SCC Item 1. South Central Water Treatment CMAR Delivery Water Utility Project UpdatesP05409-2024-005 Page 1 of 1
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TECHNICAL MEMORANDUM
To: Adam Flaherty, Otsego City Administrator
From: Scott Schaefer, AE2S Engineer
Re: Council Study Session: Drinking Water Updates and South Central Water
Treatment CMAR Selection
Date: October 9, 2025
The City of Otsego has been growing steadily, and the City’s drinking water capacity is expected
to require expansion by 2029 at current rates of residential growth. The South Central wellfield
and related South Central Water Treatment (SCWT) is the next phase of planned addition to
drinking water capacity. The Construction Manager at Risk approach has been selected to
deliver the SCWT Project. A Council study session presentation will held on October 13th, 2025
and will include the following:
·General information about the CMAR process
·Background information about the CMAR process in Minnesota, including relatively
recent legislative changes
·Use of the CMAR approach for drinking water and wastewater treatment projects in
Minnesota and the region
·Details about the CMAR procurement process for the South Central Water Treatment
project
o Schedule / Milestones
o Current Status
·As time allows, overview information about the broader Otsego Drinking Water system.
The focus of the presentation will be the South Central Water Treatment project and the related
CMAR selection process. It is anticipated that ample time will be available for questions and
answers. The secondary goal of the meeting will be to inform about the status of other drinking
water projects. Note that a more detailed Capital Improvement Plan discussion is planned for
later in October.
SCC Item 1.
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20251SCWT – CMAR RFP & ScheduleDrinking Water Utility UpdatesPresented by: Advanced Engineering and Environmental Services, LLC (AE2S)October 13, 2025Council Study SessionSUMMARY OF TOPICS•CMAR General Info•CMAR in Minnesota•South Central Water Treatment – CMAR RFP•Schedule / Milestones•Current Status•General Drinking Water System Updates12
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20252AGENDACMAR General InfoPROJECT DELIVERY: CMARPublishRFQShortlistAt Least Two Qualified RespondentsIssueRFP•RFP must identify scoring/evaluation method•May require interviewNegotiate ContractRoles & ResponsibilitiesPreserve right to move to next CMAR or even move to DBB•Construction Manager at Risk (CMAR) •State statute updated in 2023 •Many advantages for vertical infrastructure (water treatment)•Well drilling via design-bid-build34
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20253PROJECT DELIVERY: CMAR – WHY? Reference: “MacLeamyCurve” from the Construction Users Roundtable’s “Collaboration, Integrated Information, and the Project Lifecycle in BuildingDesign and Construction and Operation” (WP-1202, August, 2004)”Why CMAR for Water Treatment Projects?•Complex projects have additional opportunity for cost savings (get more bang for the buck)•Treatment equipment does not always have an “or equal”•Low bid is not always the “best”•Opportunity to control costs earlier in the project cycle•Better ability to mitigate project risks•Still maintains competitive bidding for work packages•Maintains a separation between the engineer and the contractor – both working directly for the owner 56
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20254DBB & CMAR POTENTIAL SCHEDULEContractor involved at 30-60% DesignAGENDACMAR in Minnesota78
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20255CMAR Project Examples (Minnesota)*Woodbury Temporary WTPs delivered under “emergency” declaration prior to Minnesota Statute update. Project LocationProject TypeConstruction Cost Estimate (million$)CMAR RFQ DateAnticipated Construction Completion DateShortlistOther RespondentsAlexandria (ALASD) Wastewater $75 February 2024 December 2028Rice Lake, PKG A&P, McGoughRochester Wastewater $91 February 2024 December 2026A&P, Rice LakeAurora Wastewater $13 February 2024 October 2026Magney, Shank, Rice LakeInternational Falls Water $12 August 2024 Spring 2027Rice Lake, A&P, McGough Lakehead, K-AVirginia (St Louis County) Wastewater $18 March 2024 December 2026Rice Lake, A&PMonticello Water $35-$55 March 2025 August 2028Rice Lake, Magney M&JWoodbury Temporary PFAS x3* Water $6, $1, $3 January 2020 June 2020Rice Lake, Magney, A&PSilver Bay Water $8 to $10 September 2024 August 2027Magney, Lakehead, Rice LakeHutchinson Wastewater $5 November 2024 March 2026Rice Lake, ShankRed Rock Rural Water Water $6 November 2022 June 2025Rice LakeAitkin Wastewater $6 March 2025 Fall 2027Rice Lake, LakeheadHibbing Water $9 February 2023 December 2025Rice LakeSt Peter Wastewater $9-$21 January 2025 August 2027Rice Lake, ShankRed Rock Rural Water Water $2 May 2025 July 2026 TBD TBDCMAR Project Examples (AE2S)Minnesota:•Woodbury Temporary PFAC WTP•Monticello WTP (currently in design)South Dakota:•Pierre WTP and Intake Improvements•Sturgis WRRFNorth Dakota:•Grand Forks WTP•Grand Forks WWTF Phase 2•Fargo Effluent Reuse Facility (ERF) 2.0•Watford City WWTF Phase 2Utah•Deer Creek, UT Intake Project•Eagle Mountain WWTF Expansion (currently in selection process)Montana•Kalispell Dewatering Improvements (currently in design)910
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20256AGENDASouth Central Water Treatment –CMAR SelectionGoals of the CMAR RFQ/RFP Stages•CMAR RFQ Stage Goal: Receive qualifications and narrow to a shortlist of candidates (two or three) •CMAR RFP Stage Goal: •Competitive bidding for preconstruction, overhead, and profit costs •Work through contract terms and conditions during selection•Select based upon a mix of quantitative and qualitative•Ultimate Goal: Recommend a CMAR 1112
