Detroit Lakes City Council approves $7.7 million city hall remodel project, opening expected spring 2024
Members of the Detroit Lakes City Council approved the construction bid for the $7.7 million city hall remodel project during a special meeting of the council on Oct. 28. The winning bid was submitted by Bristlin Construction of Detroit Lakes and the new city hall is expected to open in spring 2024.
DETROIT LAKES — A $7.7 million city hall remodel project cleared its final hurdle after members of the Detroit Lakes City Council approved the low bid for construction costs during their most recent meeting on Oct. 28.
The low bid of $6.6 million for construction costs was submitted by Bristlin Construction of Detroit Lakes and approved 8-1 by council members with Aaron Dallmann, alderman-at-large, representing the only dissenting vote. An additional $1.1 million of soft costs, like permitting, architectural designs, furniture, A/V equipment and other items, will factor into a total project cost of $7.7 million and the newly remodeled building is tentatively scheduled to open in spring 2024.
"The good news is we had a good response," said Kelcey Klemm, city administrator for Detroit Lakes, during the meeting. "We had six bids that came in ... obviously the issue, even with the good turn out on bids, is that even the low bid is more than we had estimated or budgeted."
City staff initially estimated the total project cost would be about $6.1 million in October 2022, but, due largely to higher material and labor costs, the price tag rose to $7.7 million.
Klemm said that, after discussing the higher than estimated bids with the city finance committee on Oct. 11, they determined they weren't able to carve enough project scope out of the remodel project to make a substantive dent in total cost, and they didn't believe material and labor costs would be drastically different if they chose to rebid the project in the spring.
"We all watch the economic indicators of signs of a potential recession next year and how that will impact the commercial construction market," he said. "I think that a lot of people probably feel that labor (cost) is probably not going to go down."
Aaron Dallmann said he disagreed and believes things are going to get cheaper "down the road," which was one of the reasons he voted against the measure.
"A budget is a budget and we're way over the budget we were initially sold at," said Dallmann. "The priority of a new city hall right now is not of the mind of taxpayers, so for myself, I'm against it."
Ron Zeman, alderman first ward and the chair of the city's finance committee, said he didn't want another public works building situation.
"Six years ago, if we would've built that public works building, which at that time everybody thought was too high, it was going to be about $6.5 million," said Zeman. "Now, we're working with our architect for that project and we're hearing now, by waiting six years, that $6.5 million is now going to be $11 million to $12 million project, so we learned on that, that the more we waited, the more the costs ended up being more than we wanted to have."
The city was able to shave $187,000 off the final price tag of the remodel using less expensive materials for some elements, eliminating part of a privacy fence near McDonald's and also eliminating some additional parking site work. The total project cost also has a $150,000 contingency built into the project budget for unexpected costs and will serve as a buffer to keep the project under budget.
"We've seen steady growth (in Detroit Lakes), and we've had a lot of wear-and-tear on this building, but this building just doesn't serve the needs of our city anymore and our staff," said Zeman. "We just think whether that waiting, and gambling, and hoping that prices are going to go down is anybody's guess."
The remodel project will be paid for using cash-on-hand from a 50/50 combination of Detroit Lakes Public Utility and city liquor funds, as well as an additional $119,000 of the city's American Rescue Plan Act funding for heating, ventilation, and air conditioning upgrades and $223,500 from the city's food and beverage tax fund to cover the parking lot costs.