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City Council - 03/27/2007 - Special APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL SPECIAL MEETING TUESDAY, MARCH 27, 2007 5:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Sherry Butcher, Jon Duckstad and Kathy Nelson CITY STAFF: Parks & Recreation Director Bob Lambert, City Attorney Ric Rosow, and Council Recorder Jan Curielli I. ROLL CALL/CALL THE MEETING TO ORDER Mayor Young called the meeting to order at 5:10 p.m. Council Member Butcher arrived at 5:15 p.m. II. PLEDGE OF ALLEGIANCE II. BIDS FOR COMMUNITY CENTER/ROUND LAKE PARK/BIRCH ISLAND PARK PROJECTS Parks & Recreation Director Lambert said RJM, the Construction Manager for the project, has provided the low bid results on 13 bids for the Community Center project. The remainder of the bids will be available for review at the April 17 Council meeting. He said the 13 low bids are presented as Exhibit 1 attached to the cover letter from RJM dated March 27. Page 1 of Exhibit 1 summarizes the low bidders for each of the 13 bid categories, including the total cost of$4,892,978 for the 13 low bids. He said the Council is also asked to approve the quote category for the elevator at$47,405, which would be in addition to the total for the 13 low bids. Duckstad asked why the elevator is not included in the list of low bids. Lambert said it is only a quote,but it must be approved along with the 13 low bids. Aho asked how these bids compare to the estimates on each of the 13 categories. Lambert replied that there were 33 bid categories in all, and the total for the 13 low bids presented today is about$18,000 less than the estimates for those items provided at last week's meeting. Duckstad asked if, once the bids are awarded and set as to the amount and what is to be performed, we are in a position to talk to each of the subs to make any changes that might be helpful to the City. In other words, are we free to negotiate after awarding the bids if we see something that would make the job cheaper and would result in as good a finished product? Bob Jossart, President of RJM Construction,replied they have a formal process in place for that between RJM and the contractors and between RJM and the City. He said they could offer advice to chose a different product with a suggested credit amount to the owner and architect and could then go back and put it into a change order. CITY COUNCIL MINUTES March 27, 2007 Page 2 Council Member Butcher arrived at 5:15 p.m. Duckstad then asked if RJM supplies the work a general contractor would do since RJM operates as the project manager and we have no general contractor. Jossart said there are many elements to the responsibilities of RJM and they are the general contractor on the project with oversight and management of all the work. Jossart noted many general contractors no longer provide any labor to the job site, so they don't do anything different than RJM does. Jossart said, unlike the typical construction manager who has no risk for time or cost, RJM signed a contract that guarantees cost and therefore is at risk for both time and cost. Duckstad asked if, when RJM accepts this, it pertains to both the Community Center and the nine additional projects being done. Jossart said all those projects are the responsibility of RJM. Duckstad asked if RJM is held to the same legal standards that a general contractor is held to in carrying out the duties of the project. Jossart said in many respects there are greater responsibilities and, as the construction manager at risk, they have responsibility to represent the City of Eden Prairie on all nine projects. Duckstad noted on many construction projects the owner of the property invariably encounters the need for extra work to be done. He asked Jossart what would be their legal and monetary response if there is extra work required. Jossart said if it changes the scope of the work, we would issue a change order, but there are many issues we expect to encounter that are considered RJM's responsibility. Jossart said they have planned for that, and expect to see very few change orders on this project compared to other contracts. Aho asked, if you are responsible and have to eat the cost, then doesn't that force your bid higher than if you are bidding as a general contractor. Jossart said they have the plans and specifications as a roadmap and all subs and bidders have bid to those. The roadmap has curves and we will identify those. Jossart said it is impossible, for instance, for the structural engineers to identify each detail involved in the construction, and we have allowed in the contract for such details. Jossart said with RJM any savings that occur come back to the City, while a general contractor would probably cover the risk and would keep the savings. Duckstad asked what Jossart had in mind for this project in regard to the word "risk". Jossart said there are a couple of major risks,beginning with the fact that Bob Lambert is leaving. He said the schedule is a risk because there are lots of responsibilities to meet dates, and overtime would be at their expense, as well as provision for things that are beyond their control. There is also a risk regarding the guarantee for price, in that RJM is saying we didn't miss anything, made no mistakes, and there will be no change in scope. Rosow said the City has approved the contract with the Construction Manager and the contract contemplates a guaranteed maximum price. They have given the contract to Rosow and Lambert, and the two of them need time to review it;however, the maximum price was set by the Council at the March 20 meeting. He said as a public entity the City CITY COUNCIL MINUTES March 27, 2007 Page 3 put out for bids and we then assign the contracts to RJM so they have authority to manage them. He said we will receive the remainder of the bids as well as the grand total for the nine projects next month. Duckstad asked Rosow if he, as City Attorney, was satisfied that we are at no greater or less risk with RJM as Construction Manager than we would be with a general contractor. Rosow said he believes we are at no greater risk and, after reviewing this type of arrangement, he believes this is a better arrangement for the City and provides more protection for the City. Nelson asked if this is covered by the funds from the referendum and the cash park fees, so funds are not coming from the future tax base. Lambert said it is covered by the referendum, cash park fees plus donations. Rosow noted there are also revenue bonds backed by revenue from the operations. Nelson then asked if it was true that costs for the project will not go on future taxes. Lambert said that was correct. MOTION: Aho moved, seconded by Butcher, to approve bids for the Community Center/Round Lake Park/Birch Island Park projects as recommended by RJM Construction. Motion carried 5-0. IV. ADJOURNMENT MOTION: Nelson moved, seconded by Butcher, to adjourn the meeting. Motion carried 5-0. Mayor Young adjourned the meeting at 5:32 p.m.