7.1.B. SR 10-16-2006 - Laserfiche WebLink

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October 12, 2006 Bill Maertz City of Elk River 13065 Orono Parkway Elk River, Minnesota 55330 Subject: Elk River Library 0606-1159-21 Dear Bill: The purpose of this memo is to summarize the approach we discussed in dealing with the project budget having received bids for the Elk River Library. As you are aware bids came in higher than anticipated, yet after adjusting dollars with in the current project budget, we are with in 10% of our Estimated Construction Cost. By making these adjustments we are able to maintain the high level of quality that you as the owner desire and your community expects with in the 10% range. The adjustments, as seen on the attached Project Summary Worksheet, are as follows: . We have adjusted the Contingency from 10% to 6%, still an amount we feel very comfortable with for a new facility, this puts 104,000 back into the building. . We have reduced the FFE budget from $164,000 to $86,000. This will require us to reselect on some of the furnishings within the revised budget, or look for additional furnishings to reuse, but still leaves enough to provide new quality furnishings in areas of focus. . We have received a letter from KFI, Mechanical Engineers for your project, and they have received and approved the product from Econar. The only concern they have is there is no experience or history with this new product for Econar. The conditions for acceptance as outlined by Econar would also need to be approved. The Architectural and Engineering would be reimbursed for any necessary redesign should the submitted product change. The value of this donation, as estimated in previous e-mailsis$50.000.This amount has been added back into the construction budget. There are several ways in which we could further reduce the differential. We can within the law engage in a contract with Merrimac, the apparent low bidder, and work with them to Value engineer up to 10% of the construction cost out. This would put those items that represent the high level and expectation of quality at risk. A detailed, in depth list can be developed if this is the direction you or council wishes to go. Alternates could be accepted, the total of these alternates is minor, and the value of them in the project adds greatly. We were very pleased with the interest the project has gotten as represented with the 15 General contractor who did bid. People want to be apart of this exciting project. The project was bid with Prevailing wage requirements, which we believe adds a value to the local economy as well.