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HomeMy WebLinkAbout1997-08-25 Council Minutes - Special Meeting0 AGFdiDA KENAI CITY COUNCIL - SPECIAL MEETIN0 AUGUST 269 1997 . 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://a OW Renai.net/city A. CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval sa 1. Ordinance No. 1756-97 - Increasing Estimated Revenues and Appropriations by $10,993,472 in the Capital Project Fund Entitled, "Kenai ARFF Project." 1. Remove from table. • b. Consideration of ordinance. C. 0 2. Resolution No. 97-61- Awarding a Contract to Alcan General, Inc., Contingent on FAA Funding, for the Project Entitled, "Alaska Regional Fire Training Center," for the Total Amount of $7,790,915.47, Which Includes the Basic Bid and Additive Alternate 2. KENAI CITY COUNCIL - SPECIAL MEET AUGUOT.26t 1997 ?:00 P.M. KENAI CITY COUNCIL CHAMBERS http://arww Read.inot/asty �T M_A� CALL TO ORDER Mayor Williams called the meeting to order at approximately 7:00 p.m. in the Council Chambers in the Kenai City Hall Building. KIM Mayor Williams led those assembled in the Pledge of Allegiance. A-2. Roll was taken by the City Clerk. Present were: Swarner, Moore, Bannock, Smalley, • Williams and Bookey. Absent was: Measles. A -So �J Mayor Williams requested the following changes to the agenda: SUBSTITUTE: SUBSTITUTE: MOTION: 9-109 Osdinn:trtce No. 1756-97 (change in estimated revenues and appropriation amounts). 2-2a, Resolution No. 97-61 (change in fifth "Whereas") Councilman Smalley MOVED for approval of the amended agenda. There were no objections. SO ORDERED. B-1. Osdiawtae No. 1756-97 - Increasing Estimated Revenues and Appropriations by $10,993,472 in the Capital Project Fund Entitled, "Kenai ARFF Project." B-16. Remove From Table. 0 • KENA[ CITY COUNCIL sPEcw. MEETING NttrrvTEs AUGUST 26, 1997 PAGE 2 MOTION: Councilman Smalley MOVED to remove Ordinance No. 1756-97 from the table and Councilman Bookey SECONDED the motion. There were no objections. 80 ORDERED. 8.1(b). Consideration of ordinance. MOTION TO SV88TITUTE: Councilman Smalley MOVED to substitute Ordinance No. 1756-97 with the substitute marked B-1c and Councilman Bannock SECONDED the motion. There were no objections. 80 ORDERED. Ross explained he and members of administration, had been in discussions with FAA for the past several days. The city has usually used "entitlement funds" which are known amounts in the bank, and the monies they have been discussing are • "discretionary funds" and these funds are used in stages. In his discussions with. Symtron, he was told all their 13 projects (building similar ARFF facilities) have been done in stages as Kenai's ARFF is to be done. Rosa continued, at this time, the project was $1.7 million over the estimated cost of the project; $1.3 million was attributed to the training building and the city is a 20% participant in that building and otherwise, a 3+/e% participant. He added, $400,000 of the $1.3 overage was in an audio-visual package which was not included in the original engineer's estimate, according to Morrison Maierle (project engineer). Ross - noted, Morrison Maierle stated they were not aware .of the added costs until two days prior to the bid opening. The city was not aware of it, council was not aware of it and neither was the FAA. Ross added, FAA will not participate in the $400,000 audio- visual package. However, administration fully anticipates the $400,000 cost for the audio-visual package will be reduced signi%antly. He noted, the Modesto facility has a $30,000 package and the Kansas City facility approximately $50,000. Ross continued, administration will submit a grant for full funding which will represent the two ordinances (Ordinance No. 1756-97, and a previous ordinance for $740,000). According to FAA, there is $3 million in the bank for the project at this time; $680,000 of it is for Symtron (for utilities and other infrastructure) and $2.1 million for immediate start of the project. As of September 30 (FAA's year-end), FAA will request an additional $6 million for this project. FAA has told Ross the city would receive the $6 million, but won't put that in writing. Ross added, h1a asked FAA what would happen if the city does not receive the $6 million and was told, if it does not come in September, youll get $3 million and the remaining $3 million in February. • xExnt crrr cocnvcn sPEcrnu MEETING MINUTES AUGUST 26, 1997 PAGE 3 Ross continued, Symtron says, if FAA states you will get the $6 million, it's as good as a hand -shake. Ross noted, this is not the way the city has funded any other project. Continuing, Ross stated, even if the $6 million comes to the city, it still leaves the city $1.45 million short. If FAA does not fund that immediately as part of the project, Symtron has agreed to lay over the safety trainer, which is about the equivalent, until the FY 99 cycle which in October, 1998. The rest of the project could proceed. Williams mentioned, in their discussions with representatives from the Helena, Montana facility, after some funding concerns, their project proceeded in the same manner. He added, it seemed to be the method of operation with FAA that causes it to be that way. Williams noted, this facility will probably