CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
4/25/2022
1 SUBJECT:
Award Civic Center Campus Facilities Project Construction Services Agreement SUBJECT:
Award of Civic Center Campus Facilities Improvement Project Construction Services Agreement RECOMMENDED ACTION:
Approve the following actions for Civic Center Campus Facilities Improvement Project (Project Number PW#2021-23):
A. Adopt Resolution next in order for a Budget Amendment for Fiscal Year 2021-2022 the total project budget to $11,651,397 by appropriating additional Returned ERAF revenues (Disaster Accounting Fund) of $900,000 and appropriating General Fund Unassigned Fund Balance (Fund 1) of $751,397 to the project budget; and B. Authorize the City Manager to award and execute a Construction Services Agreement with W.E. Lyons Construction Company (Attachment "A") in an amount not to exceed $9,222,972.00 and authorize a budget authority for construction in the amount of $9,960,810.00, which includes alternates A2, A4, A5a ($747,665), and contingencies in an amount not to exceed eight percent (8%) of the Construction Contract amount; and C. Authorize staff to execute future Change Orders not to exceed the contingency amount.
STAFF CONTACT:
Sam Bautista, P.E., Deputy Director of Public Works
(650) 738-3771
[email protected]
Lisa Petersen, P.E., Director of Public Works
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:
The ongoing Civic Center Campus Facilities Improvement project builds on and continues the work established in the 2020 Pacifica Civic Center Facilities Study and subsequent Pacifica Civic Center Conceptual Design project. Conceptual design began in October 2020 and culminated in a presentation to the City Council on April 26, 2021, at which time Council accepted the conceptual design and funding strategy. City Council approved funding and allowed the project to proceed to the schematic design/design development phase on June 28, 2021, as part of budget adoption for Fiscal Year 2021-22. The Schematic/Design Development phase began in July 2021 and was completed on October 25, 2021; pre-qualification of potential contractors was completed in November/December 2021, and the project was released to bid on February 25, 2022.
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Bid Results
The Project was advertised on March 2, 2022, and March 9, 2022, in accordance with the formal bid process. Ten (10) construction companies pre-qualified and a total of 4 bids were received on March 31, 2022, which ranged in cost for the Basis of Award (described later in the report) from $9,222,972.00 to $11,955,000.00, with two bidders within 2% (+/-) of the estimate, the third and fourth bidders at +7% and + 28% respectively. W.E. Lyons Construction had the low bid of $9,222,972 which is -1.3% lower than the Design Teams Estimate of Probable Construction Cost for the Basis of Award. The following table is a summary of bids received:
Company Basis of Award
W.E. Lyons Construction Co. $ 9,222,972.00
D.L. Falk Construction Inc. $ 9,424,092.00
Zovich & Sons Construction Inc. $ 10,030,000.00
Gonsalves & Stronk Construction Co. $ 11,955,000.00
The construction proposals received are reflective of competitive bids from qualified contractors that are consistent with the most recent January 2022 estimate of Probable Construction Cost prepared by the Design Team. TBD Consultants, the project cost estimator, reports escalation is currently being projected at 5% for 2022, but there are indications that it could go as high as 6%, or 7% for the next year or two making award of the contract at this time most cost effective for the City, as delaying the project will likely result in higher bids.
Project Cost Estimate Adjustments
The updated project budget presented to Council in October 2021 had the estimated total construction cost of $9,020,000 which included the buildings construction cost, FF+E (furniture, fixtures, and equipment) allowance, a project contingency, for a total estimated project budget, including soft costs, of $11.73M. As discussed with Council at the October meeting, the project estimate of $11.73M was consistent with the April estimate, reflecting a 2% increase due to inflation. The project team (City Staff and the Design Team) worked diligently to refine, value engineer, and include bid alternates that would provide flexibility to the City so that the project could be awarded based on priorities and available budget. Staff also noted that the team would continue to refine project soft costs (costs other than contractor costs) as an opportunity for cost savings. Cost saving strategies employed by the team included 1) continued value engineering, 2) refinement of soft costs, and 3) strategically defining add alternates to strive to bring the project budget within a $10M funding range.
Unfortunately, during this unprecedented time of uncertain bid conditions caused by higherthan-expected escalation, labor shortage, pricing volatility (due to rising material and fuel costs), and the impact of high demands on the supply chain - the continued value engineering efforts did not result in a reduced project budget. However, these efforts did help the project team maintain the overall bottom line from the October 2021 construction estimate against these surging market forces.
