The North Vine Street Corridor project will cost upwards of $3.5 million more than originally estimated, based on the low bid of Smoky Hill Construction, Salina.
That was the word Tuesday from city of Hays assistant city manager Collin Bielser, who talked about the bids during a regularly scheduled press briefing.
The project calls for four roundabouts as part of the reconstruction of Vine Street, or US-183, from south of 32nd Street to north of 41st Street.
A project of the Kansas Department of Transportation, the Vine Street Corridor reconstruction was estimated to cost just over $8 million.
But when bids were opened March 25, two contractors submitted bids more than $3 million over that.
The low bid from Smoky Hill was $11.9 million. Koss Construction Co., Topeka, bid $12.7 million.
“KDOT, they estimated $8.1,” said Bielser in the briefing, which previewed the agenda for this Thursday’s work session of the Hays City Commission. WSP USA, the city’s engineer, estimated $8.4 million. “So both were off,” he said.
The city of Hays will have to pull that money from its Capital Projects Fund, Bielser said, with the city commission at a future meeting authorizing city finance director Kim Rupp to write KDOT a check for the overage.
Originally the city was going to fund the project entirely. In 2019, however, the city secured a Federal Highway Administration BUILD grant for $6.05 million to pay for the bulk of the project.
“We have that extra federal funding, so we don’t want to lose the opportunity for that federal funding,” Bielser said. “It shouldn’t have a negative effect on the budget, because it originally was going to be financed 100% by the city. And the addition of that $6 million will cover that cost.”
City staff will present the information for discussion to the Hays City Commissioners at their work session Thursday in City Hall. The meeting is closed to public attendance due to COVID-19, but can be viewed in real time on a livestream over the Internet at https://www.youtube.com/user/NexTechChannel.
If the commission agrees to move the item on to its regular meeting April 23, the commissioners will vote then whether to concur with the bid and commit more than $6 million from the Capital Projects Fund, Biesler said.
That won’t require cutting other city projects, he said.
“The city’s share was going to be less, and now since the bids came in over estimate, the city’s share will have to be a little higher,” he said, “but it’s within the realm of what we originally intended to do if we hadn’t gotten the BUILD grant.”
Biesler clarified via email later that every capital project has its own funding source, so while the Capital Projects Fund will provide the payment to KDOT, the North Vine Street Corridor project will be reimbursed with a bond. Debt service for the bond will come from transient guest tax proceeds, he said.
It’s unclear why the bids came in so much higher than estimates, Biesler said.
“We think maybe some of the reasons for the high bid was obviously coronavirus pandemic,” he said. “Or perhaps it was a real reflection of the project. We don’t know 100%.”
Itemized bids are an internal document until the contract is awarded, he said, but when the city authorizes the contract they’ll discuss it with Smoky Hill Construction.
“I don’t know if we’ll ever know completely. I think some of it, like we said, is probably related to the environment with the coronavirus, and probably the work force, and what’s going on with the supply chain, and materials, if they’re going to be backed up,” he said. “Or maybe it was a true reflection of the project, and the engineers just came in under, and KDOT also, came in under. Their estimate was $8.1 million, so they misjudged the bid as well.”
The BUILD grant requires construction start in May, he said.