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2 DATE: September 3, 2024
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager
FROM: Derek Schweigart, Parks and Recreation Director
Justin Lai, Senior Civil Engineer
Tiffany Oren, Recreation Manager
Amy Zhou, Assistant Engineer
DEPARTMENT: Parks and Recreation Department
SUBJECT: AWARD OF CONSTRUCTION CONTRACT TO BHM
CONSTRUCTION, LLC. FOR THE CONSTRUCTION OF THE
RECREATION CENTER REBUILD PROJECT (CIP 301-678) FOR
THE BASE BID AMOUNT OF $40,647,000 AND BID
ALTERNATES SELECTED BY COUNCIL, AND AUTHORIZING
THE MAYOR TO EXECUTE THE CONTRACT; APPROVING A
CONTINGENCY OF TEN PERCENT OF THE TOTAL CONTRACT
AMOUNT AND AUTHORIZING THE CITY MANAGER TO
EXECUTE THE CONTRACT CHANGE ORDERS UP TO THE
CONTINGENCY AMOUNT, IF NECESSARY; AND EXECUTION
OF A TASK ORDER FOR MATERIAL TESTING AND SPECIALTY
INSPECTIONS WITH APEX TESTING LABRORATORIES, INC.
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution:
1) The award of a construction contract with the authority given to the Mayor to execute an agreement with BHM Construction, LLC for the Base Lump Sum in the amount of $40,647,000; and
2) The award shall include the following Bid Alternates:
a) A1. Expanded Entry Canopy
b) A3. Fitness Room Operable Partition
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2 c) L1a. Playcraft Playground and Rubberized Safety Surface d) L2. Event Terrace Glass Wind Screen
e) E1. Photovoltaic Panel System (PV) without energy storage 3) The total construction contract with BHM Construction LLC shall be for a total contract amount of $43,583,000 for the construction of the Recreation Center Rebuild Project (CIP 301-678) and authorizing the Mayor to sign the contract in a form approved by the City Attorney; and
4) The establishment of a ten percent (10%) contingency of the total contract amount for BHM Construction, LLC in the amount of $4,358,300 with authorization given to the City Manager to execute contract change orders up to the contingency amount, if necessary; and
5) The Mayor to execute a task order with Apex Testing Laboratories, Inc. in the amount of $341,520 for the material testing and specialty inspections on the Recreation Center Rebuild Project (CIP 301-678); and
6)The establishment of a contingency for Apex Testing in the amount of $30,000 with authorization given to the City Manager to execute contract Amendments up to the contingency amount.
EXECUTIVE SUMMARY
Beginning in 2019, the Recreation Center Rebuild Project (Project) has been a priority project for the City with an anticipated budget of $55 million dollars. Group 4 Architecture, Research + Planning, Inc. (Group 4) was hired to design the building, and Griffin Structures was hired as the construction manager for the Project. The designs were brought to City Council on multiple occasions for direction and comments.
At the regular City Council meeting on February 20, 2024, the City Council authorized the issuance of a Request for Qualifications for a general contractor for the construction of the Project. This helped to streamline the bidding process by establishing a shortlist of general contractors who could bid on the Project. Five (5) contractors submitted their qualifications and four (4) were approved to be on the pre- qualification list. Three bids were received by the bid deadline on August 8, 2024. BHM Construction (BHM) was identified as the lowest bidder with a base lump sum bid of $40.65 million, meeting all requirements. Along with the base bid, bid alternate prices were provided by BHM for additional enhancements to the site, such as an expanded canopy entrance and solar panels. Staff is recommending five (5) alternates be awarded with the base bid to BHM but this is contingent upon City Council direction and approval.
Based on previous actions and the estimated cost of the Project, a budget of $64,992,328 was approved prior to the bid opening. Due to the favorable bids, the 6 9
2 construction cost is below the engineer’s estimate and the overall project can be done within the existing budget. The lower bids allow for the City Council to award all the bid alternates, if desired, within budget.
The project currently has general inspection being performed by Griffin Structures, Inc., however, the construction will require material/special inspections. The City has a master agreement with Apex Testing Laboratories, Inc. (Apex). Staff recommends issuing a task order to Apex in the amount of $341,520 for material testing and inspection services to ensure proper materials are used and meet specifications.
The Recreation Center Rebuild Project is progressing on schedule and within budget, and is set to deliver a modern, sustainable facility that will enhance both recreation programming and revenue generation for the City. The Construction is anticipated to start in October 2024 if awarded and be completed in 20 months.
