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HomeMy WebLinkAbout8A 150th and TH 13 Status Update Report Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: FEBRUARY 13, 2017 AGENDA #: WORK SESSION AND AGENDA ITEM 8A PREPARED BY: LARRY POPPLER, CITY ENGINEER / INSPECTIONS DIRECTOR PRESENTED BY: LARRY POPPLER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING FUNDING FOR THE 150TH STREET / TH 13 IMPROVEMENT PROJECT DISCUSSION: Introduction The cities of Savage and Prior Lake, along with MNDOT, have been working coop- eratively to improve the 150th Street/TH 13 intersection. The work is mostly complete and final costs are being assembled. This agenda item reviews the costs and pro- vides for authorization for funding Prior Lake’s share which has increased. This agenda report is the basis for discussion at the work session and agenda item 8A. This report will discuss the following topics: 1. Overall Project Costs 2. Areas of Cost Increases 3. Property Acquisition 4. Proposed Claim against Consultant 5. Funding for Increased Prior Lake Costs As discussed in the report, Prior Lake’s preference for the improvements at 150th Street was documented in a cost sharing agreement with the City of Savage. While the City of Savage is also experiencing cost increases, Prior Lake’s share of the cost increase is larger due to the terms of the agreement. History Over the last few decades the City of Prior Lake has sought to improve the safety of key intersections on TH13. The first intersection improvement was at County Road 23. The second intersection improvement was at County Road 12. The third was Main/ County Road 44 and Ridgemont. The next logical improvement was at 150th. As the Council is aware improvements are scheduled at TH13 and County Road 42 and TH13 and County Road 21 in 2018 and 2019 respectively. In response to concerns regarding safety at the TH 13/150th Street Intersection the Cities of Prior Lake and Savage initiated a joint intersection improvement study in 2007 with the final report date of February 12, 2010. This study area includes TH 13 between 152nd Street and Rustic Road. Once the study was complete an Intersection Control Evaluation (ICE) was prepared and a concept layout was approved and each agency began programming the pro- 2 ject in their respective Capital Improvement Plans. The original concept layout pro- vided a ¾ un-signaled access at 150th Street, right in / right out access at Zinran, and a pedestrian underpass. Ultimately each agency settled on 2015 for construc- tion. Since the original study was commenced, a number of things have changed in the traffic intensity and patterns in the study area: 1. Construction of Aspen Academy Charter School at the intersection of Zinran and TH 13. 2. Residential Development along 150th Street just east of TH 13 adding addi- tional traffic. 3. Increase in traffic to and from the High School. In 2014, a feasibility report was prepared and included several alternatives for this project. Two alternatives were debated in September. Savage preferred Concept 6D (Zinran Intersection). The staff concurred with Savage largely for cost reasons. The Prior Lake City Council preferred Concept 5B (150th Intersection) largely be- cause it would result in a better and safer long term intersection for Prior Lake mo- torist and pedestrians. Concept 5B was estimated to be more expensive. Savage agreed to proceed with Concept 5B if Prior Lake agreed to pay any excess costs that the engineer had estimated relating to property acquisition. Ultimately, on consecutive nights September 15 and 16, 2014 the Savage and Prior Lake City Councils selected Concept 5B along with a Cost Sharing Agreement for the project which did provide for Prior Lake paying all land acquisition costs beyond the engi- neer’s estimate. The original property acquisition estimate from SEH was $862,000. This amount included projected property and easement costs plus 20%. The Cost Sharing Agreement stated that the estimated costs were to be divided equally between Sav- age and Prior Lake with any amount in excess of the estimate to be paid solely by Prior Lake. A Project Management Team (PMT) was formed to provide guidance on the devel- opment of the final design for this project. The PMT includes representatives from the Minnesota Department of Transportation (MNDOT), SEH, and the cities of Prior Lake and Savage. PMT meetings were held weekly between October of 2014 and June of 2015 during project design. The 60% plans were completed on December 29, 2014 which is consistent with the project schedule. The final design plans were completed by February 23, 2015. On February 9th, 2015, it became clear to staff that the cost of the project was going to exceed the estimated costs for several reasons.  The number of property acquisitions had increased from the concept plan. Per the agreement with the City of Savage, Savage’s property expenses are capped at $431,000. Half of the original estimate $431,000 plus any costs above $862,000 are the responsibility of the City of Prior Lake. Each signifi- cant property acquisition has been discussed by the city council in closed session prior to actual purchase. 