Bonds sold to construct facility, school board awards bid to general contractor.
Monday was a big day for the Crookston School District’s new bus garage project, as the school board awarded the bid to the construction firm that will build the facility and the bonds were sold to finance the construction of the facility.
With all three bidders coming within the $2.835 million budget, the decision was going to come down to four alternate packages also included in the bid documents. One alternate involves paving, curb and gutter on the property, another involves radiant floor heat in the building, another involves a hose reel system that vents exhaust from the building, and the fourth alternate is a tempered air recapture unit.
In the end, the board awarded the bid to Sand Steel Building of Emerado, North Dakota over bids submitted by MAK Construction of Grand Forks and Bradbury Stamm Construction of St. Cloud. The first three alternates will also be included, but not the fourth, with Superintendent Jeremy Olson saying he’s consulted with the project architects at ICON Architectural Group of Grand Forks and it’s been determined that the energy savings wouldn’t be worth the expense.
While there was some potential concern over Sand Steel’s proposed construction timeline of 300 days compared to 210 and 220 days proposed by the other two bidders, respectively, Olson and board chair Frank Fee each noted that the 300 days was still within the required construction timeline included in the bid documents.
In order to ensure that the overall project remained budget-friendly, the four alternates were separated from the base bid. But when the bids were favorable dollars-wise, Olson, while recommending the fourth alternate not be included in the project, did stress that he thought pavement on the property and radiant floor heat in the building were each important to the overall quality of the project and should be included.
But there was a fairly wide range in the proposed prices for the paving portion of the project. Given that, Olson said the board had the option of bidding the paving as a separate project in the hope of saving some money. But some board members were leery of taking that risk, and instead went with the “convenience” of having one general contractor overseeing the entire scope of the project.
As for the third option, the hose-reel system that hooks to bus exhaust pipes and vents the exhaust to the building’s exterior, Olson initially suggested that the board hold off on including that alternate at the beginning of the project. Noting that the system is basically a stand-alone kit that could be added later in the project or even after the facility is built, Olson recommended maintaining a cautious approach early on to make sure the overall project remains within the budget.
But board members, led by Mike Theis, who noted the importance of venting the diesel exhaust from the building and also expressed a fear of the cost of the system going up if it wasn’t added until later, decided to include the third alternate in the overall project right away.
As a result, Olson said, his recommended $100,000 contingency fund – which was around 3% of the overall project, already less, he said, than the more typical 5% – will be reduced to $80,000 to free up the $20,000 to have the hose-reel system included in the initial project.
While the contingency reduction slightly concerns him, Olson noted that the initial soil borings looked good. But, he added, things can change when the actual digging begins.
“Still, I think our project is pretty straightforward,” he said.
The district’s financial advisors, Ehlers, sold the bonds to build the bus garage on Monday, and Shelby McQuay, a senior municipal advisor with the firm, noted that it was a “really good day” to sell the bonds. Citing the growing coronavirus and its impact on the financial markets, McQuay said more investors were looking to move money into safer avenues such as bonds, which resulted in a lot of bidders for Crookston’s bus garage, and excellent interest rates.
Things were so favorable that instead of issuing $2.835 million in bonds to fund the full project, McQuay said only $2.8 million in bonds needed to be sold. Of the six bidders, Baird out of Milwaukee, Wisc. submitted the lowest bid with an interest rate of only 1.28 percent, less than the 3% estimated last year and the subsequent 2% estimated by Ehlers in pre-sale preparations in January. As a result, the district will save around $140,000 in interest payments, McQuay noted.