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Big dollar numbers

BE council OKs large projects

April 22, 2012
By Chuck Hunt - Register Editor , Faribault County Register

Big numbers.

That is what the Blue Earth City Council tackled at their regular meeting Monday night.

The council took action on several proposals that together totaled millions of dollars in costs.

And, at least one of the projects caused some public outcry at the beginning of the meeting.

Bids were opened for this summer's street/water/sewer project for portions of Gorman and 12th Streets.

Three bids were received, with the lowest coming from Holtmeier Construction for $1.223 million.

"This bid is $250,000 below the engineer's estimate," city engineer Wes Brown of Bolton and Menk Engineers, Inc. told the council. "The bid for using concrete instead of bituminous came in at $1.5 million."

But, before the council could take any action on the bids, a group of residents from the area affected by the project had several questions about it.

Those questions ranged from concerns about drainage to questions of a 2-foot strip of land between the property owners and the street.

But, the main issue was the type of curbs and gutters to be installed. Several residents questioned why the so-called 'drive over curbs' were not going to be used, saying they would prefer that style.

City Councilman Rick Scholtes says the Street Committee of the city decided to make all curb and gutters the 6-inch tall style.

Brown says that type is standard in most cities, especially in older residential areas.

In the end, despite the protests from some citizens, the council voted unanimously to accept the bid from Holtmeier Construction for the bituminous surfacing and installing the standard 6-inch curb.

"This is what the street committee decided and it is what we have used in our last three street projects," City Administrator Kathy Bailey says.

One councilman agreed right away.

"We have to follow our policy," says councilman John Gartzke. "We can't have it piecemeal around town, with different types."

Another big ticket decision came with the airport expansion bids.Engineer Ron Roetzel of Bolton and Menk told the council that two bids were received for this year's part of the project which deals with the apron expansion.

Southern Minnesota Construction was the low bidder, coming in with a total bid price of $422,216 well below the engineer's estimate of $451,185.

With engineer and other fees, the total cost of the project will be $496,017.

However, Roetzel had some disappointing news to deliver. Not all of the project was qualified for the 90/10 split from the Federal Aviation Authority.

That means, Roetzel says, that the city's share of the project will be $129,948.

"The city can use the $150,000 they will receive from the FAA in 2013 to help defray the city's cost," Roetzel says.

Bailey told the council that the city would be able to temporarily handle cost of the project putting it 'on the books' and make the decision on how to repay the amount at a later date.

The council voted to accept the bid, move forward with the project this year, and decide at a later date whether to use the FAA annual $150,000 or not.

Roetzel cautioned, however, that the decision needs to be made fairly soon.

Another large financial decision made Monday night was to proceed with two different bond sales.

Doug Green of Springsted Financial was at the meeting to present the proposal.

The bond sale would be for $4.685 million and cover three separate items the recent sewer lift station work along Highway 169, the Galbraith, 10th and 11th streets projects and a refunding of the swimming pool bonds.

"The buyers of the bond will not care what the bonds are being used for," Green told the council. "And putting them together to make one larger amount for the sale is beneficial and will attract more bids."

The council agreed and the bond sale date will be on May 23.

Green told the council that the city's excellent bond rating should result in a very favorable interest rate on the bonds estimated to be around 2.25 percent.

Plus, by refinancing the swimming pool bonds, the city should save $12,000 in current interest costs.

The city council also learned that the city is moving forward on a $590,000 general obligation sewer revenue bond through the Public Facility Authority financing.

The bond will pay for the digester lids cost at the wastewater treatment plant. That interest cost is estimated to be at 1.407 percent.

 
 

 

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