be the last one funded by the FAA. Willilams continued, he was comfortable with the funding and was not concerned that FAA won't come through with the funding. He added, once the project of this magnitude starts, they won't stop. Williams also noted, Symtron was using a lot of FAA money to front the major components of the system. Ross added, Symtron is very strong on the fact the project was ranked 21 in the nation (by FAA) and because FAA says there is enough discretionary funding to fund the first 30 projects on the list. He added, they are not worried the funding won't come to the city. There has never been one of these projects stopped in progress before. Councilman Moore asked, if the bid had come as expected- or less, would council be - having this discussion with respect to funding levels, _etc._ He asked, if FAA goes away tomorrow and the city is committed to a $10 million contract, what happens. Ross explained, the city's commitment, under Ordinance 1756-97 and the resolution to be passed, is to fund the project as FAA funds the project, and that's the city's only commitment. Williams, stated yes, they would be having the discussion, because there isn't enough money to around as it is. There would not have been enough money, under any circumstances, presently available with the amounts needed. He added, the city knew that going in and that the city knew exactly what the city's share of the cash pot was when the bid was let. They had discussed a "staged contract." Williams noted, it was always known it would be a staged contract and the money would come in chunks. Williams noted there had been discussion of putting off purchasing the trucks for the facility until the next fiscal year, which would be approximately $800,000. KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 4 contribution because FAA won't participate in the $400,000 (audio-visual equipment) and the city won't spend $400,000 on the equipment. He added, when the cost of the building was increased (excepting the $400,000), 201% of the cost became the city's. As far as the phasing contingency on FAA funding, it was always on the table. The scheduling of what was phased in, in what order, and how much the city was into the project for, was what changed. Moore stated to clarify, that was probably what happened the first time the bid was let. There was a discussion at that time that the project should not be funded in dollar amounts, but in completion stages. Rather than to do that was to bid the entire project at once. Williams stated, the city was almost forced into that situation. Had it gone the other way, there was a chance one general contractor would follow another contractor. Williams referred to the third paragraph of the Kluge letter (included in the packet) and read, "I informed the city at the time of the estimate, the AV equipment was not addressed in the construction costs. Our electrical engineer laid out the equipment • after coming to Kenai and meeting with us and the fire station representatives. This system was designed similar to the Modesto, CA facility. It was a consensus of the Mayor and fire personnel that this project's AV system should be designed to have the ability of distant learning from the lecture room and video presentations in the classroom as well as recording prop -training sessions *and lectures." Williams stated, that was absolutely true, but what there was no consensus on or direction on was that the system should be designed with $45,000 cameras and a myriad of other technical equipment that ran the price to $400,000. Williams added, he wanted council to understand, -he did not personally go out and tell Kluge-$400,000 was a good number, especially when they knew the cost of the Modesto facility's AV equipment and had been there to look at it. Councilwoman 8warner asked if the city would be borrowing against future entitlements and for how many years. Ross answered yes, and explained, the city will be using the FY 97 and 98 entitlements, because this is the only construction project the city has on the table. (The only way to get the entitlements is to have a construction project.) The FY 99 entitlements will now be used in arrears to reimburse the city for the engineering and design costs the city has already put into the project. Councilman Bannock noted the $400,000 had been mentioned several times in the material forwarded to council. However, the $400,000 was a very small portion of the $1.3 million overage. Bannock asked if they would talk about other areas where cutbacks could be made. Ross explained, aver the award of the contract, administration planned to discuss with the contractor several areas in the building • KENAi CITY COUNCIL 3PECIAI. MEETING MINUTES AUGUST 26, 1997 PAGE 5 where amounts could be saved. As an example, Ross referred to the generator, which was designed to be one large enough to run the whole facility during a power outage when what is needed during a power outage would be to run the building and the communications systems. There would be no need to continue training during a major power outage. He added, there could be a considerable savings in downsizing the generator. Ross noted, there may be other areas which could be downsized, etc. and make cost savings. Bannock stated, it appeared the only item the city had been caught up in was the $400,000 audio-visual component. Ross stated, the city was also surprised by the cost for the affluent building (noted by Morrison-Maierle) and added, there may be other areas as well. He added, finding those added costs may give some margin in the project for overruns that are a result of oversights that are a result of increased costs elsewhere. Ross noted, the project carried only a $300,000 contingency, which is a match contingency. He explained, if a change -order was required, and depending where it was, the city would have to match it by either 20% or at 31/e0/6. The contingency amount should carry a distance into the project. If the audio-visual package is downszzed, the funds will drop into contingency and may be able to be used for purchase of furnishings, etc. (Williams noted, the furnishings were never covered by FAA and were always to be the city's cost.) Overhead P:eeeaftWou Semmens gave an overhead presentation to explain the amounts given in the ordinance, the amounts showing the city's level of participation, and more of the funding breakdown. Semmens distributed sheets of information to follow along with, a copy of which is included with the packet. Semmens noted the entire project cost was now $13,435,915.47 which includes the $300,000 contingency. The project started with the appropriation of $490,000 for design work (Ordinance No. 1711-96) and $250,000 (Ordinance No. 1735-97), which totals $740,000 which the city has appropriated toward the project. Semmens noted the Alcan bid, including Alternate No. 2 was $7,790,915.47 which he broke into two components; the building and the remaining costs. He noted, the total non -grant eligible portion of the building was $1,200,000. This is a $13 million project of which $11.9 million is grant -eligible. The funding sources are $11,1729404 from federal; $1,891,097.87 from the city; and $372,413.47 from the state. Semmens reviewed the federal funding detail and noted it was important to recognize the difference between the funding sources. He explained, entitlements are revenues coming for construction projects based on the traffic through the airport; • KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 6 discretionary fiends is a pot of money that FAA, at its discretion, divides to different projects throughout the United States. Semmens noted, the federal funds were: $6269647.00 (FY97 entitlements); $700,000 (FY98 entitlements); 693,750 (FY99 entitlements) and $1,151,997 (discretionary); a total of $11,172,404. Semmens added, the FY99 entitlements were being committed by the city to reduce the discretionary portion to make it more palatable for FAA to refund the $740,000 the city has already invested into the project. This would allow the construction part of the project to proceed sooner. The $693,000 reimbursement on what has already been appropriated in the project should be received by October, 1998. Semmens explained the state share is the normal amount for FAA projects, however, representations have been made that the city may not look to the state for their funding. There are also feelings the state will participate ($372,413.47), but if they don't, the city will have to absorb those costs. Williams asked if the bid included Alternate No. 1 and Semmens confirmed it did not. Williams stated, he would be asking the council to include the extra $10,000 in the city's costs which will take care of future development of the pond (diving school, cold water recovery, and community park). Ross stated, the reason the $10,000 was not included was because there was no probability of FAA funding the development and there are no easements to allow the city to use that property. Instead of complicating the issue, they removed Alternate No. 1. Rose added, it would be council's decision whether to go forward with the pond development. Williams added, the city's figure of $1,891,000 is short from what the council had agreed would be their participation, which includes the $740,000 for design. He added, originally, they had figured the city's participation would be $2.7 million. Williams also explained, he would be happy to accept $372,413.47 from the state for the project. However, in order to get the project off the ground and get the support of the Governor, Speaker of the House, President of the Senate, Legislature and Department of Transportation, he told the Governor the city would not ask for the state's share of the project. He added, those letters of support were forwarded to Washington, DC and used to convince FAA this would be a good project. Bookey stated, the $2.7 million council had agreed to include the entitlements at that time. Williams agreed, and added they were still included. Williams added, the city's cost would still be less than the $2.7 million. Ross corrected him, noting the $1.8 had been added to the entitlements and the city was actually close to $3 million. Bannock stated his concern in regard to the discretionary funds and asked of the $9.1 million, how much had been committed. Semmens referred to "Funding Phases" information which had been distributed. He noted, of