Adopt Resolution #23-277 Approving Construction Contingency Expense No. 2 for Improvement Project #21-09, Centralized Water Treatment Plant

Purpose:
The purpose of this case is to adopt Resolution #23-277 approving Construction Contingency Expense No. 2 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 items requiring adjustments 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, seven 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 six of the RFP’s.  AE2S therefore recommends moving forward with Construction Contingency Expense No. 2, which includes prices for RFP 002, RFP 004, and the proposals for reimbursement for all building permit costs and the groundbreaking signage requested by City staff.  No time extensions are associated with these requests.
 
Details on the two RFP’s addressed within this case are summarized in the attached letter from AE2S. The letter 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 #23-277 approving Construction Contingency Expense No. 2 for Improvement Project #21-09, Centralized Water Treatment Plant.  

The attached letter from AE2S identifies project cost impacts due to Construction Contingency Expense No. 2 totaling $135,654.02 and includes supporting documentation.
 
The original Construction Contingency amount was $950,000.  By approving Construction Contingency Expense No. 2, the available construction contingency will be reduced to $737,899.45.
 
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 known when the WTP trunk watermain improvements bids are accepted and approved on November 28, 2023. The actual bonding amount will determine how much sewer and water rates will need to increase.
 
The City is also 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 #23-277 approving Construction Contingency Expense No. 2 for Improvement Project #21-09, Centralized Water Treatment Plant.