1 COUNCILMEMBERS
Edi E. Birsan, Mayor
Carlyn S. Obringer, Vice Mayor
Dominic D. Aliano
Laura M. Hoffmeister
Laura M. Nakamura
Civic Center
1950 Parkside Drive
Concord, CA 94519
www.cityofconcord.org
Special Meeting of the
Concord City Council
Tuesday,
June 11, 2024
6:00 p.m. - Open Session Council Chamber
1950 Parkside Drive
and/or Various
telephonic/electronic
locations
*IMPORTANT NOTICE ABOUT PUBLIC COMMENTS AND MEETING PARTICIPATION* Members of the public are invited to attend and participate at: Council Chamber, 1950 Parkside Drive, Concord, CA.
Please note the following change to the City’s public comment procedures: Unless a Councilmember is participating in the meeting remotely pursuant to AB 2449, remote public comment will not be accepted. Public comment may be provided in-person or via email, as set forth below. Members of the public desiring to provide comments as a part of the meeting are encouraged to either submit written comments by 3:00 p.m. prior to the meeting or to attend the meeting in person.
Under California law, public comments at special meetings are limited to subjects on the agenda only.
HOW TO PARTICIPATE
The public is invited to participate in the City Council meeting using any of the following methods:
1. IN PERSON:
a.Members of the public can provide in-person comments in the Council Chamber.
Members of the public are encouraged, but not required, to fill out a speaker card. The Council Chamber will have seating available for members of the public to attend in person up to full seating capacity.
Please note
6:00 p.m.
Meeting Start
2 2. REMOTE: Remote public comment will not be accepted, except when a Councilmember participates remotely pursuant to AB 2449. At the time of the posting of this agenda, none of the Councilmembers have notified the City Clerk’s Office that they intend to participate remotely pursuant to AB 2449, and therefore no remote public comment will be accepted at the meeting. If, after publication of this agenda and before the meeting begins, any councilmember determines that they will need to participate remotely due to just cause or emergency circumstances under AB 2449, their remote participation will be announced at the outset of the meeting in connection with the Roll Call item. If a Councilmember participates in the meeting remotely pursuant to AB 2449, the public may participate and provide public comment remotely, as follows:
a. Zoom:
https://cityofconcord.zoom.us/j/84489193681?pwd=Sd5L9sFcuPZ_SeNXBS9R9azaUoz 0rg.--Y4-3DXz7TiOPAW or Zoom Webinar ID: 844 8919 3681 and Passcode: 636203 b.Zoom Phone Numbers. Dial Toll Free: (669) 900-6833 or (346) 348-7799 or (253) 215- 8782.
c.During the meeting, each period for public comment will be announced, and participants may use the “Raise Hand” feature on Zoom to request to speak. If calling in via Zoom use *9 to raise and lower your hand. The meeting host will call on you, by name, and promote you to panelist in the webinar so you can be seen via your camera. Please enable your microphone when it is your turn to speak. In order to ensure the orderly administration of the meeting using this method, providing your name is encouraged, but is not required. (If you need instructions on how to use this feature, please contact the City Clerk by 3:00 p.m. of the meeting date at [email protected]).
3. EMAIL:
a.Public comments can also be submitted via email to [email protected]. Please note that emailed comments will not be read aloud by staff. Any public comments received up until 3:00 p.m. of the meeting date will be:
1. distributed to the Council before the meeting,
2. posted online for public inspection at
https://stream.ci.concord.ca.us/OnBaseAgendaOnline/Meetings/Search, and
3. inserted into the meeting record.
b.As emails containing public meeting comments are part of the official record, note that personal contact information may be published if it is included with your email.
4. TO WATCH OR LISTEN ONLY:
a.Watch on TV on Comcast Channel 28, Astound/Wave Channels 29 and 1026, and AT&T U-verse Channel 99
b.Watch the TV broadcast through the City’s website by following THIS LINK c.Watch Live Streaming of the meeting by following THIS LINK d.Join the Zoom webinar by following THIS LINK
3 OPEN SESSION
1. OPENING
Roll Call – Announcements/Consideration and Approval of Requests by Councilmembers to Participate Remotely Pursuant to AB 2449
2. CITY COUNCIL CONSENT CALENDAR
The public is entitled to address the City Council on items appearing on the Consent Calendar before or during the City Council’s consideration of the Consent Calendar. Adoption of the Consent Calendar may be made by one motion of the City Council, provided that any Councilmember, individual or organization may request removal of an item from the Consent Calendar for separate consideration.
