The city's Capital Improvement Plan (CIP) contains the 2021 Street and Utility Reconstruction Project CIF-20-007. On March 2, 2021, the City Council adopted Resolution R2021-025 approving the plans and specifications, and authorizing bidding of the project.

In accordance with Minnesota Statute Section 471.347 Uniform Municipal Contracting Law, bids were solicited and opened on April 8, 2021. Four (4) bids were received. GMH Asphalt Corporation, from Chaska, MN, was the initial apparent low bidder in the amount of $969,912.35. However, after review of the bid tabulations, it was determined that GMH Asphalt Corporation made several multiplication and summation errors in the submission of their bid, and the corrected bid amount was $1,070,700.23. Therefore, SM Hentges & Sons, Inc., from Jordan, Minnesota, is the low bidder in the amount of $1,007,869.66 (see the attached resolution for the bid tabulation summary).

SM Hentges & Sons, Inc., has the capacity and experience for the project and is deemed a responsible bidder. They are prepared to begin work in May with an anticipated completion in September 2021.

Based on the low bid amount, the updated total estimated project cost and funding summary for the 2021 Street and Utility Reconstruction Project is as follows:

The low bid of $1,007,869.66 is $147,095.16 over engineer's estimate of $860,774.50. The higher than expected bid amount is largely due to high bid prices associated with the highly specialized process of directional drilling a steel casing through bedrock to install a watermain pipe under the railroad crossing at 2nd Avenue and Scott Street. The increased watermain costs have been communication to Shakopee Public Utilities. The SPU Commission meets on April 19, 2021 and will discuss this watermain construction cost increase. It is expect the SPU Commission will provide direction prior to the consideration of the award of this contract by the Shakopee City Council.

Construction costs related to street improvements came in under the estimate and will reduce the impact on the CIF Fund and lower Special Assessments for property owners. Additional storm sewer pipe and catch basins were added to the final design to capture surface water in the newly added parking areas along Levee Drive and Scott Street, leading to an increase in storm sewer costs on the project. The increased costs related to storm sewer and sanitary sewer can be absorbed by their respective utility fund.

The amended total project budget of $1,142,869.66 includes a contingency amount that covers any unexpected change orders, quantity adjustments and other miscellaneous expenses encountered as part of the project. This project is funded by Special Assessments, the Capital Improvement Fund, the Sanitary Sewer Fund, the Storm Drainage Fund and Shakopee Public Utilities.

Included in the resolution is funding language that would allow the city to reimburse project costs from future bond proceeds. This language allows for greater flexibility in funding current and future projects, should the city desire or need this in the future. The additional language allows the city a period of up to three years to issue and reimburse itself with bond proceeds. The language does not change the requirements or administrative process for issuing debt. All debt issuance will still require separate approval by the City Council.