Agenda - Public Works Committee - 05/16/2006

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City Engineer Jankowsld replied it would drop the cost slightly. Mayor Gamec noted something like a $500 drop in the price would not mean too much. He suggested this project and what the City can do with the cost be discussed further by the Council. He stated all of thase gravel mad projects will need to be treated equal. Councilmember Jeffrey requested information regarding why the overhead costs have doubled. City Engineer Jankowski replied the overhead relates to areas such as costs for engineering, inspection, financing and contingencies. Twenty-five percent is used as a percentage, so when the construction estimate was raised from $142,000 to $200,000, the 25°,4 in overhead increased as well. The overhead costs could be changed to only charge the exact cost of the overhead. Councilmember Jeffrey inquired if25% is standard in the calculation of overhead costs. City Engineer Jankowski responded in the affirmative. Councilmember Cook noted there have been roads coming before the Public Works committee that were put in improperly and need to be reconstructed. The reason some of the costs for this project have gone up is due to the engineering checks and determining that more is needed for the road to stand than originally estimated. They need to be certain that these roads are engineered correctly for them to last. Mayor Game¢ asked if this process will begin all over again if it is re-bid. City Engineer Jankowsld replied the same plan would be re-bid. At this point, to re-initiate the process, this public hearing is required to inform the residents of the costs. The costs can come in lower than ttfis estimate, and staff wants to be certain things are well covered this time. After the close of the public hearing the citizens would have an opportunity to petition for or against the project. If the project is not petitioned against within 60 days, the Council could reorder the project; the project could then be advertised and ordered by July 11, which would enable the project to be completed this year. Councilmember Elvig expressed confusion as to why the same specifications would be re-bid, because it would not seem to reduce expenses in the project. City Engineer Jankowski replied the only place staff could look at reducing expenses would be the type of bituminous. A premium oil was included in the bituminous in the last bid, and $5,000 could possibly be reduced from that cost. Councilmember Elvig noted the Public Works Committee has discussed a concept of how the City would charge for the reconstruction of inadequate roads. The assessments would be a percentage, but not to exceed a certain cost on the roads. He suggested they may he splitting hairs if the cost per foot of this project comes up near the cost of rebuilding a road. City Council / March 28, 2006 Page 11 of 31 59