Chaska is moving forward with the next phase of its comprehensive Public Building Improvement Program, as the City Council unanimously approved construction contracts for a new municipal services building.
The approval of the $47 million project came on the same day — March 16 — that the city received a temporary certificate of occupancy for the newly completed Public Safety complex along Engler Boulevard.
The next building on the list of facility upgrades, the municipal services building will be constructed south of the intersection of Creek Road and Chaska Boulevard. Once completed, the facility will house the Public Works, Water/Sewer and Electric departments, as well as administrative offices.
According to City Administrator Matt Podhradsky, construction of the two-story, 148,000-square-foot facility is expected to begin in May, with substantial completion anticipated by the fall of 2027 — a 14-month construction process.
Once the building is open, four primary city operations will take place there — vehicle storage, vehicle/equipment maintenance, departmental workshops, and office administration.
In recommending approval of the construction contracts, Podhradsky noted that cost estimates provided in November totaled $46 million, but final bids ended up at $47.9 million. He reported that the majority of the overage was due to the rising cost of steel.
“That indicates how volatile the market has been over the last couple of months,” he told the council.
City staff was able to review the bids and identify about $700,000 in construction cuts “that aren’t going to compromise the functionality of the building,” he said. That helped bring down the final price of the building, but a $1.3 million gap still remained.
Fortunately, Podhradsky reported, the city had invested funds for its Public Building Improvement Program and earned about $2 million in interest to help offset the higher-than-anticipated construction costs. He didn’t think cutting the building plans further was in the best interest of the growing city.
“We think if we do any additional value engineering beyond what we’ve done, we’d start to get into some things that are going to impact us into the future and get into the real functionality and maintenance of the building,” he said. “We really feel that this is an opportunity to be able to utilize the funds that we have within the Public Improvement Fund itself and not have to use additional dollars and be able to go forward with the project as it’s proposed.”
Mayor Taylor Hubbard said she’s grateful that the interest income will eliminate the need to cut back on the square footage of the building and other important aspects of the project.
“We have volatility in the market of certain construction materials that are just higher now because of outside factors,” she said.
As the council prepared to vote on the contracts, Mayor Taylor said it was an important next step in the city’s strategic plans.
“This is exciting to be able to go forward with this and start this next step in the building process,” she said.
Council member Leah Sheveland said the timing of the project will work in Chaska’s favor in the end.
“The cost of everything is going to go up,” she said. “If we can lock in before that continually erodes our budget, that’s probably a wise thing to do.”
City Building Program
In 2021, the Chaska City Council identified six strategic visions for the future, including one that stated, “In 2025, Chaska has quality facilities.”
To achieve that vision, the city identified four major projects to improve upon its aging facilities. The first priority — the Public Safety Facility — is now completed, with the Municipal Services Building soon underway. Next up is a renovation of the current City Hall complex, followed by a new Chaska Library.
