DEPARTMENT: Environmental Resources
FILE TYPE: Regular Action
TITLE
title
Authorization To Execute Third Contract Amendment With The Boldt Company For Construction Manager/General Contractor Services For Phase II Of Byllesby Dam Water-To-Wire Development Project And Amend Total Project Budget
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PURPOSE/ACTION REQUESTED
Authorize execution of a contract amendment with The Boldt Company, for the Byllesby Dam Water-To-Wire Development Project and amend the total project budget.
SUMMARY
Dakota County owns the Byllesby Dam and operates its high-hazard hydroelectricity facility under the Federal Energy Regulatory Commission (FERC) safety regulations. Over the past decade, the Dakota County Board of Commissioners has approved significant capital investments into the project for FERC-required dam safety improvements. By Resolution No. 15-532 (October 20, 2015), the Dakota County Board of Commissioners authorized staff to execute a contract for preliminary design tasks on a turbine upgrade project to replace the existing century-old equipment in the dam.
To complete this project, County staff developed a team including an engineering consultant to provide project design, a turbine manufacturer to provide turbine and generation equipment in a complete package (e.g., water-to-wire equipment), and a general contractor for installation of the equipment and modification to the powerhouse structure.
Due to the complexities in the design, construction, and installation of the water-to-wire facilities, including new turbines and generators to maximize the electric power output of the dam in the future, staff concluded that the standard low bid methodology of awarding the construction contract was not appropriate and was unlikely to provide the best value to the County. By Resolution No. 18-538 (October 23, 2018), in accordance with the authority granted in Minn. Stat. § 130G.535, the County Board approved utilizing a special type of contractor relationship that provides both construction management and general contractor services on the project and allows staff to develop and solicit a request for qualification for services.
By Resolution No. 19-773 (October 29, 2019), the Dakota County Board of Commissioners authorized the execution of a contract with The Boldt Company to perform Construction Manager/General Contractor Services related to the redevelopment of the site for the project. By Resolution No. 21-368 (July 20, 2021), the County Board authorized the execution of a contract with The Boldt Company to perform Construction Manager/General Contractor Services for Phase II of the development project. By Resolution No. 22-286 (July 19, 2022), the County Board authorized the first amendment to the contract, bringing the total contract value to a not-to-exceed amount of $22,652,875.42. By Resolution No. 24-247 (May 21, 2024), the County Board authorized the second amendment to the contract, bringing the total contract value to a not-to-exceed amount of $26,335,502.01.
The requested third contract amendment with The Boldt Company in the amount of $1,300,000 is necessary to cover costs associated with dam safety, electrical and mechanical supporting components, site work, and high voltage interconnection work associated with selling power on the open market to increase dam revenues.
The amendment encompasses several specific cost items: the replacing of a portion of the safety wall adjacent to the river that was removed to install the coffer dam; increased costs with the completing high-voltage work required for the system interconnection; paving of the parking lot adjacent to the powerhouse, essential to mitigate long-term maintenance concerns; and the replacement of a faulty high-pressure piping system linked to the generators.
The requested third contract amendment, upon approval, will bring the total contract value to a not-to-exceed amount of $27,635,502.01 and will prevent delays in the commissioning process
In addition, a project amendment request is needed to satisfy project encumbrances exceeding the total project budget. Currently, the total project encumbrances equal $49,246,364.84 (including contingency) with a previously approved budget of $48,131,436.00, resulting in an exceedance of $1,215,948.81. These encumbrances include items related to substation material procurement, interconnection costs, electrical design, and site improvement/equipment management costs and are not related to the Boldt Construction Contract.
The exceedance of the overall project budget was identified during a budget reconciliation conducted through the County’s new Enterprise Resource Planning (ERP) system. This reconciliation, which reviewed ten years of project expenditures from 2014 to 2024, revealed a discrepancy in the total project costs between the legacy system and the newly implemented ERP.
Upon approval of the third Boldt contract amendment, and the project amendment, the project budget will total $50,546,364.84.
