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Despite bid problems Delray moves on Federal Highway project

By Palm Beach Business.com

DELRAY BEACH — Delray Beach city commissioners agreed Tuesday to move forward on the Federal Highway beautification project despite a low bidder for the job who apparently was too low.

The decision will mean the city and the Community Redevelopment Agency will have to cough up an extra $1.3 million. But it will also get the project under way and most likely completed months sooner than if commissioners had decided to re-bid the project. And it likely will ensure the city gets to keep $2.8 million in federal highway grants for the work.

The project, in the works for 10 years, essentially means making permanent those funky temporary markings  and barriers on Federal Highway that reduces three lanes on the north- and south-bound sides to two lanes per side. Hardscape will be installed and landscaping will be added.

The problem, however, is the low bidder for the project, Ric-Man International, missed a couple of key items when putting together its proposal for the project, including a requirement to work some nights. It told state highway officials it could not stand by its bid of $11.2 million.

The No. 2 bidder, Sealand Contractors, will do the project but for $12.5 million.

City Engineer Randal L. Krejcarek recommended that commissioners reject all bids and solicit new proposals, but that would have pushed the project back to February or March, and put the city in jeopardy of losing the federal grant, which has been in the works for years.

“We do risk the possibility of losing the federal funds,” Krejcarek said. But “we feel we can get a better price if we rebid.”

Mayor Woodie McDuffie noted that there are no assurances that the project cost will go down substantially if the city rebids in large measure because the economy is in recovery mode, which could mean higher prices.

Commissioners also weren’t happy with the prospect that Ric-Man International might be in a position to bid and win the job at a higher amount.

“I’ve seen projects that needed to be re-bid,” McDuffie said. “This isn’t one of them.”

Commissioners are expected to formally let the contract at its Dec. 4 meeting.

Also Tuesday, commissioners set a schedule for interviewing the five finalists to become the next city manager. Commissioners will conduct interviews individually on Dec. 6, with a reception for the candidates that night. On the 7th, commissioners will conduct public interviews beginning at 9 a.m. Interviews are expected to take place every 45 minutes or so.

City Manager David Harden is retiring at the beginning of the year.

Commissioners got a quick overview of why the police and firefighters pension fund has underperformed the city’s general employee pension fund over the past few years. Jon Breth of the Bogdahn Group, the firm that manages the fund, said it stems from a decision years ago to diversify the portfolio beyond traditional stocks and bonds into such things as real estate.

That decision coincided, unfortunately with the tanking of the real estate market.

The general employees fund, meanwhile, has a traditional stock/bond portfolio mix.

Breth said the police and firefighters fund had a strong 2012, earning $16.8 million after fees, while the general fund had a slightly better year as stocks continued to outperform. Breth, however, said the decision to diversify was based on providing stronger returns over the long term rather than market conditions of the moment.

 

 

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