The Finance Committee met 08/22/2022. They started the meeting out by voting on 5 different requests to reject bids for various projects.
- The 2022 Telulah Pavilion Renovation Project – The city had budged $200,000 for the project but the lowest bid was $220,187
- The Appleton Wastewater Treatment Plant F1-Building Remodeling Project – The city had budgeted $300,000 but the only bid they received was for $631,600
- The 2022 Appleton Red Ramp Elevator Upgrades Project – The city had budged $275,00 but the lowest bid was $724,500
- The Appleton Wastewater Treatment Plant 2022 Asbestos Remediation Project – The city had budgeted $125,000 but the only bid was for $173,086
- The 2022 Appleton Wastewater Treatment Plant H & J Buildings HVAC Upgrades Project – The city had budgeted $250,000 but the lowest bid was $302,200
They also approved an amendment to the Wastewater Treatment Plant’s F-1 Building Remodeling Project Engineering Services contract with McMahon, increasing the total contract amount by $20,000 from $24,500 to $44,500
They voted on each of these items separately but Director of Parks, Recreation, and Facilities, Dean Gazza, spoke about them altogether instead of separately.
He told the committee that 5 bids at one time was more than he had ever rejected during his entire 17 years working for the city.
The typical process for a project was to start the year out with the projects that were approved in the Capital Improvement Plan budget, spend the first part of the year designing those projects, then later in the year get bids on those designs with the hope of wrapping the projects up by the end of the year.
In terms of why all 5 of these bids came in high, he couldn’t speak for the contractors themselves, but he said in some cases it appeared their schedules were tight which increased the costs or there were inflationary costs. There were however some things he couldn’t wrap his head around, in particular the elevator project.
He said they had received a very solid number from contractors that they should budget $350,000. That was also a solid number based on the city’s experience with replacing elevators. To have both the bids come back and over double that was a shock.
Director Gazza said, “It’s not excusable to me […] And there’s no way I can move forward in good faith—not even transferring money from another project to try to make any of these projects happened. I just can’t do that.”
He preferred to reject the bids and reassess the projects. They would likely take a different approach with each of the projects. In the case of the Red Ramp elevator, they would sit down with the company and asked them to explain why the bids came in so much higher than the $350,000 the city was initially told.
He also noted that some of the other projects only had one bidder and those companies were aware when they were the only bidder. He hoped that contractors would not inflate their bids because they were the only company bidding on the project, although he was not saying that was what happened in this situation.
Alderperson Denise Fenton (District 6) asked if there were any safety issues with delaying the Red Ramp elevator project and the asbestos remediation project.
Director Gazza responded that there was not. They wanted to replace the elevator due to its age and condition but there were no safety issues other than dependability. Instead of replacing it, they would continue to try to extend its life.
The asbestos they wanted to remediate was not exposed. The city had an inventory of asbestos within city owned properties. All of the asbestos that could be reached had already been removed. The only remaining asbestos was unexposed, and they only removed it when it became accessible due to a project. In this case, it was under tile floors and when the city removed the tile floor, they would have the remediation performed before replacing the tile. [So, it sounded like they would just hold off on replacing the tile floor until asbestos remediation became more affordable.]
None of the committee members had any further questions, but Alderperson Brad Firkus (District 3) commented that rejecting these bids made sense because some of the projects were only bid on by one company or the bids were far above what was reasonably expected.
The committee went on to vote 5-0 to reject each of the bids.
They also voted on a request to amend the Wastewater Treatment Plant’s F-1 Building Remodeling Project Engineering Services contract with McMahon, increasing the total contract amount by $20,000 from $24,500 to $44,500.
Director Gazza explained that this contract was somewhat related to the Appleton Wastewater Treatment Plant F1-Building Remodeling Project that the committee had just voted to reject a bid on. During the design phase of the project some additional structural and electrical issues had been discovered. The city wanted to move forward with the design of those additional issues even though they weren’t approving a contract to actually implement the design at this time.
The committee voted 5-0 to approve the contract amendment.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=980107&GUID=F933AB1F-3265-49E9-8B04-50891A61DEA2
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