Resolution NO. 4533 - Laserfiche WebLink

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The Hearings Official asked staff to explain how Food For Lane County's estimated assessment was $18,000 when the difference between the low bid and the City's cost was about $12,000. Mr Klope explained that the bid represented construction costs but did not include markups for engineering, testing, finance charges, interest and contingency. The total project cost actually was $159,000.65. Mr. Hammer asked what the percentage of the City's markup was. Mr. Klope explained that a number of factors were included. He noted that the contract total ($106,740.50) was increased by a 10 percent contingency fee and 2 percent for testing. The resulting figure is known as the Direct Total which is, itself, increased by engineering charges of 23 percent, a finance/administration fee of 5 percent and an estimated construction interest charge of 5 percent. The final project cost is $159,000.65. Mr. Klope explained that interest is accrued as payments are made by the City. Mr. Hammer notes there is a two-foot right-of-way acquisition on his property along Bailey Hill Road. Mr. Terrel explained that this was for a future sidewalk. This sidewalk acquisition was a condition of development and was not related to the proposed LID project. Staff assumed that the proposed sidewalk width would be similar in width to existing sidewalks along Bailey Hill Road. Mr. Hammer stated that he would like to go on record for being able to privately construct the portion of Bailey Hill Road in front of his property. He indicated that he would be willing to put up a bond. In response to a question from Mr. Hammer, Mr. Klope stated that the assessment for Mr. Hammer's property was $26,545. Mr. Hammer inquired as to the staff's experience in regard to the use of the 10 percent contingency estimate. Mr. Klope responded that the City has never had to use more than a five percent contingency and therefore the current estimate of the project cost was considered to be very close. Mr. Hammer asked why staff was opposed to his using a private contractor. Mr. Klope noted that there were several reasons for the staff's position. First, he explained, it was a matter of timing. The City wants the project built and complete to meet the needs of all the property owners. He stated that he did not believe that Mr. Hammer would have any chance to get through the process to be ready for consnuction at a time when the City was ready to begin construction. Mr. Hammer, for instance, would have to hire a private engineer who would have to recreate the construction design plans as state law would forbid him from using the City's design plans which had been stamped by Mr. Klope. The developer would also have to go through the privately engineered public improvement process which normally takes more time than is available. Second, Mr. Klope stated that there is no guarantee that Mr. Hammer could get the same contractor as the City and it is not in the public interest to have two contractors working on the same project. Mr. Klope noted that one of the reasons the City has property owners sign irrevocable petitions is so the City can put together logical projects. He further noted that when the Mr. Hammer initially developed his property he was given the opportunity to build the entire project on his own. At that time, he received written notice of the City's intention to initiate the project in 1997. Mr. Hammer acknowledged receiving notification of the project but explained that Mr. Terrel had told him that the project probably would not be built in 1997. Mr. Hammer stated that he had responded to the notice with information that he wished to construct the project himself. Mr. Terrel responded that he had said that it would be difficult for the City to construct the project in 1997. Mr. Hammer wondered how much frontage his property had. Mr. Klope replied that it had 262.28 lineal feet. Mr. Hammer questioned what was the estimated assessment for his property and Mr. Klope stated that it was $26,540. Minutes -July 23,1997 Public Hearing Page 3