6.2 EDSR 09-15-2014 El Request for Action
River
To Item Number
Economic Development Authority 6.2
Agenda Section Meeting Date Prepared by
General Business September 15, 2014 _ Jeremy Barnhart, Deputy Director, COD
Item Description Reviewed by
Natures Edge Business Center Second addition
funding authorization
Reviewed by
Action Requested
Approve,by motion, the Economic Development Authority's participation in the improvements to
Natures Edge Business Center phase II.
Approve by resolution the transfer of 268,000 to the City Development fund.
Background/Discussion
In July, the EDA approved the expenditure of 300,000 for its participation in the development of
Natures Edge Business Center phase II. At that same time, the City rejected the bids,in part because the
costs came in higher than anticipated.
When the project was rebid, costs dropped considerably,but still higher than the engineers estimate.
Based on actual project costs, the proposed project funding is as follows:
EDA Development Fund - $568,000
City Development Fund - $200,000
DEED Grant $291,000
Trunk Water Fund- $203,500
Trunk Sewer Fund- $162,500
Total Project- $1,425,000
This revised funding schedule represents an increase of$268,000 from the original EDA budget, and
$100,000 from the city development from, over their original budgeted amount. Much of the EDA's
increase is due to the lower than expected DEED grant ($500,000).
Transfers between taxing authorities should be completed via resolution. A resolution detailing the
transfer of the entire 568,000 is attached.
Financial Impact
268,000 from the Development Fund
POWERED 8Y
Template Updated 4/14 NATURE
Attachments
• Staff memo dated July 21, 2014
• Resolution approving transfer
N:\Departments\Community Development\Economic Development\EDA\Adrrumstrative\Agenda\EDA Agenda Packets\Year2014\9-15-
2014\G 2 sr NEBC II funding 9-15-14.docx
gip., Request for Action
ver
To Item Number
Economic development Authority 7.1
Agenda Section Meeting Date Prepared by
Announcements July 21,2014 Jeremy Barnhart, Deputy Director,COD
Item Description Reviewed by
Natures Edge Business Center Phase II bids Brian Beeman,Director of Economic
Development
Reviewed by
Action Requested
Receive information related to the Natures Edge Business Center schedule.
Background/Discussion
The city engineer is recommending the Council reject all bids for the construction of Natures Edge
Business Center Phase II. The bids came in higher than the engineers estimate, some of the contracts
expressed concern with the tight timeline,with substantial completion due October 24th, 2014. It is
thought that the extended timeline will entice more bidders,but also allow for the acquisition of necessary
permits from the U.S.Army Corps of Engineers, reducing delays and possible change order costs.
The delay is not anticipated to negatively impact any project.
Financial Impact
None
Attachments
• Staff report to City Council dated July 21, 2014
• Project manager letter dated July 15, 2014
1111E1E1 11
Template Updated 4/14 NATURE
' Request for Action
ver
To Item Number
Mayor and City Council 4.8 ,
Agenda Section Meeting Date Prepared by
Consent July 21, 2014 Justin Femrite,P.F..., City Engineer
Item Description Reviewed by
Resolution Rejecting Bids and Ordering Re- Jeremy Barnhart, COD Deputy Director
Advertisement of Bids for Nature's Edge Business Reviewed by
Center Phase II Cal Partner,City Administrator
Action Requested
Adopt,by resolution,rejection of bids for Nature's Edge Business Center, Phase II and direction to
amend the project completion date and re-advertise the project for bids.
Background/Discussion
As detailed in the attached letter from our Project Manager,Craig Jochum,bids were received on July 15,
2014, for the construction of public improvements in Phase II of the Natures Edge Business Center.
The memo details a number of concerns relating to proceeding with the award of the bid. A component
that has delayed our schedule is a permit for wetland modifications form the US Corp of Engineers. This
permit has not yet been received. Based on all considerations, staff is proposing to re-advertise the
project with a revised completion date in order to give more time to procure the necessary permit and
allow for flexibility in the construction timeframe.
The revised project will allow for late-season grading and utility installation in 2014 with final roadway
improvements to be completed by June 2015. This revised schedule will still allow for the immediate sale
of all new lots and early 2015 construction of any potential building improvements.
Pending approvals, staff is proposing the following revised schedule to facilitate the completion of the
project:
Advertise Project for Bids July 25,2014
Open Bids August 22,2014
Consider Bids and Award Contract September,2014
Begin Construction September,2014
Finish Construction June,2015
Financial Impact
There is no cost associated with the requested action. When new bids are received we will prepare a
comprehensive list of costs and breakdown of funding sources.
