Monday, April 21, 2014
AUGUSTA -- Officials scrambled recently when they learned it will cost nearly $2 million more than expected to fix roads near a reconfigured Exit 113 and new regional hospital.
However, it appears much of that higher price tag will be covered.
The state Department of Transportation is on board, putting in an additional $1.2 million; and MaineGeneral Medical Center has agreed to increase its contribution by almost $580,000.
City councilors will vote Thursday on whether to increase by almost $220,000 the amount the city is providing through a tax deal.
The road improvement project has been long anticipated. It will connect Route 3 with Civic Center Drive and allow drivers to enter and leave Interstate 95 at Exit 113 from all directions.
It involves creation of two traffic circles and will provide better access to the Alfond Center for Health, MaineGeneral's new regional hospital, scheduled to open in November; and the adjacent Alfond Center for Cancer Care. The project is also aimed at easing traffic congestion at I-95's Exit 112, less than one mile south.
Ernie Martin, project manager for the Maine Department of Transportation, said the need to find more funding resulted largely from construction bids that came in higher than the $8.3 million state engineers had estimated. The low bid from Pike Industries Inc. was almost $9.6 million, which brings the entire project cost to almost $13 million.
Also, the cost of acquiring property and rights of way also exceeded estimates, Martin said.
"We had had $11 million in the cooperative agreement," Martin said.
That cost-sharing agreement to fund the project called for the state to pay 60 percent; MaineGeneral, 29 percent; and the city, 11 percent in the form of tax increment financing. Construction bids were opened Jan. 30. The state has 30 days after that to award the contract.
"The overall deficiency is $1.997 million," Martin said. "Again, it's the trials and tribulations of working on the planning estimate. Given the schedule constraints and availability of contractors to do this, we did receive only four bids. Given the size and complexity behind it, it kind of limits contractors."
The project is scheduled to start and finish in one construction season, and the roads are expected to be ready for traffic before the Nov. 9 hospital opening.
Paul Stein, MaineGeneral Medical Center's chief operating officer, said the hospital had planned to contribute more than $2 million to the project and is adding almost $580,000, bringing its total contribution to more than $2.6 million.
"We are currently working with the DOT to finalize the cost sharing," Stein said. "MaineGeneral is committed to working with the DOT to ensure this project gets completed, as it will provide easier access for the community to not only the Alfond Center for Health, which will be opening later this year, but also for the continued economic growth of the region."
Augusta city councilors on Thursday agreed to take up the matter of their increased commitment this week.
As part of the agreement for the project's funding, the city created a tax increment financing district encompassing the hospital property and an area along Old Belgrade Road surrounding it. The city agreed to contribute 50 percent of new property tax revenue generated by taxable development in that district over the next 30 years to the exit 113 project, up to a maximum of $1.2 million. The proposal they'll consider this week would raise that cap to $1.4 million.
If the district doesn't see enough development to generate $1.4 million in property tax revenue, the city won't be responsible for making up the difference.
"It doesn't require us to put any money up now," City Manager William Bridgeo told councilors at an informational meeting Thursday night. "It may never require us to put up money. In fact, I've looked at the map. The likelihood there's going to be $1.2 million of new property taxes in that corridor, I just don't see it. ... They'll come up with all the upfront money to actually pay the contractors and get the project done. It's just we'll have this obligation to them, only if it happens."
Councilors Michael Byron and David Rollins, both members of the TIF committee, indicated they would support the increased cap.