The Pequot Lakes City Council awarded a $2 million bid for two downtown road projects, but not without lengthy discussion on how best to carry out the improvements without hurting downtown retail business.

The council on Tuesday, Feb. 4, awarded the bid for $2,396,792 for the Rasmussen Road and South Washington Avenue road and utilities improvement project to RL Larson Excavating of St. Cloud. This was the lowest responsible bid of seven the city received.

The council also approved the construction phase engineering services proposal from city engineer Widseth Smith Nolting for $168,000.

The council awarded the bid with the stipulation that discussions be held with the contractor to negotiate doing the work without a detour or similar negative affect to area retailers, even if that possibly includes working at night, which likely would cost the city more money.

Discussion

These road projects will include underground utility work, which will require the Rasmussen Road/Main Street intersection to be closed. Requirement was for that work to be done within five consecutive days with a detour to Gravdahl, Woodman and Government Drive with signs indicating that businesses were open. Local business traffic would be allowed up to the excavation area.

Work would also require closure of the Washington Avenue/Main Street intersection.

However, council member Scott Pederson was adamant that no detour signs be posted during the day or the project not be done until October because he learned from talking to retailers in the area that the closure would be detrimental to their businesses to the point of possibly having to go out of business.

He said the council should consider paying businesses to compensate for money they lose because of roadwork.

“If there are certain requirements that the council wants for us to discuss with them (contractor) … we can bring them up in the discussion and weigh them against the contract, what they bid on,” City Engineer Tim Houle, with WSN, told the council. “We can do it, but it might be X dollars.”

Houle said the contractor had no obligation to enter into negotiations without a contract. If the council awarded the bid, the contractor would provide a schedule and details then could be negotiated. He noted road work is so weather dependent.

“To provide a good price and flexibility, we left the construction window open. But they must wrap up one phase before they can begin another phase. We will have to look at their phasing schedule and discuss it,” Houle said, noting the contractor would likely work with the city, within reason.

Pederson was adamant about helping retailers, to the point of suggesting the project be canceled.

“Their concern is not minimal. Their concern is huge, to the point of don’t do the road,” he said. “Putting up a detour sign is shutting business down in their eyes. … I’d just as soon not have the road done than kill our retail.”

Public Works Director Jason Gorr said he wants businesses to succeed, but he advised the council to be patient and have a conversation with the contractor. He warned against not doing the project, saying that could lead to bigger problems down the road.

“That won’t help any business if we have a failing water line,” he said, noting that puts the city at risk for a colossal, months long business shutdown.

Costs

City Administrator Nancy Malecha is working with the city’s financial consultant, Jason Murray from David Drown Associates, on a preliminary general obligation bond report for the project. Murray will present and review the final report at the March 5 council meeting, and will seek council approval.

In summary, according to a report from Murray, a total of $2.115 million in bonds would be issued to fund sanitary sewer and water system related costs. The total bond payment would be around $160,000 per year for 15 years.

Road costs would be covered with cash contributions from the city’s 2020 budget (about $50,000) and funds the city received when it took over road ownership after the Highway 371 bypass was built ($893,000). Also, Sourcewell in Staples would provide $7,500 for using David Drown Associates.

The average tax levy for the debt is estimated at $86,100 per year for the next 15 years. The city allocated $50,000 to the project in 2020 and 2021, so would need to increase its levy by $36,000 in 2021, and continue to levy the $86,000 per year through 2035 to pay for the project.

Water and sewer funds would need to generate about $84,400 per year starting in 2021 to pay for the project.

Nancy Vogt may be reached at 218-855-5877 or nancy.vogt@pineandlakes.com. Follow her on Facebook and on Twitter at www.twitter.com/@PEJ_Nancy.