Staff recommends that City Council approve the Gross Maximum Price (GMP) with Sletten Construction to $45,300,738.93, adding $470,873.93 for additional work to complete the Terminal Expansion Project and authorize the Mayor to sign the Final Amendment.

The Terminal Expansion Construction Project started in September of 2019 and was completed in October of 2024.  This 5-year large-scale project was definitely needed and has benefited our community by providing the traveling public with a first-class facility that added and remodeled approximately 120,000 square feet of public and airline operational space.  Specifically, it has provided the Airport with additional airline gates and ramp space, a large welcoming lobby and new TSA screening area, 50 individual bathrooms and more amenities to include a gift shop and new food and beverage options.  The newly remodeled terminal is efficient, looks great, functions well and staff continues to receive compliments on the final product.  All of this is due to an enormous amount of work and effort provided by an excellent team that consisted of Airport staff, Morrison Maierle Engineers, A & E Architects, Sletten Construction, and numerous subcontractors.  This was a multi-phased project that created unique daily operational challenges for the team, who had to resolve ongoing problems because the Terminal had to remain open and operational throughout the entire process.  The original design was estimated to cost approximately $60 million, but the team saved approximately $15 million dollars and the final construction cost totaled $45,300,738.93.  The savings were due to a successful collaborative team effort that allowed the contractor to purchase parts and materials up front and store them on site in order to avoid future price increases, continuing with construction during the pandemic, managing expenses and making excellent decisions.     

The project was set up with a contingency amount of $2,065,447.37 to pay for unexpected expenses that is typical during a large construction project and only amounted to 4.8% of the total projected cost.  After all calculations were finalized, it cost the Airport $470,873.93 more than anticipated and totaled $2,536,321.30 in contingencies, which is a very small increase and amounted to 6% of the total project. The additional amount was needed to pay for unexpected changes in order to tie the new space into the original 1952 Terminal building, including the 1972 and 1992 remodels.  This also paid for unpredictable winter weather overages for temporary building and concrete ground heat, snow removal, selective demolition and excavation, new fire sprinkler code requirements, and various other miscellaneous items.  In comparison, other recent terminal projects throughout the state of Montana have cost $100 million or more and assigned a contingency amount of 10% to 12%.              



  

City Council may:

• Approve the Final Amendment to the GMP with Sletten Construction for an additional $470,873.93; or
• Not Approve the Final Amendment to the GMP with Sletten Construction, withhold the final payment to the contractor and advise staff how to proceed

The cost for this Final Amendment to the Terminal Expansion Project is $470,873.93 and will increase the GMP with Sletten Construction to $45,300,738.93.  This final payment will cover additional contingency expenses and will be paid for with local capital dollars that are available in the Airport's construction fund.  Approximately $37 million in Grant funding paid for the majority of the Terminal Expansion project and Passenger Facility Charge (PFC) fees will pay 92% of what's left; therefore, the Airport will be debt free upon completion of this project, which is unheard of.