3  The original preliminary design did not contemplate the extent of work in Prior Lake at the 150th Street and Estate Avenue. The work involved to build this intersection to MNDOT State Aid Standards is extensive and includes additional property acquisition (in Prior Lake) and construction costs as a result.  Due to soil conditions, costs for construction of large retaining walls also contributed to the additional costs.  The inclusion of the left turn lane for Rustic Road was another item which contributed to the additional costs. At the February 9th meeting, the City Council authorized additional property acquisi- tion costs up to $1,030,150. On July 13th, 2015 the City Council approved a Cooperative Agreement with MNDOT for the project. On July 27th, 2015 the City Council passed a resolution of concurrence of award on the project. At the time of award, the total project cost was estimated at $8.8 Million. Current Circumstances Construction of the project is complete. The signal is operational with continued monitoring of the signal timing. Minor cleanup items will be completed in the Spring of 2017. Right of way and easement purchases are mostly complete with 3 properties re- maining whom have not yet settled on the property purchase. In all three cases the property owners elected to await project completion so they would know the extent of the project impacts upon their properties. All three are represented and it is expected that in all three cases that a condemnation proceeding will settle the matter. Reforestation was to be discussed at the conclusion of the project with each City separately addressing re-forestation within their community. Public Works has re- viewed the project site to determine the appropriate locations for reforestation. Unfortunately, considering utility locations and improvements, all areas disturbed with this project are being utilized and no public area is available for reforestation. A Project Conclusion It is appropriate for the City to provide additional funding for this project. It is rec- ommended that funding toward this project be increased from $3.85 Million to $4.68 Million. Direction should be given to Staff regarding their general approval for reviewing a claim against Short Elliot Hendrickson (SEH). ISSUES: Construction Expenses Construction expenses have risen above previously provided estimates. The con- struction expenses have exceeded the original contract bid amount by approxi- mately 8% ($500K on a $6.6M construction contract). The City completes many projects on our local street system and normally finds that final expenses are be- tween 5% above or below the anticipated costs from when the project is bid. A good portion of City projects are under by approximately 3%. On this project, the major 4 construction line items (in addition to land acquisition related costs) which have ex- ceeded their estimates include the following:  Erosion Control +$180,000 - Considering 2016 was one of the rainiest construction seasons in recent memory and due to the close proximity of this project to Prior Lake, larger erosion control expenses were needed to protect the lake. Even though there were many erosion control measures in place, several rain events overwhelmed these erosion control devices.  Culvert Adjustments +$60,000 – The construction plans lacked detail on the extension of existing storm sewer culvert crossings. Work was needed to extend the culverts to match the new slopes.  Traffic Staging and Temporary Pavement +$100,000 – The site con- straints were very tight during construction. Maintaining traffic on TH 13 during construction was a challenge due to the tight work space. The original construction plans lacked detail in the traffic staging and additional pavement widening and barricade movement was necessary to maintain a safe roadway for the travelling public. At several points during the pro- ject the pavement did not hold up to the traffic and emergency paving was necessary to repair these areas.  Watermain Replacement +$94,000 – During construction the watermain location was found to be in conflict with the proposed retaining wall along TH 13 and Prior Lake watermain movement was necessary. Other specific line item quantities were within range of what was expected on this project with some quantities under original projections and some slightly over the projections. Between the original approval in September of 2014 and award of a contract in 2015, other cost increases were experienced including: Poor soils, additional properties for acquisition, inclusion of a turn lane for Rustic Road, grade changes at Estate Avenue and 150th Street, and inclusion of a mill and overlay section on Highway 13. Documentation of these costs is included in the attachment to this report. Cost Saving Measures Throughout this project as costs have grown, Staff has attempted to find cost saving measures. Several larger cost saving measures include the following:  Savage Staff Inspector - $90,000 – The City of Savage offered the services of one of their inspectors for inspection of this project. This saved approxi- mately $90,000 in cost than if a consultant inspector were utilized.  