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Bremen delays decision on $8.6 million wastewater bids after estimates come in high
Summary
Engineers reported Phase 1 bids for Bremen’s wastewater plant came in about 22% above prior estimates; staff recommended a tentative award contingent on SRF funding, and the council agreed to wait for updated SRF interest rates and a Baker Tilly rate-impact analysis before formal action.
Daniel Bay of JPR told the Bremen Town Council that bids for the town’s wastewater plant improvements (Phase 1) opened Aug. 6 and came in higher than expected, raising near-term rate concerns for sewer customers. "The sum total of both contracts was about 22% over the engineer's opinion of probable costs," Bay said, listing apparent low-bid totals that together amounted to $8,636,000.
Bay said both apparent low bidders submitted complete packages and that, because of anticipated changes in interest rates, the town’s financial consultant Baker Tilly will present an updated estimate of the impact on user rates after SRF releases new interest figures in late August. He said JPR recommends the council "accept and tentatively award" both Contract A (base bid plus a mandatory alternate) and Contract B to the apparent low bidder, with awards contingent on securing SRF funding and other closing conditions.
Council members voiced concern about approving a contract without knowing the updated debt-service impact. One council member said they preferred to wait until the Baker Tilly analysis is available; Bay acknowledged that the recommendation was contingent and that a 150-day bid hold period is in the contract, allowing the council time to delay a formal award.
The presentation included additional budget details Bay said would reduce the originally-modeled contingency from 10% to a 5% construction contingency and noted the overall debt-service cost will vary with the final interest rate. Baker Tilly intends to present an estimated rate impact at the council’s first September meeting, and the council agreed to defer formal award decisions until that presentation.
Next steps: staff will hold tentative awards under the 150-day bid hold and bring the Baker Tilly rate-impact analysis and SRF interest-rate updates to the council in September for a final decision.
