Memo-12-11-2018-Item-11

December 11, 2018

MEMO TO:        Mayor Barber and Board of Commissioners

FROM:             Randy Martin, Interim Town Manager

SUBJECT:       Eastern Emerald Isle Post-Florence Beach Nourishment Project - (Summary & Suggestion Motions)

As a result of beach erosion caused by Hurricane Florence, the Board will consider a Resolution authorizing a Construction Contract with Great Lakes Dredge and Dock Company, LLC.  The previously determined project scope would be increased from ~ 471,000 cubic yards over ~ 3 miles of beach to fully replace the sand losses caused by Hurricane Florence.  The project limits would include the area from the Indian Beach town limits to just west of the Ocean Drive “dog-leg” vehicle ramp.  The project would now include the construction of a 25 ft. wide dune up to elevation +12 sea level, installation of new dune plantings, and the construction of a 40 – 60 ft. wide flat beach berm at an elevation of +6 feet above sea level.

Enclosed is a FACT SHEET for the expanded scope project provided by Greg “Rudi” Rudolph, Shore Protection Officer, including a breakdown of the results of the re-bid of the project on December 4th.  Rudi and I will be prepared to discuss in detail at the meeting the Eastern Emerald Isle beach nourishment project report and this information in total. 

As the Board was previously advised, rather intense negotiations have been underway since the re-bid opening.  As previously publicly announced, the bid solicitation had to be advertised again because only one bid was received at the first scheduled opening.  Only one bid was received at the second opening as well.  It was from Great Lakes who was also the lone bidder who responded to the first solicitation.  Great Lakes is a reputable company that has done considerable work locally and regionally in the past.

Mr. Johnny Martin, lead engineer with Moffat & Nichol, Rudi and representatives of Emerald Isle and Indian Beach have had a number of discussions/meetings on the project and bid results.  The agreed upon strategy has been for the engineers to take the lead in negotiating with Great Lakes on potential opportunities to lower the bid amount.  The focus was on items in the bid that exceeded expectations and some changes in the contract documents desired by the contractor.  The biggest item of concern to us was the mobilization/demobilization costs included which are significantly higher than estimated. For perspective, this element of the bid was approximately $1.9 million higher which comprises roughly the equivalent of 10% of the total project.  The other major items including the largest number for the construction portion are at, near or even below the estimates provided in advance by the engineers to the towns. 

Unfortunately, the negotiations to date have not resulted in any recommended change in the base bid amount or contract documents.  The parties did not finalize our collective municipal recommendations until late on Friday afternoon after negotiations did not produce a desired outcome. The engineers’ report including my bid recommendation and supporting documents has just been received and is included in the agenda package for distribution. The agenda documents will be supplemented on Monday with any additional documents received from the parties. 

All this background shared, I will recommend at the meeting that the Board authorize a project contract which will stipulate completion of the project in Spring, 2019. This recommendation to authorize the contract is supported by Rudi on behalf of the County/Beach Commission and Tim White, Indian Beach Town Manager on behalf of Indian Beach.   Tim will be presenting his recommendation to the Indian Beach Board on Wednesday after our meeting on Tuesday.  It is my understanding the Beach Commission has already authorized their required actions regarding the Salter Path portion of the project.

Obviously, none of us want to see the partners pay any more than is necessary for the work and would prefer that the project be delayed until we know for certain that FEMA and state matching reimbursements are firmly committed.  However, the bottom line is sufficient funds are available in the reserves to go forward and award the contract contingent upon the concurrence of Indian Beach and the County through the Beach Commission for the Salter Path portion.  Realistically, a federal/state reimbursement commitment for Florence is months away at a minimum which would preclude a 2019 project if we chose to delay until 2020.  

After personally riding the eastern beach area that is included in the contract scope with FEMA officials on Wednesday, I do not believe it is in the Town of Emerald Isle’s best interest to delay the project.  The risk of additional damages within the next year is in my opinion too high.  Further, although the affected Towns and County have not received formal commitments yet, I believe it reasonable to expect to receive significant reimbursement for the impacts on the entire beach from Hurricane Florence.

As for available and committed funds to cover the cost of this project, Emerald Isle, Indian Beach and the County representing the Salter Path portion have received a $5.0 million grant from the state’s Coastal Storm Damage Mitigation Fund which is available in its entirety for this project.  The distribution of this amount is based upon the share of the beach fill estimated for each community.  The Emerald Isle share is approximately 65% which equals $3,263,703 as indicated on the fact sheet.

The County reserve for beach projects through the Beach Commission provides 75% of the balance of the project cost with the Towns responsible for the remaining 25%.  Based upon the bid document as illustrated, the Emerald Isle portion including the contingency would in the worst case total $2,596,338 which would be taken from the Town’s beach fund reserve of approximately $4.0 million.  Again, it is not in my opinion unreasonable to expect that the Town will be reimbursed from FEMA sufficiently to replenish this fund in its entirety for future beach nourishment needs after the Florence reimbursements are expended.

As a final note, the capital project ordinance previously adopted and amended recently by the Board is at this time sufficient without further action to allow for the Board to authorize execution of the proposed contract.