If a request for removal of an item from the Consent Calendar has been received, the Mayor may defer action on the particular item and place the same on the regular agenda for consideration in any order s/he deems appropriate. Please see “How to Participate” above. a. Considering – for the Civic Center Roof Replacement Project (Project No. 2429):
1. Adopt the following findings based on the facts detailed within the staff report that public bidding would (i) not produce an advantage, (ii) be inappropriate, impractical and impossible, and (iii) not be in the City’s best interest due to the circumstances.
2. Authorize the execution of a construction contract in the total amount of $4,742,124.00 with Stronger Builder Services to complete the Project No. 2429; authorize staff to utilize the available project contingency for contract change orders that become necessary up to 10% of the contract amount; and authorize the Mayor to execute the contract in a form acceptable to the City Attorney.
3. Approve Amendment No. 1 to the Professional Services Agreement with Swinerton, adding $229,196.00 to their existing contract; creating a new not to exceed amount of amount of $521,426.40 to provide additional construction management and inspection services needed for the Project No. 2429; and authorizing the City Manager to execute the amendment in a form acceptable to the City Attorney.
4. Approve a temporary budget transfer in the amount of $3,100,000 to Project No. 2429: $1,044,828 from CIP Holding Account (Project No. 2723), and $2,055,172 from General Fund Reserves, and associated appropriation of such funds to Project No. 2429.
5. Authorize the City Engineer to accept the improvements upon completion of Project No. 2429 and direct the City Clerk to file a Notice of Completion.
Recommended by the Director of Community Development.
4 CEQA: Not a project/exempt per CEQA Guidelines Sections 15060(c), 15061(b)(2), 15061(b)(3), 15273, 15378, 15301, 15302, 15304 and/or Public Resources Code Section 21065.
3. ADJOURNMENT
Next Meeting: Regular Meeting
Date: 6/11/2024 6:30 PM
NOTICE TO THE PUBLIC
There is a 90-day limit for the filing of a challenge in the Superior Court to certain City administrative decisions and orders which require a hearing by law, the receipt of evidence, and the exercise of discretion. The 90-day limit begins on the date the decision is final (Code of Civil Procedure §1094.6). Further, if you challenge an action taken by the City Council in court, you may be limited by California law to raising only those issues you or someone else raised in the hearing or in a written correspondence delivered to the City Council prior to or at the hearing.
In accordance with the Americans with Disabilities Act and California Law, it is the policy of the City of Concord to offer its public programs, services and meetings in a manner that is readily accessible to everyone, including those with disabilities. If you are disabled and require a copy of a public hearing notice, or an agenda and/or agenda packet in an appropriate alternative format; or if you require other accommodation, please contact the ADA Coordinator Tianjun Cao at (925) 671-3243 or [email protected], at least 24 hours in advance of the meeting. Advance notification within this guideline will enable the City to make reasonable arrangements to ensure accessibility.
Staff Report
Date: June 11, 2024
To: City Council
From: Valerie J. Barone, City Manager
Reviewed by: Thomas Capriola, Senior Assistant City Attorney Kevin Marstall, PE, Director of Community Development
Carlton Thompson, PE, City Engineer
Bernard Enrile, PE, CIP Manager
Prepared by: Michelle Bethge, Assistant City Attorney
[email protected]
(925) 671-3331
Kevin Wheat, PE, Associate Civil Engineer
[email protected]
(925) 671-3422
Subject: Considering for the Civic Center Roof Replacement Project (Project No. 2429):
1. Adopt the following findings based on the facts detailed within the staff report that public bidding would (i) not produce an advantage, (ii) be inappropriate, impractical and impossible, and (iii) not be in the City’s best interest due to the circumstances.
2. Authorize the execution of a construction contract in the total amount of $4,742,124.00 with Stronger Builder
Services to complete the Project No. 2429; authorize staff to utilize the available project contingency for contract change orders that become necessary up to 10% of the
contract amount; and authorize the Mayor to execute the contract in a form acceptable to the City Attorney.
