Administrative
Report
H.9., File # 23-7328 Meeting Date: 12/19/2023
To: MAYOR AND CITY COUNCIL
From: TED SEMAAN, PUBLIC WORKS DIRECTOR
TITLE
ACCEPT AS COMPLETE THE REDONDO BEACH TRANSIT CENTER PROJECT, JOB NO. 20120 AND THE KINGSDALE AVENUE WIDENING PROJECT, JOB NO 41150
APPROVE AND AUTHORIZE THE CITY ENGINEER TO EXECUTE A FINAL CHANGE ORDER IN THE AMOUNT OF $190,000 FOR THE WORK
AUTHORIZE THE CITY ENGINEER TO FILE A NOTICE OF COMPLETION FOR THE PROJECT
WITH THE LOS ANGELES COUNTY REGISTRAR-RECORDER AND RELEASE THE RETENTION PAYMENT UPON EXPIRATION OF THE 35-DAY LIEN PERIOD AFTER SAID RECORDATION AND
NO CLAIMS BEING FILED UPON THE PROJECT
EXECUTIVE SUMMARY
On May 19, 2020, the City Council awarded MS Construction Management Group (Contractor), a public works contract for $11,500,000 for the construction (under a combined contract) of the Redondo Beach Transit Center Project, Job No. 20120 and the Kingsdale Avenue Widening Project, Job No. 41150 (Project). The Project encountered several surprises and challenges that have been previously detailed to Council, including COVID protocols, hyper-inflation of construction materials, design deficiencies, and unforeseen conditions underground. Despite this, the new Transit Center opened in January 2023, and the Kingsdale Ave street widening was completed in June 2023. The Project is now complete and ready to be formally accepted as such by the City. The Project recently received a “Project of the Year” award from the American Public Works Association.
Over the last several months, staff has been working with the contractor on Project closeout, including resolution of several outstanding and disputed work items. A verbal compromise agreement has been negotiated by staff, resulting in one final change order in the amount of $190,000. The Council has authorized the City Engineer to make change orders totaling $2,725,000 to date. This final negotiated settlement will exceed the allowance for City Engineer approval by approximately $97,000. As such, the City Council is being asked to authorize the final change order.
If approved, staff will close out the Project, a process that includes payment of the final invoice, recordation of the Notice of Completion with the County, and release of the retention after the appropriate waiting period with no claims being made.
With Council approval of this final change order, the total value of the construction contract for the Project is $14,321,825. Funding for the Project comes entirely from transportation restricted funding
H.9., File # 23-7328 Meeting Date: 12/19/2023
sources, including substantial Federal, Metro Measure M, and Metro Measure R grant funding.
BACKGROUND
The Project is the City’s largest active infrastructure improvement to be completed in many years.
The project was initially funded in FY 2007-08, with design beginning in 2009 and divided into two phases, the Transit Center Terminal and the associated widening of Kingsdale Avenue. Design was completed in late 2016 after being delayed several times due to scope changes, design consultant company merger that included office and staff relocation, mall ownership changes affecting the property acquisition, and revisions to the building code. Funding shortages scuttled the first attempt to award the project in early 2018, but staff secured additional funding from Metro to allow for a successful procurement process that was completed in the Spring of 2020. On May 19, 2020, the contract was awarded to M.S. Construction with an original contract total of $11,500,000.
Transit operations commenced at the Transit Center on January 29, 2023, with an official ribbon cutting opening held on February 7, 2023. Completion of the Kingsdale Widening phase occurred in June 2023. Approval of this item will allow staff to conclude the administrative closeout of the Project construction contract, file a Notice of Completion with the Los Angeles County Registrar-Recorder's Office, and authorize release of retention in 35 days, assuming no claims are made against the Project.
Per City policy (APP 14.1), projects of this size include staff authorization to approve change orders in the amount of 10% of the contract, which equaled $1,150,000 for this Project. On February 15, 2022, the City Council authorized a change order for $500,000 to replace the upper parking lot at the site. The project plans called for a 2-inch grind and overlay, but the pavement was in such bad shape, this could not be done without rebuilding the base layers as well. At that time, the Council authorized an increase in staff authority for change orders to 15%, bringing the total change order limit to $2,225,000. On March 14, 2023, the Council approved another increase of $500,000 to the change order cap under staff authority, as additional funding was secured by staff from Metro. The change order ceiling for staff authorization is now $2,725,000, of which $2,631,826.25 has been authorized and expended.
Over the past several months, the Contractor has maintained that the City is responsible for additional costs associated with supply chain delays, rising material costs, and Project timeline extensions fueled by the COVID-19 pandemic. Staff has asserted that resulting change orders were unauthorized, but has been reviewing these instances with the contractor to reach a fair and responsible resolution. After extensive data review, project team interviews, and negotiations, staff recommends execution of a final change order in the amount of $190,000. This will settle the disputed items and result in a final change order percentage of 25% of the original contract value.
The Contractor has agreed to these terms in writing. The amount, however, exceeds current staff authority and requires City Council approval to allow for project closeout.
COORDINATION
This Project has been coordinated with the Public Works Engineering and Maintenance Divisions, and the Transit Division in the Community Services Department.
FISCAL IMPACT
Approval of the recommendation will authorize an additional $96,826 to the Project’s contract value.
Funding for the final payment is available through Metro’s Regional Measure R program, and adds
H.9., File # 23-7328 Meeting Date: 12/19/2023
Funding for the final payment is available through Metro’s Regional Measure R program, and adds no additional financial burden to the City.
Construction Funding Construction Expenditures
Prop C $ 3,530,000 Transit Center (Phase 1) $ 1,600,000 Local Measure M $ 672,081 Transit Center (Phase 2) $ 9,900,000 Local Measure R $ 16,207 Change Orders $ 2,821,826
Regional Measure M $ 6,501,029
Regional Measure R $ 1,502,509
Federal Grants $ 2,100,000
Total $ 14,321,826 $ 14,321,826
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Change Order