Traci Barnard, Temple finance director, said the city recently moved about $1.9 million from the future project to cover large increases in right of way and utility relocation costs on the Loop 363 project (between Fifth Street and 57th Street) and the FM 2305 widening project (between FM 2271 and Texas 317).
She said in 2004 the city paid the Texas Department of Transportation $550,000, or 10 percent of anticipated right-of-way costs for the Loop 363 project.
In 2005 the city paid $83,000 to TxDOT as 10 percent of anticipated costs related to the FM 2305 project.
But since that time, costs shot up by $796,214 on the loop project and more than $1.1 million on the 2305 project. Since the city was committed to 10 percent of right-of-way costs, it had to come up with funding for the increased costs.
“TxDOT came back to us with projects already scheduled where we had to participate in property acquisition,” Ms. Barnard said. “And when they estimated the cost of right of way (2004-05), costs were really low.”
City Manager David Blackburn said the city is locked in to the increased costs.
“On a couple of those projects the right of way costs had escalated substantially over past years in some of those areas to the tune of almost a couple million dollars,” he said.
He said since the city was committed to the projects, TxDOT acquired and prepaid the right of way, then asked the city for reimbursement for the amount to equal its 10 percent.
Ms. Barnard said the $1,906,612 in funding came from $7.2 million she said was serving as a “place holder” for preliminary design of phases three through six, construction for phase three and right of way construction for phases three and four “for as far as it takes us,” she said, referring to the outer loop project.
She said the $7.2 million, funded through certificate of obligation bonds, was not meant to construct the four phases of the outer loop, which is estimated to cost more than $20 million in today’s dollars.
“That money would not have completed those segments anyway,” she said. “That money is looking ahead - a placeholder. We’re still going ahead with plans. If anything, it will cut back on right of way acquisition.”
She said the need to shift dollars boiled down to funding ongoing projects with money from projects not fully funded yet and not under way.
Ms. Barnard said she believes the increase in cost is related to the increase of real estate prices.
“It’s market-based,” she said. “The cost of land escalated in the past few years.”
She added it is possible that knowledge of a planned project in an area can result in land prices going up.
“Although some will argue that some projects help and some projects cause the opposite,” she said, regarding the value of land.
She said that when the city was acquiring land around the Draughon-Miller Central Texas Regional Airport for economic development, prices also went up.
“We were buying property that at one time was $5,000 an acre, then it went all the way up to $15, $16 and $17,000,” Ms. Barnard said.
She said though, that the expense and delays often associated with eminent domain might not negate increasing real estate costs.
“There is a fine line when you go there,” she said.
The outer loop, if built to the full extent, will ring Loop 363 west of Interstate 35. It will hook up with I-35 to the north in the vicinity of Moores Mill Road and to the south in the vicinity of Twin City Boulevard, according to preliminary plans.
The $14.7-million FM 2305 project will result in four lanes in the planned area plus a left-turn lane on 2305. An overpass will span Texas 317.
The work on Loop 363 between Fifth and 57th Streets will result in four main lanes and at least three access lanes, as well as a 10-lane 31st Street bridge, complete with turnaround lanes. It will cost about $28 million.
