City Beat: High bids targeted by council member

Derek Lee: Rebidding projects can result in lower project costs.

Ken McClure: Other public entities also experiencing heightened construction costs.

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A member of Springfield City Council raised concerns during the June 24 meeting about the governing body’s acceptance of bids coming in significantly over estimate.

Councilmember Derek Lee raised the issue during the discussion of the first of two council bills to approve bids that were over budget. The first bill was for intersection improvements at Division Street and National Avenue.

“The engineer’s estimate on this one was roughly 30% off,” Lee said. “The next one, it’s over 20% off. These are very large numbers. Between this one and the next bill, we’re looking at $2.75 million over budget.”

The city received two bids for the intersection project, which includes geometric improvements, new signals, pavement improvements, accessibility improvements and railroad improvements.

The low bid – ultimately accepted by an 8-1 vote of council, with Lee voting against it – was submitted by Hartman & Co. Inc. in the amount of $2.6 million, which was 37% above the engineering consultant’s estimate of $1.9 million. The unsuccessful bid, from Radmacher Brothers Excavating Co. Inc., was for $3.6 million.

A bid for the rehabilitation of the historic Jefferson Avenue Footbridge, which spans 13 rail lines just north of Commercial Street, was unanimously approved by council.

The city received only one bid, which was in the amount of $10.8 million from Branco Enterprises Inc. – 23% above the engineer’s estimate of $8.8 million.

“It’s a lot of money,” Lee said, “and it’s not normal to have them as far off as these are off.”

Mayor Ken McClure said if Lee were to check with other public entities in the area, he would find that most are experiencing the same thing.

Lee, a practicing engineer, replied, “So I have checked, and I actually do it myself, and I think that we need to at least pay attention to this in a way that we provide some kind of oversight – some kind of direction. Right now, we’re doing nothing except accept them.”

McClure said he disagreed, and that he looks at the engineer’s estimate for every bid, and if it is over, he asks why. Before putting a project out to bid, the city has one of its engineers or an engineering consultant prepare an estimate of what the project is likely to cost.

“If you want to rebid it, you’re free to make a motion to do that,” he told Lee.

Councilmember Craig Hosmer said he agrees that council should not normally accept bids that are way over the estimate, but the two projects have special circumstances. The footbridge project, for example, includes lead paint removal and capture by workers operating above a functioning railway.

Hosmer pointed out that the first set of bids received for footbridge repairs were considerably lower. Past Springfield Business Journal reporting shows two bids received in 2021 for the bridge work came in at $6.2 million and $6.4 million, more than double the $3 million engineering estimate at the time.

“That’s the problem when you don’t take some of these bids; the prices are only going up, so I think it’s one of those things we have to be careful about,” Hosmer said.

McClure also said the risk of rebidding is that the city ends up paying more on the next bill.

Lee responded, “And also, you rebid projects and they come in less. Both happen, and especially in the case where you only have one or two bidders and they’re 20% or 30% over. It’s not always one direction.”

Lee added that he considers the contractors placing the bids to be highly reputable.

“My only issue is if we’re going to protect taxpayer dollars, I think we need to look at this more,” he said.

McClure said council has final approval over whether to accept bids for city projects, and that’s where it exercises its oversight.

Councilmember Matthew Simpson volunteered the council committee he chairs, Finance and Administration, to take a deep dive into the issue.

Salary agreements
Employment agreements were approved for the 2025 fiscal year for most city workers, with two employment groups still pending.

The city has four bargaining units and five salary schedules for nonunion employees, according to Director of Human Resources Darla Morrison.

At the request of Councilmember Monica Horton, Morrison outlined salary increases granted to employees from fiscal 2021 through 2025, including action from earlier in that night’s council meeting. She noted the aggregate totals factor in workers who are still stepping, and that includes 60%-80% of them.

Morrison said in fiscal 2021, increases were not granted until January, when there was an across-the-board increase of 2%-5%, depending on the employee group or bargaining unit, with additional merit steps for an aggregate increase of 7%-10%.

In fiscal 2022, there were two allocations, in July 2021 and January 2022, and together they represented aggregate increases of 9%-11.5% for the year.

In fiscal 2023, across-the board increases ranged 2.5%-4% with an aggregate of 7.5%-9%.

Fiscal 2024 had across-the-board increases of 2.5%-6.15% for an aggregate of 7%-11.15%.

Approved for fiscal 2025 was 2%-2.25% across-the-board with a 5% merit step bringing the aggregate to 7%-7.25%.

Council also approved an adjustment to the annual percentage cap allowed for increases to the contribution rates on health insurance premiums for city workers. The current annual cap is 4%, and the proposed change would allow an annual increase up to 10% if needed.

Morrison said about three-fourths of employees are on the city’s health insurance plan, with the city picking up 100% of the cost, but about a fourth of employees have dependent coverage, which they pay for fully.

“Additionally, a 5%-10% increase in our premiums is a much different number than a 5%-10% increase in salary,” Morrison said.

Other action items

• A new Department of Economic Vitality and Workforce Development was created by council by merging two offices that were previously separate. The departments “have a uniquely integrated relationship, working closely to achieve a common goal of improving the job market in the city of Springfield and the surrounding areas,” the explanation of the council bill notes. It adds that the integration will create a synergistic approach to the challenges of fostering sustainable economic growth and supporting a skilled, educated and diverse workforce.
• The first reading was held for an ordinance to buy property at 1661 and 1660 N. Boonville Ave. to house the new department along with other agencies. The purchase price is $3.7 million, which is under the appraised value of $4 million. Additional costs for improvements are factored at $2.6 million. The project is to be funded by $4.4 million in general fund carryover and $1.9 million in bond proceeds. Council is scheduled to vote on the ordinance on July 8.
• Council held a public hearing on the annexation of 2.7 acres of private property at 3801 W. Sunshine St. into the city at the request of owners. A vote is set for July 8.
• Agreements were approved to provide shares of the city’s 5% hotel-motel gross receipts tax in the 2025 fiscal year to three agencies: the Springfield Convention and Visitors Bureau Inc., which will receive 47% of tax proceeds to promote travel and tourism within the city; the Greater Springfield Area Sports Commission Inc., with 4.5% of proceeds to attract sporting events to the city; and the Springfield Regional Arts Council Inc., with 4.5% of proceeds to support the arts and cultural tourism in the community. The remainder of the tax proceeds go to pay down debt on existing bonds, including previous improvements along the Jordan Valley Park corridor, according to past reporting.
• An agreement between the city and Missouri State University that has been in effect for 26 years was renewed to provide law enforcement services in and around the MSU campus. The explanation to the council bill shows that the Springfield Police Department will provide 10 law enforcement personnel, and the MSU Board of Governors will pay an amount not to exceed $1.1 million for services, and will also cover uniform, equipment, transportation and training costs, with an e-bicycle provided for each substation officer.
• Council approved an appropriation of $3.4 million from the Clean Water Fund for the construction of the Glenwood Regional Detention and Chestnut Phase II capital improvement project. The project will replace existing sewer mains with larger-capacity sewer mains to enhance stormwater quality of the Jordan Creek watershed.