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HomeMy WebLinkAbout04/24(1)/2001, C9 - CORPORATION YARD WAREHOUSE 1 ll council MeeaDA A ri124,2001 j apenba Repoat Jim 041 CITY OF SAN LUIS OBISPO FROM: Michael McCluskey,Public Works Dir Prepared by: Bridget O. Fraser,Associate Engineer SUBJECT: CORPORATION YARD WAREHOUSE CAO RECOMMENDATION: 1. Award a contract to Rarig Construction Company in the amount of$436,500 for"Corporation Yard Warehouse, Specification No. 99853" and authorize the mayor to execute the contract. 2. Appropriate $97,100 from the unreserved General Fund Balance. 3. Approve the transfer of$16,200 from the Water Fund Carryover Account. 4. Approve the transfer of$16,200 from the Sewer Fund Carryover Account. DISCUSSION: Background For almost 20 years,there has been an interest in constructing a warehouse at the City's corporation yard. However, for a variety of reasons, including financial crisis, this project had been deferred several times. Finally,the warehouse was funded with the approval of the 1999-01 Financial Plan. The importance of the warehouse to the City operations was fully detailed in the Capital Improvement Plan Summary(Attachment 1). Current Bid Plans and Specifications for this Warehouse Project were approved by the City Council last fall. When the final building permit was ready, the project was advertised for bid. Nine bids were opened on March 22, 2001, all of which were substantially higher than the Engineer's Estimate and approved budget. Rarig Construction of San Luis Obispo was the low bidder with a bid of $436,500. A bid summary is provided in Attachment 2. This is 38% higher than the Engineer's estimate of$315,000. Staff attributes this to several factors. 1. During construction it was discovered that the existing fire alarm panel could not be expanded to incorporate the new warehouse as planned. An addendum was issued to include the replacement of the alarm control panel and tie in of all detectors and devices for the entire Corporation Yard. This added cost is estimated as$10-15,000. 2. In reviewing the Engineer's Estimate it was found that the cost for painting the trim and exposed primed surfaces was inadvertently omitted. Based on review of the bids the average cost for painting is approximately$20,000. 3. The costs for the electrical work appeared to be nearly 3 times the estimate. All,bids received had high costs for the electrical component indicating the estimate was incorrect. 4. Over the last 1'/z years, building projects in particular, have consistently come in over the estimates. (Example: 879 Mono -20%; Fire Station 3 Remodel- 15%; Throop Park Restroom- 42%; Downtown Restroom - 34%.) With construction booming, contractors are busy. This is reflected in the bid prices. 5. The original cost estimate was prepared for a simple metal building taken directly from a manufactured building catalog. During the ARC review process the following features were added which customized the design of the building and increased costs: a) the vel&stirage Council Agenda Report—Corporation Yard Warehouse Page 2 shed roof was no longer continuous with the main building roof; b) the building roof was no longer a standard metal roof at its apex but one with an optional venting system; and c)optional overhangs were added to the building roof perimeter. The low bidder has not informed staff of what additional costs these changes made, but the point is that the original budget and estimate did not foresee these changes. Little can be done to bring the cost of the project in line with the approved budget except to substantially reduce the building size. The building has already been significantly reduced in size from that recommended in the Facilities Master Plan (from 18,000 square feet to 6,000 square feet). A smaller building will not fulfill the storage and covered parking needs of the facility. A needs assessment and preliminary design for the warehouse was completed in 1984 when the Corporation Yard Facility was originally designed. The main purpose of the warehouse was for storage of bulk items needed for maintenance on a frequent basis. The original plan included a 18,000 square foot warehouse, however, it was removed from the construction contract due to budget constraints. The 1988 Facilities Master Plan reconfirmed the need for a warehouse and also recommended the inclusion of covered parking spaces as it was found that equipment was prematurely deteriorating from constant exposure to sunlight and weather. Since then, management practices have changed in the area of storing on-site inventory allowing for a reduction in needed storage space. With this in mind, this project was designed to include construction