A contract for the Sunset Heights and Pleasant View Elementary Schools HVAC projects were awarded to Peterson Construction of Webster City Monday night by the Webster City school board.

The local contractor turned in the only bid for the project, totaling $3,197,000.

Dr. Mandy Ross, superintendent, said the sealed bid was opened on Thursday. Mitch Dunham, director of building and grounds, said three contractors did the pre-bid walkthrough to look at the elementary buildings and see what the project would entail.

“We received just the one bid and as I emailed the board this weekend, it was just about $700,000 over what the architect was anticipating,” she said. “From Thursday until the board meeting tonight, we have been in conference with our financial advisor and Tyler Riley of FEH Associates to see what our options are.”

Riley joined the Zoom meeting and talked to the board about the construction climate.

“We had other contractors interested in the project. Some came to the pre-bid walk-through, some took out plans. But that doesn’t mean they are going to bid it,” he said.

He told the board about another project he’s heading up in a different district. No contractors attended the pre-bid meeting and there were no bids received.

“I talked to a couple of contractors and they explained that they just didn’t have the manpower to do it,” he said. “I think that’s what we’re seeing now as a trend. Bigger projects are locking up these contractors.”

Increases in material costs and delays in getting items such as steel are also driving bids up, he said.

“I’m hearing that steel manufacturers are out until December and January for delivery,” he said. “That’s unheard of. Delivery time on a lot of components has been extended out significantly. I think that’s what we’re seeing on this bidding.”

He said those delays of delivery are pushing projects further into the fall, meaning more nighttime and weekend construction work, which raises labor costs.

“Contractors have to pay their staff overtime for that kind of work,” he said.

The board considered delaying the project but Riley said he had no idea of when or if the price of materials would come down or when the delivery delays would end.

Dunham concurred.

“I honestly think we’re looking at the lowest bid we’ll see in a year,” he said.

The board also passed a resolution directing the sale of $2,081,000 School Infrastructure Sales, Services and Use Tax Revenue Bonds, series 2021A through Key Government Finance of Denver, Colorado, with an interest rate of 0.98 percent.

Matt Gilaspie of Piper Sandler said proposals were taken earlier on Monday for the bond sale and five proposals were received. The Key Government Finance bid was the lowest at 0.98 percent, with Luana Bank of Luana, Iowa coming in second with a 1.12 percent interest rate, and Reliance State Bank of Story City offered 1.23 percent.