UPDATED — The City of Powell needs to find a contractor willing to upgrade its HVAC systems ASAP or it will miss out on hundreds of thousands of dollars of state funding.

City officials secured a $420,000 grant last year to help upgrade some aging and inefficient heating and cooling systems at city hall, the Powell Police Department and The Commons. But as an October deadline approaches for the grant, the city has been unable to find a contractor willing to take on the project.

As a result, “that money’s probably going to be … well, not probably. It will be turned back [to the state],” City Administrator Zack Thorington said at Monday’s council meeting.

However, Thorington also said he was still hoping to find a way to move forward with the state funding. On Thursday morning, after this story was published, Thorington received word that the State Loan and Investment Board (SLIB) would allow the city more time to find a contractor.

The SLIB awarded the funding in February 2023. City engineers completed the design work a couple months ago, Thorington said, and the city went out for bids last month.

A pre-bid meeting on Aug. 27 was well-attended, but when the city went to open proposals from contractors on the afternoon of Sept. 10, “there was nothing to open,” Thorington said. “Nobody bid.”

When bids don’t come in the way they like, city officials can usually just re-advertise and try again. But in this instance, the state grant came with a condition that the money be “encumbered,” or under contract, by Oct. 1. That’s intended to give SLIB the opportunity to reallocate the dollars, which stem from the American Rescue Plan Act (ARPA), by an end-of-the-year deadline imposed by the federal government.

“I wish we would have had more time to try it again,” Thorington said at Monday’s meeting. “But I mean, if you’re not getting interest now …”

Councilman Steve Lensegrav wondered if SLIB, which is made up of the five statewide elected officials, would “take into consideration the fact that we did try to go to bid … it’s kind of not really our fault, per se.”

Thorington agreed and said he’s reached out to the board, adding, “We can’t control the bid — and we have to go to bid.”

SLIB staff responded on Thursday to say that they would extend the city's deadline to Oct. 31 and allow time to rebid the project.

"... Staff is working something up as we speak and will be rebidding soon," Thorington said Thursday morning.

In visiting with the city’s engineer about the initial lack of bids, he said their best guess was that the project wasn’t big enough to entice general contractors, who would spend much of their time “babysitting subs” (subcontractors); he also said the paperwork tied to the ARPA dollars may have discouraged potential bidders.

In the second round of bidding, Thorington said they will likely separate the projects out in an attempt to entice bidders. The city initially bid out the project in a way that contractors could either bid the entire job or just individual buildings, he said at Monday's meeting, but “we got nothing.”

“We were banking on at least getting one or something …,” he said.

City staff  discussed other ways to move forward with the grant, but options are limited beyond rebidding. For example, the city can’t just order some of the parts and set them aside, because “it has to be a project, not just the units,” Thorington said.

In the meantime, the city administrator said he told the engineers working on the city’s ARPA-funded stormwater improvements around Northwest College to “get that out to bid as soon as possible.” That job needs to be under contract by Dec. 31 in order to utilize the federal dollars. 

(Editor's note: This version has been updated to reflect that SLIB has extended the city's deadline. It also adds more detail about the portion of the grant that the city has already used.)