6.3. SR 02-22-1999
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Item #6.3.
MEMORANDUM
TO:
Mayor & City Council
FROM:
Pat Klaers, City Administrator
DATE:
February 22, 1999
SUBJECT: East Elk River Bids
In mid November 1998, the city received and opened bids for the east Elk
River trunk sewer and water project. This project includes approximately
1,000 gross acres. A large number of bids were received. The bids were
competitive and the low responsible bidder is a very good contractor. The bids
for the trunk sewer and water project need to be approved before mid March,
which is the 120 day maximum provided in the bid documents before the bids
"expire."
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The bids were received prior to the December 3, 1998, assessment hearing on
the project. After deducting wetland and flood plain acres, this project
includes approximately 700 assessable acres. The City Council assessed out
the trunk sewer and water project at $6,000 per acre and three property
owners have appealed their assessments. These assessment appeals will be
going before the District Court in April. After assessments to benefited
property owners, the trunk sewer and water project is approximately $1.63
million short in available funds. (See 11/24/98 attachment)
Staff has advised the developer of the trailer court redevelopment project and
the business park/industrial project that the city would consider awarding the
bids if permanent trunk sewer and water easements, rights-of-way, and
temporary construction easements were provided. These documents have been
received by the city. Rights-of-way and easements through this area and the
Trott Brook Farm plat is sufficient for, at a minimum, construction of Phase I
of the trunk sewer and water project.
The City Council has approved the preliminary plat for the Trott Brook Farms
project contingent upon the city ordering sewer and water. This plat is an
urban density plat (approximately 620 homes on 300 acres), is in the urban
service district, and cannot move forward without municipal utilities. Upon
. approval of the bids for trunk sewer and water into this area, the final plat is
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 . TDD & Phone: (612) 441-7420. Fax: (612) 441-7425
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expected to proceed. The developers of Trott Brook Farms hope to have models
available for the fall Parade of Homes.
A great deal of discussion has taken place regarding phasing in this public
improvement project. By ordering only Phase I of the trunk sewer and water
project, there is less risk to the city in terms of cash flow issues and from an
overall funding position. However, if the council proceeds in phases, I think
everyone knows that we are committing to a larger project in order for federal
funds for the street project to be used. In this manner, the Phase I sewer and
water and street/storm sewer construction would be completed at the end of
2000 and construction for the second phase (going all the way down to 171 st
Avenue and Highway 10 intersection) would need to begin in late 2002 and be
completed by September 2004. If Phase II takes place in 2002, then we have
an assessment issue to resolve with the Phase II land owners that were
assessed for trunk sewer and water on 12/3/98.
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In looking at the entire project, street and storm sewer along with the trunk
sewer and water, there is a significant funding deficit for the council to
address. Assuming that all the assessments are paid, the trunk sewer and
water project is in better financial condition than the street/storm sewer
project. This better financial position is based on the water utilities
committing to paying the $800,000 shortage. This commitment includes a
worst case scenario request for $300,000 to be available if required via the TIF
project. The trunk sewer line shortage of approximately $200,000 needs to be
financed by the wastewater treatment plant (WWTP) enterprise fund over the
life of the bond which is expected to be a 20 year proposal. At this time the lift
station at approximately $630,000 is proposed to be financed by way of TIF 19.
The final decision on the funding components within TIF 19 has not yet been
made. The recent newspaper article includes some maximum funding figures.
The totals for the city share of TIF No. 19 can always come down if the funds
are not needed (i.e. water department request) or if alternative funding
sources are used. However, it is much more difficult to go back after a few
years and amend a TIF Plan to spend more money on city improvements.
Accordingly, the TIF No. 19 Plan is dealing with some very large numbers.
If no redevelopment project took place and no TIF monies were available, the
city could still move forward with this trunk sewer and water project based on
the water utilities commitment and action that is recommended the City
Council take regarding the approximately $200,000 commitment from the
sewer department. With this trunk sewer and water project, only the lift
station at approximately $630,000 is planned to be funded by way of TIF No.
19. If no TIF No. 19 took place, this lift station expense would need to be
. resolved by the City Council.
