RESOURCE RECOVERY AND RECYCLING CAMPUS - CONSTRUCTION MANAGER AS ADVISOR CHANGE ORDER
On September 23, 2025, the City Council awarded a contract in the amount of $1,249,640 to Story Construction Co. for Construction Manager as Advisor (CMA) services for the construction of the Resource Recovery and Recycling Campus (R3C) (Click here to view the September 23, 2025 Council Action). The CMA was brought on board as the design process for the R3C began to aid in constructability review and provide value engineering where appropriate to reduce expenses.
The $1,249,640 CMA contract value is calculated based on four components: 1) A Pre-Construction Services fee ($40,000), 2) Construction Phase Services ($560,040), 3) a Base fee (2.25% of the actual construction value of the project, estimated at $201,600), and 4) General Conditions services (estimated at $448,000).
At the time of contract award for the CMA services, the estimated construction value for the project was $8,960,000, resulting in the Base fee of $201,600. As the design development continued, the project construction scope grew to accommodate the needs of the facility with engineer's estimate prior to bid at $16,821,527. Contracts and change orders for 11 bidders were ultimately awarded following a rigorous value engineering exercise for a construction value of $17,991,996.03. A number of change orders have been approved by staff or City Council bringing the current construction value of the R3C project to $18,261,657.88.
The table below compares the original value of the CMA contract at the time it was approved with the revised amount based on the increased construction cost:
|
Description |
Original Value |
Revised Value |
|
Pre-Construction Services |
$ 40,000 |
$ 40,000 |
|
Construction Phase Services |
560,040 |
560,040 |
|
General Conditions |
448,000 |
448,000 |
|
|
|
|
|
Base Fee (2.5% of construction value) |
|
|
|
Estimated construction value of $8,960,000 |
201,600 |
|
|
Estimated construction value of $18,261,657.88 |
|
410,887.30 |
|
TOTAL |
$ 1,249,640 |
$ 1,458,927.30 |
|
|
|
|
|
Difference |
|
$209,287.30 |
Staff has been tracking this increased base fee amount in the project budget any time a change is made with a construction contractor. Change Order No. 1 in the amount of $209,287.30 will bring the construction contract value up to date to reflect the changes since the CMA contract was executed. It is very likely that this amount will be revised again at project closeout to reflect the actual as-built construction costs.
A revised project budget is provided below. The base fee amount is reflected as a part of the Construction Manager Fee line item in the budget that is shown in the table below:
|
Budgeted Revenues |
Budgeted Expenses | ||
| Revenue Abated G.O. Bonds | $22,006,730 | Land Acquisition (220, 306, 312, 318, 400 Freel Drive) | $1,077,500 |
| Fleet Services Reserve Fund | 425,000 | Due Diligence prior to closing |
15,465 |
| FY 2025/26 Stormwater Quality Improvements CIP | 159,077 | Conceptual Design and Financial Modeling |
50,000 |
| Electric Services Rebate |
3,000 |
Final Design |
965,715 |
|
Solid Waste Alternatives Program (SWAP) Grants |
100,000 |
Final Design Contingency |
75,000 |
|
|
|
Permitting |
36,930.85 |
|
|
|
Builder's Risk Insurance |
25,444 |
|
|
|
Construction Contracts (as bid) |
$19,619,767 |
|
|
|
Previously approved change orders |
(1,433,873.37) |
|
|
|
Change Order #2 |
75,764.25 |
|
|
|
Construction Incentives |
100,000 |
|
|
|
Items by Owner (FFE/Cameras/Fiber Network/Tree Clearing) |
266,600 |
|
|
|
Construction Contingency |
337,556.97 |
|
|
|
Construction Inspection (est) |
75,000 |
|
|
|
Construction Manager Fee (Fixed fees plus 2.25% of contract amounts) (This Council Action) |
958,927.30 |
|
|
|
Construction Manager General Conditions Costs (est.) |
448,000 |
|
R3C Construction Revenue Subtotal |
$22,693,807 |
R3C Construction Subtotal |
$22,693,807 |
|
Electric Utility Fund |
$2,340,000 |
Mobile Equipment - New Transfer Trucks (6x) (actual) |
$1,230,384 |
|
G.O. Bonds |
$975,000 |
Mobile Equipment - New Transfer Trailers (7x) (actual) |
942,585 |
|
Unobligated G.O. Bonds |
225,000 |
Mobile Equipment - Use Transfer Trailers (3x) (est.) |
180,000 |
|
Water Utility Fund |
40,000 |
Freel Drive Paving (as bid + contract admin) |
$1,102,310 |
|
|
|
|
|
|
Total Project Revenues |
$26,273,807 |
Total Project Expenses |
$26,149,086 |
- Approve Change Order No. 1 to Story Construction Co., of Ames, IA, in the amount of $209,287.30.
- Do not approve the change order and direct staff to make other modifications to the project.
The CMA contract includes a base fee that varies depending upon the value of the construction that is managed by the CMA. At the time of the execution of the CMA contract, very little design development had occurred and therefore an estimate of the construction value was used as a placeholder.
Following bidding and value engineering exercises to reduce the cost of the project, the new construction value requires that a change order be issued to reflect the current construction value and updated base fee amount. Depending upon the actual final construction costs at the end of the project, an additional adjustment to the base fee is likely following the completion of the construction to reflect the final as-built project value. Staff will continue to track changes to the fee as project changes inevitably occur and will reflect those in the budgetary table.
This change order does not reflect additional costs due to schedule or completion dates. The R3C project is currently tracking for substantial completion in spring 2027 and staff is closely monitoring CMA expenditures related to project management and completion dates. Staff does not believe any adjustments are necessary at this time for those CMA services.
Therefore, it is the recommendation of the City Manager that the City Council approve Alternative 1, as described above.