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Armstrong bid comes in under estimate

The Glencoe City Council accepted a bid for construction services for the Armstrong Avenue project at its regular meeting Monday night.
The low bid came from R&R Excavating of Hutchinson for a total of about $3.52 million.
Short Elliot Hendrickson (SEH) Engineer Justin Black said the bidding was very competitive with six offers on the table ranging from R&R Excavating’s $3.52 million to $4.3 million.
The accepted bid was lower than the engineer’s estimate of $4.3 million.
“At this point we have a little bit of money sitting on the table,” City Administrator Mark Larson said.
The resolution passed 4-1, with Council Member Allen Robeck voting no.
The Council also approved a supplemental agreement with SEH for construction management of the project. The cost of management has already been included in the budget for the project. Black explained because Armstrong Avenue is a state aid project, the city has additional tasks and requirements to follow, including a state aid certified lead inspector.
Robeck asked if the agreements made with SEH at a previous Council meeting would apply to this cost. Black explained those were for the environmental study and design portion while this agreement is for services moving forward with the project.
Robeck questioned the cost, saying the fee was over 10 percent of the project costs. Black said that was correc,t but state aid guidelines allow for the cost to be up to 18 percent. Robeck asked if the city could do anything in-house to lower costs, but Black explained that would not fit with state aid guidelines.
The agreement passed 5-0.
The City Council also heard a review of the financing plan for Armstrong Avenue from Paul Donna of Robert W. Baird and Company.
Donna explained the breakdown of the general obligation bonds for the project, taking into account the lower construction cost. The total bond proceeds are set at $4.025 million. Donna said that can be broken down in uses to about $982,000 for assessments, $1.543 million for municipal state aid, about $725,000 for water, $222,000 for sewer and $473,000 for tax levy with $79,250 for cost of insurance and $1,480 additional available.
Pricing will be the week of April 25 at the latest, but Donna said it will likely be on the market before then. Closing would then be mid-May at the latest, but once again likely a week or two earlier Donna said.
The estimated debt service is set at a 15-year schedule to achieve level annual payments. The true interest cost rate is set at 2.16 percent with an all-in rate at 2.26 percent.
“These rates are very low,” Donna said.

For more, see the March 9 print edition of The Chronicle.