Boyne City commission reviews CWSRF bids, debates $2.7 million shortfall and moves to tentatively award construction contract

Boyne City commissioners spent much of their meeting reviewing bids for a Clean Water State Revolving Fund (CWSRF) wastewater and water-main project, confronting higher-than-expected construction prices and discussing how to cover an approximate $2.7 million shortfall.

The meeting opened with staff and consultants summarizing the packet materials and recent bid openings. Mike (city staff) told the commission the city submitted its CWSRF application after a late state funding notice and that bids were opened last week. Mike Faith, the lead engineer from c2ae, said bids for the wastewater-plant repairs (contract two) were ‘‘tight’’ and reasonably competitive, while bids for the sewer-improvements work (contract one) exceeded staff estimates. Faith said some scope changes added mandatory code-driven items — including a fire sprinkler, control valves and a full eyewash/shower system with a hot-water heater for the adjacent building — that increased costs.

Consultants and commissioners focused on how the packet divides ‘‘participating’’ (CWSRF-eligible) work from ‘‘nonparticipating’’ items such as road drainage and water-main extension. Staff explained the method used to apportion engineering and administration fees between those categories. That allocation matters because the city’s tentative loan amount, as discussed in the packet, is $12.8 million; bids as submitted would put the participating work above that cap, creating the funding shortfall commissioners discussed.

Andy Campbell, the city’s financial consultant, said the city’s debt model would not change if the commission keeps the loan at $12.8 million but uses reserves to cover the remainder. Campbell told the commission that using $1.5 million from the sewer fund, $800,000 from the water fund and $400,000 from the general fund would close the roughly $2.7 million gap presented in staff’s working numbers; he described that mix as one possible path that would preserve the planned 3% annual rate increase for sewer customers. Campbell cautioned that increasing the loan amount instead would raise the customers’ rate projections.

Commissioners pressed staff and the engineer on specific bid-line discrepancies and a unit-quantity error in the bid tabulation for a spot-repair line item that, if corrected, could materially change some totals and possibly the low-bid ranking. Staff acknowledged those discrepancies and said they would double-check bid tabulation line items and follow up with contractors where appropriate.

The commission discussed options to bridge the shortfall: reduce project scope (staff identified particular streets or components that could be deferred), negotiate with contractors for savings (staff said contractors had indicated limited but possible opportunities), use reserves/general-fund balance, or pursue future special assessments for individual hookups. Staff also noted that certain nonparticipating road and drainage work cannot simply be deleted if sewer work proceeds, because rebuilding a road typically requires addressing drainage.

Pat mcau (city consultant) and other staff walked commissioners through the state timeline: the packet’s ‘‘part 3’’ submission is due next week, a call with the state program and the Michigan Finance Authority is expected in early August, the state order is currently scheduled for mid-August and purchase contracts would follow in late August; closing would then follow in early September. Staff said the city has a short window in July to adjust alternates or scope before financing is effectively locked in at the purchase-contract stage.

On the question of resident participation, staff confirmed that two public meetings are scheduled at the end of July to explain options and to seek the 50% participation threshold for property-owner hookups on affected streets. Commissioners voiced concern that residents may be unwilling to pay steep hookup costs and discussed wording for the outreach letter and how to present the prospect of a future special assessment.

Near the end of the discussion a commissioner moved to award contract one and to accept the resolution in the agenda packet with a stated dollar figure on the record; the motion was seconded. The transcript records the motion and the roll-call prompt but does not include a full roll-call tally or an explicit recorded outcome in the provided excerpt. Staff and consultants remained available for follow-up and commissioners requested additional reconciliation of bid math and prioritized recommendations on where scope could be reduced if financing limits hold.

The commission set next steps: complete the packet corrections, hold the two public meetings at the end of July, continue negotiations and conversations with the state program and the Michigan Finance Authority, and return with clarified funding options and recommended de-scoping priorities before final contract signature or loan closing.

Ending note: The transcript shows a motion to tentatively award one construction contract; the meeting materials and discussion make clear that any award would be contingent on successful financing, final reconciliation of bid tabulations, and any public input or negotiated adjustments that follow.