Minutes - Council Work Session - 10/23/2012

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Interim Engineer Nelson explained it depends on how you look at it but if looking at the $5.642 million revenue sources presented at the June 26, 2012, meeting, then there is a $135,000 shortage. However, the $210,000 was originally included as a separate line item. At one time, $1.2 million was budgeted from the revolving equipment fund resulting in a funding overage of $74,000. City Administrator Ulrich asked whether there was a budgeted contingency of 10 %. Interim Engineer Nelson stated there was not a contingency budget line item. However, the initial budget included higher costs that would have allowed for a contingency but if using a $5.642 million budget then there is a shortage. Councilmember Elvig asked to see the slide of the meeting minutes, noting it indicates the former City Engineer had reviewed a $5.35 million funding package in March. Interim Engineer Nelson stated this reflects discussion at a meeting and he had also viewed this meeting video to be sure the budget was not separately approved. He indicated the Council's motion was to enter into a construction contract, not to approve the budget. The $5.35 million budget was from an early meeting in March and he had found 8 -9 versions of the project budget so it is hard to determine the actual approved budget. Councilmember Strommen stated she still has many of the paper budget versions but when the construction project was approved and moved forward, that was the basis on which she made her decision. Interim Engineer Nelson reviewed the revenue sources presented of $5.642 million at the meeting of the bid opening. He explained the $5.642 million budget had not been shown on the screen; however, the former City Engineer had indicated it was passed out to the Council before the meeting. The bids were opened after the case reports were written and that distributed budget was at $5.642 million. Mayor Ramsey stated if using the $5.642 million budget, then the project is at a positive $74,000. Councilmember Strommen stated that is not correct because the project is at $5,777,990 and the $210,000 was wiped out when the bids came in. Finance Director Lund explained the original documents pre -bid included an additional $210,000 and then it was included in the bid document. The original equipment revolving fund had an additional $210,000. The prebid amount included an additional $210,000 for the Northstar Marketplace grading, but was included in the construction bid with North Pine. If using the project construction bid, the overall project was estimated at $5,642,000, leaving the current project budget short by $135,990. If the Council chose to use the amount that had originally been incorporated to come from the equipment revolving fund (prior to actual bids received and when it was believed that the Northstar Market Place grading would be extra) the equipment City Council Work Session / October 23, 2012 Page 3 of 11