Attachments
• Bid Analysis Letter from Project Manager
• Resolution
rI ■ EIf , 1r
NATURE
I 11-'111i Hakanson Main Office:
Anderson 3601 Thurston Avenue,Anoka, MN 55303
Phone:763/427-5860 Fax: 763/427-0520
www.haa-inc.com 35
July 15,2014
Justin Femrite,City Engineer
City of Elk River
13065 Orono Parkway
Elk River,MN 55330
RE: Natures Edge Business Center—Phase 2
Bid Evaluation
Dear Mr.Femrite:
As you are aware, construction bids for the above referenced project were opened at 11:00 a.m. on July 15,2014
at the Elk River City Hall.A total of 6 bids were received and opened. The following is a summary of the Base
Bids:
Northwest Asphalt,Inc. $1,445,592.94
Douglas-Kerr Underground,Inc. $1,558,196.24
Burschville Construction,Inc. $1,578,374.20
J.R.Ferche, Inc. $1,709,099.07
Northdale Construction Company, Inc. $1,858,623.96
Peterson Companies $1,867,345.93
This project also included an Alternate Bid. The Alternate Bid included the construction of the improvements on
Twin Lakes Road between the south property line and the intersection of 168th Avenue and Twin Lakes Road.
The Alternate Bid improvements included the sanitary sewer, watermain, concrete curb and gutter, bituminous
surfacing, and striping. The storm sewer for this segment of road was included in the Base Bid to provide an
outlet for Pond 3.The following is a summary of the Alternate Bids:
Northwest Asphalt,Inc. $203,361.99
Peterson Companies $206,780.43
Douglas-Kerr Underground,Inc. $212,906.79
Northdale Construction Company,Inc. $221,492.44
Burschville Construction,Inc. $228,235.00
J.R.Ferche, Inc. $237,1 03.25
Northwest Asphalt, Inc. of Shakopee, Minnesota was the low bidder for both the Base Bid and the Alternate Bid.
We have requested references for Northwest Asphalt, Inc. Reference checks will be performed once they are
received. Tabulations of Northwest Asphalt's proposed suppliers and subcontractors were not included with the
bid.This information has also been requested.
We would have expected more than 6 bidders on this project. Based on the feedback from contractors' during the
bidding process it appears that many contractors were concerned about the project substantial completion date of
October 24,2014 and chose not to bid this project.
As you are aware the US Corp of Engineers has not yet issued the wetland permit for this project. Although it
appears that, based on discusses with the Corp project manager,the permit will be issued in August of 2014 there
is no guarantee since the Corp is not mandated by any legal deadlines.
We compared this project with the unit bid prices for Natures Edge Business Center Phase 1 which was
constructed in the year 2012.Using the unit bid prices from the Phase 1 project the total Rase Rid for this project
would be$1,327,097 or approximately 8.2% lower.
Given the bid comparison discussed above and the current bidding climate it would appear that the bid received
from Northwest Asphalt is reasonable. However if the US Corp wetland permit is not received in a timely manner
it could lead to project delays and potential change orders. For this reason the City may want to consider
rebidding this project with an extended substantial completion date. If this project is rebid we would recommend a
substantial completion date of June 30,2015.A copy of the bid tabulation and bid comparison is attached for your
use.
If you have any questions please call me at 763-852-0485.
S'ncerely,
kanson nd rson ____
Craig J.Jr‘ u ', P.E.
IHakanson
■■ Anderson
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City of
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Resolution 14-05
A Resolution of the Economic Development Authority of the City of IElk
River, Transferring funds to the City of Elk River
WHEREAS, the City of Elk River is developing property it owns as Natures Edge
Business Center (NEBC) for community and economic development purposes; and,
WHEREAS, development of NEBC requires the installation of certain public
improvements,including streets and utilities;and,
WHEREAS, the Economic Development Authority (EDA) desires to facilitate the
construction of NEBC by financing the public improvements for NEBC.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority
in and for the City of Elk River, Minnesota, that
1. The EDA finds that the development of NEBC will facilitate economic development
growth in the city by making additional land available for industrial and commercial
development.
2. The EDA agrees to transfer $568,000 from the EDA to the City Street Reserve Fund for
the express purpose of funding the NEBC public improvements.
Passed and adopted this 15" day of September, 2014.
ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR
CITY OF ELK RIVER
Dan Tveite, EDA President
ATTEST:
Jeremy Barnhart, EDA Interim Executive Director
P 0 W f R 1 0 0 1