Hays council authorizes BK Drilling contract for municipal well despite lack of performance bond

The council debated a sole-bid contract with BK Drilling to drill a new Edwards aquifer well at an old city well site and authorized entering the contract while agreeing a financial safeguard would be included in the terms. Don Ross Schubert, the city's consultant/engineer, told the council BK Drilling does not provide performance bonds for projects of this size and recommended contractual protections including a withholding/retainage amount and close supervision. "They don't do performance bonds," Schubert said when explaining typical driller practice and the contractor's limitations.

Council members pressed for insurance documentation and discussed whether to require a larger upfront deposit (50%) or accept a lower deposit and a 10% invoice retainage. After discussion and an amendment, the council approved a motion directing the mayor and staff to execute the contract with a retainage arrangement and gave the mayor and staff latitude to negotiate final deposit terms and require proof of insurance. The motion included direction that staff closely monitor the project and return to council if the contractor will not accept the negotiated payment structure.