3. Approve Amendment No. 1 to the Professional Services Agreement with Swinerton, adding $229,196.00 to their
existing contract; creating a new not to exceed amount of amount of $521,426.40 to provide additional construction
2.a
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Agenda Item No. 2.a
June 11, 2024
management and inspection services needed for the
Project No. 2429; and authorizing the City Manager to
execute the amendment in a form acceptable to the City
Attorney.
4. Approve a temporary budget transfer in the amount of $3,100,000 to Project No. 2429: $1,044,828 from CIP Holding Account (Project No. 2723), and $2,055,172 from General Fund Reserves, and associated appropriation of such
funds to Project No. 2429.
5. Authorize the City Engineer to accept the improvements upon completion of Project No. 2429 and direct the City Clerk to file a Notice of Completion.
CEQA: Not a project/exempt per CEQA Guidelines Sections 15060(c), 15061(b)(2), 15061(b)(3), 15273, 15378, 15301, 15302, 15304 and/or Public Resources Code Section 21065.
Report in Brief
Early this year, the City of Concord (“City”) terminated Commercial Waterproofing Systems, Inc. dba ERC Roofing and Waterproofing (“ERC”), who was the general contractor on the Civic Center Roof Replacement Project (“Project”), after ERC failed to address its numerous defaults under the contract, refused to move forward with completion of the Project, and abandoned the site. In connection with terminating ERC, the City called upon the surety who provided ERC’s Performance Bond - the Ohio Casualty Insurance Company (“Surety”) – to provide for completion of the Project. The Surety sought bids for completion of the Project and Stronger Builder Services (“Completion Contractor”) provided the lowest bid at $4,742,124.00. The remaining work on the Civic Center Roof Replacement project is anticipated to take approximately four months to complete.
After receiving the Completion Contractor’s bid, the Surety informed the City that the Surety would not takeover completion of the work. Instead, the Surety wanted to tender the Completion Contractor to the City, issue a check to the City to finance a portion of the completion of the project, and requested a one-sided release. The Surety’s offer, which was focused on limiting its own liability and risk, did not comply with the Surety’s obligations under the Performance Bond. While City staff works to enforce the City’s rights under the Performance Bond through negotiations and litigation, the City can no longer wait for the Surety and must move forward with the Completion Contractor to ensure the Project is completed before the 2024-2025 rainy season. Accordingly, staff requests authority to execute a direct contract with the Completion Contractor, including the making of specific findings provided for by case law; amend the City’s existing agreement with Swinerton, the construction management firm, to aid with continued
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construction management of the project; and approve budget transfers to fund the completion of the Project. The City is seeking full recovery from the Surety under the Performance Bond.
Recommended Action
1. Adopt the following findings based on the facts detailed within the staff report that public bidding would (i) not produce an advantage, (ii) be inappropriate, impractical, and impossible, and (iii) not be in the City’s best interest due to the circumstances.
2. Authorize the execution of a construction contract in the total amount of $4,742,124.00 with Stronger Builder Services to complete the Project No. 2429; authorize staff to utilize the available project contingency for contract change orders that become necessary up to 10% of the contract amount; and authorize the Mayor to execute the contract in a form acceptable to the City Attorney.
3. Approve Amendment No. 1 to the Professional Services Agreement with Swinerton, adding $229,196.00 to their existing contract; creating a new not to exceed amount of amount of $521,426.40 to provide additional construction management and inspection services needed for the Project No. 2429; and authorizing the City Manager to execute the amendment in a form acceptable to the City Attorney.
4. Approve a temporary budget transfer in the amount of $3,100,000 to Project No. 2429: $1,044,828 from CIP Holding Account (Project No. 2723), and $2,055,172 from General Fund Reserves, and associated appropriation of such funds to Project No. 2429.
5. Authorize the City Engineer to accept the improvements upon completion of Project No. 2429 and direct the City Clerk to file a Notice of Completion.
