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Cost overruns prompt request for additional $250,000 for Lincoln and Monroe downtown paving project

UPDATED: Thu., Nov. 30, 2017, 9:37 p.m.

FILE - Downtown road construction at Sprague Avenue and Monroe Street in downtown Spokane on Tuesday, Nov. 1, 2016. The city is now seeking an additional $250,000 above the original contract cost to pay for unexpected costs, including additional paving and traffic control, that would bring the total bill for the two-year downtown paving project to $3.6 million. (Jesse Tinsley / The Spokesman-Review)
FILE - Downtown road construction at Sprague Avenue and Monroe Street in downtown Spokane on Tuesday, Nov. 1, 2016. The city is now seeking an additional $250,000 above the original contract cost to pay for unexpected costs, including additional paving and traffic control, that would bring the total bill for the two-year downtown paving project to $3.6 million. (Jesse Tinsley / The Spokesman-Review)

A request for new funds in the city’s effort to repave downtown sections of Lincoln and Monroe streets has raised some eyebrows on the Spokane City Council.

The request, put forward by the city’s engineering department this week, would add a quarter of a million dollars to the project’s price tag, raising its final cost to $3.6 million.

Kyle Twohig, the city’s engineering operations manager, apologized to the council Monday for the cost overruns.

“It’s absolutely my fault,” Twohig said. “I should have come in and requested more reserves for (the project). I do apologize for that. I did not know where we were going to land.”

The project’s initial price tag included a 10 percent reserve to cover overruns beyond the $3.1 million contract. Those initial reserves have already been spent.

Twohig attributed the need for additional funds to a series of small-scale adjustments the city requested from the firm conducting the repaving, made largely to ensure the project – which drew the ire of some surrounding businesses for blocking downtown shopper access – would be completed more quickly.

The city authorized increased overtime in August 2016, a move which increased the final cost of the contract by nearly $40,000. The use of portable lights to allow nighttime paving cost the city an addition $67,360, according to contract documents submitted to the city by T. LaRiviere Equipment & Excavation, the Athol, Idaho-based contractor overseeing the project.

A message left for the project manager with T. LaRiviere for comment on the paving work was not returned Thursday.

Multiple council members raised concerns that the city was now asking them to increase the budget for the project after work had already been completed. After laying down a single layer of asphalt for the winter, crews completed the paving and sidewalk work on the busy downtown couplet this summer.

“I think we were just taken by surprise,” said City Council President Ben Stuckart, who said in his nearly six years at City Hall he couldn’t remember another project where city staff asked for additional funding so long after a project’s completion.

Stuckart said that although he had reservations, he’d seek a majority of the council to approve the request from city staff, and would bring the resolution forward for a vote Monday.

“We’ve got to find four ‘yes’ votes,” Stuckart said. “That’s my job.”

Stuckart said he didn’t blame Twohig specifically for the cost overrun. When he was appointed the city’s engineering services manager in 2013, questions were raised about his lack of an engineering degree.

“Kyle’s a great project manager,” Stuckart said. “Whether he has an engineering degree or not, that wouldn’t have any effect on not keeping track of additional expenses.”

The proposed resolution increases the reserve amount set aside for the work with additional money from the city’s Arterial Street fund, which includes all the funds set aside for road projects throughout the city planned for the next six years.

Per city policy, $312,000 was set aside when the contract was signed in April 2016. The city is now requesting an additional $252,000 to timely pay back the subcontractors who handled traffic control and performed sidewalk-cutting and installation work, as well as additional paving on side streets in the roughly eight-block grid torn up not only for repaving, but also utility work as part of the city’s pledge to repair subterranean lines at the same time as road surfaces.

Marlene Feist, strategic development director for the city’s Public Works division, said she didn’t believe there was a formal policy that requires officials to approach the council as a project’s budget approaches the maximum allowable amount.

“Certainly, if we believe we’re going to go over the administrative reserve, we seek an expansion of the reserve amount,” Feist said.

Public works officials have approached the council to approve projected cost increases on other projects. In November 2013, the council was asked to approve an additional $1.4 million for construction strengthening the Greene Street Bridge following what was described as a consultant’s error by city engineers.

The additional cost was approved in a series of adjustments known as “change orders” that were requested and approved by city engineers, according to paperwork on file with the city. In October, the amount of those change orders – which now number close to 30 for the entire paving project – began to exceed the $312,000 reserve amount.

City Councilwoman Candace Mumm said she didn’t oppose the additional spending to speed up the project, but believed the question should have been put before lawmakers earlier.

“We need to come up with a better way. Otherwise you impact other projects,” Mumm said.

City Councilwoman Karen Stratton indicated she may vote against authorizing the additional money. If the council were to deny the request, the city would return to the contractor to negotiate an “equitable” adjustment to the contract amount, Twohig told the panel.

“I’m glad that he explained it to us,” Stratton said. “I just think, at what point do we say ‘Enough is enough, we’re not going to approve this.’?”

Feist said the lessons learned from the downtown paving project, which included work on complicated underground vaults that hadn’t been unearthed in decades, had already informed the work on the recently completed East Sprague roadwork, and could be seen in next year’s North Monroe corridor revisions. Instead of leaving a road lane open and requiring additional money to pay for temporary traffic control, the city completely shut down portions of East Sprague to speed up the construction work, Feist said.

“To maintain a lane of traffic through that kind of construction is very slowing,” Feist said. “It really impeded the project. It was difficult having pedestrians walking through that construction zone.”

The project’s difficulties weren’t just confined to work crews.

Mr. Tux, the men’s formal wear clothier at the corner of Lincoln Street and First Avenue, filed a nearly $250,000 claim after cement dust filled their basement storage facility as a subcontractor cut sidewalk cement outside their front door in October 2016. Heidi Cane, a manager at the shop, discovered the problem and told the workers outside to immediately stop what they were doing.

“You had to go down there with a mask,” Cane said. “They cleared up everything about the middle of February, which was good because that’s our big homecoming and prom season.”

The claim, which was filed against the city last year, was eventually settled between the shop owner and the contractor, said Tim Dunivant, Spokane’s director of finance and head of risk management. Pursuant to the terms of its contract with T. LaRiviere, the city wasn’t required to pay any damages, he said.

Teresa Gonder, co-owner of Tamarack Public House, said the business survived the construction season exclusively through its event-hosting business. Walk-in traffic took a 50-percent hit during the roadwork, and even Health Department officials delayed their inspection visits to avoid the traffic snarls created by the downtown work, Gonder said.

“It took all our working capital to stay afloat,” said Gonder, whose business will celebrate its third anniversary this February. “But people are finding us again. Coming in to the city is easy now.”