the $11,172,404, FAA had committed to the $3,008,857 and that amount consisted of FY97 entitlements, FY98 • KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 7 entitlement estimate, and the FY97 discretionary amount of $1,682,200, leaving a federal balance of $8,163,547. He continued, FAA had committed they would put $6 million into their end of year plan, however they would not commit how much of the $6 million the city would receive at the end of the year (September 30, 1997). That amount depends on how much is available and FAA's priorities. Smalley asked if the entire $6 million was not received at September 30, would the remau . g amount would come by February, 1998. Semmens answered yes, FAA had indicated they would submit as a FY98 discretionary grant, the difference between the $6 million and end of the year amount. Semmens continued, $2,163,547 is the balance to fund after the $6 million. Of that, $693,750 will be covered by the PY99 entitlements which leaves a balance of $1,469,797. Semmens noted, they hoped to receive the entire $6 million at September 30, 1997. Semmens continued, if the $6 million was received at September 30, then $1,470,000 would be left and the city would request that amount be covered by a FY98 discretionary grant. Bannock asked what time line would be assigned to that and Semmens answered, FY98 begins October 1, 1997 and the FY98 discretionary grant money could be available as soon as February. If it is an unfunded item, funding could come at the end of the year FY98 year. Semmens noted, there is, with the federal money, city match and state match, $3,209,447 with which to begin the project. Those monies, he explained, would be used as follows: If the contract is awarded, $687,000 would be appropriated to Symtron for the long -lead time items (remaining amounts for Symtron's contract would be awarded later); placing utilities -- $200,000; arid, $2,322,447' would be available_for .construction (the Alcan General contract).. If more money is received_ in October, Phase II would move forward with the contractor schedules and if the FY98 discretionary comes through, the specialized fire trainer would be purchased (Phase III). Semmens noted, they have been told the city would meet the regulations with the fuel. spill propeller and purchase of the trainer could come later. Phase IV, Semmens noted, would be the receipt of the FY99 entitlements. Ross stated, they feel ver7 comfortable the $1.4 million will be received for the fuel spill propeller as that training is required for Alaska airports to be certified. Ernst noted, this project is 21 on FAA's national list for funding and within Alaska, it is first. Williams noted, Kenai would not be competing against any other group within the FAA Alaska region. Overhead presentation concluded, • KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 8 Williams requested comments or concerns of council. Bookey stated he felt the project was important to the city, but was discouraged the way it was coming along but felt it was partly because it was on a fast tract mode. He added, he was comfortable with going ahead and awarding the project, as long as the contractor was happy with it and understood it could only go to Phase I if the other $6 million was not received. Bookey continued, he had faith in the project, administration and federal government and felt they needed to go forward. Councilwoman Swarner stated she really didn't like the fast -track projects because unavoidable mistakes happen and disliked having to pay for those mistakes. Councilman Moore asked if there were representatives from FAA or Symtron present. Answer was no. Moore stated he would feel comfortable having something on the record in regard to the representations made to Ross about their commitment to work with the city. He added, if not in writing, maybe a handshake, but at least on the record. Ross stated, Symtron's commitment would be on the record when the resolution was passed at the next council meeting for $687,000 (if the award of the contract was made at this meeting). He added, it was not possible to get a written commitment from FAA and noted, he tried to get that commitment. Moore asked if a representative from was Alcan present. There was, and he introduced himself as Terry Fike, President and Chief Executive Officer of Alcan General. Moore asked Pike if he was willing to proceed with the project in the phases as presented with the same bid. Fike answered, he had no problem with proceeding with the contract as explained during this meeting. He added, they would be writing their subcontracts with the same language as the city's contract with Alcan General. If the subcontractors don't agree, they will negotiate with another subcontractor.... Moore asked him, if by council's acceptance of the resolution, he was committed to proceeding with the project. Fike answered, yes. Moore asked if Fike would have bid the project differently, after knowing about the funding. Pike answered, they were aware of the funding when they bid the project and knew the city did not have all the funds. He added, they have worked with FAA and just completed a project with them and are aware of their funding distributions. Bannock