Stimulating the price of asphalt?
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The city of Urbandale will take a wait-and-see approach to paving a section of 156th Street.
Dave McKay, the city’s director of engineering and public works, believes the city might have fallen victim to a post-stimulus price hike when it sought bids from asphalt contractors to pave 156th between Meredith Drive and Waterford Road.
The low bid was 35 percent higher than estimates, at a price of $89.50 a ton for asphalt. Last year, the city had paid $68 a ton for what McKay considered a more complicated project.
McKay investigated the causes of the higher-than-expected bids. He was told that the cost of asphalt had gone up in the past year and that trucking costs were up due to an increase in fuel prices.
McKay is a man who checks his indexes, and he knows that asphalt prices have been relatively stable for the past year, as has the cost of fuel.
He came to the conclusion that post-stimulus euphoria might have prompted contractors to boost their bids. After all, a majority of the federal transportation stimulus funds for Greater Des Moines will be spent resurfacing asphalt streets.
Urbandale will seek bids on the project later this year in hopes that prices will be more realistic.
“I don’t know that I hold out hope that the costs will change that much,” McKay said.
Bill Roesner, executive vice president of the Asphalt Paving Association of Iowa, said asphalt prices are dropping.
“In the last three months, we have seen a steady reduction,” he said.
Data from the U.S. Bureau of Labor Statistics show that asphalt prices dropped 8.6 percent in the past year and 2 percent between January and February.