Bid Add Alternates
To provide flexibility in the project award, the bid package was designed with a Base Bid plus Add Alternates. More specifically, and refined further between completion of the Schematic/Design development phase and release of the bids, a “Basis of Award” option was created consisting of the Base Bid plus Add Alternates A2, A4 and A5A. These three basic add alternates, based on construction efficiency, are considered integral to the project. They Pacifica City Council 3
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include:
A2: Exterior site improvements to the west and north;
A4: Exterior accents on the P&P building - wood-look phenolic and metal rain screen accents;
A5A: City Hall Exterior, historic redwood siding rehabilitation.
Although the City has the choice of not awarding the Basis of Award Add Alternates (A2, A4, A5a), it should be noted that there will be a significant impact to the overall project, including an incomplete site and limited improvements to the exterior of City Hall, and the P+P building.
Add Alternate A2 will add usable public green space to the site; Add Alternate A4 would modernize the exterior of the P+P building by adding the wood-look phenolic and metal rainscreen accent materials to the building; and Add Alternate A5a would expose the historic redwood siding to revert the building to its original look. Additionally, delay in completing the Basis of Award Alternates (A2, A4, and A5a) scope would likely result in an increased cost due to future escalation, redundant soft and hard overhead costs, and because it will be more difficult to complete the work as independent elements rather than as part of a larger project.
Therefore, the City Manager recommends including the Basis of Award Alternates in the contract award. This recommendation, as shown in the table below, brings the total construction budget to $9,960,810. It also brings the total project budget, including design and other soft costs, to $11,651,397. As discussed in the Fiscal Impact section of this report, the City Manager is recommending a combination of one-time funding sources to cover the additional $1.65 million in funding above the approved $10 million to achieve the Basis of Award Add Alternates for the project. Appendix A provides more information on all Add Alternates that were included in the project Bid Documents.
Green Sustainable Project Features
The project is fully compliant with current CalGreen mandatory measures that are part of California’s Green Building Standards Code as well as industry best-practices for sustainability.
In particular, the project includes the following sustainable features for the building and site:
BUILDING:
• Reuse of existing building elements for both the City Hall and P+P building • Reuse of existing redwood in City Hall exterior (also rehabilitating historic architecture)
• Use of natural daylighting and daylight harvesting
• Low-flow plumbing fixtures
• Energy-efficient building systems, including LED lighting • Responsibly-sourced and low VOC building interior and exterior materials • Photovoltaic infrastructure ready
SITE:
• Native, drought tolerant, and climate-appropriate plantings • High efficiency irrigation system
• On-site stormwater treatment
• Preservation of healthy, mature trees
• Bicycle racks and pedestrian path through site to promote alternate means of transportation and connectivity to the neighborhood
• Reduced night sky light pollution with site lighting
• Infrastructure for electric vehicle charging stations Recommendation for Contract Award
With the award of a contract to W.E. Lyons Construction, the low bid contractor, for the Base Pacifica City Council 4
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Bid and Add Alternates A2, A4 and A5a (Basis of Award), the updated project budget is as follows:
PACIFICA CIVIC CENTER PROJECT BUDGET
April 25, 2022
W. E . Lyons Bid Proposal Budget
Line
Item
SCOPE OF WORK- Construction Contract
1-7 Base Bid, including mobilization,
demolition, general conditions, general
requirements, site preparation, site
improvements, City Hall renovation, and
P+P building renovation
$8,475,307.00
A2 Add Alternate Site Improvements $68,145.00
A4 Exterior Accents at P+ P Building $346,060.00
A5A City Hall Exterior refinishing, and new
doors/ windows
$333,460.00
Subtotal Construction Contract $9,222,972.00
Project Construction Contingency $737,838.00
Total Construction Budget $9,960,810
SCOPE OF WORK- FF+E
FF+ E Allowance (w/contingency) $40,000 $40,000
SCOPE OF WORK- Soft Cost
Design + Engineering Fees (SD- CA) $1,160,587
Construction Management (allowance) $300,000
City Fees + Testing (allowance) $190,000
Subtotal Soft Cost $1,650,587 $1,650,587
TOTAL PROJECT BUDGET $11,651,397
Project soft costs are costs not related to payments to the project contractor, such as costs above for design, construction management, and testing. The soft cost allowances from the October 2021 budget have been refined in the above project budget and are reflective of current projected costs for these fees.
The City Manager recommends awarding the construction of the Base Bid plus Add Alternates A2, A4, and A5a to W.E. Lyons Construction Co. as it will renovate the City Hall to a historic look, provide the P+P building with modern architectural accents and add green space.
As stated earlier in the report, Appendix A lists all the Add Alternatives and their cost. Should the Council wish to choose an item or items on the Add Alternatives list beyond the Add Alternatives included in the total project budget shown above, additional funding would be required. For example, should the City Council choose to add Alternate A3 (Split Cooling System for P+P Conference Rooms) and Alternate A8 (PV Infrastructure), staff would need to increase the project budget by $147,193 plus an 8% construction contingency factor.
