Shifting cost numbers

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I was looking through the archives of the daily paper for stories about The Channels and about the long process of public scrutiny required for that plan for the Arkansas River before it could be put to a public vote. In the process, I came across some cost estimates for other river projects. (Emphasis added in all cases.)

The price of west bank land

From November 2, 2006:

The William K. Warren Medical Research Center has signed purchase options totaling $65 million to acquire the sites of the Westport on the River apartments and the Mid-Continent Concrete Co. for a proposed $788 million river development, it was revealed Wednesday....

The $28 million purchase option for the 23.7-acre apartment site includes only the land on the west bank. During a transfer of land for the apartments when Sen Jim Inhofe was Tulsa's mayor, the river abutting the site remained in the ownership of the city.

The Tulsa Stakeholders had to pay to get the confidentiality agreement lifted, but that amount, which was not disclosed, is not included in the purchase price, Ducato said.

The $37 million purchase option for the concrete plant site covers 26.7 acres of land on the west bank plus acreage to the middle of the river.

The cost of bridges and dams

From Janet Pearson's column on October 8, 2006:

Other observers note that the amount eyed by Tulsa Stakeholders would pay for most of the major improvements called for in the master plan, including: several new low-water dams at about $22 million apiece; several new pedestrian bridges, about $3.4 million each; a Gilcrease Expressway bridge, $27 million; a 41st Street [vehicular] bridge, $13 million; a Yale Avenue bridge, $33 million; a 193rd East Avenue bridge, $20 million; a new Riverside Drive West from 71st Street to the 11th Street bridge, $29.3 million; and improvements to the existing Riverside Drive from 21st Street to Interstate 44, $11.6 million.

Not to depend too heavily on a Tulsa Whirled editorial writer, but I'd bet someone, maybe at INCOG, supplied Pearson with those numbers.

Let's compare these estimates from a year ago to what we're being told about the cost of projects in the October 9th river tax. (The number for the low-water dams includes Vision 2025 dollars. The number for acquiring the concrete plant is from news stories; there's nothing in the official ballot resolution that allocates money specifically for land acquisition on the west bank at 21st or anywhere else in Tulsa.)

Project Fall 2006 estimate River Sales Tax estimate*
Low water dam (each) $ 22,000,000
$ 27,500,000
Pedestrian bridge (each) $ 3,400,000 $ 15,000,000
Concrete plant acquisition
$ 37,000,000
$ 52,000,000
Cost of two low-water dams,
two pedestrian bridges,
and concrete plant
$ 87,800,000
$ 127,000,000

The most striking thing is the difference in the cost of the pedestrian bridges: $3.4 million each last year vs. $15 million this year. What accounts for that dramatic a difference? Inflation doesn't come close to accounting for the huge jump in costs.

Notice that last year's estimate of the cost of a vehicular/pedestrian bridge at 41st Street -- $13 million -- is less than what they're telling us this year is the cost of a pedestrian-only bridge at that same location -- $15 million, even though the cost of materials, engineering, and construction ought to be far higher for a bridge designed to carry cars.

A reader points to some other information that indicates someone did a cost estimate for the dams. A version of the Water Resources Development Act of 2007 approved by the Senate back in May (H.R. 1495, Engrossed Amendment as Agreed to by Senate) contained the following language:

SEC. 3012. MCCLELLAN-KERR ARKANSAS RIVER NAVIGATION SYSTEM, ARKANSAS AND OKLAHOMA.

(a) Navigation Channel- The Secretary shall continue construction of the McClellan-Kerr Arkansas River Navigation System, Arkansas and Oklahoma, to operate and maintain the navigation channel to the authorized depth of the channel, in accordance with section 136 of the Energy and Water Development Appropriations Act, 2004 (Public Law 108-137; 117 Stat. 1842).

(b) Mitigation-

(1) IN GENERAL- As mitigation for any incidental taking relating to the McClellan-Kerr Navigation System, the Secretary shall determine the need for, and construct modifications in, the structures and operations of the Arkansas River in the area of Tulsa County, Oklahoma, including the construction of low water dams and islands to provide nesting and foraging habitat for the interior least tern, in accordance with the study entitled `Arkansas River Corridor Master Plan Planning Assistance to States'.

(2) COST SHARING- The non-Federal share of the cost of a project under this subsection shall be 35 percent.

(3) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection $12,000,000.

