Streetcar developer needs extra $492k for project

CINCINNATI, OH (FOX19) - Streetcar developer Messer/Prus/Delta Railroad JV has requested about $492,000 in additional funding for the project.

MPD was the lowest bidder, but their bid expired when the project was delayed. The additional funding is related to increased costs for materials and labor.

City manager Milton Dohoney issued the following memo to members of city council and Mayor Mark Mallory:

With City Council's approval of $17.4 Million as well as the award of an additional $5 Million in federal dollars in funding to the streetcar project, the streetcar project is sufficiently funded to proceed with the award of a construction contract to Messer/Prus/Delta Railroad JV (MPD), the low bidder. The Administration is in the final stages of those discussions and we expect that to be executed in the immediate future.

The project team has been meeting regularly with MPD to discuss additional cost and schedule changes related to the delay between the anticipated Notice to Proceed (NTP) date of April 8,2013 and the new award date. MPD has requested additional funding in the amount of $492,933 related to increased costs for materials and labor resulting from this delay. This is covered in the current project budget. 

As discussed before Council, The Administration was not able to negotiate the final contract provisions and associated costs until the money was available. No reductions to contract scope are included in this contract. We're very glad that the MPD team has remained committed over the last few months and it underscores our confidence that they are the right choice for our project.

The project team has reviewed MPD's request and has concluded that the costs are reasonable and represent estimated costs associated with the delay in contract award as well as the risk that Messer and City are willing to take to due to this delay.

"We have always said that the streetcar was something we cannot afford," councilman Chris Smitherman argued. "This is just yet another example that the cost is going up by another $500,000 dollars."

The increased cost will be covered under the current project budget which has a built in contingency fund that pays for unexpected expenses.

"It's already an overrun before we even started building the streetcar," Smitherman said. "So this is an appropriation that should be subject to approval by city council."

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