Agenda - Council - 03/28/2023 - Laserfiche WebLink

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Alternatives: Alternative # 1: Motion to adopt Resolution #23-061 accepting bids and awarding a Contract for construction of Improvement Project #21-09, Centralized Water Treatment Plant, to Magney Construction, Inc. for their Base Bid and Section 01 21 00 Allowances in the amount of $31,528,500. Alternative #2: Motion of other. Funding Source: The 2023-2032 CIP lists total project costs for all required WTP improvements at $47,600,000. This includes costs for both the WTP and the trunk watermain improvements. Currently, total project costs for all required WTP improvements are estimated at 42,500,000. The low bid submitted by Magney Construction, Inc. for construction of the WTP, minus bid alternate #1, is $31,5281500. The total estimated project cost is $34,680,000 assuming 15-percent indirect costs. Estimated project costs for the WTP trunk watermain improvements is currently $7,820,000. Funding for all WTP project improvement costs is proposed to come from the following sources: . $33,500,000 from sewer ($8,900,000) and water ($24,600,000) utility funds . $9M from bonding (TBD ... based on WTP trunk watermain improvements low bid) Based on these funding amounts, Staff proposes to increase water and sewer rates by 10% in June of 2023. Staff also proposes to issue the $9M bond in December of 2023 with a 15-year term. Assuming a true interest rate of 3.9-percent, this will carry an estimated annual debt service of $798,000 resulting in a total interest payment of slightly less than $3M. The amount of actual bonding needed will be determined after bids are received for the WTP trunk watermain improvements in late 2023. The actual bonding amount will determine how much sewer and water rates will need to increase. A 10% rate increase for sewer and water was originally calculated, but this may need to be increased based on the final bonding amount. In the meantime, construction of the WTP can be funded solely from sewer and water utility funds. The City also recently submitted 2023 Legislative Session requests related to the WTP project including $20 million in State Bonding as well as sales and use tax exemptions (HF 1177 & SF 1197). Any funds received from the legislative session will have the direct result of reducing bonding needs and the possible reduction of double-digit utility rate increases. The status of these legislative requests is not yet known. Staff also explored available grant funding opportunities. The City would not qualify as a disadvantaged City and would therefore not be eligible for a forgivable grant under the Public Facilities Authority (PFA) Drinking Water Revolving Fund (DWRF) loan program. However, Staff did place our WTP project on the 2022 DWRF Project Priority List (PPL) in hopes of receiving a low interest loan. In the end, our project did not rank high enough on the PPL to receive funds because of the City of Ramsey's excellent financial status. AE2S is also requesting a $225,100 amendment to the attached original construction phase services contract, which was based on a construction schedule of 18-months. Since the schedule was extended to 24-months an additional 6 months of engineering construction services is required. Attached is a copy of the AE2S contract amendment. This additional cost will be approved upon adoption of Resolution #23-061. Recommendation: