Staff recommends that the City Council approve the purchase of road materials from Knife River for $7.60 per ton for road materials, $12.60 per ton for bedding materials, and $125 per ton for cold asphalt mix for the first year with increases of $1 per ton in years 2 and 3 for the road and bedding materials and an increase of $40 per ton in year 2 and $60 per ton in year 3 for the cold asphalt mix.  

The Public Works Department uses the road materials to restore leak hole trenches and street right of way.  On average, 6,500 tons of road material, 1,250 tons of bedding material, and 350 tons of cold asphalt mix are used annually. The bid for road materials was advertised on November 3 and November 10, 2023, in the Yellowstone County News and on the City's website.  Bids were opened on November 21, 2023, and one bid was received.   Knife River submitted the only responsible bid. There are limited suppliers of these materials in Billings, and typically we only receive one or two bids. The road materials price is a decrease from the price paid last year and the bedding materials are a 4% increase from the previous price. The price per ton for the cold asphalt mix increased by approximately 40%, but staff checked the pricing with other vendors and this is the market price for this material.  Staff also analyzed the use of a different material, but cold asphalt mix is the least expensive option.

City Council may:

• Approve the award for the purchase of road materials; or,
• Not approve the award for the purchase of road materials.  If not awarded, the Public Works Department will not be able to repair trenches or street right of way when repairing water services.

The following bid was received:
 

Vendor	Price per ton per year road materials	Price per ton per year bedding materials	Price per ton per year cold asphalt
Knife River	Year 1 $7.60	Year 1 $12.60	Year 1 $125
Knife River	Year 2 $8.60	Year 2 $13.60	Year 2 $165
Knife River	Year 3 $9.60	Year 3 $14.60	Year 3 $225

The bid from Knife River was the only bid received for the three-year contract.  The total annual cost for the first year is estimated to be $110,000.  The road materials are budgeted in FY24 using water funds. There is sufficient budget to award this bid.