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5.6. SR 05-06-1996r~ity of MEMORANDUM iver FROM: DATE: SUBJECT: Mayor & City Council Pat Klaers, City A~or iMc~Y:'el::~ssues × ITEM 5.6. A-C It appears that the long ice arena project planning process is winding down and that we are close to awarding the ice arena bids and beginning construction. I say that we are close because the city should wait to sign the contracts until the local banks have confirmed that they will be participating in this project in the amount of $2.1 million and at an interest rate that compares favorably to the public bond market. Even after this bank commitment, the city still needs to hold a public hearing on the issuing of the bonds. As previously reviewed with the City Council, the bids were very favorable for this project. The construction bids and soft costs (i.e., architect fees, legal fees, construction manager fees, ice consultant fees, construction contingency, builders risk insurance, engineering, bond issuance fees, etc.) bring the project to an estimated $2.65 million. This excludes the contributions from the city/utilities and youth hockey. The city/utilities contributions include the city portion of the building permit fee, sewer and water expenses to connect to Lowell Street (engineering, land acquisition, and actual construction) SAC and WAC fees, removal of the light poles, electric connection fee, and parking lot signage/striping. The youth hockey contributions include the locker room accessories, landscaping, signage, scoreboard, concession equipment, paint and labor for both interior and exterior areas, hockey goal nets, hockey equipment, and other items for the interior part of the building. Additionally, it should be noted that the locker rooms will not be finished and that two of the three sets of bleachers will also not be provided. The permanent bleachers are in the project but the retractable bleachers are not. The financing for the project is $2.6 million plus $50,000 from youth hockey over time. The $2.6 million comes from the bank ($2.1), the Mighty Ducks grant ($250,000), the city ($50,000), youth hockey cash ($150,000) and the Rogers Plastics Foundation ($50,000). The $50,000 over time from youth hockey is needed to make the project work. However, the city needs this money in 1996 in order to pay off the contractor. Accordingly, the city should 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 consider "loaning" youth hockey this money with an understanding that they will repay this $50,000 to the city over the next five years. Youth hockey can't pay this money now due to their commitment for various components of the project as noted above. Accordingly, the city may have to come up with $100,000 for this project if it is to "loan" youth hockey $50,000 and make its $50,000 contribution. The two sources of city funds for this project that I know of are the RDF contributions and the liquor store reserves. The RDF contributions are currently being used for the purchase of the Cass property, but we expect this money to be recaptured in a year or so. This doesn't help us too much when we need the money in 1996 for the contractors. The liquor store funds are available, but using $100,000 for this project may delay the construction of a second liquor store. (Based on our meeting with the liquor store architect and his cost estimates for a new store, the project, from a financial point of view, may have to be delayed a year regardless of this ice arena financial commitment.) RSP, Mortenson, and I.C.E. have all reviewed and analyzed the ice arena bids. Please see the attached material from Mortenson and I.C.E. regarding the low responsible bidders for this project. Staff concurs with the recommendations as outlined in the attached material. Staff recommends approval of these bids contingent upon the banks making a commitment to the $2.1 million amount at a competitive interest rate. The timeframe for this project calls for substantial completion 215 days after awarding the bids and signing the contracts. This puts substantial completion into early December, so it is imperative to have this project move forward as soon as possible in order to facilitate the obtaining of ice rental contracts. In working on this project over the past few years, a number of adjustments and changes have happened with the project. This has necessitated additional work from the architects. This additional work was requested by the Task Force and the Task Force is recommending