HomeMy WebLinkAboutA001 - Council Action Form dated October 13, 2026ITEM #:34
DATE:10-13-26
DEPT:PW
SUBJECT:RESOURCE RECOVERY AND RECYCLING CAMPUS - CONSTRUCTION
MANAGER AS ADVISOR CHANGE ORDER
COUNCIL ACTION FORM
BACKGROUND:
On September 23, 2025, the City Council awarded a contract in the amount of $1,249,640 to
Story Construction Co. for Construction Manager as Advisor (CMA) services for the
construction of the Resource Recovery and Recycling Campus (R3C) (Click here to view the
September 23, 2025 Council Action). The CMA was brought on board as the design process
for the R3C began to aid in constructability review and provide value engineering where
appropriate to reduce expenses.
The $1,249,640 CMA contract value is calculated based on four components: 1) A Pre-
Construction Services fee ($40,000), 2) Construction Phase Services ($560,040), 3) a
Base fee (2.25% of the actual construction value of the project, estimated at $201,600),
and 4) General Conditions services (estimated at $448,000).
At the time of contract award for the CMA services, the estimated construction value for the
project was $8,960,000, resulting in the Base fee of $201,600. As the design development
continued, the project construction scope grew to accommodate the needs of the facility with
engineer's estimate prior to bid at $16,821,527. Contracts and change orders for 11 bidders
were ultimately awarded following a rigorous value engineering exercise for a construction
value of $17,991,996.03. A number of change orders have been approved by staff or City
Council bringing the current construction value of the R3C project to $18,261,657.88.
The table below compares the original value of the CMA contract at the time it was approved
with the revised amount based on the increased construction cost:
Description Original
Value Revised Value
Pre-Construction Services $ 40,000 $ 40,000
Construction Phase Services 560,040 560,040
General Conditions 448,000 448,000
Base Fee (2.5% of construction value)
Estimated construction value of $8,960,000 201,600
Estimated construction value of $18,261,657.88 410,887.30
TOTAL $ 1,249,640 $ 1,458,927.30
Difference $209,287.30
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Budgeted Revenues Budgeted Expenses
Revenue Abated G.O. Bonds $22,006,730 Land Acquisition (220, 306, 312,
318, 400 Freel Drive)$1,077,500
Fleet Services Reserve Fund 425,000 Due Diligence prior to closing 15,465
FY 2025/26 Stormwater
Quality Improvements CIP 159,077 Conceptual Design and
Financial Modeling 50,000
Electric Services Rebate 3,000 Final Design 965,715
Solid Waste Alternatives
Program (SWAP) Grants 100,000 Final Design Contingency 75,000
Permitting 36,930.85
Builder's Risk Insurance 25,444
Construction Contracts (as bid)$19,619,767
Previously approved change
orders (1,433,873.37)
Change Order #2 75,764.25
Construction Incentives 100,000
Items by Owner
(FFE/Cameras/Fiber
Network/Tree Clearing)
266,600
Construction Contingency 337,556.97
Construction Inspection (est)75,000
Construction Manager Fee
(Fixed fees plus 2.25% of
contract amounts) (This Council
Action)
958,927.30
Construction Manager General
Conditions Costs (est.) 448,000
R3C Construction Revenue
Subtotal $22,693,807 R3C Construction Subtotal $22,693,807
Electric Utility Fund $2,340,000 Mobile Equipment - New
Transfer Trucks (6x) (actual)$1,230,384
G.O. Bonds $975,000 Mobile Equipment - New
Transfer Trailers (7x) (actual)942,585
Unobligated G.O. Bonds 225,000 Mobile Equipment - Use Transfer
Trailers (3x) (est.)180,000
Staff has been tracking this increased base fee amount in the project budget any time a
change is made with a construction contractor. Change Order No. 1 in the amount of
$209,287.30 will bring the construction contract value up to date to reflect the changes
since the CMA contract was executed. It is very likely that this amount will be revised
again at project closeout to reflect the actual as-built construction costs.
A revised project budget is provided below. The base fee amount is reflected as a part of
the Construction Manager Fee line item in the budget that is shown in the table below:
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Water Utility Fund 40,000 Freel Drive Paving (as bid +
contract admin)$1,102,310
Total Project Revenues $26,273,807 Total Project Expenses $26,149,086
ALTERNATIVES:
1. Approve Change Order No. 1 to Story Construction Co., of Ames, IA, in the amount of
$209,287.30.
2. Do not approve the change order and direct staff to make other modifications to the
project.
CITY MANAGER'S RECOMMENDED ACTION:
The CMA contract includes a base fee that varies depending upon the value of the
construction that is managed by the CMA. At the time of the execution of the CMA
contract, very little design development had occurred and therefore an estimate of the
construction value was used as a placeholder.
Following bidding and value engineering exercises to reduce the cost of the project,
the new construction value requires that a change order be issued to reflect the current
construction value and updated base fee amount. Depending upon the actual final
construction costs at the end of the project, an additional adjustment to the base fee is
likely following the completion of the construction to reflect the final as-built project
value. Staff will continue to track changes to the fee as project changes inevitably
occur and will reflect those in the budgetary table.
This change order does not reflect additional costs due to schedule or completion
dates. The R3C project is currently tracking for substantial completion in spring 2027
and staff is closely monitoring CMA expenditures related to project management and
completion dates. Staff does not believe any adjustments are necessary at this time for
those CMA services.
Therefore, it is the recommendation of the City Manager that the City Council approve
Alternative 1, as described above.
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