The Silver Bay City Council has approved a bid for the three building improvement projects slated for this summer despite the lowest bid coming in nearly $200,000 over the engineer's highest estimate.
The roofs of City Hall, the public works shop and Silver Bay Municipal Liquor Store are due for replacement, along with a few other repairs and changes.
Joe Rhein of the city-contracted engineering company Bolton and Menk explained the bids during the council meeting Monday, May 20. The projects received five bids, which were fairly close to each other in price. The lowest bid for the three projects, from Kaski Inc., came in at $1 million, compared to the engineer estimates of $800,000-$866,000.
Rhein attributed roofing costs for the high bids.
"We're seeing that the roofing costs are really unusually high right now," Rhein said. "In fact, the building that was strictly a straight roof replacement, the liquor store, came in the farthest over its estimate."
The liquor store, slated to have its old ballasted roof system replaced with an adhered rubber membrane roof, was estimated to cost about $87,000. The bids for the replacement came in at $169,000-$234,000.
Rhein said he reached out to the bidders to ask why the prices were much higher than estimated and received some feedback about the current bidding market.
"They referenced that right now there's a really strong economy and there's a lot of work out there," Rhein said. "Contractors can be selective in the jobs they're going after and selective with the prices they're putting on jobs."
The other thing that's influencing the market in the region right now, is the new $800 million Essentia campus project in Duluth.
"Three of the bidders mentioned that this project is going to influence the bids on the building trades here for the next 8-12 months," Rhein said. "We asked, 'If we were to reject the bids and rebid next spring, would it lower prices?' One said it might, the rest said they'd have to increase their prices."
"It's not going to get any cheaper. That's what it comes down to," councilor Richard DeRosier said. "These projects aren't going to get completed by themselves. Holding out isn't going to do us any good. The costs will continue to go up, the roof will continue to leak and it's going to dribble into some piece of electronics and then we'll have to buy that, too."
The councilors voted unanimously to approve the bid from Kaski Inc.; councilor Carlene Perfetto was absent.