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City Council Page Two March 10, 2009 As outlined in a previous memo to the City Council, staff is recommending to table action on award of the bids at the March 10'" meeting. An informational meeting has been scheduled for March 16, 2009 with the property owners along Eli Road, Desoto Street, and Lakeside Court to review the bid results and the corresponding assessments prior to a decision on the award of the project. On the street reconstructions it is not anticipated that there will be a reduction in the street assessments because the City's maximum front foot assessment rate controlled the original assessment amounts. However, based on the low bid there would be a savings of approximately $1,100.00 to each of the residents on Lakeside Court due to the watermain prices received. A copy of the revised preliminary assessment roll for Lakeside Court based on the low bid amount is attached. Following the informational meeting staff will prepare a recommendation for action on the bids at the March 25t" City Council meeting. Staff wanted to provide the Council with information as to the cost savings that is being realized as a result of the competitiveness of the construction market due to the current state of the economy. This cost savings is hard to express as an exact number because historical averages and estimated future costs are always subject to debate. With that in mind, we would offer the following. As with the Mill and Overlay Project we again used 2006 as the comparison year. Using only the bid prices for the significant items that were used in both the 2006 project and the 2009 project a comparison was completed. The cost of the items using prices received in 2006 would have been approximately $1,051,000.00; the cost in 2009 of those same items is approximately $968,000.00. We believe this reinforces City staffs opinion that there are cost saving benefits that can be realized by the City at this time due to the economic conditions. As competition for work decreases, either due to a decrease in contractors or an increase in work within the marketplace, the City's ability to capitalize on these savings will be lost. If you have any questions concerning this information, please call me at (763) 780-0450 Sincerely, Elfering & Associates .--~-~- ~ ~~ ~, Lee Elfering, P.E. City Engineer Attachments ltr-031009-CC (Reconstruct Bid Results) 10062 Flanders Court NE, Blaine, MN 55449 - Ph: (763) 780-0450 -Fax: (763) 780-0452