The Philomath City Council reaffirmed its commitment to the Downtown Safety and Streetscapes Project on Friday evening with unanimous approval of the city’s portion of a $2.5 million budget overrun on construction costs.
The Oregon Department of Transportation will pay $2.2 million of the amount over the estimated construction budget with Philomath committed to paying $326,024. The construction portion of the project had been projected at about $11.5 million and the low bidder came in at nearly $14 million. ODOT awarded the contract to Corpac Construction out of Portland.
“For a project as large as this and the times that we’re in, I feel like this is pretty good,” Philomath City Manager Chris Workman said.
Based on an initial breakdown of the overages, Philomath’s share had been projected at $599,042. However, Workman and ODOT worked out a deal to split the cost of street lighting to bring the city’s responsibility down to $324,024.
“To me, it shows this is an important project for ODOT and they recognized the hardship that would’ve been on Philomath,” Workman said, giving credit to the state agency when a councilor tried to thank the city manager for his negotiating. “Finding $324,000 is no small feat … we had another project already budgeted and it’s pretty simple to take that street money and put it into this street project.”
Workman said if the initial figure of around $600,000 had stuck, the city would’ve had a more difficult time coming up with the money.
“Off to a good start and I give ODOT all of the credit for being willing to help us out there,” Workman said.
The street funds that Workman referenced involve the amount earmarked for the North 11th Street Local Improvement District project — but that proposal was put on hold and the money became available to be used elsewhere.
“I think the council all knows that the funds from the 11th Street LID project are not a tax assessment levied against those property owners because the LID never got created,” City Attorney Jim Brewer said for the record, adding that grant funding that was also to go toward the LID’s establishment is also not included in those funds. “It’s all money that’s within the council’s control and we don’t have other conditions on it.”
The budget adjustment, scheduled to occur in January after the city’s audit is completed, also will have no impact on the financing of sidewalks to be installed on North 11th, Brewer confirmed.
The three unsuccessful bids were from K&E Excavating ($14.3 million), Knife River Corp. ($14.7 million) and Kerr Contractors ($17 million).
Further overages are always a possibility with such projects.
“We have a contingency built into this project … if there’s change orders, it’s going to go against that contingency first and foremost,” Workman said. “If it’s specific to decorative lighting, then they’re going to look to the city to pay that. If it’s not, then they’re going to have to put it towards that contingency and bring that contingency down.”
Workman added that there is a process built into the contract on how to handle change orders. Since it is ODOT’s contract, the city will not be involved with those decisions.
As for the project timeline, the most recent estimate appears to remain intact.
“We were supposed to go out to bid at the end of May and we went to the end of July (when the bid period closed), so that was the only bump or change in the schedule,” Workman said. “Murraysmith, our engineer, feels good about the time frame they set out. … As long as the contractor stays on that schedule, then yeah, there’s a lot of confidence that we’ll meet those time frames.”
The most recent project timeline published on the city’s website shows construction to begin next month.
Of course, there could always be other delays.
“Right now, we all feel pretty good but we don’t have any shovels in the ground,” Workman said. “There’s some variables out there still.”
The council could’ve chosen to walk away from its commitments to the project, a process that dates back at least 13 years, but no such conversation came up during deliberations.