HomeMy WebLinkAbout5.B.1. Authorize Final Payment to Centerpoint Energy for Project No. 2006-1
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CITY OF SHAKOPEE
Memorandum
TO: Mayor & City Council CONSENT
Mark McNeill, City Administrator
FROM: Bruce Loney, Public Works Director
SUBJECT: Authorize Final Payment to Centerpoint Energy for
Gas Main Relocation for 1 ih Avenue hnprovement Project,
Project No. 2006-1
DATE: April 17, 2007
INTRODUCTION:
This agenda item is for City Council to authorize the final payment for the gas main
relocation associated with the 17th Avenue Improvement Project, from Southern
Meadows to CSAH 83, Project No. 2006-1.
BACKGROUND:
On June 20 2006, City Council awarded a contract for the construction of 1 ih Avenue,
from Southern Meadows to CSAH 83,and also authorized the execution of an agreement
with Centerpoint Energy for a natural gas pipeline relocation associated with this project.
In this agreement, Centerpoint Energy estimated the cost of the relocation to be
$54,000.00. Also, in the agreement are conditions that the City of Shakopee will pay the
final amount based on actual costs for the work performed.
Final costs have been determined by Centerpoint Energy to be in the amount of
$136,509.00. The relocation work included original work scope of approximately 1,100
feet of 8" steel pipe line and an additional 80 feet of pipe was relocated near the CSAH
83 intersection during the project.
Staff has had several meetings and discussions with Centerpoint Energy officials in
regard to this final cost of construction versus the previous estimate. Staff has been able
to get Centerpoint Energy to reduce its costs to $117,720.00.
Staff has reviewed the agreement and additional costs with the City Attorney and the City
is obligated to pay the actual final costs, as determined by Centerpoint Energy, unless it
can be determined the invoice is not correct. Staffhas reviewed the documentation of the
work performed, as presented by Centerpoint Energy, and to the best that staff can
determine, the work was done. Staff is somewhat disappointed in this effort pertaining to
communication with Centerpoint Energy and these additional costs. However, the
agreement that the City signed does obligate us to pay the actual costs, as determined by
Centerpoint Energy.
Although the City did previously execute an agreement which obligates the City to pay
for this, staff is bringing this additional cost item for approval by City Council since it
was so much higher than the previous estimate. There are sufficient funds in the 17th
Avenue Project account to pay for this additional cost of gas main relocation.
ALTERNATIVES:
1. Approve a motion authorizing the final payment to Centerpoint Energy of
$117,720.00 for the gas main relocation work, as per the agreement to relocate
natural gas pipe line dated June 20, 2006.
2. Do not authorize final payment.
3. Table for additional information.
RECOMMENDATION:
Staff would recommend Alternative No.1, as the City is obligated to pay these actual
costs and staff has not been able to determine if there are any discrepencies of work
performed and has been able to reduce the original cost from $136,000.00 to
$117,720.00.
ACTION REQUESTED:
Approve a motion authorizing the final payment to Centerpoint Energy of $117,720.00
for the gas main relocation work, as per the agreement to relocate natural gas pipe line
dated June 20, 2006.
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Public Warks Director
BUpmp
ENGRl2006PROJECTI17THA VElWORD/CENTERPOINT-ENERGY-PA YMENT
CENTERPOINT ENERGY
8" Transmission Line Relocation, City of Shakopee
17th Avenue East
Adjusted Actual Installation Cost Break-Down
Item No.
Costs Mark/Up Total
Original Work Scope:
1) Install 1200' 8" Steel CL P Pipeline $29,225 $6,725 $35,950
2) Sand Padding actual. $13,352 $3,071 $16,423
(Not included in original estimate)
Calculated cost for minimal sand padding 162 tons
Reimbursement -$6062 -$1394 -$7456
3) Company Crews & Equipment for 8" CI P $4,160 $957 $5,117
4) Materials and Fittings 8" Steel CI P $20,000 $4,600 $24,600
(Materials experienced a $7,000 increase)
Subtotal: $74,634
Notes: The original estimate was for $54,000. Adjusting the actual project costs for sand
padding and material cost increases results in a project value of$58,667. This results in
an estimate that is within 10% of the estimated project cost for known work items.
Added Work Scope:
5) 8" Steel CI 6 in conflict with final grade
(Site-meet with WSB & Hentges to resolve grade issue).
Cut and remove 80' of 8" ST, temporary cap 6" PE, and
assisted SPUC in burying electrical cables $22,245 $5,117 $27,362
Reimbursement for SPUC cable burial -$ 3,520 -$ 810 -$ 4,330
(1 Crew Day)
6) Reinstall 8" Steel Cl 6 $3,610 $830 $4,440
7) Lowering of 6" PE $1,895 $436 $2,331
8) Remove abandoned pipe not done by City $3,493 $803 $4,296
Contractor.
