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LAKE ELMO CITY COUNCIL MINUTES 12-4-84 PAGE 6 the past the State and Federal grants had been extended in the same percentages to cover those increased costs. Usually that amendment to our grant does not take place until after the bids are received; however, because we have to bond for our interim financing and do other financial planning, he has asked the MPCA for a preliminary determination as to whether the grant would be extended to cover the increased costs. The MPCA has verbally given approval to the City Administrator that the grant will be amended. The Engineer further reviewed his letter of November 29, 1984 in which he addresses the Step 2 Engineering Costs for the 201 Program. Work for the Step 2 portion of the 201 program is essentially complete. The only work remaining will be to incorporate any of the MPCA's suggestions into the plans and specifications based upon their review. In October of 1983, TKDA and the City of Lake Elmo entered into an agreement to provide engineering services for Step 2 work. This agreement set $103,000 as the maximum cost for the work, subject to certain adjustments. Based upon the construction cost of $360,000 estimated in the Facilities Plan, the grant allowance the City would receive for Step 2 work was $22,600. This would leave a cost to the City for Step 2 work at $80,400 ($103,000 - $22,600). It appears that the actual cost of completing the Step 2 work with no increase in fixed fee will be approximately $152,000. Since the construction cost is now estimated to be approximately $1,404,000, the Engineer expects that the grant will be amended at the( i time of bid opening so that the Step 2 allowance that the City will receive will be approximately $82,150; therefore, the cost to the City for Step 2 will be substantially less. The engineering agreement provides that the terms of the original agreement may be changed by consent of both parties if the level of work effort required or the cost of the project changes significantly. Since the City's cost is expected to decrease because of the increased allowance and since the additional engineering expense is directly related to the increased project cost, the engineer stated that it seems fair to ask that TKDA be reimbursed for its additional expenses out of the additional grant allowance. The Engineer asked that the City Council move to amend the engineering agreement at this time but that no additional costs be paid until such later time when the bids are received and the grant is amended to adjust the Step 2 allowance. This amendment to the engineering agreement would allow the engineer to be reimbursed for its additional cost up to a maximum such that the local share of Step 2 costs (Step 2 costs less grant allowance) does not exceed the originally estimated local share of $80,400. Morgan/Fraser - To amend the the agreement for engineering services between the City of Lake Elmo and the firm of Toltz, King, Duvall, Anderson & Associates, Incorporated for performance of Step 2