Faced with adopting a $666,490 general fund deficit budget, the Cody City Council has rescinded a street overlay project awarded last month to Wild West Construction.
The expected savings of $150,000 will carry over to fiscal year 2019-2020 that starts July 1.
Not everyone on the council supports the action. In a 4-2 vote June 4, Jerry Fritz and Justin Baily cast no votes while Mayor Matt Hall, Glenn Nielson, Heidi Rasmussen and Diane Ballard voted to rescind the council’s May 7 19th Street Overlay Project award to Wild West.
Due to conflict of interest, council president Landon Greer left the room during discussion and the vote.
Fritz explained his objection.
“We notified the contractor he was the low bidder,” he said. “We went through the process … Now we tell them there’s no award for the project.
“It’s a bad way for us to do business if we start to rescind projects.”
If the city puts it off, the project cost will increase, he added.
An official notice of award had not yet been issued to Wild West for the project.
‘A budget thing’
Phillip Bowman, public works director, said he and city administrator Barry Cook informed owner Bill Sheets about the budget workshop discussions, which resulted in the city’s decision to cancel the project.
He said they do not expect Wild West to oppose the decision.
Sheets did not attend the council meeting. When contacted by phone afterward, the longtime Cody business owner chose not to comment.
The city’s bid documents contain the statement: “Award of bid is subject to budget appropriation for this purchase.”
The project is not included in the city’s proposed $9.98 million general fund budget now undergoing the three-reading approval process.
Bowman said the project would likely be included as a capital infrastructure project on a 1-cent specific purpose sales tax wish list for future consideration by Park County voters.
“I know it’s a budget thing,” Baily said before voting no. “But it’s kind of shady in my opinion.”
Wild West’s bid award started out as part of an extraordinary situation after Greer, owner of Quality Asphalt Paving, and Sheets each bid on similar street paving projects: one on 19th and the other on Sunshine.
“In a unique outcome, the bids received from both companies on both projects were for the exact same amount and were deemed by city staff and the city attorney to be equal,” Bowman wrote in a May 7 agenda summary.
The city would provide some labor, all materials and the asphalt; therefore bids were sought from contractors only for equipment and labor for paving because the city doesn’t own a paving machine.
Each contractor bid 85 cents per square yard for 2 inches of pavement placement and rolling 19th and $1.25 per square yard to put down 3 inches of asphalt on Sunshine.
“It was a surprising outcome,” he said.
Both contractors agreed to draw a name from a hat to determine which contractor would receive the larger 19th Street project, Bowman said. The bidder not drawn was awarded the Sunshine Avenue Paving Project.
At the May 1 draw, with the contractors and city staff present, Wild West was drawn for the 19th Street project, leaving the Sunshine Avenue project for Quality Asphalt.
“The city attorney is confident it was done in a fair way,” Bowman said at the May 7 council meeting.
Councilors awarded the $11,825 bid to overlay 19th from Big Horn to Sheridan to Wild West and authorized Cook to sign contract documents. In a separate motion, they awarded a $6,458 contract to Quality Asphalt to pave Sunshine Avenue from Heart Mountain to 11th.
The votes were unanimous, and Greer recused himself from each vote.
In June 2018, both paving projects were approved as part of the FY 2018-2019 budget.
According to Bowman, bids received this spring on both projects were in line with amounts budgeted to complete them. Before an exceptionally cold and wet spring delayed work, the plan was to finish both before July 1. Funds from unfinished projects are carried forward to the next year’s budget.
During special budget work sessions May 14-16, council members instructed him to analyze potential cost savings in the current budget as a way to increase reserves by June 30.
Those savings would then help offset the general fund deficit anticipated in the proposed FY 2019-2020 budget, Bowman said.
The public works director presented 19th Street as the project to cancel for a few reasons.
Bowman said this would save $163,904 since project expenses had not yet been incurred – mainly the purchase of asphalt and other materials. Plus the magnitude of the 19th Street project is bigger, and consequently deemed as an appropriate 1-cent sales tax funded project, he said.
The Sunshine project combines waterline replacement with street paving. Bowman said by the time the council’s request was made, the city had already started working on the project.
“That wasn’t really a good candidate to remove and not do the project, given the combination paving and waterline work,” he said.