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Home My WebLink AboutItem 08 Date: December 21, 2020 Item No. KEOKUK LIQUOR STORE RESOLUTION ACCEPTING BIDS AND APPROVING CONSTRUCTION CONTRACTS AND AMENDING THE 2021 BUDGET, AND A SUPPLEMENTAL RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF LAKEVILLE TO REIMBURSE CERTAIN EXPENDITURES FROM BOND PROCEEDS Proposed Action Staff recommends adoption of one of the following motions: • Move to accept base bids plus alternate and award construction contracts for the construction of the Keokuk Liquor Store (City Project 20-24) and amend the 2021 budget to include City Project 20-24. • Move to accept base bids and award construction contracts for the construction of the Keokuk Liquor Store (City Project 20-24) and amend the 2021 budget to include City Project 20-24. Staff also recommends adoption of the following motion: • Motion to approve the supplemental resolution declaring the official intent of the City of Lakeville to reimburse certain expenditures from bond proceeds. Overview Bidding the construction of the Keokuk Liquor store will be completed in two packages. The first package included the structural steel supply which was awarded to Distinctive Iron at the November 16, 2020 City Council meeting. Bids for the second package were advertised in late November and early December and included the base store construction and an alternate event space. On December 14th the City received 134 bids for 20 scopes of work that are required for the construction of the store and event space. The list of recommended low bidders for each scope of work are shown on Exhibits A and B. The total cost of the base bid package for the construction of the store is $4,126,954 ($275,855 below estimated budgeted costs). The total cost of the construction of the store with the event space is $4,690,179 ($194,728 below estimated budgeted costs). The cost difference to include the event space with the construction of the store is $563,225. Primary Issues to Consider What are the primary funding sources for this project? • The primary funding source for the construction of the store will be from the sale of bonds. In addition to the construction costs the project will also include costs associated with architectural fees, construction management, design and construction contingencies, furniture/fixtures/technology costs and the initial cost to stock the store. It is anticipated these additional costs will be approximately 1.8 to 2 million dollars. A portion of these additional costs will be funded through the Liquor Fund (proceeds from the sale of the Kenrick Property). The attached resolutions include an amendment to include the Keokuk Liquor Store project within the 2021 budget. The following chart shows the estimated costs for constructing the Keokuk Liquor Store: Item Base Bid / Base Bid Alternate Tushie Montgomery Architects $424,000 Loeffler Construction Management $378,342 General Conditions $151,447 Design Contingency (5%) $215,222 Construction Contingency (5%) $225,983 Structural Steel (first bid package) $179,000 Furniture/Fixture/Technology $300,000 Store Inventory $500,000 Store Construction (second bid package) $4,126,954 / $4,690,179 Total Estimated Costs $6,500,984 / $7,064,173 Supporting Information • Resolution Accepting Bids and Amending the 2021 Budget • Supplemental Resolution Declaring Intent to Reimburse Certain Expenditures from Bond Proceeds • Exhibit A: Bid Tabulation Base Bid • Exhibit B: Base Bid Plus Alternate Event Space Financial Impact: $See Chart Budgeted: Y☒ N☐ Source: Liquor Fund & Bond Proceeds Envision Lakeville Community Values: Diversified Economic Development Report Completed by: Allyn Kuennen, Assistant City Administrator CITY OF LAKEVILLE RESOLUTION NO.______ RESOLUTION ACCEPTING BIDS AND APPROVING CONSTRUCTION CONTRACTS FOR THE KEOKUK LIQUOR STORE CONSTRUCTION AND AMENDING THE 2021 BUDGET WHEREAS, the City of Lakeville received sealed bids on Monday, December 14, 2020, at 2:00 p.m. for the Keokuk Liquor Store construction. WHEREAS, Exhibit A and B attached hereto lists the lowest responsible bidder for each scope of constructing the Keokuk Liquor Store; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota does hereby acknowledge acceptance of the bids as shown on Exhibit A and B attached hereto; and BE IT FURTHER RESOLVED, the City Council does hereby approve amending the 2021 budget to include funding sources and costs to be incurred in 2021 for the construction of the Keokuk Liquor Store City Project 20-24. ADOPTED by the Lakeville City Council this 21st day of December 2020. ______________________________ Douglas P. Anderson, Mayor _________________________________ Charlene Friedges, City Clerk CITY OF LAKEVILLE RESOLUTION NO. ____ SUPPLEMENTAL RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF LAKEVILLE TO REIMBURSE CERTAIN EXPENDITURES FROM BOND PROCEEDS WHEREAS, The Internal Revenue Service has issued Treasury Reg. 1.150-2 (the “Reimbursement Regulations”) providing that proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements are met; and WHEREAS, The City expects to incur certain expenditures that may be financed temporarily from sources other than bonds, and later reimbursed from the proceeds of tax-exempt bonds; and WHEREAS, The City has determined to make this declaration of official intent (“Declaration”) to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations; and WHEREAS, The City has, by resolution adopted October 5, 2020, declared its intent to issue tax- exempt bonds in an amount not to exceed $18,091,000 in 2021 for purposes of reimbursing costs of certain Projects, as described in such resolution; and WHEREAS, The City reasonably expects to issue additional tax-exempt obligations in order to finance an additional project, consisting of the construction of a new liquor store (the “Additional Project”). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota as follows: 1. The recitals set forth above are incorporated herein. 2. The City proposes to undertake the Additional Project. 3. The City reasonably expects to reimburse the expenditures made for certain costs of the Additional Project from the proceeds of bonds in an estimated maximum principal amount of $6.6 million. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations. 4. This Declaration has been made no later than 60 days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: a) costs of issuance of bonds; b) costs in an amount not in excess of $100,000 or five percent of the proceeds of an issue; or c) “preliminary expenditures” up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that are reasonably expected by the City to finance the project for which the preliminary expenditures were incurred. The term “preliminary expenditures” includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. 5. This Declaration is an expression of the reasonable expectations of the City based on the facts and circumstances known to the City as the date hereof. The anticipated original expenditures for the Additional Project and the principal amount of the bonds described in paragraph 3 are consistent with the City’s budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the City’s budget or financial policies to pay such Additional Project expenditures. 6. This Declaration is intended to constitute a declaration of the official intent for the purposes of the Reimbursement Regulations. ADOPTED by the Lakeville City Council this 21st day of December 2020. ______________________________ Douglas P. Anderson, Mayor _________________________________ Charlene Friedges, City Clerk VOTE Anderson Hellier Lee Volk Wheeler Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