of a 6,000 square foot pre-engineered metal building flanked on three sides by an awning to provide approximately 20 covered parking spaces for trucks and equipment. FISCAL EMPACT: This project is included in the 1999/01 Financial Plan, Appendix B on Pages 422-424. The costs for the warehouse were to be split between Public Works and Utilities based on an estimated usage by each department. Thus, costs were divided between the General, Water and Sewer Funds as follows: 75% General Fund, 12.5% Water Fund and 12.5% Sewer Fund. A current accounting of the project budget and estimates for construction costs are recapped on Attachment 3. As shown, there is a current balance of $360,500 remaining in the project accounts for construction and inspection. An additional $129,500 is needed to fully fund the project. Staff recommends going forward with the project by providing the additional funding. We recommend funding the additional cost of $129,500 from the General, Water and Sewer Funds using the same benefit ratios as the original project cost, summarized as follows: Allocation Percent Amount General Fund 75.0% $ 97,100 Water Fund 12.5% $ 16,200 Sewer Fund 12.5% $ 16,200 Total 100.0% $ 129,500 General Fund. Funding for the General Fund's portion of the added cost is not available within existing resources. As such, we recommend appropriating $97,100 form the unreserved General Fund balance. Based on the Mid-Year Budget Review for 2000-01 and Council approved changes since then, this will result in an ending fund balance that is 24% of operating �pt QQaies ' I \J Council Agenda Report—Corporation Yard Warehouse Page 3 compared with our policy minimum of 20%. Additionally, after adjusting for the City's likely construction cost for our share of repairing the Santa Rosa - Stenner Creek Culvert (about $200,000),this will reduce the estimated carry over balance available for 2001-03 to $960,000. Water and Sewer Funds. To fund the water and sewer fund's share of$32,400, staff proposes to use water and sewer fund carryover. Currently, there is about $460,000 available in the water fund's general carryover and about$96,000 in the sewer fund's general carryover that can be used to support this project. ALTERNATIVES: 1. Redesign the building. The most direct way to bring costs in line with the budget would be to down size the building. For reasons stated previously, staff does not support this alternative as the building size has already been reduced to a third of the original size recommended in the Facilities Master Plan. 2. Defer the project. Based on past experience, costs are more likely to increase with time. The project will be more expensive to build as time passes. 3. Abandon the project. Corporation Yard's need for storage of bulk items and covered parking will continue to be unmet. Premature deterioration of vehicles and equipment will continue. Attachment: 1. CIP Summary 2. Contract 3. Bid Summary Sheet 4. Accounting of Construction Costs W-Gurrent RgectsGdps_99853 CY Warehouse\D=x=td&StaB Repoft1M53 CAR Award CY Warehouee.DoC C9-3 1999-01 Financial Plan ATTACHMENT 9 CAPITAL IMPROVEMENT PLAN PROGRAM: Buildings REQUESTT=: Corporation Yard Warehouse Project Summary Constructing a 760 square meter (8,000 square foot) storage building at the Corporation Yard will cost$270,000 in 1999-00. Project Objectives e Prevent premature wear on construction equipment • Extend the service life of construction equipment • Realize higher resale or trade-in value on surplused construction equipment • Prevent potential injuries from frequent use of the Corporation Yard mezzanine for storage • Realize savings on bulk pricing and reduce shipping costs for materials which must be ordered from out-of- town suppliers Project Focus This project will build new facilities. Existing Situation The need for a warehouse at the Corporation Yard has been well-documented and acknowledged in past budget deliberations. Major issues are discussed below. Exposure of Construction Eguirnnent One of the primary purposes for the warehouse is to protect expensive construction equipment from premature wear from exposure to ram and sunlight Rain and ultraviolet radiation cause premature oxidation of paint, metal, and rubber hydraulic hoses on all vehicles, but particularly on expen- sive heavy construction equipment and specialty vehicles. This oxidation.increases maintenance expense, short- ens expected service life by an estimated five years, and reduces resale and trade-in value. The acquisition cost of the 24 pieces of construction equipment which would be parked under cover was over$1.2 million. With bet- ter protection from exposure,Public Works estimates that the City would realize