Adopt Resolution #19-113 Accepting Bids and Awarding Contract for Improvement Project #19-01, Ford Brook Estates Street Reconstructions

Purpose:
The purpose of this case is to adopt Resolution #19-113 accepting bids and awarding a contract for construction for Improvement Project #19-01, Ford Brook Estates Street Reconstructions.

Background:
Attached is a copy of the plans prepared by City staff for Improvement Project #19-01, Ford Brook Estates Street Reconstructions, which proposes to reconstruct 180th Lane and Krypton Street in the Ford Brook Estates neighborhood.  Maps attached to this case show the general location and scope of the proposed improvements.
 
Existing Conditions
Krypton Street and 180th Lane were constructed in 1981 as rural sections with bituminous pavement at a width of 24 feet and measure approximately 860 feet (0.16 miles) in length.  Both streets are generally centered within a 66-foot wide right-of-way.  Attached is a street segments summary that includes other existing conditions such as curb type, PASER rating, maintenance history, and pavement section information obtained from ground penetrating radar.
 
The existing bituminous pavement section ranges between 1.2 and 6.4 inches thick, with a median thickness of 4.3 inches.  The existing aggregate base section ranges between 2.4 and 6.8 inches thick, with a median thickness of 4.1 inches.  Section thicknesses were obtained using Ground Penetrating Radar (GPR) analysis performed by Braun Intertec in 2017.  The pavement section was built on silty sand and lean clay subgrade materials.  Clay subgrade is not good for pavement support and typically requires subgrade corrections.
 
The City annually evaluates and rates the condition of pavement on all City streets using the Pavement Surface Evaluation and Rating (PASER) system. In the summer of 2018, the pavement of the above referenced street segments were rated with PASER ratings of 2 indicating that these streets require complete reconstruction.
 
The storm sewer system consists of ditches along both sides of the streets within the right-of-way and drainage and utility easements. Storm runoff is generally carried in the ditches to the ditch along TH 47 and directed north to Ford Brook.
 
Municipal utilities (sanitary sewer and watermain) do not serve this neighborhood.
 
Proposed Improvements
The existing bituminous pavement and aggregate base sections will be removed first, and then 2-feet of the unsuitable existing clay subgrade material will be removed.  Geotextile fabric will be placed over the shaped and compacted subgrade, and 2-feet of compacted select granular borrow (sand) will be placed on top of the fabric.  Drain tile will be installed on top of the fabric along the outside edges of the select granular borrow, and will connect to a storm sewer structure to drain the subgrade at low points.  Then 4-inches of imported aggregate base will be placed and compacted on top of the select granular borrow, followed by 3½-inches of new bituminous pavement.  The new pavement section will provide a 7-ton pavement design, the City standard for residential streets.

Existing ditches will require re-grading due to the subgrade corrections, and some driveway culverts will require replacement.  The culvert crossing 180^th Lane will be replaced, and a storm manhole will be added to the culvert crossing to allow for drain tile connections.  In addition, a new swale will be graded across a corner of one property to prevent runoff from the ditch from traversing through the property where no easement currently exists.
 
Bids
On May 1, 2019, two (2) sealed bids were received and were publicly opened.  The bids were generally competitive and complied with the advertisement for bids. A summary of bids is below and in the attached resolution.
 

CONTRACTOR	BASE BID	ALTERNATE BID	TOTAL BID
Asphalt Surface Technologies	$249,901.55	$12,601.70	$262,503.25
Northwest	$299,982.36	$14,632.60	$314,614.96
Engineer’s Estimate	$190,942.75	$10,794.80	$201,737.55

 
Asphalt Surface Technologies of Saint Cloud, Minnesota, submitted the lowest responsible total bid of $262,503.25 for constructing the base bid ($249,901.55) plus alternate bid ($12,601.70) in accordance with the approved plans and specifications and advertisement for bids.  This bid is $60,765.70 (30.1%) more than the engineer’s estimate of $201,737.55.
 
Following award of Contract, a Notice of Award will be issued to Asphalt Surface Technologies to initiate execution of a contract and issuance of the required bonds and insurance. The City Attorney will verify that the contract, bonds, and insurance are in proper legal form prior to execution of the contract. Once the Contract is executed, staff will issue a Notice to Proceed so construction can begin.  At this time, it is anticipated that construction will begin in June or early July, depending on the Contractor’s availability.