approval of the RSP change order as outlined in the attached material. The Council has been aware that RSP helped with the submission of the Mighty Ducks grant application and this is one part of the change order. Another part of the change order is the design development changes that were requested by the Task Force. The final, and biggest, part of the change order relates to the fact that the project was simply too expensive as originally designed and this did not become apparent until after the construction plans had developed to a certain stage. Once this became apparent, the Task Force ordered the size of the arena to be reduced and other adjustments to be made. This required the architects to have their employees and their consultants to revise the construction documents for the structure. The total change order is in the neighborhood of $25,700. This change order should be formally approved by motion of the City Council. Additional work for this project, as mentioned in last week's memo, include obtaining easements for the connection of sewer and water to Lowell Street, the development of an Arena Advisory Committee, the legal work necessary to obtain ownership of the existing arena, the hiring of Arena Manger Rich Czech as a city employee, and the public hearing to sell bonds for this arena project. Regarding the bonds, it is recommended that the City Council establish a public hearing date for considering these bonds for its June 3, 1996, meeting or call a special meeting for Tuesday, May 28, 1996, at 5:30 p.m. before the Planning Commission meeting (the Council is not scheduled to meet this Memorial week). Action Items The City Council needs to determine its source of funds for the ice arena project and if it is going to temporarily finance the youth hockey's $50,000 commitment. The City Council should consider a motion approving the RSP Architect's change order. The City Council should set a May 28 or June 3, 1996, public hearing date to receive citizen input on the plan to sell bonds for this project. The City Council should award the contracts and authorize the city administrator to execute the contracts as recommended by Mortenson and I.C.E. contingent upon obtaining the bank's commitment for $2.1 million at a competitive interest rate. s:council/iceiss INDEPENDENT CONSULTING ENGINEERS, INC. Bradford A. Lemberg, RE., President 80 W. County Road C Little Canada St. Paul, Minnesota 55117 Suite 801 PHONE: 612-482-9313 FAX: 612-482-9558 May 1, 1996 City of Elk River 13065 Orono Parkway Elk River, MN 55330 Attn: Mr. Pat Klaers City Administrator Re: Bid Award Recommendations Arena Expansion Project Elk River, Minnesota File No. 230294 Dear Mr. Klaers Following are our recommendations for contract awards, as requested, on the ice related bid items received on April 23, 1996: mo · Refrigeration System & Rink Floor 1. The bid from Pro-Freeze must be rejected since no bid bond was included. Based on the review of the bids and on the option available from Premier for an indirect system, it would be our recommendation to purchase and install the available used equipment for the new rink. This would then provide the same type of system for refrigeration that is in the existing rink and will make operations much easier for the rink operators since both rinks will have the same type of system. o Based on the bids, we would recommend award to the low bidder of the combined rink equipment, dasherboards and safety netting. This would then be awarded to Rink Systems, Inc. for a lump sum of $394,470. Bo Dasherboards 1. Dasherboards were bid as follows: ao Becker Arena Products $ 124,911 Crystaplex 126,664 Rink Systems 134,475 (Add for Tempered Glass - $10,100) Since Rink Systems submitted a combined total bid for refrigeration piping, floor and dasherboards that was lower than any of the other combinations available, our recommendation as noted in A-3 above would stand. Ve~j~[uly---~ yours President BAL:svg Page 2 of 2 MORTENSON The Construction Organization BUILDING DIVISION May 2, 1996 Minneapolis Office 700 Meadow Lane North P.O. Box 710 (55440-0710) Minneapolis, Minnesota 55422-4899 Telephone: (612) 522-2100 Facsimile: (612) 520-3430 Mr. Pat Klaers City of Elk River 13065 Orono Parkway Elk River, Mn 55330 Re: Elk River Ice Arena Expansion Dear Mr. Klaers: We are pleased to report that we have successfully completed the bidding for the Ice Arena project. We have carefully analyzed the bids and have reviewed them in detail with your task force. The task