Commissioner unanimously approved a change to the city’s construction contract with Swank Enterprises that reduced the cost by $244,655 for the new indoor aquatic center.

The commission awarded the construction contract to Swank in November with a base bid of $17.9 million and an alternate for $354,000 for about 45,000 square feet of new construction, site work such as excavation, new utility extensions, new parking lots, playgrounds and landscaping at 900 29th St. S. in a portion of Lion’s Park.

City reduces construction contract cost for aquatic center

At the time, staff recommended awarding the contract even though it exceeded the project budget.

Under Montana law, city staff can negotiate with the low bidder to get a more competitive price as long as it doesn’t exceed seven percent of the total bid proposed, according to the staff report.

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But the aquatic center is funded in part by a U.S. Defense Department grant, different rules apply and staff couldn’t negotiate prior to awarding the contract, according to staff.

The DoD selected the city for a $10 million grant toward construction of the aquatic center and the city has to match that with $10 million of its own.

The facility will serve Malmstrom Air Force Base and the Montana Air National Guard. The facility will be supported by user fees and those fees have not yet been established but military members and civilians will pay the fees, according to staff.

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Once commissioners awarded the contract to Swank, staff was able to negotiate with the company to “develop a deductive change order reflecting value engineering and other ways to get back within budget,” according to the staff report.

The reduced cost will not change any of the amenities of the facility but affects materials.

Steve Herrig, city park and recreation director; and Tim Peterson, president of LPW Architecture, which is the project design lead, said that staff worked with Swank to go through the contract and find ways to reduce the costs.

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That was a list of about $500,000 in potential reductions, Peterson said.

Then they took those potential reductions to their consultants who offered guidance on where the cuts would not affect the quality or integrity of the structure.

In one instance, the cost rose for roofing materials, but other reducations offset that.

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Herrig and Peterson said that there were some options to cut costs in materials or systems when the consultants told the city team that they didn’t know the lower cost option would be bad, but recommended staying with the original plan.

“There’s nothing in this list that we feel bad about,” Peterson told commissioners.

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Peterson said they’re also seeing significant increases in construction contract costs, so the city got lucky when it bid the project and that contractors were willing to hold pricing as long as they did.

Currently, the total indoor aquatic center project is about $102,000 over budget.

That includes costs already expended, such as the $1.8 million design contract, the $136,860 contract for the water main relocation in Lions Park, and the obligated construction contract.

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Commissioners also voted to approve a professional services agreement with Bannack Group, LLC to explore fundraising and sponsorship opportunities for the project.

The city issued a request for proposals for the sponsorship and fundraising services in December and received three bids.

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Staff selected the Bannack proposal and will pay the company a monthly retainer of $7,500, pro-rated for any partial month. Out-of-pocket expenses for all services, including travel to/from on-site services and expenses related to third-party services, are additional. All expenses will be reimbursed at cost, according to the staff report.

The other two companies that submitted bids were Great Plains Sponsorships out of Sioux Falls, S.D. and Superlative out of Cleveland, Ohio.

Herrig said that Bannack’s proposal offered a flat rate fee, versus the percentage fee from the other two that would have cost the city $250,000 or more.

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The city has set a $1 million fundraising goal to make up for the budget shortfall and hopefully add more amenities into the facility.

Depending on the amount raised, Herrig said he also hopes to create a scholarship fund that would help more people use the facility.

The city used to have such a program that was funded with federal Community Development Block Grant dollars, but the rules of that program changed and it’s no longer available.

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Herrig said the plan is a one-year agreement with Bannack, but it will likely take closer to two years to reach the goal. He said if the city is unhappy with the progress, they can give 60-day notice to cancel the agreement.

Herrig told commissioners that there are no guarantees in fundraising but they’re confident in the potential to raise funds for the facility.

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The Park and Rec department is potentially using funds from the Park Trust and some funds from a land sale to pay Bannack.

Herrig said they’re planning to run the fundraising effort through the Peoples Park and Recreation Foundation.