HJ - Standard 600 Council

Building Crafts, Inc., of Red Oak has been awarded the contract for the construction of the new wastewater treatment facility in Clarinda.

Steven Troyer of Fox Engineering met with the Clarinda City Council during its meeting Wednesday, Sept. 25, at Clarinda City Hall to review the three bids received for the project. Troyer originally met with the council in November 2017 to outline a proposed $11.7 million upgrade to the plant to meet regulations issued by the Iowa Department of Natural Resources.

However, Troyer said all three of the bids received for the project came in higher than his original proposal.

Building Crafts submitted the low bid of $13,380,000 for the project. John T. Jones Construction of Fargo, North Dakota bid $14,563,000 for the project. The final bid of $16,742,000 was submitted by Weiss Construction Company of Novi, Michigan.

“The low bid was about 17 percent higher than our opinion of cost, which was about $11.4 million,” Troyer said. “We looked at why the cost came in higher than anticipated and even during the bidding process there just wasn’t a lot of contractor interest in this project.”

In fact, Troyer said the bid deadline was extended by approximately two weeks to generate additional interest in the project. Troyer said he even contacted various contractors to see if they were interested in bidding on the project.

“The feedback we got was ‘we’re really busy right now and we got a lot of work on our backlog. There are a lot of projects bidding in the Omaha area yet this fall that we’re looking at. There’s a lot of flood rehab work going on. So, with all that combined, we’re just not going to be able to look at your project.’ That was the feedback we got from them. We just think the low contractor interest and higher bids were the result of the bidding climate we’re in right now,” Troyer said.

In addition, Troyer said he spoke with a manufacturing representative that sees the bidding for several different projects. He told Troyer a project in Omaha earlier in the week came in approximately 25 percent higher than the estimated cost.

“He said a lot of projects they’re seeing are coming in 20 percent over as well. So, unfortunately, it’s kind of the climate we’re in right now,” Troyer said.

“I understand, just driving around in Omaha and all over, there is construction going everywhere. So, I can see why the bids are high,” council member Gary Alger said.

“It was good to hear those projects in Omaha are bidding out there also,” council member Matt Ridge said.

Therefore, Troyer said there were three options the council could consider. First, the council could reject all three bids and rebid the project at a later date.

Second, the council could try cutting some features out of the project and rebid the project to see if it would reduce the cost of the project. However, Troyer said he was not sure that approach would result in any significant savings for the city.

“There’s not a lot that could be cut from this project. It’s pretty much at a minimum right now,” Troyer said.

The final option, which Troyer recommended, was to accept the low bid and move forward with the project. Troyer said Building Crafts had indicated it would like to start work as soon as possible.

“They will probably start this fall because they have a lot of dirt they need to move his fall and let it settle,” Clarinda City Manager Gary McClarnon said.

“The plant will be operational near the end of 2021 and then it will be into 2022 to finish up the punch list,” Troyer said

However, since the bid prices were higher than expected, McClarnon said water rates in Clarinda would be further impacted during construction of the facility. He said there would be a four year overlap where local residents will be paying higher water and sewer rates because of the debt service associated with those utility improvements.

“Theoretically, after the four years, we should be able to drop our water rates back down to a more reasonable amount. I’ve done some quick calculations on my own, as far as what this is going to do to rates. We already passed an ordinance to increase the rates, which now, we are looking at an additional $5 per month on top of what we already set for an average 4,000 gallons per month user. For the average 8,000 gallons per month user, it would be an additional $9 per month. I did those calculations based on a $15 million bill over 20 years at 1.75 percent (interest),” McClarnon said.

Prior to awarding the contract to Building Crafts, the council held a public hearing on the proposed plans, specifications and form of contract for the construction of the facility. No comments were received during the hearing. As a result, the city council passed a resolution approving the proposed plans, specifications and form of contract for the construction of the facility.

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