Morrisville town center construction hits unforeseen utility and design costs; staff to seek roughly $1.86 million

Town Manager Brandon Zuda and Singh Development representatives updated the council on construction of Phase 1A of the Morrisville Town Center during the June 23 work session, describing active site work, utility conflicts discovered during excavation and a set of revised construction and permit‑driven costs that increased the project estimate since the council last reviewed the budget in September 2025.

What happened: contractors and staff discovered subsurface utility configuration and capacity issues — notably with electrical conduit and gas line locations — once excavation began. Jeremiah Sloop, Singh’s regional construction director, said that some primary conduits that were expected to exist did not, and that resolving those gaps required additional coordination and work with Duke Energy and Inbridge (the gas utility). The team said collaborative problem‑solving with town staff, Duke and subcontractors reduced some of the potential costs: Duke agreed to extend power along Carolina Street at its cost, and some contractor and design adjustments yielded credits and value engineering savings.

Budget changes: the original construction estimate the council saw in September 2025 was $20.9 million. Staff and Singh identified additions from the bulletin‑level design clarifications (≈$679,170) and subsequent permit‑ and utility‑driven adjustments (≈$257,000), plus other program items (including IT/Graybar work) increasing the project cost to about $22.75 million — approximately $1.8 million above the September baseline. Singh agreed to reduce its management fee by $200,000 and to absorb $42,000 in temporary parking costs. The project also received $250,000 in federal funding from U.S. Representative Deborah Ross. After credits and those offsets, staff calculated an unfunded balance of approximately $1.36 million.

Staff request: to cover the outstanding gap and create a modest owner contingency, staff asked council to approve adding roughly $1,863,000 to the project: $1.36 million to fund the immediate unfunded items plus a proposed $500,000 owner contingency under town control. Proposed funding sources are (a) interest projected to accrue on the town‑center capital account over the coming 12 months (approximately $900,000) held in the North Carolina Capital Management Trust, and (b) $963,000 from the parks reserve fund (which includes recent project closeouts and an incoming ~$300,000 return from a dog‑park project closed on consent that evening).

Why it matters: staff and contractor representatives said many of the cost changes were typical for infill projects with old, mismapped utilities and that the PPP (public‑private partnership) delivery model enabled quicker coordination with utilities and value engineering. Council members expressed interest in process improvements (more rigorous pre‑construction verification) and asked for more frequent and timely updates should the contingency be spent beyond thresholds.

Next steps: staff will draft a capital project ordinance amendment and a second amendment to the development agreement reflecting the fee credit and other contract changes and return them for council action on the July 28 agenda. Council did not vote on the funding request at the June 23 meeting; staff sought direction to proceed with final documentation and to present the ordinance for adoption in July.