As the Cook County Board of Commissioners, the Community Center Steering Committee and ORB Management hammer out the changes to the design of the Cook County Family YMCA to bring expenses in line with the $9.5 million budget, work continues on the construction site on the west end of the Cook County Schools complex.
Whether to work out project reductions with the lowest bidders on the next phase of the Cook County Family YMCA building or to re-bid the work was still in question after a discussion by the county board on February 12. Wade Cole of ORB Management brought the pros and cons to the commissioners after a conference call the day before with attorney Ken Donovan of Fryberger, Buchanan, Smith, & Frederick, P.A. of Duluth.
When the bids came in, they brought the project $1.96 million over its $9.5 maximum. The Community Center Steering Committee then came up with a list of how the costs could be contained.
The minutes of the conference call stated that “there is some risk to the project in either scenario….” The legal risk would be if companies that were not the low bidders took issue with not being able to re-bid when the project was changed significantly.
“Per Attorney Ken Donovan, the need to re-bid or not depends in large part on the extent of material changes within the project,” the minutes stated. “And although there is no clear definition of when a material change is large enough in scope to require a re-bid, Mr. Donovan indicated that a 20 percent scope change is sometimes used as a general rule.
“Ken noted that it is within the county’s jurisdiction to re-bid any one or select divisions without the need to re-bid the entire package.
“After discussing the VE [value engineering] items [things that could be changed to bring costs down] Ken stated the risk to the county was ‘not terribly high’ and any second low bidder would have the burden of proof.
“It was also pointed out that there is always a risk of a lawsuit but the fact that we conducted this meeting shows the county did its due diligence in pursuing the right solution.”
The minutes also stated that to cover the cost of getting the building they really wanted, the county board could authorize use of the $500,000 the Community Center Steering Committee had set aside for outdoor recreational amenities near the new facility.
Re-bidding the work would put the project behind about six to eight weeks, bringing its completion into 2014. The YMCA often sells a lot of its memberships at Christmas and New Year’s when people are giving gifts and resolving to get into shape and would lose out on some of those sales. The school would also have to alter its plans for use of the building next school year.
Cole said the low bid is often quite a bit lower than the second-to-fourth-lowest bids, which are often close. When a project is re-bid, he said, the low bidders have had a chance to see what everyone else bid and often submit higher prices the second time around.
Costs would also be likely to increase because of “reimbursables,” extra costs incurred in the re-bidding process. The price of construction materials often goes up in the spring as well, Cole said. Commissioner Bruce Martinson pointed out that new drawings reflecting the design changes would cost money as well.
“It’s a Catch-22,” said Commissioner Sue Hakes, who is on the steering committee and was part of the conference call with the attorney.
Cole told the board that the low bidders had been working with the design team on reductions that could be made, even though they had not been awarded the contracts, a financial risk on their parts.
Commissioner Garry Gamble said he didn’t think they should award contracts without knowing what the revised project would now include.
Commissioner Bruce Martinson commended ORB and the steering committee for coming up with $1.9 million in reductions to bring the project back into the budget. He said it would be good to know if the $1.9 in reductions was realistic and thought the next phase should be re-bid.
Commissioner Hakes said her concern had been that they would avoid breaking any laws in reducing the project after the bids were in. She said cutting something out of a plan would not be considered a material change, but making a stickbuilt house instead of a pre-built house, for example, would be. The two design changes that could be considered material changes were the H-VAC and window packages.
Cole said it’s a risk of lawsuit vs. a risk of higher price and longer timelines. “There’s nothing without risk in this project,” he said. The design team has been working on documents to present to the low bidders.
Commissioner Gamble said businesses are “hungry,” looking for business and not expecting the profits they once saw. He said he would expect bids to be competitive. “…I think that means they sharpen their pencils.”
To award contracts before “counting our bricks” would be unwise, Gamble said.
The board did not make any decisions about whether to re-bid any portions of the project. ORB will continue working with the design team and the low bidders, and the steering committee will meet again on February 25. When the commissioners have more information, they will consider their options again. Request for additional funding
During the public comment period at the beginning of the meeting, Community Center Steering Committee member Beth Schwarz requested that the board provide another $500,000 in funding for the YMCA project. The board took no action at the meeting.
In other county news:
. The board approved an agreement between financers of the Cook County Whole Foods Cooperative building project. The co-op has borrowed $937,500 from the North Shore Federal Credit Union, $400,000 from the Northcountry Cooperative Development Fund, and $75,000 from the Cook County Revolving Loan Fund, a total of $1,412,500. Cook County holds the second mortgage, and the collateral is the property.
. At the initiative of the Minnesota Association of County Veterans Service Officers, the state will no longer be contracting with counties for veterans service officers (VSOs). The county was under a contract with the state for the services of Tribal Veterans Service Officer Clarence Everson but will go back to employing its own VSO as it did previously. The cost of employing someone directly 15 hours a week will be about the same as the county was paying the state to provide a VSO.
. Personnel Director and Board Secretary Janet Simonen submitted her resignation, but as she had promised last summer, she gave the county six months’ notice. She is retiring after 30 years of public service, four with the City of Duluth and the last 26 with Cook County. Simonen suggested that the board consider whether they want to change the position and that she not be too involved in finding a replacement so that new ideas could be infused into the process. She said one change they could consider, for example, would be to split the benefits administration role from the board secretary role. Commissioner Garry Gamble asked her to give the board her recommendations. The board accepted her resignation with regrets. Her last day will be Friday, August 9.
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