about$16,000 per year in higher resale and trade-in prices when this equipment is replaced. Inefficient and Unsafe_Storase. Field crews must now store materials in the mezzanine of the maintenance building and at remote locations throughout the City, mostly in storage containers near Mission Plaza and in the parks. Continually stocking and then retrieving materials from these locations wastes time and disrupts repair activities. Also, the maintenance building mezzanine was intended for long-term storage of rarely used supplies and equipment Frequent storage and retrieval of materials from the mezzanine invites continual safety violations. For instance, moving heavy loads requires using the overhead crane, which in tum requires OSHA certification for the operator and use of hardhats throughout the area. Often a certified operator is not around when needed, creating the temptation to operate the crane without certification and observation of safety procedures. Also, OSHA regulations require employees to use handrails when ascending and descending the stairs to the mezzanine. When employees retrieve light materials from the mezzanine, they routinely use both hands to carry the load and violate safety procedures when descending the stairs:_ Inability to Use Bulk Purchasing. Maintenance crews generally try not to stockpile large quantities of materials, particularly materials which are readily available from local vendors. Because some frequently used materials must be ordered from out-of-town suppliers, though, it makes sense to stockpile larger quantities to get bulk C9-4 422 ATTACHMENT 1 Corporation Yard Warehouse Page 2 of 3 pricing and save shipping costs. But this strategy is not feasible if materials must be stored outside,because there would be unavoidable weather deterioration and sometimes thefh Some equipment, lice plastic barriers and traffic delineation barriers and cones, must now be stored outside because there is no room elsewhere. Continuous exposure to sunlight deteriorates these items and necessitates early replacement. Public Works crews estimate that bulk pricing and extended life for parts and materials available with covered or indoor storage would save about$7,000 each year. Goal and Policy Links Adopted Building Maintenance Program goals.. safe and productive work environments • 1995-97 Financial Plan(pages E-12 and E-27) 1997-99 Financial Plan(pages E-12 and E-33) 1988 Facilities Master Plan Project Work Completed Needs assessment and preliminary design for a warehouse were completed when the Corporation Yard was originally.designed, but this 1,765 square meter building was deleted from the construction contract because of budget limitations. The 1988 Facilities Master Plan reconfirmed the original basic needs assessment but recommended a slightly smaller building size of 1,670 square meters with 10 covered parking spaces at a cost of $1.5 to 2.0 million. This plan commented that 1,670 square meters would suffice primarily because of slower city growth than originally projected. Staff evaluation in 1997 concluded that different management practices (particularly the emergence of"just-in-time" inventory management) and more basic accouterments would allow reduction of needed building size to 760 square meters at a construction cost of less than$500,000. In consultation with an architect, the engineering staff has prepared plans and specifications for a pre-engineered metal building. As part of the 1997-99 Financial Plan,$99,000 was provided for design,concrete flooring and equipment shelter. Other Special Review Considerations • Planning review • Architectural review Building and safety review Project Phasing and Funding Sources Pro'ed Costsby Type Project Costs To-Date 1999-00 2000-01 2001-02 2002-03 Total Design 9,000 9'000 Construction 90,000 260,000 350,000 Construction management 10,000 10,000 .on - Total 89,000 1 270,000 - - - 369,000 423 C9-5 ATTACHMENT 1 Corporation Yard Warehouse Page 3 of 3 Proect Fundinz bv Source Project Funding Sources To-Date 1999-00 2000-01 2001-02 i002-03 Total General fund 66,000 216,000 282,000 Water fund 16,500 27,000 43,500 Wastewater fund 16,500 27,000 43,500 Total 99,000 270,000 - - - 369,000 Implementation Task Date Complete plans,specifications,and final cost estimates. mme Advertise for bids on a construction contract February 2000 Award a construction contract May 2000 Complete construction. February 2001 Project Manager and Department Coordinator Project manager: Reinie Jones Department coordinator. Todd Martin Public Art Policy One percent of project construction costs should be set aside for public art Project Effect on the Operating Budget Hours of engineering staff time needed for construction project design: 250 Hours of engineering staff time needed for construction inspection: 100 Horns of maintenance stafftime.needed for project coordination: 300 Conceptual Design See attached. C9-6 sw odstao sm, res .. o�e - mos E LflIF. � � /���e� "'...2.Ce eii;a a5 Jo !y.