The Community Development Division is managing the Kings Green Phase IV Project that is installing site improvements in the final phase of the King's Green Subdivision. The City Council awarded the construction contract to Knife River October 24, 2011. Shortly after the contract was awarded, staff realized the installation of sidewalks had inadvertently been left out of the design and original bid documents. The addition of sidewalks resulted in Change Order No. 1, for $26,434.40 or 10.95% of the contract, which the City Council approved at its January 9, 2012 meeting. Change Order No. 2, for $2,876.03, or 1.2% of the contract, became necessary when Knife River found a storm drain connection shifted horizontally and vertically and they had to field fit the manhole and existing inlets together with some additional concrete and cutting work. The final project walk-through was conducted May 17, 2012, and a short punch list was created. The contractor recently completed all punch list items and submitted the final pay estimate along with Final Reconciling Change Order No. 3, a DECREASE of $1,086 or -.45% of the contract. Because the City Administrator's signing authority is the lower of $100,000 or 10% of the contract for cumulative project change orders, the City Council is being asked to approve Final Reconciling Change Order No. 3 on the King's Green Phase IV Project.

There are no viable alternatives to approving this final change order.

A total of $389,043 was budgeted for this project in the Affordable Housing Fund in the Fiscal Year 2011/2012 budget. Because of the favorable construction contract bid price ($241,388.30), this project will be completed under budget, even with the change orders previously approved by the City Council.

Staff recommends that the City Council approve Final Reconciling Change Order No. 3 for a DECREASE of $1,086.