force has made the decision to except the following alternates: Bid Category No. 1 Alternate No. 1 Parking Lot Bid Category No. 4 Alternate No. 1 Used Ice Equipment Furnished by the Owner Bid Category No. 4 Alternate No. 3 Safety Netting at ends of new rink Based on that decision, we hereby recommend that you award contracts for the work per the attached summary. We have met with the contractors to review their bids, and are forwarding herewith their Surety's statement of bonding capacity. Please feel free to contact us if you have any further questions regarding the bids. Very truly yours, Gil Fleischhacker Senior Project Manager amg cc: Pat Barnett Minneapolis. Seattle-Denver. Colorado Springs. Milwaukee,Grand Rapids. San Diego. San Francisco. Honolulu. Los Angeles ELK RIVER ICE ARENA ELK RIVER, MINNESOTA JOB//951019 1 General Shaw Lundquist Paul Nelson $1,220,500 $28,000 ($3,600) N/A $1,245,700 Contractor Associates 454-0670 2805 Dodd Road 454-7982 Fax St. Paul, Mn 55121 2 Mechanical Horwitz, Inc. Bill Schiferli $299,700 N/A N/A N/A $299,700 5000 North Highway 169 533-1900 Minneapolis, Mn 55428 819-3712 Mobile 533-1438 Fax 3 Electrical Reliance Electric Inc. Kelly Johnson $154,466 $ 8,520 $4,219 N/A $167,205 26122 Main Street 856-4371 Zimmerman, Mn 55398 856-3077 Fax 4 & 5 Ice Rink Arena Systems Gene Krieger $525,900 N/A ($135,180) $3,750 $394,470 Equipment and 420 E County Road D 490-3044 Combined Dasher Boards St. Paul, Mn 55117 490-5357 Fax Bid 6 Bleachers Seating and Athletic Steve Snyder $52,570 N/A N/A N/A $52,570 Facilty Enterprises 507-256-7604 RR 2 Box 24A 507-256-7207 Fax Ellendale, Mn 56026 Total $2,159,645 May 2, 1996 AFI=ILtATED WITH THE AFL.CIO LOCAL UNION NO. 110 BRUCE D. CAMPBELL BUSINESS MANAGER-FINANCIAL SEORETAI=ry OFFICE 1330 CC)N~"VAY STREET, SUITE 110 SAINT PAUL, MN 5S106-5819 PHONE: (612) 7?6-64?8 THIRD TUESD&Y April30.1996 ;vfi-, Larry-D. Johnson. President Reliance Electric 26122 Main Street Zimmerman. N~' 55398 Dear !Vlr. Johnson: Enclosed for you review is a letter from Construction Industry Research Company. Inc. to Mr. Patrick Klaers, City Administrator for Elk River. We t,n~erstand that your company is the apparem Iow bidder for the Elk River Ice Arena. I would like to remind you that this project involves money from the state of Minnesota Mi~zhtv Ducks bill. A~{y project using this grant money must pa), the prevailing wage rate es~abiished i~ that county. Due to the large disparity between your bid and the other bidders, it is .my belief that you may not have used the prevailing wage rate in your bid. I thought it would be appropriate to point this out to you before you signed the comract, t will also be asking the city of Elk River to appoint a compliance oflqcer to monitor your payroll reports for prevailing wage. RJV/xvs opekl# j 2 1~..~spectl'hlly submit~ .e,47'---, Richard J. Vite"rli Assistant Business Manager I.B E w. Local Union I i0 Ellclosure ; j'p 20 March 1996 ~dexander F. Ritter, A.I.A. Michael J. Plautz, A.I.A. 3ick B. Daniels, A.I.A. iim Fitzhugh, A.I.A. Robert M. Lucius, A.I.A. :)avid C. Norback, A.I.A. Jerry Wobken, A.I.A. Mr. Patrick Klaers City Administrator City of Elk River 13065 Orono Parkway Elk River, MN 55330 Elk River Ice Arena Project and Contract Status RSP Comm. No. 6190.801.17-2 Dear Patrick: Back on 18 May 1995, just before we were scheduled to issue completed drawings for the footings, foundations, precast concrete, and roof trusses based on the original design, the project was placed on hold. This decision was made by the City and the Arena Board for two reasons. The first was to apply for a "Mighty Ducks" Grant and the second to allow the Youth Hockey Association time to do more fund raising. As previously discussed, this decision impacted our scope of services as follows. Mighty Ducks: RSP agreed to assist the Owner in procuring a Mighty Ducks Grant and estimated our services to be $1,100, plus reimbursables, to complete our portion of the Grant submission. We ended up providing assistance in assembling the forms, overall graphics, etc., which resulted in RSP exceeding our original fee estimate. This was brought to your attention and it was agreed when the project started up again the additional $1,013.27 cost would be covered. With the project now restarted, we have enclosed our billing for this mount. Design Revisions: Unfortunately, Elk River was not one of the communities to be selected for the first round of grants. With this information in hand, on 19 December 1995, the City and the Arena Board directed RSP to develop possible design revisions that would reduce the cost of the building. The final approved revisions are as follows: Site Work: 1. Indicate the new water line and sewer that is being installed by the City to mn past the east side of our arena project to the cul-de-sac just north of the school. 