A preconstruction meeting will be held before construction begins. Staff will then mail letters to abutting property owners to provide updates on the proposed construction schedule and operations based on the Contractor’s input at the preconstruction meeting.  The letter will also contain a link to the City’s web site where up-to-date information can be found during construction, as well as contact information in case property owners wish to contact the Contractor or City project inspector for any reason.

Project schedule:
May 14 – Accept Bids / Award Contract
June / early July – Begin construction
August 16 – Substantial completion (open to traffic)
September 10 – Order Assessment Hearing
October 8 – Conduct Assessment Hearing

Public Comment
Staff conducted a public information meeting for this project on Thursday, November 8, 2018.  The purpose of the meeting was to present the proposed improvements, estimated costs, funding program, and preliminary project schedule to benefiting property owners, and to receive public input on the project. Property owners from 3 of the 8 identified benefiting properties attended.  None of the owners objected to the project.  Most questions pertained to special assessments and the reasoning behind the School Districts request to expand the cul-de-sac. The residents questioned why the School District asked the City to expand the cul-de-sac now, and noted that they continue to see buses stopping on Highway 47 in other locations.  The property owners did not formally object to expanding the cul-de-sac, they just didn’t understand why this request was being made now as they said they had asked the School District to pick up and drop off kids in the cul-de-sac years ago when there were far more kids in the neighborhood, yet their request was denied.  Now there are fewer kids in the neighborhood and they asked if other options are available.
 
A property owner in attendance at the Public Hearing in November again questioned why the School District wanted to enlarge the cul-de-sac.  Staff has been in contact with the School District numerous times since and has received the same answer each time.  The School District confirms that buses will not be allowed to stop in dedicated turn lanes on Highway 47 and will need to turn onto 180^th Lane to pick up and drop off kids starting this fall, and will therefore need the cul-de-sac expanded to turn around.
 
Staff prepared final plans and specifications including an alternate bid for expanding the Krypton Street cul-de-sac per the School District’s request.  As per the City’s Special Assessments Policy, costs to expand streets are ineligible for assessments so the costs to expand the cul-de-sac must be covered 100% by the City.

Advertisements for bids were published in the Anoka Union Herald and in Finance & Commerce on March 29 and April 5, 2019, as required by State Statutes.

Observations:
The engineer’s estimate based on final plans was $60,765.70 (30.1%) less than the lowest bid.  When preparing engineer’s estimates, Staff applies unit bid prices from projects recently bid, typically within the last year or two, and adjusts unit prices based on any new information available.  The intent is for the engineer’s estimate to fall within the middle of all bids received.  In recent years, this has generally been the norm.  However, this year all bids received for both proposed 2019 street reconstruction projects were more than the engineer’s estimate.  This is primarily due to higher unit bid prices for mobilization ($18,000), bituminous pavement ($12,867), and concrete work ($8,262).
 
Other cities are also experiencing higher bid prices in these areas.  As such, Staff does not recommend re-bidding with hopes of receiving better bids.

The proposed improvements are anticipated to have a serviceable life of 60 years, assuming proactive maintenance operations are performed on a regular basis over the life of the improvements.
 
Some properties may have private irrigation systems that could be impacted during construction.  Staff will notify property owners in writing of the pending construction as far in advance of construction as possible to allow as much time as possible to relocate irrigation system components out of the construction area.  Once the project is complete, property owners will be allowed to relocate irrigation system components to their previous locations, if desired.  All costs required to relocate private irrigation system components will be the responsibility of the property owners, but if private irrigation systems are damaged due to negligence on the part of the City’s contractor, the contractor will be responsible to repair the damage.
 
This is the final year of the 2015 - 2019 Street Reconstruction and Overlay Program (SROP).  If this project is not completed in 2019, it could be added to the next 5-year SROP to allow reconstruction between 2020 and 2024 instead, though this would reduce the overall scope of pavement maintenance work that will be completed in 2019 since no new streets can be added to the current 5-year SROP.
 
