Broadway bids are $495,000 over

Published 11:00 am Sunday, April 7, 2013

A.L. City Council requests public input before proceeding on downtown project

Albert Lea city officials are asking for the public’s input on how to proceed with the Broadway reconstruction and streetscape project after the low bid for the proposal came in $495,000 over the budget estimate.

Higher-than-expected costs were presented for the Fountain Lake Park improvements, the street and plaza streetscape elements, and the street lighting and electrical systems.

The low bid, from BCM Construction Inc. of Faribault, also included higher costs for mobilization, or when a contractor sets up and takes down for a project.

Chad Adams

Chad Adams

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City Manager Chad Adams said the mobilization costs would be lower if the project wasn’t going to be completed in phases, but that would not have been feasible for downtown business owners.

Adams and Dan Sarff, project engineer with Bolton & Menk, presented the bids to the Albert lea City Council Thursday during a workshop.

“Looking back at our estimates, we were just a little overly optimistic with the prices unfortunately,” Sarff said.


A breakdown of the bid

According to city officials, the engineer’s estimate for the entire project was $4.1 million, including street and utilities reconstruction, sidewalk replacement and the replacement of the street lighting and other amenities. It also included the redesign of Fountain Lake Park, turning it into a grand staircase that can double as seating for events.

The project, which had been slated to begin in May, is being ordered primarily to replace aging underground infrastructure, but there has been controversy about how many extra amenities to include above ground.

The low bid included a base bid of $3.77 million for everything from the street work, sewer and water replacement, sidewalk replacement, street lighting, decorative pavers and basic plazas on William Street and Water Street.

To enhance the two plazas with additional pavers, it would be an additional $48,921 for William Street and $37,029 for Water Street.

The Fountain Lake Park part of the project came in at $438,089, about $159,000 higher than the engineer’s estimate.

Adding in the engineer’s fee of $305,000, the total low bid for the project came in at $4.59 million.

The city also took out bids for the reconstruction of the North Broadway parking lot, though the parking lot is not included in the financing for the Broadway project.


How should the project be paid for?

During the workshop Thursday, Adams presented financing options the council could consider to make up for the difference in cost.

He said out of the proposed now $4.59 million project, there are state bonding funds for $1 million, Broadway businesses are slated to pay $820,000, and sewer and water funds would cover $1.5 million. This would leave the city with costs of $1.275 million. The city could choose to bond for that amount, he said.

If this were the case, a $100,000 home would have to pay $11.70 a year for 10 years to cover the cost, while a $100,000 business would have to pay $18.20 a year.

If the city were to bond for $800,000 — which was the original estimate — a $100,000 home would be charged $9 a year for 10 years, while a $100,000 business would be charged $14 a year.

Or, Adams said, the City Council could choose to take out parts of the project including the enhanced plazas on William and Water streets or even the park.

There are also options of using 2012 surplus funds to cover the difference or dipping into the general reserve fund, which is currently at about 51 percent, Adams said.

Second Ward Councilor Larry Baker said he thinks the improvements to Fountain Lake Park need to stay in the project.

“If you say you’ll do the park later, it will never get done,” Baker said.

Fourth Ward Councilor Reid Olson agreed.

Olson said while he did not like that the bid for the park came in over what was estimated, he thinks the project can add to the quality of life for residents.

Mayor Vern Rasmussen said he would be willing to get rid of the enhancements on the William and Water street plazas, but he wanted to keep the park as well.

Adams said he will make a presentation about the bids during the Monday night City Council meeting. People will be able to provide feedback at the meeting.