Staff recommends that the City Council approve Amendment No. 6 to the City’s professional engineering services contract with HDR Engineering, Inc. for W.O. 19-12: West End Reservoir (WER) Project in the amount of $4,994,200.

HDR’s preliminary design contract for the WER project in the amount of $1,564,000 was approved by Council in March 2019.  This project phase evaluated raw water sources and quality, conducted a West End Water Treatment Plant (WEWTP) siting and Hesper Road evaluation, performed geotechnical evaluations, initiated permitting activities, completed preliminary assessment of groundwater impacts, prepared a preliminary design report, developed a master plan and conceptual designs for end-land use improvements and completed a planning level cost estimate.

Council approved Amendment No. 1 in the amount of $2,096,200 in April 2020 to design a new Yellowstone River intake near the Duck Creek Bridge and 4-mile-long pipeline to the WEWTP; a shale material processing study was also included in this amendment.  Amendment No. 2 in the amount of $698,400 was approved in May 2020 to perform additional geotechnical investigations and topographic survey, and Amendment No. 3 in March 2022 for $73,900 enabled some additional data collection, field work and permitting activities.

Council approved Amendment No. 4 in the amount of $1,991,300 in August 2022 to enable bidding, construction administration, field inspection, training, startup, and programming services for the River Intake & Pump Station (IPS), and Raw Water Pipeline (RWP) projects.  This amendment also included some additional survey, permitting and environmental work at the river and the pipeline crossing of I-90 and Montana Rail Link.

In October 2022, the City’s General Contractor/Construction Manager (GC/CM) for the RWP project (COP Construction) presented an $18.0 million Guaranteed Maximum Price (GMP) to construct the pipeline.  In November 2022, one bid of $18.0 million was received for the IPS project.  The cost of these two projects substantially exceeded the City’s projections and neither project was awarded; instead, the City pursued a more cost-effective option to deliver raw water to the WER and WEWTP. In May 2023, the City entered into an agreement with the Billings Bench Water Association (BBWA) to receive water from the BBWA Canal. The agreement allows the City to utilize it for up to 20 years.

Council approved Amendment No. 5 in the amount of $2,115,400 in October 2024 to extend GC/CM coordination, environmental, permitting and grant assistance for the West End Reservoir and BBWA Raw Water Delivery (RWD) projects.  In addition, Amendment No. 5 brought the reservoir design to 30% and included Raw Water Delivery final design, bidding, construction programming, startup and training services.

Amendment No. 6 now under consideration totals $4,994,200 and generally consists of the following elements:

• Extends GC/CM coordination and agency, environmental, permitting and grant assistance for the Reservoir and BBWA RWD projects;
• Completes a BBWA raw water delivery operations plan and extends field construction inspection services;
• Brings the Reservoir project through Final Design and Bidding; and
• Includes Reservoir Construction Contract Administration services based on a construction schedule extending from April 2026 through December 2027.  Training, Startup, Wrap-Up/Acceptance, Post-Construction Warranty, and Programming services are included.

GC/CM coordination involves ongoing cooperation with the contractor to optimize designs, refine cost estimates, and develop bid packages. These efforts optimized sequencing, minimized cost, and reduced the construction schedule.   As part of the coordination efforts, HDR has developed plans and specifications for several different work packages including Electrical Equipment Procurement, BBWA Raw Water Delivery (BBWA Unloader, Screen Structure, Diversion Channel and Canyon Creek Offloader), Knife River Fill Material, Raw Water Piping Installation, and the Hesper Crossing (box culverts, raw water crossing, electrical conduits, and storm).

The current construction schedule runs from Spring 2026 through Fall 2028; however, there are opportunities to complete the work sooner by bidding multiple schedules.  More will be known about the potential for schedule and cost-savings once bidding commences, bids are collected and contracts negotiated.  Amendment No. 6 includes Construction Contract Administration services through the end of 2027 in anticipation of realizing cost-savings on administrative and field inspection services, including potential use of City staff. In summary, Amendment No. 6 finalizes reservoir design through bidding, adds reservoir construction contract administration, and concludes the BBWA raw water delivery work package through construction.
 

City Council may:

• Approve Contract Amendment No. 6 with HDR Engineering; or,
• Not approve Contract Amendment No. 6.  If this amendment is not approved, the West End Reservoir design cannot progress, which would result in significant project schedule delay.

Original Contract: $1,564,000
Previous Contract Amendments 1 through 5: $6,975,200
This Amendment: $4,994,200
Contract Total: $13,533,400

Fees associated with engineering design and construction contract administration are 17.6% of the BBWA Raw Water Delivery and estimated Reservoir construction cost, but within that work scope several engineering tasks cost more than the typical project.  For example, geotechnical investigations and design are about 2% higher than normal due to the critical nature of the reservoir embankment and piping, and environmental permitting is about 1% above typical due to extensive wetland and dam permitting efforts.  Preliminary project planning tasks were about 1% of the project.  

Water funds budgeted in FY26 for this project are adequate and will be used for this amendment.