Minutes - Council Work Session - 10/23/2012

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Councilmember Strommen stated the budget was a Council consideration because it was discussed that the HRA would not be making a contribution. City Administrator Ulrich stated that was also his recollection and that the Council had decided on the budget. Mayor Ramsey noted the Council should have taken action to officially approve the budget for this project. Councilmember Elvig stated he recalled a $5.35 million budget number but that number had varied and there had been discussion whether the number would still be moving. He stated he thought the Council had approved a budget. Mayor Ramsey stated the Council approved a project dollar amount, but perhaps not the actual budget. Councilmember Wise noted the numbers were changing because the project went from a partial taking to full property acquisition. City Attorney Ulrich advised that approval or non - approval of the project budget is not a legal issue. Interim Engineer Nelson agreed and stated he had been asked whether the project was over or under budget so he had researched the project file to determine the budget that had been approved. He noted the budget was discussed several times, but a final contribution with funding sources had not been formally approved by Council action. Councilmember McGlone stated if the numbers and potential funding sources were discussed, it is his opinion that the budget was approved if the project moved forward, so that is a moot issue. City Administrator Ulrich stated the Council determined to eliminate land proceeds and decided to use grant funding along with MSA to fill the gap. Finance Director Lund indicated the Equipment Revolving Fund was to also fill the gap. Interim Engineer Nelson displayed a slide showing the bid with two schedules (Schedule A and B). He reviewed past City Council meeting minutes, noting there had been discussion; however, the motion approved was to enter a construction contract. He presented the final spreadsheet, noting land acquisition is not final but he thinks it will be within budget at $2.7 million. The construction, after bids were received, with a $2.35 million budget, would be about $100,000 over the construction portion of the budget presented on June 26, 2012. On the expenditure side, the original budget estimate was at $470,000 and is now at $497,000 (including the requested $15,000 of additional services). Councilmember McGlone asked Interim Engineer Nelson whether his calculations factor in a project contingency when saying the project is over budget. City Council Work Session / October 23, 2012 Page 2 of 11