This project is part of the ongoing Street Preventative Maintenance Program supported by the City Council since 1985. Annually, staff identifies streets proposed for preventative maintenance which typically includes chip seal resurfacing, overlay resurfacing, and crack sealing.  Chip sealing is an economical surface treatment designed to protect and prolong the life of the pavement.  The bulk of the project which is Schedule 1 will provide a chip seal on approximately 12.3 miles of streets throughout the City. It includes an Additive Alternate A to fog seal the chip seal in one area and also includes a Schedule 2 which will provide a new paved surface on three non-maintainable city streets. The attached maps show the locations of the proposed work. Staff opened bids on February 14, 2017, for the Work Order 17-03, Contract #1 City Chip Seal. The contract was advertised on January 26, February 2 and 9 in The Billings Times and on the City's website. Knife River submitted the lowest responsible bid for Schedule 1 which is the chip seal and Hardrives Construction, Inc submitted the lowest responsible bid for Schedule 2 which is paving a new surface on the non-maintainable streets.

The Council may:

• Award W.O. 17-03, Contract #1 City Chip Seal Schedule 1 with Add Alternative A to Knife River in the amount of $884,713.67 and Schedule 2 to Hardrives Construction, Inc. in the amount of $117,649.00; or
• Do not award a contract and reject all bids.  If this project is not awarded, the deferred maintenance of City streets will increase.

The following bids were received and evaluated:

Contractor	Schedule1	Schedule 2	Additive Alternate A
Knife River	$876,953.67	$126,478.00	$7,760.00
Hardrives Construction, Inc.	$980,227.26	$117,649.00	$9,750.00
Wharton Asphalt	$1,021,714.55	$158,737.50	$8,790.00
Riverside Contracting, Inc.	$1,158,327.66	Did Not Bid	$11,900.00

The funding for the project was budgeted in FY17 and the source is gas tax and arterial funds.

Project Budget	$2,925,000
Previously Encumbered	$0.00
This Contract	$1,002,362.67
W.O. 17-03 Contract #2 City Overlay	$1,232,661.77
Budget Remaining	$689,975.56

Staff recommends the City Council award a contract for W.O. 17-03, Contract #1 City Chip Seal Schedule 1 with Additive Alternate A to Knife River in the amount of $884,713.67 and Schedule 2 to Hardrives Construction, Inc. in the amount of $117,649.00.