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City Council, March 24

Resolution opposing offshore drilling approved but with much dissent
Management of Galliard construction questioned
Marc Knapp

The resolution to oppose drilling and seismic testing off the coast of South Carolina was subject to much debate at last night’s Council meeting. All but one Council member spoke to the issue and Council ultimately approved the resolution. But with a 7 to 5 vote, the support was not overwhelming. Council members White, Alexander, Riegel, Moody, and Wagner voted against the resolution. The Mayor supported the resolution and said that a vote was necessary at the meeting to enable the resolution to be submitted to Ocean Energy Management before the end of this month when the opportunity for public comments closed.

Predictably, the issue drew a large number of speakers in Citizen’s Participation, including some from the Coastal Conservation League. Their comments were also predictable – seismic testing and offshore drilling threatened marine wildlife and an oil spill could irrevocably harm Charleston’s and the State’s tourist industry. There were also some comments about the general adverse impact of hydrocarbons on the environment.

Some speakers referred to the large amount of evidence that supported their claims of environmental damage but no specific papers or research were tendered. A representative of the S.C Petroleum Council stated that there had been a considerable changes to the nature of seismic testing in recent years and that the impact on marine life was not as adverse as projected by opponents. She also referred to the possible large creation of jobs, and the favorable impact on the economy should oil be discovered off the coast. All speakers referred to the extensive damage caused by the BP well failure in the Gulf of Mexico and some speculated as to the result if such an event were to occur off the coast of Charleston. Council member Gregorie also complained about the lack of transparency in that data collected from seismic testing would not be available to the public.

Those on Council who supported the resolution largely echoed the comments of citizens. Council members Lewis and Williams noted that the Sustainability Committee had supported the resolution. The Committee had been formed in a way that a large cross section of the community was represented. Council member Lewis said that members of the oil industry had been invited to address the Committee but none turned up to speak. Council member Waring, as well as warning of the danger of drilling, waxed on the virtues of wind power and the prospective windmills off the coast. (He did not mention the large and deadly impact on marine bird life of these rotating guillotines, nor the need for wind to drive the turbines, or more importantly, the small contribution that wind can make to the nation’s energy needs.)

Council member White was the first to speak against the issue. He opined that emotion was overcoming reason. He suggested that voting on the resolution be deferred until Council could hear arguments from the other side of the issue. Council needed all the facts. Council member Alexander also took up this theme. Some Council members also stated that much more information was needed before a judgment on offshore drilling could be made. A seismic survey would aid an assessment on the prospects of a major oil and gas find. If the potential rewards were huge, they could not be ignored.

Council member Moody responded to Council member Gregorie’s concern over transparency. The oil companies will be financing the surveys and understandably, will be retaining the data for their own use and planning. Apart from the petroleum industry speaker, only my associate Warwick Jones and I were citizens opposed to the resolution. Our comments were similar to those made by Council members opposed to the resolution. But we also noted that off shore drilling has been around for decades and that thousands of off shore wells had been drilled around the world and with no significant environmental damage. Considering the massive cost to BP and its partners in the cleanup and penalties relating to Deepwater/Horizon, we think drillers will be very concerned about potential environmental damage from drilling activities. We also noted the importance of hydrocarbons as an energy source and that their importance is unlikely to diminish significantly in future even with the advent of more wind and solar investment.

Considering that the Galliard project is taking longer than projected to complete, it should not have been a surprise that some of the consultants are requesting an extension of their contracts. But it was their letters to the City that got our attention. All has not been well in the construction project, with fingers pointing to Skansa-Trident, the general contractor.

Firstly – the changes. A note from the Mayor shows that for Design Architect David M Schwartz Architects Inc., additional costs arising from the delayed construction would be made up from “savings ($100,000) that would be realized in the reimbursable allowance". But for Architect of Record, Earl Swenson Associates Inc, a fee adjustment of $550,000 is necessary. For the Project Management Consultant, the Projects Group, a fee amendment of $150,000 is necessary.

Secondly – the letters. Below are extracts from a letter from The Projects Group to the City

  • For this current extension, we are unable to absorb further time without a fee modification. In 2014 we reduced our monthly fee from $33,133 to $30,500 in order to absorb additional time.

  • TPG understands tat we must propose services that include all fee and expenses within $150,000….However with this limited fee, it gives us less flexibility to have time in the agreement to address some of Skansa’s disorganization and poor planning

  • We propose to extend this current agreement to July 31,2015. …However due to the current track record of Skansa-Trident’s ability to manage punch lists and complete components of work , we are able to reasonably quantify the effort are unable to appropriate the number of hours required. (This is a garbled sentence but we suspect the first “able” should be “unable”)
And from Earl Swenson Associates to the City
  • We based our original fee estimates on other projects of similar scope and complexity , but the time we have spent for much of CA , has greatly exceeded the amount of work we originally estimated for this project

  • But as you know, SSR (one of the consultants) has had a lot of trouble getting information from the CM prior to their reviews, has had incomplete information ….. Many of the consultants have been asked to perform services beyond their scope, or redundantly.

The question remains as to what will be the final cost of the Gaillard project and will it remain within budget? So far, higher than projected costs have been absorbed by contingency and other provisions. And the fee increases sought by the consultants are not threatening. The final outcome should be known in the next few moths with the new construction contract extended to July 31, 2015.

Council signed off on the remuneration increase for the Mayor and members. The Mayor’s salary rises from $162,816 to $180,000 and Council members from $15,000 to $17,000. The increases will apply from January 12 next year and the Mayor’s salary will be subject to a 1.5% yearly escalation. Council members Wilson and White voted against the salary increase. There was no discussion on the item.

Council also took a major step forward for construction of a Senior Center for West Ashley. It allocated $615,925 for Lioillo Architects for design. The Center will be constructed on land provided by Bon Secours St.Francis Xavier Hospital, and next to its facilities on Henry Tecklenberg Drive. Funding for the Center has already been provided in appropriations in past years.

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