Hilton Head leaders asked to OK $5.6M for sewer work

A five-year sewer expansion project is underway on Hilton Head Island, and the Town Council will be asked next month to approve a $5.6 million repayment contract for the first two years with the utility serving the island’s northern end.

The town’s Public Facilities Committee on Monday approved a cost-reimbursement agreement with the Hilton Head Public Service District. The $5.6 million of the total estimated $9.7 million expansion project covers design, engineering and construction costs.

“We do it by repayment agreement,” Pete Nardi, the public service district’s general manager said Monday. “The utility pays the cost of the project. The town reimburses the utility.”

Nardi said the first two years of the project were consolidated to make it more attractive to contractors submitting bids. He said the remaining three years of the project likely will be combined for the same reason.

The expansion project, which began in April on Oakview Road, will cover nearly 500 customers without sewer access. There are about 900 parcels that rely mainly on septic tanks on the northern portion of Hilton Head and Jenkins Island.

For this fiscal year, which ends June 30, $3.6 million has been appropriated for the project. The proposed amount for fiscal year 2018 is $2.5 million, which has to be approved by the Town Council as part of the town’s overall budget.

Marc Grant, a Town Council member and chairman of the Public Facilities Committee, said the reimbursement agreement likely will be presented at the council’s June 6 meeting. The town budget must be approved before going into effect July 1.

The sewer expansion project was approved in December 2015. Earlier this month, the estimated cost of the five-year plan increased from $3.6 million to $9.7 million. The original cost was based on initial estimates, while the new projected cost includes more specifics, officials said.

“We’re seeing price increases not just for this project but for other projects,” Phil Waters, design engineer for the Hilton Head Public Service District, said at Monday’s meeting when asked by Town Council member David Ames what accounted for the increased projected cost.

Sewer lines are scheduled to be installed in 21 areas, including Spanish Wells and Marshland roads, in the first two years. The Oakview Road area will be completed first.

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This story was originally published May 22, 2017 at 4:47 PM with the headline "Hilton Head leaders asked to OK $5.6M for sewer work."