Reimbursement for abandoned pipe removal -$3,493 -$803 -$4,296
9) Company Crews & Equipment for 8" & 6" CI 6 $4,000 $920 $4,920
10) Materials and Fittings for 8" Steel CI 6 $9,000 $2,070 $11,070
Subtotal: $45,793
TOTAL $97,905 $22,522 $120,427
Notes: Added work scope increased project costs by $45,793. Work was discussed and
approved by city representatives to facilitate road construction.
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Bruce Loney
From: Dale Gade
Sent: Wednesday, April 25, 2007 1 :43 PM
To: Bruce Loney
Subject: FW: Invoice Correction 17th Ave East, Shakopee
They are reducing it further due to the error I found.
From: Salgobin, Andrew [mailto:andrew.balgobin@centerpointenergy.com]
Sent: Wednesday, April 25, 2007 1:36 PM
To: Dale Gade
Cc: Wiinamaki, John M.; Sodahl, Dale H.
Subject: Invoice Correction 17th Ave East, Shakopee
On review of the Invoice sent earlier to you for Work completed on 17th Avenue East there is a reduction of
$2195 on the.
Costs Gross-up Total
Original Cost Break Down $97,905 $22,522 $120,427
Corrected Cost Break-Down $95,709 $22,013 $117,720
Any questions or comments, please call me.
Andrew
Andrew Balgobin
Administration Engineer
Engineering
612-321-5426
4/25/2007
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CITY OF SHAKOPEE
Memorandum
TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Bruce Loney, Public Works Director
SUBJECT: Consider Awarding a Contract for 17th Avenue, Project No. 2006-1
And Consider Agreements with Centerpoint Energy and
Extension Agreement with WSB & Assoc., Inc.
DATE: June 20, 2006
INTRODUCTION:
Attached is Resolution No. 6444, which accepts the bids and awards the contract for 17th
Avenue, from Southern Meadows East Plat Line to CSAH 83, Project No. 2006-1. Also
included is an agreement to relocate natural gas pipe line with Centerpoint Energy
Resources Corp. and the City of Shakopee, as well as an extension agreement with WSB
& Associates, Inc. for construction services associated with this proj ecl.
BACKGROUND:
Previously, the City Council adopted Resolution No. 6425, a resolution approving plans
and specifications for the 1 ih Avenue Project on May 16, 2006. This roadway
improvement project is to construct a four lane divided roadway, which would then
connect 1 ih Avenue with CSAH 83, and would be the last connection made to complete
17th A venue through the City of Shakopee.
On June 19,2006, a bid opening was held on this project in which there were three bids
opened. The bids are summarized in the attached resolution. From the bid opening, the
apparent low bidder is S.M. Hentges & Sons, Inc. with a bid of $1,521,526.85. The
Engineer's estimate for this job was $1,748,000.00 and the low bid received is under this
estimate and under the feasibility report estimate. A revised cost summary is attached
showing the estimated cost splits between the City, County, Shakopee Public Utilities and
assessments.
One of the other items on the agenda is the approval of a Cooperative Agreement with
Scott County for cost sharing with this project and both the City and the County feel that
this is an important project to complete this year.
In addition to awarding this contract to the low bidder, staff will need to authorize
consultant engineering services to provide surveying and construction administration
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services necessary for this project. Attached to this memo is an extension agreement
with WSB & Associates, Inc. to perform those necessary services as they were the design
engineer for this project. Also, attached is an agreement to relocate natural gas pipe line
with Centerpoint Energy which is also part of the project to lower a high pressure gas
main in the area in order to complete the construction of 1 ih Avenue.
If Council awards the contract, staff is also requesting a contingency amount equal to 5%
of the contract to cover minor change orders and quantity adjustments that may occur on
the proj ect.
The City will obtain the right-of-way for 17th Avenue on June 23, 2006 through
condemnation on the north side. The south side of 1 ih Avenue right-of-way will be
provided by Shakopee Gravel. The City Attorney has been working with Shakopee
Gravel's attorney to finalize the easement.
AL TERNATIVES:
1. Accept the low bid of S.M. Hentges & Sons, Inc. and adopt Resolution No. 6444.
2. Reject the low bidder and award to another bidder.
3. Reject all bids and rebid.
4. Authorize the appropriate City officials to execute an extension agreement with
WSB Associates, Inc. to perform consultant services on this project.
5. Authorize the appropriate City officials to execute an agreement to relocate
natural gas pipe line with Centerpoint Energy, associated with the 1 ih Avenue
Improvement Project.
6. Approve a 5% contingency amount on this project for use by the City Engineer in
authorizing change orders or quantity adjustments on this project.
7. Table for additional information.
RECOMMENDATION:
Staff recommends Alternative No. ' s 1, 4, 5 and 6 in order for this proj ect to commence.
ACTION REQUESTED:
1. Offer Resolution No. 6444, A Resolution Accepting Bids for 1 ih Avenue
Improvements, from Southern Meadows East Plat Line to CSAH 83, Project No.
2006-1 and move its adoption
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2. Authorize the appropriate City officials to execute an extension agreement with
WSB Associates, Inc. to perform consultant services on this project.
