City weighs Katrina’s effect on construction costs

Tuesday, Sept. 6, 2005 | 9:04 a.m.

Henderson plans to issue $56 million in bonds by the end of the year for expanding its court and police facilities, but city officials warned that the devastation caused by Hurricane Katrina may drastically increase the costs for construction projects.

The Henderson City Council is scheduled to vote tonight on issuing the 30-year bonds, most likely in December. The city has unveiled plans for five projects that would utilize the $56 million in bond funds.

Officials said, however, that because of Katrina, that may not be enough money or some of the projects may have to be scaled back to fit the budget. Henderson has built in more than $2 million in contingencies for cost overruns.

"A lot of the numbers we have (for construction costs) are premature," said Henderson Finance Director Steve Hanson. "That is all subject to change. The big question mark is what is the impact of New Orleans and their need for construction materials is going to have on what we pay for materials in Southern Nevada."

Mark Hobaica, Henderson's construction manager, said the hurricane has curtailed the oil supply and that can drive up costs for transportation of goods and the costs of construction materials made from oil products. The demand for materials for New Orleans and the Gulf Coast will impact the entire country, he said.

"Because of the efforts that are going to be required to rebuild that area of the country, there is going to a strain on all materials," Hobaica said. "That is going to affect everything we do in Henderson."

Officials said Henderson has already seen higher construction costs in recent months because of higher fuel costs. The city has also had to deal with higher cement prices in the past year because China has gone from an exporter to importer of cement, Hanson said.

The projects that are part of the bond package are:

Tonight the Henderson City Council will consider authorizing staff to request proposals and conduct interviews of architectural and engineering teams for expanding the Henderson Justice Facility and for building a 440-vehicle parking garage on the site across from City Hall.

The population growth in Henderson and the rest of Clark County has placed a heavy demand on the justice facility, which will get four additional courtrooms, office space and classrooms as part of the expansion, officials said.

The existing facility, which opened in early 1993, houses three city-operated Municipal Courts and two Clark County-operated Justice Courts.

The city added a third Municipal Court, which is used by newly elected Municipal Judge Diana Hampton, by displacing staff of the city attorney's office who are working out of trailers on the justice center site.

Trailers near the justice facility are also being used for classrooms and programs serving those convicted of DUI, traffic violations and other crimes.

Based on the caseload growth, Henderson will need a fourth Municipal Court by 2008 and a fifth by 2010, Hobaica said. He said part of the push for more space is impacted by the city's plan to hire an average of 50 officers a year over the next five years.

"What that does is increase all the tickets that are written and means more criminals are caught," Hobaica said.

Because Clark County shares the facility, the city is negotiating with the county to pick up close to half of the $26 million tab to expand the building by 45,000 square feet from an existing 110,000 square feet.

The building's design work will take about eight months to complete. Construction could begin by the end of 2006 and take 20 months, officials said. The plan calls for adding on to the facility's second and third floors by expanding them into the existing parking lot. The first floor is below ground.

The hiring of additional police officers over the next five years will also prompt the need for more space. Plans call for constructing a police substation east of Boulder Highway that measures about 30,000 square feet to house more than 100 officers. No site has been selected.

The city has a police headquarters downtown and a police substation on Green Valley Parkway, south of Interstate 215.

Henderson plans to pay for the bonds out of existing sales tax revenues.2