Administrative
Report
H.9., File # 22-5076 Meeting Date: 11/1/2022
To: MAYOR AND CITY COUNCIL
From: TED SEMAAN, PUBLIC WORKS DIRECTOR
TITLE
APPROVE ESCROW AGREEMENT NO. 10277604 WITH SULLY MILLER CONTRACTING
COMPANY FOR SECURITY DEPOSITS FOR THE RESIDENTIAL STREET REHABILITATION PROJECT, CYCLE 2 PHASE 3, JOB NO. 40190
EXECUTIVE SUMMARY
Sully Miller Contracting Company (Sully Miller) was awarded a public works contract in the amount of $4,611,206 to complete the Residential Street Rehabilitation Project, Cycle 2 Phase 3, Job No 40190, and will begin work in early November. As part of the contract administration and under the provision of the Public Contract Code, Sully Miller has opted to open an escrow account into which the City will make retention deposits, in lieu of retaining 5% of the monthly progress payments. The attached Escrow Agreement between Sully Miller, the City and U.S. Bank National Association, is necessary for the administration of that account. Establishment of the account does not increase costs to the City and the account governed by this agreement will be closed immediately upon disbursement of all funds after the project is accepted as complete by the City and the 35-day notice period for potential claims has passed.
BACKGROUND
Sully Miller was awarded a public works contract in the amount of $4,611,206 to complete the Residential Street Rehabilitation Project, Cycle 2 Phase 3, Job No 40190. Construction Notice to Proceed was issued on October 17, 2022. The contractor has started surveying work sites and construction is expected to start in early November and be completed by March 2023.
As required by Public Contract Code Section 9203, the City withholds 5% retention of each progress payment to the contractor to ensure that the contractor completes the project per the Agreement.
Section 22300 of the Public Contract Code provides contractors with the option of having retention funds deposited into a joint escrow account rather than being retained by the administering public agency. Sully Miller Contracting Company has requested that contract retention payments be placed in escrow pursuant to Escrow Agreement 10277604 with U.S. Bank National Association named as the Escrow Agent.
The Escrow Agreement gives the City the right to draw upon the funds in escrow in the event of default by the Contractor. Upon the City's written notice that the Contract is final and complete, the escrow will be closed and all funds held therein less the escrow fees and charges will be returned to the Contractor. The Escrow Agreement requires the Contractor to pay all costs incurred by the
H.9., File # 22-5076 Meeting Date: 11/1/2022
escrow agent.
COORDINATION
The City Attorney’s Office approved the Escrow Agreement as to form.
FISCAL IMPACT
There is no fiscal impact to the City with approval of the proposed Escrow Agreement. All costs associated with the escrow account are to be paid by the contractor.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Agmt - Escrow Agreement No. 10277604- Sully Miller Contracting Company