BACKGROUND
At the Special City Council Meeting on January 31, 2022, the City Council adopted Minute Order No. 1832, and directed staff to proceed with the “build-to-budget” option for the Recreation Center in an amount not-to-exceed $55 million; and proceed with utilizing $36 million from the Capital Asset Acquisition and Replacement Fund (CAARF) and $19 million from the General Fund Reserves.
At the City Council regular meeting on November 21, 2022, the City Council awarded an agreement with Group 4 Architecture, Research + Planning, Inc. (“Group 4”) for professional design, bidding, and construction support services. The design phase began in January 2023 with the award of a construction management contract going to Griffin Structures on March 20, 2023.
At the regular City Council meeting on September 18, 2023, staff and Group 4 presented to City Council a full schematic design presentation which included an estimate of probable construction costs and a list of bid alternatives with cost information for City Council’s consideration. The City Council approved the schematic design and Project budget estimate, as well as provided direction on additional enhancements to be included in the Project.
At the regular City Council meeting on December 18, 2023, staff and Group 4 presented to City Council a full design development presentation which incorporated and reflected the design refinements directed by Council at the meeting on September 18, 2023. The Design Development Project Update was received and accepted unanimously by Minute Order No. 1953 which allowed staff to begin the construction document phase of the design.
At the regular City Council meeting on January 16, 2024, the City Council received a Project budget update from staff along with various proposals to address the Project budget shortfall between the approved budget of $55,374,250 and the design team’s 6 9
2 estimate of $65,943,000, a difference of $10,568,750. To address the shortfall, the City Council directed several actions including:
•Eliminating the Bocce Court Expansion from the Project scope and budget reducing the budget by $1,009,000 while still maintaining the design as a bid alternate if the bids come in lower than anticipated;
•Authorizing the release of $5,000,000 from the remaining Levee project funds and appropriate it to the Project;
•Appropriating grant funds from Gilead Foundation in the amount of $500,000 toward the Project;
•Appropriating anticipated park impact fees from the new Gilead building at 331 Lakeside Drive in the amount of $594,000 to the Project: and •Eliminating or delaying some park CIP projects through reprioritization.
Following the budget update on January 16, 2024, the project moved into the construction documents phase which would last approximately 8 months during which staff and the design team collaborated with other city departments and consultants to finalize room layouts, select fixtures, and address audio-visual, telecommunication, and security needs. An Interiors Committee provided recommendations for the building's color palette, wayfinding signage, lighting, and floor and ceiling materials and finishes. For the exterior site plan, the project team worked with landscape designers and engineers to finalize the rose garden and events plaza, as well as the selection of plantings and monumental signage.
At the regular City Council meeting on February 20, 2024, the City Council authorized the issuance of a Request for Qualifications for a general contractor for the construction of the Project. Five contractors submitted their qualification packages and staff approved four of the five contractors for future bidding following a scoring process.
At the regular City Council meeting on April 1, 2024, the City Council approved an additional appropriation to the Project budget in the amount of $58,323 with West Coast Code Consultants (WC3) for plan check services for the Project. This increased the Project budget to $55,432,578.
On June 3, 2024, the City Council adopted Resolution No. 2024-60 approving the plans and specifications for CIP 301-678 and authorizing the call for bids. It was noted before the call for bids that the engineer’s estimate was over the existing budget, and it was likely going to require additional funding. Bid alternates were also being bid which could increase the cost if selected.
During the bidding phase, five (5) addendums were issued to address comments from general contractors and the City’s building department. These addendums addressed the various requests for information (RFIs) and provided the necessary detail for general contractors to provide the most accurate estimate and informed bidding which helps to avoid speculation which may lead to higher bids. 6 9
2 On August 15, 2024, Group 4 submitted a conformed plan set which matches the five (5) addendums for receiving the building permit. On August 28, 2024, the construction plan set for the proposed Recreation Center (excluding deferred items and separate permits) was approved by the required City Departments, including Building, Planning, Engineering, San Mateo Consolidated Fire Department, and Parks and Recreation.
Upon City Council’s approval of the bid, the Building Division will issue the permit to the selected contractor.
ANALYSIS
On August 8, 2024, three (3) bids were received from the four pre-approved general contractors. The bids include both the base bid lump sum and optional bid alternates.
All bids received for construction were below the engineer’s estimate of $48.3 million which reflects the current bid market. Construction market conditions in the Bay Area have shifted in the recent months making it a favorable environment for bidding of civic projects due to the declining factors in the private sector which have stopped or delayed the funding and construction of many projects.
