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Vernon Center tables well-project award after bids exceed estimates; USDA-RD funding review required
Summary
The council held off awarding a contract for water and wastewater plant improvements after two bids exceeded engineering estimates; the low bid from Rubin Construction was $1,216,310 and the council asked USDA Rural Development to reconcile loan offsets before proceeding.
The Vernon Center City Council decided not to award a contract for planned water treatment plant and wastewater improvements after bids came in above the engineer’s estimate.
Engineer Chris Knutson said two bids were received at a July 29 bid opening; the low bid from Rubin Construction of Tyler, Minn., was $1,216,310. Knutson and Clerk Kara Hansen said both bids exceeded the engineer’s projected amounts, and USDA Rural Development staff indicated the city must reconcile prior loans and offsets — including amounts tied to a Northland Trust loan and two PFA loans — before RD can confirm how much of the RD loan remains available for the well project.
Hansen summarized figures used earlier in the year: a combined figure for sewer and water that RD had provided for loan calculations, and a working number of approximately $1,364,000 that had been adjusted to $1,260,978 for the June 2026 milestone. She said Ed Gilmore of USDA-RD must calculate what the city owes on prior loans and how remaining RD funds can be applied to the well project. The council agreed it could approve a bid contingent on RD concurrence but should not issue a notice to award until RD confirms funding; if RD later confirms funds, the council may call a special meeting to formally approve an award and notice to award.
Councilors approved Pay Application #16 (pending receipt of bonding and other outside funds) and MRWA invoice #11 as separate items, while leaving the well contract decision dependent on USDA-RD’s determination.
Engineer Knutson also noted warranty items from the larger infrastructure project — including popped concrete and unglued cleanouts — that contractors must remedy under warranty.
