CAPITOLA — Costs are rising as a project along Highway 1 near Capitola and Aptos progresses, prompting the local transportation agency helping lead the effort to fork over millions of dollars more to keep momentum going forward.
The Santa Cruz County Regional Transportation Commission agreed unanimously at its Thursday meeting to program an additional $6.6 million to help get Phase 2 of the Watsonville-Santa Cruz Multimodal Corridor Program over the finish line. The money will be provided through an amendment to the commission’s Measure D highway corridors budget for fiscal year 2025-2026, but commission Executive Director Sarah Christensen has also been authorized to pursue a short-term money borrowing strategy that may be needed to avoid cash flow issues.
The project, which stretches along the highway from the Bay Avenue/Porter Street exit to State Park Drive, broke ground in April 2024 and as of this week is approximately 45% complete, according to representatives from Caltrans. In addition to auxiliary lanes and bus-on-shoulder facilities in both directions of the highway, another central feature of the project includes a complete rebuild of the bridge at Capitola Avenue and that specific component is about 90% complete.
As a project partner, Caltrans was responsible for awarding and administering the original $72 million construction contract to Granite Construction, but the transportation commission is required to shoulder the burden of project cost overruns, according to the staff report.
“In construction projects there’s a lot of, sometimes, unforeseen situations; a lot of in-field conflicts that come along in the construction,” said Amin AbuAmara, the commission’s director of capital projects. “Sometimes these conflicts happen.”
The priciest contributor to the ballooning budget is a modification to a pedestrian overcrossing at Mar Vista Drive, Caltrans representatives explained at the meeting. Once crews began digging, they discovered two unmapped sewer force mains that necessitated a redesign of the bridge and ultimately equated to $2.8 million in additional spending.
Additionally, the construction contractor originally planned to close all four exits at the Bay Avenue/Porter Street ramps simultaneously for 14 months, but once the commission’s staff was notified of that plan, they knew a change was needed and asked for a phased closure schedule despite the adjustment resulting in $1.9 million of added costs.
“We intervened and said, ‘Absolutely not,’” said Christensen. “I suppose the cost increase associated with maintaining traffic and limiting the impacts to the traveling public is somewhat of a price to pay to limit impacts to the traveling public.”
Other significant expenditures arose from discovery of unsuitable, human-made materials and utility conflicts, along with additional required tree removal.
While the requested funding for additional work totaled $7.7 million in all, Caltrans managed to cut $1.5 million in costs by reducing the size of the soundwall between the highway and the frontage road, and through more efficient use of excavation materials, resulting in the final request of $6.6 million.
Commissioner Steve Clark was not pleased with the commission’s newfound cost burden and asked a series of questions to confirm reasoning for the changes, some of which he suggested could have been predicted.
He then continued by asking about the overruns’ impact on the third and final phase of the project that extends south to Freedom Boulevard and is also the costliest segment. In addition to increasing that phase’s original contingency allocation, Christensen added context by saying that all of the funding available for highway projects included within Measure D — a 30-year half-cent sales tax — has already been used on the first two phases.
“Staff has been working really diligently to manage the risk of that (Phase 3) project so that we can successfully complete it and hopefully have a little bit of funding left over to do other enhancements into the next few decades of the life of the measure,” said Christensen.
To meet current funding commitments for Measure D’s highway category, according to the staff report, a line of credit was recommended instead of bonding because it allows the commission to only pay interest for what is needed.
The finance plan for the line of credit will be shared with the commission at a future meeting where its approval will be requested.
