Scottsdale approves $43.7 million Scottsdale Road project despite 215% cost overrun, 5-2 vote
SCOTTSDALE, ARIZONA — September 24, 2024

Scottsdale approves $43.7 million Scottsdale Road project despite 215% cost overrun, 5-2 vote

City Council approved $43.7M Scottsdale Road improvement project with significant cost overruns and controversial roundabout design, while also confirming multiple board and commission appointments.

Scottsdale Council Approves $43.7 Million Scottsdale Road Project Amid Cost Overrun Controversy and Roundabout Opposition

Scottsdale City Council approved a $43.7 million infrastructure improvement project on Scottsdale Road from Joe Max Road to Dixileta Drive on September 24, 2024, despite sharp criticism over a 215% cost increase since the project's 2019 estimate. The five-to-two approval—conditional on quarterly cost reporting—revealed significant tensions over budget transparency, scope creep driven by drainage design, and a controversial roundabout conversion at Scottsdale Road and Dynamite Boulevard that residents view as likely to create traffic congestion.

The meeting began with a special session devoted entirely to board and commission appointments, during which Vice Mayor Adam Kwasman (serving as chair) presided over the selection of volunteer board members. The council appointed twelve candidates to eight different boards, including Jay Leopold to the Board of Adjustments; Chad Bennett and Michael Kravit to the Building Advisory Board of Appeals; April Holland to the Citizens Bond Oversight Committee; Rose Smith to the Historic Preservation Commission; James Somerville to the Human Relations Commission; Lee Coulie, Jeff Jameson, and Neil Shear to the Human Services Advisory Commission; Caroline Petran and Helen Whitecorn to the Judicial Appointments Advisory Board; and Kyle Davis and Carrie Wilcoxon to the Transportation Commission. The council also reappointed Michael Kravit, Jeff Jameson, Neil Shear, Chris Montgomery, and Carrie Wilcoxon to second terms. All appointments passed unanimously. The city affirmed Mayor David Ortega's appointment of Susan Galpin Tyree to the Public Safety Personnel Retirement System boards.

Key Speeches

"The roundabout was determined back in 2017, 2018 by our traffic engineering staff to be the most important configuration and operational improvements at this intersection due to the roundabout's ability to reduce those serious and severe crashes related to intersections." — Nathan Do, Transportation Planning Manager

"When I look at the cost increase breakdown, which I think I got because we asked the question, I really have problems with some of the cost increases. Admin CPM allocation greater than 100% increase—how do we justify that? I am not comfortable with that. I want more information on that." — Council Member Betty Janik

"Mortality rates are lower with roundabouts and I cannot argue with a lower mortality rate. So I think that is really a good decision to do the roundabout. Um, I'm guessing it's more expensive than standard lights, and the reason that there's fewer mortalities it's because people have to go slower and I think it's about time that the city and all of our residents realize that we speed way too much." — Council Member Betty Janik

"We have a shovel ready project. What that means is that to get to this point, to actually have a contract in our hand, it has been reviewed with competitive bidding. We are bidding against other cities trying to build four miles of highway." — Mayor David Ortega

"I'm going to vote no on this motion tonight. We hire professionals, train professionals to budget. I know we all know circumstances have changed drastically, but we also knew about the medians. We knew the fact that it floods there. That's not new information. We've known that forever. And so it's a 215% increase." — Vice Mayor Barry Graham

Timeline

Opposition

Number of speakers against: Zero formal public comment submitted.

Main concerns (as articulated by council dissenters):

  1. Unjustified cost escalation: A 215% increase from $13.9 million (2019) to $43.7 million demands forensic explanation, not vague references to inflation and pandemic disruption.

  2. Budget labeling inconsistency: The staff presented cost-increase figures allegedly tied to an "original" 2019 budget, but some figures were drawn from 2024 or mid-year CIP updates. This opacity undermines public trust and council oversight.

  3. CPM and administrative cost bloat: Construction Project Management and administrative allocations increased more than 100%. Barry Graham and Council Member Janik insisted these figures lack sufficient justification.

  4. Scope vs. cost ambiguity: Council members struggled to understand whether the $29.9 million increase reflected genuine design changes (drainage culverts, land acquisition) or inflated unit costs. Staff acknowledgment that design phase revealed unanticipated land needs suggested scope did shift, contradicting earlier assertions that "the scope didn't change."

