Tucson paying $4M and counting for company to oversee delayed streetcar construction

With no vehicles delivered yet, expense of oversight firm to grow
2013-05-05T00:00:00Z 2013-09-11T15:32:56Z Tucson paying $4M and counting for company to oversee delayed streetcar constructionDarren DaRonco Arizona Daily Star Arizona Daily Star
May 05, 2013 12:00 am  • 

Tucson is paying a consultant more than $4 million to monitor construction of its streetcars in Oregon - and repeated delays at the factory are expected to push that figure even higher.

LTK Engineering Services, which holds the $3.9 million city monitoring contract, is supposed to be done by November. But the final car from Oregon Ironworks now is expected to arrive in April 2014 at the soonest, and still has to be tested before it is accepted.

It's unclear how much more the city will have to spend on monitoring is unclear because no one is certain when Oregon Ironworks will deliver a streetcar to Tucson.

"We're still developing costs. We want to have a good idea of what the delays will actually be," streetcar project manager Shellie Ginn said. There will be additional costs "with several of the contracts associated with the delayed streetcars," Ginn said.

Tucson's first car was supposed to be delivered in October 2012. Delivery was initially delayed until January 2013, and then to March 29, with two other cars to follow in April. So far, the tracks remain empty.

Ginn said the newest delivery date for the first car is sometime in August.

Once here, the city has to test the cars before it can officially accept them. Ginn said that could take awhile because the city's entire system is brand new and there could be some unexpected kinks to smooth out.

"We have paid for great experts to help us with this," Ginn said. "So technically, it looks like it's going really well, but the proof is in the pudding and we have to wait for the first vehicle to get here and start testing on it to see how everything pans out."

In addition to the city's monitors, the Regional Transportation Authority has paid former Oro Valley mayor Paul Loomis $273,637 since July 2010 - at a rate of $75 an hour - to monitor streetcar construction. In April Loomis was given a new 14-month contract that will pay him up to $121,000 more.

Jeremy Papuga, the RTA's director of transit services, said it's too early to tell how much more it will cost for Loomis to monitor the streetcars. But like city officials, he said the delays will add to oversight expenses.

"Oregon Ironworks is currently working on an updated schedule for vehicle delivery," Papuga said in an email. "Once that schedule is finalized we will be able to more accurately assess the cost impact to the project for the continued oversight of vehicle production."

Portland, which uses the same monitoring company as Tucson, estimated its monitoring costs will be double what was expected because of the delays.

Ginn doesn't expect Tucson's costs will go up that much since the city was fortunate to benefit from Portland's cars going into production first and the two streetcars having similar designs.

"I don't think we are going to double our contract, but we're definitely going to be adding to it," she said.

Ginn also credited city personnel responsible for overseeing the streetcar monitors with keeping costs down."Our contract reps have done a good job of monitoring LTK oversight to make sure we're not spending an inordinate amount of money on our oversight," she said.

Oversight is a Federal Transit Administration requirement, Ginn said. Since the city didn't employ any streetcar specialists, it had to turn to an outside agency.

Late Fees

Tucson recently told Oregon Ironworks it intends to charge liquidated damages for missed deadlines.

"Back in February they submitted their first late schedule. Up to that point they hadn't submitted anything officially to us indicating that our vehicles were late," city contract administrator Victoria Cortinas said.

The city is charging Oregon Ironworks $750 a day for three late vehicles. That number will increase if more cars become tardy.

"We're about a month into the vehicles being delayed. As time marches on and more vehicles are delayed … it's going to accumulate on each vehicle," Ginn said.

The city can charge up to $1,800 a day per vehicle, but the amounts can't exceed 10 percent of the base $29 million contract - or about $2.9 million.

So far, the city has paid Oregon Ironworks $13,813,068 with the next payment of about $480,000 due in two weeks.

Final damages won't be known until after the cars are delivered.

"Typically you wait until you complete the project and sit down to figure out where your damages are at," Ginn said. "It's not as clear cut and black and white as one may assume at first. You have to go through the discussions and agree where the harm is and the liquidated damages apply."

While delays completing cars for Portland and Tucson have raised questions about Oregon Ironworks completing its streetcar projects, Ginn said she just returned from a trip to the company's plant and things appear to be moving along nicely.

"These vehicles are doing very well in the large component area," Ginn said. "Propulsion, system integration, they are passing those tests with flying colors. It's the small little items like the windows might have a gap or there's a paint chip or a seat cover is raising up. It's all these fit and finish types of issues and that's what the problems they are having.

"I can tell you that when it comes to getting the vehicle here, they are actually doing really well."

On StarNet: Go to timeline.azstarnet.com/streetcar for all of the streetcar construction news.

"I don't think we are going to double our (monitoring-expense) contract, but we're definitely going to be adding to it."

Shellie Ginn, streetcar project manager

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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