Adopt Resolution #17-06-148 Accepting Bids and Awarding Contract for Improvement Project #17-09, Bunker Lake Boulevard Utility Extensions

Purpose:
The purpose of this case is to adopt Resolution #17-06-148 accepting bids and awarding a Contract for Improvement Project #17-09, Bunker Lake Boulevard Utility Extensions.

Background:
Two development proposals are currently being considered for the Future Business Park area, which is generally shown in Figure 1 of the attached Future Business Park report prepared by Bolton & Menk, Inc.  Both developments would be located in the City’s MUSA area and as such would be served with City sewer and water.

Capstone Homes is proposing to construct a residential development consisting of just under 300 units. This development, known as Riverstone, is proposed to be located within the area bordered by the Northfork golf course, Alpine Drive, Puma Street, and Highway 10.  Capstone contends that they are firmly committed to this project, as supported by the numerous non-refundable payments they have made to the current property owner.

PSD, LLC (PSD) is proposing to construct a new business park on 45 acres of land between Bunker Lake Boulevard and Highway 10, east of Puma Street.  PSD has a letter of intent to purchase the land from Hageman Holdings. The PSD proposal initially includes mass site grading, storm water pond grading, and installation of utility stubs. PSD also appears to be firmly committed to this proposal.

When Bunker Lake Boulevard was improved west of Armstrong Boulevard in 2006, approximately the first 2,650 feet of Bunker Lake Boulevard west of Armstrong Boulevard was constructed with trunk sanitary sewer and watermain under a full pavement section. The remaining 1,400 feet or so of Bunker Lake Boulevard to Puma Street, as well as all of Puma Street between Bunker Lake Boulevard and Alpine Drive, was constructed with a temporary pavement section consisting of a few inches of aggregate base under about 2 inches of bituminous pavement. No public utilities were installed under the temporary pavement sections along Bunker Lake Boulevard or Puma Street.

The existing trunk watermain along Bunker Lake Boulevard is 16-inch ductile iron pipe (DIP). The existing trunk sanitary sewer is 18-inch polyvinyl chloride (PVC) pipe. These trunk utilities were intended to be extended to and along Puma Street based on demand, after which the streets would be constructed to permanent sections. The trunk utilities are currently located 3 or more feet south of the edge of the existing pavement section so extending the utilities can be accomplished by closing one lane of traffic on Bunker Lake Boulevard.  Access to the existing home in the northeast corner of the intersection of Bunker Lake Boulevard and Puma Street would be maintained throughout construction.

In March 2017, Bolton Menk updated the Future Business Park report to include estimated costs for extending trunk utilities to Puma Street. A copy of the updated report is attached. Per their report, costs to extend the 16-inch trunk watermain line 1,400 feet to Puma Street, including fire hydrants and service stubs to abutting properties to the north and south, were estimated at $154,000.  Costs to extend the 18-inch trunk sanitary sewer line 1,400 feet to Puma Street, including manholes and service stubs to abutting properties to the north and south, were estimated at $179,000. These costs include 30% contingency and indirect costs. All costs to extend utilities are proposed to be paid with City sewer and water funds. The developer’s share of these costs will be recovered through their trunk utility fees at the time of development.

The City is currently working with Capstone Homes to develop an assessment agreement to allow the City to construct the remaining public infrastructure needed to support their development, including trunk utilities, streets, and sidewalks/trails along Bunker Lake Boulevard and Puma Street. The assessment agreement will allow the City to assess the developer for a pro-rata share of construction costs. Staff anticipates being able to present the assessment agreement to the City Council for consideration of approval on July 25th.

Capstone Homes proposes to begin construction of the Riverstone development this summer, with development of the lots on the south end occurring first. To issue Certificates of Occupancy, homes must be served by City sewer and water. This requires the existing trunk utilities along Bunker Lake Boulevard to be extended through Puma Street. By completing this work as a City improvement project in advance of the assessment agreement improvements, Capstone Homes will be able to connect more homes to City sewer and water in the fall of 2017 due to the time that will be saved by extending trunk utilities to Puma Street in advance of the assessment agreement improvements.