  5. Roundabout controversy: Barry Graham explicitly stated the roundabout "is not consensual and controversial among residents." Residents fear traffic gridlock; critics argue the city prioritized safety metrics over livability concerns.

  6. Alternative project delays: Barry Graham questioned whether the $5.6 million drawn from the 0.1% transportation sales tax (earmarked for ALCP projects) would delay other approved projects. Staff denial that any projects face delay was met with skepticism, given limited ALCP funding and multiple queued projects.

  7. Utility cost responsibility: Solange Whitehead queried why APS's $1.7 million utility relocation cost fell entirely on the city rather than the utility. Staff clarified APS holds "prior rights" in the corridor, making the city liable for conflicts—a seemingly one-sided cost allocation.

Most compelling arguments:

Barry Graham argument that "we hire professionals, train professionals to budget" and the city has "known about the medians…known that forever" framed the cost increase not as an unavoidable market phenomenon but as a sign of poor planning or inadequate scrutiny at the 2019 stage. Council Member Janik's insistence on quarterly reporting and her note that "when you say a number is 'up to,' everybody seems to manage to get to that high number" reflected a taxpayer accountability posture grounded in household budget management principles.

Organized groups: None named or present.

Support

Number of speakers in favor: Zero formal public comment submitted; support articulated entirely by council members.

Main concerns (as advocated by supporters):

  1. Safety imperative: The intersection experienced one fatal and seven serious-injury crashes over five years. Roundabouts demonstrably reduce severe-crash outcomes compared to signalized intersections. This is empirical, not opinion.

  2. Drainage necessity: Scottsdale Road experiences recurring monsoon flooding that damages pavement, strands motorists, and requires costly repairs. The scope expansion driven by culvert design is a rational response to a persistent problem, not budget mismanagement.

  3. Market realities: Council Member Caputi, who works in construction, testified that a 215% increase over five years—spanning a pandemic, supply-chain collapse, and unprecedented inflation—is not anomalous. Concrete and steel remain volatile; contractors are risk-averse and demanding higher prices.

  4. Federal leverage: The city receives a 70% federal match and 30% local match. Declining the project would forfeit $31.1 million in federal and regional funds. As City Manager Thompson noted, unspent ALCP dollars revert to other cities; Scottsdale benefits from additional federal money "without taking it away from any other project."

  5. Design-phase discovery: Dan Worth (staff) and Mayor Ortega contextualized the cost increase as a natural outcome of moving from napkin sketch to detailed engineering. Ground conditions, hydrology, and utility conflicts emerge during design; estimates are revised upward. This is standard practice, not malfeasance.

  6. Comprehensive improvements: The project adds four lanes (two per direction), landscape medians (which Council Member Caputi noted "save lives"), a complete street with sidewalk and shared-use path, and culverts at four crossing points. It is not piecemeal; it is transformative.

Most compelling arguments:

Mayor Ortega's statement that federal money "puts $4.2 trillion dollars just to get us through the pandemic that caused an erosion of our dollar value that has never been seen before in this country" provided macro context. Council Member Durham's personal anecdote about Pima Road's post-rain flooding (which drainage improvements resolved) gave local, lived credibility to the drainage investment. Kathy Littlefield synthesis—comparing infrastructure design to sketching a kitchen on a napkin while drinking wine, then discovering reality diverges from the draft—acknowledged the inevitability of cost revision without excusing poor governance.

Organized groups: None named or present.

Project Details

Vote Breakdown

Outcome & Next Steps

Resolution 13188 approved. Hunter Contracting Company will execute a $29.4 million construction contract. Federal grants totaling $31.1 million (SHSP $1.8 million for roundabout; STBGP $29.3 million for corridor improvements) and local funds from the regional arterial lifecycle program ($8.9 million) and 0.1% transportation sales tax ($5.6 million across FY 2425 and 2526) will fund the $43.7 million total project. Construction to commence pending bid finalization. City Manager and Transportation Department will provide quarterly cost reports to council documenting cash flow, actual expenses against budget, and any scope changes or claims—a condition appended by Council Member Janik and accepted as a friendly amendment. The roundabout at Scottsdale Road and Dynamite Boulevard will proceed as designed, notwithstanding resident opposition. Safety improvements, including medians, drainage, and intersection design, are expected to reduce severe and fatal crashes along the corridor.

