W.O. 15-07 Orchard Lane Reconstruction is a project to reconstruct Orchard between King Ave East and State Avenue. The improvements on Orchard will include two travel lanes, a two way left turn lane, 7 foot sidewalks with new corner radiuses, and street lights. Schedules 1 is the base bid and schedule 2 is the additive alternate for the street lights for the SILMD that was approved by Council on April 11th.  Staff opened bids on April 12, 2016. The contract was advertised on March 24th, 31st, and April 7th in the Billings Times and on the City's website. CMG Construction Inc. submitted the lowest responsible bid.  The bids are higher than the budget, which is discussed in the financial impact portion of the Council memo, but after reviewing the bids, staff believes they are responsible bids.  There are three bidders and the bids are close to each other, indicating that the project documents were well understood and the bids are competitive.  Staff uses historical bids to anticipate costs for current projects, but the construction industry experiences fluctuating costs and there are many factors that drive the bid prices.  By bidding competitively and seeing a tight grouping of bids, the City can be confident that the project costs are fair.

The Council may:

• Award W.O. 15-07, Orchard Lane Reconstruction to CMG Construction Inc. in the amount of $4,070,702.00 for Schedules 1 & 2; or
• Do not award a contract and reject all bids.  If this project is not awarded, Orchard Lane will not be reconstructed.

The following bids were received and evaluated:

Contractor	Schedule 1 & 2
CMG Construction Inc.	$4,070,702.00
Wilson Bros. Construction	$4,083,548.25
Knife River	$4,325,571.95

The funding for the project was budgeted in FY16 and the sources are TIF, Sewer, Gas Tax, and Storm Drain.  The project bids came in higher than expected but the SBURD would like to proceed and use TIF funds to make up the difference.  A third quarter budget amendment will be forwarded to Council.

Project Budget	$4,139,522
Previously Encumbered	$382,622
This Contract	$4,070,702
Budget Remaining	-$313,802

 

The project is primarily funded by tax increment financing (TIF) funds from the South Billings Urban Renewal District (SBURD).  Gas tax is being contributed in the amount equal to an overlay which the City had planned for the street before the SBURD determined a full reconstruction was desired.  Sewer funds are allocated for adding future sewer services and the City is contributing $400,000 of storm funds due to the fact that the stormwater main in Orchard collects stormwater from other streets and must be sized accordingly.

Staff recommends the City Council award a contract for W.O. 15-07, Orchard Lane Reconstruction to CMG Construction Inc. in the amount of $4,070,702.00.