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Council hears details on contingencies, CMAR role and financing options for water plant
Summary
AE2S engineers described contingency structures (3% CMAR, 2% Owner) and how unused contingency funds are handled; city staff said reserves will bridge initial payments until bond proceeds are available and referenced a PFA credit enhancement program.
AE2S Engineers explained the project's contingency structure and how change orders and unknown conditions will be handled under the CMAR delivery model. Hanson said the "CMAR has 3% contingency and the Owner is 2% contingency," and described how unused contingency funds are refunded along with a percentage of the CMAR fee. Councilmembers asked about which contingency would cover equipment pivots; a Rice Lake representative responded that coverage would "depend on what schedule of the project," and that it would be a discussion during contracting.
On financing, Administrator Flaherty said reserves will cover initial payments until bond proceeds are received, and noted the city is looking at a credit enhancement program through the PFA. Flaherty said staff will return with financing details at the council's first meeting in August. Council did not vote on contract awards or contingency reallocations at this meeting.