referred to Line 3 of the ordinance and asked what "ARFF" was. Chief Burnett answered, Aircraft Rescue Fire Fighting." Bannock asked Fike if he saw any pitfall in front of the city, since he had experience working with FAA. He asked, if Fike could make a recommendation, suggestion or if he saw some glaring error the city was about ready to make. Fike answered no, and added, the documents were very clean and understandable. The subcontractors they tentatively plan on using are very knowledgeable of the documents and they have not heard of any problems in KENAI CITY COUNCIL . SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 9 regard to the documents (their worst fear is a poor set of documents). He added, he saw no pitfalls that could not be resolved amicably through both parties. Smalley stated, based on the fact that the prior 13 like projects had been funded in this manner, he agreed with Bookey's comments. He referred to the last whereas of the resolution where it stated, "...contingent on funding and approval..." he was comfortable with the project. Williams stated he agreed with Swarner in regard to comments about fast track projects. He added, this project should have been started three years ago by the city, instead of two. He noted, there were other factors which prevented the city from doing it and when they first made a presentation they were off in projected costs by a considerable amount. He added, he took part of the blame for the fast -tracking of the project, but timing was critical by the time they really began working on the project. Ross noted, one of the considerations the city has is the knowledge the project got fast -tracked and then the window of opportunity for private industry came up and there was no way to delay the project in order to correct problems. Delaying would have increased expenses and possibly loss of the opportunity. Moore noted, when comparing the original ordinance (marked B- la) with the substitute (B-lc), there was less money being transferred with the substitute than with the original ordinance. Would there be a transfer at a later phase? Semmens answered, when writing the original ordinance (B-1(a)), he did not take into consideration the $740,000 that had already been transferred with a previous ordinance. The difference between the original and substitute ordinance was the $740,000. Swarner asked Fike when he anticipated beginning construction. Fike answered, as soon as the contract was awarded and the permitting processes were in place. He added, they will need to meet with the city to see what the phasing requirements will be and discuss budgets for the phasing requirements and what potentially may be taken out of the project, etc. Fike noted, they are in a time crunch as it is late in the year. Swarner asked when he anticipated completion of the building. Fike answered, July at the latest. Swarner asked if that would include pictures or video of construction. Fike answered, if it's required by the documents. Ross stated, if the resolution is awarded to Alcan at this meeting, they will meet with them and engineering and work out the phasing and items to come out of the project. In addition, before giving a notice to proceed, a grant will be sent to FAA for the $3 million. After that is signed and returned, they will issue a notice to proceed. • KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 10 • • Ernst stated, he believed the grant would be signed and returned by the first week in September. Fike noted, that would be consistent with the contract documents. Ernst added, FAA was now waiting for the grant application. Williams asked for further comments. There were none. Williams noted council realized the city's financial involvement would be more than originally anticipated, but recognized the facility at almost $13 million would be a tremendous asset to the community. VOTE: Swarner: Yes Moore: Yes Measles: Absent Bannock: Yes Smalley: Yes Williams: Yes Bookey: Yes MOTION PASSED UNANIMOUSLY. B-3. Resolution No. 97-61 - Awarding a Contract to Alcan General, Inc., Contingent on FAA Funding, for the Project Entitled, "Alaska Regional Fire Training Center," for the Total Amount of $7,790,915.47, Which Includes the Basic Bid and Additive Alternate 2. MOTION: Councilman Bookey MOVED for adoption of Resolution No. 97-61 and Councilman Bannock SECONDED the motion. - MOTION TO AMIMD: Councilman Bookey MOVED to amend the motion by substituting Resolution No. 97- 61 marked as B-2(a). Councilman Smalley SECONDED the motion: There were no objections. SO ORDERED. Williams asked council if they had any questions or comments before asking for comments from the public. Smalley asked if they needed to discuss the Alternative Alternate No. 1 at this time. Williams answered, no. Moore asked if there should be a "whereas" in regard to modification of .the basic bid that may be negotiated. He asked if the resolution would bind the city to the basic bid and Alternate No. 2 as originally bid. Ross stated, it could without the • KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 11 is 40 representations heard. However, to begin negotiating a bid with the low bidder before its award, is probably not what they should do. Williams