Change orders for Confluence Drive "exhaust and exceed" the contingency fund allocated for the $28.3 million project, city manager Justin Clifton announced at last week's council meeting.
The city set aside $1.1 million, or 5% of the project cost, for contingencies.
A sizable chunk of the contingency fund was previously used for soil stabilization of a beet disposal site near the Foster Farms silos. The most recent change orders also involve soil, specifically the need for import and export of soils.
A key factor is the exchange agreement with Union Pacific Railroad, which was finalized this month after extensive negotiations. But Union Pacific is refusing to grant access to UP property to construct truck route-related improvements until after the rail line has been relocated and "seasoned."
"On the schedule we're looking at a seasoning period that starts in mid-October so we're not looking to be able to access that property until mid-November," public works director Jim Hatheway explained to council members.
When the road was designed, Hatheway continued, the city anticipated being able to excavate road material from the south end, where the rail line will be relocated, to the north end. Since UP is denying access until later this year, the project from 5th Street north becomes an "import heavy" site and the portion of the project is now an "export driven project," Hatheway explained.
"What was originally bid as a single project has developed into two projects separated by 5th Street," Hatheway said.
There is a silver lining, he added. City staff, Hamon Contractors and representatives from Stantec, the bypass design firm, put their heads together and found a solution at Riverbend Park. The new city park is being developed on the north side of the Gunnison River. The site was formerly occupied by a gravel pit and will have to be reclaimed before the park is opened to the public. Hamon agreed to complete a portion of the reclamation work on the north side of the existing lake and transport the road material to the truck route.
"We're essentially getting double benefit," Hatheway said.
The construction team also identified some savings, but the bottom line still exceeds the project contingency by $257,212, Hatheway said. There may also be a potential scheduling issue, he added. If Hamon has completed the bulk of the project before access can be gained to the UP property, there could be additional costs for remobilization.
"We're trying to capture some of those costs [in this change order]," he said. "We want to present as realistic a view moving forward as possible."
The city accepted UP's position "not without much pleading," Clifton added. "We tried to explain the financial impact, but they have the prerogative and they exercised it. We elected to move forward on parallel tracks to begin construction in the midst of negotiations when we didn't have any guarantees. This is one of the outcomes."
The city received an additional $1 million award from the Department of Local Affairs that eases the pain a bit, Clifton said. Still, it's likely the city will have to transfer funds from Citywide Capital Improvements to the Confluence Drive project. A transfer would bring the Citywide Capital Improvements Fund below $1 million, and the fund would then need a year or two to recover. That would prevent the city from undertaking any significant projects in other areas of the city. "That's the real struggle," Clifton said.blog comments powered by Disqus