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Home My WebLink About12/15/2009, C9 - REIMBURSEMENT TO UNITED RENTALS FOR WATER MAIN CONSTRUCTION ON TANK FARM ROAD counat °� IS coq j agcnaa Report `N.A` c9 CITY OF SAN LUIS O B I S P O FROM: Carrie Mattingly, Utilities Director Prepared By: Gary W. Henderson, Water Division anager Hwy SUBJECT: REIMBURSEMENT TO UNITED RENTALS FOR WATER MAIN CONSTRUCTION ON TANK FARM ROAD RECOMMENDATION 1. Approve the reimbursement of$284,000 to United Rentals Northwest, Inc. for the cost of constructing a master planned water main in Tank Farm Road, and; 2. Approve the reimbursement agreement and authorize the Mayor to execute the agreement. DISCUSSION The United Rentals facility is located at 635 Tank Farm Road and is one of the newly annexed properties in the Airport Area. The property currently does not have water or sewer service provided by the City. The owners of the business desire to extend an existing 12" water main from its current terminus east of the property on Tank Farm to the corner of Santa Fe to provide fire protection to the property. In addition, the property will connect to the water main to provide domestic water service and will pay the appropriate water impact fees. United Rentals does not plan to connect to the City's sewer system at this time. The City's Water System Master Plan identifies the backbone water infrastructure needed to serve the Airport and Margarita areas. The 12" water main extension required to provide service to the United Rentals facility on Tank Farm Road is part of that backbone infrastructure. The City has adopted an "add-on" water impact fee for properties in the Airport and Margarita areas to fund backbone water facilities (such as the one proposed). The "add-on" fees were established to pay for 100% of the backbone water infrastructure in the Airport and Margarita areas. Since the fees are collected as development occurs and some of the road alignments (which is where the water mains will go) have not even been firmly established, it was determined that the backbone water infrastructure would be constructed when needed to serve new development as it occurred. It was anticipated water infrastructure would be extended in the Airport and Margarita Areas at the time new roads were built or when new development was proposed. The United Rentals situation is somewhat unique as it is an existing facility and was not originally envisioned as a driving factor for extension of services. Regardless, it is appropriate to extend water service to the United Rentals facility as requested. United Rentals will undertake the construction of the required infrastructure and be reimbursed for the construction costs but will pay all other costs related to engineering, design, and construction management including payment of fees for City staff inspection services. United United Rentals Reimbursement Agreement Page 2 Rentals staff requested three bids from contractors for this construction project. Two bids were received; the lower of which was for a total of$284,000. City staff reviewed the bids and found them reasonable and appropriate. The proposed water main extension has been designed to City standards and will ultimately be owned and maintained by the City, following final project acceptance. Add-on impact fees were calculated based on estimates for construction costs only. The proposed reimbursement agreement with United Rentals is for construction costs only. As discussed below in the fiscal impact section, there are currently funds available to support the extension of the backbone water infrastructure required to serve the United Rentals facility. While sufficient funds exist today to accommodate immediate reimbursement as reflected in the proposed reimbursement agreement, future infrastructure reimbursements may require longer term reimbursement agreements. The availability of reimbursement funds will be highly dependent on how future development occurs in the Airport and Margarita areas. Staff recommends approval of the reimbursement agreement for the construction costs associated with the water main extension for a total of$284,000. FISCAL IMPACT Previous Financial Plans, as well as the 2009/10 Financial Plan, have included$250,000 per year for construction of backbone water mains in the Airport and Margarita areas. Delays in the Airport and Margarita Area annexations, and the associated construction of master planned roads and other infrastructure, have resulted in an accumulation of funding. Currently, there is $1,711,390 in the Water Distribution Master Plan Implementation account to support the recommended action. Reimbursing United Rentals $284,000 for construction costs associated with this water main in Tank Farm Road will leave $1,427,390 in the Water Distribution Master Plan Implementation account to support construction of other