City Council Minutes 2016 03 15 - Laserfiche WebLink

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City Council Meeting Minutes March 15, 2016 Page 9 of 17 A budget amendment will be required to formally approve the increased amounts to the Capital Fund, Water Fund and Stormwater Fund. This would occur in April /May of 2016 in conjunction with the overall budget amendment typically occurring in the 2" quarter of the year. Capital Fund and Water Fund increases in 2016 will produce future decreases in the 5 year CIP due to acceleration of water line replacement previously planned for 2017 and booster street reconstruction previously planned for 2019. Staff recommended Council authorize the Mayor, City Manager, City Attorney, and Director of Public Works & Utilities to negotiate and execute a final agreement incorporating actual bid costs with H2 Development Services, LLC based upon the Preliminary Budget of $3,115,193.94. In the event the actual bid costs exceed 10% of the Preliminary Budget this agreement will come back before City Council for additional review. COUNCIL QUESTIONS Council member Stolzmann asked about the handouts Council received. Public Works Director Kowar noted he had provided an overview describing the qualifications of H2. He provided a summary of the Urban Renewal Authority agreement reconciliation to be paid out over some amount of time; estimated to be around $1.9 million. There was also an updated forecast of project costs. Mayor Pro Tem Lipton inquired when firm estimates would be available to understand what the costs are. Public Works Director Kowar said if the contract was awarded, the bidding process would occur over the next month. Pro Tem Lipton asked what would incentivize the contractor to constrain the cost besides the sharing of risk and reward of the contingency. Public Works Director Kowar stated there is no risk or reward management on the actual line items. What is bid is how the final contract will be structured. Mayor Pro Tem Lipton asked if as the bids come in, adjustments would be made to the contingency and then the sharing of contingency savings as the price gets more refined. The answer was yes. Council member Maloney asked what if bids come in at 4 million dollars. Public Works Director Kowar noted Council would then have to review. Council member Maloney thought sequencing the projects made perfect sense but in asking for a sole source, he felt the need for a good job of communication in explaining why this is the right time and what the economies of scale are. Public Works Director Kowar noted H2 was already operating in the area, it would be difficult for the City to bring in their own contractor because of sequencing problems and the 5% fee was very competitive.