Cedar Rapids absorbs Quaker's flood deductible leading to low bids for flood wall

A wall (seen at center) runs along the bank of the Cedar River and Quaker Oats in Cedar Rapids on Tuesday, Jan. 9, 2018.
A wall (seen at center) runs along the bank of the Cedar River and Quaker Oats in Cedar Rapids on Tuesday, Jan. 9, 2018. The city council plans to approve funding for flood protection around the company's facility. (Rebecca F. Miller/The Gazette)

CEDAR RAPIDS — Bids for the Quaker Oats section of the Cedar Rapids flood protection system — the latest and thus far largest component — came in less than expected.

That quickens the pace for another section downstream near Czech Village, a city official said.

Because Quaker’s exposure to flooding increases while the project is in process, the city agreed to cover the company’s $5 million flood insurance deductible with Factor Mutual — that plan will remain in effect — if flooding occurs, said Rob Davis, the Cedar Rapids flood control manager.

“The city project is responsible for the first $5 million should there be any loss of operations or damage due to a flood that is directly relatable to our opening up their existing flood wall,” Davis said.

He noted the city’s responsibility is limited to flooding within river stage 20 to 27.

Davis updated City Council about bids for the project during a meeting on Tuesday. The only council comments were supportive.

The council likely will vote on approving a contractor in March, but typically selects the lowest bid that meets the scope of the project. Before signing a deal, the city needs concurrence from the Economic Development Administration, which is kicking in a $1.73 million grant for the project, and coordination with Union Pacific, which has tracks to the Quaker site.

The project includes a new 2,150-foot-long flood wall 13 to 18 feet tall from the edge of the Quaker parking lot north to railroad tracks at the edge of Cedar Lake, and two pump stations. The three-year project is expected to begin in August.

A few bids for the project were well below the $17 million internal cost opinion. WRH Inc. of Amana bid $14.2 million, which was the lowest of seven bids.

WRH completed the existing flood wall around Quaker seven years ago, which Davis viewed as a positive as does Quaker, he said.

Davis attributed the increased competition for the project to the city absorbing the insurance risk. Half as many contractors bid on a smaller version of the project, but the city rejected those bids and delayed the project, he noted.

“The city plans to provide the insurance for this rather than have the contractor do it,” Davis said. “One of the big advantages was it opened the project to a greater number of bidders.”

The nature of the project requires breaching the existing flood wall, which is why insurance became an issue.

A plan has been developed to minimize flood risk, such as constructing one pump station at a time, placing HESCO barriers — used effectively during the city’s 2016 flooding — behind the open section of the wall and annual flood-response training.

The contractor will be limited to tackle 170 foot sections at a time, which minimizes flood risk although stretches the completion timeline, Davis said.

“You’ve done a good job mitigating the risk Quaker Oats could be at and the city,” City Council member Ann Poe said. “It looks like you’ve thought of every contingency.”

The expected cost savings allows staff to speed up the construction of a levee near Czech Village. Staff had been planning to construct a section of levee along A Street SW, from the old landfill site to Bowling Street SW this year, and then skip a year before proceeding to the next section. Now, staff say they will be able to move directly into the section from Bowling to 16th Avenue SW.

That section is estimated to cost $6 million and would be constructed from fiscal 2019 to 2020


“This allows us to keep going with another construction project right after we finish,” Davis said.

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