Humboldt project approved
Downtown project bids came in higher than estimated, but it will go forward
HUMBOLDT — Despite hesitation, the Humboldt City Council approved the 2019-20 Downtown Revitalization Project, which includes removal of all trees, improvement of storefronts, replacing a stop light with stop signs and converting all lighting to decorative street lamps.
With a 3-1 vote on June 18, only City Council member Joel Goodell voted against accepting a bid from Sande Construction and Supply Co., of Humboldt, for a touch over $1.35 million — 80% above engineering estimates. Council member Mike Worthington was not present.
The bid, shaved down a tad from $1.37 million after negotiation and cost reductions on certain items, beat out a bid from Castor Construction, of Fort Dodge, for about $1.59 million.
“They are engineer’s ‘estimates;’ just their best guess based on various prices,” explained Travis Goedken, Humboldt city administrator. He blames bad weather over the last year in part for the acute inflation of bids from contractors.
“With this being the wettest 12 months on record since 1895, contractors are absolutely backed up,” from a wet, lingering spring and an early winter last year, according to Goedken.
“For them to take on new projects, we’re seeing higher costs,” he said.
Some speculated that rejecting the bids and requesting them at a later time might save the city money, but Goedken rejected that notion.
“The only hypothetical way it could possibly go down is if we rejected bids and put it back out two years from now,” he said. “They’re all playing catch-up and lots of projects are being awarded this year.”
In Humboldt’s situation, he said that wouldn’t work. Sande Construction, present at the meeting when the decision was made, said they would not rebid if their bid was rejected.
“Typically, in that situation, if they reject a bid and rebid immediately with the same plan, you see the low bid come up a little bit and the high bid come down a little bit,” the administrator explained. “You don’t see better prices to award, you just see the numbers get closer to each other.”
He added that contractors take note of which communities are easy to work with, avoiding submitting bids for city’s with an undesirable reputation.
Less agreed-upon aspects of the project, besides the cost cited by Goodell as an objection, included the bump-outs to make cross walks shorter, and the installation of stop signs to replace stop lights.
“That’s common,” he said of the disagreement. “You’re not going to get a unanimous decision on every aspect.”
Current stop lights at the intersection in question have a broken control device that needs to be reset manually every day. Replacement for the control device would cost about $300,000. Of the project’s budget, $200,000 will be earmarked for facade and roof improvements for businesses downtown, available via grant.
The project will be financed through bonds over a 15-year term. The bonds themselves have become a more appealing option for the city, as its financial rating from Standard and Poor’s was upgraded from “A- with a stable outlook” to “A with a stable outlook.” Higher ratings make bonds a more appealing option for investors.
The city’s most recent budget also reduced local taxes by $1.93 per $1,000 valuation, which Goedken said is the result of the city retiring $15 million in debt and an increase in the taxable valuation of its property, due in part to the city’s successful implementation of Tax Increment Financing (TIF) in the past.
The city has seen a total taxable assessed valuation — 100% of the city’s valuation — increase of 2.4% over the last year, to $296.7 million. Taxable valuation itself went from $149 million to $172.5 million.
“We are seeing continued development,” Goedken said optimistically.