�D Ywa AZa Y`Wr 11111Jtl�3�Jtl1101S NJl12LL 4 3Sf10Fi3NtlM Q S e C7 g ATTACHMENT 1 0 o u t m1.. -'u Yi Q q.. ...E i.�� L`� LL 's IJZ U_ . ._. C" w SG�m r U EEE EE >a. 0- uu� CL m �NEg£S UU�U m Q ry V 6 Y V lV i+1 O.N 0I� J Q m R' N U cc N _ Z O Z Q ® {0 LLI`/ r Q ® 'LU ® V/ O VI N C9-7 ATTACHMENT 2 CITY OF SAN LUIS-ORTSPO CALIFORNIA AGREEMENT THIS AGREEMENT,made on this day of 20_,by and between the City of San Luis Obispo, San Luis Obispo County, California, hereinafter called the Owner; and Rarig Construction Company_ hereinafter called the Contractor. WITNESSETH: That the Owner and the Contractor for the consideration stated herein agree as follows: ARTICLE 1,SCOPE OF WORK: The Contractor shall perform everything required to be performed, shall provide and furnish all of the labor;materials; necessary tools,expendable equipment, and all utility and transportation services required to complete all the work of construction of Corporation Yard Warehou-ce= Sperification Nn.99853 in strict accordance with the plans and specifications therefor,including any and all Addenda,adopted by the Owner,in strict compliance with the Contract Documents hereinafter enumerated. It is agreed that said labor, materials, tools,.equipment, and services shall be furnished and said work performed and completed under the direction and supervision and subject to the approval of the Owner or its authorized representatives. ARTICLE II, CONTRACT PRICE: The owner shall pay the Contractor as full consideration for the faithful performance of this Contract,subject to any additions or deductions as provided in the Contract Documents,the contract prices as follows: Item Item Unit of Estimated Item Price(in Total No. Measure Quantity figures) (in figures) 1. Base Bid.Based upon all work Lump Sum 1 436,500.00 $436,500.00 required to satisfactorily complete the work indicated in the plans and Special Provisions. BID TOTAL• 43fisoo_no Payments are to be made to the Contractor in accordance with and subject to the provisions embodied in the documents made a part of this Contract: Should any dispute arise respecting the true value of any work omitted, or of any extra work which the Contractor may be required to do, or respecting the size of any payment to the Contractor,during the performance of this Contract,said dispute shall be decided by the Owner and its decision shall be final,and conclusive. ARTICLE III,COMPONENT PARTS OF THIS CONTRACT: The Contract consists of the following documents; all of which are as fully a part thereof as ifherein set out in full,if not attached,as if hereto attached: 1. Notice to Bidders and information for bidders. 2. Standard Specifications,Engineering Standards and Special Provisions. 3. Accepted Proposal. 4. Public Contract code Section 10285.1 Statement and 10162 Questionnaire. O - C" Q - I - 7 ATTACHMENT 2 5. Noncollusion Declaration. 6. Plans. 7. List of Subcontractors. 8. Agreement and Bonds. 9. Insurance Requirements and Forms. ARTICLE IV. It is further expressly agreed by and between the parties hereto that should there be any conflict between the terms of this instrument and the bid or proposal of said Contractor, then this instrument shall control and nothing herein shall be considered as an acceptance of the said terms of said proposal conflicting herewith. IN WITNESS WHEREOF,the parties to these presents have hereunto set their hands this year and date first above written. APPROVED AS TO FORM: CITY OF SAN LUIS OBISPO, A Municipal Corporation City Clerk Mayor APPROVED AS TO FORM: CONTRACTOR City Attorney Rarig Construction Company C9-9 -2- OCL Oli s 6 s — ATTACHfNE.M g e 2 a m o g o $ $ c $ g „, g $ � $ V a 00 U ? g CN 8 � Z U � ''i• Z m ;D a O $ 9 o o = u $ 2 $ a z Z a C v 00 00 3 O e EG, UE.G. U v: In OF c m V O 4 _ � d y Q z z � a a A O F F R � o o o 0 O C N � � L•. Z O. O D d z at f U °° v n m m m C9-10 � � me Z � Z ^ Council Agenda Report—Corporation Yard Warehouse Attachment 4 Current Funding Sources: Fund General Water Sewer Total Used Remaining Design: $ 65,300 $16,500 $16,500 $98,300. $7,300 $91,000.00 Construction 206,000 27,000 27,00.0 260,000 500 259,500 Management 10,000 0 0 10,000 0 10,000 Total : $281,300 $43,500.00 $439500 $368,300 $$79800.0 $3609,500.00 0 Estimated Construction Costs: Construction 436 500 ffispection and Testing 10,000 Contingencies P, 10% $43,500 Total: $4909000 Available Balance: $360,500 Budget shortfall: $1299500.00 C9-11