City of Corona
Staff Report
400 S. Vicentia Ave.
Corona, CA 92882
File #: 22-0303
REQUEST FOR CITY COUNCIL ACTION
DATE: 04/20/2022
TO: Honorable Mayor and City Council Members
FROM: City Manager’s Office
SUBJECT:
City Council consideration of adopting Plans and Specifications for the Harrison Emergency Shelter/Navigation Center (Harrison Shelter) Phase 2 Capital Improvement Project No. 75025 and approval of a construction contract with Golden Gate Steel, Inc., dba Golden Gate Construction.
EXECUTIVE SUMMARY:
This action is for the award of Notice of Inviting Bids (NIB) #22-046CA to Golden Gate Construction (Golden Gate) for $972,329 for the Phase 2 renovation of the Harrison Shelter. The Phase 2 renovation work addresses mandated improvements for compliance with the Americans with Disabilities Act (ADA) and responds to City Council direction related to clinic improvements, a dog run shelter, and other necessary improvements.
RECOMMENDED ACTION:
That the City Council:
a. City Council adopt the Plans and Specifications for the Harrison Shelter Phase 2 Capital Improvement Project No. 75025.
b. City Council award the Notice of Inviting Bids #22-046CA, to Golden Gate, the lowest responsive, responsible bidder, for the total bid amount of $972,329, and waive any and all minor irregularities in the bidding document as submitted by said bidder. c. City Council authorize the City Manager, or his designee, to execute the Construction Contract with Golden Gate in the amount of $972,329.
d. City Council authorize the City Manager, City Attorney, or their designees to negotiate and execute non-substantive extensions, change orders, and amendments up to 20% of total contract cost or $194,466 as authorized by Corona Municipal Code Section 3.08.050(H).
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File #: 22-0303
e. City Council authorize the Purchasing Manager to issue a purchase order to Golden Gate in the amount of $972,329.
f. City Council approve a General Fund budgetary transfer of $600,000 from the Homeless Programs operating budget within the City Manager’s Office to the Harrison Shelter Phase 2 Project No. 75025.
g. City Council authorize an additional appropriation of $631,795 from the General Fund to the Harrison Shelter Phase 2 Project No. 75025.
BACKGROUND & HISTORY:
On June 17, 2020, the City Council adopted the Homeless Strategic Plan (the Plan) with the following vision:
ü A comprehensive, five-year roadmap that will be implemented in phases over time. ü A document that supports a flexible and scalable system of services that can respond to changing needs, issues, and opportunities.
ü Requires a Homeless Solutions Annual Action Plan (HSAAP) that is tied to the annual budget process.
ü The HSAAP includes goals, strategies, and specific milestones that guide each phase of implementation.
Goal #2 of the Plan is to develop a low-barrier emergency shelter/navigation center system. In support of this goal, on November 18, 2020, the City Council approved a construction contract with J.A. Urban in the amount of $1,001,817 for the Phase I renovation of the Harrison Shelter. Phase I costs also included $100,000 for design and construction management, $25,000 for project management, and a 20% contingency of $200,364 for a total project cost of $1,327,181. Phase I costs were fully funded with Federal CDBG and local Dwelling Development Tax (DDT) funds.
ANALYSIS:
Transition from Phase 1 to Phase 2 Renovation Plans
During the Phase I construction process, it was determined that Phase 2 improvements were needed to enhance the provision of multi-disciplinary services at the Harrison Shelter. Accordingly, on June 2, 2021, the City Council directed staff to proceed with cost estimates, develop a Phase 2 scope of work, conduct a contractor bid selection process, and return to City Council with recommendations.
