Nags Head approves funding for almost $20 million for public services complex, advanced metering infrastructure system

Published 4:56 pm Thursday, January 5, 2023

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Nags Head commissioners approved the “not to exceed” total project cost of almost $20 million for the public services complex and advanced metering infrastructure (AMI) at the December 21 Nags Head commissioners meeting.

A.R. Chesson was awarded the bid for the public services complex at 2110 S. Pond Ave. and 2200 and 2208 S. Lark Ave. The project includes the construction of five buildings – a 3,685 sq. ft. administration building; a 15,647 sq. ft. fleet maintenance building with 3,335 sq. ft. of interior finished floor area; a 4,848 sq. ft. water distribution building with 1,136 sq. ft. of finished floor area; a 8,318 sq. ft. vehicle storage building; and a 2,000 sq. ft. equipment building.

Out of five bidders, A.R. Chesson came in with the lowest bid at $14,494,000. Added to that are additional expenses for design fees ($1,580,000); fuel station relocation/canopy ($405,000); contingency ($362,350), equipment ($362,914); financing expenses ($300,000); truck/vehicle wash areas ($220,000), building security ($161,000); furnishings ($105,352); and site lighting ($20,000) for a total project cost of just over $18 million. The town will receive an estimated sales tax reimbursement, bringing the all-in project cost to $17,760,616.

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This comes in above the January 2022 original project budget of $15 million. The town opted to enclose the vehicle storage garage and to add additional items to the project including masonry work on the exterior walls of all the buildings, HVAC to the fleet maintenance building, mezzanine storage to three of the buildings and a photovoltaic electrical system.

Commissioners heard a presentation from Tim Oakley and Ann Collier with Oakley Collier Architects about the public services complex design process.

Finance director Amy Miller then discussed the AMI system. AMI is a data collection device on the meter that sends data to the utility at regular intervals. The utility can use the information to identify suspected leaks and identify trends or patterns in water usage that customers can use to improve efficiency.

Town staff recommended the lowest bidder, Consolidated Pipe & Supply, for the AMI system at a total cost of $1,650,495. This includes over $1.5 million for the meter and installation, plus $147,155 for hardware, software and training. There is an annual fee of $16,828. Miller said the town is applying for a grant that could cover the cost of the AMI system. There may be a water rate increase for residents, but that was not decided upon at the meeting.

Miller said for an extra $8,400, the town could add a phone app that customers can download to check water bill usage, set alarms or check for leaks.

Commissioners then met with finance consultant Andrew Carter via Zoom to discuss the funding for the projects, explaining to the board “how we get the actual money.” The town will work with bond attorneys and underwriter PNC Bank to sell bonds on the public market.

Commissioner Renee Cahoon asked if the local community would be able to purchase bonds but Carter said they would not; bonds were for sale only through the public market.

The public sale of bonds will take place on February 15 with a closing date of March 1.

There will be a public hearing January 4 to discuss options for the financing.

Commissioners took action to approve the “not to exceed” amount for $19,900,000. Carter said they can finance less, but they cannot finance more without returning to the board for approval. The motion was approved unanimously, with commissioner Mike Siers absent.