Reduction in Scope of Work - $50,000 – Work on 150th on the City of Savage side was reduced for a savings of $50,000.  Prior Lake Review of quantities - As a result of a review, an additional $200,000 was saved overall. Day to day, the project inspector worked diligently with the Contractor on many small items to reduce costs, including minor modifications to project limits or elimination of work. The Cities also adjusted contract terms and construction hours to maximize the ease of construction and minimize delay in project completion. 5 The City of Savage should be commended for their efforts to reduce cost throughout the project. Below is additional information about the two biggest variables in this project: Property Acquisition The original property acquisition estimate was $862,000. This amount included pro- jected property and easement costs plus 20%. To date property acquisition ex- penses are estimated to be over $1.6 Million including all legal, appraisals, and ad- ministrative costs. This means that Prior Lake’s contribution toward property acqui- sition will be nearly $1.2 Million instead of $431,000. This is a $770,000 difference from the original calculations in September of 2014. As the property acquisition values were becoming known, staff checked in with the City Council on many occasions including February 9th 2015. At this date the ap- praisal values were known and offers to property owners were being prepared. The offers alone accounted for $1,030,000 at that point. This City Council agenda and discussion was a tipping point for the project as offers were being prepared for presentation to property owners. The City Council proceeded with the project and authorized the additional expenditures. Again, as the project was being awarded for bid in July of 2015, the City Council reviewed the costs for the project including property acquisition. At that time the offers and settled property costs were esti- mated at $1,195,210 not including legal, administration and appraisals. At many other executive sessions discussing specific property offers, the City Council ap- proved additional expenditures. Out of 18 total properties to be acquired in full or in part, 15 have settled. The re- maining three are some of the larger acquisitions and appear to be proceeding to condemnation hearings. As a part of the process “commissioners” are selected to review the appraisals from both the City and the property owner. At the hearing the commissioners publicly discuss the appraisals and discuss an appropriate value for the property. After the hearing, has been closed, the commissioners may take as much as 6 months to determine the final value of the property. The hearings are being scheduled for July of 2017, meaning a final determination on the property and easement amounts may not happen until December of 2017. An appeals process may occur after that if one side feels the amount is not appropriate. For Prior Lake, the easement costs have risen by nearly $770,000 since the City signed the cost sharing agreement with the City of Savage in September of 2014. This is the single largest line item change for Prior Lake on this project. Claim Against Consultant Staff has found that several design elements for this project were overlooked or underestimated. The engineering firm for this project was Short Elliot Hendrickson (SEH). SEH provided both the preliminary engineering, final design, and construc- tion administration. The overlooked or underestimated items increased the cost on this project to both Prior Lake and Savage. The staff has initiated preliminary action to perfect a claim: A listing these items and their impact to cost are provided below:  Under-estimating Property Acquisition – The consultant SEH provided a cost estimate of $862,000 for property acquisition in September of 2014. This figure was relied on in the cost sharing agreement between Prior Lake 6 and Savage. The estimate provided by SEH did not contemplate the ex- cessive property acquisition on the Prior Lake side due to the change in elevation at Estate Avenue and 150th Street. The grade change at Estate Avenue alone added at least three more properties with appraisal value or settlement value of $263,000 not including appraisal fees, legal, and staff time. This - worked against Prior Lake as the cost sharing agreement was written such that Prior Lake was responsible for all costs in excess of $862,000. Based on invoices, settlements, future legal expenditures, and future settlements, costs are estimated to top $1.6 Million. If this amount is accurate, Prior Lake will expend almost $1.2 Million instead of the originally estimated $431K. This is nearly $770K more than originally expected.  