Council reschedules public-works bond hearing and raises advertised estimate to $1.8 million

The city council voted to reschedule its public hearing on the Public Works building project for Feb. 25 and approved changing the advertised project estimate from $1,600,000 to $1,800,000 to prevent restarting the state-required notice process.

Staff member speaker 2 told the council the change is a protective step: "I would ask that we could I could change that to 1.8" for advertisement purposes. He said the change is an estimate only and that the final cost will be set by the lowest responsive bid after advertising and bidding.

Speaker 2 said Northland Securities’ George Iverson will attend the hearing to review general obligation bond options required under Minnesota statute and that staff is tentatively considering a 15-year general-obligation bond term. "He does mention a 15 year general obligation bond," speaker 2 said while describing the letter in the meeting packet. Staff also told the council it needs a final engineer estimate from SEH before firming numbers.

Council members debated whether listing a higher advertised amount might signal a larger budget to contractors. Committee member speaker 4 said, "To me, it's kinda backwards because in my eyes, it's telling the contractors what we have to work with," and cautioned that a higher advertised number could influence bids.

Council members acknowledged the advertised number can be set higher for legal notice and that bids sometimes come in below the engineer’s estimate. After brief discussion the council approved the resolution with the amended exhibit and the new hearing date by voice vote.

What happens next: the council will hold the public hearing on Feb. 25, hear a presentation from Northland Securities, and receive updated cost and bidding schedules from project engineers before deciding whether to proceed with bonding or modify the plan.