Components of Phase 2 Renovation
Council direction on the components for Phase 2 improvements included building modifications to add an onsite clinic in the west wing of the building, a dog run shelter, and security system enhancements. In addition, Phase 2 improvements triggered additional American Disabilities Act (ADA) requirements and improvements. Finally, because the shelter will have guests onsite 24 hours a day and 7 days a week, an emergency back-up generator has been added to the scope of work. To begin the design process for Phase 2 and to address some outstanding ADA issues from the Phase I renovation, on November 3, 2021, City Council approved the transfer of $120,000 in DDT funds to establish the Phase 2 Capital Improvement Project (CIP) No. 75025. A total of $101,843 will fund design costs, and the remaining $18,157 will fund material and labor costs related to outstanding City of Corona Page 2 of 7 Printed on 4/14/2022
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File #: 22-0303
design costs, and the remaining $18,157 will fund material and labor costs related to outstanding ADA improvements outlined in the Building Department’s Accessibility Inspection Report.
Phase 2 Security System and Operations Infrastructure
As part of Phase 2 renovation plans, on March 3, 2022, the City Council approved the award of a $251,700 contract with ADT, Commercial LLC. for the installation of an Access Control and Video Surveillance System. The City Council also approved a 20% contingency of $50,340. City Council’s approval action resulted in the appropriation of DDT funds to cover the $302,040 in costs.
In addition, the Information Technology Department has identified $46,896 in infrastructure costs needed to support operations at the shelter. These include internet service, network cabling, firewall, switches, and wireless access points. The networking equipment will be procured through approved City vendors and funded with general funds from the Homeless Programs operating budget in the City Manager’s Office.
Phase 2 Design and Bid Specification Process
The Phase 2 plans and specifications were prepared by Pettit Engineers and Architects, Inc. (Pettit).
Pettit’s architectural design services on-call contract was previously approved by the City Council.
The Pettit contract of $101,843 was procured following the purchasing guidelines included within the Corona Municipal Code (CMC).
Phase 2 Prime Contractor Bid Process
Notice Inviting Bids 22-046CA was advertised in the Sentinel Weekly pursuant to Public Contract Code formal bidding procedures and CMC Section 3.08.090 public projects formal bidding procedure requirements on January 12, 2022. The advertising process included publishing the bid on PlanetBids, a bidding platform, and e-mailing bid documents to Plan Rooms on January 13, 2022. A total of 195 prospective contractors were notified of the bid opportunity by PlanetBids with 46 prime contractors downloading the bid and contract documents.
A mandatory pre-bid conference was held on January 26, 2022, and twenty-seven (27) contractors participated. The bid close date was extended to March 3, 2022 as a result of the release of three (3) addenda, which were issued to provide responses to 97 contractor Requests for Information (RFI’s).
Three (3) bids were received by the revised bid deadline of March 3, 2022. The bid schedule included two alternate bid items to address ADA ramp improvements with the complete replacement of the existing ADA ramps as alternate Option A and the modification of the existing ramps as alternate Option B. Bidders were required to provide a bid for the total base bid items and alternate bid Options A and B with the lowest responsive, responsible bidder determined on the basis of the summation of the total Base Bid Schedule and the two Alternate Bid Schedule Options A and B.
The Bid and Contract Document allows the City to award the contract on the total base bid amount alone, the base bid, and any selected alternate bid item or a combination of alternate bid items. Staff is recommending award of the Base Bid and Alternate Bid Option B for a total contract price of $972,329 (Base bid in the amount of $770,061 plus Alternate Bid Option B in the amount of $202,268 for a Total Bid of $972,329).
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Summary of Bids Received:
No. Contractor Name City Base Bid
Amount
Alternate Bid A Alternate Bid BTotal Bid
1 Golden Gate
Steel, Inc.
