Council Discusses Project Overruns

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1On Monday, May 12, Milford City Council voted to approve transfers from reserve funds to cover two project cost overruns for the city. One transfer was for $45,000 for the Washington Street Water Treatment Facility and the other was for additional costs for the remodeling of the PNC Bank building.

“There were some delays related to the Washington Street pump station which has required an additional $45,000,” said Erik Retzlaff of Davis, Bowen & Friedel. “The project was supposed to be completed January 3, but was not completed until February 5. The contract for the project allows the city to withhold up to $1,500 per day for each day the project is extended, and that totals about $20,000.” City Manager, Richard Carmean, said that the transfer of funds was to cover outstanding bills, but that the city still had funds owed to the contractor that would not be sent until the project delay situation was worked out.

The second transfer was to cover $4,090 for inspections and architectural work for the remodeling of the PNC Bank building, which is planned for use as the city’s billing office. Mr. Carmean explained that some cost overruns are to be expected in construction projects.

“For the PNC Bank building, the extra costs were for additional inspections and architectural costs we had not anticipated,” Mr. Carmean explained. “We had all the drawings done and the Fire Marshall came in and requested drawings of the basement and other floors that we did not intend to use, but since he asked for them, we had to comply. We also had to have inspectors review the vault door and determine what to do to keep it from locking. We want to keep the door for the aesthetics, it is a beautiful old door and adds to the look of the building.” Mr. Carmean also explained that the building was 80 years old, and he wanted to be sure it was structurally sound. In addition, he requested additional soil testing due to previous businesses that had been located adjacent to the bank in order to be sure the property did not need extensive clean-up work.

Councilman Dirk Gleysteen expressed concern over what appeared to be quite a few cost overruns for projects in the city, stating that it seemed as if projects were rarely under budget.

“What suggestions can you make to keep council apprised of how contracts are moving along?” Councilman Gleysteen asked Mr. Retzlaff. Mr. Retzlaff explained that when it came to construction, costs constantly change, so it is difficult to prepare for unforeseen circumstances. Mr. Retzlaff said that in the case of the Washington Street project, issues were uncovered that they did not expect, which is not unusal when dealing with a 45-year old system.

Mr. Gleysteen asked if there could be a template that would show council throughout the project to keep them informed regarding areas that are above or below budget. Mr. Carmean explained that one of the reasons he asked Mr. Retzlaff to come to council meetings was to keep council informed and to explain why a project was over or under budget.

“We have projects like Front Street where we tear the street up for one thing and find water issues we have to address,” Mr. Carmean explained. “It is those types of things that I like to have Erik come here and explain so that council has the full picture before they make any decisions.”

Council voted unanimously to transfer the funds for both projects from reserves into the General Fund.