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City manager: Rocket Lane project far over initial estimate; change orders and penalties expected
Summary
City Manager Lanny Lambert told the council that Rocket Lane construction has exceeded the original MPO funding estimate and that change orders and disputed liquidated-damage calculations will be presented at the next meeting.
City Manager Lanny Lambert gave a detailed status update on the Rocket Lane construction project on April 15 and warned council that the road has exceeded original estimates and that several change‑order requests remain to be decided.
Lambert summarized the project's major cost components: utility relocation ($1,213,139), the 2022 low bid ($9,368,061.36), construction management ($932,947.98 to date) and design engineering ($624,868). He said those items combined pushed project spending ‘‘over $12,000,000’’ compared with an original MPO funding expectation of about $5.5 million when the project was initiated. He told council that the previous city manager had authorized about 20 change orders over the project and that the project currently includes roughly $267,215.14 in change‑order increases to date, with three or four additional proposed change orders totaling about $160,900 to be presented at the next meeting.
Lambert said staff is negotiating liquidated damages with the contractor and expects some credit: "we do have some penalty coming for penalties, although they're arguing with us on how much they should be penalized… $2.50 a day for 200 days, that's $50,000," he said in the discussion; staff noted the amount and calculation are part of an ongoing dispute with the contractor.
Lambert recommended the council examine whether certain functions now contracted out—construction management/engineering, building inspections and legal counsel—could be brought in‑house in future years to reduce long‑term costs. He told the council that hiring a full‑time city engineer (estimated market salary roughly $120,000–$140,000) could reduce reliance on outside construction management for large capital projects and potentially shorten schedules.
Why it matters: the Rocket Lane project began with an MPO funding estimate of about $5.5 million but has grown to more than double that figure when utility relocations, design and contracted construction management are included. Pending change orders and dispute over liquidated damages will affect the final cost and the city’s negotiations with the contractor.
Next steps: staff will bring the outstanding change‑order proposals and final reconciliation to the next council meeting; council will consider approvals and any contract adjustments at that time. Lambert also asked council to consider a future analysis of in‑house engineering and inspection staffing to potentially reduce costs on large projects.
