Budget and Finance Committee recommends that Council approve Change Order #2 to the Dick Anderson Construction CMAR contract for construction services at new City Hall for $2,418,341.14 for window replacement. 

When the New City Hall project costs came back at around $2.5 million under design development cost estimates, the Building Committee presented at the Budget and Finance Committee meeting held on April 26, 2023, potential options for either keeping the scope as is, or adding full generator back up and window replacement to the project. The committee voted unanimously for the Building Committee to pursue adding the window replacement and generator backup to the project (see attached Committee Meeting Minutes from 4/26/23). The estimates at that time were about $2,000,000 for full window replacement.

The existing windows are original vintage from the early 1960’s and most window assemblies throughout the building have failed, and all glazing units need varying degrees of repair. The windows include glass, sash, gaskets/seals, and frame, and account for roughly 40% of the overall building envelope system. The new window frames will be brushed aluminum to match the original design aesthetic.

Full window replacement will result in significant improvements to the long-term health of the building’s exterior envelope, building comfort, decreased maintenance costs, and increased thermal efficiency.

Upon the recommendation of the Operations Committee to move forward with window replacement, the design team began work on a new window design that met the requirements of State and National Historic Preservation.

The attached memo by JLG architects outlines the historic preservation process, review, and the design, scoping, estimating, and bidding efforts for the window replacement.

Completing the window replacement at this time will allow for access from the interior of the building during normal progression of construction and should not significantly impact construction schedule. If the decision is made not to replace the units during construction it will be more costly, damaging, and intrusive to complete this work once the building is occupied.

Staff recommends full replacement as repair of individual windows is not economically feasible due to the amount of labor involved to disassemble, repair, and reinstall. Additionally, repairing units would result in a performance level lower than installing new units, and would also have a limited-service life as compared to new units.

Building windows' breakdown:

• 1st Floor: 122 units
• 2nd - 5th Floors: 630 units 
• Total window units: 752

The new windows for the current Yellowstone County Suite on the 3rd floor will be procured as part of this change order, but not installed at this time. The windows will be installed at such time that the County moves out or remodels their space under a separate contract. 

Dick Anderson Construction advertised an Invitation for Bid on 08/18/2023, and 08/25/2023 in Yellowstone County News and on the City’s Website.

Four (4) bids were submitted by 08/31/2023. TC Glass Inc., was the lowest responsible bidder.

City Council may:

Approve the full window procurement and proposed replacement scope (PCCO #002 - Option A). Note that the 3rd floor County Suite windows would be procured but not replaced under this scope. 

Advantages to approve the Change Order include:

• Less costly to do it during construction that after construction is completed and building is occupied 
• Historic tax credit reimbursement is only available for 60 months from the start of the project, so a project beyond 5 years would not have that opportunity for reimbursement 
• Immediate utility and energy savings 
• Fewer issues with window repair and maintenance with new units 
• Increased building comfort for occupants starting on day one
• 60+ years of not having to plan for a large-scale replacement of windows 
• Historic tax credit reimbursement of around $400,000 - $450,000 

Disadvantages to approving the Change Order include:

• Increasing the construction budget by about $420,000 more than anticipated in build-out costs over Design Development estimates 
• Additional short-term financing needed to cover the increase in construction costs 

City Council may not approve the Change Order and only the broken and damaged windows in the original bid documents will be repaired during construction. 

The total construction contract (pre-construction services, Bid Package #1 and GMP/Change Order #001) is $22,220,134.00. 

Change Order #002, Option A is $2,418,341.14. If accepted, this would bring the total contract price to $24,638,475.14, including a 5% project contingency. 

The City Hall construction project is funded by various sources, but primarily by the General Fund. Energy savings from the new windows were estimated at $125,892 annually based on 2022 utility costs. With the increase in utility costs estimated at about 4% a year, the ROI of replacing all windows in around $2.5 Million after 15 years. 

The windows are approximately 60 years old and will need to be replaced at some point. If this scope is not included at this time, reserve funds will need to be saved up for the future replacement. Future replacement will also be significantly more expensive as it will include:

• Major work disruptions for staff and visitors 
• Contractor mobilization and general conditions 
• Disruption to elevator use for construction 
• Protection of finishes, furniture, and equipment 
• Dust control 
• Removal of ceiling, gypsum wall board, and framing around windows 
• Removal and disposal of 752 windows 
• Manufacture and replacement of 752 windows 
• Replacement of framing, gypsum wall board, and ceiling at each window 
• Painting 
• Final clean up

City Staff met with the Budget and Finance Committee on 09/15/2023. The Committee unanimously recommended approval of Change Order option A, contingent on identifying several funding sources to cover the approximate $420,000 additional costs associated with window replacement. These sources include: 

• Owner contingency of approximately $900,000
• Contractor contingency of approximately $800,000
• Delay install of exterior signage for $200,000
• Reduce scope of work for owner supplied items: AV, furniture, and security 
• Historic Tax Credit reimbursement for window replacement 
• Also, if needed, the scope of work for full building generator back-up can be reduced 

Currently, it is not clear which of the above options is best for funding the difference, but the preferred method would be to use contingency funds.