Title
Resolution to Establish a Contingency Budget for the Facilities Renovations Project at the Wastewater Treatment Plant ($9,978,874.00)
Memorandum
We request your approval to establish a project contingency budget in the amount of $9,978,874.00 to finance change orders for the Facilities Renovations Project (FRP) at the City's Wastewater Treatment Plant (WWTP).
The FRP consists of upgrading, rehabilitating and/or replacing the aging and deteriorating facilities at the WWTP, based on the results of extensive facilities master planning and community engagement. The oldest portion of the WWTP (West Plant) has exceeded its useful life and was taken out of service in 2006 due to its dilapidated condition. Replacement of the West Plant is necessary for the WWTP to reliably meet current and future wastewater treatment capacity requirements. In addition, the FRP includes miscellaneous renovations and improvements throughout the WWTP to maintain treatment viability and reliability.
On January 23, 2012, Council approved a Professional Services Agreement with Malcolm Pirnie, Inc. (MPI) in the amount of $10,802,423.00 for engineering services to support construction of the FRP. On February 6, 2012, Council approved tentative award of a construction contract to Walsh Construction Company II, LLC (Walsh) in the amount of $92,929,000.00 for construction of the FRP.
The action to tentatively award a construction contract was a requirement for obtaining a low interest loan to finance construction of the FRP from the State Revolving Fund (SRF) program administered by the Michigan Department of Environmental Quality (MDEQ). The language in the Council resolution for tentative award was mandated by the MDEQ and did not provide for Council to approve a project contingency budget. However, the SRF program allows contingency funding in the amount of 6% of the total loan amount for the project, or $6,261,714.00. As a result, the total SRF loan amount, which includes engine...
Click here for full text