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Price hikes for sand continue; progress lags

(Week of March 24, 2011)

Last week was a good week, price tag-wise, for replenishment of our North County beaches.  The project, now approaching $7 million over budget, only saw the cost of the trucked-in sand rise another $4,000.

The price will likely continue to fluctuate with fluctuating fuel costs, now that the county has basically caved in to the ultimatum from contractors, who despite a fixed price contract, made it clear the project would grind to a halt unless the county agreed to pay more for the work.

It was not such a good week, however, for progress.

Both the sand miners and Indian River County officials have now acknowledged that the North County project -- unless it’s scaled back significantly – will not be completed by April 30 when the annual sea turtle nesting season means equipment must vacate the beach. 

To complete the project by April 30  would require leaving oceanfront property in Windsor, Seaview and surrounding areas without the promised and needed amount of sand.

County Attorney Alan Polackwich on March 2 notified Ranger Construction’s surety company via certified mail that the County might file a claim against an $8.5 million performance bond and Polackwich told the County Beach and Shore Advisory Committee “There is at least some chance that all of this could end up in litigation.”

Though he said commissioners could approve an extension to the April 30 deadline allowing completion in the fall, Polackwich also on March 2 notified Ranger Construction that “the county will not consent or agree to any reduction in Ranger’s obligations under the Agreement.”

The upshot of the rising tab and the dragging out of construction into yet another season is that it’s putting the fate of future beach replenishment projects in peril.

Meanwhile, the owner of the only sand mine shown so far to be capable of producing beach-grade sand boasts that he has other buyers for the material – a curious boast given that his firm not being able to produce enough sand to finish the North Beach job on schedule.

As of Friday, contractors had placed 67,500 cubic yards on the beach and had constructed 1,600 linear feet of beach. That means only 11.5 percent of this phase has been completed, with less than six weeks to go. On a perfect day, about 4,200 cubic yards of sand is hauled and tested.

Despite much hand-wringing and complaining, the board of county commissioners last week approved the fuel factor cost increase -- the latest in a seemingly endless string of cost overruns on the second phase of the 6.6-mile beach replenishment project.

The request was for $303,000; contractor Ranger Construction got the thumbs up for half of that so far. “The board approved 50 percent of the requested increase as a preliminary measure,” said County Budget Director Jason Brown. In turn, he explained how the fuel cost factor system would work. 

“For example, the March 2010 diesel price index was about $3 per gallon.  If the prices for February were $3.30, then Ranger would receive an increase based upon a 10 percent fuel cost increase.  If March has a cost of $3.60, then the adjustment would be 20 percent,” he said.

The upcharge will be divided among the truck drivers, the contractor moving sand on the beach and the sand mine operating the dredge 12 hours per day to excavate and screen the sand.  Based on gas prices last week, that increase would be about 90 cents per cubic yard of sand for sand hauled last week – or about $4,000.

Figures from Brown’s office show that the project total, which was budgeted at $13.1 million inclusive of design and permitting, sand, monitoring and mitigation, has now risen to $19.7 million. A full $17.3 million of that is for construction. That price has more than doubled from Ranger Construction’s initial bid in the fall of 2009.

Unfortunately, gas prices aren’t the only factor causing the price tag of what’s known as the “Sector 3 Project” to rise. Delays in project completion are expected to cause the County to incur unknown tens of thousands of dollars in increased costs over the next three years.

At one point in the discussion at last week’s county commission meeting, a representative from sand mining interests suggested that if we “drag this out” into next season, we could “save some money.”

The statement referred to the slim possibility that diesel prices might drop substantially over time, but the miner speaking was looking at the project from the construction phase point of view.

County Coastal Engineer James Gray said the delays, and the possibility of a Phase 3 of construction, could in fact have a domino effect on the other costs of placing beach on the sand -- satisfying state and federal regulators.

“At minimum, we would need another notice to proceed and as far as further testing goes in the event that there is a Phase 3, our permit is silent on that,” Gray said.

“We never anticipated that this would take so long that there would have to be a Phase 3.