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City Council <br />Page Two <br />March 10, 2009 <br />As outlined in a previous memo to the City Council, staff is recommending to table action on <br />award of the bids at the March 10t" meeting. An informational meeting has been scheduled for <br />March 16, 2009 with the property owners along Demont Avenue to review the bid results and <br />the corresponding assessments prior to a decision on the award of the project. Based on the <br />low bid, a cost savings of approximately 40% is expected as compared to the feasibility <br />numbers presented at the public hearing. A copy of the revised preliminary assessment roll for <br />Demont Avenue based on the low bid amount is attached. Following the informational meeting <br />staff will prepare a recommendation for action on the bids at the March 25t" City Council <br />meeting. <br />Staff wanted to provide the Council with information as to the cost savings that is being realized <br />as a result of the competitiveness of the construction market due to the current state of the <br />economy. This cost saving is hard to express as an exact number as historical averages and <br />estimated future costs are always subject to debate. With that in mind, we would offer the <br />following. The City last completed a mill and overlay project in 2006. Using only the bid prices <br />for the items that were used in both the 2006 project and the 2009 project, the cost of the <br />comparable items using prices received in 2006 would have been approximately $400,000.00; <br />the cost in 2009 of those same items is approximately $365,000.00. We believe this reinforces <br />City staff's opinion that there are cost saving benefits that can be realized by the City at this time <br />due to the economic conditions. As competition for work decreases, either due to a decrease in <br />contractors or an increase in work within the marketplace, the City's ability to capitalize on these <br />savings will be lost. <br />If you have any questions concerning this information, please call me at (763) 780-0450. <br />Sincerely, <br />Elfering & Associates <br />~~ <br />Lee Elfering, P.E. <br />City Engineer <br />Attachments <br />ltr-031009-CC (Mill & Overlay Bid Results) <br />10062 Flanders Court NE, Blaine, MN 55449 - Ph: (763) 780-0450 -Fax: (763) 780-0452 <br />