SPECIAL MEETING

November 16, 1959

The special meeting of City Council was held Monday, November 16, 1959, at 7:30 P.M. with Mayor Haman presiding. Councilmen present were Messrs Davis, Fromm, Hayes, Holpp, Mundy, Turner and Zartman.

POWER PLANT

Representatives of the Kuljian Corporation, E. J. Healey, C. E. Fischer and W. F. Corl, Jr., outlined to Council the progress made to date in the study of the electrical plant needs of the City of Dover. Mr. Corl read a letter addressed to the City in which was pointed out that the program of the Atomic Energy Commission for the construction of a pilot generating plant for a small utility was not a practical one insofar as participation by Dover was concerned. It is a matter for future consideration when Dover’s electrical load has grown.

A second letter read by Mr. Corl reported that test borings had been completed on a plant site on which Dover has a purchase option. The tests indicated that piling would be required in plant construction. The Kuljian Corporation believed that no better conditions could be found and recommended purchase of the site.

Mr. Corl presented a preliminary progress schedule under which a new electrical generating plant would consist of two 16,500 KW turbo-generators. Under this schedule revenue bonds to finance the project would be sold in May, 1960. Prior to the sale of bonds, preliminary engineering and the receipt of firm prices of major items of equipment is highly desirable in order to present the best picture possible to bond purchasers. Mr. Corl presented Kuljian’s proposal for engineering fees which, briefly, is 5% of the entire cost of the project plus out of pocket expenses for travel, etc., which was estimated to be not more than $3,000. Kuljian proposed that or the sum of $120,00, less credit for previous payments of approximately $5,000, they would complete all preliminary work beginning for the bond sale. Payment could be made at the rate of $20,000 per month beginning December 1, 1959 with the final payment May 1, 1960 being approximately $15,000. These payments of $120,000 would be credited against the total engineering fees involved in the complete project, but would be the entire payment required if the plant is not built.

Mr. Corl also presented a proposal for construction management service under which Kuljian would supervise all details of construction, in effect acting as the general contractor. The fee would be 4% of the cost of construction plus field administration costing an estimated $295,000. Estimated feed are summarized as follows:

            Engineering fees                                 $419,800

            Construction Management                  322,400

            Field Administration                           295,000

The estimated cost of the entire project, including the above fees, is $8,816.500. Council discussed the rate of the fees. Mr. Fromm stated that, based in his experience, the fees were high, particularly those for Construction Management and Field Administration. He felt that the fees should be based on an incentive plan Field Administration. He felt that the fees should be based on an incentive plan under which savings under the original estimated cost of the project would be divided between the City and the Engineers. On motion of Mr. Fromm, seconded by Mr. Davis, Council authorized the Kuljian Corporation to proceed with the outlined preliminary engineering work required for the bond sale on a per diem basis and requested Kuljian Corporation to submit a revised proposal for all fees including a plan to share in any resulting cost savings.

Council tabled the decision on purchase of the plant site and final authorization to proceed with the project until estimates are made available by the City Clerk of future financial needs of the City and the effect of the project on them. Before final authorization is given, it was suggested that Delaware Power and Light Company be contacted once more, appraised or our position, and requested for a last proposal for sale to Dover of all its electrical requirements.

Council adjourned at 12:45 P.M.

F. Neylan

City Clerk

All ordinances, resolutions and orders adopted by City Council at its meeting of November 16, 1959 are hereby approved.

November 19, 1959                                                                             W. Edward Haman

                                                                                                                            Mayor