Staff recommends Council to authorize the City Manager to award and execute an agreement with W.E. Lyons Construction Company in an amount not to exceed $9,222,972.00 and authorize a budget authority for construction in the amount of $9,960,810.00, which includes Pacifica City Council 5
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contingencies in an amount not to exceed eight percent (8%) of the Construction Contract amount.
Civic Center Financing
In November of 2021, Council adopted a resolution approving a lease financing agreement in the amount of $4M to finance a portion of the construction of the Civic Center Improvement Project with Sterling National Bank (SNB). The loan rate offered for the $4M was 1.97% for a 15-year loan. In addition to the $4M, SNB committed to providing the City with an additional $1M within a 24-month period, if the City decides to increase the borrowing amount. Based on recent discussions with SNB, should the City choose to exercise this option, interest rates would most likely be in the range of 2.95% to 4.5%, depending on when the rate is locked in. Based on these rates, annual debt service for the additional $1M would be approximately $93,000 to $102,000, respectively. As discussed further under the Fiscal Impact section of this report, the City Manager does not recommend increased borrowing for this project, but rather use of available one-time funding.
ALTERNATIVE ACTIONS:
Several alternative actions the Council may choose are as follows:
Contract Award/Add Alternate Alternatives:
1. Award only the Base Bid - Council may choose to only award the Base Bid in the amount of $8,475,307 and not award Add Alternates A2, A4 and A5a, which would provide a cost savings of approximately $807,500. This action is not recommended for reasons noted in the report and because completing these Add Alternatives with the base bid will allow for cost efficiencies.
2. Award the Base Bid with Add Alternates A2, A4 and A5a, plus additional Add Alternates - Council could include any combination of A1, A3, A6, A7, A8, A9 listed in Appendix A, to be funded by undesignated fund reserves.
3. Do not award the Civic Center Facilities Project Construction Services Agreement to W.E. Lyons Construction Co. or Reject all bids and/or rebid the project - This is not recommended as the renovations are needed for the Civic Center facilities and this would result in a delay of that work and would likely increase construction costs due to increasing inflation.
Funding Alternatives:
4. Provide alternative recommendation(s) for the use of one-time funding for the Basis of Award - For example, the Council may choose to use the General Fund (GF) Unassigned Fund balance for the entire additional allocation of $1,580,000 needed for the project budget, rather than using any Returned ERAF funds.
5. Exercise right to increase the City’s lease financing by $1M - Use the additional $1M financing option, which would significantly reduce the use of one-time Returned ERAF and/or the General Fund Unassigned Fund balance. This alternative is viable, however adding an ongoing General Fund expense of approximately $100,000 per year for the next 15 years would contribute to the City’s projected ongoing structural deficit and cost more in interest payments.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
The renovation of the Civic Center Campus to construct safe working conditions for City employees and a safe public facility for the public relates to fulfilling all the City Council's goals and priorities.
FISCAL IMPACT:
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On April 26, 2021, the City Council approved the recommended $10M funding strategy, which identified six sources of one-time funds that total approximately $6 million, leaving $4 million to borrow. The six sources of the original project budget are listed below:
1. General Fund Unassigned Balance: $3,000,000
2. Returned (formerly called “Excess”) ERAF: $1,500,000
3. American Rescue Plan Act for COVID-related safety systems (e.g., HVAC): $525,000
4. Insurance Reimbursement: $350,000 (minimum)
5. Roy Davies Trust Fund for park amenities: $325,000
6. Wastewater Fund for wastewater employee/FTE office space: $318,184 The remaining $4 million is in the form of a lease financing with a competitive interest rate. The bank has also authorized an additional $1 million borrowing to augment the project budget, if needed.
