City Council Meeting Date: January 21, 2025
To: Mayor and City Council
City Administrator
From: Justin Wagner, Utilities Manager
David Bennett, P.E., Public Works Director/City Engineer
Title
Consider Accepting Bids and Awarding Contract - Water Treatment Plant Project.
Body
Action Requested:
The Northfield City Council considers the attached Resolution accepting the bids and awarding the contract bid for the Water Treatment Plant Project (WATR2023-J34).
Summary Report:
The City Council is being asked to accept bids and award the contract for the Water Treatment Plant Project (WATR2023-J34). The plans and specifications were completed by Bolton and Menk, Inc. and approved by the City Council at the November 12, 2024, City Council meeting via Resolution 2024-116. The project was advertised as required by Minnesota Statue. The ad for bid was published in the Northfield News and on the Quest cdn site.
The City received four (4) responsive, competitive bids, which were publicly opened and tabulated on December 19, 2024 at 2:00 p.m. The lowest responsive bidder was Magney Construction, Inc. with a bid of $61,840,000.00. Bolton and Menk, Inc. reviewed the bids and recommends award to the lowest bid.
In 2018, the Minnesota Department of Health set a guidance level for manganese in drinking water for infants. The City has tested its water since and is above the guidance level for manganese in 3 of the 5 wells and is very close to the guidance level in a 4th well. The City recommends that infants do not drink the water without further treatment.
Since 2018, the City has conducted a water system study that recommended construction of a water treatment plant that included gravity filtration and reverse osmosis. The water system study was accepted by the City Council on April 5, 2022. On April 18, 2023, the City Council approved a contract with Bolton and Menk, Inc. for the design of the water treatment plant. If the City Council approves the contract with Magney Construction, Inc., work will begin on the construction of the water treatment plant.
The water treatment plant design is a gravity filtration plant with reverse osmosis. The gravity filtration does the main iron and manganese removal, and the reverse osmosis softens the water as well as removes any future or unknown contaminants such as forever chemicals (all 5 city wells have PFBA which is a type of PFAS or forever chemical at low levels). Additionally, the reverse osmosis lowers the chlorides discharged to the Cannon River which the City could be required to lower in the future at its wastewater treatment plant.
The reverse osmosis portion of the water treatment plant is estimated to cost between $3.5 and $3.95 million for the building based on the Reverse Osmosis square footage. The City can provide softened water at roughly $8 per month which is cheaper than the typical homeowners $19 per month for treating at their own house. If the City were to remove the reverse osmosis treatment from the project, bids would have to be rejected. It would take roughly 6 months to redesign the water treatment plant. Staff would estimate that the price would come down the $3.5 - $3.9 million for the building or 5% of the total project. However, due to delaying bids and inflation the total project would go up roughly 5% resulting in a similar project cost with less treatment and lower quality water to water users.
Staff has received a few questions regarding the water treatment plant design and is answering the questions below:
- As part of the construction of the water treatment plant, two meeting rooms were included the design. One of the meeting rooms was planned for the purpose of an internal staff meeting room. The other meeting room was planned for full public works staff meetings, neighborhood project meetings, and the City having a larger meeting room that is accessible during voting when City Hall isn’t available.
- All Utilities staff will move from their current office to the water treatment plant.
- The garage was designed for the purpose of storing all the utilities departments equipment.
- An exercise room was planned for both the benefit of health and for future office expansion if needed since the water treatment plant is planned to be in use for over 50 years with the potential to be used for over 100 years. If the council prefers the space to be designated as future use and not an exercise room, staff can change the space to future use/storage.
- Outside of the front entrance there is a 365 lineal foot stamped concrete near the walkway that is to emulate a water well for the purpose of educating the public on how a drinking water well is constructed. Staff has tours with school age and college students for educational purposes that the concrete would be used for demonstrating the depth of a well.
- Site Landscaping, the plan specifies tree plantings around the site that are 2.5 Inch diameter trees, this is typical for public projects. If awarded and Council is interested staff could look small diameter trees such as 1-inch.
Alternative Options:
The City Council could choose to reject the bids for the water treatment plant. If the City Council were to reject the bids, staff would plan to bring back a discussion to the City Council to determine how the city should move forward in the water treatment industry.
Financial Impacts:
The project breakout for the water treatment plant is listed below:
|
Item |
Cost |
|
Construction |
$61,840,000.00 |
|
Contingency |
$ 6,184,000.00 |
|
Total Water Treatment Plant Project Cost |
$68,024,000.00 |
The water treatment plant will be funding through the Public Facilities Authority (PFA). Financing through PFA will provide the City with low interest loans for the project. Currently, interest rates through PFA are around 3.1%. Staff had Baker Tilly update the water rates report (Attachment 4) based on the recent bids. The report recommends the water rate increase of 28% in 2025, 50% increase in both 2026 and 2027 and a 14% increase in water rate in 2028. After 2028, a 2% increase is planned. Water rates are currently around 3¢ per 5 gallons and after the increases, the rates will be 9¢ per 5 gallons in 2030. Below is a full breakout of the updated rates based on the recommendation. Based on the bids, the average water user monthly water rate will be $69.24 where it was planned to be $57.73 prior to bids.
The engineer’s estimate for the project was $41,470,000.00 with contingencies. Reasons that the bids came back higher were due to inflation, waiting on the project while the City was seeking federal funding, and our water plant is one of the first plants that is required to follow Build America, Buy America (BABA) for PFA funding. Bolton and Menk, Inc. will be in attendance of the meeting to provide further detail on cost increases.
Tentative Timelines:
With the approval of the contract, the water treatment plant will begin early 2025 and have thirty months for completion. The water treatment plant is expected to be operating in 2027.