noted, the fifth "whereas" states the award is contingent on FAA funding approval and the contractor's agreement to phase the project. Bannock asked, when the project was bid, were their items that were line -items or, with exception of the alternates, was it a one -lump bid. Answer was, it was a one - lump bid. Bannock asked if administration was comfortable with awarding the bid that way and then taking upon itself to negotiate with the contractor over the other items. Ross answered, he didn't see any other option than to do it that way. He added, Mr. Fike (Alcan General) made representations that he was willing to see some adjustments. Ross noted, the city had been very expressive when gathering information concerning the audio-visual package and thought Fike represented that was an area of adjustment that he found acceptable. The audio-visual package was the major item, however there would be other items administration would discuss with Fike as well. Ross added, he did not attempt to negotiate an amount beyond the low bid. Williams noted, in contracting it is a lot easier to negotiate out those items early before the physical work begins because there are items the general contractor has to purchase. If the contractor does not have to purchase some items, it is a lot easier to bargain it out. Williams opened the discussion to the public for comment. Dave Burnett, Kenai File Chef. - Burnett reported he talked with Mo Rank; President of ESI. Ranck is very excited about when the project would break ground,_ etc. They have already issued certificates to proceed for the engineering, to Symtron to build the propellers, and to have their building built. He urged council's support of the project. Williams explained the ESI project is a separate project built in conjunction with the city's project. Kelly Keating, Rimy Construction - Stated it was his understanding that there will be negotiation with the award of the project after the award. Ross answered, the city would award the project as bid by Alcan. The city has identified items that the city will try to pull out. Those are items for which FAA said the city will have to provide the funding (audio-visual package being the main item). Ross continued, there had not been any negotiations with Alcan beyond accepting their low number. KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 12 Keating stated, he thought the city was in a tough position to negotiate if there was an award. He added, they have been involved with other contracts, some federal contracts, where the project was over budget. In those projects, they had the option to negotiate with the bidders. He thought the city may have another option if there was going to be some negotiation, some price changing, request for substitution or elimination of some items. He added, he didn't know if that would be allowable, but in the projects they had done (for the Forest Service), they asked the two bidders who met all their requirements to review their list of items they wanted to negotiate and went from there. Ross stated, the city reviewed that possible option, but found, in order to do that, the construction season would be delayed with going back through engineers, finding what are acceptable products or not. The award is to Alcan at their bid amount. The only definitive item to discuss is the audio-visual package because, from the city's point of view, it is fully funding it. He added, it's the same package that everyone else bid and is a fairly consistent number. At this time, the audio-visual package is the only item the city can identify. Keating stated, he thought it would be toughs to construct the building during the winter. He didn't think that was the real issue, but thought a sensible approach to the construction was to get initial site work done this fall and build the building first thing in the spring. Ross answered, that was what they didn't want to delay. Keating added, if there was another option, he thought council should think about it and know about it. Moore stated he had to give some thought to that comment - that a contractor, who was not the low bidder, finds out that maybe the audio-visual package is not wanted, and maybe not the big generator or the building as it was designed, maybe would have bid the project differently. Ross stated, the only items identified were the audio- visual package and the possibility of a downsize on the generator which had not been discussed (the generator) with the general. He added, no matter where the bid went, they would do that. If the city begins negotiating the building, the project wouldn't begin this year on any part of the project because it would take several weeks to make those decisions. Ross continued, at this time, he was recommending council award the contract to Alcan General as the low bidder. If the audio-visual package could not be negotiated out at a good number, it would be a problem, but at this time, the city had a package before council with a low number and was recommending council award the bid to Alcan General. Williams noted council should remember the package they would be negotiating would be paid for out of the city's funds. With that, the city has the prerogative to