Commissioners put cap on added cost for beach restoration fuel costs

INDIAN RIVER COUNTY – County commissioners voted Tuesday to approve additional funds to help cover the increased cost of fuel for the ongoing beach restoration project.

That approval, however, has a cap of about $261,000 to cover only the sand placed on beach as part of the project’s second phase.

Commissioners did not approve paying for higher gas prices for the sand that was placed during this round of restoration that had been scheduled to be placed during the first phase.

A representative of Ranger Construction, the firm hired to perform the restoration work, expressed opposition to the commissioners’ move to limit the funds to be paid out.

Bob Schafer told commissioners that he had been under the impression that the county was going to set a system in place to determine the actual fuel cost difference on a weekly basis, which would be paid by the county. He said he did not expect them to cap that amount.

“We’re very concerned about the cost,” County Administrator Joe Baird said, adding that – at the rate the project is progressing – using inland-sourced sand will cost more than the county originally estimated for off-shore sand.

The county’s beach project is a test case for using inland sand for restoration. Commissioners approved going that route due to the projected cost savings it was purported to have over off-shore sand.

As it is, contractors and county staff do not believe Ranger can deliver all the sand needed by the end of April, especially now that one of the mine’s two dredges has become disabled and there are no plans to fix or replace it.

Public Works Director Chris Mora told commissioners that they are projecting between a 100,000- and 120,000-cubic-yard shortage for Phase Two.

“We’ve got some decisions to make,” Mora said, explaining that the county might have to choose between abandoning the unfinished portion of the project or extending it to a third phase.

“It’s going to cost us more money” if the project is dragged out to another phase, Mora said.

His current estimate is an additional $700,000 for engineering and monitoring.

Commissioner Wesley Davis voiced concern about having the issue of fuel costs continually return to the board, noting he’d rather get the project done and not slow it down. He ultimately voted against implementing a cap to fuel cost adjustments.

“You know, this project, we basically opened our checkbook,” Baird said. “We’ve opened our checkbook as much as I think the county needs to.”

He reminded commissioners that the county has made numerous concessions to Ranger Construction, including pre-paying for excavated sand to help expedite the project at the start of the second phase.

Baird said the county now needs to encourage Ranger to get as much of the project complete as quickly as possible, adding there is no incentive if “we have an open checkbook. This thing has become an open checkbook.”

Budget and Finance Director Jason Brown told commissioners that he felt it is the in the county’s best interest to limit the pay-out for fuel costs based on potential fuel increases.

Brown said that he run the numbers based on what a 20 percent cost increase could mean for the county. That number would expose the county to about $400,000.

“It’s pretty poor negotiating,” Brown said if Ranger asks for $280,000 and the county offers back $400,000.

“We want to be fair,” Commissioner Peter O’Bryan said. “But at the same time we want to get the project done.”

He said that if fuel prices were to continue to increase above what the county’s cap is at, then Ranger should share in that pain.

As for extending the project to a third phase, which could start in late 2011, O’Bryan said the county would have to renegotiate that contract before moving forward.

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