The 2022 Capital Improvement Plan (CIP) contains the West End Lower Bluff Utility Improvements Project Sewer-24-001. On March 1, 2022, the City Council approved the plans and specifications and authorized bidding of the project.

In accordance with Minnesota Statute Section 471.345 Uniform Municipal Contracting Law, bids were solicited and opened on April 5, 2022. Seven bids were received and Northern Lines Contracting, from Bloomington, Minnesota, is the lowest bidder in the amount of $2,695,452.60 (see the attached resolution for the bid tabulation summary). The most recent engineers estimate for construction cost is $2,817,000. Northern Lines Contracting, has the capacity and experience for the project and is deemed a responsible bidder.

Based on the low bid amount, the total estimated project cost for the project is $3,421,452.60. It is important to note that the total project budget shown in the 2022 CIP (see attached CIP summary sheet) did not include costs for the watermain improvements ($1,300,000) but has been added to the over budget. The below table summarizes the cost and funding sources for the project with an updated CIP budget estimate that includes SPU's watermain portion.

The amended total project budget of $3,421,452.60 includes a $136,000 contingency amount that would cover any unexpected change orders, quantity adjustments and other miscellaneous expenses encountered as part of the project. The increased project cost is a result of adding a County Road 69 sanitary sewer and casing crossing, the installation of a dual sanitary sewer force main, and current material shortages and inflationary conditions. The County Road 69 sanitary sewer crossing was added to the project to include that work under a city led project (vs. future developer project), which will ease the readiness for future connections and extension of the sewer. The dual sanitary sewer force main was added to the project to allow for redundancy and flexibility during operations and maintenance.

The project is to be funded out of the Sanitary Sewer Fund and SPU Water Trunk Fund in the short term. The long term sanitary sewer funding will be fully generated and paid by property owners/developers within the service area through the Trunk Sanitary Sewer Charge, Lateral Sanitary Sewer Connection Charge and Sanitary Sewer Connection fees once the land is developed and/or connected to the sewer. The sanitary sewer costs are 100 percent recoverable from the area it will serve (e.g. future development area) and no costs are absorbed by other property owners.