Rehoboth officials set to approve budget
Rehoboth Beach officials are set to pass the city’s 2017-18 budget despite continued questions about change orders and financing for the City Hall project.
The commissioners expect to take a vote on the budget at their Friday, March 17 meeting. The $28 million budget requires no new taxes or tax increases, and city officials say they can pay for a $2.6 million capital improvement program in addition to City Hall. Mayor Sam Cooper said the City Hall project will likely end up $2.3 million over budget.
The commissioners reviewed the latest round of change orders from contractors Whiting-Turner and some from Corrado Construction. There are $252,000 in outstanding change orders, including some that city officials have not yet reviewed. The city has already approved $787,000 in change orders since the beginning of the project. Most change orders, Cooper said, are fairly minor and were ultimately necessary. Most were changes that were unforeseen during the planning stage and were picked up once contractors were on-site.
At the commissioners’ March 6 meeting, Cooper said the largest change order on the list is $125,000 for stormwater management plan revisions; those costs are pending and have not been approved, he said. He said this work would replace pipes that were not in the original contract but are required to satisfy state stormwater regulations that were recently changed.
Another large change order is $59,000 for an underdrain for the foundation wall. Cooper said this price was negotiated down from $100,000. He said the concrete contractor had to leave a final piece of the foundational wall unfinished to install the underdrain and then return later to finish the wall once the drain was installed. He said the work put construction crews six weeks behind, and the contractor wanted to be paid for all six weeks. After negotiations, the contractor agreed to reduce those costs to four weeks.
Former Commissioner Walter Brittingham said there has been no transparency in the public’s ability to view the proposed changes.
“Nothing’s come back here. People don’t know anything. People are not being told anything, and it’s wrong,” he told the commissioners during the meeting.
Getting a handle on exactly how much the City Hall project will cost has city officials concerned. All told, the project is estimated to cost $20.3 million to $20.6 million, to be paid for largely through an $18 million loan from the U.S. Department of Agriculture for construction. Late last year, USDA wanted to close the loan with the city, offering a 2.375 percent interest rate. However, to justify that rate, USDA asked the city to include all costs related to the project, a number that included money already budgeted and spent by the city on planning work.
While getting the lower interest rate will ultimately save the city $3 million in interest payments over the 25-year life of the loan, closing starts the clock ticking on repaying principal and interest, whereas the city had anticipated only paying interest this budget year.
To view the updated list of approved and pending change orders, visit capegazette.com.
Budget meetings to resume in April
The commissioners plan to continue discussion of the city’s financial issues in April, starting with talks of the city’s benefit package for employees. Cooper has maintained that the city’s budget for employees is unsustainable.
City Manager Sharon Lynn had planned to hire a full-time public works director, someone with an engineering background who could oversee the streets, water and wastewater departments. While the commissioners agreed to set aside money for the position, they also agreed not to hire anyone for the role until discussion could be held on the city’s benefit package going forward.
