Prior Lake could pay more than $1 million more than previously estimated on its Highways 13 and 21 project following a City Council vote Tuesday.
City Engineer Andy Brotzler said during the special meeting that the lowest bid came in from S.M. Hentges & Sons at $13.4 million, about $3 million above a 2018 estimate. The city’s share of the cost in partnership with Scott County therefore rose from a projected $2.6 million to $3.8 million.
Having allotted $2.7 million for the project, Brotzler said he’s looking for ways to make up the gap without a levy increase. He said that this year, contracts are more expensive across the board due to increasing material costs and a lack of skilled labor workers.
One option is delaying a median monument project of about $560,000. The monuments would have been sailboat mast-like structures with LED lights.
Brotzler said if the change order can be negotiated with the contractor and the project can be completed later on, the city could save about $310,000. That would leave the shortfall at $750,000.
“In essence, we’d be able to obtain more competitive bidding by getting the package out to a number of specialty contractors,” Brotzler said.
He said there are additional costs in the project that will allow the city to dip into its state-aid funds to make up for the rest. He also said the city’s construction and utility funds have leftover money that could be used.
“I think it’s smart and wise, fiscally, to wait on the monuments,” said Councilwoman Annette Thompson. “But I would like some kind of guarantee or commitment that we will get those installed within a short period of time, whether that’s six months or a year.”
City Manager Michael Plante said the city and the county are taking the brunt of the overall project cost increase.
“(The Minnesota Department of Transportation) is going to consider increasing their contribution as well,” he said. “That’s not included in these funding sources only because it’s not a certainty.”
Councilman Warren Erickson said he believes now is the worst time to put out a bid due to contractors taking on a high volume of projects, and he asked Brotzler whether the city could receive lower bids in winter. Brotzler said there’s a risk to re-bidding and delaying the project when the bid amount might stay the same.
Councilman Kevin Burkart said the contract’s bid and timing weren’t ideal.
“The first thing to go is the window dressing,” he said. “Those citizen groups who wanted to do these monuments, that was good input. But I think if you’d told them that the price tag was $350,000 or $500,000, I think very few would say that’s a go.”
The council voted 4-1 to recommend that Scott County accept the $13.4 million bid with Burkart’s dissent.
The city in recent weeks sold general obligation bonds for $2.65 million to fund road resurfacing and roundabout construction on Highways 13 and 21 and downtown roads.
The roundabouts will be constructed at the intersection of Highways 13 and 21 and at the intersection of Highway 21 and Arcadia Avenue toward the end of summer. Stage 1 of the project, stretching from Highway 282 to Vergus Avenue on Highway 13, began in May.