Rehoboth city hall project $2 million over budget
A new city hall under construction in Rehoboth Beach is $2.68 million over budget due to a string of unexpected expenses that range from more extensive stormwater management to adding handrails that were inadvertently left out of the plans.
Mayor Sam Cooper, at a city workshop meeting Monday, said he has "every confidence the city has the money" to pay for the work. Construction is also running behind schedule but the building is expected to be finished in the fall.
LIVE: Rehoboth City Hall construction cam
Despite the overrun, no fee increases are anticipated in the upcoming budget, expected to be adopted on March 17, Cooper said.
Instead, city officials will draw on a cash reserve fund and $1.3 million that is already budgeted to cover the project in the proposed budget, he said.
"We have the money," said City Manager Sharon Lynn.
Some city residents were unhappy, not so much that the project was over budget but that city officials weren't sharing the information about why the project was costing more than expected.
"There's no transparency here, folks," said Walter Brittingham, a city resident and former commissioner.
Brittingham said he was concerned that city residents and taxpayers were unaware of what was causing the change orders that have lead to the spike in the cost.
Cooper said that so far, the city has approved 53 change orders on the construction project that total around $600,000. Several other change orders have yet to be approved, he said.
There is good news, Cooper said. The city will save $120,000 to $125,000 annually because of a lower than expected interest rate on the 25-year, low-interest loan.
STORY: Coworking space The Mill continues breakneck growth
STORY: Rehoboth Beach City Hall meets wrecking ball
Rehoboth officials borrowed $18 million from the US Department of Agriculture rural Development Community Facilities program in federal fiscal year 2015.
The federal program provides grants and loans to provide essential services in rural areas and towns with populations of 20,000 or less. Every municipality in Sussex County meets that benchmark. Rehoboth Beach has a yea round population of 1,398 in 2013, according to the U.S. Census Bureau.
The same year Rehoboth got its loan, Nanticoke Memorial Hospital in Seaford was awarded a $7 million loan to connect two existing buildings. The Lewes Public Library received a $50,000 grant and the Harrington Police Department received $15,700 to replace a police car that was damaged in an accident. All told, rural communities in Delaware and Maryland received $31 million in fiscal year 2015 for community facilities.
The project will replace a municipal building that was constructed in 1964. Rehoboth Beach Convention Hall was not demolished as a part of the municipal building project but some upgrades in the convention center are planned.
Rehoboth has two major construction projects in the works. Besides the new city hall, the city has $52.5 million in loan commitments from the state Clean Water State Revolving Fund for build a new ocean outfall and upgrade the city's existing wastewater treatment plant. The city is under a court order to stop discharging treated wastewater into Lewes and Rehoboth Canal by June 2018. The city is awaiting state and federal permits on the project.
Contact Molly Murray at (302) 463-3334 or mmurray@delawareonline.com. Follow her on Twitter @MollyMurraytnj.