GLADSTONE — The Gladstone City Commission awarded the bid for its 9th Street Project to Oberstar Inc., with the contingency to keep the total construction cost under $3.5 million. This means cuts will be made to the project to keep costs down. The decision came after the three bids received for the project were higher than expected.

The total infrastructure and utilities project was estimated at $4 million. However, the lowest bid from Oberstar Inc., based in Marquette, was $4.3 million. The $4.3 million bid did not include other costs associated with the project such as engineering services and the bonding. The project would total closer to $5 million if cuts were not made.

Scott Nowack, of Coleman Engineering Co. based out of Iron Mountain, explained awarding the bid with the contingency was not a contract with Oberstar, but allowed engineers to negotiate changes to the project. By keeping the total construction cost under $3.5 million, project costs including bonding, issuance cost and engineering would not exceed the original estimate of $4 million.

The 9th Street project, which is supposed to begin this summer and conclude in the fall, includes a total reconstruction of 9th Street — including work on storm drains, water lines, and sewer lines from Minneapolis Avenue to 4th Avenue — as well as work on other streets, avenues and alleys. The work on 9th Street will also include work on some of the sidewalks and an addition of a bike lane.

The 9th Street project is within the Downtown Development Authority’s district, so the DDA will cover the cost of 70 percent of the project and the city will cover the remaining 30 percent.

To fund the project, the DDA and city have looked into a 15-year capital improvement bond through Robert W. Baird & Co., an American multinational independent investment bank and financial services company based out of Milwaukee. The city plans for a special assessment to pay for its portion of the project.

Both the DDA and the city have already put money towards the project and have included the payments within their budgets.

The 9th Street project was to encompass parts of 9th Street, Delta North and South alleys, 6th Street, Superior Avenue, 11th Street, the alley between Minneapolis and Wisconsin avenues, 3rd Avenue, 8th Street, and the 4th Street sanitary. However, Superior Avenue and the sanitary sewer on 4th Street are going to be cut from the project.

“Combined of (Superior Avenue and 4th Street sanitary) removes approximately $800,000 from the project — right around that number,” Nowack said.

The cutting of the 4th Street sanitary will not effect the 4th Street paving project, which will occur in 2020 and is funded through the MDOT Small Urban Program.

City Manager Darcy Long explained large pieces of the project that were able to be scaled back were examined. He said the total construction on Superior Avenue and sewer work on 4th Street fit that criteria.

Commissioner Darin Hunter raised the question about how much the special assessment would cost property owners. He also said the assessor needs to make sure there are not properties within the project’s district still paying for a special assessment from past projects — as they may not be able to be assessed again within a certain timeframe.

Once the bid was awarded and the scope of the project changed, a motion was made by Commissioner Brad Mantela to direct Janice Ketcham, the city assessor, to start the process of evaluating the properties eligible for special assessment within the jurisdiction of the project.

The motion was unanimously approved.