Council approves revision to Papillion Creek CMAR contract after tense debate over bidding and fees, 4–3

The Omaha City Council on April 21 narrowly approved amendments to the city’s construction-manager-at-risk (CMAR) agreement for the Papillion Creek Water Resource Recovery Facility secondary expansion project, approving a process that includes open-book, third-party-reviewed self-perform scopes and a guaranteed maximum price (GMP).

Council debate centered on whether city staff and the CMAR followed the procurement and self-performance procedures that the 2024 ordinance described, and whether the city had effectively changed the contract’s approach without earlier council approval. Council Member Harding said the practice of moving forward without prior council approval risked eroding public trust: “We're violating the public's trust by doing so, in my opinion,” he said during the discussion.

City attorneys pointed to Nebraska statute (13-29-12), which allows a CMAR contract to be conditioned on later refinements in scope and price and to permit refinements without invalidating the contract, and said the law department believed the proposed amendment complied with state law. Ryan Wiesen, deputy city attorney, summarized the Attorney General's letter to the council: “The letter concluded by stating that the Attorney General's office could find no violations of state statute and stating that the attorney general would take no further action on this matter.” The AG also flagged public-policy concerns about departing from competitive bidding practices.

Representatives for McCarthy and the city defended the open-book approach as a risk-mitigation measure for a technically complex project that must remain operational during construction. Jaren Murphy of McCarthy said the approach was meant to protect continuity and safety: “This is a plant that needs to stay active, that needs to operate. There cannot be any shutdowns.” HDR and Jacobs provided independent review and auditing in the open-book process, McCarthy and city staff said.

Council members debated fee structure and markups. HDR staff explained that self-perform labor and materials typically carry a subcontractor markup (commonly discussed in the hearing as up to about 15%), and the CMAR adds a management/risk fee (here 7.5%), producing an effective total that prompted scrutiny from members who worried about layered fees and transparency. Council discussion cited figures introduced in the hearing including a self-perform total reported in session (approximately $187,000,000) and a GMP of $411,000,000; an unsolicited estimate of $350,000,000 was also referenced as a comparison.

After extended questioning, multiple legal and technical witnesses and long deliberation, the council recorded a roll call and approved the amendment 4–3. The yes votes were Hugg, Festersen, Goodwin and the presiding officer; Melton, Roe and Harding voted no. Proponents argued the decision preserves cost-control mechanisms and third-party audits; opponents said the process should have come to council earlier and that the public-policy implications warrant caution.

The council also approved a separate resolution to buy a builder's risk insurance policy and pay a premium of $2,800,000 for the same project; that vote was unanimous.

The approved amendment authorizes the open-book, third-party-audited approach for self-perform scopes but leaves open council oversight in subsequent contract actions and retains auditing and documentation requirements as described in the amendment text.