Background
The City formally bid the Project in February 2023. At the March 28, 2023, City Council Meeting, the City awarded the construction contract to Commercial Waterproofing Systems Inc dba ERC Roofing and Waterproofing (“ERC”). The construction contract was fully executed on April 24, 2023. ERC’s first working day was on July 6, 2023 (per the issued Notice to Proceed). Per the Contract and bidding documents, the Project was required to be complete within 100 working days (e.g. by November 28, 2023). During the course of the Project, ERC fell behind in the construction schedule and refused to perform critical components of the work required under the contract and by the Building Code.
On November 7, 2023, the City sent a Notice of Default to ERC and directed ERC to perform the work in accordance with the contract requirements. Following the Notice of
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Agenda Item No. 2.a
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Default, ERC took no action to attempt to remedy the findings. Instead, ERC stopped work completely on the Project and ultimately abandoned the site entirely.
At this same time, due to pending rain events, the City began taking precautionary measures to protect the Civic Center roofs, with particular focus on the flat roof of Wing C that had been exposed by ERC’s demolition work prior to their refusal to move forward. This City-initiated protective work included placing a shrink-wrap tent over the flat portion of the roof to prevent further water intrusion. This tent was large enough to permit work to continue underneath the tent, but also protect the roof from water that might accumulate during rain events. The City also had staff go on the roof daily to vacuum up and broom off any water that had penetrated the wrap or trickled from the open side of the tent. The City also placed plastic wrap on the sloped parts of the roof of Wings D and A, where shingles had been removed and partially replaced in order to protect this portion of the roof.
On February 16, 2024, the City formally terminated the contract with ERC and called upon the Performance Bond. Under the Performance Bond, the Surety was then obligated to either (1) step into ERC’s shoes and take over the completion of the contract (Section 5.2 of the Bond), (2) tender a completion contractor and pay the City all those costs set forth in Section 7 of the Performance Bond (Section 5.3 of the Bond), or (3) waive its right to complete or arrange for completion and (i) issue a check to the City, which could be rejected by the City if inadequate or (ii) deny liability, and be subject to litigation from the City (collectively, Section 5.4 of the Bond).
The Surety put out the Project completion to bid and received a bid from the Completion Contractor in the sum of $4,742,124. The Surety then informed the City that it would not complete the work under Section 5.2 of the Bond, because the Surety believed selecting that option could result in the Surety paying out more than the Penal Sum of the Performance Bond, which is set at $4,261,838 (i.e. the amount of ERC’s contract with the City).
On May 30, 2024, the City issued a 7-day notice to the Surety demanding performance under the Performance Bond. On June 4, 2024, the Surety responded by presenting the City a so called “tender agreement” that would have had the Surety, City, and Completion Contractor enter into a three-party whereby the Surety issued a check to the City, the City would hire the Completion Contractor, and the City would sign away various rights vis-à-vis the Surety, which would protect the Surety and negatively impact the City’s interests. On June 5, 2024, the City responded by advising the Surety that this offer was not in conformance with the Surety’s obligations under the Performance Bond and was rejected. Statements by the Surety’s representatives during negotiations suggest the Surety thought it could leverage the City’s need to complete construction work before the next rains and the Surety’s ability to provide access to funds to get the City to accept significantly less than what the City is entitled to under the Performance Bond. On June 7, 2024, the Surety’s 7-day time frame to respond to the City expired.
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Accordingly, the City advised the Surety on June 10, 2024, that the Surety had also failed to respond by June 7th in accordance with the Performance Bond, that the City found the Surety in default, intended to move forward with completion of the Project, and enforce its rights to recover the full Penal Sum of the Performance Bond.
As a result of the Surety’s failure to step forward, City staff is bringing: (1) this direct agreement with the Completion Contractor to complete the Project that will have the Completion Contractor perform the remaining work under the original contract with ERC and (2) an amendment to the contract with the City’s construction manager, which had significant unanticipated costs as a result of ERC’s defaults and the resulting mitigation efforts. The Completion Contractor’s work is expected to take approximately four months to complete, with work commencing early July.
Analysis
The City needs to complete the Project and allow City staff to reoccupy Wing C. This Project was formally bid out by the City in February 2023 and a contract was executed with the low bidder in accordance with the Public Contract Code. After the City found the original contractor in default and terminated the contract, the City turned the Project over to the Surety. The Surety accepted bids for the completion of the Project in late April 2024 and subsequently presented that bidder to the City.