Per City Council direction, Staff prepared plans and specifications to extend trunk sanitary sewer and watermain along Bunker Lake Boulevard through its intersection with Puma Street this summer to support the current Riverstone development proposal, as well as all future development proposals within the Future Business Park area. Attached is a copy of the draft plans for the proposed improvements.


The City Council accepted plans and specifications and authorized advertisements for bids on May 23rd.  Bids were advertised May 26th and June 2nd.  On June 21st, twelve (12) sealed bids were received and were publicly opened and read aloud.  The bids were competitive and favorable, and complied with the advertisement for bids.  Bids were checked for errors and omissions, then tabulated.  Only one bid was adjusted; Ryan Company’s bid increased by $3.  See * in bid tabulation below.
 

CONTRACTOR	TOTAL BID
Metro Utilities, Inc.	$268,500.00
RL Larson Excavating, Inc.	$281,916.21
Douglas-Kerr Underground, LLC	$287,992.36
C & L Excavating, Inc.	$306,929.66
North Pine Aggregate, Inc.	$329,098.55
Lametti and Sons, Inc.	$374,700.00
Northdale Construction Co., Inc.	$382,505.76
SR Weidema, Inc.	$393,622.36
Dave Perkins Contracting, Inc.	$395,781.00
Kuechle Underground, Inc.	$397,152.13
Ryan Contracting Company	$411,463.00*
Northwest Asphalt, Inc.	$432,680.53
Engineer’s Estimate	$336,368.00

 
The bid of Metro Utilities, Inc. of Elk River, Minnesota, in the amount of $268,500.00 for the total bid in accordance with the approved plans and specifications and advertisement for bids, is the lowest responsible bidder.  The low bid is $67,868.00 (20.2%) less than the engineer’s estimate of $336,368.00.
 
If Council accepts bids and awards a Contract to Metro Utilities, Inc., staff will issue a Notice of Award to initiate execution of a Contract and issuance of the required bonds and insurance.  The City Attorney will then verify that the Contract, bonds, and insurance are in proper legal form prior to execution of the Contract. After the Contract is executed, a Notice to Proceed will be issued allowing construction to commence.
 
A preconstruction meeting will be conducted before construction begins. At this meeting, the contractor will provide the City with their proposed project schedule.

The proposed schedule for this project is as follows:

• June 27th – City Council accepts bids and awards contract
• July 10th – Begin construction
• August 25th – Complete construction

Advertisements for bids were published in the Anoka Union Herald and in Finance and Commerce on May 26th and June 2nd.

Observations:
City Staff prepared plans and specifications for completing the trunk utilities extension improvements in-house. Staff proposes to administer the project and to stake and inspect construction.

Staff will continue to work with property owners along Bunker Lake Boulevard to ensure all proposed utility service stubs are properly located to minimize or prevent future impacts to Bunker Lake Boulevard.

Repairs to the existing temporary street section due to the utilities extension work will consist only of temporary aggregate surfacing.  This is because only a small area of Bunker Lake Boulevard is proposed to be disturbed during this project and the entire street is proposed to be reconstructed to a permanent section next spring. The City’s aggregate base stockpile on the future Public Works campus site will be used for the temporary aggregate surfacing.

Alternatives:
Alternative #1 - Motion to adopt Resolution #17-06-148 accepting bids and awarding a Contract for Improvement Project #17-09, Bunker Lake Boulevard Utility Extensions.

Alternative #2 - Motion to deny adoption of Resolution #17-06-148 at this time.

The low bid as submitted by Metro Utilities, Inc. is $268,500.00.  After adding 23% for indirect costs, the total project cost becomes $330,255.   All costs for the trunk utility extensions are proposed to be paid from City sewer and water funds.

Staff recommends alternative #1 to support current and future development within the Future Business Park area.

Motion to adopt Resolution #17-06-148 accepting bids and awarding a Contract for Improvement Project #17-09, Bunker Lake Boulevard Utility Extensions.