The remaining project schedule includes the completion of high-voltage interconnection work, replacement of the high-pressure piping system, and final site work. Both the high-voltage interconnection and the piping system replacement are critical items essential to the testing and commissioning timeline. As currently proposed, testing and full commissioning are anticipated to occur in October 2025.
RECOMMENDATION
recommendation
Staff recommends approval of the proposed contract amendment and an amendment to the overall project budget.
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EXPLANATION OF FISCAL/FTE IMPACTS
The Adopted 2025 Byllesby Dam Capital Improvement Program includes a total budget of $48,131,436 for the Byllesby Dam Water-to-Wire project. A budget amendment is requested to cover the needed contract amendment to finish the project.
☐ None ☐ Current budget ☐ Other
☒ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, by Resolution No. 15-532 (October 20, 2015), the Dakota County Board of Commissioners authorized staff to execute a contract for preliminary design tasks on a turbine upgrade project to replace the existing century-old equipment in the dam; and
WHEREAS, to complete this project, County staff developed a team including an engineering consultant to provide project design, a turbine manufacturer to provide turbine and generation equipment in a complete package (e.g., water-to-wire equipment), and a general contractor for installation of the equipment and modification to the powerhouse structure; and
WHEREAS, due to the complexities in the design, construction, and installation of the water-to-wire facilities, including new turbines and generators to maximize the electric power output of the dam in the future, staff concluded that the standard low bid methodology of awarding the construction contract was not appropriate and was unlikely to provide the best value to the County; and
WHEREAS, by Resolution No. 18-538 (October 23, 2018), in accordance with the authority granted in Minn. Stat. 130G.535, the County Board approved utilizing a special type of contractor relationship that provides both construction management and general contractor services on the project and allows staff to develop and solicit a request for qualification for services; and
WHEREAS, by Resolution No. 19-773 (October 29, 2019), the Dakota County Board of Commissioners authorized the execution of a contract with The Boldt Company to perform Construction Manager/General Contractor Services related to the redevelopment of the site for the project; and
WHEREAS, by Resolution No. 21-368 (July 20, 2021), the County Board authorized the execution of a contract with The Boldt Company to perform Construction Manager/General Contractor Services for Phase II of the development project; and
WHEREAS, by Resolution No. 22-286 (July 19, 2022), the County Board authorized the first amendment to the contract, bringing the total contract value to a not-to-exceed amount of $22,652,875.42; and
WHEREAS, by Resolution No. 24-247 (May 21, 2024), the County Board authorized the second amendment to the contract, bringing the total contract value to a not-to-exceed amount of $26,335,502.01; and
WHEREAS, the current amendment in the amount of $1,300,000 is necessary to cover costs associated with dam safety, electrical and mechanical supporting components, and high voltage interconnection work associated with selling power on the open market to increase dam revenues and reduce the project payback period; and
WHEREAS, staff recommends execution of a third contract amendment with The Boldt Company, bringing the total contract amount to $27,635,502.01 and including an amendment of the overall project budget in the amount of $2,414,929, bringing the total project budget to $50,546,365.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Physical Development Director to execute a third contract amendment with The Boldt Company to provide Construction Manager/General Contractor services for Phase II of the Byllesby Dam Water-To-Wire Redevelopment Project in the amount not to exceed $27,635,502.01 and amend the overall project budget, totaling $2,414,929 subject to the County Attorney’s Office as to form; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby amends the 2025 Byllesby Dam Capital Improvement Program Budget as follows:
Revenue
Environmental Legacy Fund $2,414,929
Total Revenue $2,414,929
Expense
Byllesby Dam Water-to-Wire (BD0008) $2,414,929
Total Expense $2,414,929
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PREVIOUS BOARD ACTION
15-532; 10/20/15
18-538; 10/23/18
19-773; 10/29/19
20-319; 07/14/20
21-368; 07/20/21
22-286; 07/19/22
23-524; 11/28/23
24-247; 5/21/24
ATTACHMENTS
Attachment: Presentation Slides
BOARD GOALS
☐ Thriving People ☒ A Healthy Environment with Quality Natural Resources
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Nikki Stewart
Author: Cole Johnson