MEMORANDUM 06-119(S)(1)

To: Walt Wrede, City Manager

From: Carey Meyer, Public Works Director

Date: August 10, 2006

Subject: Kachemak Drive (Phase I) Water and Sewer LID

Construction Contract Award Recommendations

Public Works opened bids for the above referenced project on July 20. Bid amounts exceeded the engineers estimate by more than 15%. The project was rebid (deleting boring work and substituting open trench road crossings) on August 9. Below are the final results:

Original bid Final Bid

Zubek, Inc. Kenai, AK $1,080,290 $1,158,053

Herndon Construction, LLC Homer, AK $1,188,283 $ 967,769

Public Works has reviewed the bids and evaluated the responsiveness of each bidder. The final apparent low responsive bidder is Herndon Construction. The original total sewer LID cost estimate (used to create the sewer LID in 2004) was $644,800; and the original total water LID cost estimate (used to create the water LID in 2005) was $397,210 ($644,800 + $397,210 = $1,042,010). The estimated cost of construction was $890,000. ($890,000 x 1.09 = $967,769)

The 75% of the cost of the water portion of this project will be charged to the Kachemak Drive (Phase I) Water LID property owners (215-826); 75% of the cost of the sewer portion of this project will be charged to the Kachemak Drive (Phase I) Sewer LID property owners (215-826); and 25% of the cost of each portion of the project will be paid for directly by the HAWSP fund (163-175).

Recommendation: The City Council should authorize the City Manager to issue a Letter of Intent to Award to Herndon Construction, Homer, Alaska. Upon meeting the conditions of the Bid Documents, the City Manager should be authorized to award the contract to Herndon Construction. in the amount of $967,769; issue a Notice to Proceed, and execute all required documents needed to complete this project (in accordance with previous authorizations by the City Council).