Grade Change at Estate Avenue and 150th Street – In addition to the $263,000 in additional property acquisition at Estate Avenue and 150th Street, the cost implications of raising the intersection and extending the construction limits added $200,000 in construction costs.  Retaining Wall Piling – During the design process it was determined that piling was needed to support the large retaining wall along TH 13 due to poor soils. As a part of the geotechnical report, the geotechnical engineer suggested a depth to drive piles and recommended that test piles be com- pleted to determine the appropriate depth. SEH as a part of the bidding did not recommend test piling and therefore it was not part of the bid. The structure of the bid included purchase of 16,610 linear feet of “12”CIP Con- crete Piling Delivered” bid at $35 per foot and 16,610 linear feet of “12” CIP Concrete Piling Driven” bid at $1 per foot. CIP piling is a special order item specially machined for the project. The piling is driven into the ground until it reaches a “refusal depth”. This is the depth at which the pile does not continue to proceed. This refusal depth was found to be significantly shal- lower than expected resulting in less piling needed for the project. Unlike other bid items on the project, because piling is a specialty order item it can not simply be returned if it is not needed. On this project 7,375 feet of ex- cess piling was delivered and not used on the project. At a cost of $35 per foot this was $258,000 in excess piling which was not needed. After spend- ing several weeks researching options and trying to find other projects which might need piling it was sold back to the Contractor at $8 per foot or $59,000. While this saved an unexpected $59,000 in project expenses, the net difference is $199,000. This expense could have been avoided if test piling was performed. Test piling would have reduced the amount of piling delivered on the project. SEH has provided the attached response regard- ing the piling situation. They indicate that test piling was not performed due to access limitations and the cost to performing test piles. Staff believes the test piling should have been performed and the test piles abandoned (cut off at grade).  Property Encroachment – During the construction process it was deter- mined that a storm sewer pipe should be added below the retaining wall to control drainage. SEH provided a design and staking for the added storm sewer pipe. Unfortunately, the design and construction encroached on a small sliver of private property which SEH had not identified for purchase or easement by the city. This encroachment will cost an estimated $46,000 to move the pipe. In addition, the property owner has hired an attorney re- garding this matter and is demanding damages.  Incomplete Staging Plan – The construction drawings lacked detail and thought regarding staging of construction under traffic. Much discussion 7 with the Contractor was needed to develop an appropriate plan to build the project under traffic. The added cost for project staging was $100,000.  Missing Culvert Adjustments – The construction drawings did not address the extension of existing culverts under TH 13. This added $60,000 in cost to the project.  Lack of Public Emergency Overflow on 150th Street – The low point along 150th was built with no public emergency overflow. In order to correct and include an emergency overflow, a portion of roadway may need to be re- built or an easement secured.  Watermain Conflict with Retaining Wall – During construction 1,600 feet of watermain which had not been identified by SEH was found to be in conflict with the proposed retaining wall and needed to be relocated adding $94,000 in cost to the City of Prior Lake.  Additional Driveway and Property Impact – Construction of driveways and yards near the intersection of Estate Avenue and 150th required additional tree removal and driveway expense because of the understated grade im- pacts provided by SEH. This added $14,000 in expense to the project.  Clearing and Grubbing Limits – The amount of clearing and grubbing during construction was nearly double the amount expected in the contract docu- ments prepared by SEH which resulting in $18,000 in additional cost. The City Attorney is reviewing the items above and preparing a memo giving rec- ommendations on this claim. The City staff is assuming the City Council supports this effort. If there is not Council support, the City Council should provide direction. Additional non recoverable legal expenses can be anticipated in proceeding with this claim. Lessons Learned The 150th and TH 13 project was a very large and complex project involving three public agencies, a large footprint, difficult topography adjacent the lake, and signifi- cant property acquisition. While the agencies worked well together, several lessons can be learned for future projects. 