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HomeMy WebLinkAbout08-28-17 City Commission Packet Materials - A6. Resolution 4840, Budget Amendment for WRF Small Works Project No. 1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Kristin Donald, Finance Director Brian Heaston, Senior Engineer SUBJECT: Commission Resolution No. 4840 – Amending the City’s Annual Budget for Wastewater Fund Appropriations for the Fiscal Year Ending June 30, 2018 (FY18). MEETING DATE: August 28, 2017 AGENDA ITEM: Action RECOMMENDATION: Approve Resolution No. 4840 - Amending the City’s Annual Budget for Wastewater Fund Appropriations. BACKGROUND: The attached Resolution amends the current year budget to increase funding for a project that was approved in both the adopted Capital Improvements Plan and the FY18 Budget for the Wastewater Fund. WRF Small Works Project No. 1 consists of 6 individual capital improvement items. The advertised bid package was believed to be sufficiently large to entice contractors to submit bids. The City’s recent experiences with bidding independent projects at the WRF has not yielded favorable results. On two separate occasions in 2016, bids were advertised for work on upgrading components of the WRF's existing secondary clarifiers and on both occasions, no bids were received. The engineers estimate for the clarifier upgrade was $300,000, which failed to be large enough to attract attention from bidders. The Small Works Project No. 1 combats this prior 346 dearth in interest by packaging together 6 projects into one larger construction contract with an engineer’s estimate of $868,000. Bids were opened for the WRF Small Works Project No.1 on August 1, 2017. One bid was received, and with a total price of $1,214,000 significantly exceeds the $867,718 engineer’s estimate. It is apparent that contractors working in the Bozeman market appear to be operating at maximum capacity and that bid prices are reflecting an imbalance in supply and demand. We do not believe a more favorable price could be achieved if the project is re-advertised for bid, as there are no signals that the overall demand for work in the Bozeman area will be shrinking anytime soon as we are seeing sustained population growth rates approaching 5% per annum. A $250,000 budget amendment will provide for a total funding amount of $850,000 for the work and allow five of the six individual projects of the bid package to be awarded. The recommended contract award totals $838,800 with the secondary clarifier improvements item, bid at $375,200, removed from the contract. Although improvements to the secondary clarifiers are needed, they are not a priority item relative to the five other bid items in the recommended award. The secondary clarifier improvements can be bid out again later and packaged together with rehabilitation work needed on the existing primary clarifiers to create a larger project that should garner bidder attention. Of highest priority is the rehabilitation of primary anaerobic digesters no. 1 and no. 2 and replacement of the membrane roof system over these digesters and digester control building no. 1. The digester mixers require replacement, which is crucial to the proper operation of the anaerobic digestion process. Mixer gas seals at digester 1 have failed creating intrusion of a large volume of digester gas into the membrane roof system. Digester gas is explosive if exposed to an ignition source so the gas entrapped under the roof is a hazardous situation needing an immediate remedy. Furthermore, the membrane roof has failed in multiple locations and leaks water into the digester control building and old administration and lab rooms. Full replacement of the roof is necessary to bring these assets into proper repair and set upon a proactive asset management track. Remaining items in the award include replacement of old 347 waste activated sludge pumps and installation of new variable frequency motor drives for the new pumps, as well as minor piping modifications at various locations about the WRF. The $250,000 amendment affords a modest construction contingency of $11,200, which could be used if conditions encountered during prosecution of the work differ from those precedents in preparation of the bid. The expenditures will be funded with cash-on-hand that is available in the Wastewater Fund. ALTERNATIVES: Do not fund the project at this time. FISCAL EFFECTS: The current budgeted spending in the Wastewater Fund will increase by a total of $250,000. The FY18 estimated ending cash balance in the Wastewater Fund will be decreased from $3,004,211 to $2,754,211. As payments are made to contractors, cash will decrease in the fund. The Wastewater Fund has sufficient cash available to fund the additional spending in FY18. Attachment: Resolution No. 4840 Report compiled on August 15, 2017 348 Page 1 of 3 COMMISSION RESOLUTION NO. 4840 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AMENDING FISCAL YEAR 2018 (FY18) WASTEWATER FUND BUDGET TO INCLUDE ADDITIONAL EXPENDITURES OF $250,000 FOR INCREASED COSTS RELATED TO THE COMPLETION OF SMALL WORKS PROJECTS. WHEREAS, the City Commission did, on the 26th day of June, 2017, after due and proper legal notice, conduct a public hearing and adopt a municipal budget for Fiscal Year 2017- 2018 (Fiscal Year 2018); and WHEREAS, the small works projects were listed for funding in Fiscal Year 2018 in the most-recently adopted Capital Improvement Plan; and WHEREAS, the small works projects were authorized in Fiscal Year 2018 Approved Budget in the Wastewater Fund the amount of $600,000; and WHEREAS, the City Commission did, on the 28th day of August 2017, after due and proper legal notice, conduct a public hearing on proposed amending the municipal budget. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, to wit: Section 1 – Appropriation Changes The City Commission of the City of Bozeman, Montana, does hereby authorize the following changes to expenditures in the Wastewater Fund: 349 Resolution 4840, Amending the FY18 Budget for the WRF Small Works Project No. 1 Page 2 of 3 Additions: This project and amount is added to the FY18 budget. WRF Small Works Projects $250,000 Total Appropriations Changes: $250,000 Section 2 – Use of Cash on Hand in the Street Impact Fee Fund The increased appropriation will be funded with cash on hand in the Wastewater Fund. Section 3 Pursuant to Section 7-6-4030, M.C.A., this resolution, upon its passage, shall be in full force and effect on July 1, 2017. Section 4 That should it be found by any court of competent jurisdiction that any section, clause, portion, sentence, word, or phrase of this resolution is deemed to be contrary to any existing law or regulations, that in this instance, it is the intent of the City Commission of the City of Bozeman, Montana, that all other portions, sections, words, clauses, phrases, or paragraphs of this document shall remain in full force and effect. 350 Page 3 of 3 Resolution 4840, Amending the FY18 Budget for the WRF Small Works Project No. 1 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 28th day of August, 2017. ___________________________________ CARSON TAYLOR Mayor ATTEST: _____________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 351