Mojave County’s capital improvement project is currently about $16 million over budget, officials said in a report filed with the county’s governing board this week.
Inflation is accelerating in nearly every aspect of American commerce, even local government agencies are unaffected. According to Mojave County Chief Financial Officer Luke Mounian, capital improvement projects, infrastructure projects and basic supply costs for the county have skyrocketed over the past two years.
Mouniang said county officials have seen a 39% spike in construction material costs since July 2019. Construction costs for non-residential buildings increased by 37% in this period, and highway construction costs increased by 30% in the last two years.
Postage paid by the county has increased by $28,000 over the past two years, and printing by Mohave County’s accounting and assessor’s offices has increased by another $33,000, Mournian said.
The estimated cost of a project may be less than the actual price before the project is completed. But now, some of the county-approved projects are double the original proposals.
The Mojave County Law and Justice Center in Kingman had an initial budget of $7.33 million for Phase 2. As of this month, the estimated cost of that project is expected to be closer to $11.8 million.
The county’s new legal services center has a budget of $10.5 million and could be estimated to cost $11.51 million to complete. The new Mojave County Animal Shelter could see a 43% variance from his original budget of $3.5 million to his final estimated cost of $5 million.
According to Mouniang, the most affected project will be the replacement of the aging water system in the Horizon Six Improvement District. The project, which was funded through his initial $2.1 million funding allocation under the American Rescue Plan Act, could cost an estimated $6.25 million at a cost increase of 198%.
Inflation ultimately led to longer lead times, difficulty sourcing materials, backorders, and canceled orders across Mojave County this year.
“It’s pretty chilling to see how diluted the purchasing power of the county has become,” Mojave County Manager Travis Lingenfelter said at a board meeting on Tuesday. “We are not alone. All public institutions are affected by what is happening nationally with inflation. We have money available to run.”
There are steps counties can take to avoid rising costs from inflation, Mournian said.
These methods include “value engineering,” in which counties adjust project designs to include alternative materials or reduce the scope of certain projects to meet budgetary constraints.
A second option, according to Mournian, is to divide future projects into multiple sub-phases, which would allow the county to spread costs across an extended span rather than face a single exorbitant expense. can be absorbed.
But Mounian said even with such measures, the county may have to overcome a shortage of resources that are more valuable than money.
“Labor shortages are affecting the construction industry more than any other industry,” says Mournian. “If you ask any footbuilder around town, I think they will tell you the same thing. Obviously, it’s a key component of these projects.”
The Mojave County Board of Supervisors took no action on the issue at its latest meeting in Kingman on Tuesday.
