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Home My WebLink About5I 2017 Overlay Project 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: MAY 22, 2017 AGENDA #: 5I PREPARED BY: JASON WEDEL, INTERIM PUBLIC WORKS DIRECTOR PRESENTED BY: JASON WEDEL AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION ACCEPTING BIDS AND AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE CITY’S STANDARDIZED CONSTRUCTION CONTRACT FOR THE 2017 STREET OVERLAY PROJECT AND CONCRETE REPAIRS DISCUSSION: Introduction The purpose of this agenda item is to accept the bids and authorize the Mayor and City Manager to execute the City’s Standardized Construction Contract with Northwest Asphalt for the 2017 Overlay Project. History Pavement management projects are primarily completed through two main projects. The first is in collaboration with other south metro cities through a Joint Powers Agreement that is administered by Burnsville. This work includes the crack sealing, seal coating and long-line striping. Separate from this agreement the City annually completes an overlay project. To keep up with our aging streets, it is the goal of the City to complete 4 miles of mill and overlays each year. Current Circumstances Project Timing: 1. Authorized Preparation of Feasibility Study – November 28, 2016 2. Accepted Report and Ordered Public Hearing – February 3, 2017 3. Held Public Hearing – March 13, 2017 4. Ordered the Improvements – April 10, 2017 5. Accepted Plans and Authorized Ad for Bid – April 10, 2017 6. Accepting Bids & Authorizing Contract – Tonight 7. Hold Assessment Hearing – September/October 2017 Streets to be overlaid in 2017 were identified in the feasibility study. Cardinal Ridge Neighborhood Crossandra From Trail Crossing to Victoria Curve Victoria Curve From Fish Point to Parkview Parkview From Crossandra to Cul-de-sac Cardinal Ridge From Fish Point to Cul-de-sac Overlook Circle Meadowview Ct 2 Parkview Circle Wren Ct Mallard Way Kildeer Lane Oriole Place Five Hawks Neighborhood Five Hawks From Priorwood to CR 13 An advertisement for bid was published in both the Prior Lake American and Minnesota Construction eAdvertising with bids due and opened May 10, 2017. The City received 4 bids which are listed in the chart below. All bids were reviewed for accuracy and no errors were found. Company Address Total Northwest Asphalt Shakopee $442,050.60 Bituminous Roadways Mendota Height $472,395.00 McNamara Contracting Rosemount $497,000.00 Valley Paving Shakopee $525,489.56 Conclusion Staff is recommending awarding the construction contract to the lowest responsible bidder, Northwest Asphalt in the amount of $442,050.60. Northwest Asphalt has previously worked for the City of Prior Lake and has completed these projects successfully. ISSUES: This will be the first pavement overlay project that will be completed under the revised City Assessment Policy. The City Council approved amendments to the Assessment Policy at their regular meeting on May 23, 2016 so that street reclamation and street overlay projects would be assessed. It was concluded by the City Council that the use of assessments for reclamation and overlay projects was appropriate and provides a funding source that reduces the overall tax levy by distributing a portion of the costs to the benefitting property owners. Per the Assessment Policy, the assessment rate in 2017 for street overlay projects is $1,200 for single family and $960 for multifamily (0.8 x $1,200). Commercial and industrial parcels are assessed based on their Residential Equivalent Density (RED). The assessment rate will be adjusted annually with an escalator based on the Construction Cost Index (CCI). The assessment period is over 5-years. Based on the age of the City’s existing streets, the City is entering a time period where more streets are in need of timely mill and overlay projects to extend their useful lives. The previous method of funding these projects put pressure on the tax levy. Utilizing special assessments brings greater equity to the City’s funding of transportation improvements. 3 FINANCIAL IMPACT: Expenditures for this project are budgeted in the Street Department portion of the general fund budget of which $544,502 is identified for the City’s street maintenance programs. We utilized $67,000 for the JPA and have identified $450,546 for the Overlay. The remaining funds from the balance will be used for other pavement maintenance throughout the City. The funding source and the corresponding estimated amounts are shown below: General Fund Reserve Transfer $120,000 Assessments 350,357 Total $470,357 Assessments: The 2017 adopted budget included the issuance of $300,000 in Revolving Fund Bonds to partially finance the 2017 overlay project. Based on the scope of the project, the bond amount will need to be increased slightly. Repayment of the bonds will be provided by Special Assessments. Beginning in 2017, a portion of such projects are now being paid through special assessments. The anticipated assessments outlined in the feasibility study that will be collected as part of this project are $350,357. The assessments are proposed to be collected over a 5-year period. It is expected that some property owners will prepay their assessments this fall, but it is not possible to predict how many will so the City has to be prepared to cover the construction costs. General Fund transfer portion of funding: The agenda report dated February 13, 2017 requesting approval of the feasibility report for the 2017 Mill and Overlay Project contemplated a budget carryforward of $120,000 to achieve the City’s pavement management goals in 2017. Staff recommends that the Council consider use of these funds for the 2017 overlay project. The funds were unused in 2016 as retaining wall work was postponed and will be completed with a future street project. These funds will be transferred from the General Fund to the Permanent Improvement Revolving (PIR) fund when the fund is established as part of the 2017A Bond Sale which will be brought to Council on June 12. As the City collects the assessments those funds will be directed to the newly created (PIR) fund. The funds will be used exclusively for future street maintenance projects Any funding above actual contract costs will be reserved for future year overlay projects in the PIR fund. It is anticipated that in future years, the assessments will not be such a large part of the project, so it is recommended that the City begin to build a balance in the PIR Fund. ALTERNATIVES: 1. Motion and a second to approve the resolution which accepts the bids and authorized the Mayor and City Manager to execute the City’s Standardized Construction Contract with Northwest Asphalt for the 2017 Street Overlay Project and concrete repairs. 4 2 Remove this item from the consent agenda for additional discussion. RECOMMENDED MOTION: Alternative #1 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 17-___ A RESOLUTION ACCEPTING BIDS AND AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE CITY’S STANDARDIZED CONSTRUCTION CONTRACT FOR THE 2017 STREET OVERLAY PROJECT Motion By: Second By: WHEREAS, The City of Prior Lake is committed to improving the streets within the City by providing continued maintenance; and WHEREAS, Continued maintenance of City streets will reduce the need of costly reconstruction in the near future and; WHEREAS, A total of 4 bids were received for the identified improvements as follows: Northwest Asphalt $442,050.60 Bituminous Roadways $472,395.00 McNamara Contracting $497,000.00 Valley Paving $525,489.56 WHEREAS, Northwest Asphalt is the lowest responsible bidder with a bid amount of $442,050.60 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 Mayor and City Manager are hereby authorized to execute the City’s Standardized Construction Contract for the identified street overlays with Northwest Asphalt for an estimated cost of $442,050.60. The funds will be drawn from the Permanent Improvemen t Revolving (PIR) Fund F450 which will be established as part of the 2017A bond sale that will be brought to Council on June 12. Construction contract expenditures will be charged to 450-43100.00-54010.01 3. The City Council authorizes a transfer of $120,000 from the General Fund to the PIR Fund as part of the Street Overlay funding. Passed and adopted by the Prior Lake City Council this 22nd day of May, 2017 VOTE Briggs McGuire Thompson Braid Burkart Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager