By BECKY KISER
Hays Post
Hays city commissioners voted 3-2 Thursday to accept the low bid for construction of the North Vine Street Corridor Improvement Project.
The bid from Smoky Hill Construction, Salina, was $3.5 million over estimates by the city's project engineer, WSP of Lenexa, and by the Kansas Department of Transportation. KDOT will oversee the project.
Voting in the negative were the two newest city commissioners, Michael Berges and Mason Ruder.
Ruder was also the sole voter against accepting the $1.2 million single construction engineering bid for the project from Kirkham Michael, Ellsworth, which passed 4-1. Kirkham Michael will be working under an existing contract they have with KDOT for on-call inspection services.,
The city does not specifically know why the two construction bids it received for the work are nearly 30 percent higher than anticipated.
The low bid by Smoky Hill Construction, which has completed four other major projects for the city in the past 14 years, and has built traffic roundabouts in other Kansas communities, was $11,915,287. The other bid, from KOSS Construction, Topeka, was even higher. KOSS has also built roundabouts elsewhere.
The engineer's estimate was $8,463,336 and KDOT’s estimate was lower at $8,152,118.
John Braun, city project manager, told the commission last week he "mainly attributed it to the current economic situation caused by the COVID-19 pandemic."
"The city is able to cover the higher than estimated cost of construction," Braun said.
Berges, a financial analyst, asked several questions of City Manager Toby Dougherty and Finance Director Kim Rupp. As he said last week, Berges remains opposed to the project. "I just couldn't reconcile voting for the approval with the (bids) coming in that far off."
Hays was awarded a $6.05 million federal BUILD grant in December 2018. Dougherty reminded the commission it is 2018-allocated monies from the Federal Highway Administration, saying "if we don't take it, somebody else will."
The construction bid, combined with $1.2 million for construction engineering by Kirkham Michael of Ellsworth, brings the project cost total to $13.1 million.
Subtracting the $6 million federal grant leaves the city’s share at $7,110,430. It will be paid from the Capital Projects Fund by a 2% increase in the city's Transient Guest Tax (TGT) that was implemented in 2018. The TGT is now 7%.
Berges was also concerned about the reliability of the TGT. "How do we fund that (possible) gap?" he asked Dougherty.
"I think you'd have to have a lot of hotels shut down," Dougherty responded.
"The current scenario doesn't include the two new hotels that are under construction (Hilton Garden Inn and AVID, both north of Interstate 70). They're going to be a draw and the development at (I-70 Exit 157) that is going to include hotels.
"You'd have to see either of those hotels not come online and/or a wholesale reduction in the other hotels. That's why we feel fairly confident in making a recommendation like that."
Dougherty added that Rupp has been "fairly conservative with his estimates on that."
Dougherty also noted the city has very little general obligation bond debt.
As Berges did last week, Ruder this week supported the idea of "pushing it down the line and getting some concrete numbers where we're going to be after the summer. See how businesses bounce back. See what other funds are available .... In the fall it would give us some more time to find out why there was such a drastic difference."
Acknowledging the city was disappointed when the bids came in higher than expected, Commissioner Ron Mellick said "I have to live with today" and the city should get construction started now.
"If we wait another six months, what will the bids do then?" he wondered. "Higher, lower, none at all? I don't know.
"I do know with what the bids are today, we can afford to do it today."
Mellick also talked about how complex the job is as another possible reason for the high bids.
"I don't believe engineers have a full grasp of how difficult it is. People who actually do this work have a better understanding of what the labor is and what it's going to cost to do it."
Shaun Musil, mayor, said the large project drew the most contacts and emails from residents he's had in a long time. He also feels the cost estimates "are just flat wrong."
"There's been so many studies. ... I think this is best for the community. It'll be many years before we see it. It is (temporarily) going to hurt businesses," Musil noted.
" ... With the policies the city has in place - even after this pandemic - two or three years down the road, we're (still) going to be in good shape."
Vice-Mayor Sandy Jacobs expressed her continued support for the project, saying "I'm not closed-minded about it and have done my due diligence in speaking with developers, contractors and bankers."
Both Ruder and Berges at the end of the meeting expressed their respect for the other commissioners' decisions.
"I know we've all done extensive research and talked with many, many contractors, citizens, businesses," Ruder said. "I believe we're all up here doing what we believe is best for the city of Hays."
According to the work timeline, construction will begin next month and continue through October 2021.
