Agenda - Council - 09/10/2019 - Laserfiche WebLink

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Project Costs On May 14, 2019, the City Council accepted bids and awarded a construction contract to Omann Contracting Companies Inc. of Albertville, Minnesota, per their low bid of $304,916.53. Street reconstruction project costs include 23% indirect costs for administrative (6%), engineering (15%), finance (1%), and legal (1%) costs. Upon adding 23-percent to construction costs, the contracted project cost is $375,047.33. The engineer's project cost estimate based on final plans was $327,938.11. The contracted project cost is $47,109.22, or 14.4-percent, higher than the engineer's project cost estimate. When preparing engineer's estimates, Staff applies unit bid prices from projects most recently bid (within the last year or two), and adjusts unit prices based on the latest available information pertaining to inflation. The intent is for the engineer's estimate to fall within the middle of all bids received, which has been the norm in recent years. Bids received this year were higher than the engineer's estimates. The unit bid prices that were significantly higher on this project were for bituminous pavement ($25,587), and concrete work ($11,535). Other cities also experienced higher bid prices this year, particularly on bituminous and concrete pay items. Staff is working to finalize actual construction costs. Based on quantities known to date, final construction costs will likely be equal to or slightly more than the contract amount. Final project costs will be reviewed in detail during the Assessment Hearing. These improvements were included in the City's Capital Improvement Plan for 2018 construction. Funding sources include a combination of unexpended street reconstruction bond funds, special assessments to benefiting properties, and stormwater utility funds. Special Assessments The City's Special Assessments Policy (attached) calls for special assessments to pay for up to 25-percent of eligible street reconstruction improvement costs. Special assessments are calculated using methods resulting in reasonable and equitable distribution of assessments that are uniform upon the same class of properties within the assessable area. The test for determining the validity of a special assessment is whether the improvement for which the assessment was levied has increased the market value of the property against which the assessment was levied in at least the amount of the assessment. Ramsey's Special Assessments Policy identifies three optional methods for calculating assessments; Adjusted Front Footage, Area, and Per Lot. The Feasibility Report for this project identified 59 benefiting residential properties that are proposed to be assessed up to 25-percent of eligible project costs. On all previous residential street reconstruction projects, the Per Lot assessment method was applied so Staff recommends using the Per Lot method for this project. Fifty-nine (59) benefiting properties receive special benefit from the improvements and are proposed to be assessed up to 25-percent of eligible project costs. Eligible project costs include all costs except those related to subgrade corrections and public utility improvements. Assessments are proposed to be applied equally across the 59 assessable properties using the "per lot" assessment method as allowed by the adopted Special Assessments Policy. Over the last four years, special benefit consultation reports have been prepared for each street reconstruction project, and the results of the reports were used to defend final assessment amounts. This year, special benefit consultation reports were not prepared since each report costs around $6,500 and this year's projects are so similar to other projects that the results from those reports can be directly applied to these. For this project, the Rivers Bend Street Reconstructions project report is most applicable, and the range of anticipated special benefit to each property identified within that report fell between $7,000 and $7,500. The City will fund 100% of all project costs not eligible for assessments, including subgrade corrections. On November 13, 2018, the City Council adopted a preliminary assessment amount of $1,303.70 per benefiting property. Based on the contracted project cost, and assuming final construction costs are equal to or slightly higher than the contracted project cost, final assessments for benefiting parcels are anticipated to increase to approximately