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We have talked about this project for a number of years and we are
approaching a moment of truth. It is impossible to have all of the financial
issues addressed with this project as the street and storm drainage
improvements have yet to move to the bidding stage. Also, there is a concern
about green acre deferrals, but some of this concern may go away if the city (or
EDA) acquires the Brown property. We will never know all of the financial
answers before "it is time" to move forward with the trunk sewer and water
project. I feel comfortable that the various funding sources are going to be
available to make this sewer and water project work out from a financial point
of view. If things do not work out properly, then the city will have to look at
accessing some reserve funds to make bond payments or utilizing its tax levy
authority.
The City Council is asked to review the attached information from the city
engineer and consider the resolution awarding the bids for this project. The
resolution awards the bids for the entire project area contingent upon the city
obtaining the necessary easements (i.e. through the Brown property, the
Deschenes property, etc.).
The City Council is requested to consider a motion authorizing use of sewer
funds for the sewer trunk line funding shortage.
EAST ELK RIVER PROJECT
. November 17 Bid
Water Sewer Lift Station Total
Proiect Costs
Construction 1,929,269 2,623,684 492,201 5,045,153
Overhead 540,195 734,631 137,816 1,412,643
Total Costs 2,469,464 3,358,315 630,017 6,457,796
Revenues
Trunk Assessments 1,395,460 2,790,920 4,186,380
Hohlen Lateral Assmts 103,500 103,500 207,000
Trott Brook Oversizing Cr. (99,000) (176,000) (275,000)
Trott Brook Addl Trunk Assmt. 270,887 436,088 706,975
Total Identified Revenues 1,670,847 3,154,508 4,825,355
Balance to be Funded 798,617 203,807 630,017 1,632,441
_her Financina Sources XXX XXX 630,017 630,017
IF 19
Water Fund XXX
Sewer Fund XXX
Financing to be Identified 1,002,424
(amounts from above sources
not yet determined)
July estimated shortfall (without TIF for Liftstation) was $964,745.
November bid shortfall (without TIF for Liftstation) is $1,632,441
Budget vs Actual
Construction
Water Sewer Lift Station Total Only
Budget 1,809,313 2,473,206 800,606 5,083,125 3,971,191
Actual 2,469,464 3,358,315 630,017 6,457,796 5,045,153
(Less Trott Brook Request) 165,120 541,775 706,895 552,262
Adjusted Actual 2,304,344 2,816,540 630,017 5,750,901 4,492,891
Variance (Over Budget) (495,030) (343,334) 170,588 (667,775) (521,700)
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11/24/98
Page 1
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EAST ELK RIVER PROJECT
July 1998 Construction. Estimates
Proiect Costs
Construction
Overhead
Land Acquisition
South of CR 12
North of CR 12
Railroad Crossing
Total Costs
Revenues
High Priority Project $
TEA 21
ti"ott Brook Farms Assessment
MSA Funds (Land N of 12)
Total Identified Revenues
Balance to be Funded
Other Financinq Sources
TIF 18
TIF 19
SWM Tax Levy
Tax Levy
Other
Financing to be identified
(amount from above sources
not yet determined)
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11/24/98
Storm
Streets Sewer TOTAL
1,976,598 1,621,527 3,598,126
553,448 454,028 1,007,475
458,500 458,500
300,000 300,000
508,992 508,992
3,797,538 2,075,555 5,873,093
2,400,000
264,320 183,680
295,764 264,457
300,000
3,260,084 448,137
(537,454) (1,627,418)
2,400,000
448,000
560,220
300,000
3,708,220
(2,164,873)
508,992
508,992
(1 ,655,881)
Page 2
EAST ELK RIVER PROJECT
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PROJECT SUMMARY
Water Sewer Lift Station Streets* Storm Sewer* TOTAL
Projected Shortfall 798,617 203,807 630,017 537,454 1,627,418 3,797,313
Other Funding Sources
TIF 630,017 508,992 1,139,009
FUNDING TO BE IDENTIFIED 798,617 203,807 28,462 1,627,418 2,658,304
Possible Sources include:
Additional TIF 19-
Tax Levy
SWM Tax Levy
Water and Sewer Funds
MSA
Other
*Based on July Estimates
**TIF 19 projections assume including some City costs.
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11/24/98
Page 3
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Howard R. Green Company
CONSULTING ENGINEERS
February 19, 1999
File: 800110J-0071
The Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
P.O. Box 490
Elk River, MN 55330-0490
RE: EAST ELK RIVER PHASE 1 IMPROVEMENTS
AWARD OF CONTRACT
DearCoun~IMembe~:
As you are aware, construction bids for East Elk River Phase 1 Sanitary Sewer and Water
Improvement were opened in mid November 1998. The low bid was submitted by S.R.
