Costs rising for Mendota Heights fire station remodel

Mendota Heights is trying to figure out how to keep work on track after receiving contract bids that were significantly more expensive than expected for its planned fire station remodel. 

On March 5 the council, without members Ultan Duggan and Joel Paper, voted to accept 20 out of 21 bids, which came in at more than $1 million over expected costs. 

 

A costly ‘milestone’

City Administrator Mark McNeill said that night marked another milestone in the process of remodeling the city’s existing fire station. The facility dates to the 1980s and the planned improvements to it will more than double its size.

Planning began last year when CNH Architects created preliminary designs and cost estimates. The council decided a general obligation bond would fund the project.

The preliminary bond was set at $6.125 million, but was increased on the recommendation of the city’s financial adviser to $7 million.

Bids were opened on Feb. 21. McNeill said when all of the 21 different components were added up, the total came to roughly $6.8 million, which is roughly $1.2 million more than what the city had hoped to spend.

Fire Chief Dave Dreelan said in late 2018 the fire station committee started to get some sense that the construction market was more inflated than they anticipated. 

He said that in November, the committee got together and began trying to identify places where money could be saved. Come January, Dreelan said it looked like the construction market would be even tighter, so the committee again looked at cost-cutting measures.

In all, it cut $300,000 worth of work out of the project, something Dreelan said he thought would be impossible.

He said if any other money were to be pulled from the plans for the building, the functionality and design would drastically change, and the objectives that had been laid out would not be met. 

 

What to do?

McNeill said the question before the council was what to do: either reject bids and start over or accept the bids and find ways to fund the increase. 

“In speaking with the construction manager, if we rebid it right now we’re going to be competing for the same companies that are out there now saying that they’ve got enough work to do,” McNeill said, pointing out that made it unlikely the city would save money by rebidding.

He said if the city waits until fall to rebid for the 2020 construction season, there would be an additional year of construction inflation on top of that.

In order to pay for the difference, McNeill said the council could call for a new public hearing to talk about increasing the bonds to cover it. 

“That is something that would further increase property taxes,” he noted.

Another option, which the staff recommended, was to take money out of some existing capital funds and assign the proceeds of the sale of the Village lots toward the fire station project. The sale of the lots could bring in an estimated $800,000.

There is also legislation moving through the Capitol that would exempt the fire station work from sales tax.

McNeill said another complication is the bids are only good for 30 days. Any additional actions would need to be taken by March 21. He said a couple of companies that bid have asked if the city is serious, otherewise they were going to bid for other projects. 

McNeill said city staffers recommended moving forward with 20 of the 21 construction package contracts, adding up to $6.8 million. 

 

 

The green light

Mayor Neil Garlock said that public safety is paramount to the city, adding he thought the fire station should have been updated long ago.

Council member Liz Petschel said the fire station work is a need, not just a want.

“There are aspects of this fire station that we need to have for the continued public safety of this city, but also for the safety of our firefighters,” she said, adding that she worried if the project were delayed further, it might never happen.

Council member Jay Miller, a longtime volunteer firefighter who was promoted to captain in 2016, said everyone involved in the planning looked to make a station that addresses the real needs that exist for both firefighters and the community.

“The fact that they are continually working to find cost saving measures, I think, is a testament to what we’re trying to do, which is provide a service to the city at a reasonable price,” he said. “A good firefighter always has a plan, and then four or five or six backup plans, and we’re seeing that in action right now.”

The council is likely to continue its discussion on financing the fire station remodel at its March 19 meeting.

 

–Hannah Burlingame can be reached at 651-748-7824 or hburlingame@lillienews.com.

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