The new southern extension of Butterfield Boulevard might be complete, but a dispute over construction delays and cost overruns remains unresolved, according to City staff.
The roughly 4,000-foot four-lane roadway project extended Butterfield Boulevard from its previous terminus at Tennant Avenue, in a southwesterly direction to Monterey Road where it connects with Watsonville Road.
The City Council approved a construction contract with RGW Construction for about $14.9 million in April 2011. But at the project’s completion summer, the actual total cost came out to about $15.2 million, according to a City staff report. Both costs include a 5-percent reserve budget.
The project was delayed by 147 days, allowing the City to assess the developer a penalty of $2,000 per day according to the terms of the construction contract, according to Project Manager Julie Behzad. That penalty comes out to $294,000.
The City is also asking RGW to pick up the costs for unauthorized work, particularly on the sections of the project that include a bridge over the Union Pacific Railroad tracks, and a drainage basin. These costs are $10,449 for unauthorized excavation of the basin area, and $16,804 for the removal of asbestos material that was imported to, and then quickly removed from the site, City staff said.
The project required 21 change orders, which cost about $937,000, according to City staff.
The City’s total assessment of penalties and damages – which is disputed by RGW Construction – comes out to about $321,000, according to City staff.
The City and RGW are in discussions to resolve the disputed costs, but those discussions have not reached formal mediation or legal action, Behzad said.
Still, the City Council was scheduled to formally accept the project as complete at Wednesday’s Council meeting.
But the City is going to withhold a portion of a 10-percent “retention” amount paid up front by the contractor, until the dispute is resolved, according to Behzad. The City has the right to withhold up to 150 percent of the cost it says the contractor owes until a resolution is attained.
One of RGW’s disputes, according to a City staff report, is that the City owes the contractor an unspecified amount for extra work related to the importation of fill dirt to construct the railroad bridge.
RGW Construction Operations Manager declined to comment on the dispute before it is resolved because “it may well end up a legal dispute.”
The total budgeted cost of the Butterfield Boulevard extension project is $22 million, including property purchases for the road’s right of way, according to City staff. The project was funded mostly by the City’s Redevelopment Agency.
Construction started in the winter of 2012, and the project was completed in May.
