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program should not be funded by the bond assessment for the undergrounding program .
• ySales Tax Savings : This opinion of cost considers that approximately $ 250,000 will be saved through the direct purchase of communications conduit and other necessary materials over the duration of the program .
12.6 Inflation
The Construction Cost Index ( CCI ) as calculated by Engineering News Record was used to estimate an average inflation rate to be applied to this program . The CCI tracks the change in price for a specific combination of construction labor , steel , concrete , cement , and lumber using data from 20 Cities in the United States . The CCI is similar in concept to the well-known CPI ( Consumer Price Index ), which tracks the consumer prices for a representative base of goods and services for urban consumers , but is considered more reflective of the construction industry and construction labor rates .
The average yearly historical CCI ’ s between January 1990 – August 2016 were reviewed . The average percentage increase of construction costs during the time between January 1990 and August 2016 , as well as the time between the years 2006 and 2016 , was 3.0 % per annum . The average annual percentage
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increase in average construction costs for any given year since 1990 ranged between 2.5 % and 3.9 %. Based on this information , an annual inflation factor of 3 % was used for estimating inflation cost impacts in this Opinion of Probable Cost . It should be noted that inflation is difficult to accurately project into the future and historical trends are not necessarily indicative of future inflation rates . Month-to-month or year-to-year changes in inflation rates could be significantly more or less than the percentages assumed for this opinion of cost .
12.7 Assumptions and Limitations
Assumptions made in the preparation of this Opinion of Probable Cost include the following :
12.7.1 General Assumptions and Limitations
• yThis opinion of probable cost considers the undergrounding of electrical , cable , and telephone facilities only . Cellular facilities , broadband infrastructure improvements or new broadband network installations , planned infrastructure improvements , and / or other facilities are not considered in this opinion . The unit costs provided assume all cable , electrical , and telephone conduit will be installed in a joint trench by the same contractor who is directly contracted by the Town .
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• yThis opinion of probable cost assumes that the Town will engage a contractor to install all equipment and materials except those items and operations that are required to be performed by the utility owner . We recommend that the Town perform as much of the construction as possible . This provides the Town with more control over project costs and schedule and it has been our experience that costs are lower and the schedule is reduced when the municipality performs the work over when the various utility owners independently perform the work . Items and operations that are required to be performed by the utility owner include , but are not limited to , underground system make-ready and energization , telephone cable and equipment installation , cable television cable and equipment installation , and overhead infrastructure removal . Costs related to these utility owner activities have been included in this opinion of probable cost .
• yThe opinion of probable cost developed for this master plan is based on a high-level cost analysis for large-scale planning and budgetary purposes only based on the information available at the time this master plan was developed . Opinions of cost contained in this master plan should not be considered applicable to a single block or
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other specific smaller scale are area due to variations that may exist on a smaller scale .
• yDetailed network designs for proposed electrical , cable , or telephone infrastructure were not performed and therefore were not available at the time of this master plan . Opinions of Probable costs are based on assumptions and generalizations regarding elements that a typical underground utility conversion project within the Town of Palm Beach is likely to include .
• yThis opinion of probable cost assumes a phased construction approach as outlined in this Master Plan . Each phase of construction is expected to have approximately an 18 to 24-month construction duration . Construction will occur continuously throughout the phase based on Town Council approval of year-round construction for the undergrounding program .
y • It is assumed that the Town will acquire private easements to implement the program when sufficient right-of-way is not available to contain the new underground equipment . It is assumed that easements will be donated by property owners when required as has been the case on several past Town undergrounding projects . Costs related to any eminent domain processes are not considered in this master plan .
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