Walnut Grove receives two bids for sewer plant expansion; low bid exceeds current budget by about $600,000

Walnut Grove city staff told the council on [work session date] that two bids were opened for Phase 2 of the city's land application system expansion, and the low bid exceeded the project's current budget by roughly $600,000.

The most immediate facts: city staff said the low bidder was IHC Construction Services LLC at about $4,055,005 and the other bidder was Sol Construction at $4,718,000. Staff told the council the current project budget stood at $3,567,250 and that approved appropriated funds, grants and local funds available for construction plus contingency added up to $3,362,250, leaving the city short of the amount needed to award construction.

Why it matters: the Phase 2 expansion is intended to add treatment capacity the city has advertised and that prospective developers are waiting to reserve. A shortfall of this size affects whether the city can immediately award the work and proceed to construction, or must identify additional funding or reduce scope.

City engineer and staff briefed the council on options. Staff and the project engineer said options include: (1) re-scoping the project to reduce production capacity, which staff said the mayor viewed as undesirable; (2)…