Norwalk $770,061 $220,978 $202,268 $1,193,307
2 MCEC Inc. Azusa $1,163,210 $353,050 $166,750 $1,683,010 3 Loghmani &
Associates
Playa Del
Rey
Nonresponsive Nonresponsive Nonresponsive Nonresponsive A nonresponsive bid was received from Loghmani & Associates. The contractor front loaded the majority of the project’s construction cost into line item 1 which specifically covers mobilization, demobilization, and general conditions only. Front loading or unbalanced bids are prohibited by the Instructions to Bidders section of the Bid and Contract Document. Section 17 - Basis of Award; Balanced Bids states, “the City may reject as non-responsive any bid which unevenly weights or allocates costs including, but not limited to, overhead and profit to one or more particular items.” Additionally, the Bid Schedule required bidders to enter individual unit pricing on an “each, square foot, or linear foot” basis for many of the work items to be performed under the contract. This is important as construction contracts are often bid and awarded based on estimated quantities of work, while payments to contractors are based on the actual quantities of work performed. Unit pricing protects the City’s interests and mitigates potential bid price manipulation when negotiating necessary change orders for added/decreased scope or balancing change orders at the end of the project to address final quantities put in place by the contractor.
The City utilizes unit pricing wherever feasible but there are some situations in which certain line items are typically bid on a lump sum basis, including mobilization, demobilization, and general conditions. For line item 1, contractors were required to provide a lump sum price for mobilization, demobilization and general conditions, and the Bid Schedule stated the amount could not exceed 10% of the contractor’s total bid amount. Loghmani entered a bid amount of 60% of the contractor’s total bid amount, into line item 1 which is prohibited as stated above, and the contractor’s bid was determined to be nonresponsive. These conditions make it difficult for the City to know the true cost of items and could lead to issues with project progress as the majority of the project funding has been disbursed upfront.
Purchasing staff emailed the non-bidders attending the mandatory pre-bid conference requesting their feedback as to why the contractors elected not to submit bids. The initial email request was followed up by a second request. Unfortunately, no responses were received by staff to either set of inquiries. Purchasing then contacted J.A. Urban, the prime contractor awarded the Phase I work.
During the phone conversation, J.A. Urban told Purchasing staff that the construction industry is extremely busy and as a prime contractor, he had difficulty receiving bids from subcontractors. This current industry problem impacted JA Urban’s ability to submit a bid for the Phase 2 renovation work. This seems to be indicative of challenges faced by many contractors within the industry.
Pettit Engineers and Architects prepared a construction budget estimate with an Engineer’s Estimate City of Corona Page 4 of 7 Printed on 4/14/2022 powered by Legistar™
File #: 22-0303
Pettit Engineers and Architects prepared a construction budget estimate with an Engineer’s Estimate of probable cost in the amount of $523,649. It is important to note that construction cost estimates are prepared using historical cost data that usually lag current market conditions, and design firms typically do not have the same availability to cost information as prime contractors bidding the work.
The three bids received were significantly higher than the Engineer’s Estimate. Staff believes the higher bid amounts reflect current market conditions, especially since this bid outcome is consistent with other recent projects in the City.
City Staff recommends that City Council award a construction contract in a not to exceed amount of $972,329 to Golden Gate Steel, Inc., as the lowest responsive, responsible bidder for the Harrison Shelter - Phase 2 Project. All licenses and references for Golden Gate Steel have been reviewed and verified by City Staff, and all other required documentation is in order. Consistent with how the Phase 1 project was managed, staff recommends a 20% contingency of $194,466.
Project management will be performed by City staff. The estimated cost of project management by City staff is approximately $20,000. Construction management will be performed by one of the City’s on-call consultant firms. These firms were previously awarded on-call services contracts by the City Council in accordance with CMC and purchasing policies The approximate cost of labor compliance and construction management is $45,000.
Summary of Phase 1 and Phase 2 Costs
Phase 1 Description Cost
JA Urban Contract $1,001,817
Pettit Engineers & Architects Design $100,000
Construction Management $25,000
20% Contingency $200,364
Total Phase 1 Costs $1,327,181
Phase 2 Description Cost
Security System Contract with ADT $251,700
Security System Contract 20% Contingency $50,340
Operations/Infrastructure Costs for Internet Service,
Network Cabling, Firewall, and Wireless Access Points
$46,896
Design Costs $101,843
Outstanding ADA Compliance Work from CASP Report $18,157 Construction Management $45,000
Project Management $20,000
Golden Gate Steel Prime Contract $972,329
20% Contingency $194,466
Total Phase 2 Costs $1,700,731
Grand Total of all Costs $3,027,912
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Timeline
If City Council approves staff recommendations, Purchasing will issue a Notice of Award Letter to Golden Gate to proceed with fulfillment of license, bond, and insurance requirements. Per the contract, the contractor has ten days to comply with this requirement. After that, staff will schedule a preconstruction conference between the Prime contractor and Security System contractor; therefore, the Notice to Proceed will be issued sometime during the week of May 9, 2022.
