Dramatic drop in costs means Red Deer County will spend $8 million on roads

Red Deer County has launched a mammoth $8-million road paving program this year to take advantage of prices driven down by a stumbling economy.

Red Deer County has launched a mammoth $8-million road paving program this year to take advantage of prices driven down by a stumbling economy.

Frank Peck, the county’s director of operations, said on Tuesday that he has accelerated the county’s 10-year asphalt maintenance program by eight years and contractors will put asphalt overlay on 70 km of roads. In the past, only a few kilometres a year were resurfaced.

The county put its paving plans in overdrive after finding prices had cooled significantly from past years. Paving costs that peaked at $142 a tonne last year are down to $70 this year.

“That actually came in better than we predicted,” he said, adding he optimistically predicted $80 per tonne earlier this year.

“The major difference in pricing is due to the market,” said Peck in his report to county council. “Contractors will not have enough work to keep busy in 2009, and the two local contractors took a good run at this contract.” One of those, Border Paving Ltd., was the winning bidder at $7.96 million.

The county was also able to take advantage of the cost savings involved in tendering a much larger contract than normal.

Since the county only had about $1 million in its road paving budget, the remaining $7 million will be taken from reserves. That money can be made up by reducing the paving budget by $1 million over the next seven years, he said.

Councillor Jim Wood said although the money was not budgeted, it’s a good time to take advantage of pricing.

“I think we will see significant benefit across our municipality.”

Wood said the paving work will allow trucks with heavier loads to use county roads and will improve traffic flow.

The paving work will also help stimulate the local economy, said Councillor George Gehrke.

Councillor Jim Lougheed said the paving initiative shows the wisdom of salting money away in reserve accounts.

“I don’t think we can stress enough the importance of maintaining a proper balance of reserves,” he said. “I’m really happy that we’re able to take advantage of these prices.”

pcowley@bprda.wpengine.com

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