Meridian council approves cooperative agreement with Toll Brothers to accelerate McDermott sewer trunk line
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Summary
Council approved a public‑private agreement with Toll Brothers to build a portion of the McDermott sewer trunk line early; Toll Brothers will pay construction costs upfront and the city will reimburse 50% later, with contract protections including a 10% bid off‑ramp and a 5% cap on city change‑order exposure.
City staff presented a cooperative development agreement proposed with Toll Brothers to advance construction of a segment of the McDermott trunk sewer earlier than the city's original 2028 schedule. Warren (city staff) said Toll Brothers would pay the construction costs now and the city would reimburse 50% of the final construction cost at the time the city had planned to fund the project, preserving the city’s capital‑plan timing.
Council members pressed staff on financial protections. Staff described two main protections for the city in the agreement: an off‑ramp if the contractor bid exceeds the estimate by a threshold (described in the agreement as roughly 10%), and a cap that limits the city’s exposure to change orders to 5% of the contract value; change orders beyond that would be Toll Brothers’ responsibility. City attorneys and project managers said geotechnical and construction‑inspection fees remain the city’s limited exposure but are relatively small compared with total construction costs.
A Toll Brothers representative told the council that Toll Brothers does not provide a fixed maximum price in its internal language but that the project contract becomes that contract price once bids are received; the agreement with the city ties the city’s reimbursement to that bid amount and limits the city’s financial exposure via the change‑order cap.
Councilman Taylor moved approval of the agreement and, after discussion and staff clarifications, the council voted to approve the cooperative development agreement. Staff said the city will review the final Toll Brothers construction contract when bids are received and would bring higher‑than‑expected bid results back to council for a decision under the agreement’s off‑ramp.
Staff also noted the agreement contains a legally required non‑appropriation clause that allows a future council to withhold the reimbursement appropriation in the year funds are scheduled to be paid; staff described this as a necessary legal protection under Idaho law to avoid creating an impermissible debt obligation by future councils.
The council approved the cooperative development agreement at the meeting and directed staff to continue coordination with Toll Brothers on bid oversight and contract review.