A nearly $800,000 cost overrun for the installation of more than 200 light poles on part of Atlantic City’s Boardwalk could delay the rest of a project that eventually will improve lighting along the entire promenade.
Officials are trying to keep the project on track. But the cost overrun comes as public agencies are already having trouble funding a multi-million dollar initiative to improve the five-mile-long Boardwalk.
The Atlantic City government says Atlantic City Electric charged $3.3 million to remove existing light poles and put in new ones on the Boardwalk between Albany and Connecticut avenues last spring — the first phase of a project targeting the entire walk.
The project was expected to cost more than $2.6 million, according to a contract between the city and the utility, with the Casino Reinvestment Development Authority slated to pay $2.5 million of it. Revel meanwhile had agreed to pay $115,000 for a portion of lighting installed on the Boardwalk in front of the megaresort.
Instead, the CRDA was billed $3.3 million, including for the section of lighting in front of Revel.
Besides the apparent $115,000 billing error, there’s also disagreement about how much it cost to replace each pole.
Atlantic City Public Works Director Paul Jerkins said the overrun breaks down to $3,000 per pole for 220 poles, or $660,000 extra.
“We’re still trying to find out where the problem came in and who made the error. Unfortunately, right now, that’s one of our holdups because we don’t want to do the second phase until we’re quite sure of what we’re going to pay them, and I’m sure Atlantic City Electric doesn’t want to do it until they’re sure of how much they’re going to get paid,” Jerkins said.
Revel casino spokeswoman Maureen Siman said the casino still intends to pay for its agreed-upon share of the first phase.
“We’re just awaiting resolution of what’s in the plan versus what’s in the field and awaiting the final bill,” Siman said.
It is unclear what exactly ran up the bill. ACE representatives said laborers had to perform extra work to correctly install the poles, which costs $115 per hour, its city contract states. The company declined to provide more details.
State law requires contractors to seek a change order as soon as they know their actual costs will exceed what they projected. That did not happen here, according to the city.
The law limits increases between projected and actual costs to 20 percent for most public projects.
There are exceptions, however, for cases — such as this — where virtually no alternative contractors exists.
When the city sought reimbursement from the CRDA, the agency balked.
Because of the cost overrun, CRDA staff is scrutinizing invoices and has not reimbursed the city, said spokeswoman Kim Butler.
The second phase of removal and re-installation of lights was scheduled to replace lighting between Albany Avenue and the Ventnor border at Jackson Avenue in the resort’s Lower Chelsea neighborhood.
Upon finishing light installation in Lower Chelsea, Atlantic City Electric workers were to immediately move onto the Boardwalk north of Connecticut Avenue, under the original plan.
But most of that area is badly dilapidated. Concerned about worker safety, Atlantic City Electric won’t send crews to that section of boardwalk until it’s repaired and structurally sound, said Ken Mosca, the company’s public affairs liaison.
The city recently started making repairs with pine to the Boardwalk because it’s cheaper than — but lasts half as long — as ipe, rainforest wood that was used in the past. City officials have qualified for a $2 million FEMA grant to help pay for that.
Unless they get matching funds by next year, the grant will expire.
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