Undergrounding of Utilities Town Update

The Town of Palm Beach will move forward with a Peer Review of the Town-Wide Undergrounding of Utilities Master Plan, which includes the cost estimates, phasing and sequencing plans. The process requires the Town hiring an independent engineering firm to review the current master plan. The Town, with input from the Underground Utilities Task Force, has created a Request for a Proposal for firms interested in providing Peer Review services.

A Peer Review selection committee has been created and will review the Proposals and make recommendations to the UUTF and Town Council. The Peer Review will not slow down the project nor stop the project team from getting “shovels in the ground”. Rather, this process is intended to take a parallel track to the detailed design and construction efforts.

The Palm Beach Civic Association has agreed to fund 50%, up to $50,000, of the Peer Review cost.

The Peer Review process was used successfully with the Town’s ten-year shore protection plan and ultimately provided strategic advice to the Town.

The Undergrounding of Utilities Master Plan recommended the Construction Manager at Risk (CMAR) project delivery method to implement the undergrounding work. The CMAR project delivery method helps ensure the project phases do not go over budget and provides more schedule control throughout the undergrounding construction phase. CMAR was successfully used during the Lake Towers undergrounding project as well as many other large infrastructure projects that have been completed by the Town.

The Town Council approved the use of CMAR during the planning process for Phase 1 of the undergrounding project. The Town has selected separate construction managers to complete the work with Burkhardt Construction (selected to complete the work in Phase 1 north) and Whiting Turner (selected to complete the work in Phase 1 south).  At the April 13th Town Council meeting, the preconstruction survey budgets for Phase 1 north and south were approved.

With this approval, both construction managers will initiate development of a Guaranteed Maximum Price (GMP) to be presented to the Town for eventual Town Council approval. Each phase of the project (there are eight total) will be going out to bid separately to ensure transparency, accountability, and competition amongst proposing construction managers.

At the April 13th Town Council meeting, Council members reviewed the proposed assessment methodology that is being considered to repay the General Obligation Bonds that would be secured to fund the project. The methodology used is following a similar formula to what other municipalities have done to finance undergrounding projects. The Town tweaked the assessment methodology that could result in a reduced annual assessment for condo owners of about $49 and an increase in the annual assessment to single family homes by about $90.  The Town is also working with the assessment methodology to see how properties with above ground equipment such as transformers can be given a credit that would go towards reducing their assessment.

Due to the ongoing lawsuits, the Town cannot secure the General Obligation Bonds needed to fund the project.  Due to inflation, for each month the project is delayed the cost of Phase 1 increases approximately $29,000 per month. The Underground Utilities Task Force recommended that the Town Council seek proposals for a one, two or three year line of credit to help fund the beginning of the project until the bonds can be secured.  By seeking a line of credit for the initial phases of the project, the Town will be saving millions of dollars in the overall project budget due to current low interest rates and use of assessments to reduce the amount to be borrowed.

The Town Council took two actions regarding undergrounding financing:
1. The Town Council made a motion which directed staff to draft a resolution for implementing the proposed assessment methodology. The motion only directed staff to draft the language and was not a vote in approval of the methodology.  The Town Council will be voting on the assessment methodology resolution at a later Town Council meeting following public notice requirements.  The motion passed.

2. The Town Council made a motion which directed staff to issue a request for proposals for a line of credit from banks and financial institutions. The line of credit would be used to fund the undergrounding project until the General Obligation Bonds can be secured.  The motion was only to seek proposals which would then be presented to the Town Council for a vote. The request would take approximately 60 days to complete and then presented to Town Council for final approval. The motion passed.

Residents along Nightingale Trail & La Puerta Way are in the construction process of a neighborhood undergrounding project. The Nightingale/La Puerta Undergrounding of Utilities Project is a neighborhood project that was approved by residents in the project area prior to the 2016 Town-Wide referendum. Residents approved the utilization of the special assessment process for funding the project.  The installation of conduit and equipment has already begun with undergrounded utilities scheduled to become operational in late summer with overhead poles coming down in the fall of 2017.

The Town is working with local groups, organizations and property owners to host undergrounding presentations to keep residents informed. To schedule an undergrounding presentation for your community organization, please contact: Underground@TownofPalmBeach.com.

Read the latest news, updates and stories about Undergrounding online at www.Undergrounding.info/Notices