2. Indicate the majority of the parking lot to be an alternate for pricing. RSP Architects Ltd. 120 First Avenue North Minneapolis, MN 55401 FAX 612 · 339 · 6760 612 · 339 · 0313 Mr. Patrick Klaers 20 March 1996 Page 2 Building Plans: Reduce the width of the building housing the ice surface, reflecting a reduction in seating from 2,500 to 1,500 to 1,700 people. Elevate seating to have front walkway (±36") above finish floor. 2. Cut the corners of the building at 45 degrees, omitting the storage units and stairs that were housed within. 3. Retain an elevated running/walking track around the perimeter of the building. 4. Omit all of the structural, architectural, mechanical, and electrical elements associated with the mezzanine portion of the original design. 5. Modify the original design for the entry, moving the office and ticket rooms back into the existing building's lobby area. 6. Omit the sloped metal roofing dement on the front of the building and replace with a parapeted flat roof. Omit the finished locker rooms from the plans, show an empty space with a concrete floor, plumbing rough-ins, and minimal electrical/mechanical systems. The Youth Hockey Association will complete this work outside of this contract. RSP will issue only our design floor plan to the Association to assist them when monies are available. Ice Package: 1. Base design will be to relocate the existing ice equipment to the new location in the addition. The unit will be modified so it can operate both rinks. Bid Alternate #1, leave existing unit in place and operating the existing rink. The Hockey Association will supply to the project a piece of used equipment they plan to purchase to refrigerate the new rink. 3. Bid Alternate #2, bid out the purchase of a new piece of equipment for the new fink. RSP's initial estimate to create these design revisions was $4,500 plus our reimbursable costs. Three meetings and several design solutions later, the revised design was approved. The actual time spent on these design revisions and the approval process exceeded our estimate by $1,980, bringing the total redesign cost to $6,480. Now that this phase of work is completed, enclosed is our final billing for the balance of these services, plus reimbursable costs. Mr. Patrick Klaers 20 March 1996 Page 3 Revised Construction Document Phase: When the decision to place the project on hold was made on 18 May 1995, the overall design team was approximately 50% complete with the project; our structural engineers were even further along because of the early structural bid package. The decision to accept the cost reduction design revisions has affected the work effort of all the design professionals. Wherever possible we built on the previously completed work; however, in many places we were required to make major revisions to completed work or, in some cases, the work was completely omitted. The Bid Alternates #1 and #2 for the ice equipment have also resulted in an expanded scope of work for both the mechanical and electrical engineers. Enclosed is a revised fee sheet to be attached to the original contract and to receive your initials for validation. Our professional fee for these revisions is broken down below. We feel the simplest way to handle the change in our contract is to adjust our fees for the Construction Document Phase of the project. Civil $8OO Structural $4,800 Architectural $6,740 Mechanical/Electrical 4,775 Total $17,115 Due to the lack of information and difficulty we have been having in securing information on the used equipment in Atlanta, our mechanical/electrical engineers have requested a one-week extension. RSP as well needs to know the physical size of the used equipment to make sure the new equipment room is of sufficient size. The bid documents will now be available 2 April 1996. We will coordinate with M.A. Mortenson on notice and distribution. a.vailab~my discussions and/or questions. Enclosure Copy: Pat Parrish File LCF/Icf:PJp ic¢\elknverXl0319Icl, doc Please note that I will be out of the country from 21 March to 31 March on a previously scheduled family vacation. In my absence, Courmey Kuch and/or Bob Lucius will be /rrincipa~l. LucluS, A.I.A.