At present there is not enough money to rebuild the South-end fire station. Because of several factors, the project is now expected to be almost $400,000 short. At a city council meeting Monday, Nov. 18, staff discussed how to account for the unexpected gap in funds.

The fire station’s budget of $5.4 million will not only go toward bricks and mortar but the purchase of a new rescue truck, space to house equipment and staff while the station is under construction, as well as permitting, design and a number of other related costs.

Chip Corder, finance director for the city of Mercer Island, said the uptick in the economy was partly responsible for the $400,000 in added costs.

When conversations first convened on Fire Station 92’s renovation, the recession had left many construction firms without work, making it an ideal time to build. Corder estimated that window of opportunity would begin to close in 2013 and urged council to work quickly.

“It wasn’t possible to get a bid any sooner than we did,” he said. “But when you look around, what do you see? Lots of buildings, lots of cranes – it’s an indication things have really picked up.”

Council ultimately awarded a bid to Corp Inc., the lowest of fourteen ranging from $3.5-4 million. Council also approved alternative means of funding. Residents voted last year on a nine-year levy for the fire station, which began collection this year.

Corder explained that excess levy proceeds will go toward the project. Savings for a fire rescue truck and surplus revenue from the city’s Real Estate Excise Tax (REET), amounting to about $250,000 more than budgeted, would also aid in the shortfall. Corder said that the city will next year decide how much is needed from that REET surplus.

In the meantime, city staff will continue investigating why the bids came in higher than expected. If there is a means to slim down the budget – for instance a cheaper HVAC system – those savings would help.

But, emphasizes Corder: “This building is very modest…This is not a Cadillac. This is a Honda Civic at best…People keep asking, ‘Can you cut this? Can you cut that?’ But this is very bare bones.”

Despite a budget shortfall for the fire station, for the first time since 2008, the city saw a General Fund revenue surplus of $600,000 to $800,000. The additional money, explained Corder, was thanks to extra development activity on the Island, or construction-related sales tax revenue and development permit fees.

The number of single-family residential building permits is up by 23.8 percent from last year.

“Compared to Bellevue or Kirkland where retail sales are the bread and butter, for us it’s people doing additions or remodels of some kind. Since 2004 — that’s when it really started taking off, and it’s still continuing now.”