Depending upon timing for permits and purchase of materials, the start of construction is tentatively scheduled to commence sometime in May 2022. Assuming there are no supply chain or labor market delays, construction completion is anticipated sometime in September 2022. The estimated timing of construction completion will work well with the Shelter/Housing Operator RFP which has the following milestone dates:
ü April 2022 Release of Operator RFP
ü June/July 2022 Committee to Review/Rate Proposals
&
Interview Top Scoring Candidates
ü July/August 2022 Operator Contract Award to City Council ü September/October 2022 Operator to Hire Staff
&
Purchase/Install Furnishings/Decorations
ü November 2022 Grand Opening Ceremony
ü December 2022 Launch Shelter/Housing
Program Services
FINANCIAL IMPACT:
As outlined in this agenda staff report, based upon prior City Council actions and purchasing procedures, some of the Phase 2 costs are being funded with DDT funds and General Funds in the Homeless Programs Budget in the City Manager’s Office. The recommended actions for this agenda item cover the following costs:
Golden Gate Steel $972,329
20% Contingency $194,466
Construction Management $45,000
Project Management $20,000
Total $1,231,795
Therefore, approval of the recommended actions will result in a General Fund budgetary transfer of $600,000 from the Homeless Programs operating budget within the City Manager’s Office to the City of Corona Page 6 of 7 Printed on 4/14/2022
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File #: 22-0303
$600,000 from the Homeless Programs operating budget within the City Manager’s Office to the Homeless Shelter Rehabilitation Phase 2 Project No. 75025; this change will include an additional appropriation of $631,795 from the General Fund to the Homeless Shelter Rehabilitation Phase 2 Project No. 75025.
GENERAL FUND
Adopted Budget - FY 2022 Estimated Revenue Over Expenditures $ 14,593,660 Less Measure X Reserves (13,144,418)
Previously Approved/Revised Budget Adjustments (Net)* (10,723,585) Current Estimated Revenue Over Expenditures (9,274,343) Homeless Shelter Rehabilitation Phase II - Appropriation (631,794) Revised Estimated Revenue Over Expenditures $ (9,906,137) Budget Balancing Measures Reserve - Actual 06/30/2021 43,614,486 Section 115 Trust (30,000,000)
Estimated FY 2022 Change in Budget Balancing Measures Reserve (9,906,137) Estimated Budget Balancing Measures Reserve - 06/30/22 $ 3,708,349 * Approved through Council Action or other operational process.
ENVIRONMENTAL ANALYSIS:
This action is categorically exempt pursuant to Section 15301(d) of the Guidelines for the California Environmental Quality Act (CEQA), which states that “Restoration or rehabilitation of deteriorated or damaged structures, facilities, or mechanical equipment to meet current standards of public health and safety, unless it is determined that the damage was substantial and resulted from an environmental hazard such as earthquake, landslide, or flood” is therefore exempt from CEQA. This action involves repairs/rehabilitation to existing structures to meet current standard of public health and safety and therefore is exempt from the requirements of CEQA. Therefore, no environmental analysis is required.
PREPARED BY: KAREN ROPER, HOMELESS SOLUTIONS MANAGER
REVIEWED BY: ROGER BRADLEY, ASSISTANT CITY MANAGER
Attachments:
1. Exhibit 1 - Harrison Emergency Shelter - Phase 2 Project Plans and Specifications
2. Exhibit 2 - Addendum 1
3. Exhibit 3 - Addendum 2
4. Exhibit 4 - Addendum 3
5. Exhibit 5 - Construction Contract
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