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Pool project hit with undertow from contractors

By Staff | Mar 11, 2020

The Estherville Parks & Recreation board reviewed bids for the city’s municipal pool project at Monday night’s meeting. Bids for the pool vessel, mechanical and general construction came in at $5,520,000 for the project, which was budgeted for $4,600,000, to be paid for chiefly with a $4 million municipal bond that was approved by a two to one margin on Aug. 6, 2019.

The board was scheduled to make a recommendation to the city council to accept the low bid or reject all bids. That action was tabled until special meetings could be arranged to further explore the possibilities of additional fundraising or make the difficult decision to reject all bids and rebid the project.

After removing some alternate parking lot work and other items, the price is still about $5.3 million.

The contractors Christensen Construction of Estherville and Ricchio Construction out of Illinois, had not provided an explanation for the price as of press time.

City administrator Penny Clayton said, ‘These bids came in very high compared to what we expected. It’s unusual to have two bids so far over the engineer’s estimate.”

As board members quietly reviewed the bid numbers, Clayton said, “We’re faced with a challenge. Now the question is, how do we overcome this challenge?”

The city council has 30 days from Feb. 27 to award or reject the bids.

There will not be any increase in tax assessments or bills to pay for the increases, nor for the base cost of the pool.

Before weighing the options of negotiating with the contractors, Clayton asked city attorney Jennifer Bennett Finn for an opinion as to the legality of changing anything about the bid parameters as they were set for the bidding process. Bennett Finn issued a letter, which in part quoted Iowa Code Section 26.9, “The contract of the public improvement must be awarded to the lowest responsive, responsible bidder.”

Bennett Finn stated the City should either award the project to the lowest responsive, responsible bidder, “or reject all the bids and determine if the project should be re-bid with the proposed changes to the project.”

Clayton said this brings the board to choose from two options, each with their own complexities: 1) raise more money; or 2) rebid the project and make significant changes to the scale of the project.

On the topic of scale, board member Gary Phillips, who also served on the pool committee that designed the project and reviewed sites for the pool, said, “All the cutbacks were done during the process with [Burbach Aquatics] and the pool committee. What we were looking at was a bare-bones pool proposal.”

The city of Estherville has already invested about $500,000 into design and engineering and other preliminary expenses for the project, which has faced numerous obstacles over the last five-and-one-half years.

Board member Bob Jensen said after the years of work, it would be devastating to go back to the drawing board. Jensen said, “The public has spoken. The citizens approved this project by almost 67 percent.”

Jensen, who is also board chair of Excel! Estherville, said he would call a special meeting of the Excel board and revisit the organization’s pledged contribution. Excel has pledged $150,000. Jensen said if payments could be made over a number of years, Excel may be able to pledge a significantly larger amount.

“This is a once in a lifetime project,” Jensen said. “Let’s get the conversation started with the community.”

These are the funds committed for the pool as of press time:

n $4,000,000 municipal bond approved in Aug. 6, 2019 special election

n $150,000 Excel! Estherville

n $50,000 Emmet County supervisors

n $50,000 Employees Credit Union per Laurel Hash

n $5,000 unsolicited donation

Additionally, the city of Estherville is applying for an Enhance Iowa grant with a maximum award of $250,000. The city anticipated having pledges from individuals and businesses committed by April 15 in advance of the May 1 grant deadline. The grantor prefers to see at least 65% of community-based funds pledged by the deadline, and as the grant is very competitive, Clayton said it would be optimal to reach that goal.

Parks & Rec board members made plans in a special meeting last month to approach business leaders in the community for pledges to cover the amount needed above the bond amount.

The board had previously estimated pledges from businesses and community members could reach nearly $250,000.

To meet the additional costs, the board has a one-month window to raise approximately $650,000.

Board member Laurel Hash said, “I don’t know about the general public’s feelings on this. People vote for something, but don’t pay for it; they know they’re paying for it in the long run through the bond issue, but it’s different when it’s coming directly from their pocketbooks.”

Hash said a meeting with her employer, Employees Credit Union, indicated the credit union would pledge $50,000.

If the city receives the Enhance Iowa grant and community leaders pledge close to their estimated gifts, this brings the fund development total to approximately $555,000.

There may be additional funds available in the Parks & Recreation special projects fund, Clayton said.

Clayton said, “I do not recommend extending a new award contract for a job we don’t have all the funds for.”

Estherville and Emmet County economic development director Lyle Hevern said, “We should not do that.”

Jensen said, “Everyone looks like someone ran over their dog. We need to figure out how we’re going to get this done.”

Phillips said he was displeased with Burbach Aquatics. “Burbach knew how much money we had. Every time [the pool committee] looked the design over, we cut back on extras. Burbach told us that’s what they had built before for $4 million[Burbach] led us down a road that was not truthful. We told them our price; that’s not what we got. What Burbach did to us was terrible. It was a screw job, plain and simple. This is a tough, tough situation that’s not our fault, not the pool committee’s fault.”

The drawback with going with a new pool contractor is the loss of investment of approximately $500,000 and five-and-one-half years of work, however.

Jensen said, “We move forward now or we don’t do it. We can’t just hope we raise enough money. We figure out the way to do it.”

Jensen made a motion for members of the board to determine additional funding options before March 27, leaving the project open to provide the opportunity to look at the logistics and raise the pledges of money in order to get the Enhance Iowa grant.

Jensen also set a special meeting of Excel for 5:30 p.m. on March 23.

In other business, longtime Parks & Rec Board chair Wayne King was not reappointed to the board by Mayor Joseph May, but was made a lifetime honorary member of the board going forward. May stopped in after the meeting adjourned to speak with King and said as mayor he was thinking of the future of the city parks and wanted King involved, but also wanted to find within the community the next Wayne King.

In addition to the vacancy left by King, Tina Jensen has resigned from the board due to a work schedule conflict. Mayor May is seeking a new board member for that vacancy.