Des Moines seeks $1.2 million contingency to finish 20 Fourth Avenue South project after utility conflicts

City engineers told the Des Moines City Transportation Committee on March 13 that the 20 Fourth Avenue South improvement project has incurred roughly $1.2 million in additional costs after repeated conflicts with a franchise utility, and staff will ask the City Council to amend the construction contingency to finish the work.

The committee heard a presentation from Kyle Le, principal engineer, who said the project — segment 2 of 20 Fourth Avenue South, which adds a two‑way left turn lane, curb, gutter, sidewalk and bike lanes — ran into multiple unplanned utility conflicts during construction. "We encounter multiple, like, conflict with PSC, like, utilities, which led to, 2 different, like, expansion of work," Le said during the presentation. Le and other staff recommended adding contingency so the contractor can be paid and the roadway work completed on schedule.

The additional contingency requested is approximately $1,200,000. Staff told the committee that the funding would come from the arterial paving fund (the same fund that paid last year’s overlay program) and that, as a result, some overlay work planned this year will be deferred. "That 1,200,000.0 is basically exactly what we spent on last year's overlay program. So, with this, you're not going to see overlay this year," a staff member said.

Committee members pressed staff on the causes and on the city’s ability to recover the cost. City staff said the primary cause was delays and incomplete relocations by the franchise utility; staff have escalated a claim under the franchise agreement and are negotiating with the utility. "We met our obligations under the franchise agreement... they assured us that they would be ready for us to go forward and they were not," a staff member said. The city has documented direct contractor costs and negotiation efforts; staff said the city attorney believes the claim has a high likelihood of recovery but that the process could involve negotiation, arbitration or litigation and may take time.

The presentation included a line‑item summary of added costs staff attributed to the utility conflicts and suspensions of work: an early suspension overhead item of about $235,551; utility‑impact productivity losses of roughly $41,580; a larger delay impact listed at about $298,620; a separate suspension overhead of about $65,000; a rough allowance for inflation/material increases of about $150,000 (still under negotiation); increased project management and inspection costs (described as roughly $240,000 and tied to about 53 additional working days); a temporary construction easement extension and consultant support around $100,000; and about $40,000 in additional franchise utility forces. Staff said many of these items were reduced through negotiation with the contractor and that some are still being negotiated.

Staff also emphasized schedule and safety priorities. A city representative said the project will resume construction in late March and that staff "anticipate the completion by the October of this year," with most paving work expected to be finished before the first day of school. City staff said they are coordinating with Highline School District on frontage work and that a development agreement is under preparation so the district can incorporate its frontage improvements into the city project.

On next steps, staff said they will bring a motion to the City Council to amend the project contingency and continue negotiations with the utility to recover costs. Committee members said they supported completing the work for safety and school access and encouraged aggressive pursuit of recovery from the franchise utility.

Votes at a glance: the Transportation Committee approved the meeting minutes for Jan. 9, 2025, by voice vote at the start of the March 13 meeting (motion moved and seconded; "All in favor? Aye. Approved."). No committee vote on the contingency amendment was recorded — staff said the change would be requested at an upcoming City Council meeting.

Why this matters: the project is a major arterial improvement adjacent to school frontage; the committee was told the additional contingency will come from arterial paving funds and that delaying recovery could defer other paving projects. The city is proceeding to finish construction while pursuing a claim against the franchise utility under the franchise agreement.

What remains open: the exact settlement amount the franchise utility will accept, the timing and form of any arbitration or litigation, and final confirmation of the council action to amend contingency.