PORT TOWNSEND — The failing south jetty at Point Hudson will not be replaced this year.
After months of discussion, a majority of port commissioners voted to reject all bids Wednesday night, and thanked the contractors for their time and effort in preparing their proposals.
Commissioners Steve Tucker and Bill Putney voted to suspend the South Jetty Breakwater Project, citing lack of funds to pay for the jetty work and the port’s overall financial condition.
Commissioner Pete Hanke abstained from the vote, citing his conflict as a tenant at the Point Hudson marina.
Hanke owns Puget Sound Express, a whale watching cruise operation.
He also said after the meeting that he didn’t necessarily agree with the position taken.
Eric Toews, director of planning for the port, has said that four construction firms submitted bid proposals. American Construction Co. of Tacoma was the apparent low bidder in the amount of $3.991 million.
This bid exceeds the engineer’s final estimate of the probable construction cost of $3.709 million by $282,119.
Toews said Wednesday the low bid, combined with project’s “soft costs” of project management and engineering support and contingencies that total more than $650,000 in staff’s estimation, exceed the money the port has presently allocated for the project by $1.2 million, making the estimated total funding needed $4,679,119.
“As this analysis and memorandum makes plain, the port simply lacks the resources to proceed with the project within the time frame that was originally anticipated,” Toews said.
Hanke asked Towes what the bid environment would be like in one year. Toews said he didn’t know.
“There is no hard and fast number, but it would be more costly according to Mott MacDonald, the engineering firm that consulted with the port on this project,” Towes said.
Responded Hanke: “That number is so critical to this decision and I’m unhappy that we don’t have some estimate as to what that number might be. “How do we make this decision on whether to delay or not?”
“What I would say, unequivocally, is that I lack a crystal ball,” replied Toews. “In my conversations with Mott McDonald, they, too, lack a crystal ball. We can make some reasonable assumptions about inflation and increased costs between now and then.
“What we don’t know is what the bid environment in Puget Sound will be in a year and whether or not the economic circumstances will remain largely the same in a robust economy and a really competitive market or not.”
Said Port Executive Director Sam Gibboney: “The escalation of the price is not a linear function.”
She said some of fluctuation is caused by certain parameters, some beyond their control, and some that were important to the commission and the organization such as daily openings to keep the marina operating and their tenants in business.
After a lengthy discussion, commissioners voted to indefinitely postpone issuance of a $3.4 million limited tax general obligation bonds. The commission did not want to use any bond funds for other capital projects at this time that would reduce the bonding capacity available for the jetty.
Delaying the project indefinitely could result in both the forfeiture of the remaining BIG Tier II grant funds — a state grant originally of over $1 million — and repayment of grant monies expended to date, which total approximately $176,562.
The port had about $175,000 in donations from the public pledged to the project if it would be going ahead this year, according to officials.
The south jetty replacement project has been ranked the top priority of the port’s capital projects since 2015. The existing jetty would be removed and a redesigned jetty will be constructed at the entry into Point Hudson Marina.
The port also will have to tackle sometime in the future the north breakwater at Point Hudson, a project that is estimated to cost $2,253,000.
The two Point Hudson breakwaters are failing and in need of replacement. Point Hudson serves as the hub of the maritime center’s biggest annual events, such as the Wooden Boat Festival and Race to Alaska, which bring in tourists and community members.
As of this month, the port’s current financial health seems to be improving, said a port official.
“The port is headed in the right direction,” said Abigail Berg, director of Finance and Administration, on Thursday.
“Trends are up year-to-date, revenues are above last year’s by 11 percent, we will pay off another bond this year — which means less debt, and we are building up our cash balance.”
Gibboney said staff will seek an extension for the BIG Tier II grant, which was awarded in 2016, and develop an operation plan, capital repair or risk mitigation actions, and emergency and/or jetty failure response plan.
Staff also will look into other funding mechanisms such as grants, lenders and lines of credit.
Jefferson County Editor/Reporter Jeannie McMacken can be reached at 360-385-2335 or at [email protected]