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Home My WebLink About04/19/2005, C6 - DESIGN FOR TENANT IMPROVEMENTS AT 919 PALM STREET SPECIFICATION NO. 90323 council 04/19/2005 j Acenaa PEpoizt �N CITY OF SAN LUIS OBISPO FROM: Jay Walter, Public Works Director Prepared By: Michael J.McGuire SUBJECT: DESIGN FOR TENANT IMPROVEMENTS AT 919 PALM STREET SPECIFICATION NO. 90323 CAO RECOMMENDATIONS: 1. Approve Amendment No. 1 to the contract in the amount of $39,795 for design services associated with 919 Palm Street Tenant Improvements from RRM Design Group. 2. Approve the transfer of $39,795 from the contingency account to the design account for payment to RRM Design Group for these services. DISCUSSION On September 3; 2002 the City Council awarded an agreement in the amount of$89,290 to RRM Design Group to furnish design services for tenant improvements at 919 Palm Street. Since then, design revisions initiated by the City have resulted in five Additional Service Authorizations totaling $60,898. Additional Services Authorization No. 5 was established as $24,973 plus hourly tasks. These hourly tasks, along with other expenses from the original design contract, totaled nearly $33,000, which has remained unpaid since September, 2004 due to questions regarding some of the billing items. In January, 2005, City Staff met with RRM Design Group and negotiated a credit for the City, reducing the outstanding invoices to $22,256. Recently, a partial payment of $2,461 has been made to RRM Design Group for the unpaid invoices, emptying the design account balance. Staff recommends the transfer of$19,795 from the contingency account to the design account in order to fully pay these outstanding invoices. Also, in January, as a result of estimated increases in the cost of improvements, Staff initiated value engineering, which entails investigating ways to lower the overall construction cost for the tenant improvement project. Value engineering was recently concluded, finding a potential $400,000 cost savings for construction by elimination and/or substitution of building materials and redesign of certain components. These value engineering revisions must be incorporated into the plans and specifications by RRM Design Group in order for the project to be bid at a reduced cost. The proposed tenant improvement plans and specifications, and accompanying construction budget estimates and adjustments, are currently scheduled for Council consideration on May 17. Staff recommends the transfer of an additional $20,000 to the design account to cover the costs of the value engineering revisions (see Attachment). RRM Design Group and their consultants have indicated they will not make design revisions to the plans and specifications until the outstanding invoices have been paid. This will create a delay in the overall construction schedule. p t litX — l Design for Tenant Improvements at 919 Palm Street Paget FISCAL IMPACT The following table summarizes existing and additional design contract costs: Existing Design Contract Costs: Construction Documents—Electrical/Lighting $1,353 Bidding Assistance 15,806 Construction Review 1;588 Statement of Probable Construction Cost 1,240 Meetings & Shell Coordination 11,205 Reimbursables 1,706 Credits (10,642) Design Account Payment (2,461) $19,795 Additional Design Contract Costs: Value Engineering Revisions by RRM&List Engineering $10;761 Value Engineering Revisions by Thoma Electric (estimated)* 7,500 Additional Meetings and/or Coordination 1,739 $20,000 Total Design Contract Costs:. $399795 * Note at this time no estimate has been provided for electricalflighting plan revisions. Staff is estimating this to be $5,000 to $7;500., More specific information will be provided to the City Council as it becomes available. Currently; there is $171,000 budgeted for contingencies for the office component of this project. This proposed funding transfer will leave a contingency balance of$131,200. ALTERNATIVES 1. The City has a contractual obligation to pay for the fees incurred to date. Council could direct Staff to attempt to further negotiate fee reductions. Staff believes that they have negotiated as much of a reduction as possible.. 2. A different architectural firm could be hired to complete the revisions. Staff does not believe this is practical due to the costs involved and the time delays that would occur. 3. The current plans and specifications could be used for bidding purposes but the project would be significantly more expensive to build. ATTACHMENT Amendment No. 1 to Agreement To Furnish Design Services For Tenant Improvements At 919 Palm Street with RRM Design Group.. I:\—Council Agenda Reports\W05 agenda reports\Engineering and Maintenance Services(Walter)\Capital Projects Design(Lynch)\Shortcut to 90323 CAR Value Engineering.doc ATTACHMENT AMENDMENT TO AGREEMENT THIS AMENDMENT TO AGREEMENT is made and entered in the City of San Luis Obispo on this 19th day of April, 2005,by and between the CITY OF SAN LUIS OBISPO,a municipal corporation,herein after referred to as City,and RRM Design Group,hereinafter referred to as Consultant. WITNESSETH: WHEREAS, on September 3, 2002, the City entered into an Agreement with Consultant for design services associated with the tenant improvements for 919 Palm Street Offices;and WHEREAS, the City desires to amend the scope of services to include additional services and value engineering revisions to the tenant improvement plans and specifications and Consultant has submitted a proposal for this purpose that is acceptable to the City. NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained,the parties hereto agree as follows: 1. The scope of services and related compensation is hereby amended as set forth in Exhibit A attached hereto. 2. All other terms and conditions of the Agreement remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first written above. ATTEST: CITY OF SAN LUIS OBISPO, A Municipal Corporation By: City Clerk City Administrative Officer for Mayor] APPROVED AS TO FORM: CONSULTANT By: ity A rney r Exhibit A Existing Design Contract Costs: Construction Documents—Electrical/Lighting $1,353 Bidding Assistance 15,806 Construction Review 1,588 Statement of Probable Construction Cost 1,240 Meetings & Shell Coordination 11,205 Reimbursables 1,706 Credits (10,642) Design Account Payment .(2,461) $19,795 Additional Design Contract Costs: Value Engineering Revisions by RRM &List Engineering $10,761 Value Engineering Revisions by Thoma Electric (estimated) 7,500 Additional Meetings and/or Coordination 1,739 . $20,000 Total Design Contract Costs: $39,795