SANTA CRUZ — Transportation planners reported that one of the Santa Cruz County’s largest and most visible projects is several million dollars over budget, prompting local leaders to formally commit to footing the bill.
After some debate and consternation at its meeting last week, the Santa Cruz County Regional Transportation Commission unanimously agreed to allocate about $3 million of additional Measure D-Highway Corridor funds to ensure an effort to establish auxiliary lanes and bus-on-shoulder facilities along Highway 1 from 41st Avenue to Soquel Drive reaches the finish line.
Under the terms of state grants that made the project possible, Caltrans is responsible for staffing and construction costs while the commission, acting as the project sponsor, has to cover overrun fees.
“At the end of the day, we’re on the hook for the cost increase,” explained Mitch Weiss, interim executive director of the commission. “We’re not in a strong negotiating position.”
David Silberberger, Caltrans’ lead project manager, confessed to the commission at its meeting Thursday that Caltrans shoulders a large chunk of the blame for the increase due to an early budgeting oversight. Much of the extra costs, he said, were identified about a year ago after the state agency discovered an hours estimate from its surveys unit was not included in the original cost plan.
“We take our job very seriously. We don’t like to make mistakes and we did make one,” said Silberberger. “But additionally, we’re trying to make sure that we are keeping costs as tight as we possibly can.”
In addition to the hours error, Silberberger noted that consultant fees are also to blame for the project’s ballooning price tag. Caltrans has been having trouble finding local specialists to address certain construction components and instead has relied on consultants, who come at a higher cost, to get the job done.
But he also stressed that without the funding infusion, money could dry up in a matter of weeks which would halt the project and compound the added costs through lost work claims.
Commissioners Manu Koenig and Alexander Pedersen were the most vocally skeptical of the proposition and advocated for a “trust but verify” approach. Both commissioners expressed concerns that the commission didn’t have enough information about funding allocation from Caltrans or reassurance that an error like this wouldn’t happen again.
“I just don’t want to get into a situation where we’re approving a significant change here, certainly more cost, without the detail and then, you know, maybe opening the door for the same thing to happen again in the future,” said Koenig. “I’d feel more comfortable looking at this again at our next meeting in August with that detail before approving it.”
Silberberger and commission staff confirmed that plans are in place to conduct an audit of Caltrans’ spending to ensure the commission’s money is getting put to good use and so that it can recoup any savings.
According to Sarah Christensen, a senior transportation engineer with the commission, Caltrans’ original budget within the “construction support category” was $3.9 million, meaning, the new budget will be $6.9 million with the added $3 million.
Other commissioners, though also unhappy about the prospect of forking over more money, said cost overruns are a common feature of large infrastructure projects.
“This is not the first time this has happened, and it may not be the last time even for this project,” said Andy Schiffrin, an alternate for Commissioner Justin Cummings. “We’re on the hook because we asked for the project. We want to see the project done.”
Commissioner Sandy Brown said in her eight years of holding various positions in public office, only one project has come in under budget.
Still, a handful of commissioners weren’t convinced. Koenig made a substitute motion, seconded by Pedersen, authorizing as much as $1 million — instead of $3 million — and the ability to call an emergency meeting if funds ran out before August, when the commission was expecting to get more audit information.
That motion failed on a 7-4 vote, with Koenig and Pedersen joined by Commissioners Kristen Brown and Randy Johnson.
Moments after, the dissenting commissioners reversed course and joined the seven others in unanimously accepting the $3 million allocation. The commission also authorized the repurposing of about $186,500 of federal earmark funds to support the construction effort. The funds were left over from a 2014 project that established auxiliary lanes between Morrissey Boulevard and Soquel Drive.
The Soquel Drive to 41st Avenue project is the first of a three-phase effort to establish auxiliary lanes and bus-on-shoulder facilities down to Freedom Boulevard in Watsonville. This first phase, which broke ground last April, also includes establishment of 12 to 14-foot-wide bicycle and pedestrian bridge at Chanticleer Avenue stretching across the highway.
According to the project fact sheet, the first phase will cost $38.6 million with $5.2 million coming from Measure D and the rest from state and federal grants. The commission’s spending approval brings those totals to $41.6 million and $8.2 million, respectively.