From: Jennifer Cline

Sent: Thu Oct 29 13:32:18 2015

To: Gerald Fisher

Cc: Dan Huff

Subject: FW: CPI versus CCI (ENR)

Importance: Normal

Attachments: CCI_CPI1984-2014.pdf;

Hi Gerald,

Jimmy, one of our City councilors, had a question about using the CPI versus another index that may better represent capital improvement projects. I let him know that I would follow up with you on that question and let him know why you chose the CPI versus another inflation index. Let me know your thoughts.

Thanks,

Jennifer Cline, P.E. | Public Works Director

Licensed in OR, WA

City of Molalla <http://www.cityofmolalla.com/>

117 N Molalla Ave. | PO Box 248 * |Molalla, OR 97038

O: 503.759.0218 | F: 503.829.3676

-----Original Message-----

From: Jimmy Thompson [mailto:jthompson@cityofmolalla.com]

Sent: Thursday, October 29, 2015 11:25 AM

To: Jennifer Cline <jcline@cityofmolalla.com>; Dan Huff <dhuff@cityofmolalla.com>

Subject: CPI versus CCI (ENR)

CPI and CCI (construction cost index, prepared by the Engineering News Record, or ENR.

Historically, they tend track relatively close together. I attached a graph I found. I am fine with whatever index you determine fits better. My only concern is that if a future council does not do a rate study regularly, there may be a gap because consumers are not buying the same thing as engineers or contractors.

I mentioned to Jennifer about asphalt. I did an analysis recently to do some projections on fuel prices and the effects on the road fund. Because of the low price per barrel, and expectation on inflation, there should be savings from fuel prices. But costs are going to increase because while the price of fuel has gone down, more efficient production is leaving less for making asphalt, and the cost of asphalt has increased anywhere from 10-14%. Right now, the CPI is near zero. The CCI is around 2%.

http://enr.construction.com/economics/

http://www.bls.gov/news.release/cpi.nr0.htm