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Home My WebLink About5.A.1. Authorize Final Payment to Centerpoint Energy for Project No. 2006-1 CITY OF SHAKOPEE Memorandum s. fT. J-, CONSEt~T TO: Mayor & City Council 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 Improvement Project, Project No. 2006-1 DATE: May 15, 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. Staff has 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. Staff has met with Centerpoint Energy officials to discuss a procedure for scope change work and how to improve the process in the future. 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 1 ih Avenue Project account to pay for this additional cost of gas main relocation. AL TERNA TIVES: 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. I!i~ Public Works Director BUpmp ENGR/2006PROJECT/17THA VElWORD/CENTERPOINT -ENERGY -PAYMENT CENTERPOINT ENERGY 8" Transmission Line Relocation, City of Sbakopee 17th Avenue East Adjusted Actual Installation Cost Break-Down Item No. Costs Original Work Scope: 1) 2) Install 1200' 8" Steel CL P Pipeline Sand Padding actual. (Not included in original estimate) Calculated cost for minimal sand padding 162 tons Reimbursement $29,225 $13,352 -$6062 3) 4) Company Crews & Equipment for 8" Cl P Materials and Fittings 8" Steel Cl P (Materials experienced a $7,000 increase) $4,160 $20,000 Mark/Up Total $6,725 $35,950 $3,071 $16,423 -$1394 -$7456 $957 $5,117 $4,600 $24,600 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 Cl 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 $22,245 Reimbursement for SPUC cable burial -$ 3,520 (1 Crew Day) 6) Reinstall 8" Steel C16 $3,610 7) Lowering of6" PE $1,895 8) Remove abandoned pipe not done by City $3,493 Contractor. Reimbursement for abandoned pipe removal -$3,493 9) Company Crews & Equipment for 8" & 6" Cl 6 $4,000 10) Materials and Fittings for 8" Steel Cl6 $9,000 TOTAL $97,905 Notes: Added wo k' . a . r scope mcreased project costs by $45 793 'Pproved by CIty representatives to facilitat d '.' e roa constructwn. $5,117 $27,362 -$ 810 -$ 4,330 $830 $4,440 $436 $2,331 $803 $4,296 -$803 -$4,296 $920 $4,920 $2,070 $11,070 Subtotal: $45,793 $22,522 $120,427 Wark was discussed and Page 1 of 1 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: Balgobin, 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/?sn007 /3. is. ~ CITY OF SHAKO PEE Memorandum TO: Mayor & City Council Mark McNeill, City Administrator FROM: Bruce Loney, Public Works Director SUBJECT: Consider Awarding a Contract for 1 ih 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 17ili 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 project. 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 1 ih Avenue 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 10w 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 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 1 ih Avenue on June 23, 2006 through condemnation on the north side. The south side of 17th 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. ALTERNATIVES: 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. Rej ect 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 project to commence. ACTION REQUESTED: 1. Offer Resolution No. 6444, A Resolution Accepting Bids for 1 ih Avenue Improvements, from Southem Meadows East Plat Line to CSAH 83, Project No. 2006-1 and move its adoption 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 7th Avenue improvement proj eet. 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. ~ Bruce LonH Public Works Director BUpmp ENGRI2006PROJECT/17THA VElWORDIMEM . CenterPoint@ Energy 700 West Linden Avenue PO Box 1165 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. Sin,cerely, &~ ,-t'- nJ"L" V'---- " -- ::} 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 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 ("Center Point 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 Center Point 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 ofthe 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. Page 1 of 2 r 1_< 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 of the 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 ofthis 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 tillS 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. TillS Agreement shall be governed by the laws ofthe State of Minnesota. CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Minnesota Gas By: City of Shakopee ~ Its: Mayor //) /'/'/ ......- By: /2/"''"22~~ '-::.If:t-ryvt.--.1--.' 1./ ~ ~ .,f ,,//.r /() at I ,,/ Its: / I' E-f I . ("'?-v r-- ,,/) Date: rr /70/01 I I Dm~) ~~, ~Oqs Z ..~ Cit~~~:al ~ Cit Clerk v "-../ Page 2 of 2