Ham Lake council approves 2012 road project bids

by Eric Hagen
Staff Writer

The Ham Lake City Council Feb. 21 unanimously approved bids for a couple different road projects that will take place this year.

Overlaying 9,711 feet — about 1.8-miles — of city streets and overlaying a 55,450 square-foot parking lot for the public works building is expected to cost $291,444.20. Knife River Corporation out of Sauk Rapids had the lowest bid out of the 11 submitted for this project.

Reconstructing 1,886 feet of streets within the Hasting Hills neighborhood and overlaying 720 feet of streets within Livgard Acres will cost $144,980.57. North Valley, Inc. of Nowthen had the lowest of 10 bids submitted. These two neighborhoods are close to each other, so the projects were placed together to get the lowest bid possible, according to City Engineer Tom Collins.

Overlay project

The roads being overlayed in 2012 include 149th Avenue from Naples Street to Lexington Avenue. This project will be funded by the city’s Municipal State Aid (MSA) account, which is dollars that the Minnesota Department of Transportation (MnDOT) sends to cities each year from gas tax revenues.

The city’s own pavement management fund is paying for the overlay of streets in the Homestead Estates development, which is located between Hastings Street and Radisson Road and south of 153rd Avenue. The city will also be overlaying the parking lot of the public works building parking lot.

All 11 bids came in under Collins’ original construction estimate of $377,781.25. The highest bid was $344,850.40.

One area where unit pricing came in much lower was for the edge mill bituminous surface portion. Collins had estimated the cost would be $7.50 per square-foot for 8,922 square feet. North Valley’s unit price bid was $1.60.

Collins said the 2012 overlay project is only costing 0.5 percent more than the 2011 overlay project even though the mileage is similar.

For budgeting purposes, the city adds in 7 percent inflation each year for road project costs in order to be prepared in case bids come in higher than expected, he said.

The city will take these bids into consideration and adjust the projections for other 2012 road project estimates, Collins said.

Hastings Hill-Livgard Acres

As was the case for the 2012 overlay bids, all 10 companies bidding on the Hastings Hill reconstruction and Livgard Acres overlay project were well under Collins’ estimate, which was $191,776.

The Hastings Hill streets are 23.73 feet wide and will be widened to 24 feet, according to Collins. These streets were constructed in 1989. The existing bituminous will be reclaimed and used in the new road to save costs. The Livgard Acres streets were constructed in 1994.

Collins said the city was low in some areas and high in some areas for its estimate compared with what North Valley bid. Collins had budgeted $40,000 in mobilization costs, which was double the highest bid for this service. North Valley said its mobilization will only cost to city $4,338. Collins thought bituminous pavement reclamation would cost just under $20,000, but North Valley bid just over $8,000.

On the other hand, North Valley bid about $3,800 for turf establishment. The city thought this would cost under $1,000. North Valley bid over $5,200 for common excavation costs. The city thought this would cost just under $3,600.

Loan at end of 2011

Ham Lake splits its road projects into two different accounts. The MSA account is for projects on more highly traveled roads or roads where the city expects heavier truck traffic. Dollars for these projects come from the gas tax. The other account is the revolving street fund, which is covered by the general fund levy.

According to Finance Director Sharon Kutzke, the city spent time and resources in 2011 on projects that have yet to be built such as the service road on the northwest corner of Highway 65 and Crosstown Boulevard and the service road on the east side of Highway 65 between 153rd and 159th avenues. Once these roads are built, MnDOT will reimburse the city for these expenses.

For the time being, the city has completed an interfund loan by transferring $618,359 from the revolving street fund to the MSA fund. This was necessary to bring that MSA account fund balance to zero by the end of 2011. Kutzke said this is the first time in recent years the city had to loan money to the MSA account from the revolving street fund.

Councilmember Gary Kirkeide sees this transfer as a temporary issue. He is also a fan of the city’s policy to not assess property owners for road projects.

According to City Administrator Doris Nivala, the city in 1996 transferred $10,000 from the general fund to the revolving street fund. The council in 1997 under the leadership of then mayor Kirkeide increased the transfer to $150,000. The April 1997 resolution noted that the city had conducted an in-depth analysis of road conditions over the past two years and that some roads were approaching ages of 20 to 30 years old.

The council eliminated road assessments seven years later, Kirkeide said, because the council felt it made more sense for all residents to pay a little more each year rather than be hit with an assessment of a few thousand dollars every 20 years or so. Commercial and industrial property owners also had faced assessments.

“When paying property taxes you expect everything to be paid with these property taxes and you shouldn’t be surprised with a street assessment,” Kirkeide said.

At the same time assessments went away, the council decided to transfer $765,000 from the general fund to the revolving street fund. The transfer was $850,000 in 2009, but otherwise has hovered around $750,000 since 2005.

The revolving street fund account is anticipated to have a fund balance of just over $1.5 million at the end of 2012 while the MSA account may have a fund balance of less than $300,000, according to Kutzke.

Eric Hagen is at eric.hagen@ecm-inc.com

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