negotiate items of that nature. He added, the contractor may look at it differently and KENAI CITY COUNCIL SPECIAL MEETING MINUTES AiJ(3U3T 26, 1997 PAGE 13 not want to negotiate. It's not FAA money, but it is the city's. In regard to Keating's comments, there would be no negotiation with FAA regarding the audio-visual package. Bookey asked Attorney Graves for his comments. Graves stated, it was not that unusual for governments to let contracts and then change items. The question was, at what point is the project substantially altered and the audio-visual package didn't meet that threshold. He added, he didn't have a big problem with it and didn't think it was tlfat uncommon in government contracting. Smalley added, the code allows the city to negotiate a bid after its award to the low bidder. Graves added, the city has negotiated items before, maybe not a project of this size, but have changed items. He added, as long as it is not substantially altering the scope of the contract, it is allowed under construction rules. Smalley noted, it had been done with automobile purchases. Williams noted, there were probably many in the court house project. Graves added, the court house project was a good example as there were many changes to save money after running into the environmental and winter construction problems. Williams remembered the air conditioning type had been substituted. Williams added, when the contract was awarded for the congregate housing project, a change order was issued at the same meeting and adding approximately $100,000 to the project. Bill Kluge, Architect - Stated he didn't see a problem with negotiating the audio- visual package because he was unaware of the exact cost of the package until two days prior to bid. He continued, his electrical engineer met with the city representatives and discussed the facility and what the Modesto facility had and he instructed the engineer to design a first-class system. The package includes two extra cameras for the future structural trainer on the building, which are weather-proof security cameras. He added, there are less expensive systems than what was specified, but what was specified are serviced out of Anchorage and first-class components. Kluge added, he didn't think the city should participate in the cost of the boiler system which is included in the building for snow -melt on the trainers. He was told it was a $135,000 cost which is included in the structure. The system is to facilitate the boiler and associated piping, but the floor strength had to be increased because of the weight of the system. He noted, the snow -melt system is for melting the snow around the fire trainers and was not just a building expense. Also, there is extra cost associated with the pump and associated structure. He added, the intent was to accommodate the items within the building rather than build another building with a separate heat plant for another building, etc. Kluge also noted there were other items KENAI CITY COUNCIL SPECIAL MEETING: MINUTES AUGUST 26, 1997 PAGE 14 that ended up in the building package instead of the site work, i.e. the leach field and drainage for the roof system, the associated concrete walks for the parking area, and site lighting for the trainers. Kluge added, he felt there were quite a few items in the building because of the complexity of the project. He noted, when there is a short amount of time to formulate the amounts and where they belong, they sometimes get placed where they don't belong. He added, he worked extra hard on the project to make sure it would be a durable facility with first-class materials. In regard to the estimating on the project, they had it prepared for June 9, but the drawings were not completed. Since that time, snow -melt systems for the walks and hydronic heating in the floor of the apparatus area were added.. In regard to the generator size, Kluge stated he would be concerned if a training session was in progress when the power goes out, leaving participants in the dark. Kluge added, the command center on the second floor of the building was not fully detailed when the project was estimated either. Williams stated, he thought Kluge's explanation was good when comparing the costs i of the building. VOTE: Williams asked if there was objection to unanimous consent. Moore objected and a roll call vote was taken. Swarner: Yes Moore: No Measles: Absent Bannock: Yes Smalley: Yes Williams: Yes Bookey: Yes MOTION PASSED. Williams asked council if they had further comments. Bookey - Glad the project is underway. Starner - There may be members in the audience who may have comments. Moore - Stated he whole-heartedly supports the project, but had concerns about the bid process and that was why he voted no. Bannock - Thanked Semmens for the break -down on funding. Smalley - No comment. There were no comments from the audience. Williams noted, they were all comfortable with proceeding with the project and felt it would be a good one for the city . He added, he hoped it worked out according to plan. KENAI CITY COUNCIL SPECIAL MEETING MINUTES AUGUST 26, 1997 PAGE 15 The meeting a4ourned at approximately 8:21 p.m. Minutes transcribed and prepared by: Carol L. Freas, City Clerk • 140 9 s