Controversies & Context

Budget Transparency and Labeling: Council Member Janik's most pointed complaint centered on what she termed the mislabeling of budget figures. Staff presented cost increases using an "original" budget that was not actually the 2019 figure but a 2024 CIP revision. Janik stated: "When you sketch something like when you sketch your new kitchen on a napkin and you're real excited and you're drinking wine, that design and that estimated cost in the reality usually don't quite match." This observation, echoed by Mayor Ortega, conceded that design-phase discovery is normal—yet Janik insisted the city clarify which figures were from 2019, which from 2024 updates, and which from April 2024 engineering estimates. As a scientist, she objected to inconsistent baseline definitions as a matter of methodological integrity.

Roundabout Opposition: Barry Graham stated plainly: "This roundabout is not there's not consensus on a roundabout on Scottsdale Road in fact I think I would argue it's very controversial." He framed the council's endorsement of the roundabout as a top-down imposition of safety metrics (lower fatality rates) over resident preferences. Council Member Janik countered by defending the roundabout on mortality statistics. A four-car accident at the intersection on September 23, 2024 (the day before the council vote), was invoked by Mayor Ortega as evidence that the intersection is genuinely dangerous. The council voted to approve the roundabout as part of the project, despite noting resident dissatisfaction.

Cost Drivers and Scope Ambiguity: The conversation exposed a semantic and substantive tension: did the project's scope change, or only its cost? Staff initially said scope did not change—all elements, including medians and drainage, were in the 2019 design. Yet City Manager Thompson and Dan Worth clarified that during the design phase (which began after the 2019 estimate), engineers discovered that the four culverts would require land outside the right-of-way, necessitating property acquisition not originally budgeted. Technically, the "scope" (the list of improvements) remained the same; the extent of land acquisition (the physical footprint) enlarged. This distinction, while technically accurate, proved unsatisfying to council members who viewed it as evidence of poor initial scoping.

Federal and Regional Funding Leverage: City Manager Thompson emphasized that the additional federal money from the Maricopa Association of Governments (MAG) ALCP program "does not come away from our current allotment" and that other cities' inability to fund their ALCP projects creates a pool of dollars available to Scottsdale without opportunity cost. Barry Graham countered that while new federal dollars may not displace other city projects immediately, the 0.1% sales tax local match is finite: drawing $5.6 million for Scottsdale Road leaves less for the three other ALCP projects in queue. Staff did not provide a specific list of delayed projects but implied that the ALCP portfolio is managed flexibly and no existing approved projects face certain delay.

Construction Market Context: Council Member Caputi noted that only two general contractors bid on the project, signaling that the market for large infrastructure is constrained. Contractors are reportedly risk-averse due to volatile material costs (concrete, steel, asphalt) and labor shortages. The 2019 estimate, therefore, was anchored in a fundamentally different market. Mayor Ortega's reference to "$4.2 trillion" in pandemic stimulus and the resulting currency erosion—an unusual federal fiscal argument to hear from a municipal executive—framed the cost increase as a consequence of national monetary policy, not local management failure.

APS Utility Liability: The $1.7 million APS utility relocation cost was attributed to APS's "prior rights" in the corridor. Arizona law apparently assigns relocation costs to the project proponent (the city) if the utility had established infrastructure first. Solange Whitehead found this arrangement inequitable but accepted it as a legal necessity. Staff did not challenge the cost; they characterized it as inevitable once APS's electrical lines were discovered in conflict with the culvert placement.

Duration

Other Notable Items

Board and Commission Appointments: The council held a special session dedicated to 12 volunteer appointments across eight boards and commissions. Adam Kwasman presided. Notable appointees included James Somerville (Human Relations Commission), who runs an HR consulting firm with 125 clients and expressed concern over DEI initiatives being "taken to the extreme"; Caroline Petran (Judicial Appointments Advisory Board), a 40-year trial and corporate counsel; and Carrie Wilcoxon (Transportation Commission), the State Traffic Engineer for ADOT and a 28-year Scottsdale resident. All appointments were uncontested and passed unanimously. The council also reappointed four sitting members to second terms. Mayor Ortega's appointment of Susan Galpin Tyree to the Public Safety Personnel Retirement System boards was affirmed by council vote (all in favor). This portion of the meeting was largely routine and ceremonial, with no contentious discussion.