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Utility Undergrounding Surprise
Art Olson | Avenida Primavera

UPDATE: undergrounding project delayed for at least 3 months while consultant helps coordinating committee find a way to lower costs.  10/31/09

Del Mar North Hills Undergrounding Project

Graphic Art Olson. Word Cloud via www.wordle.net

While progress has been made in the move to underground utility lines in the North Hills and Sunset Districts of Del Mar, there was good and bad news with regard to the construction costs, and another slippage in the schedule.

The City received bids for trenching and conduit work from 13 independent contractors and from SDG&E. Bids were made for the two Undergrounding Districts both separately and combined. The combined bids ranged from a low of $4,011,779 to a high of $10,546,631. The SDG&E bid for the work was $9,201,351. The AM Ortega Construction Co., who submitted the lowest bid was chosen at the October 5 Council meeting. According to Assistant City Manager Mark Delin, the City was comfortable choosing the lowest bidder since Ortega had previously done undergrounding work in Del Mar and in Solana Beach . This low construction bid was good news.

While the city requested alternate bids to include screening improvements around the above ground utility boxes for the Sunset District, these costs were much higher than originally estimated and were not part of the awarded contract.

A delay in getting total construction costs and distributing the draft property assessments is due to the need for clarification of the SDG&E bid. The cabling costs, which includes materials and the installation, must be done by SDG&E. The City discovered that these costs were not in the original SDG&E bid, and that for both districts SDG&E would charge $4,453,000 for the work. According to City Engineer Ernesto Aquilar, the City was “astonished at the cost,” and is pursuing SDG&E regarding the significant increase from the past. Aquilar summarized initial discussions with SDG&E stating that these costs “won’t change much.” As of this writing, there is still an effort to negotiate these costs down.

In addition to contracted construction costs the City Council approved an additional contingency fund not to exceed $600,000 for unforeseen site conditions. Construction makes up about 80% of the total project costs, according to Aquilar, the other 20% is spread between engineering, project coordination and financing costs.

Until the SDG&E costs are firmly established, the draft assessments will not be sent out to property owners, and the community meetings to discuss them will be delayed accordingly. Also, because of a lack of a quorum for the scheduled November 2 City Council discussion of the draft assessments, it will also be pushed back.

The costs, as they currently stand, are a disappointing surprise in that the hoped for savings that were expected due to the slowdown in the construction industry would be offset by the increase in SDG&E cabling costs and would total to an estimated $9 million for construction for the two districts. Thus the total cost for the project would be in the range of $11.3 million and the average assessment per property would be approximately $24,000. If the cost estimate stands, many feel that such high assessments could weaken the chance for a positive vote on moving ahead with the undergrounding.

 
 

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