In addition, the labor and material availability for projects has also increased and provided a favorable interest and competition of multiple subcontractors bidding on the available civic projects which result in higher competitive pricing amongst sub- contractors. The bids are as follows:
SWINERTON
S J
AMOROSO
BHM
CONSTRUCTION
BASE LUMP SUM $42,000,000 $43,547,000 $40,647,000
BID ALTERNATES
A1 Expanded Entry Canopy $2,900,000 $850,000 $773,000
A3
Fitness Room Operable
Partition $150,000 $110,000 $176,000
L1
Playground with Play
Equipment
(Option 1- Columbia Cascade
Company) & Rubberized
Safety Surfacing
$900,000 $330,000 $277,000
L1a
Playground with Play
Equipment
(Option 2- Playcraft &
Rubberized Safety Surfacing
$1,300,000 $690,000 $513,000
L2
Event Terrace Glass Wind
Screen $750,000 $300,000 $256,000
L3 Bocce Courts $1,500,000 $840,000 $1,043,000
E1
Photovoltaic Panel System
(without Energy Storage) $1,500,000 $1,200,000 $1,218,000 6 9
2 E2
Photovoltaic Panel System
(with Energy Storage) $2,500,000 $2,200,000 $2,250,000
The following is a breakdown of the bid alternates:
•A1. Expanded Entry Canopy – This alternative will provide an enhanced entry canopy, which will help provide shelter closer to the parking lot and add interest to the building with a prominent “sail shaped” entrance. The current Recreation Center utilizes an expanded entry canopy to provide shelter for those who may not be as mobile due to age or special needs.
•A3. Fitness Room Operable Partition – This alternative will provide a partition to the fitness room, which would allow for multiple classes to occur at the same time and provide enhanced revenue potential.
•L1. Columbia Cascade Playground with Equipment and Rubberized Safety Surface – This alternative will provide a playground area and play structure to the project.
•L1a. Playcraft Playground with Equipment and Rubberized Safety Surface - This alternative is similar to L1 but will provide a playground area and enhanced play structure to the project. Both options provide for a highly sought after amenity by park users which does not currently exist in one of the City’s largest and most used parks. The enhanced design provides for greater play and interest for youth of all ages and a complementary amenity for the youth programs operating out of the Recreation Center.
•L2. Event Terrace Glass Wind Screen – This alternative will provide additional wind protection to the event terrace. The installation of this 5’ high glass wind screen along the south and west side of the events terrace will increase the usability of the outdoor space.
•L3. Bocce Courts – This alternative will both renovate the existing bocce courts, while expanding the area with two additional bocce courts. Additional landscaping is also included in the adjacent areas.
•E1. Photovoltaic Panel System (without energy storage) – This alternative will provide solar power to the building. The City is expected to receive a non- competitive grant from Peninsula Clean Energy (PCE) in the amount of $551,232 which can be used to offset the cost of the PV system and/or used for other sustainability features. The addition of a PV system will also enable the City to receive more points toward LEED certification possibly resulting in an increase from Silver to Gold certification. More importantly, the building will be a net-zero carbon facility, a remarkable achievement and huge step in promoting the City’s Climate Action Plan goals.
•E2. Photovoltaic Panel System (with energy storage) – This alternative will provide solar power to the building with the addition of energy storage. The 6 9
2 energy storage will allow the Recreation Center to utilize the solar power when there is less sun and avoid using the grid during peak pricing periods.
The lowest bidder BHM Construction, LLC has met all the bid requirements, and their contractor license is current and active according to the Contractors State License Board (CSLB). BHM Construction has been in business since 2007 with over 253 completed projects in the Bay Area with a combined total of $1.7 Billion dollars. Their projects are comprised of civic centers, community centers, libraries, athletic facilities, K-12 schools and multi-family housing projects.
The City’s construction manager Griffin Structures has managed two projects where BHM was the general contractor: the City of Half Moon Bay Library, and the City of Burlingame Community Center which was also designed by Group 4.
Based on the bids that were submitted, staff is recommending the approval of the base bid plus the following bid alternates (totaling $2,936,000):
•A1. Expanded Entry Canopy - $773,000
•A3. Fitness Room Operable Partition - $176,000
•L1a. Playcraft Playground and Rubberized Safety Surface – $513,000 •L2. Event Terrace Glass Wind Screen - $256,000
•E1. Photovoltaic Panel System (PV) without energy storage - $1,218,000 Ultimately, the City Council has the option to select none, all or any combinations of bid alternates they desire. Based on the direction from City Council, the resolution will be modified to include the desired alternates from City Council which will alter the total construction contract cost and contingency amount. For reference, Attachment 5 shows the pricing of different alternate combinations ranging from the least expensive to the most expensive.
