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Lean times help city budget

Due to a sluggish economy, estimates are more competitive, costs are down, helping city save $2M, of

Posted: June 17, 2012 1:30 a.m.
Updated: June 17, 2012 1:30 a.m.
 

While tough economic times mean that many are tightening their belts, the city of Santa Clarita has seen a benefit from the situation — there has been increased competition on city construction project bids resulting in savings to the city including $2 million just on one project, according to officials.

When Santa Clarita officials prepare the budget for each fiscal year, they include a cost estimate for each capital improvement project. In some cases, the city has realized significant savings from these projects and been able to use the money elsewhere, said Robert Newman, city public works director.

One key example is the Newhall Library, Newman said. The city spent $2 million less than it projected for the project due to competitive bidding.

The library is set to open Sept. 29, city spokeswoman Gail Ortiz said Friday.

Most city projects are coming in under budget due to increased competition and lower prices for construction, Newman said.

The City Council recently approved its budget, which includes $46.4 million in capital projects throughout the city.

“During the economic slowdown, the bidding environment became very competitive and the city has been the beneficiary of this pricing competition and realized lower-priced construction work,” Newman said. “The majority of city projects come in under budget.”

Newman estimates that the city has seen 5-percent to 15-percent lower costs since the economic slowdown started and has lowered its estimates in some cases.

“Where it makes sense, we have lowered the project budget amounts based upon the reduced costs we are seeing,” Newman said.

Other projects that have come in under budget include the cross-valley connector, median landscape construction and Safe Routes to Schools projects, Newman said.

When the city saves money on these projects, the cash is returned to the fund balance used for the project, so the savings for the Newhall Library went back into the library fund. Those funds can then be used for other projects, Newman said.

If the city comes under budget on a project that is funded through a grant with a directed purpose, then the city may not use that  grant money elsewhere, Newman said.

The grand opening for the Newhall Library — at 24500 Main St. — will be held Sept. 29 from 10 a.m. to 2 p.m., Ortiz said.

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