1. Time – Many of the changes from the original estimates can be traced back to too much work occurring in a short amount of time. The debate on the location of the improvement pushed into September of 2014. This pushed the design of the project back. The Consultant indicated that they could meet the new timeline but we believe that several project expenses may been identified earlier if we had greater time to review the Consultant’s work during the design process. The Cost Sharing Agreement entered into between Savage and Prior Lake was quickly assembled to meet MNDOT timing. At the time, MNDOT was contemplating re-assigning their project contribution to another project. In September of 2014 both Cities were debating the intersection location. Ulti- mately the Cities agreed that the intersection location was to be at 150th Street and not Zinran. Because this larger more expensive project was the preference of the City of Prior Lake, the cost sharing agreement was not in Prior Lake’s favor. More time in contemplating the terms of the agreement would have been useful. 8 On projects of significance such as the 150th and TH 13 project, the lesson learned is to start work several years in advance of these significant projects. 2. Property Acquisition – Because State Statute does not favor the condemning authority, property acquisition expenses can expand greatly. Another large expense is the professional services involved in the property acquisition pro- cess (Appraisals, Legal, Consultant). The lesson learned is to anticipate larger easement limits during preliminary design and budget professional services for full condemnation proceedings. 3. MNDOT or Scott County as Lead Agency – Projects involving State and County Highways are almost always multi-million dollar projects. If the City is the lead agency, MNDOT or Scott County funding is typically capped within the Cooperative Agreements. This puts the risk on the local agencies if the project expenses are greater than expected. When the State or County is the lead agency, the State or County are exposed to the risk of project overruns. On the 150th and TH 13 project, both Cities identified the intersec- tion improvements as a priority for the community and pushed MNDOT for funding. Since both Cities were initiating the project for the community and not MNDOT, Savage and Prior Lake were responsible for leading the project and MNDOT funding was capped. The lesson learned is to either expect additional costs if the City leads these types of projects or push the State or County to lead these projects. Another option is to simply wait on projects until MNDOT or the County is ready to complete and lead the project regardless of community feedback, crashes, or deaths. 4. Protecting the Lake – Projects near the lake can drive up costs related to erosion control protection. While we have always budgeted for protection of the lake, erosion control on larger projects involving a large footprint can be exponentially expensive. The Consultant provided proposed erosion control but it was not sufficient. In the future, we recommend budgeting for more erosion control in initial project design costs. Budgeting for heavier rains should be factored into the initial project design costs. 5. Piling – Retaining walls involving piling is a special circumstance. City Staff lacked knowledge of the piling process during the design and construction and relied on the Consultant recommendations. Staff gained experience in understanding the piling process. Final Comments The costs for this project have increased since the project was approved by the City Council in September, 2014 for a variety of reasons as discussed above. Work involving State Highways and large County roadways are extremely expensive as these are the higher volume and higher speed roadways within our community. 9 This project represents the fourth intersection project along TH 13 which has been completed to improve safety now and for decades to come. This new intersection has the capacity for expected traffic increases for years to come since traffic signals and appropriate lanes and channelization were built for this capacity. The project also includes the first section of trail along TH13, a safety improvement which has been widely supported and eagerly awaited to begin to fill a key gap in our trail system. We have been aware that these major projects will be of considerable cost. Soon additional projects at TH 13 and CR 42 and at TH13 and CR 21 may have even larger expenditures. This project is expected to be the most complex, owing to the involvement of three public agencies. FINANCIAL IMPACT: The MNDOT contribution is proposed to be $2.216 Million. In accordance with the cost sharing agreement, the Cities of Prior Lake and Savage will split the remainder of the cost of the project including design, right of way acquisition, construction costs, and project support costs whereby the City of Prior Lake would pay $857,000 more than Savage and pay for