While the Project was originally bid out, the City has determined that the combined the time to go through yet another public bid and complete the work would delay completion into the winter months; is unnecessary since the Project was already bid out once; be unlikely to save the City money given the limited number of initial bidders and Surety’s receiving bids just last month; further extend the time City staff is displaced from their offices in Wing C; create the potential for significant additional mitigation costs; create additional potential disputes; and unnecessarily extend the risk to City infrastructure.
Accordingly, a second round of public bidding would be incongruous and not result in any advantage to the City in its efforts to contract for the greatest public benefit.
For these reasons, competitive bidding would also not produce any advantage and could create potential conflicts with the Surety who is obligated under the Performance Bond to pay liquidated damages of $4,000 per day. Here, the Surety bid the project out to contractors and received the bid from the Completion Contractor and offered the Completion Contractor’s bid over to the City as their understood cost to complete the Project. Further delay through another bidding process would therefore only add to the potential dispute, creating additional risks.
The bidding of the project would also be undesirable, impractical and impossible due to the time constraints of this Project. The City has already faced significant delays with the Project and at this point needs to start the work to complete the Project before the next rainy season. The Project was originally scheduled to be completed in November 2023, so the new roof would be in place before the rainy season. The flat portion of the
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roof on Wing C has been exposed since July 2023 and City staff has been displaced since that time. Any further delays are undesirable and impractical as City staff cannot continue to be out of a building for integral city staff and departments, namely the Finance and IT department. Additionally, the City must complete the Project before the next rainy season and Completion Contractor has estimated the Project will take 120 calendar days to complete so the Project must commence as soon as possible. The City took significant efforts to mitigate and limit water intrusion during the last rainy season, and the public will not benefit from the City incurring costs to take such mitigations in the upcoming winter or from splitting up the completion of the Project. This would increase mobilization and demobilization costs, thereby increasing the amount of money at dispute with the Surety and likely incur costs exceeding the Penal Sum of the bond.
While the City could also meet the standards set forth in Public Contract Code for an emergency, by making the requested findings the City can rely on well settled caselaw to directly award this contract to the Completion Contractor.
City staff also recommends a temporary budget transfer to the Civic Center Roof Replacement Project in order to complete the construction, provide Construction Management, and pay for staff time working on the project.
Additional budget is needed for Swinerton to provide construction management and inspection services for the remainder of the project. Swinerton provided construction management during the Project, including providing assistance with mitigation efforts.
With a new Contractor taking over, an additional 4 months of coverage (and budget) is needed. The previous budget for Swinerton has been used up in the roof work previously completed, their support to City Staff with the previous Contractor, and mitigation efforts during the delay of the project. Swinerton has also assisted City Staff in getting the project started back up again in that same time frame.
Financial Impact
The City terminated the contract with ERC and retained approximately $2.5 million from the original contract. The City will need to utilize additional funds to cover the remainder of the contract price, in addition to replenishing the contingency funds for the project and the upcoming additional construction management and architect funds. The funds will be coming from a temporary budget transfer in the amount of $3,100,000. Of this amount, $1,044,828 would come from CIP Holding Account (Project No. 2723) and $2,055,172 from General Fund Reserves, which may result in a small dip below the Council’s target of a 30% General Fund Operating Budget. Staff will seek full reimbursement of these funds as part of the settlement or litigation with the Surety.
Environmental Determination
Pursuant to Public Resources Code Section 21065, CEQA Guidelines Sections 15060(c), 15061(b)(2), 15061(b)(3), 15273, and/or 15378, Council action on this item is
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Agenda Item No. 2.a
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not subject to environmental review under the California Environmental Quality Act (CEQA) of 1970, as amended, as it will not result in a direct or reasonably foreseeable indirect physical change in the environment. In the alternative, Council action on this item is exempt under CEQA Guidelines Sections 15301 – Existing Facilities, 15302 – Replacement and Reconstruction, and 15304 – Minor Alterations to Land. No unusual circumstances exist and none of the exceptions under CEQA Guidelines Section 15300.2 apply. This determination reflects the City’s independent judgment and analysis. The Notice of Exemption will be filed with the County Clerk’s office following the Council action on this item.
Public Contact
The Council Agenda was posted.