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HomeMy WebLinkAboutResolution No. 4241, Bozeman Water Reclamation Facility, Phase 1, Change order 4.pdf Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Bob Murray, Project Engineer Rick Hixson, City Engineer Chuck Winn, Assistant City Manager SUBJECT: Bozeman Water Reclamation Facility, Phase 1 Improvements – Change Order No. 4 MEETING DATE: February 8, 2010 AGENDA ITEM TYPE: Consent RECOMMENDATION: Motion and vote to approve and authorize City Manager to sign Bozeman Water Reclamation Facility, Phase 1 Improvements – Change Order No. 4. BACKGROUND: Attached is a copy, of change order number 4 for the above referenced project which modifies the wage rates for this project. The City has always intended on financing a large portion of the Water Reclamation Facility improvement costs through a loan from the SRF (State Revolving Fund) Program. The Finance Department began working with SRF on funding this project in 2006. The project, funding package, and construction contract were approved by SRF prior to awarding the construction contract in 2008. It was decided to wait on closing the loan until we expended the available City funds in order to reduce the amount of interest that we ultimately pay on the loan. When the admin/lab and digester projects were advertised for bid in November, we heard for the first time that we would be required to pay Federal Davis Bacon Wages on those projects. We were assured however that our large Phase I project that was under construction would be grandfather in and could continue to use the Montana Prevailing Wage rate it was bid under. Shortly thereafter, we were informed by SRF that a federal law had gone into effect October 30, 2009 that required the use of federal wage rates on SRF projects, and the EPA who funds the SRF program would not allow our project to be grandfathered since the loan was not closed prior to the effective date of the law. Since that time, the SRF staff and bond council have both made appeals to the EPA, both of which were denied. Staff has also had discussions with all of our federal delegations hoping they could convince the EPA to reverse their decision, but to date the EPA has refused. This issue has much larger financial considerations to several other states than it does Montana, and as such it is going to be the focus of a federal hearing in the upcoming months. In the interim however, the EPA will not allow our loan to be closed without a change order being processed to require federal rates to be utilized from October 30th until the end of the project or until the EPA’s decision is reversed whichever comes first. 126 The attached change order institutes the federal rates on the project. It is written so that we will need to make a lump sum payment to cover the labor since October 30, 2009 retroactively, and then we will pay the incremental difference between the rates for the labor utilized on the project on a monthly basis. If the EPA’s decision is reversed in the future, the rates will revert back to the Montana Prevailing Wage rates, but we will not be able to recoup the dollars spent between October 30, 2009 and the reversal of the decision. No change in contract time is being provided with this change. FISCAL EFFECTS: If the federal wage rates must be utilized for the remainder of the project, it is estimated that it will increase the project cost by approximately $300,000. ALTERNATIVES: As suggested by the City Commission. Attachments: Change Order No. 4 Resolution 4241 Report compiled on: 2/2/10 127 1 of 2 COMMISSION RESOLUTION NO. 4241 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, APPROVING ALTERATION/MODIFICATION OF CONTRACT WITH WILLIAMS BROTHER CONSTRUCTION, LLC., BILLINGS, MONTANA. WHEREAS, the City Commission did, on the 10th day of November 2008, authorize award of the bid for the Bozeman Water Reclamation Facility Phase I Improvements project, to Williams Brother Construction, LLC., Billings, Montana; and WHEREAS, Section 7-5-4308, Montana Code Annotated, provides that any such alterations or modifications of the specifications and/or plans of the contract be made by resolution; and WHEREAS, it has become necessary in the prosecution of the work to make alterations or modifications to the specifications and/or plans of the contract. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, that the proposed modifications and/or alterations to the contract between the City of Bozeman, a municipal corporation, and Williams Brother Construction, LLC., as contained in Change Order No. 4, attached hereto, be and the same are hereby approved; and the City Manager is hereby authorized and directed to execute the contract change order for and on behalf of the City; and the City Clerk is authorized and directed to attest such signature. 128 Resolution No. 4241, Change Order 4 for WRF 2 of 2 PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 8th day of February 2010. __________________________________________ JEFFREY K. KRAUSS Mayor ATTEST: ________________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: _____________________________________________ GREG SULLIVAN City Attorney 129 130 131 132 133 134 135 136 137 138 139 140