SEQUIM — Plans for new traffic signals at the Washington Street intersections of Sequim and Third avenues remain on hold.
The City of Sequim received only one bid on the project, which was almost twice the cost of the city engineer’s estimates.
Sequim City Council members unanimously voted against the approximate $778,000 contract from Interwest Construction at the Oct. 25 council meeting.
Outgoing public works director Matt Klontz reported city staff’s estimate was about $405,000.
“It was dang near double what we budgeted for,” Klontz said. “There’s a lot of strange market headwinds — to people being busy, to not having labor to deliver projects — it’s endless.”
Working under the name The Washington Street Traffic Signal Upgrade Project, it would replace the intersections’ signals from 1986 and their cabinets and controllers, add pedestrian crossing signals and a yellow phase for left-turn movement.
City staff budgeted $450,000 for the project in the proposed 2022 Sequim budget.
Interwest was the only bidder during the bid period of Sept. 20-Oct. 12.
City staff members report they will investigate alternative options to finish the project, including obtaining the needed equipment on their own and only soliciting bids for installation. They also will consider a more favorable time to advertise bids for more competitive bids when contractors are less busy, but it’s unknown when that would be, city staff said.
Budget’s upward trend
Planning for this year’s city budget was completed 1½ years ago, but Sue Hagener, Sequim’s administrative services director, said on Oct. 25 that tight budgeting led to trending overages in several areas of the budget as of Sept. 30 — including streets, water and sewer costs.
Calling it a “COVID Budget,” Hagener said planning came “right in the height of businesses’ shutdown, so our revenue forecasts were a little horrifying, and we slashed budgets to accommodate the uncertainty.”
For example, she said, street operations were over the anticipated budget as of Sept. 30 by $15,000 for this time of year.
Some of that includes maxed-out overtime (about $14,000), and traffic and pedestrian expenses going over about 144 percent of budget so far (about $63,000) for items such as deferred crosswalk maintenance.
Water was about $138,000 over budget, and sewer was about $159,000 over budget as of Sept. 30, Hagener said. For sewer, she attributed higher expenses to the Wastewater Treatment Plant being down two employees and staff maxing out overtime at $25,000, and increased costs for treatment as hand sanitizers are impacting production of biosolids at the plant.
With equipment, city staff allocated $53,000 for updating audio/video equipment for city council chambers, and $121,000 for updating the city’s virtual applicant (software environment for running computers and applications).
Council member Mike Pence asked when they’d stop spending because everything is going over budget, including a mower estimate that was $13,000 more than budgeted. He added that with fewer projects moving forward, they should hold off on buying larger equipment.
“I’m not trying to place the blame on anyone,” he said. “It either costs more or not. Make the decision to buy it or punt it.”
Klontz said staff missed the cost increase and were surprised at the increase.
“When budgeting, you’re moving fast at times,” he said. “It was a gloss.”
Sarah VanAusdle, assistant public works director, said it was budgeted for in 2019 and deferred because of COVID-19 to this year, and that staff should have estimated for more in price as the “cost of goods has gone up exponentially.”
Council member Keith Larkin said he’s concerned about the increasing costs despite revenue sources increasing. With council members opting not to raise utility rates for the second year, he doesn’t want to see deep revenue losses next year as city staff propose moving funds to make up for overages.
“I anticipate we will be slightly over budget,” Hagener said. “Staff just need to go back to the drawing board about what we’re not going to fund … I can eliminate a transfer out of streets’ reserve, or out of the water fund. If that’s an option you want us to do.
“We’ve just trended out of where we think we’re going to be.”
Matthew Nash is a reporter with the Olympic Peninsula News Group, which is composed of Sound Publishing newspapers Peninsula Daily News, Sequim Gazette and Forks Forum. Reach him at [email protected].