The scope of work includes demolishing the existing Recreation Center and rebuilding a new Recreation Center in its place at Leo J. Ryan Park. The new facility will serve as the community’s hub optimized for environmental sustainability and energy savings, expanded recreation programming and rentals, and enhanced user experience at community events and festivals which are dear to the residents and community partners of Foster City. The approved plans and specifications are available for viewing at City Hall upon request.
The new Recreation Center will result in enhanced revenues for the City which will help reduce the impact to the City’s General Fund over the long term. In addition, major site, utility, structural, and landscape improvements are planned for the property which will complement the iconic facility and provide for further gathering opportunities and community vibrancy. City staff and the City’s Construction Manager Griffin Structures will oversee the construction of the Recreation Center. 6 9
2 While the project currently has general inspection being performed by Griffin Structures, the construction will require material/special inspections. The City has a master agreement with Apex Testing Laboratories, Inc. (Apex) and is recommending issuing a task order to Apex for $341,520 and including a $30,000 contingency. This task order will allow Apex to provide any material testing to ensure proper materials are used and meeting specifications for construction.
The anticipated project schedule is as follows:
September 2024
•Construct Temporary Modular Buildings
•Relocate Cathodic Protection
•Process Construction Agreement
•Work with PG&E to disconnect existing Recreation Center from power •PG&E to construct temporary power
October 2024
•Start construction (anticipated to be 20 months)
CEQA
In July 2023, the City of Foster City, in accordance with the requirements of the California Environmental Quality Act (“CEQA”), the State CEQA Guidelines adopted by the Secretary of Resources, and the City of Foster City Environmental Review Guidelines, prepared an Initial Study and Mitigated Negative Declaration (SCH # 20231009) with Standards Conditions and Mitigation Monitoring and Reporting Program (SCAMMRP), and CEQA Findings (IS/MND) for the Recreation Center Rebuild Project.
On November 16, 2023, the City Planning Commission adopted the IS/MND and approved the Use Permit for the Project. Pursuant to Public Resources Code section 21166 and CEQA Guidelines section 15164(b), the City prepared an Addendum to the adopted Mitigated Negative Declaration for the temporary Modular Buildings portion of the work.
FISCAL IMPACT
The following is an overview of current Project funding sources as reflected on June 17, 2024; the City Council adopted City Resolution No. 2024-66 approving the Fiscal Year 2024-2025 City Budget. This adoption added $9,092,750 to the Recreation Center Rebuild Project Budget.
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2 Description
Funding
Source
Prior Year
Funding FY 2024-25 FY 2025-26 Total
Recreation Center
Rebuild Project $ 55,432,578 $55,432,578
City CIP Fund City CIP 324,250 324,250
Gilead Grant City CIP 500,000 500,000
CIP 657 Levee
Project City CIP 5,000,000 5,000,000
CIP 655 Bocce
Courts
Park in
Lieu 745,000 745,000
CIP 655 Bocce
Courts City CIP 83,000 83,000
Park Facility
Impact Fees PIF 594,000 467,000 1,061,000 Building
Maintenance
Fund BMF 1,846,500 $ 1,846,500
$ 55,432,578 $9,092,750 $ 467,000 $64,992,328
The current approved budget will cover the base bid and all alternates if desired with a 10 percent construction contingency, a contingency percentage that has been reflected in the budget throughout all phases of the Project.
With the current approved Project budget of $64,992,328 and total anticipated Project cost of $56,408,000 which includes the construction base bid, design and construction management, the City has $8,584,328 available to utilize towards alternates and their contingencies.
Not reflected in the current funding above is a grant from PCE in the amount of $551,232, which can be used to offset the cost of the PV system and/or used for other sustainability features. In the meantime, staff will continue to seek other grants and sources of funding that can be used for the Project.
Staff is also proposing to conduct a fundraising campaign to help offset the cost of furniture, fixtures and equipment (FF&E) for the new Recreation Center which has been done with other City facilities such as the Foster City Library and with similar projects in other cities. This could include a sponsor wall or the ability to sponsor specific rooms of the Recreation Center.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
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2 ATTACHMENTS:
Attachment 1 – Resolution
Attachment 2 – Construction Agreement
Attachment 3 – BHM Construction LLC Bid Submittal
Attachment 4 – Statement of Probable Cost
Attachment 5 – Bid Alternate Combination Breakdown
Attachment 6 – Task Order ATL-2024-1