Boyne Valley Trailway construction moves ahead despite high bid

BOYNE CITY — Although it will cost more than originally expected, by this time next year people should be enjoying a hike or a ride on a brand-new, non-motorized trail between Boyne City and Boyne Falls.

At its regular semimonthly meeting Tuesday, the Boyne City City Commission approved a contract with J & N Construction in the amount of $1,775,720 to construct a 7.2-mile non-motorized trail from Boyne City to Boyne Falls.

City planning director Scott McPherson said the bid was the lowest of six bids received on the project, but it was still $159,000 more than the engineer’s estimate for the project.

The city commission passed the measure 4-0 (commissioner Sally Page was absent from the meeting) after learning their options under the circumstances were limited.

The vast majority of the project will be paid for through state and federal grants. Specifically the project is slated to receive $595,000 in Michigan Department of Natural Resources Trust Fund money and $1.07 million in Michigan Department of Transportation Transportation Alternative Program grant money.

Other contributors to the project include about $81,000 from foundations and a cycling group and $10,000 from the county parks and recreation millage. So far the Village of Boyne Falls has committed $10,000, Boyne Valley Township has committed $60,000 and and the City of Boyne City has $35,000 committed.

Mike Sheean, who serves on the Boyne Valley Trailway committee, said the committee has another $30,000 it can contribute to the cause.

Sheean noted that the committee is working to “look under every rock and shake every tree” to find additional money for the project.

Boyne Valley Township Supervisor Sue Hobbs was also at Tuesday’s meeting. Hobbs said the township board just discussed the issue at its meeting Monday night and, although they did not take any official action, she said the board seemed agreeable to considering increasing its contribution to the project.

Ultimately, the responsibility for any shortfall in funding will rest with the city, because it is the municipality through which the grants must be awarded.

City manager Michael Cain said a recent review of the city’s fund balance shows that the city could absorb what he called a “worst-case scenario” hit of about $200,000 without putting the city’s budget in peril.

Cain noted that unlike most city construction contracts, contracts through this program do not include a contingency amount. Therefore, it’s possible the costs could increase further if crews encounter unforeseen circumstances in the course of the work.

Both Cain and a representative of the city’s engineering firm said the city’s options are limited under the circumstances. Because of the grants, the contracts are actually bid through the state. Under the program, the city would only have the option of seeking to rebid the project if the lowest bid came in more than 10 percent above the engineer’s estimate. In this case, the bid came in at 9.86 percent over the estimate.

The city would have the option of simply walking away from the project, but in doing so, the city would not only forfeit the grant money it has been awarded, but also would likely seriously jeopardize any future grant applications to the same programs.

Even if the bid had exceeded the 10 percent threshold, several officials at Tuesday’s meeting said rebidding the project could result in the bid coming in even higher.

Cain said he would continue talks with other municipal entities involved seeking to come up with an equitable split of the additional costs.

Cain noted that about 23 percent of the trail is located within the city limits.

The consensus among the commission was that, given the amount of time and effort that has been put into pursing the project, and the risk of losing these and future grant dollars, it is still prudent to move forward with the contract.

“Another way to look at it is right now the City of Boyne City is at about 2 percent (invested in the project). We’re getting 98 cents on the dollar from a host of other investors,” mayor Tom Neidhamer said.

Answering a question from commissioner Dean Soloman as to why the prices are so high for construction projects, Cain said he thinks it is a combination of a strong economy and only a handful of contractors available to do the work.

The project, the planning for which has been in the works since about 2000, will include a 10-foot wide trail extending roughly 7.2 miles, beginning with a trailhead near the Boyne City Municipal Airport. The trail will run behind the airport and the city’s industrial park and mostly follow the long-abandoned Boyne City, Gaylord and Alpena Railroad right-of-way to an area near the Boyne Falls Public School.

From there the trail will cross M-75 from the school property where it will enter Boyne Mountain Resort property and follow along the west side of the resort’s airport runway. Then it will cross the Boyne River and terminate at another trailhead near the intersection of U.S. 131 and Cherry Hill Road. In addition to the trailhead parking areas at both ends of the trail, two other trailhead parking areas are planned where the trail crosses Dam Road and on the Boyne Falls school property.

If the project proceeds as planned, work will likely begin this fall, continue through mid-November and then resume in mid-April 2020 to complete the trail.