During the mid-year budget discussion with Council in March, staff noted a one-time increase to the City’s General Fund Unassigned balance which included $1M in staff salary savings due to vacancies. Additionally, staff recorded additional Returned ERAF revenues of $900,000 received above the original budget added to the Disaster Accounting Fund at midyear. To fund the additional costs required to cover the Civic Center project “Basis of Award” construction costs and soft costs, the City Manager is recommending Council adopt the attached resolution approving a Budget Amendment to authorize allocation of the additional Returned ERAF revenues of $900,000 from the Disaster Accounting Fund to the project budget. Also, the City Manager is recommending authorizing a one-time use of the General Fund Unassigned Fund Balance (Fund 1) of $751,397 to add to the project budget. The new recommended project Source and Use of Funds is shown below:
Total Project Source and Use of Funds (SUF)
Capital Improvement Fund 22 (Design & Construction) $ 10,000,000 Additional Returned ERAF - Disaster Recovery Fund
(Fund 38)
$ 900,000
General Fund Unassigned Fund Balance (Fund 1) $ 751,397 Total Source of Funds $ 11,651,397
Design Cost $ (1,160,587)
Construction Services Agreement $ (9,222,972)
Construction Contingency (8%) $ (737,838)
Furniture, Technology, & Signage and Soft Costs $ (490,000) Total Use of Funds $ (11,651,397)
Estimated Project End Balance $0
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APPENDIX “A” - COST OF ADD ALTERNATES
ALTERNATE ITEM SCOPE LOW BIDDER
COST
A1 EV Charging Stations Install 4 charging stations $88,070.00 A2* Site Improvements West side and North of City Hall site improvements
$68,145.00
A3 Split Cooling System for
P+P Conference Rooms
Split Heat Pump Units - Indoor units
and associated outdoor units
$78,905.00
A4* Exterior Accents @ P+P
Building
Wood-look phenolic and metal
rainscreen accent material
$346,060.00
A5a* City Hall Exterior - Reuse
Redwood Siding
Remove existing cement plaster and
lath, rehabilitate redwood siding,
and repair underlayment from
interior side, install cavity
insulation, install plywood on
interior. Rehabilitate areas
identified.
$333,460.00
A5b City Hall Exterior - New
Redwood Siding
If it is determined that the redwood is
infeasible to repair due to the existing
condition of the wood, Alternate 5b
may be employed where necessary in
lieu of Alternate 5a. Alternate 5b may
not commence without review by the
Architect and written consent from the
Owner. Alternate 5b: remove cement
plaster and lath, remove redwood
siding (to studs). Install plywood
sheathing, underlayment, new siding,
matching original siding pattern, and
paint.
$310,659.00
A6 A/V
Equipment/Technology
A/V equipment/technology for meeting
and conference rooms
$35,230.00
A7 Window Coverings Manual window coverings for interior and exterior windows; motorized
window coverings at rooms P+P Conf
Rms.
$84,600.00
A8 PV Infrastructure PV infrastructure and stanchions for PVs on P+P roof
$68,290.00
A9 Generator New generator to replace existing
and new shed for new generator.
$171,915.00
Total: $1,585,334
*Alternates recommended to be
funded with the Base Bid
($747,665)
Remaining Unfunded Alternates $837,669
ORIGINATED BY:
Engineering
ATTACHMENT LIST:
Exhibit 1 - Amended Capital Budget for Fiscal Year 2021-2022 (PDF) Pacifica City Council 8
April 25, 2022
Attachment A - Construction Agreement with W.E. Lyons Construction Co. (PDF) Pacifica City Council 9
April 25, 2022
RESOLUTION NO. __-_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA ADOPTING A BUDGET ADJUSTMENT FOR FISCAL YEAR 2021-22
WHEREAS, the City Council has reviewed the Construction Services Agreement to W.E.
Lyons Construction Company for the Civic Center Campus Facilities Project (Project #2021-23); and
WHEREAS, the 2021-22 Adopted Budget appropriated $10,000,000 from Fund 1 (General Fund), Fund 27 (Roy Davies), Fund 34 (WWTP), a bank loan, and various fund sources for expenditures associated with the Civic Center Campus Facilities Project; and WHEREAS, the Civic Center Campus Facilities Project expenditures supported by the various funds are $1,651,397 higher than originally anticipated.
NOW THEREFORE BE IT RESOLVED, the City Council of the City of Pacifica hereby
1. Incorporates changes into the City’s FY 2021-2022 Adopted Capital Budget as set forth in Exhibit 1 attached to this Resolution; and
2. Authorizes the City Manager to award and execute a Construction Services Agreement with W.E. Lyons Construction Company (Attachment "A") in an amount not to exceed $9,222,972.00, authorizes budget authority for construction in the amount of $9,960,810.00, which includes alternates A2, A4, A5a ($747,665), and contingencies in an amount not to exceed eight percent (8%) of the Construction Contract amount; and, authorizes the City Manager to execute future Change Orders not to exceed the contingency amount; and
3. Authorizes the City Manager to amend the FY2021-22 Budget to appropriate additional funds to the total Project Budget as shown in Exhibit 1 to $11,651,397, from the following sources:
a. A budget transfer of additional Returned ERAF revenues of $900,000 from the Disaster Accounting Fund to the Project Budget;
b. Additional appropriation of $751,397 from the General Fund Unassigned Fund Balance to the Project Budget.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 25th day of April 2022, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
Pacifica City Council 10 April 25, 2022
ABSTAIN, Councilmembers:
Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney