Consider Recommendation to City Council to Accept Bids and Award Contract for Improvement Project #21-09, Centralized Water Treatment Plant 

Purpose:
Consider Recommendation to City Council to Accept Bids and Award Contract for Improvement Project #21-09, Centralized Water Treatment Plant. 
 
Background:
In early 2019, the Minnesota Department of Health detected manganese concentrations above recommended health guidelines in several of Ramsey's city wells. Since then, the following actions have been completed.

• Staff drafted a letter outlining the new manganese issue and the City's short and long-term plans to address the issue and mailed the letter on 5/15/2019 to 5,600 Ramsey households.
• A public meeting was held at city hall to address concerns with residents.
• Wells #5, 6 and 7 have been exclusively utilized since these wells have the lowest concentrations of manganese.  Unfortunately, these three wells have the largest concentrations of Iron leading to increased rusty water complaints.
• Wells #1, 3, 4 and 8 have Manganese concentrations above the MDH guidelines. These wells have only been utilized when water demand increases beyond the capabilities of wells #5, 6 and 7.
• A Manganese hot line was established and Staff spoke to 88 concerned residents regarding Manganese and Iron in Ramsey's municipal water supply.
• Several articles have been published on Facebook and in the Ramsey Resident
• Monthly updates are being made to Ramsey’s website regarding current Manganese concentrations. Staff collects and tests 15 random water samples monthly and publishes results on the City website.
• SEH, Inc. completed a pilot plant study on Wells #3 and #4 to determine the correct filtering process to remove Manganese and Iron from Ramsey's municipal supply.
• SEH, Inc. completed a water treatment plant Feasibility Study.
• SEH, Inc. prepared final plans and specifications for the required raw and finished water trunk lines needed to serve the proposed water treatment plant. The plans were advertised for bids but all bids were rejected as they significantly exceeded the engineer’s estimate.
• AE2S prepared final plans and specifications for the proposed WTP and administered the bid process and will provide construction administration services upon award of the project to the lowest responsible bidder.

.
The proposed City of Ramsey Water Treatment Plant (WTP) project generally consists of constructing a new 10 million gallons per day (MGD) gravity filtration WTP.  In general;

• Building construction consists of cast in place concrete and concrete masonry units.
• Processes include a backwash reclaim basin, conventional dual-media gravity filters, a clear well, a reservoir, general process piping ranging in size from 3 to 30-inches, numerous valves, fittings, and appurtenances.
• Chemical feed systems include chemical storage tanks, containment, and feed equipment for chlorine, permanganate, phosphate, hydrofluorosilicic acid, and polymer; high service pumps; general mechanical work including HVAC work, ductwork, drain, waste, and vent piping; and other mechanical equipment and appurtenances.
• Electrical systems consist of electrical circuits and controls including lighting, power, instrumentation and controls, and associated conduit and wiring.
• A standby generator sized to meet emergency and load management electrical requirements.
• Sitework includes grading, seeding, influent water main, sanitary sewer, storm sewer, piping appurtenances, an asphalt access road and parking lot, and a stormwater filtration basin.

AE2S completed plans and specifications January of 2023.
 
Advertisements for bids were published in the Anoka County Union Herald and in Finance & Commerce on Friday, January 27, and Friday, February 3, 2023. The project was also advertised and bid electronically through QuestCDN.
 
Three bids were received and publicly opened on March 9, 2023.  Attached is the project bid tabulation.  
 

Staff anticipates 15 minutes will be needed to present this case and respond to questions. 

Observations:
The WTP trunk watermain improvements are proposed to be bid this Summer/Fall. Construction is anticipated to take 3 to 4 months to complete so these improvements can be constructed in 2024 and/or early 2025 to support a WTP commissioning date in Summer/Fall of 2025 
 
Peak water use season typically begins early June and ends early September. A non-mandatory pre-bid meeting was held on February 15th and representatives from all 3 bidders attended. During that meeting several items were discussed including that the bidders recommended allowing more than 24 months for completion of construction from the date a contract is awarded.  The bidders stated that it generally takes 3 to 4 months to execute contracts with their subcontractors and to order materials before construction can begin.  This then only leaves the contractor 20 to 21 months to construct the WTP. As such they will likely increase their bids to account for the risk of financial penalties for not meeting specified completion deadlines.
 
Staff discussed the contractor’s comments with AE2S and an addendum was subsequently issued to include an alternate bid to extend the project completion deadline by 4 months at an overall project cost savings to the City. Below are the base bid and alternate bid project completion deadlines.
 
Base Bid Completion Dates:
1. Substantial Completion by May 1, 2025.
2. Final Completion by August 1, 2025
 
Bid Alternate No. 1 Completion Dates:
1. Substantial Completion by September 1, 2025.
2. Final Completion by December 1, 2025
 
On April 28th the City Council will consider accepting the three (3) bids and awarding a contract for construction to the lowest bidder, potentially including their alternate bid saving the City approximately $50,000.

Alternatives:
Alternative #1:
Motion recommending City Council acceptance of bids and award of construction contract for Improvement Project #21-09, Centralized Water Treatment Plant, to Magney Construction, Inc. in the amount of $31,478,500.

Alternative #2:
Motion of other.   
 

The 2023-2032 CIP lists total project costs for all required WTP improvements at $47.6M.  This includes costs for both the WTP and the trunk watermain improvements, which will be bid at a later date. Funding was proposed to come from the following:

• $33.6M from sewer and water utility funds
• $14M from bonding 

 
With the need to write investments down to market value in an amount of approximately $5M, this will decrease the amount of internal funding. So, as of January it was estimated that the sewer & water utility funds will provide about $29M and bonding the rest.  The amount of bonding needed will determine how much the sewer and water rates will need to increase.  A 10% rate increase was calculated, but this may need to be increased based on final bonding amount.  Any funds received from the legislative session will have the direct result of reducing bonding needs and the possible reduction of double-digit utility rate increases.

Staff recommends alternative #1.  

Adopt Resolution #23-032 approving plans and specifications and authorizing advertisements for bids for Improvement Project #21-09, Centralized Water Treatment Plant.