Finance committee advances $25 million disappropriation after sewer project bids come in under estimate

The Newark City Council Finance Committee on Jan. 20 voted unanimously to disappropriate roughly $25 million from a previously budgeted $65 million allocation for the 16 North sewer separation project after the lowest construction bid came in at about $38 million.

An unidentified presenter told the committee that three bids were received and the low, successful bid was approximately $38,000,000, leaving about $25,000,000 that the city no longer needs to keep appropriated for the project. Council member Barker made the motion to disappropriate and Hauser seconded; the committee voted 5–0 to advance the measure.

Committee members asked why bids were substantially lower than the engineering estimates. "We originally budgeted $65,000,000... the low most successful bid was 38,000,000," the presenter said, and noted the city’s engineers had included a 20% contingency in their estimate. Questions from a commenter identified in the transcript as "Mister Allen" and others elicited responses that the bidding environment had grown more competitive, in part because of recent local economic developments and because the winning contractor was experienced with similar local projects.

The presenter said lead times for pipe and related materials have shortened, which also affected bid pricing, and added that other material costs such as concrete and asphalt remain high. Committee members and staff described confidence in the winning contractor based on prior city projects.

The committee recorded the motion as approved by a 5–0 vote. The disappropriation will reduce the budgeted appropriation level for that project and return the excess to the general fund for reallocation through later action by council or administration.

The committee adjourned the finance session following the vote.