3. Authorize the appropriate City officials to execute an agreement to relocate
natural gas pipe line with Centerpoint Energy, associated with the 1 ih Avenue
improvement proj ect.
4. Approve a 5% contingency amount on this project for use by the City Engineer in
authorizing change orders or quantity adjustments on this project.
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Public Works Director
BUpmp
ENGRl2006PROJECT/17THA VEIWORDIMEM
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. CenterPoint@ 700 West Linden Avenue
PO Box 1165
Energy Minneapolis, MN 55440-1165
July 11, 2006
Bruce Loney
City of Shakopee
129 Holmes Street South
Shakopee, MN 55379-1328
Re: Natural Gas Pipeline Relocation
Relocate 8" Transmission Gas Pipeline
17th Avenue East
Shakopee, Minnesota
Dear Mr. Loney:
Attached for your files is one signed fully executed original contract to relocate
approximately 1100 feet of 8 inch diameter transmission gas pipeline as shown on
CenterPoint Energy Main Project 41266078 of 2006.
CenterPoint Energy has started procurement of materials and will begin construction
shortly.
CenterPoint Energy's Project Engineer for this project is Dale Sodahl. Dale can be
contacted at 612-321-5444.
Should you have any questions please contact either Dale or me.
Thank you for your cooperation.
Sincerely, 2r..t ~ ~
'J;L" .~,
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Andrew Balgobin
Administration Engineer
Delivery Systems
Engineering
612-321-5426
Pc: John Wiinamaki
Dale Sodahl
Pat Hanson
Gary Allison
Dale Anderson
Nina Zellmann
Reim File # W/O 41266078
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AGREEMENT TO RELOCATE NATURAL GAS PIPELINE
This Agreement to Relocate Natural Gas Pipeline ("Agreement") is between CenterPoint
Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas ("CenterPoint Energy") and
The City of Shakopee.
* The City of Shakopee has requested that CenterPoint Energy perform the
following work:
Relocate approximately 1100 feet natural gas pipeline as shown on CenterPoint Energy
Work Order No. 41266078.
* CenterPoint Energy estimates this project will cost $54,000.00.
Therefore, the parties agree:
1. Easement modifications are necessary. The existing easement will remain in force until
relocation is complete and new easement documents executed.
2. CenterPoint Energy shall not be liable for any circumstances that may delay project
completion.
3. The City of Shakopee agrees to pay CenterPoint Energy for all costs CenterPoint
Energy incurs in relocating the pipeline.
4. Costs include, but are not limited to, contract labor, internal labor, materials, taxes and
internal overhead charges. The parties agree that CenterPoint Energy's standard
accounting records and procedures shall be acceptable to determine costs. The City of
Shakopee agrees to pay all costs and attorney's fees incurred in any collection matter
brought by CenterPoint Energy against The City of Shakopee.
5. CenterPoint Energy and CenterPoint Energy's Contractor shall have complete, unlimited
access to the relocation site.
6. The facilities or equipment installed or removed by CenterPoint Energy or its Contractor
shall be CenterPoint Energy's property. Payment by The City of Shakopee does not
entitle it to any ownership interests or rights in that property. CenterPoint Energy will
not remove abandoned pipelines except as required by law.
7. The City of Shakopee will provide CenterPoint Energy with a $0.00 deposit before
relocation of the line is begun.
8. The amount specified above is an estimate, and The City of Shakopee agrees to pay to
CenterPoint Energy any costs, including all applicable taxes, in excess of that amount
within 15 days of a final invoice summary from CenterPoint Energy. If the final invoice
summary is less than the advance, CenterPoint Energy will refund the difference without
interest.
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9. The City of Shakopee will pay CenterPoint Energy within fifteen days after the date of
any invoice. Invoice amounts not paid within 30 days of invoice date will be assessed an
additional 1.5% per month.
10. The exact nature and scope of CenterPoint Energy's work, including materials, fittings,
etc., may not be determined until a complete visual inspection ofthe gas facilities has been
made by CenterPoint Energy.
11. If CenterPoint Energy, in its sole discretion, determines that the pipeline relocation is not
feasible at anytime, it retains the right to terminate the relocation project and return all
amounts paid by The City of Shakopee less any direct costs actually incurred by
CenterPoint Energy for the relocation.
12. Failure by CenterPoint Energy to insist upon observance of any terms or provisions of this
Agreement shall not be deemed a waiver of CenterPoint Energy's rights. No waiver shall
be binding on CenterPoint Energy unless in writing.
13. This Agreement may be modified only by a writing signed by both parties.
14. The persons signing this Agreement have the real and apparent authority to bind the
respective parties.
15. This Agreement is binding upon the successors and assigns of the parties.
16. This Agreement shall be governed by the laws of the State of Minnesota.
CenterPoint Energy Resources Corp., d/b/a
CenterPoint Energy Minnesota Gas
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BY:~;? ~- By:
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Its: /'of-Ila1tf-v1-- - Mayor
Date: 6/70/0./ Da;Jr~ ?--oo(;
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Cit Clerk
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