Hagen's reporting is Bolton and Menk apparently did projections of sewer hookup demand, future forecasting being fraught with uncertainty, witness Feges projections of "up scale" shops and restaurants when he was in the early part of this decade pitching Ramsey Town Center and before the real estate housing and commercial sectors went splat.
So, 3-2, East Bethel's council votes to bring in a guy from Landform, neither Lazan nor Jungbauer, a credentialed engineer instead, for a second opinion. It makes sense to me, and whether the pricing's fair or not, three councilmembers believed it was and they held the power to hire the firm - whatever firm they wished.
With a ten grand cap, if honored, East Bethel has no major exposure to anything like gouging (Ramsey pays flat fee $15,000 per month, last time I saw a contract, and time and activity accounting is NOT required, not any longer, it's strictly a flat fee, paid monthly, for whatever).
Hagen's item reports in part:
Landform’s proposed contract would not exceed $9,750.
At the same time, the city invited Kreg Schmidt of Bolton and Menk to give a presentation during a regular council meeting. Schmidt had been working on this project until the council voted to cease all contract activity on Jan. 5.
[Newly elected council member] DeRoche said when the council majority decided to suspend the sewer and water project it was because it did not have enough information on how the city and Bolton and Menk came up with the sewer and water hook-up projections and how realistic these projections are.
“You have numbers you’ve thrown around, but they do not bring the full picture of how much it’s going to cost,” [newly elected mayor Richard] Lawrence said to incumbent Councilmembers Boyer and Voss.
Lawrence said before Landform Vice President Robert Schunicht gave his presentation that, “We’re not proposing to spend any money.”
“If you want a third-party review, you should put out a request for proposal, get the most qualified person at the most cost-effective price. And you have no way of knowing whether that’s been done with this proposal or not. We’re just spending $10,000 because apparently somebody knows these people,” Boyer said.
In response to Moegerle’s questioning whether the city had to seek RFPs for this consulting service, [newly appointed] City Attorney Mark Vierling responded that state statute only requires the RFP process if the proposal is over $100,000. Therefore, the council does not legally need to seek RFPs from potential competitors of Landform for this third-party sewer and water project study.
[Incumbent council member] Boyer questioned where the $9,750 would come from.
According to David Schaaf, [newly appointed] acting city administrator, it would come from the savings that the city will see from having him as acting city administrator versus the salary and benefits that former City Administrator Douglas Sell would have received in 2011.
Boyer said that the acting city attorney firm’s rates are much more expensive than what the city paid its last city attorney before the council dismissed him at the Jan. 5 meeting. The council was slated to discuss sending out RFPs for city attorney services at its Feb. 2 meeting. More on that story will be in the Feb. 11 edition of the Anoka County Union.
[Landform engineer Bob] Schunicht said he would be meeting with Bolton and Menk to discuss the basis behind their projections. Landform will also provide the most recent demographic information, provide information on competing projects and cities in the vicinity of East Bethel and prepare a risk assessment on Project 1, Phase 1.
Landform’s letter states that the economic downturn has severely diminished revenue from development. For example, the Metropolitan Council’s Sewer Access Charge (SAC) revenue in 2010 was less than 30 percent of the revenue in 2005. Landform said it would meet with the Metropolitan Council and other government officials at the state and county level to gather the most recent projections on growth and development.
The risk assessment that Landform would provide would consider a range of growth and revenue projections.
Alternate scenario spread sheet comparisons, to me is not a "risk assessment" and I think major insurance industry actuarial experts might agree. Exactly what kind of "risk assessment" East Bethel gets, for its money, is unclear from reporting, other than that Landform would do alternate scenario stuff. If the decision is based on a short proposal letter, good luck, Charlie - or good luck, Mayor Lawrence, Mr. Schaaf, et al.
That reported scope of work seems like a lot to be doing for under ten grand, depending upon it being done in a thorough and professional way by a credentialed engineer, or under a professional engineer's very close scrutiny.
I have no idea whether this Schunicht is the only licensed professional engineer Landform has, while I know Lazan and Jungbauer each lack that qualification.
Bolton and Menk is an engineering firm, it is their speciality, but projecting growth and such is more voodoo than engineering, witness the Met Council and their always high-balling growth projections when imposing comp plan quotas upon the world, or as much of it as they can coerce [Wright and Sherburne Counties, take notice, you're outside of the metro area, and should want to remain so].
Met Council does its "million more in metro by 2030" hand-waving, and it's how reliable, really?
I know the SEC has soft rules about future projections when it comes to standards of security fraud under Rule 10b-5, misstating or omitting material information that makes a statement capable of misleading investors. Future projections are unreliable, no matter who does them. Even your trusted fortune teller, be skeptical. I suppose only Nancy Reagan's astrologer was above doubt.
So, is Landform even better equipped than Met Council to do such grown projections and produce reliable answers?
My simple answer, even while having little regard for the Landform firm, is how could they be worse than Met. Council? It's not feasible to me anyone could be more "overly optimistic" about growth numbers than that bunch.
What I did not see in the Hagen reporting, is anything specifically about consulting the state demographer and comparing that office's relevant projections with Met Council's. Also, reporting is unclear whether Hagen was using Landform-letter numbers about the magnitufe of Met Council cash flow decreases, or whether it is something he independently verified.
That's needed. And, if Schunicht consumes a lot of Bolten and Menk time, that firm deserves to be compensated hourly, and I can see the total cost, reasonably, exceeding the under ten grand figure Hagen reported - which was only to be payment to Landform.
I know Boeing from time to time has low-balled initial contract proposal costs on military contracting, and then prospered greatly on change orders and contract modifications.
With the East Bethel city attorney no longer from Bill Goodrich's firm, I cannot say how carefully contract papers would be expected to cover cost over run possibilities.
Bottom line: I most certainly like as things now stand, the East Bethel situation with Landform, more than I like Ramsey's.
Do you suppose any firm can produce future projections "you can take to the bank?"
Depends upon the bank I guess, and under today's credit pinch, what's your bet, any bank?
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