McKim & Creed’s Southeast regional manager explains that the construction costs are rising because of the ‘boom economy’
Before they unanimously agreed this week to another $3,071,400 for the services of McKim & Creed, Sarasota city commissioners peppered the firm’s Southeast regional manager about the overall expense of the Lift Station 87 project.
“One of the biggest cost factors is that we had to deepen everything 8 feet to build the microtunnel safely under the [Hudson Bayou] bridge,” Robert Garland explained during the board’s regular meeting on Oct. 16.
That microtunneling had to go through “really hard limestone,” he added.
Moreover, “we’re in a boom economy for the construction market,” he added, with shortages of workers and materials driving up expenses.
McKim & Creed recently saw cost estimates for a project it is managing in Hillsborough County come in 20% to 30% higher than expected, Garland pointed out.
In response to questions from Mayor Shelli Freeland Eddie, Garland explained that the bulk of the funding in the contract amendment before the board on Oct. 16 was for the firm’s services in overseeing the actual construction of the lift station in Luke Wood Park. The facility will be able to withstand a Category 3 hurricane, staff has emphasized.
The lift station will be fully aboveground, he added. “This is a very unique facility,” Garland said, because most of those structures are underground.
The facility is expected to be completed in late spring of 2020, the city’s utilities director, Mitt Tidwell, has told the board. Garland noted on Oct. 16 that a pre-construction meeting has been set for Oct. 31. His goal, he added, is to expedite the completion timeline.
A memo provided to the City Commission in advance of the meeting says, “Industry standard fees for design and engineering costs will generally run between 10% and 15% depending upon the complexity of the construction project. McKim & Creed’s fees for the entire construction project … are estimated to be approximately 19% of construction costs.”
Anthony Centurione, the city’s capital projects engineer, pointed out that a State Revolving Fund loan the city received for the project will pay for $2,320,000 of the latest contract amendment with McKim & Creed. State law allows up to 10% of the proceeds of such a loan to be used for technical services for construction, Centurione added.
The expense for Phase I of Lift Station 87 was about $8 million, Centurione explained; for Phase II, about $21 million. Phase III will cost about $5 million, Garland added.
The Oct. 16 contract amendment will boost the total amount paid to McKim & Creed to approximately $8 million, Centurione noted.
The memo says the total is $8,338,876.
A work in phases
The city has been in litigation since February 2013 with AECOM, the firm that originally handled the Lift Station 87 project, City Manager Tom Barwin told the board. The city invested about $9 million in that earlier attempt, he said.
Not only has McKim & Creed been handling the design and engineering for “an unusually complex construction project which was previously delayed due to poor engineering,” the memo to the board says, but representatives of the firm also have been deposed in the litigation against AECOM.
In fact, Garland told the commissioners on Oct. 16, he was scheduled to give a deposition in the case the following day.
“This has to do with the total restarting of Lift Station 87 after the first failed attempt,” Barwin said of McKim & Creed’s work for the city.
After the firm was hired in August 2013 to take over the project, Barwin continued, its staff determined that the microtunneling designed by AECOM would have come close to hitting the Hudson Bayou bridge and might even have struck it, “creating perhaps millions and millions of dollars of potential liability to the city.” Such an incident also would have necessitated the redirecting of traffic from that portion of Osprey Avenue “for a long period,” he pointed out.
“In essence,” Barwin said, McKim & Creed “had to start from scratch and redesign the project so it could be completed safely.”
Previous city commissions chose to divide the overall project into phases, he explained, so the board members could provide “important guidance” at each step.
The microtunneling was completed successfully in the spring, Barwin noted. The pipeline is encased in steel and then surrounded by concrete, he explained. “[It] should be there … for probably 150 years or more. … It’s deep underground.”
Because of the complexity of the project, he continued, it is necessary to have every step of the work vetted and inspected, which has been McKim & Creed’s responsibility.
Barwin said the hope is that the city will win its lawsuit against AECOM and recoup $10 million to $20 million, though the attorneys representing the city “will not promise anything.”
He anticipated the court case to take another year “to work itself out.”
The new Lift Station 87 will handle one-third of the city’s wastewater, Barwin noted. It will serve Sarasota Memorial Hospital and the surrounding medical complex, as well as residential customers, he added.
The final phase of the project is not anticipated to begin for about two years, Garland noted. That will entail the connections to the new lift station, the diversion of flow from Lift Station 7 to Lift Station 87 and the resurfacing of streets after the lines have been laid, Barwin said. New water wells will be installed, too, Barwin noted, because that infrastructure in the project area is old and needs to be replaced. He has pointed out in the past that the water line work will be more cost-effective in coordination with the sewer line installation.
“This project frustrates me, the money we’re spending on it,” Commissioner Hagen Brody said. When Brody asked whether the board is bound to proceeding with it, Garland replied, “Yes.”
When she was elected to the commission about two years ago, Vice Mayor Liz Alpert said, “I asked the same question. It wasn’t feasible to change then. … It’s been moving down the track too many years to stop it.”
“The city has done a very good job of protecting its investment, with the phased approach,” Garland told the board.
Commissioner Willie Shaw said he believes the residents whose homes will be connected to the new lift station “will be more than relieved with the way that this has come out. … We’re doing very well, I think, on this one …”
Shaw made the motion to approve the contract amendment; Commissioner Jen Ahearn-Koch seconded it.