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20257South Central Treatment – Overall ScheduleQ2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Design BiddingBiddingAdvertiseConstructConstructConstructPreliminary Design Final DesignTest Well ConstructEasements DesignWellsWater TreatmentCMARPipelinesActivityScopingDesign PhaseYear2025202620272028PWSCCouncilReviewApprovalEngineering AgreementReviewSpecial Session / Approval CMAR SelectionInterviewCMAR AdApprovalApprovalCMAR GMPWells Ad/BidReviewApprovalReviewSite PlanningReviewNote: The actual meetings schedule will develop with project progress, and topics will be combined to the extent practical, particularly in 2025. Pipelines Ad/BidApprovalReviewRibbon Cutting!CMAR Procurement: RFQ SCHEDULEComplete1314
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20258CMAR SOQs and Short List•SOQs Received from:•Journey Construction•Magney Construction•Rice Lake Construction Group•Shank Constructors•Selection Committee Recommended Shortlist: •Rice Lake Construction Group•Magney Construction•Journey Construction•Council Meeting – Issuing the RFP to shortlisted candidates is on tonight’s Consent AgendaCMAR Procurement: RFP SCHEDULE10/13/2025Site Visit(s): October 20 - 31Interviews: Week before Thanksgiving1516
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 20259RFP ScoringPoint ValueDescriptionRating CategoryNot ScoredTransmittal Letter1Not ScoredExecutive Summary25Part 1 – Changes to Proposer’s SOQ310Part 2 – Scope of Preconstruction Phase Services415Part 3 – Comments/Exceptions on Draft CMAR Contract515Part 4 – Project Approach630Part 5 – Price Proposal725Interview8Pass/FailOrganization and Completeness of Proposal (including forms)9100TotalPoint ValueDescriptionRating CategoryNotes:oPrice Proposals (Part 5) will be evaluated separately and after the non-price portions of the Proposal evaluations are completed.oLowest total price will receive full points for the Price Proposal (Part 5). The remaining Proposals will receive a prorated portion of the full points, based on the percentage above the lowest price. (Example: Proposal B is 10% higher than the lowest Proposal, so Proposal B receives 90% of the points)oPoints awarded for Proposal will not be added to points awarded for SOQ. A final selection of CMAR will be based on the scoring of the ProposalCMAR Proposal FeesGMP = Cost of Work + CMAR Fee + Construction Support Fee + CMAR AllowanceNotesPaymentDescriptionFee•Lump SumPreconstruction/procurement servicesPreconstruction Services•8% fixed for all change orders•Best indicator to compare CMAR proposals•Percentage of Cost of WorkFixed markup on the "Cost of the Work" (direct construction costs like labor, materials, subs)CMAR Fee•Adjustable only for Owner caused changes•Hybrid of fixed and time-sensitive"General conditions" or field overhead costs (e.g., site management, safety, temp facilities, permits, bonds/insurance). Construction Support Cost (includes both “fixed” and time-based)Exhibit B of Agreement (amended after CMAR selection)•Time-Sensitive Construction Support Costs•Costs which will increase if the performance of the Work extends beyond the Construction Period •CMAR Contingency Allowance•Exclusive use by CMAR while executing the Work 1718
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 202510GMP Development Process•GMP = Guaranteed Maximum Price•60% Draft GMP•90% Draft GMP•Final Design GMP•GMP typically accepted around 90% or Final Design•Work Packages are bid: target 3+ bidders•CMAR can bid to self-perform•Favorable bids on Work Packages can lower the project cost•Contractor’s contingency is already included in the GMP•Scope changes via Owner Contingency increase total cost •GMP = Cost of Work + CMAR Fee + Construction Support Fee + CMAR AllowanceSouth Central “Program” – Construction Packages•CMAR – Single GMP•Water Treatment•Ground Storage Reservoir •Admin/Garage•“On-site” pipe and site work•Design-Bid-Build – multiple bid packages •Test Well Program•Includes two full size wells•Two Additional Wells•Well Equipment•“Off-site” Pipelines1920
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 202511AGENDADrinking Water Utility: Status UpdatesPHASING PLANYOU ARE HERE2122
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 202512SOUTH-CENTRAL WELLFIELD DEVELOPMENT – PHASE 1A – SCHEDULEEstimated Completion DateProject Task / PhaseJanuary 22Present to PWSCJanuary 27Council to Authorize Advertisement for BidsJanuary 28Post Advertisement for BidFebruary 18Bid OpeningFebruary 24City Council to Award ContractLate 2025 / Early 2026Driller MobilizationMid-2026Well DrillingLate Summer 2026Test PumpingFall 2026Substantial CompletionWinter 2026Final CompletionMobilizing SoonWellhouse 4 Water Treatment Updates•Construction Continues •Filter vessels are on site•Anticipated to be operating by February/March 2026•Funding Updates•EPA / Federal Funding Approved ($3.4M)•SRF Loan Forgiveness cap was raised•Up from $3M to $4.2M2324
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 202513Wellhouse 3 Water Treatment Updates•At 60% Design•Bidding – Early 2026•Operational – Late 2027•Funding •EPA / Federal Funding ($1.5M)•SRF Loan Forgiveness anticipated•Potentially up to half of project costWellhouse 3 Water Treatment - Rendering2526
Otsego Council Study Session: SCWT CMAR RFP and Drinking Water UpdatesOctober 202514QUESTIONS?Water Updates and South Central Water Treatment CMAR27