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Council debates raising bond authorization for Fifth Street project after construction bids rise to $8.6M
Summary
Council heard that low construction bids for the Fifth Street project reached $8.59 million; staff recommended adding a 10% contingency and increasing previously authorized bond funding from $6M to about $8.25M to cover construction and engineering costs. Council directed staff to place bond-issuance and construction-engineering items on the regular agenda for future action.
City staff and the project engineer told the Committee of the Whole on March 10 that the Fifth Street road project's low construction bid was $8,590,596.90 and recommended a 10% contingency, bringing the city's estimated ask to roughly $8.25 million.
Superintendent Landers and a CMT representative said the bid includes construction engineering costs; the revised engineering proposal for construction engineering is about $1.66 million and staff recommended the council add contingency to account for unknowns. The council had previously authorized up to $6 million in bond money for the project; staff asked the council to consider authorizing an additional $2.25—2.5 million in GEO bonds so the city can proceed.
Treasurer Mr. Conzo cautioned that issuing bonds for the full amount before money is spent would incur interest costs on borrowed funds not yet needed and recommended staging borrowing to match cashflow. Council members pressed on timing and budget priorities; one alderman attributed cost escalation in part to railroad delays that delayed the project and increased inflationary impact.
Staff also reported they are exploring potential external grant funding (staff said opportunities up to about $3 million are being pursued) and that contractors were ready to start in April or May. The project schedule referenced 210 construction days with a projected completion in November 2027, subject to weather and other delays.
Council directed staff to place two separate items on the upcoming regular agenda: acceptance of the construction engineering agreement (CMT, about $1.66M) and a request to consider issuing an additional $2.25M in bonds (to raise the total authorization to the $8.25M range). No final bond issuance vote occurred at the committee meeting.
A council member summarized the immediate next steps: staff will work with bond underwriters and bond counsel on the ordinance, schedule required public hearings and return to council with a timeline and the formal bond ordinance should the council choose to proceed.
The discussion spanned the Fifth Street project item in the committee record (SEG 1818—2313).