master planned water mains in the future. ATTACEIN(MNT Reimbursement Agreement between United Rentals Northwest, Inc. and City of San Luis Obispo. Attachment Reimbursement Agreement between "United Rentals Northwest, Inc." and City of San Luis Obispo THIS AGREEMENT is made and entered into this day of , 2009 by and between the CITY OF SAN LUIS OBISPO, a chartered municipal corporation of the State of California, herein referred to as "City", and United Rentals Northwest, Inc herein referred to as "Developer". WITNESSETH WHEREAS, as the Developer wishes to extend water services to the property located at 635 Tank Farm Road in San Luis Obispo; and WHEREAS, through the development of the Water System Master Plan (October 2000, Boyle Engineering), certain water facilities were determined to be master planned improvements benefiting a large number of users; and WHEREAS, Developer desires to construct the master planned potable water main for the benefit of the Developer's property in advance of the City's plans to install the water main; and WHEREAS, the City has budgeted funds to support the construction of the master planned water system backbone infrastructure in the Airport and Margarita areas; and WHEREAS, the City has established a separate add on water impact fee for the properties located in the Airport and Margarita areas that are intended to recover all the costs for construction of the master planned water system backbone infrastructure;and WHEREAS, the City wishes to reimburse Developer for the cost of constructing the master planned water main. C 9 - 3 Attachment NOW,THEREFORE, in consideration of the above, the City and Developer agree as follows: 1) The Developer will construct a segment of the master planned 12" potable water main in Tank Farm Road. 2) The Developer agrees to install a water service and meter to provide domestic water service to the property. The Developer agrees to pay the appropriate water impact fee based on the meter size needed to serve the property. 3) Compliance with Laws and Wage Rates. The Applicant shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and County and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work. This includes compliance with prevailing wage rates and their payment in accordance with all provisions of the California Labor Code, specifically including, but not limited to, California Labor Code Section 1720, et, seq.. For purposes of this paragraph, "construction" includes work performed during the design and preconstruction phases of construction, including but not limited to, inspection and surveying work. 4) Upon verification by the City that the constructed facilities meet City standards and are in accordance with the approved project improvement plans; and upon approval and acceptance of said improvements by City, City shall reimburse Developer for the costs of the construction of the potable water facilities in accordance with the cost schedule identified as Exhibit A, which is attached hereto and hereby incorporated into this Agreement by this reference. 5) No interest shall accrue or be paid by City on any amounts subject to such reimbursement. 6) Disbursements of funds by i the City shall be made to: United Rentals Northwest, Inc. 635 Tank Farm Road San Luis Obispo, CA 93401 7) The total amount ($284,000) set forth in Exhibit A shall constitute the full and � q -�t Attachment final amount of project costs to be reimbursed by the City and any costs or expenses not reflected therein, which subsequently may be discovered, charged, or claimed by any person, entity, or party, shall be the sole responsibility of the Developer. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF SAN LUIS OBISPO "DEVELOPER" By: United Rentals Northwest, Inc. By: David F. Romero Steven E. Nadelman Mayor Senior Vice President APPROVED AS TO FORM: P. LOW" City Attorney 1 Attachment EXHIBIT A United Rental: Tank Farm Road Water Main Extension—681 Tank Farm to Santa Fe Road Item Description Unit Quantity Unit Cost Total Cost 1 Mobilization LS 1 25,000 25,000 2 Construction Staking LS 1 3,000 3,000 3 Sheeting, shoring, bracing, trench LS 1 15,000 15,000 Latin (incl. deep jack/bore it) 4 Traffic control for entire project LS 1 30,000 30,000 5 Potholing and report to Engineer LS 1 8,500 8,500 0 12" PVC, C900, Class 150 LS 1 60,000 60,000 7 Fire hydrant assembly—near side LS 1 7,000 7,000 8 Fire hydrant assembly—far side, LS 1 8,000 8,000 with road crossing 9 12" butterfly valves LS 1 5,000 .5,000 10 Sawcutting LS 1 3,000 .3,000 11 Pavement removal —bike lane LS 1 2,000 2,000 (curb to stripe) 12 Waterline tie-in (night work) @ LS 1 2,500 2,500 existing main 13 Jack and bore, including LS 1 65,000 65,000 dewatering 14 Pavement restoration—entire LS 1 40,000 40,000 project 15 Removable bollards for far side LS 1 1,000 1,000 hydrant 16 Restri'ping LS 1 9,000 9,000 TOTAL $2849000