The Cambridge City Council has awarded the bid for the 2020 street improvement project, although there is a small, unique glitch that might make the project trickier to fund.
During the April 20 city council meeting, the council approved awarding the bid to Douglas-Kerr Underground, in the amount of $5,265,560.65. According to City Engineer Todd Blank, this bid came in under the engineer’s estimate by approximately $400,000 and was the lowest bid among the four received.
In his presentation to the council, Blank said the city has done business with Douglas-Kerr, who is based in Mora, before.
“They replaced the Garfield lift station and they completed the 2014 street improvements,” Blank said. “They did a nice job on those projects.”
During normal years, once the council approves the bid, a bond would be issued to the city for payment. With the financial uncertainty surrounding the COVID-19 pandemic, however, Mayor Jim Godfrey asked if that would now be a sticking point.
Finance Director Caroline Moe said she doesn’t expect there to be too major of problems, but if there was, the city does have alternatives.
“I have had some feedback from Ehlers (Finance Advisors) and they are having okay sales of bonds,” Moe told the council. “If we do get poor results on bond prices, we can temporarily postpone and go to market on a different day. So I do believe we are in good shape to proceed at this point.”
Even in a worse-case scenario, Moe said the city has enough money on hand to prevent the postponement of the project. Plus they could take out a loan with a private, local bank.
“Banks are more interested in placing loans at this time because they’re not able to lend as much because their offices are closed,” she said. “So that’s our backup plan.”
The brunt of this year’s street improvement project will be on 16th Avenue SE, from Old South Main Street to South Roosevelt Street. It also includes South Main Street to just beyond Cambridge Christian School. The council also added a mill and overlay of South Main Street from 3rd Avenue SW to 24th Avenue SW to fix the recurring pothole problem along that stretch. That work will begin this Monday, May 4. Finally, parking lots at the new library, Peterson Park, and an addition to the pickleball courts in Central Greens will be done.
Financial preparations due to pandemic
Also at the meeting, the council approved making budget revisions in order to help keep the city as financially stable as possible in light of the pandemic.
“Due to the economic uncertainty arising out of the COVID-19 pandemic, we recommend the city take swift action to continue its strong financial position in order to ensure that essential services may be maintained,” Moe said.
Moe said the main impact to the city that might occur is an increase in tax delinquency, with possibly up to 15% of the taxes coming in on time. This would create an approximate shortage of over $678,000.
“We hope that wouldn’t happen, but these are very unusual economic times and we want to make sure we are making a good first step on how we would address it,” Moe said.
There may also be another decrease of over $110,000 from reduced building permits, plus the Cambridge-Isanti School District canceled their School Resource Officer contract since all schools have been forced to go to distance learning.
To overcome this deficit, Moe recommended the city delay the City Hall and Cambridge Mall’s roof replacement project, which had over $629,715 already budgeted. The city will also put off the replacement of street light poles, which will save an additional $80,000. Finally, the city will increase the money they receive from Northbound Liquor by $150,000.
“We normally end up on a regular year with $150,000 (in profits) more than what we take for the general fund,” Moe said. “They are having an unusual amount of revenue at this point, so we believe we will be able to pull at least $150,000 more to the general fund.”