The Richmond Heights City Council Monday night reluctantly approved the contractor for the city’s new public works building, which when completed, will clear the way for the Menards development to begin.
The council authorized Mayor James Beck to enter into a $1.4 million deal with Raineri Construction for a new public works building. However, the project will likely be getting some additional scrutiny before Mayor Beck actually signs the contract – and quite a bit thereafter, city officials say.
Construction of the new facility at 7990 Jones, and demolition of the city’s present public works building at 8108 Elinor, is considered a key step in development of the new Menards home improvement store on Hanley Road.
“We want Menards open,” Hamilton said. The store is expected to bring the city $1.7 million in sales tax revenues annually, as well as 200 new jobs.
The city plans to have the building open on Nov. 1, clearing the way for completion of the Menards development, which is already a year behind schedule, Hamilton noted.
However, council members Monday questioned Raineri’s low bid of $1,461,631 – some $600,000 below the $2 million construction costs projected by city planners. The next lowest bid, from Delaney Construction, came in at $2,047,500.
That raised “red flags” for Councilman Matt Casey of District 1, who noted Raineri was the contractor for the city’s recent Dale Avenue Streetscape project and drew numerous complaints, from both nearby residents and city officials, about delays, deadlines and problems and work quality.
The contractor has also been targeted by labor unions in several law suits, alleging the company has failed to pay overtime or did not meet prevailing wage standards, council members said.
Neither Raineri nor Delaney representatives could explain the half-million-dollar-plus differences in their bids, City Manager Amy Hamilton told the council. The city planning department has reviewed all submitted bids and found them to meet the city’s bid specifications.
However, Raineri representatives have noted they are offering the city a “one-to-one match” for a Menards purchase credit, Hamilton said. The home improvement supply retailer provided Richmond Heights a $500,000 purchase credit as part of its development deal with the city. The city, in turn, has offered to transfer the credit to the contractor selected for the public works facility in exchange for a reduction in the contractor’s bill to the city. Representatives of competing bidder Delaying Construction said they could only reduce their bid 10 or 15 percent in exchange for the credit, Hamilton said.
No Raineri spokesperson was present for Monday night’s city council meeting.
Several council members expressed concern that Raineri’s disputes with labor officials might prompt picketing at the city public works facility site, possibly prompting work stoppages at the adjacent Menards site. However, city planning department staff said labor unions make it a practice not to picket as long a prevailing wage standards are being met at a construction site.
State law effectively requires contractors to pay the prevailing wage on public works jobs, City Attorney Ken Heinz noted. However, during a public comment period, former councilman Mike Jones contended it would be “easy” for a contractor to reduce costs on the public works facility up to a half million dollars by using non-union labor.
While acknowledging he shared the council’s concerns, Mayor Beck questioned whether it is “worth $500,000” to city taxpayers to reject the low bid for the project.
Under its contract with the city, Rainier will be subject to a $1,200 per day penalty should the company fail to complete the public words facility within a 210-day period, Mayor Beck noted.
Beck emphasized that council approval does not finalize the deal with the contractor. He said he intends to continue to study the contract carefully before determining whether to sign it. A planning departments staff members will be assigned to monitor construction and sit in on the contractor’s weekly planning meetings.
Council approval came on a motion by District Councilman Ed Notter, a “reluctant” second by District 2 Councilman Rick Vilcek, and a 5-3 vote. Correction: The vote was previously reported as 5-4, with Mayor Beck as the tie-breaker.
Raineri emphasizes that their structural and road-building units are “completely separate,” Hamilton said. The company’s building unit has provided recommendations from several past clients. Raineri will subcontract with Vee-Jay Cement Construction, one of the St. Louis area’s most respected concrete contractors, for the public works building, according to District 4 Councilman Dan Sebben. Correction: This statement was previously attributed to District 1 Councilman Rob Jacknewitz.
In general, it is worth 25% more money to achieve a long-term lasting product over shoddy work that will need repairs within a decade. a 15% reduction of D’s bid would put it at 1.73 mil or so, which is not so far divorced from the 1.46 of R’s bid.
If a company has a bad track record, throwing them more business “because they’re cheap” may not be a good long-term solution. Short term thinking is very bad for public budgets and leaves crippling legacies generation-to-generation.
However, I don’t know enough about this specific case to comment further.
I gathered from reading this story that the deal was not done “until the Mayor signs the contract”. He has signed the contract. I conveyed major concerns to one of the council people who voted no. I know that Rainieri did not pay the City of St. Louis for inspections the City did on property on which Rainieri bid; when Rainieri pulled out of the job, they left the City hanging. Personally, I wish the Mayor would have held onto the Menard’s credit; perhaps it could be used to fix streets that have been torn up by the Water Company after months of them “fixing” things. As a tax payer I wish RH would have honored a company that has a better reputation; cheaper does not necessarily make the taxpayer happy if the job is poor and will require attention in a short period of time.