Road project's rising cost gives Minnetonka cold feet

Shocked by construction costs that have more than tripled, Minnetonka is reconsidering whether it can afford to rebuild Shady Oak Road.

After three years of refining a design to please residents and motorists, the Minnetonka City Council last week balked at giving final approval to the Hennepin County project because the cost has risen to $30 million from an estimated $8.6 million in 2004. The council is scheduled to discuss it again on Dec. 17.

"It's not a slam dunk to have this thing proceed," said Council Member Terry Schneider.

The widening of Shady Oak Road from two to four lanes from Excelsior Boulevard to Bren Road, a distance of about 1.7 miles, is scheduled to start next year and be completed in 2010. But the city's share of the project has increased from $2.75 million to $6.5 million.

"Maybe we are designing roads that we can't afford," said Council Member Brad Wiersum. The design calls for two lanes in each direction with left and right turn lanes, a median and a trail flanking the road.

With construction plans ready to go, two-thirds of the right of way purchased and the risk of losing $5.5 million in federal funding if it's not spent by March 2010, county officials are eager to move forward.

"We have the final plans done. We are not going to be proposing changing the design," said Craig Twinem, manager of the design division of the county transportation department. "We feel we have the right design. It's the right project."

Some residents along the street consider the design too big and have suggested a three-lane road with one lane in each direction and a third lane for turns.

County project director Brent Lindgren said three lanes would not accommodate the growth in traffic expected in the next 20 years. He said four lanes with protected turn lanes is the safest design. A median also cuts down on sideswipes and head-on crashes, he said, adding that the new road will have to serve for 50 years.

Minnetonka engineer Lee Gustafson is looking for ways to shave costs from features that are nice to have but not essential.

The project includes $1.3 million in decorative retaining walls and $290,000 for landscaping to compensate for the removal of more than 400 trees. But eliminating the retaining walls would require the purchase of more property and the loss of more trees, Twinem said.

"The city is taking a look at the retaining walls. I think they are going to conclude that the walls are where they need to be," he said.

The price of the project has risen so dramatically because the original estimate did not include property acquisition and because the rising cost of fuel, steel and concrete has inflated construction costs, officials said. The retaining walls will require a lot of concrete and the walls will be more massive than originally estimated, county officials said.

While costs have increased, the city's share of gas-tax revenues has stayed the same. The state gas tax was last raised in 1988, when it went to 20 cents a gallon. Minnetonka has received about $1.5 million a year for the past 10 years, City Manager John Gunyou said.

The city has used that money to pay its required share of city and county road projects. That is how it planned to pay for the Shady Oak Road project.

But the higher price would eat up gas-tax receipts for years to come, Gunyou said. Then the question becomes how the city would pay for other projects, including widening Shady Oak between Excelsior Boulevard and Hwy. 7, a distance of about three-quarters of a mile. The city considers that segment to be a higher priority than the segment between Bren and Excelsior.

One financial option would be for the city to issue bonds to pay its share of large projects, Gunyou said.

The city already raised property taxes by 10 percent over two years to pay for street improvements, Gunyou said.

By Dec. 17, Gunyou said he will have information for the council on costs of going ahead with the project, not doing it or delaying it.

Laurie Blake • 612-673-1711