Title
Resolution to Approve a Construction Contract with Bailey Excavating, Inc. for the Ann Street Improvements Project ($6,312,780.85) and to Appropriate $2,000,000.00 from the Street, Bridge, Sidewalk Millage Fund, $1,580,000.00 from the Stormwater Fund, $1,961,000.00 of Funding from the Downtown Development Authority (8 Votes Required)
Memorandum
Attached for your review and approval, please find a resolution to approve a construction contract between the City of Ann Arbor and Bailey Excavating, Inc. in the amount of $6,312,780.85 for the Ann Street Improvements Project (RFP 26-03).
The Ann Street Improvements Project, from North First Street to North Fifth Avenue includes the following elements and (funding sources):
• Water main and related appurtenances replacement (Water Supply System Funds)
• Infiltrating stormwater system installations and select stormwater system improvements (Stormwater Funds)
• Road resurfacing, curb replacement - including removal of the entire curb cut at 201 N Main St., - bump-out additions at intersections to comply with Vision Zero initiatives, midblock crosswalk by parking structure, sidewalk and ramp replacements (Street, Bridge, and Sidewalk Millage Funds)
• Streetscape improvements in the amenity zone from Ashley Street to Fifth Avenue, including new and replaced streetlights, brick pavers, tree grates, and benches. (DDA Funds)
• A fully ADA accessible on-street parking space and approach and sidewalk replacement of the Ann Street entrance to the Ann-Ashley parking structure. (DDA Parking Funds)
The construction of the project is scheduled in three phases to minimize traffic and business impacts and to coordinate with other downtown capital projects:
• Stage 1: April to June 2026; all work from First St. to Main St.
• Stage 2: July (after Art Fair) to August 2026; all work in Main St. and Ann St. intersection.
• Stage 3: August to November 2026; all work from Main St. to Fifth Ave.
Annual events on Main Street and Ann Street (Main St. to Fifth Ave,) scheduled before July 20, 2026 will proceed as planned. Main Street will remain open to traffic through July 27th, 2026 and opened to traffic by the end of August.
Engineering staff supervised the creation of plans and contract documents and issued a request for proposals through the City’s Procurement Unit. On January 27, 2026, three proposals were received for this work. A selection committee comprised of Public Services staff reviewed the proposals and determined which bidder was the Best Value based on the criteria in ORD-21-41:
• Qualifications, Experience, & Accountability (20%)
• Workplace Safety (20%)
• Workforce Development (20%)
• Social Equity & Sustainability (20%)
• Schedule of Pricing/Cost (20%)
After reviewing and scoring the proposals, staff ranked the responding firms in the following order:
1. Bailey Excavating, Inc.
2. Fonson Company, Inc.
3. Major Contracting
Bailey received the highest score among the proposals reviewed by the selection committee. Therefore, staff recommends awarding the contract for this project to Bailey Excavating, Inc. Bailey complies with the City’s Non-Discrimination and Living Wage ordinances.
Budget/Fiscal Impact: Bailey’s proposal, based on their unit prices, exceeded the budgets for the Project. Pursuant to Section I/F of the City’s Public Improvement Request for Proposal document, the City and DDA negotiated with Bailey to reduce the total project cost. Some scope of work was removed (decreased quantity) and some unit prices were reduced. The original and the amended Schedule of Pricing forms are provided in the contract. The updated quantities and unit prices are highlighted. The Amended Schedule of Pricing dated February 24, 2026 shall be the governing Schedule of Pricing for the Contract.
This project is included in the FY26-31 Capital Improvements Plan (UT-WS-16-34, UT-ST-2403, TR-SC-16-16). The estimated total cost of the project is $7,991,000. Funding for the project is included in the approved capital budgets of the Water Supply System, Stormwater, and the Street, Bridge and Sidewalk Millage Fund. The DDA will contribute funds for the project in accordance with a separate cost sharing agreement.
Fund Total Project Cost
Water Supply System Fund $ 2,450,000
Street, Bridge and Sidewalk Millage Fund $ 2,000,000
Stormwater Fund $ 1,580,000
DDA $ 1,768,000
DDA Parking $ 193,000
Total $ 7,991,000
Staff
Prepared by: Nicholas S. Hutchinson, P.E., City Engineer
Reviewed by: Jordan Roberts, Public Services Area Administrator
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The existing water mains and stormwater infrastructure in the project area have been identified as needing upgrade or replacement;
Whereas, The pavement on Ann Street is in poor condition and in need of replacement;
Whereas, Public engagement has been conducted for the final design chosen to promote an All Ages and Abilities network and Vision Zero Transportation Plan.
Whereas, Funding for the project is included in the approved capital budgets of the Water Supply System Fund; Stormwater Fund; and Street, Bridge and Sidewalk Millage Fund;
Whereas, The Downtown Development Authority will contribute funds for the streetscape and related improvements;
Whereas, The City of Ann Arbor received three proposals for this work on January 27, 2026 and Bailey Excavating, Inc. received the highest score among the proposals reviewed by the selection committee;
Whereas, Bailey Excavating, Inc. complies with the City’s Non-Discrimination and Living Wage ordinances; and
Whereas, It is now necessary to enter into a contract with Bailey Excavating, Inc. for the performance of this work;
RESOLVED, That City Council approves a construction contract with Bailey Excavating, Inc. in the amount of $6,312,780.85 for the Ann Street Improvements Project (RFP 26-03);
RESOLVED, That $1,580,000.00 be appropriated from the Stormwater Fund Capital Budget to the Ann Street Improvements Project, thereby increasing the project revenue and expenditure budgets;
RESOLVED, That $2,000,000.00 be appropriated from the Street, Bridge, and Sidewalk Millage Fund Capital Budget to the Ann Street Improvements Project, thereby increasing the project revenue and expenditure budgets;
RESOLVED, That a contingency amount of $630,000.00 be established within the project budget and that the City Administrator be authorized to approve construction change orders not to exceed that amount, in order to satisfactorily complete this project;
RESOLVED, That the Mayor and City Clerk be authorized and directed to execute said construction contract agreement after approval as to substance by the City Administrator and approval as to form by the City Attorney;
RESOLVED, That the project revenue and expenditure budgets be increased by $1,961,000.00 of funding from the Downtown Development Authority based on a Cost Allocation Agreement for the Ann Street Improvements Project;
RESOLVED, That the Mayor and City Clerk be authorized to execute a Cost Allocation Agreement with the Downtown Development Authority for the project after approval as to substance by the City Administrator and approval as to form by the City Attorney;
RESOLVED, That the City make the following declaration for the purpose of complying with the reimbursement rules of Treasury Regulations 1.150-2 pursuant to the Internal Revenue Code of 1986, as amended: that the City reasonably expects to reimburse itself for expenditures for the costs of the Project with proceeds of Bonds; and
RESOLVED, That the City Administrator be authorized to take necessary administrative actions to implement this resolution, including issuing temporary and permanent Traffic Control Orders and night work authorizations as required for the construction of the project.