Effects of oil prices push landscaping costs higher

High oil prices have rippled into the landscaping industry, raising costs for landscape contractors, commercial property managers and tenants.

Local landscape contractors have been hit with huge increases in the cost of petroleum-based products, such as fertilizers, pond liner and sprinkler pipe, and they're passing some of that on to customers.

Lebo Newman, a co-owner of Signature Landscapes in Reno, says the cost of sprinkler pipe and parts has jumped 50 percent to 100 percent, and fertilizer prices have risen 10 percent to 30 percent in the last year. In some instances last fall, he says, suppliers raised prices twice in one day.

High fuel prices have raised the cost of non-petroleum-based materials, too.

"Virtually no plant material is grown here," Newman says. "It's all brought in from California and Oregon, so the nurseries have added on fuel surcharges."

Some landscape contractors are also adding fuel surcharges. But others, such as Signature Landscapes and Affordable Landscaping Inc., have chosen not to go that route.

A.L.I. president Bart Brocklehurst says his company ate some of the extra supply costs, raised maintenance prices by 2 percent to 3 percent and sent letters to customers explaining the increase.

Newman says his company is negotiating with vendors as much as possible, and is using some larger machinery to improve productivity. But the company can't absorb the entire cost increase, he says. Signature builds the higher cost of materials into its bids for construction work and is charging slightly higher hourly maintenance rates than a year ago.

Judy Cook, director of property management for Colliers International in Reno, says landscape contractors' bids have gone up for both labor and materials. Other trades, including plumbers and electricians, have also raised their prices. As a result, she bumped her maintenance budget up by about 5 percent.

Tenants with leases requiring them to pay all the operating costs, such as utilities, insurance, landscaping and maintenance, are feeling the pinch. The operating costs for one property managed by Colliers, for instance, rose 45 percent to 42 cents from 29 cents per square foot in the last year, Cook says.

Whether rents for full-service leases will go up depends on what the market will bear. It's better for an owner to eat some of the rising costs than to increase rent too much and lose tenants. "A five-minute vacancy costs money," Cook says.

A lot of clients are looking for ways to save on energy and water use, Cook says, including installation of xeriscape, which requires less maintenance and water than traditional landscaping.