Agenda - Council - 05/26/2015 - Laserfiche WebLink

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provide the needed generator. Why is the City responsible for this change? The City (staff) never indicated to the design firm (BKV Group) or the general contractor via bidding (Brennen Construction) that a "new" generator would be needed for this project. As a result, both parties never included said costs within the original scope of work. This is not a change -order in the classic sense of the term. This is a change of the scope of work to be completed, requested by the City, after design and awarding a contract. How will this fit into our budget? The City does have a contingency built within the original budget ($160,000 hard costs and $50,000 soft costs). Because this project is just beginning, the project manager (BKV Group) is recommending the City does not use the project contingency. Doing so will expose the City to risk on the back end to change orders; and not having adequate funding available to cover. The increase in cost to this project, due to the change of scope (generator), is $65,000. As the Council may recall, the lowest responsible bidder on this project came in below BKV Group's engineer's estimation ($3,180,000 estimation vs. $3,135,000 bid = $45,000 difference). As a result, a $45,000 balance/ savings existed within the City's original bond/ budget. Additionally, staff requested BKV Group to review the project budget for potential dollars available to pledge towards the generator costs. BKV Group suggested the $20,000 budgeted for "commissioning" could be removed from the project budget*. Therefore, between the savings on the construction bid ($45,000) and removing commissioning ($20,000), the $65,000 needed for the generator can be covered through the original bond amount/ budget reviewed by the City Council. The result of this action is no "savings" to the project as originally anticipated (i.e. the final bond amount for the project would not be lowered as indicated by staff in April). *Commissioning is the process of hiring a third -party to inspect the installation of HVAC and utility systems; and monitor for one year after the project is completed. The purpose of this work is to ensure maximum efficiency of said systems long term. BKV Group indicated the size of this building/ investment makes the need for this work debatable. Typically, projects above $10M are commissioned. Projects less than $10M are commissioned periodically; and BKV Group does not believe commissioning is critical -priority for this type of building. The City's Building Maintenance staff has the ability to reasonably cover this work. BKV Group is willing work with our Building Maintenance staff to make sure this work is complete. Is the generator needed? The City has the ability to not install a generator. However, because this site serves as a back-up emergency operating center (EOC), and provides several critical public services to our community, staff feels strongly a backup generator should be included in this project. Is Anoka County willing to help? Staff continues to work with Anoka County to resolve this issue. At a minimum, staff will seek to maximize some form of financial contribution. The City should not rely on a potential contribution from Anoka County. The budget proposed for this scope of work assumes no contribution. Notification: NA Observations/Alternatives: NA Funding Source: