Adopt Resolution R2022-067, rejecting bids for the Quarry Lake Park Improvements Project PR-21-006.

The City's Capital Improvement Plan (CIP) contains the Quarry Lake Park Improvements Project. Part of the overall project included constructing access and amenities on the west side of Quarry Lake. This project included constructing a park road, dual boat ramp, handicap accessible trail, handicap accessible parking stalls, and storm water mitigation components, all that were part of the Quarry Lake Park Concept Design, approved by the Council on January 19, 2021. These amenities were to serve the Shakopee-Prior Lake Waterski Association (SPLWSA), the Xcel Mountain Bike Park, the Shakopee Fire Department for emergency access and training, and to make that portion of the park's amenities compliant with the Americans with Disabilities Act. As an aside, a license agreement partnership with Xcel Energy was approved to use their land for a portion of the mountain bike park and part of that agreement included a plan to construct a private driveway as an emergency access/backup to their primary driveway for use when the railway blocked their primary driveway. 

On March 1, 2022, City Council adopted Resolution R2022-029 approving the plans and specifications and authorizing bidding for the park road/trail/boat ramp project. In accordance with Minnesota Statute 471.345 Uniform Municipal Contracting Law, bids were solicited and opened on April 19, 2022. Five bids were received and Minnesota Dirt Works, Inc., from Lakeville, Minnesota was the low bidder in the amount of $662,198.55 (see attached resolution for the bid tabulation summary). The bid is 13% above the most recent engineers estimate of $585,831.00. While the bid amounts are slightly higher than the estimated cost, the received bids are competitive and represent the cost of construction in the current market.

Other consideration items in considering the bid include the involvement of Xcel Energy and the SPLWSA as follows:

Xcel Energy. Xcel Energy had planned to extend a driveway from the south end of the park road cul-de-sac (a separate project to be developed and paid for by Xcel), but has developed an alternative that is more favorable to them where they would construct a driveway on the north end of the park, parallel to the railway tracks (see attached alternate concept plan). This alternative driveway location will be further presented to the City Council as a future Xcel Energy driveway license agreement consideration item in the coming months as details are developed. Under either scenario (the south driveway alternative or the north driveway alternative), Xcel Energy has indicated that they will donate $100,000 for the park road construction and/or other future Quarry Lake Park improvements.

Ski Association. The ski association has indicated that they support the funding amount designated to them ($383,585), which is the cost of 50% of the park road and 100% of the boat ramp in accordance with the funding prescription of the SPLWSA use agreement that has been in place since 2005. However, the agreement expires in 9 years (2031) and they have indicated that they do not support their funding allocation without an extension of the agreement. Without an agreement extension and without the ski associations funding, the project is generally considered impractical.

Based on the low bid amount, the total estimated project cost for the Quarry Lake Park Improvements Project is $787,207.55. The project was proposed to be funded by the Shakopee Prior Lake Water Ski Association, Xcel Energy and the Park Development Fund. Table 1 below summarizes the costs and funding sources for the project, comparing the estimated amounts to the bid award amounts. With the increased potential funding amounts by both the ski association and Xcel Energy, the city's allocation would be substantially less than originally planned.

Table 1. Cost and Funding Summary