CR 07-026 RejectBids,Hvac Upgrade ProjectG~TY OF
March 1, 2007 y O p K I N s Council Report 2007-026
REJECT BIDS, HVAC UPGRADE PROJECT
Proposed Action
Staff recommends adoption of the following motion:
Move that City Council reject all bids submitted for City protect #2006-18, City Hall
HVAC Up rade.
Overview
As part of the City's ongoing maintenance and upkeep of its buildings, City staff
proposed replacing the existing City Hall 80 ton cold water air conditioning chiller and
air handler with two rooftop heating, ventilation and air conditioning units. The goal
was to significantly reduce the cost of energy consumption needed to cool and heat the
existing City Hall. The energy savings with this proposed system change is significant
with the original project payback at 4 to 5 years due to reduced energy costs.
The Engineers estimate for this project was $90,000. The City received three bids; the
lowest bid was $159,000.00. After conferring with the bidders it was determined that
costs could be reduced by clarifying several construction items and changing
equipment specifications to better match our existing HVAC control system.
Primary Issues to Consider
• Will the project require additional funding from the city?
• Revised estimated cost for the HVAC Upgrade
• What is the time frame for this project?
Supporting Information
• Capital Improvements Fund (305) -Working Capital report
ti~U~~
Norbert Kerber
Building/Equipment Supt.
Financial Impact: Budgeted: Y/N Source:
Related Documents (CIP, ERP, etc.):
P Y ISSUES TO CONSIDER:
Will the project require additional funding from the City?
Yes, due to the three competitive bids and after conferring with the bidders we can only
assume that the engineers estimate of $90,000 was low. The CIP budget amount is
$76,000. As far as being able to provide additional funding, it appears that the 2006
General Fund ended in a stronger position than originally anticipated and that additional
funds could be available from the General Fund to help with 2007 projects. Accordingly,
staff maybe recommending additional funds transfer from the 2006 General Fund to the
Equipment Replacement Plan and/or Capital Improvements Fund in order to stay within
City and State Auditor guidelines for fund balance, targeted at 50% of annual
expenditures. Staff should be able to confirm these 2006 GF projections prior to the
March 27 bid opening.
Revised estimated cost for the HVAC upgrade
By clarifying some construction items, modifying equipment specifications to eliminate
the higher control system interface costs and requiring apre-bid site visit by all
contractors, we hope to reduce the construction cost to no more than $120,000. Even
with the projected higher construction cost, the project is still cost-effective as it will
replace the existing oversized, 43-year old equipment and significantly reduce the City
Hall heating & cooling costs -even with the increased cost the estimated payback due to
energy cost savings is 7 - 9 years. As an example, the current amp draw for all the
equipment needed to run the AC unit is 550 full load amps, the new proposed rooftop
units will draw only 110 full load amps.
What Is The Time Frame For This Project?
We will re-advertise the project with the changes and open bids again on March 27. If
we're able to award a contract at the Apri13 Council meeting, the project should be
completed by May 25, 2007.
Bid Tabs:
Cool Air: 173,200
Shadegg Mechanical: 159,000
New Mechanical: 169,500
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