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Dubuque construction company submits $19 million low bid for WRRF project

By Kelly Terpstra,

Portzen Construction out of Dubuque submitted the low base bid for just under $17 million to construct the new WRRF (water resource recovery facility) in Charles City.

That was just some of the good news that came out of the city planning workshop on Wednesday that was held in the housing department at 501 Cedar Terrace South.

The $19 million project to replace the 54-year-old wastewater treatment plant came in $575,000 under the estimated cost. The bid also includes the replacement of the Chautauqua lift station, which was expected to be a $300,000 stand-alone project.

“All I have to say is we’re very happy with how the bids came in,” said City Administrator Steve Diers. “I was working on an estimate of $17.523 million for the total project.”

Diers said that there was anywhere from 10 to 12 bidders that at some point were interested in the project. Four bids were received, with Henkel Construction out of Mason City being the highest bidder at just over $20 million.

Three bid alternates that totaled $107,000 were recommended to not be accepted when the plans and specifications are discussed at public hearing on Monday at a regular city council meeting. The council can consider awarding the project to Portzen Construction at that time.

Portzen Construction recently finished work on North Liberty’s wastewater treatment plant. Fox Engineering, which did the design work on the WRRF project, will be present at Monday’s council meeting to further explain the proposed work.

“There’s a lot of moving pieces to this,” said Diers.

The construction of the WRRF will help eliminate nitrogen and phosphorus – two nutrients that have been identified by the Iowa Department of Natural Resources that are required to be reduced under the city’s most recent permit issuance in 2014.

Creation of equalization basins, that help with heavy water flows, is also a key component to the project.

Another facet of the proposed undertaking is reed bed installation. The bio-solids left over from treating wastewater create a sludge that needs to be hauled off from the current site. Once completed, the beds will naturally dewater the sludge and be able to turn it into dry compost material that can easily be removed.

The plans call for a completion date of May 2022 for the new facility.

Diers said a portion of the funding is planned to come from the Iowa Department of Natural Resource state revolving loan fund.  Another financing option could come from general obligation loans backed with TIF dollars from the adjacent South Grand Urban Renewal Area.

Also at the meeting Wednesday, two development agreements are nearing the final stages.

The agreement between the city and the  Charles City Area Development Corp. regarding the Avenue of the Saints Development Park certified site will move to consideration before the council on Monday.

The development/grant agreement lays out the ground rules for the city to grant up to $2.156 million to CCADC to purchase 75 acres of real estate that is in the process of being designated as a state of Iowa certified development site. The industrial park is located on South Grand Avenue and the CCADC will maintain, market and attempt to sell the property.

The city will fund the purchase through tax increment financing dollars from the South Grand Urban Renewal TIF District. Diers said it would take 11 years to satisfy the debt and pay back the bonds. Any rental income will go to offset the operating costs from CCADC.

“Whatever we get in rental income from them will be that much more we don’t have to borrow or certify through TIF,” said Diers.

Diers said the city will have to borrow $2.3 million and once the borrowing costs are covered, any money generated from the sale of the property must be used within the South Grand Urban Renewal Area.

The agreement states that CCADC would not be able to purchase the property before Dec. 1, 2019.

The other development agreement discussed Wednesday concerns the 1930s portion of the 500 North Grand building, which Johnston developer Shawn Foutch looks to turn into approximately 40 market-rate apartments if the city agrees to  a 10-year property tax abatement.

Foutch purchased the old middle school building for $1 from the Charles City School District last month. Foutch owns JMAE LLC., a construction company that specializes in historic rehabs and property management.

In order to move forward with his design plan to erect at least 35 apartments on the site and to acquire financing, he needs the council to award him a 10-year, 100 percent tax abatement on the increased value of the property, that would save him more than $589,000.

Revision of the agreement included Foutch paying the legal fees of up to $6,000 up front to set up the Urban Revitalization Area to begin the project.

There is also a penalty that could be enforced if Foutch is unable to make a Jan. 1, 2023, completion date.

The site-specific urban revitalization plan will be terminated on Feb. 1, 2024, one year and one month after the specified completion date, giving Foutch an extra year in which to finish the project and file his tax abatement application. Once applied for, the abatement is locked in for 10 years.

If Foutch would need an extension past that date, he would need the approval of the council and pay up to $6,000 in legal fees.

Diers said this approach was a good way to “grease the wheels” of the project and would give Foutch incentive to meet the deadline.

“It will basically have a hard cut off – either it’s done or it’s not done. If we get to that point and it’s not done for a reason and we feel that it’s valid to redo it and he pays to renew it, we can do it then, or we say enough is enough,” said Diers.

Other topics on the agenda that were discussed at the planning session were as follows:

• Heidi Neilsen with the Housing Department recommended a bid of almost $8,000 by Do It All Construction to have work done on retaining walls at Morningside Apartments. She also said there was change order for labor costs of over $17,000 that was requested by MidAmerican Energy on work done with the electrical upgrade project at South Cedar Terrace.

• A $1,000 facade improvement grant for 205 N. Main St. that houses Johnson Accounting Services was brought before the council. The owner, Kenneth Johnson, said that Community Revitalization has already approved the grant, which would go toward a $2,000 project to restore and install metalwork atop the building.