October 27th, 2010 | by BETH SLOVIC News | Posted In: CLEAN UP, City Hall

Sewer Money for Bikes: Mayor's "Contract Savings" Decline Again

Mayor Sam Adams
A 5-0 council vote today to increase a City of Portland construction contract by $4 million had an unspoken downside: The additional spending approved today will further diminish the potential "contract savings" in the city's sewer budget that Mayor Sam Adams allocated back in February to the Bicycle Plan for 2030 .

This isn't the first time the price tag on the $19 million winning bid for this particular construction project—the Portsmouth Force Main Segment 2—has grown. This same contract got a $8.6 million boost in April after the construction firm encountered boulders underground that required more work.

Here's where some math comes in. Today's action increases the value of the original $19 million contract to $32 million. The $32 million is $3 million less than the $35 million that city engineers estimated the project would cost. Based on that $35 million estimate, the mayor said the $19 million project could produce almost $16 million in "savings."

Commissioner Dan Saltzman's office and the director of Portland's sewer department, the Bureau of Environmental Services, strongly argued against that logic.

Back in April, the mayor fiercely defended his "contract savings" plan, saying only $15 million of the $20 million for the Bike Plan would come from "contract savings" and that a number of projects over the next several years presented opportunities for additional savings.

However, today's action further illustrates the dangers of estimating "savings" before a project is finished. Roy Kaufmann, the mayor's spokesman, was not immediately available for comment.
 
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