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City Council Regular Meeting Minutes June 9, 1997 Page 6 • 1 Michael Neisly, Senior Architect of KKE, reported the bids for the project were received on 2 June 5, 1997. The lowest base bid was received from Lund Martin Construction. They are 3 well respected in the industry and have been in business in this area for 46 years. The base 4 amount that was bid is $629,800, an alternate bid for re-roofing the Tires Plus store was 5 $39,800, an alternate bid for fascia improvements on all sides of the Tires Plus store to match 6 with the work being done on the liquor store side was $83,000. One thing noted in the bid 7 opening was that Lund Martin identified that they had not received addendum #2. It was 8 determined that they did not receive the addendum due to a facsimile error. Addendum #2 9 included removal of three inches of a concrete floor. The value of this work is $2,500. Lund 10 Martin was asked if they would perform the work for the stipulated sum and they agreed to in 11 order to keep the job. KKE recommends that if the bid is based on the base bid amount that 12 the contractor be allowed to increase the bid to include the slab removal. 13 Mr. Neisly stated that the current electrical service in the building is not legal from the 14 standpoint of the current code. Each building is required to have separate service. The Tires 15 Plus building is fed from the Montgomery Wards building. The Electrical Engineer suggested 16 that this work be separated from the building because it falls into an issue of whether the City 17 will purchase the building at the price originally thought. The cost to add the transformer, 18 electrical cabinets and main disconnects for each facility is $8,000 to $9,000. What is already 19 included in the bids is a feeder line that goes from what was thought of as the service 20 entrance to the new liquor store entrance. That cost is $10,000 to $15,000. If the transformer • 21 is placed in a location so that it will shorten the feed, the City may actually recoup money 22 from the low bidder and apply that to the additional cost. The service at the Tires Plus store 23 is currently 300 amps. It is the opinion of the Electrical Engineer that this is oversized. By 24 reducing this, the City could possibly save some more money. 25 Mr. Neisly stated one final issue is that the current roof of the portion of the building to be 26 remodeled is a ballasted rubber roof and is over stressed by 7%. It will need to be upgraded 27 to meet the current Code requirements. This cost is not included in the bid price_. The cost 28 of this improvement is approximately 25% more than the roof price in the bids. 29 B. Resolution 97-037 re: Authorize Sale of Bonds Relating to SAV 2 Liquor Store. 30 Mr. Bob Thistle, Springsted, explained there are two processes available to redistribute debt. 31 One is through the competitive bid and the other through the negotiated bid. The negotiated 32 bid is used in three instances including if the issue is small, very large or if it contains a very 33 complicated story. This bond issue falls into the third instance. This is a revenue-issued 34 bond which is based strictly off the revenue received from the liquor store. Only two or three 35 companies have experience with these type of bond issues. The critical number in this issue 36 is the coverage time. On a liquor bond issue this number must remain above two. 37 This proposed structure will be identical to the previous liquor bond issue of the City. The 38 current liquor issue will be concluded as of January 1, 1998. The amount remaining on that 39 issue is $90,000. The City currently has reserve funds in place for that issue. In order to get • 40 the coverage time factor where it is today, Springsted is proposing to take that reserve and 41 defease the existing bond. This is done by taking the money and giving it to a trustee who