Minutes - Council - 07/25/2006 - Laserfiche WebLink

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Case #5: Consider Award Bids for Improvement Project 05-27 Welcomes Road Street Grading and Paving Improvements City Engineer Jankowski reviewed that bids for this project were received on July 7, 2006 and the low bid received was 12.4% higher than the estimated construction cost contained in the revised May 2006 feasibility study. This cost is an increase of 17% over the same project which was bid in February 2006 and is a result of the continuing increase in bituminous and energy costs. City code states that no contract shall be let in the event that the lowest responsible bid exceeds the estimated cost by more than 10%. Consideration of award of this project was tabled by Council at the July 11, 2006 meeting to allow the City Attorney and staff to review what options might be considered in pursuing this project. Although this restricting language regarding the award originated within the City charter and has since been eliminated form the charter, it is the opinion of the City Attorney that an award of this contract contrary to the City code could result in a legal challenge that would jeopardize the entire proposed assessment. On the other hand, postponing the project would most likely result in still higher project costs unless oil and bituminous prices decline, which is not expected. City Engineer Jankowski explained the assessment procedures allow the opportunity for property owners being assessed a period of 30 days beyond the date of the assessment hearing to appeal the assessment to District Court. While the assessment hearing is typically conducted after the project is completed or substantially completed, it is possible to hold the hearing prior to award to determine whether any substantial assessment challenges will be made by the property owners. Staff is proposing a special meeting be scheduled for the assessment hearing on August 14, 2006, with the project awarded at a special meeting on September 14, 2006 if there are no challenges to the assessment. Under this timetable, notice to proceed would be issued on September 20, 2006. The contractor has agreed to extend his bid period; he is confident he can complete the work this year unless for some reason the weather were to turn sour. He would not guarantee the bid price for next year. Mayor Gamec inquired about the cost increase in bids. City Engineer Jankowski replied the current bid is approximately $25,000 more than the feasibility study, which was an additional $8,000 over the last bid of $192,000. Mayor Gamec asked if these projects include the first sealcoat. City Engineer Jankowski responded in the negative. Councilmember Strommen requested clarification whether this project would be completed at 110% of the cost of the feasibility analysis. City Engineer Jankowski replied this would be at Council's direction. Staff recommendation was at 112.4%, but this could be amended to 110%. Councilmember Strommen noted the previously discussed project was approved at 110%, and the same situation should apply to all of the projects. City Council! July 25, 2006 Page 10 of20