INDIAN RIVER COUNTY – Ranger Construction will receive a $150,000 check from Indian River County to help cover the increase price of diesel fuel the miners, truckers and movers are using to put sand on the beach.
The check is a temporary measure to appease the contractor and the subcontractors while county staff work to develop a formula to better gauge the price difference in fuel.
The $150,000 represents approximately half the amount Ranger Construction had requested from the county. It was enough, at least temporarily, to stave off the threat of strikes from the truckers.
“We’ve had a threat of mutiny,” said Ranger Construction Vice President Bob Schafer said.
Ranger was hired in 2009 to rebuild more than 6 1/2 miles of beach along the barrier island from Treasure Shores Beach to Indian River Shores. The effort is expected to require more than 580,000 cubic yards of sand.
The original contract was for $7.27 million, but has grown to $10.3 million, before the $150,000 allocation for fuel.
Dredge operator Chuck Kramer reminded the Board of County Commissioners that this beach renourishment project is the first of its kind, and as such, not everything could be anticipated.
When Ranger bid the project in August 2009, the cost of diesel was $2.60/gallon – now, it’s at $3.60 per gallon.
“The fuel cost is kind of crippling,” Kramer said.
Schafer told commissioners that the project uses about 3,500 gallons of fuel daily, from dredging the sand, hauling it, and placing it on the beach.
A year ago, in March, Schafer had told the commission that they would not seek additional money to get the project done. At that time, diesel had risen from $2.60 to $3 per gallon – but Schafer did not request a fuel adjustment, he reminded the board.
“We assumed that risk,” Schafer said of fuel prices going up. “We absorbed it.”
Commissioners balked at cutting a $303,000 check to Ranger, explaining that they did not agree that the fuel adjustment should be based on the August 2009 price as Ranger requested.
Instead, they decided to use the price of diesel as of March 23, 2010 – when Schafer promised to lock in the price per cubic yard of sand.
“I believe they were sincere,” Commissioner Peter O’Bryan said.
Commissioner Gary Wheeler recommended that the county offer a fuel adjustment based on sliding scale where both the county and the contractor pay for the increased fuel cost.
“We’re all in this and we’re all losing money,” Wheeler said.
Commissioners agreed to have staff and Ranger figure out a formula to determine the fuel cost difference and apply that difference to the amount of sand delivered.
As it is, county staff does not believe that Ranger can complete the second phase of the project by the April 30 deadline.
County Public Works Director Chris Mora said that as of last Friday, March 11, only about 14 percent of the sand had been delivered to the beaches.
“He is behind,” Mora said of the contractor.
So far, approximately 2,000 linear feet of dune has been rebuilt and 600 linear feet of the beach template has been filled.
The current projection is that time will run out with about 80,000 cubic yards of sand left to deliver. The area expected to be shorted over the summer is the Seaview community – approximately 4,500 feet of beach.
If the project cannot be completed by April 30, Schafer said they would finish after sea turtle nesting season in November. He said the company would be willing to stockpile sand at the mine over the summer and forfeit their mobilization fees.