Adopt Resolution #23-226 Approving Construction Contingency Expense No. 1 for Improvement Project #21-09, Centralized Water Treatment Plant

Purpose:
The purpose of this case is to adopt Resolution #23-226 approving Construction Contingency Expense No. 1 for Improvement Project #21-09, Centralized Water Treatment Plant. 
 
Background:
The Water Treatment Plant (WTP) project includes a construction contingency cost of $950,000.  This contingency cost is intended to pay for new items during construction that were not contemplated during the design process, or for items that the owner, engineer, or contractor(s) propose to revise during construction.
 
Attached is a letter from the Construction Lead that works for the Project Engineering firm of AE2S that identifies several items requiring adjustments or that are recommended to be adjusted during construction. The letter is intended to outline the adjustments and to summarize the current project budget to allow the City to fully understand the status of the project before spending a portion of the construction contingency costs.
 
To date, 6 requests for pricing (RFP) have been submitted to Magney Construction, the awarded contractor for this project.  A full list of these requests is included in the attached letter. AE2S has since received pricing back from Magney on 3 of the RFP’s.  AE2S would therefore like to move forward with Construction Contingency Expense No. 1, which includes prices for RFP 001, 003, and 006. It is important to note that the Contractor has included a request for time extension in RFP 001 and RFP 006. More information has been requested before approving these time extensions.  If an extension is approved to extend the substantial
completion date, that will result in a Change Order issued at a different time.
 
Details on the 3 RFP’s addressed within this case are summarized in the attached letter from AE2S and below.
 
RFP No. 001: Mixing Pumps Pipe Upsizing
The Backwash Tank mixing system manufacturer is recommending that the suction and discharge piping on the mixing pump be upsized from the proposed 6” to 14” to meet the required mixing flow rate. This change will not alter the price of the mixing system package that will be supplied by the manufacturer.  However, it will require Magney to upsize the pipes and valves from the pump to the tank.
 
RFP No. 003: Administrative Area Ceiling Grid Color
The acoustic ceiling suspension grid in the administrative area of the Water Treatment Plant was originally specified as being white. However, after reviewing samples provided by the manufacturer, it was determined by the Architect that a chrome system would be better suited for the aesthetics of this area.
 
RFP No. 006: Storm and Plumbing Updates
For plan approval, the Department of Labor Industries must review all plumbing and civil plans. Comments back required adjustments to various plumbing elements and modifications to the stormwater retention pond were required. These changes are necessary to meet all building codes.
 
The attached letter from AE2S also summarizes all known construction contingency expenses at this time to assist the City of Ramsey in better understanding the current contingency status. As construction progresses, AE2S will continue to provide cost updates and will coordinate closely with the City on all issues impacting project costs. AE2S will also continue to support and track the progress of the WTP and will provide updates as necessary for the City of Ramsey to make responsible decisions on the progress of the WTP.   

Notifications are not required for this case.   

Alternative #1:
Motion to adopt Resolution #23-226 approving Construction Contingency Expense No. 1 for Improvement Project #21-09, Centralized Water Treatment Plant.  

 

Project cost impacts due to Construction Contingency Expense No. 1 total $76,446.53.
 
The original Construction Contingency amount is $950,000.  By approving Construction Contingency Expense No. 1, the available construction contingency will be reduced to $873,553.47.
 
Funding sources and amounts for the WTP project are currently proposed as follows:

• $33,500,000 from sewer ($8,900,000) and water ($24,600,000) utility funds
• $9M from bonding (estimated)

 
The actual amount of bonding needed will be determined after bids are received for the WTP trunk watermain improvements in November. The actual bonding amount will determine how much sewer and water rates will need to increase.
 
The City is also currently working to fully understand project cost impacts related to the grant funding appropriated to the project during the 2023 Legislative Session, as well as project cost savings related to sales and use tax exemptions (HF1177 & SF1197).  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.  The status of these legislative requests is not yet fully understood.  

Staff and AE2S recommend approving alternative #1.  

Motion to adopt Resolution #23-226 approving Construction Contingency Expense No. 1 for Improvement Project #21-09, Centralized Water Treatment Plant.