Adopt Resolution #23-107 Approving COR Infrastructure Design Services Proposal and Authorizing Bids for Improvement Project #23-17; COR Tree Clearing

Purpose:
The purpose of this case is to adopt Resolution #23-107 approving Bolton and Menk, Inc.’s COR Infrastructure Design Services Proposal dated April 7, 2023, and authorizing advertisements for bids for Improvement Project #23-17; COR Tree Clearing.
 
Background:
Attached are copies of agenda cases from the following meetings including attachments that outline all relevant details associated with this case.

• EDA meeting - October 13, 2022
• City Council regular meeting - October 25, 2022
• City Council work session - December 13, 2022

 
Also attached are The COR Analysis Update and the COR Infrastructure Design Services Proposal, both prepared by Bolton and Menk, Inc.
 
On February 21, 2023, the Public Works Committee (PWC) identified the following immediate COR Infrastructure priorities;

• Grading, lining and installing storm sewer for the Waterfront stormwater pond,
• Filling low-lying COR properties using fill from the Waterfront pond excavation,
• Reconstructing Zeolite Street,
• Reconstructing and realigning the north end of Center Street, and
• Constructing Ramsey Parkway between the Sunwood Drive roundabout and Willemite Street.

 
The PWC felt the extension of Veterans Drive and the construction of Peridot Street were not a high priority at the time. Minutes from this meeting are attached.
 
During the February 28, 2023, City Council work session, Council confirmed these priorities by consensus. Minutes from this meeting are also attached.
 
Based on the identified priorities, Bolton and Menk, Inc. prepared the attached COR Infrastructure Design Services Proposal to identify the associated scope of services and estimated costs required for design services, as well as estimated construction costs.
 
Per the attached proposal, significant progress can be made in 2023 to achieve the identified priorities in the near future. More specifically, in 2023 the following work can be completed;

• Grading, lining and installing storm sewer for the Waterfront stormwater pond,
• Filling low-lying COR properties using fill from the Waterfront pond excavation,
• Design and prepare plans and specifications for Zeolite Street,
• Design and prepare plans and specifications for the north end of Center Street, and
• Design and prepare plans and specifications for Ramsey Parkway between the Sunwood Drive roundabout and Willemite Street.

 
Tree removals are needed first to allow mass grading of The COR to occur.  By authorizing bids for tree removals this evening, bids can be opened June 6th and Council can award a contract for construction on June 13th, allowing tree removal operations to be complete before the end of July. Estimated costs for removing all trees from the COR, grubbing stumps, and hauling loose materials away, is $445,500 based on average MnDOT bid prices.  Staff anticipates actual costs will be less than this.  While bids are being advertised, staff will review the required tree replacement process and costs per City code.  It is currently estimated that replacing all higher quality trees with new trees would cost $288,000.  However, an option may exist to pay into the forestry fund instead at a significant discount.  When tree removal bids are brought forward for Council action, staff will discuss tree replacement costs in more detail with Council.
 
The next Council action that would be required would be to authorize bids for mass grading the COR, including grading the Waterfront pond and filling the low-lying COR parcels.  These bids are anticipated to occur in July, allowing all mass grading work to be completed from August through October, with cleanup and dormant seeding occurring in early November.  During this work, Zeolite Street will need to be closed to traffic.
 
Design and plan preparation for the three segments of Zeolite Street, Center Street, and Ramsey Parkway identified above would occur in phases starting immediately and concluding this fall. First, street profiles would be designed to set ground elevations along the streets to allow for mass grading work. The remainder of the design and plan preparation work would then occur as time allows during the Summer/Fall. The construction of these streets can then be completed any time after.     

Upon Council approval, bid advertisements will be published in the Anoka Union Herald on Friday, May 12, and Friday, May 19, 2023.  

Observations:
Plans for the identified tree clearing will be complete and ready to bid by Friday, May 12, 2023. Staff is therefore requesting Council authorization to advertise bids for the COR tree clearing work to allow all COR properties to be graded and filled as identified in the attached proposal in 2023. This includes the Waterfront stormwater pond site and all parcels identified to receive fill from the pond excavation.  Staff proposes to bid the plans as soon as possible to allow the mass grading work to commence as soon as possible so all proposed infrastructure improvements can be complete by the end of November to meet current TIF deadlines.
 
All of the identified preliminary and final design work can also be completed by the end of November.
 
Staff have verified that contractors still have the capacity to complete the COR tree clearing and mass grading work in 2023.  
 
Alternatives:
Alternative #1: Adopt Resolution #23-107 approving COR Infrastructure Design Services Proposal and authorizing advertisements for bids for Improvement Project #23-17; COR Tree Clearing.
 
Alternative #2: Motion of other. 

The attached proposal from Bolton and Menk identifies the following not-to-exceed estimated costs. As noted on page 5 of the attached proposal, costs will be less if individual projects are combined and constructed as larger projects and not individually.

• Design services costs for all identified improvements = $548,181
• Construction costs for identified 2023 improvements (not including streets and associated storm sewer, sidewalks, trails, sanitary sewer and watermain) = $5,874,000

 
Construction-related services such as staking, administration, and observation are not included in the above design services cost estimate.  When construction of the identified improvements occurs, a separate construction services proposal will be submitted by BMI.  

Proposed COR infrastructure project funding sources include;

• TIF 14 Bonds (street, sidewalk and trail costs)
• Stormwater Funds (stormwater management costs)
• Sanitary Sewer Funds (sanitary sewer costs)
• Watermain Funds (watermain costs)

 
Finance Director Lund and the City’s financial consultant, Ehlers, recommend using tax increment bonds for the approximate $7,000,000 in COR improvements, which includes the HY-10 Ramsey Improvements (excluding municipal utilities) and the COR Infrastructure Improvements.  Attached is a 15-year tax increment bond run provided by Ehlers. According to Ehlers, the City will have the annual $640,000 needed to make the necessary debt service payments due to increment generated by various developments within The COR.  The 15-year bond term expires before 2040. 
 
Issuing a tax increment bond requires increment to be available in the amount of 20% of the bond.  The city does not currently have $7M in the TIF 14 district and the issuance of debt allows the city the flexibility to keep the current TIF 14 funds (approximately $2M for other improvements in the future).  The issuance of debt is a cleaner process as it avoids the need for the set-up of internal loans from other funding sources, tracking these loans with not only pay back when increment becomes available, but also tracking interest. 
 
City staff will inspect construction and process pay requests.  

Staff recommends alternative #1.  

Adopt Resolution #23-107 approving COR Infrastructure Design Services Proposal and authorizing advertisements for bids for Improvement Project #23-17; COR Tree Clearing.