Inflation is driving up the cost of Palm Beach’s townwide underground utility conversion, with total construction now estimated to reach as high as $150 million.
The burial of all overhead power, phone and cable television lines in town began in 2017 and is expected to reach completion in 2027. The project was carved into eight phases, each with a northern and southern segment, except for Phase 8, which is not divided.
Construction bids are awarded separately for each segment, nearly all of which have been completed or are under construction.
For budgeting and planning purposes, the town relies on a 2019 “engineer’s opinion of cost” as its estimate for each construction segment and for the total project.
The town’s 2019 estimate for the townwide undergrounding was $128 million. But escalating costs for materials and labor in the South Florida market have fueled much higher construction bids in the post-pandemic years.
On July 9, the Town Council approved an $11.4 million contract with Burkhardt Construction to build Phase 7 South of the undergrounding work, which extends from Atlantic Avenue northward to Via Los Incas and Sanford Avenue.
(The $11.4 million does not include a separate $376,765 contract with Kimley-Horn and Associates for engineering services for Phase 7).
The $11.4 million is $5.1 million or about 80 percent higher than the town’s $6.3 million 2019 estimate for Phase 7 South, Town Engineer Patricia Strayer said.
The Phase 7 South contract with Burkhardt moves the total cost of the townwide utility undergrounding into the range of $140 million to $150 million, Strayer told the council.
The town will know more about the total cost of the townwide utility conversion when the construction bid for the final undergrounding phase, Phase 8, becomes available. Strayer said she expects to present that number to the council in October.
The’s town 2019 estimate for Phase 8, which extends from Royal Poinciana Way to Everglade Avenue, is $10.7 million, according to Strayer.
Nearly a year ago, the council approved construction for Phase 7 North, from the Palm Beach Country Club north to the south side of List Road. The cost was $10.5 million – 75 percent higher than the 2019 estimate of $6 million.
Councilman Lew Crampton said the town is “going to be a facing a major shortfall at some point. We are going to have to wrestle with this, this budget session and subsequent budget sessions as well.”
The town has been drawing on annual surpluses from the Town Marina to help cover the higher costs for the utility project.
During the 2024-25 budget year, which begins October 1, the town will draw $6 million marina to help fund the utility undergrounding, the council decided. That is about 60 percent of the marina’s projected $10 million annual surplus.
The town paid for most of the townwide utility burial with $90 million in bonds approved by residents in a 2016 voter referendum. The bonds are being repaid through assessments on properties throughout town for up to 30 years.
Town Council members and Mayor Danielle Moore have said the town will not ask for more money from property owners to meet the costs of the project.
The town also received an $8.5 million grant from the Federal Emergency Management Agency to help cover the undergrounding costs.
Status of Townwide Utility Burial
Phase 1 South: Sloan’s Curve to South Town Limit – complete.
Phase 1 North: Onondaga Avenue north to Palm Beach Inlet. Complete.
Phase 2 North: Onondaga Avenue south to Osceola Way. Complete.
Phase 2 South: Sloan’s Curve to the intersection of South Ocean Boulevard and South County Road. Complete.
Phase 3 North: Osceola Way to the north side of La Puerta Way. Complete.
Phase 3 South: South Ocean Boulevard and South County Road to the alley south of Worth Avenue. 93 percent complete.
Phase 4 North: south side of La Puerta Way to north side of List Road. Poles are being removed.
Phase 4 South: Peruvian Avenue to Royal Palm Way. 78 percent complete.
Phase 5 North: Country Club Road to Southland Road. 88 percent complete.
Phase 5 South: South Lake Drive/Hibiscus Avenue and Peruvian Avenue/Royal Palm Way, and properties between the Lake Worth Lagoon and the Atlantic Ocean, and from Royal Palm Way to Seaspray Avenue. 85 percent complete.
Phase 6 North: Chateaux Drive and Kawama Lane to the south side of Plantation Road. 73 percent complete. Pole removal expected by end of this year.
Phase 6 South: Seaspray Avenue to south of Royal Poinciana Way. 40 percent complete. Pole removal expected in 2025.
Phase 7 North: Palm Beach Country Club to the south side of List Road. 21 percent complete.
Phase 7 South: Atlantic Avenue to Via Los Incas and Sanford Avenue. Design complete and all easements approved.
Phase 8: Royal Poinciana Way to Everglade Avenue. Design is 80 percent complete and 94 percent of easements approved.
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