As Denver gears up to ask voters for a multimillion-dollar tax increase for infrastructure needs, the City Council is still handling cost overruns from the last bond.
In 1998 voters passed a bond that went more than 40 percent over the budgeted $98.7 million.
Three district police stations budgeted at $18.3 million more than doubled in price. A $1 million addition to Rude Recreation Center turned into an $8.2 million reconstruction.
And last week, the council signed off to increase the budget for Westwood Community Center a third time – pushing the budget to $3.7 million from the $2.2 million promised in 1998.
“I don’t see how government can generate confidence when you have a surplus like this,” Councilwoman Jeanne Faatz said. “You are only as good as your word.”
In the years since voters passed the 1998 bond, officials have blamed the overruns on hasty cost estimates and the politics of prematurely promising a local benefit to woo voters in particular areas.
While the 1998 bond was prepared and passed under the Wellington Webb administration, Mayor John Hickenlooper’s administration has been aware of past pitfalls as it looks to ask residents for a new bond.
More than 100 community leaders have worked with city officials as part of the Infrastructure Priorities Task Force to assess some $700 million worth of desired projects.
The number of projects that will go to a bond still has to be narrowed, but voters could see a bond on the ballot as soon as this fall.
“We are certainly focused on this issue of mitigating the risk of cost overruns and time overruns,” said Denver’s chief operating officer, Chris Henderson.
Evidence of the pitfalls of promising an outcome without close examination can be found in the Rude Recreation Center.
In 1998, the city did not study the feasibility of an addition to the rec center until after voters had approved the $1 million project, public works official Leslie Thomas said.
Thomas was not on the staff at the time, but she said the study found putting a new addition on the aging building would have been “throwing good money after bad.”
The old center was torn down, and a new $8 million facility stands in its place.
Much of the $43 million cost overrun from the 1998 bond was caused by unexpected increases in construction costs.
“The longer you wait,” Henderson said, “the less predictable the cost outcome is going to be.”
This time around, Henderson said, each project has been professionally priced, and only projects that are ready to go are being prioritized. He said the city is also factoring in an inflation rate of 20 percent to 25 percent.
“I think that absolutely that the things like the deliberative nature of the process and the cost estimators and the readiness are responses to historical experience,” Henderson said.
Councilwoman Kathleen MacKenzie noted that the cost overruns associated with the 1998 bond have not soured voters on civic projects. Since then, voters have approved several tax increases, including a $373 million justice center complex and a $12 million annual increase in sales taxes to create a preschool education system.
“We have had issues pass which indicate that the public still has faith in the government,” she said. “But as we are preparing another bond issue … we need to be sure that we are rigorous about the cost.”
Staff writer George Merritt can be reached at 303-954-1657 or gmerritt@denverpost.com.
1998 bond estimates vs. actual costs
Project Bond Amount Total Cost Difference
Ashland Recreation Center $3,244,027 $5,199,027 $1,955,000
La Alma Recreation Center $514,640 $954,640 $440,000
MLK Therapy Pool $418,000 1,058,000 $640,000
Montclair Recreation Center $3,289,600 $5,494,256 $2,204,656
Montbello Recreation Center $2,060,000 $8,985,094 $6,925,094
Rude Recreation Center $1,060,000 $8,209,100 $7,149,100
Three police substations $18,306,940 $38,047,000 $19,740,060
Buchtel trail and streetscape $1,048,360 $1,348,360 $300,000
Skateboard park $1,439,900 $1,665,140 $225,240
Skyline Park $2,000,000 $3,500,000 $1,500,000
Sloan’s Lake Park and restroom $1,422,000 $2,930,715 $1,508,715
Molkery in Montclair Park $450,000 $626,500 $176,500
Whittier Neighborhood Community Center $318,000 $468,000 $150,000
West Harvard Gulch Platte River trail $103,000 $303,000 $200,000
West Quincy Avenue $956,870 $1,590,770 $633,900
122 other projects $62,008,663 $62,008,663
TOTAL BOND BUDGETED: $98,640,000 TOTAL OVERRUN: $43,748,265