This project, along with Improvement Project #19-03, were the first projects to be bid electronically through QuestCDN.  Using electronic bids helps streamline the bidding process for both the City and the bidders.  The new electronic bidding process went very smoothly and reduced the amount of time Staff normally spent opening and reading sealed paper bids aloud, and Staff did not field a single call from bidders inquiring about the bid results afterwards.

Alternatives:
Alternative #1 – Motion to adopt Resolution #19-113 accepting bids and awarding a contract for construction for Improvement Project #19-01, Ford Brook Estates Street Reconstructions, to Asphalt Surface Technologies for the base bid plus alternate bid in the amount of $262,503.25.

Alternative #2 – Motion to adopt Resolution #19-113 accepting bids and awarding a contract for construction for Improvement Project #19-01, Ford Brook Estates Street Reconstructions, to Asphalt Surface Technologies for the base bid only in the amount of $249,901.55.

Alternative #3 – Motion to deny adoption of Resolution #19-113 at this time.

Project Costs
Construction and total project costs based on the lowest responsible bid received from Asphalt Surface Technologies of Saint Cloud, Minnesota, are as follows.
 

	Base	Alternate	Base + Alternate
Construction Costs	$249,901.55	$12,601.70	$262,503.25
Project Costs	$307,378.91	$15,500.09	$322,879.00

 
Project costs include 23% indirect costs for administrative (6%), engineering (15%), finance (1%), and legal (1%) costs.
 
Attached is a proposal from Bolton & Menk for construction staking services in the not-to-exceed amount of $4,060.  With the recent retirement of the senior engineering technician, Staff no longer has the ability to stake construction so consultants will need to provide this service on all future public improvement projects.  This cost is included under indirect costs for engineering.


Project Funding
This project is proposed to be funded using a combination of the following funds;

• Unexpended street reconstruction funds = $258,385.74*
• Special assessments = $31,359.20
• Storm sewer funds = $33,134.06

            * After collecting assessments (bonds initially cover assessments).
 
Approximately $900,000 in unexpended Street Reconstruction Program funds are available to fund both street reconstruction projects.  Bonding is therefore not required to pay for the 2019 street reconstruction projects.
 
Eight (8) benefiting properties will receive special benefit from the improvements and are proposed to be assessed up to 25-percent of eligible project costs.  Eligible project costs include all costs except those related to subgrade corrections and public utility improvements. Assessments are proposed to be applied equally across the 8 assessable properties using the “per lot” assessment method as allowed by the adopted Special Assessments Policy.
 
A preliminary assessment amount of $3,919.90 per benefiting property was adopted by Council on November 13, 2018.  Based on low bid project costs, assessments for benefiting parcels would increase to $6,635.80.  Considering the significance of this increase, and considering that special assessments levied with the 2015 Jarvis Street reconstruction project, a similar rural road reconstruction project, were $4,500 per property, Staff believes it would make sense to keep assessments for benefiting properties below $4,500.
 
Final assessments will be adopted following the Assessment Hearing on October 8, 2019, after construction is complete and actual construction costs are known.  Over the last four years, a special benefit consultation report has been prepared for all projects and the results of the report were used to help guide final assessment amounts.  However, this year Staff recommends not completing a special benefit consultation report for this project, which would cost around $6,500, and instead use these funds to offset the increased assessments.
 
The City will fund all non-assessed project costs, including the costs required to expand the cul-de-sac per the alternate bid.

Staff recommends Alternative #1.  This will allow the project to be constructed in 2019, will allow school buses to use the expanded cul-de-sac to pick up and drop off children living in the neighborhood, and will allow for the use of special assessments to pay up to 25% of eligible project costs per the applicable provisions of Chapter 8 of the City Charter, the City’s Special Assessments Policy, and Minnesota Statute Chapter 429.
 
Staff does not recommend Alternative #2.  This would result in school buses not being able to the use the reconstructed cul-de-sac to pick up and drop off children living in the neighborhood.  An alternate bus pick up and drop off location would need to be selected, potentially on the opposing side of Highway 47.

Motion to adopt Resolution #19-113 accepting bids and awarding a contract for construction for Improvement Project #19-01, Ford Brook Estates Street Reconstructions, to Asphalt Surface Technologies for the base bid plus alternate bid in the amount of $262,503.25.