MEMORANDUM #09-82

To: Walt Wrede, City Manager

From: Carey Meyer, Public Works Director

Date: June 5, 2009

Subject: Midhill PRV Station Stairway - Contract Award Recommendations

Public Works opened bids for the above referenced project on June 5. Three bids were received.

Bidder Location Base Bid

Twin Peaks Construction, Inc. Anchor Point, AK $ 337,620

Jay Brant General Contractors, LLC Homer, AK $ 235,733

Steiner’s North Star Construction, Inc. Homer, AK $ 175,927

Engineer’s Construction Estimate $160,260

The apparent low bidder is Steiner’s North Star Construction, Inc., Homer, AK. This project was not bid with the City’s 5% local bidder’s preference requirements (because of the use of state loan funds do not allow for local preference considerations). The low bid is higher than the engineer’s estimate by 9%. The budget approved by the City Council is $190,000, including design and construction. The low bid received is within the project budget:

Engineering $ 5,000

Construction $ 175,927

Administration $ 3,000

Advertisement $ 900

Total Est. Project Cost $ 184,827

Funding for this project is being provided by economic stimulus funding. Public Works has indicated in the past that our understanding is that this funding is in a form of a forgivable loan. The latest information from the funding agency (ADEC) is that “green” projects will be eligible for 100% forgiveness. This project is now considered to not be “green” and may very well be eligible for only 90% loan forgiveness. Public Works will engage the City council at the next meeting to formally establish funding for the 10% unforgivable portion of this project. The unforgivable loan portion of this project is estimated to not exceed $19,000; Public Works will suggest that this portion of the project funding come from the Public Works Reserve Fund or HAWSP.

Recommendation: The City Council award the construction contract for this project to Steiner’s North Star Construction, Inc., Homer, AK for the base bid amount of $175,927 and authorize the City Manager to execute all appropriate documents. (Fiscal Note: 215-867)