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Airport Terminal Project May Be In Jeopardy

By Staff | Sep 12, 2008

Emmetsburg Municipal Airport received grant funds of $72,946 from Palo Alto County Gaming Development Corporation to assist in the construction of a new terminal building. The grant was based on engineer estimates of just over $97,000 for the project.

At the Sept. 2 bid letting only one bid had been submitted and that was for $118,525 submitted by Gramowski Construction. A project over $100,000 could put the project in jeopardy.

“My recommendation is to award the bid, contingent upon Palo Alto County Gaming Development Corporation (PACGDC) funding the bid at $72,946,” said City Administrator John Bird. “The city would fund the difference.”

Bird had explained to the council that plans and specs were sent out to 14 local contractors and building centers, in addition to publishing the legal notice on a bid letting. He noted that some contractors told him there was not enough time to submit a bid and the bid letting date was then set back two weeks.

“I don’t believe it was the time span that limited it to one bid,” said Bird. “Contractors are busy and that’s good for Emmetsburg.”

Bird also told the council that there may be a problem with PACGDC funding a project of over $100,000 at 75-percent.

“I prefer being open and up front,” said Bird. “The bid came in over budget. It’s better to be up front and let them know that.”

Mayor John Schad was not present at the meeting, but had submitted a Mayor’s Report which was read by the Deputy City Clerk. In his report, Schad said, “Mr. Bird has indicated that he wants to request that the non-profit waive their rules capping a project with 75% funding at a maximum of $100,000. The city would drop to a 50% grant if the project exceeds that amount, unless those rules are changed… If they did not, the city would have to foot the bill for half the construction costs instead of 25% of the costs.”

Bird told the council that the project could be shrunk to come in under $100,000.

Mayor Schad also commented on the fact that the sole bid for the project was submitted by councilman Corey Gramowski.

“Corey…had every right to submit a competitive bid on the project. He is legally not in any conflict of interest situation…My concern is that the city had received objections that contractors were given the specs too late…” Schad wrote in his report.

“Realizing that we were trapped in a bad situation due to the slowness of the FAA to approve the plans, I suggest that we can resolve both issues by rejecting all bids and asking for another round of bids, this time itemized so that the city can pick and choose various components of the project to complete the work as specified by the non-profit, but to insure that the work will come in under the $100,000 cap… This approach also gets the city off the hook of having only one bidder, a member of our council. All contractors will be given a second chance to bid. If only one bids in the future, we can point to a substantial effort made by the city to attract more bidders.”

The city administrator addressed the suggestion of a conflict of interest with councilman Gramowski bidding on the project, citing Iowa Code 362.5 “Interest in public contract prohibited – exceptions.”

The code states “A city officer or employee shall not have an interest, direct or indirect, in any contract or job of work or material or the profits thereof or services to be furnished or performed for the officer’s or employee’s city. A contract entered into in violation of this section is void. The provisions of this section do not apply to:”

subsection 4 – “Contracts made by a city, upon competitive bid in writing, publicly invited and opened.”

subsection 5 – “Contracts in which a city officer or employee has an interest solely by reason of employment, or a stock interest of the kind described in subsection 9, or both, if the contract is for professional services not customarily awarded by competitive bid, if the remuneration of employment will not be directly affected as result of the contract, and if the duties of employment do not directly involve the procurement or preparation of any of the contract.”

Bird said, “In layman’s terms, Gramowsk Construction had every right to submit a bid.”

“No one is saying it was a conflict of interest,” said council representative Pam Smith. “Can’t there be some kind of compromise? Can’t we change the scope of the project?”

Bird pointed out if the project was re-bid, it would push back construction of the project. He noted that the money has to be spent by the end of February to meet grant specifications.

The city administrator proposed sending a letter to Palo Alto County Gaming Development Corporation explaining the situation. The letter given to council representatives for their approval addressed the fact that the bid came in over the proposed estimate.

“It is no secret that the cost of construction materials have been inflated drastically over the past year, and I believe that the disparity between our estimates from last fall and the bid obtained this week is evidence of that fact,” Bird wrote in the letter.

The letter requested that PACGDC continue to support the airport terminal building project with grant funds of $72,946 and the city would commit the additional funding to complete the project. Bird noted that the grant funds would actually assist with 61.5% of the total cost instead of the anticipated 75%.

Emmetsburg City Council voted unanimously to award the bid to Gramowski Construction for the airport terminal building project, contingent upon the letter being sent to Palo Alto County Gaming Development Corporation and their decision.