What is the proposed change?
To date, the City has not planned for (budgeted/ designed/ etc.) for the inclusion of a back-up generator within the scope of this project.  The City, not the architect or general contractor, provided this direction.  As outlined in the "question" below, the City originally anticipated Anoka County would provide capacity for back-up power to Fire Station #2.  However, as discussions with Anoka County have transpired, they will not be able to provide sufficient back-up power for Fire Station #2.  As a result, the City is proposing to change the scope of this project, to include said work (purchase and installation of a 85KW back-up generator).  The estimated cost of this work, is not to exceed $65,000.  Attached is the lowest competitive proposal received.

Why wasn't this a part of the original scope?
Attached to this case is a reference map.  A permanent easement, in favor of Anoka County, was recorded on this City owned parcel in 2006.  The purpose of this easement was to allow Anoka County to construct a communications tower.  This improvement/ easement included a secured, fenced in area containing the tower, and a back-up generator.  Said improvements were completed in 2006.

As part of the 2006 discussions/ negotiations RE the permanent easement for the Anoka County communications tower, the City had an understanding (informal) that Anoka County would design their back-up generator to serve both their communications tower and the future Fire Station #2. 

Unfortunately, as time transpired from 2006 to now, that verbal agreement/ understanding had been lost.  Anoka County did install a back-up generator within their easement.  However, the Anoka County generator is vastly undersized for serving the new Ramsey Fire Station #2.  For the past 12 months, the City has been working with Anoka County to resolve this issue.  Until recently, staff was confident the Anoka County would provide the needed generator.

Why is the City responsible for this change?
The City (staff) never indicated to the design firm (BKV Group) or the general contractor via bidding (Brennen Construction) that a "new" generator would be needed for this project.  As a result, both parties never included said costs within the original scope of work.  This is not a change-order in the classic sense of the term.  This is a change of the scope of work to be completed, requested by the City, after design and awarding a contract.

How will this fit into our budget?
The City does have a contingency built within the original budget ($160,000 hard costs and $50,000 soft costs).  Because this project is just beginning, the project manager (BKV Group) is recommending the City does not use the project contingency.  Doing so will expose the City to risk on the back end to change orders; and not having adequate funding available to cover.

The increase in cost to this project, due to the change of scope (generator), is $65,000.  As the Council may recall, the lowest responsible bidder on this project came in below BKV Group's engineer's estimation ($3,180,000 estimation vs. $3,135,000 bid = $45,000 difference).  As a result, a $45,000 balance/ savings existed within the City's original bond/ budget. 

Additionally, staff requested BKV Group to review the project budget for potential dollars available to pledge towards the generator costs.  BKV Group suggested the $20,000 budgeted for "commissioning" could be removed from the project budget*.  Therefore, between the savings on the construction bid ($45,000) and removing commissioning ($20,000), the $65,000 needed for the generator can be covered through the original bond amount/ budget reviewed by the City Council.  The result of this action is no "savings" to the project as originally anticipated (i.e. the final bond amount for the project would not be lowered as indicated by staff in April).

*Commissioning is the process of hiring a third-party to inspect the installation of HVAC and utility systems; and monitor for one year after the project is completed.  The purpose of this work is to ensure maximum efficiency of said systems long term.  BKV Group indicated the size of this building/ investment makes the need for this work debatable.  Typically, projects above $10M are commissioned.  Projects less than $10M are commissioned periodically; and BKV Group does not believe commissioning is critical-priority for this type of building.  The City's Building Maintenance staff has the ability to reasonably cover this work.  BKV Group is willing work with our Building Maintenance staff to make sure this work is complete.

Is the generator needed?
The City has the ability to not install a generator.  However, because this site serves as a back-up emergency operating center (EOC), and provides several critical public services to our community, staff feels strongly a backup generator should be included in this project.

Is Anoka County willing to help?
Staff continues to work with Anoka County to resolve this issue.  At a minimum, staff will seek to maximize some form of financial contribution. The City should not rely on a potential contribution from Anoka County.  The budget proposed for this scope of work assumes no contribution.