Cape Coral Community Redevelopment Agency and LCEC officials expect few surprises when work eventually begins on burying transmission lines along Southeast 46th Lane, although the city did assume any risk for those unknowns once construction does begin.
City Council approved that decision Monday night.
The project is estimated to cost $4.5 million, which the city will bond and the CRA will then pay back with interest.
LCEC is expected to credit $600,000 toward the project.
According to the agreement, the city agrees to pay back LCEC for any “subsurface” unknowns once ground is eventually broken.
It was generally assumed that contractor bids will come in cheaper than the other option, which had contractors assume any risk for overages.
LCEC spokesman Rick Fuson said Monday evening that the electric cooperative feels good about the arrangement, and he doubts there are any major unknown obstacles lurking underground.
“There is that possibility (of unknowns) but we’re confident this is moving forward,” Fuson said. “We’ve come a long way on this.”
The CRA previously committed $1.9 million to previous underground efforts.
Board Chairman Don Heisler said it’s possible the $1.9 million could still be committed, but added the CRA is waiting until the bids came back before making a final decision.
The CRA could commit a portion, if not all, of the $1.9 million if needed.
“We’re looking to maximize the cash we have in lean times,” Heisler said. “We’re waiting on that (bid) number.”
Should the CRA commit any portion of the $1.9 million, it will likely lessen its long-term debt on the overall cost.
Councilmember Bill Deile said the CRA could save $240,000 in interest payments if it committed the entire $1.9 million.
“Why pay the interest if you don’t have to?” Deile said.
Council also approved an indemnification agreement with LCEC over the transmission lines.
In other news, City Council will take its summer hiatus as planned, after Council-member Chris Chulakes-Leetz could not find majority support to lessen the length of absence.
Council did decide to change the language, however, turning “summer hiatus” into “district work period.”
The city governing board’s planned hiatus is scheduled from June 14 – July 19.