Officials attribute increase to rush to finish work by year’s
end and spiraling cost of materials
Gilroy – The city has not yet started its major overhaul of downtown Monterey Street, but the price tag of the project has already jumped by more than $1.13 million, according to city officials.
In March, after PG&E workers are finished laying gas lines, construction crews are expected to begin tearing up a two-block section of Monterey Street to make way for a new road, wider sidewalks, new street lights and other improvements. When complete, the portion of road between Fourth and Sixth streets will have angled parking and no medians.
But the rush to complete the work before the end of the year and spiraling costs for materials such as asphalt and concrete have caused a spike in the overall budget, according to City Transportation Engineer Don Dey. He said officials now estimate the streetscape project will cost $5.37 million.
The increase will leave the city picking up a bigger share of a project that relies on $2.9 million in state and federal grants.
The need to switch proposed contractors prevented the city from trimming $400,000 from its share of the tab. A review of the $3.7-million project bid from the Don Chapin Company, the contractor now working on the sports complex just south of Luchessa Avenue, has found that the contractor failed to meet hiring guidelines.
Projects involving federal money require construction companies to farm out a percentage of the work to subcontractors classified as “disadvantaged businesses enterprises,” small businesses owned by low-income people, minorities, or some other economically or socially disadvantaged group. In cases where bidders fall short of the mark, city staff must review the bid to ensure the company made an effort to hire disadvantaged businesses.
The city requested that 19.2 percent of the Streetscape work go to disadvantaged businesses, Dey said, but the Chapin bid earmarked less than 1 percent for that group.
“We looked at a variety of areas and said we do not believe they made a good faith effort. They didn’t do enough outreach, didn’t do enough follow-up,” Dey said. “That clearly was a red flag for us. The next two low bidders both exceeded the 19.2 percent threshold. For whatever reason, the other two companies did the outreach and met the goal.”
On Monday, council members are expected to approve the next lowest bid from Golden Bay Construction, of San Carlos. The company’s bid came in at $4,130,555 and exceeded federal hiring guidelines.
Despite spending two weeks reviewing the Chapin bid, Dey expected the streetscape project to end by its original completion date at the end of October, in time for the holiday shopping season.
City Administrator Jay Baksa said officials would plug the budget shortfall buy using $1.5 million intended to extend streetscape improvements to side streets off Monterey.
“Sounds like normal construction (issues),” said Michael Brownfield, who runs a vacuum store in the heart of the project area along Monterey Street. “There are always cost over-runs. Getting it done on time – that’s the most important thing.”
