance.  Increases were anticipated and built into the planning.  However, we are recovering from a recession.  Demand for construction services sank during the recession, and so did costs for those services.  Now that demand is on the rise, so are costs.

Desormeaux delivered a detailed and sobering update.  Costs for building a school include the actual school building and site preparation for that building.  Mid-2014 bids saw increases only in site preparation costs.  But bids in December 2014 and April 2015 have seen significant increases in building and site preparation costs.

All together now: “How significant are they?”

It is projected that increases will be in the $50 million range, or roughly 8.5 percent of the overall $600 million being spent on school construction.  In other words, we can afford to build/renovate two fewer schools than originally planned.

Desormeaux did have a bit of solace for school board members.  The need for additional funding falls to projects scheduled for 2017.  This is late enough that there is time to seek additional funding (the next bond) and still meet demand for the seats that these projects provide.

That’s a win-win for WCPSS and Wake County.

Scroll to Top