property acquisition costs over the originally esti- mated $862,000. Below is the latest cost information for this project: ITEM COST SHAR- ING AGREE- MENT AT TIME OF BID (JULY, 2015 COST SHARING AGREEMENT CURRENT ESTIMATE AMOUNT OF CHANGE SINCE JULY OF 2015 CONSTRUCTION $6,595,000 $7,134,144 $539,144 PROPERTY ACQUISITION $1,317,000 $1,607,404 $290,404 ENGINEERING / ADMINISTRATION $900,000 $1,075,379 $175,379 TOTAL COST $8,812,000 $9,817,000 $1,005,000 *Did not include preliminary engineering The table below compares the City of Prior Lake Cost of this project: FUNDING SOURCE COST SHARING AGREEMENT AT TIME OF BID (JULY, 2015 COST SHARING AGREEMENT CURRENT ESTIMATE AMOUNT OF CHANGE SINCE JULY OF 2015 State Aid $1,000,000 $1,060,000 $60,000 Street Oversize Fund $250,000 $250,000 - Tax Levy $2,516,630 $2,835,442 $318,812 Reserves - $190,000 $190,000 Water Quality Fund $60,000 $150,000 $90,000 Water Fund $12,956 $187,310 $174,354 Sewer Fund $12,956 $7,688 ($5,268) TOTAL CITY COST $3,852,542 $4,680,440 $828,000 10 The following table compares the contributions for each funding partner: FUNDING SOURCE COST SHARING AGREEMENT AT TIME OF BID (JULY, 2015) COST SHARING AGREEMENT CURRENT ESTIMATE City of Prior Lake $3,852,542 $4,680,440 City of Savage $2,718,078 $2,919,851 MNDOT $2,242,000 $2,216,637 TOTAL CITY COST $8,812,620 $9,817,000 Overall the City of Prior Lake’s share of the improvements has increa sed by $828,000 since the bid approval in July of 2015. The City of Savage’s share has increased by $200.000. Since Original approval in September of 2014, Prior Lake’s share has increased by $1,850,000 and Savage’s share has increased by $1,150,000. The changes to the Prior Lake watermain system amounted to improvements total- ing $187,310. Sewer improvements totaled $7,688. These items would be funded by the Water and Sewer Fund respectively. Changes in the water system were discussed above including relocation of watermain along the new retaining wall. Considering the increase in water quality measures to protect Prior Lake, it is ap- propriate to increase the contribution from the Water Quality Fund to $150,000 cor- responding to the increases in erosion control measures. Staff recommends that the remaining revenue gap be funded by a combination of property tax levy and the use of General Fund reserves. This recommendation is based on the following. As shown above, the overall tax levy portion of the project has increased by $318,812. This can be accomplished with minimal impact to the tax levy. A review of the 2017 Prior Lake transportation projects indicate that the levy portion is esti- mated to be $750,000 less than originally budgeted in the Capital Improvement Plan. The Long-Range financial model included the total amount shown on the Transportation Plan of $3.45 million. Assuming a reduction in the amount of bonds issued paid for by the tax levy of $430,000, the overall rate of increase for debt service payable in 2018 would be lower than projected by about 0.5%. This amount is calculated based on a 10-year debt schedule or $43,000 per year. The report mentions that there is still some work to complete on the project plus finalizing the remaining land acquisitions. Those final costs have not been deter- mined. Because of that, the use of reserves is appropriate. At the end of 2015, the City had a General Fund reserve balance of about 47%. Our Comprehensive Financial Management Policy targets a range of between 40 and 50%. By using $190,000 of reserves for this project, the fund balance percentage would be about 45%. If final costs for unsettled items is below projections, less reserves would be utilized. 11 Staff’s recommendation on the use of fund balance provides the City Council with the flexibility to minimize the impact of debt service on the tax levy but also retain the ability to use fund balance to offset spikes in the tax levy due to other reasons. This could include other projects the council would like to complete or for budgetary purposes. ALTERNATIVES: 1) Approve a Resolution Authorizing Additional Funding for the 150th Street and Trunk Highway 13 Improvement Project. 2) Deny this item for a specific reason and provide staff with direction. 3) Table this item until some date in the future. RECOMMENDED MOTION: A motion and second for approval of alternative number 1. 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 17-022 A RESOLUTION AUTHORIZING FUNDING FOR THE 150TH STREET AND HIGHWAY 13 IMPROVEMENT PROJECT (STATE PROJECT #7001-104, CITY PROJECT #TRN15-000001) Motion By: McGuire Second By: Thompson WHEREAS, The reconstruction of the 150th Street and TH 13 intersection was considered a priority to the City of Prior Lake, City of Savage and MNDOT, and WHEREAS, WHEREAS, WHEREAS, The City entered into a cost sharing agreement with the City of Savage for this project; and The project is substantially complete and final project costs are being assembled, and Approval by Prior Lake of additional funding is necessary in accordance with the cost sharing agreement between Savage and Prior Lake. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The Prior Lake City Council hereby authorizes funding up to $4,802,440 for the 150th and Highway 13 Improvement Project (State Project #7001-104, City Project #TRN15-000001). 3. The City Council authorizes funding for this project as shown in the following table and in accordance with the cost sharing agreement between the City of Prior Lake and the City of Savage: FUNDING SOURCE COST SHARING AGREEMENT AT TIME OF BID (JULY, 2015 COST SHARING AGREEMENT CURRENT ESTIMATE AMOUNT OF CHANGE SINCE JULY OF 2015 State Aid $1,000,000 $1,060,000 $60,000 Street Oversize Fund $250,000 $250,000 - Tax Levy $2,516,630 $2,835,442 $318,812 General Fund Reserves - $312,000 $312,000 Water Quality Fund $60,000 $150,000 $90,000 Water Fund $12,956 $187,310 $174,354 Sewer Fund $12,956 $7,688 ($5,268) TOTAL CITY COST $3,852,542 $4,802,440 $950,000 4. Costs will be recorded in the Construction Fund (#501-43500.00-TRN15-000001 expenditure account, as applicable) for the 150th and TH 13 Improvement Project. 5. The City Council authorizes fund transfers into the construction fund as indicated in the above table effective as of December 31,2016. N:\City Council\Resolutions\2017\150th and TH 13 Status Update - Res2.docx 2 6. The City Council authorizes transfers from General Fund Reserves as deemed necessary in 2017. 7. The City Council authorizes the intent to issue General Obligation Bonds for this project. 8. Proceeds from the bond sale will be deposited in the Construction Fund. PASSED AND ADOPTED THIS 13TH DAY OF FEBRUARY 2017. VOTE Briggs McGuire Thompson Braid Burkart Aye ☒ ☒ ☒ ☒ ☒ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager TH 13 at 150th Street Construction  SEH Project SAVAG 133360  Piling Questions and Responses – June 13, 2016      Black Text ‐ John Powell questions via email dated March 29, 2016  Red text ‐ SEH responses by Mark Maves and Mike Kotila     At our meeting with SEH on 2/5/16, the cities requested written documentation of the process that SEH  used to determine the quantity of piling, this has not yet been received.  As the excess piling has now  been sold, we are requesting that this documentation also include steps taken to try and mitigate the  cost impact.    Specific questions to be addressed in the document are as follows:           What was the total length of piling specified by SEH?    16,610 Lin Ft     What was the basis used for this quantity?  When referencing any geotechnical reports, please  be specific.  Page 21 of 32 of the Geotechnical Exploration Program Preliminary Report prepared by Element  Materials Technology and dated January 19, 2015 stated “We estimate the pile tip should be  driven to an approximate elevation of 822’……” and “The estimated 12‐inch pipe pile length for  supporting the retaining wall, based on anticipated cut off elevation (approximately 1’ above  bottom of footing elevation), would be approximately 89’ at boring B29.”    Quantity was based off of the tip elevation of 822.00.      SEH requested additional borings for the retaining wall design, was this to help clarify the piling  depth?    Per discussion with Element, original borings were 35’ to 46’ based on a preliminary planning of  a spread footing or a possible sheet piling wall system. When a deeper CIP pile was discussed,  Element suggested that deeper drilling most likely would be required. At that point SEH agreed  and requested additional, deeper borings.     If not, why weren’t more soil borings performed or deeper depths?  We are uncertain why deeper borings were not performed. Element may be able to answer that  question.      What was used?    12” diameter cast‐in‐place piles. The design follows the Standard MnDOT design sheets for this  type of wall.      What were the bid prices?    Item 2452.507 CIP Concrete Piling Delivered, 12”; Bid price $35.00 / Lin Ft  Item 2452.508 CIP Concrete Piling Driven, 12”; Bid price $1.00 / Lin Ft  Item 2452.529 Pile Points 12”; Bid Price $225.00 Each     What price was the extra piling sold for?    7375 Lin Ft of extra piling was sold to SM Hentges for $8.00 per Lin Ft, totaling $59,000.   This  $59,000 will be credited to the City through a Supplemental Agreement.     What was the estimated scrap value?    In February 2016, the going rate for “prepared” ferrous metal scrap was $75‐$80 per ton based  on rates available on web‐sites for Twin Cities scrap dealers. Per their definition, “prepared”  steel would need to be cut into 5 foot lengths. Our 12” steel pipe is in 40 foot or greater lengths,  not fitting this definition.  But – if sold to the scrap yards, at $80/ton, the 7375 feet of pipe  would have been valued at $1.34 per lineal foot totaling $9,853.00 less delivery costs.     What is involved in pile driving? Equipment, manpower, etc.    Site preparation/leveling, crane and crane operator, pile hammer and operator, cutting and  welding equipment and operators, concrete – delivered and placed to fill the pipe, additional  laborers.     