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Homewood council approves ALDOT agreement to advance Lakeshore Parkway interchange; members warn on cost overrun risk
Summary
Homewood’s City Council on April 14 approved an agreement with ALDOT to advance a diverging-diamond interchange at the Lakeshore Parkway I 60 5 interchange, but councilors warned the city could bear any construction cost overages above $23,000,000.
Homewood’s City Council on April 14 approved a new agreement with the Alabama Department of Transportation to move forward toward bidding a diverging-diamond interchange at the Lakeshore Parkway I 60 5 interchange, voting 9-0 on resolution 25-56.
Councilors said the interchange is long-awaited and could improve traffic flow at a congested corridor, but several members raised procedural and fiscal concerns about the agreement’s allocation of cost risk to the city if construction bids exceed $23,000,000.
The council president introduced the item as the next step needed to get the project to bid by July. Members and staff said the city has budgeted its share and negotiated a new form of agreement with ALDOT so the project can proceed to procurement.
Discussion focused on the degree of the city’s financial exposure if the eventual construction contract and subsequent change orders push project costs above the $23,000,000 figure in the agreement. Several council members said they supported starting the process to test market pricing but that they were uneasy about committing Homewood to cover all overages beyond the stated figure without a mechanism to share or cap future excess costs. Council members asked staff to return to the council with any options available after bids are received, including exercising termination rights if the final bid or projected overages exceed thresholds the council finds unacceptable.
City staff and the council noted an out clause in the agreement that allows the council to decide whether to authorize construction after bids are received; the vote on April 14 authorized the agreement to proceed to the bid phase, not automatic construction. The council directed staff to bring the bid results and any recommended next steps back to the council for review.
Next steps: staff expects the project to be bid this summer and will present the bid results, cost estimates and recommended action to the council before any construction authorization.
