04/11/1988 Meeting (2) - Laserfiche WebLink

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e bond, which will be $910,000 over the original resource estimate, and $688,000 in interest earnings, which were also not included in the original resource estimate. This brings the total available revenue to $19,967,868. Using the low bid, Ms. Andersen said the total costs of the project are $20,210,217. This leaves a deficit of $242,349, Ms, Andersen said the only alternative to stay within the original budget is to reject all bids and redesign the project. Taking into account several factors including an annual overall inflation factor of 6 percent, Ms. Andersen said this will require a $2,1 million reduction in the project. She said current projections do not indicate a drop in construction activity over the next two years, Cutting the $2.1 million would likely mean eliminating the second level boarding area. To address the $242,000 gap, Ms. Andersen said staff has identified phasing repayment of the fleet fund loan, exercising deductive alternates, and a carpet reduction of $150,000. Ms, Andersen said staff is recommending the carpet reduction as the most responsive deductive alternative. Although those working on the project are disappointed in the cost overruns, Ms, Andersen said staff feel reasonable options exist that would not create additional general fund impacts. Steve Counard, vice chair of the Airport Commission, said the commission e unanimously supports going ahead with the current project. Mayor Obie asked Mr, Counard for his opinion as a bUilding contractor. Mr, Counard said rejecting the bid will mean the City misses several building opportunities, He said it also means the airlines will have to go through two more holiday seasons in the current airport, and will likely face higher building costs in the coming years. Ms. Ehrman asked where the terminal project was estimated over budget. Ms. Andersen said that is difficult to answer because the bids are "lump sumll bids that do not contain line item costs, Mr. Holmer pointed out the council subcommittee following the project was insistent that the architect and engineer offer realistic budgets that meet the City's needs, He noted the City has an escape clause that the architects will redesign the project if the bids exceed the budgeted amount by 4 percent, Although he said he understands staff's reasoning for not wanting to redesign, Mr. Holmer asked what leverage the City has with the architects if it does not use that option. Ms. Andersen said she does not feel there has been a lack of good faith on the part of the architects and engineers, Although the council can exercise that option, she said a punitive approach might not be the most appropriate, e Mr, Holmer asked what assurances council has that future budgets will not MINUTES--City Council April 11, 1988 Page 10