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Cooperative pricing agreement paying off
(by Karen F. Mrnarevic - May 28, 2008)
|
What each town will save
|
| Municipality |
Engineer estimate* |
Actual Cost (bid) |
Savings |
| Emerson |
$295,100 |
$189,234 |
$105,867 |
| Hillsdale |
$175,960 |
$148,911 |
$27,049 |
| Old Tappan |
$53,000 |
$38,569 |
$14,431 |
| Oradell |
$151,589 |
$87,501 |
$64,088 |
| Park Ridge |
$240,460 |
$187,069 |
$53,391 |
| River Vale |
$339,623 |
$235,783 |
$103,840 |
| Westwood |
$294,309 |
$223,657 |
$70,652 |
| Woodcliff
Lake |
$338,882 |
$232,382 |
$106,500 |
|
| *Note: This figure includes both construction costs an engineer’s design fee. None of the municipalities paid the design fee because Woodcliff Lake Administrator Ed Sandve prepared the design. |
Eight
Pascack
Valley towns who entered into a cooperative pricing agreement earlier this year now have something to show for their efforts. The agreement, which allows the towns to bid jointly on capital projects as well as share services and equipment, is aimed at lowering municipal costs. In February, each of the participating towns, Emerson, Hillsdale, Old Tappan, Oradell, River Vale, Park Ridge, Westwood, and
Woodcliff
Lake , submitted lists of their respective planned road resurfacing projects for the upcoming year.
Westwood, the lead agency of the consortium, produced a joint bid, hoping to save money on materials and labor by employing a single contractor to do all of the resurfacing jobs. There are indeed measurable savings. The actual cost of the roadwork will be $545,853 less than the towns’ engineers originally estimated. That is about 25 percent less than what the towns would have spent if they had gone out to bid separately.
According to Woodcliff Lake Administrator Ed Sandve, however, the actual savings may be somewhat lower, since engineers’ estimates tend to be based on the worst-case scenario. Sandve, a professional engineer, also pointed out that $98,884 of the total savings would have been a fee that each town would normally pay its engineer to produce a design for the projects. “That’s clearly a savings,” he said in a phone interview, “because I did the design, and no one is being charged for that.”
Westwood Administrator Bob Hoffmann expressed appreciation for Sandve’s handling of the project. “Not only did we save on the front end,” said Hoffman, “but also on the back end because of Ed’s design work.” Since Westwood is the lead agency in the cooperative pricing agreement, Hoffmann was in charge of preparing the joint bid and authorizing the employment of a contractor. Now the other participating towns can formally hire the contractor to do their resurfacing jobs.
At the May 19 meeting of the Westwood Mayor and Council, a resolution was passed to award the bid to the selected contractor, a Bellville based firm called DL Paving. Bidding jointly on the approximately $1.3 million job will save the participating towns between 10.29 and 38 percent in construction costs, compared to engineers’ estimates. “This shows that when municipalities work together we are successful beyond our borders,” said Hoffmann, “and it benefits every taxpayer in the valley.”
To put the advantages of joint bidding in perspective, Hoffmann described another resurfacing project that Westwood will soon be undertaking. The borough recently went out to bid on a separate project to repave Irvington Street; the borough has been awarded a grant from the Department of Transportation to fund the project. According to Hoffmann, the cost of asphalt for the paving of
Irvington was $98 per ton. The cost of asphalt for the joint resurfacing project was $62.70 per ton. “So we saved $35.30 per ton over bidding alone,” Hoffman said. “That’s a 36 percent savings.” He calls the
Irvington project a “beta test,” which serves as an example of the benefits of the cooperative pricing agreement.
“This is the culmination of several meetings and lots of effort,” said Hoffmann of the resurfacing project. “It’s a wonderful beginning.” But it isn’t nearly the end. The consortium currently has about 25 projects on its agenda. Each member administrator, said Hoffmann, has taken the initiative to investigate a different area in which the participating towns could possibly save money by working together. “Our focus is how to do more with dwindling resources,” said Hoffmann.
Emerson Administrator Joe Scarpa is currently investigating joint banking opportunities, and Emerson and Westwood are working on establishing a shared pistol range for use by their police departments. Oradell Administrator Wolfgang Albrecht, said Hoffmann, is taking the lead on producing a joint energy bid for the participating towns. Hoffmann is currently looking into how the municipalities can focus more on “green” initiatives such as exploring alternative energy sources and encouraging the use of hybrid police vehicles. He is also in the process of preparing applications for two grants, which would fund a study on DPW equipment sharing.
Hoffmann emphasized that the DPW study will not be aimed at consolidating departments or eliminating jobs, but rather at maximizing the use that all of the participating towns can get out of their own and one another’s equipment, such as street cleaners and wood-chippers. “We each have special equipment,” said Hoffmann, “but if we can loan it out, we all benefit.”
Karen F. Mrnarevic's e-mail address is Mrnarevic@northjersey.com.
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