Weidema, Inc., in the amount of $5,871 ,384.60. Since the bid opening the City Council has had
numerous discussions regarding the financing of these improvements and the two proposed
developments that petitioned for the improvements. The City now has received most of the
permits for the proposed improvements and has received the easements from the Elk River
Crossing development. Therefore, we feel it appropriate to consider the award of the bids at
this time. Attached is a draft resolution for the City Council's consideration that accepts the bid
and authorizes execution of the contract with S.R. Weidema, Inc. A condition has been added
to the resolution which states that the Notice to Proceed will be given section by section and
that it is dependant upon the City's ability to successfully complete the necessary easement and
right-of-way acquisition.
To help with the City Council's discussion of this item, I have attached an exhibit, which
graphically shows the improvements involved in this contract. The original bid contained
additional trunk sanitary sewer and water main in County Road 12 to the east of Tyler Street.
This was anticipated to be funded by the Trott Brook Farm development. However, after the
bids were received, the developer asked that this sanitary sewer and water main be deleted and
instead routed internally through his development. We are currently working with the contractor
to assemble Change Order No. 1 to this contract, which would delete this sanitary sewer and
water main and slightly modify the sanitary sewer and water main improvements along Tyler
Street north of County Road 12. One additional item, which would be included in this first
change, order would be the internal improvements necessary for the Vandenberg Industrial
development. We anti~pate that Change Order No. 1 will result in a reduction to the total
contract amount of approximately $125,000 to $150,000. We would request City Council
approval to complete the negotiations on Change Order NO.1 assuming the end result will be a
o.lproj.l110-0218.feb
1326 Energy Park Drive. 81. Paul, MN 55108 . 651/644-4389 fax 651/644-9446 toll free 888/368-4389
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The Honorable Mayor and City Council
February 19, 1999
Page Two
reduction in the total contract price in this range. We would request the contractor executing
Change Order No. 1 be a condition of the award of the contract. We believe this will provide the
City maximum leverage in negotiating the final dollar amount of the change order.
I will be in attendance at your February 22, 1999, City Council meeting to answer any questions
you may have regarding these issues.
Sincerely,
HOWARD R. GREEN COMPANY
~fr!~~
Terry J. Maurer, P.E.
o.lproj.l110-0218.feb
Howard R. Green Company
CONSULTING ENGINEERS
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RESOLUTION 99 -
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION ACCEPTING BID AND AUTHORIZING EXECUTION
OF CONTRACT IN THE MATTER OF THE EAST ELK RIVER PHASE I
SANITARY SEWER AND WATER IMPROVEMENT OF 1999
WHEREAS, pursuant to Resolution 98-106, competitive bids were solicited
and received for the East Elk River Phase I Sanitary Sewer
and Water improvement as set forth in the bid tabulation
attached hereto and incorporated herein by this reference;
and,
WHEREAS, the City Council has considered the amount of the bids and
the responsibility of the bidders and determined that S.R.
Weidema, Inc., is the lowest responsible bidder.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Elk River, Minnesota:
1.
The Mayor and City Administrator are authorized and directed to
execute, on behalf of the City, such contract with S.R. Weidema, Inc., as
is approved by the City Attorney for the completion of the East Elk
River Phase I Sanitary Sewer and Water improvement according to the
approved plans and specifications designed in Resolution 98-106.
2. Issuance of the Notice to Proceed shall be done by section and is
dependant on the City's ability to successfully complete the necessary
easement and right-of-way acquisition.
3. The City Administrator is authorized and directed to forthwith return to
all bidders the deposits made with their bids upon execution of the
contract specified above.
Passed and adopted by the City Council of the City of Elk River this 22nd day
of February, 1999.
Stephanie A. Klinzing, Mayor
ATTEST:
Sandra A. Peine, City Clerk
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JOl1uary 22, 1999 9;36;12 a.m.
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APPROVED:
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EAST ELK RI VER
UTILITY ALIGNMENTS
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JANUARY 1999
DATE:
800110J
JOB NO.
LEGENQ
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PROPOSED TRANSPORTATION
AND UTILITY CORRIDOR
TRUNK SANITARY SEWER
LA TERAL SANITARY SEWER
IIImllJlllllllllllUlfnlll1 FORCEMAIN
TRUNK WA TERMAIN
LIFT STATION
COUNTY ROAD NO. 12
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175TH