Port Engineer Gary Gillette explained the cost estimate increases for Juneau’s cruise ship dock expansion to the City and Borough of Juneau Assembly Finance Committee at its Wednesday evening meeting, chalking them up to changes made to accommodate users of the Taku Dock.
The total project costs swelled in the July 2012 cost estimate from $85.3 million projected in April 2011 to $102 million, with the cost hike coming from modifications to the project design and bond interest expense increases.
When the Planning Commission met to discuss the project earlier this year, Gillette said, the owners of Taku Smokeries, local fishermen and others expressed “concerns about access into this area where they would dock to the Taku Dock.”
As a result, Gillette continued, the design was altered slightly, with trial runs using buoys to simulate the location of the planned docks helping to determine what changes had to be made.
“The point on the north end we held tight to where we were … and we rotated the whole thing out 50 feet,” Gillette explained.
Massive concrete floats were also rearranged and access bridges were lengthened to provide more space between the cruise ship docks and the shore in the design. The alignment of the Taku Dock itself will also be changed under the new plans.
In total, the cruise ship dock expansion is now estimated to come in at $71.1 million, an increase of $7.5 million over the April 2011 cost estimate.
A $29 million revenue bond issue is needed by July 2013 to ensure the city has enough money on hand to award a contract, under city code.
“Our intent is to go out to bid this thing after the first of the year, about February or March 2013,” Gillette told the committee. “And the intent is to get a contract signed by July of 2013, even though we’re not going to be building until October 2014.”
Gillette said that the concrete floats needed for the project can only be built by two companies in the Pacific Northwest, and at least one is already booked until February 2014 with prior commitments.
“If we wait until 2014 to bid this, somebody else may be in line and could impact our schedule another year or two,” said Gillette. He added, “This is a pretty big, complex project. … It’s important for us to keep this thing on schedule.”
Bob Bartholomew, director of the Finance Department, outlined multiple options for retiring the debt from the project. The $13.9 million now estimated for bond interest expense can be reduced by shortening the debt service schedule with larger annual payments, he said, but it would come with a tradeoff.
“If we use basically most of the revenues that we have available for … port development and we put it all here, that means we’re making implicit choices not to do other things,” Mayor Bruce Botelho observed.
Assembly member Jesse Kiehl agreed.
“I don’t like paying more interest than you absolutely have to … but my concern … is that we can pledge ourselves into a point where we really lack flexibility,” said Kiehl.
Assembly member Karen Crane, chairwoman of the committee, thanked Gillette and Bartholomew for their presentations. She added, “I imagine we will be meeting again on this relatively soon.”
• Contact reporter Mark D. Miller at 523-2279 or at email@example.com.