Council accepts SD DOT Highway Fund Loan for up to $1.967 million at 1% interest

By Brett Nachtigall

Publisher

HOT SPRINGS – As stated by John Van Beek with Avid4 Engineering at the Hot Springs Urban Reconstruction update meeting on March 1, the overall project – which includes seven different individual construction projects – still has a bid price of $31 million. This number includes a projected $25 million that the S.D. Department of Transportation will be spending on the highway reconstruction, along with the City of Hot Springs’ North River Street suspended sidewalk with a projected cost of $3.9 million, and the previously projected cost of $1.7 million for city utility improvements. 

However, the final cost of the project will most likely be significantly different when it’s completed in the next couple of years, due to work delays, changes in the scope of the project and several other factors.

According to On-Site Project Engineer Matt Rippentrop, the SD DOT has an estimated 75 working days that will be coming to the contractor for additional days to complete the work in 2023 and 2024, due to the delays experienced during the 2022 construction season.

“We don’t have an overall increased cost yet to the project because some items will go over and some will run under,” Rippentrop said.

The City of Hot Springs however does have some specific details on increased costs for their portion of the project, which Finance Officer Misty Summers-Walton outlined in an email to the Fall River County Herald-Star.

She said the original project estimate for the city’s utility upgrades (water & sewer) was about $1.1 million, but the Complete Concrete Construction bid ultimately came in at the aforementioned $1.7 million price tag.

There however has since been a total of six change orders that have increased the price an additional $632,887, for a new total of nearly $2.4 million.

The largest change order was for about $422,000, which added 1,900-feet of water main replacement from Minnekahta Avenue to Battle Mountain Avenue.

At this past Monday night’s Hot Springs City Council meeting on March 6, the most recent change order was for up to $117,953, due to damp soil issues and to extend the completion date of the project by one year. Mayor Bob Nelson described the change order at the March 6 meeting and said that the dollar amount represents the maximum amount of soil that may need to be replaced as part of the utility work, due to highly saturated soil conditions that the utility contractor has discovered. It was pointed out that a contributing factor to the wet soil was from the previous broken water lines and valves.

In regards to the Suspended Sidewalk portion of the project, thus far there have been only two change orders, which have increased the anticipated costs a total of about $22,000. The current bid price is now $3.926 million, which does not include the engineering costs. The original estimate of the suspended sidewalk – prior to receiving the $3.9 million bid from Complete Construction – was $2.8 million, which included $433,000 for the engineering costs.

With all of the various price increases, the Hot Springs City Council approved a plan to help pay for the project at their March 6 city meeting, when they authorized Mayor Nelson to sign a SD DOT State Highway Fund Loan Agreement for up to $1.967 million at 1% interest for a term of 10 years.

Also at the March 6 council meeting, Finance Officer Summers-Walton described how the city is not able to use the funds from that SD-DOT loan for the utility improvements but can use the funds for costs related to the suspended sidewalk, decorative lighting and asphalt repairs. For that reason, the council also approved a motion authorizing Summers-Walton to transfer back nearly $1.6 million of city monies from the suspended sidewalk fund and into the city’s General Fund and Additional Sales Tax Fund in order to cover costs associated with the utility improvements.

Both agenda items – which included accepting the SD DOT loan and the transferring of city’s cash from one fund to the other – were approved unanimously.