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The recent announcement that Butte-Silver Bow (BSB) road and water crews are embarking upon a major construction project on Dewey Boulevard should give taxpayers and motorists great pause.

Complex water/sewer and pavement reconstruction projects are typically designed by professional engineers, advertised for competitive bids, and awarded to a construction company that posts a surety bond guaranteeing taxpayers a completed project within a given number of contract days. On behalf of the public owner, the engineering firm holds the contractor accountable to rigorous specifications and timeframes to assure taxpayers that the project is done properly. Who will hold Butte-Silver Bow crews accountable for meeting specifications, timeframes, and notably, costs?

The Montana Standard reported the project will take three years to complete. If BSB bid the job out to private companies, that timeframe would likely be 12-18 months.

BSB estimates the cost of the project to be about $4 million. How will it track costs? Who is accountable if there are overruns, and what recourse is there for taxpayers? Who will do the testing to ensure specifications are met? What happens if the pavement or water mains fail? If a private contractor failed to meet specifications, they would be forced to either pay a financial penalty, or tear out the work and replace it at no cost to BSB.

BSB, like many local governments, routinely asserts it has limited financial resources with which to maintain streets and roads. Despite that, it chose to forego competitively bidding this significant project to taxpaying construction firms. It certainly stifles the local economy when government competes with its own taxpayers, thus weakening its own tax base.

While BSB may allege it can do the work “cheaper,” it is unlikely BSB will hold its crews accountable to build the project to the same specifications as it would hold a private contractor. If the quality of the project is substandard, what is BSB’s recourse? Will its crews go back and do the work over again at taxpayer expense, or repeatedly repair it and patch it, while the public endures it?

Either way, taxpayers get the short end of the deal. What if the project isn’t completed within the promised three years (that should be less than two)? Will there be financial penalties like a private contractor would pay? Will someone at BSB get fired? Will BSB go bankrupt like a substandard construction company would?

Importantly, how will BSB track and report its true and actual costs for the project? In truth, it’s unlikely it will accurately track costs such as depreciation on expensive equipment, administrative overhead, pension liabilities for employees, and other real, but hidden, costs of doing business. And of course, local businesses will undoubtedly experience declining sales as the project drags on for three or more years, restricting access and increasing inconvenience for motorists and pedestrians.

The main reason voters are opposed to raising taxes for infrastructure upgrades is they don’t believe the taxes they already pay are being used efficiently. BSB’s Dewey Boulevard project might just prove that perception to be correct.

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Cary Hegreberg is executive director of the Montana Contractors’ Association. 


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