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Page 2 of 2 wastewater annual charges or can be invested into the City’s sanitary sewer system towards the elimination of I/I. If the City elects to invest in its sanitary sewer system to eliminate I/I and “pay off” the surcharge, it has four years to do so. A summary of the three surcharges the City has been assessed is as follows: Date Meter Shed Overage Surcharge June 21, 2013 051 0.38 mgd $154,660* June 19, 2014 051 0.46 mgd $190,900 June 19, 2014 054 0.28 mgd $116,200 $461,760 *$67,508.02 has been completed with 2013 sewer lining project. 2015 is the second of the four years needed to “pay off” the 2013 surcharge, and it is the first year for both of the 2014 surcharges. All of the proposed improvements in the 2015 project are in meter shed 051 so they would go towards the 2013 surcharge first and the 2014 meter shed 051 surcharge second. It is important to note that only a portion of the cost (approximately 50%) of sewer lining goes towards reduction of surcharges. The City did apply for the latest round of MCES grants for I/I reduction. This is the third time this program has been offered through funding from the Legislature. The program has been changed this year. In the past two programs, cities were awarded a maximum grant. If too little city-funded work was completed to use all of the allotted funding, the unused funds were forfeited. This year, each applicant was awarded a minimum amount and any leftover funding will be distributed at the end of the program based on the amount of work each city has completed. Arden Hills’ initial award is $37,295.31. The 2015 Capital Improvement Program (CIP) contains an item for I/I reduction in the amount of $400,000 (a copy of the CIP detail sheet is attached). When the CIP amount and the MCES grant are added together, the total bid is approximately $60,000 over the budgeted amount. Staff would recommend still awarding the entire contract (base bid plus all alternates) for a couple of reasons. First, with the surcharge amounts due over the next several years, a significant investment in the sanitary sewer system will need to be made beyond the 2015 project. Next, the bids received were very competitive; there is the potential for increase grant monies at the end of the program by doing more work; and finally, by doing more work up front in meter shed 051, it reduces the likelihood of overages in the future which would lead to more surcharges. Attached is Resolution 2015-026 Awarding the Contract (base bid plus all alternates) to Hydro- Klean LLC of Des Moines Iowa. Staff would recommend adoption of Resolution 2015-026. Attachments Attachment A: Project Exhibit Attachment B: Bid Tabulation Attachment C: Bid Results Attachment D: CIP Detail Sheet Attachment E: Resolution 2015-026