Doing the math, $12,000,000 is about 65% of $18,500,000. That suggests a cost of about $9 million each for the low-water dams, or possibly less, depending on how much was figured in for non-dam projects.

The version that came out of conference committee (House Report 110-280) included more funds for the Arkansas River, but used different language to describe the project:

SEC. 3132. ARKANSAS RIVER CORRIDOR, OKLAHOMA.

(a) In General- The Secretary is authorized to participate in the ecosystem restoration, recreation, and flood damage reduction components of the Arkansas River Corridor Master Plan dated October 2005. The Secretary shall coordinate with appropriate representatives in the vicinity of Tulsa, Oklahoma, including representatives of Tulsa County and surrounding communities and the Indian Nations Council of Governments.

(b) Authorization of Appropriations- There is authorized to be appropriated $50,000,000 to carry out this section.

The bottom line question is: What is the basis for estimate for each of the items in the October 9th ballot resolution? Recent comparable construction in other cities? Rough order of magnitude quotes from potential suppliers? Given the wide range of numbers, the tax proponents need to show their work, in detail.

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6 Comments

Day Dreamer said:

With the kind of cutting, Laser Beam financial analysis Michael Bates is getting into on the EVER-changing costs of the Kaiser River Tax, how long will it be before local Heavy Construction companies (Flint-Skin and LooneyToon Families), Hard-Destroy's concrete companies, The County Ring, Atkins-BenGay, and associated crony sub-contractors SILENCE Mr. Bates?

He's messing in their local tax-payer provided Honey Pot, and they're not liking it...........Not one little bit.

Paul Tay said:

HELP! I need 500 hands to say "NO". Tomorrow morning, 0830, 29 September, 93rd Street Jenks Bridge.

s said:

Michael Bates has outdone all of the news channels and especially the Tulsa World reporters on the River Tax issues.

If it passes and people want to come to Bixby, cops love to pull you over is anyone in your car is not wearing a seat belt. That's how they raise money down in Bixby -- even if you are going the speed limit or just sitting there waiting on any light to change in Bixby, cops love to just sit there doing nothing but writing tickets without any warning tickets in case a passenger just happened to not put on their seatbelt. Welcome to Bixby developers! You can see the pattern of how the police write tickets especially at the end of the month and at Christmas when they have been known in the past to get Christmas bonuses on the amount of money they bring in by writing tickets for all those drivers in Bixby!

XonOFF said:

Can't say I ever noticed The Channels plan included $33 Million for the South Tulsa TOLL Bridge at Yale.

Has anyone thought to ask if this project is included in the Oct 9 County Rive Tax? Seems with all the inflated costs, they may be padding for this one, then later will tell us it was in there the whole time.

NO RIVER TAX!

s said:

The River Tax p.r. info came in our mailbox today. "It takes job, a good job to make ends meet." So far, it looks as those most of the 9,450 that are only hopeful estimated jobs in new retail development and the other jobs that will be in other areas such as restaurants are low paying jobs. Their River Tax pr. team always stretches the truth and never shows their work with facts as Michael Bates has pointed out.
The Channels team also thought their ideas were good but again once people started questioning them on the reality of if it would really work, it was set aside.
Thanks to George Kaiser's father that started his road to wealth, Kaiser is billionaire and will have plenty of millions to donate to this same cause next year, or let the private investors develop it with their own money. They are the ones that will be reaping the financial reward.

XonOFF said:

While the pedestrial bridge costs of $15 Million each (compared to $3.5 Million initially) is extrodinary, it would appear to me the most striking difference is in the cost of the dams. The Corps estimate in HR 1495 Sec 1302 placed them at less than $9 Million each, while the current plan has them now at $27.5 Million each.

That's over a 3X factor for dams. But, as you say, the $3.5/$15 for pedestrian bridges is even greater. Appears the County's estimators use simple factors like 3.0 times the last number they saw to get their prices.

And, despite what the Whirled says, the original cost of the Zink dam was only $4 Million, which escalates to $8 Million in 2007 dollars.

I'd be far more confident with the Corps' estimate than anything printed in the Whirled.

The $282.25 Million River Tax plans' numbers seem to have been adjusted in a manner which tried to use up the anticipated revenue. "Yeah, add $5 Million to the bridge, and double the dams' cost, that's the ticket."

Spreadsheet economics.

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This page contains a single entry by Michael Bates published on September 27, 2007 9:26 PM.

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