Why the significantly lower re‐sale value?  The contractor advised that the re‐sale price is lower due to the risk the contractor is taking to  be able to use it on another project or sell it to another contractor. Plus the contractor needs to  cover his transportation and storage costs.     Who at SEH made the determination on the piling depths and quantities?   Mark Maves is the Engineer of Record for the retaining wall design.     Were other types of piles considered? H‐piles?  Why was our piling chosen?  Why did we need  piles?  The Geotech Report listed above recommended the piling type.  H‐piles were not considered  due to the soil types encountered in the borings. Spread footings (foundations not requiring  piling) was not considered due to the low bearing value needed for support.       Why wasn’t test piling a part of the project?  Who made this decision?  A test pile was suggested by the Geotech Engineer after the first 8 piles – but based upon field  conditions it was not practical to consider.  The Contractor advised that test piles would cost $5‐ $10K if they could do them – but due to the narrow work area – the piles needed to be  constructed in sequence from north to south. A test pile installed in the middle of the wall  length would preclude access to the rest of the pile locations needed.  In addition, a pile analysis  would need to be done for each test pile at a cost of about $4000 each.     Was MnDOT involved in the piling process, during design and construction?  MnDOT’s review process was managed by State Aid staff. They distributed design materials to  appropriate functional groups within MnDOT; they gathered comments and provided a  summary back to SEH.     MnDOT Materials Unit reviewed and approved the Geotech Report by letter without comment.  MnDOT Foundations Unit will typically review the foundation recommendations during design,  but we have no record of their review and did not receive comments.  MnDOT reviewed and approved the plans.  MnDOT reviewed and commented on the Special  Provisions.  MnDOT reviewed the recommendation to award and provided a letter of  concurrence.      During construction, SEH asked MnDOT for input on how to handle the excess pile situation.  They advised that returning the pile to the manufacturer, paying delivery costs, and a restocking  fee is an acceptable approach provided that the contractor agrees.  The Contractors piling  supplier refused to take the pile back.  MnDOT then advised that the City is the owner of the  pipe and has the authority to dispose of it as they wish. Selling it back to the contractor was  recognized as the cleanest approach given that they were already on site, had responsibility to  manage the work site and manage the schedule as it relates to other work they are performing  on site.     In mid‐November, S. M. Hentges wanted an immediate answer in order to stop the delivery of  the remaining 2,400’ of piling.  SEH’s response was “At this time, it appears that we will have a  significant length of piling that will not be driven, and I suggest we continue to work with  Hentges on this.”  As this was not specific with regard to the piling length needs, the cities had  no engineering basis for not accepting the piling.  What discussions took place within SEH that  formed the basis for this statement?  We assume a recommendation would have been made by  SEH if there was a basis for rejecting the additional piling, is that correct?     “. . . continue to work with Hentges on this . . .” infers – continuing the conversation with the  contractor regarding potential cost and schedule ramifications of accepting the delivery or  rejecting the delivery. City staff made the decision to accept the delivery without additional  input from SEH.      The bidding of piling has two components, 1. Piling delivered 2. Piling driven.  It appears that all  the contractors bid this in an unbalanced way and if we have too much piling, the re‐sale is  significantly lower than the cost to manufacture and deliver the piling.  Can SEH explain the way  this is bid?  Why wasn’t this flagged when we received the bids?     The final cost of the piling has three components when you consider the item for Pile Points. The  contractor would need to explain how they bid each of the items.  Our comments on review of  the bids are as follows:   MnDOT historic average contract prices from 2014 (based on 10 occurrences) and 2015  (based on 18 occurrences) were:   CIP Concrete Piling Delivered, 12”;   2014 /$30.31; 2015/$34.97   CIP Concrete Piling Driven, 12”; 2014/$1.32;  2015/$1.29   Pile Points 12”; average contract price was $200 Each in 2014 and $225.51 in 2015  These are not much different than the actual bids prices of $35 /Lin Ft and $1 /Lin Ft bid and  $225 each for the pile points. In other words, this is how the contractor’s traditionally bid these  items, so it was not abnormal to see it bid in this manner.