HomeMy WebLinkAbout05/04/2004, C3 - BUDGET AMENDMENT: DAMON-GARCIA SPORTS FIELDS i
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CITY O F SAN LUIS O B I S P O
FROM: Michael D. McCluskey, Director of Public Work /
Prepared By: Daniel Van Beveren, Associate Engineer Iwl
SUBJECT: BUDGET AMENDMENT: DAMON-GARCIA SPORTS FIELDS
CAO RECOMMENDATION
1. Approve an increase in the construction budget for the Damon-Garcia sports fields of$200,000..
2. Transfer$200,000 from completed projects in the Capital Outlay Fund($194,600) and Parkland
Development Fund($5,400)to fund the increase in the construction budget.
3. Transfer the remaining balance from completed projects in the Capital Outlay Fund of$45,200
to the CIP Reserve.
REPORT-IN-BRIEF
As the construction of the Damon-Garcia Sports Fields project is nearly complete, an evaluation of
the construction budget has revealed that an additional $200,000 will be needed to fund
unanticipated project costs. This budget deficit is due to the culmination of numerous items, many
of which have only recently become apparent. The extra costs are described in this report by the
following categories:
1. Optional Costs
2. CalTrans Permit Related Costs
3. Omitted Items
4. Design-Related Errors
5. Unknown Site Conditions
6. Utility-Related Costs
7. Funds Transferred to Design Account
An evaluation of completed Capital Improvement Plan (CIP) projects in the Capital Outlay and
Parkland Development Funds shows an available remaining balance of$245,200. By closing out
these projects, $200,000 can be transferred to the Damon Garcia Sports Fields construction
account, and the rest($45,200) can be transferred to the CIP Reserve.
DISCUSSION
Background
The Damon-Garcia Sports Fields project has been under construction for approximately one
year. On December 9, 2002, the CAO awarded the construction contract to Souza Construction,
with a contract amount of$3,363,509 and a construction contingency of$396,000. The Council
approved an additional $50,000 for construction in December 2003. Construction of the project, 2
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Budget Amendment: Damon-Garcia Sports Fields Page 2
is now nearly complete. An increase in construction quantities as well as the accumulation of
additional contract change orders on this project have resulted in the need for an additional
$200,000 to fund completion of the project.
Why the Additional Cost Increase?
The Council approved an increase of$50,000 in the project contingency budget on December 3,
2003. At that time, staff had estimated that this increase would be sufficient to fund all
anticipated final project costs through the end of construction. However, as construction
progressed, more project revisions and additions arose that had not been anticipated at that time.
As discussed below, most of these added costs are for modifications that could not have been
reasonably foreseen at the time of bid, or are solely related to quantity changes that would have
been reflected in the original bid if more accurate estimates had been available at that time. In
short, with the exception of expanding the area of sand-based turf to include all of the turf area,
which was specifically approved by the Council in May 2003, none of the changes reflect
"project'creep for optional items.
Summary of Construction Cost Increases
The following discussion summarizes all of the costs, which were unanticipated at the time of
project award. The costs, indicated by category, were paid for out of the construction
contingency, which thus far is approved at $446,000. The additional $200,000 that is requested
will be sufficient to bridge the funding gap for all of these unanticipated items.
Optional Costs-$70,000
One of the most important features of the sports field complex is a state of the art technology in
which sand is used as the material beneath the turf. During the initial months of construction,
staff recognized the value in expanding the area of sand based turf to include all of the turf area
on the project. As noted above, this decision was supported by Council action in May of 2003
by the approval of this contract change order, and represents the only optional cost increases in
this project.
CalTrans Permit Related Costs- $65,000
This project includes frontage improvements to State Highway 227 (Broad Street), which is
adjacent to the facility. At the time that the project was bid, CalTrans had not yet approved the
Public Improvement Plans for the Broad Street work. The CalTrans approval process resulted in
some modifications to the Broad Street plans, and in particular, an increase in the area of new
asphalt required and the amount of payment to the contractor for this work. Additionally, the
project specifications stated that the City was responsible for all CalTrans permit fees associated
with the work in the State Right-of-Way. The $65,000 is the sum of all of the extra costs
associated with the work on Broad Street.
Omitted Items- $170,000
These costs are those which staff considered being a necessary component of the project, but
were not included in the original plans and specifications, or were misquantified in the bid sheet.
It is worth noting that costs within this classification are not extra costs related to the design,
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Budget Amendment: Damon-Garcia Sports Fields Page 3
rather, costs that would have resulted in the initial bid had all of these items been on the plans
initially. In other words, if the original plans and specifications had included these items of
work, then the result would have been a higher initial bid amount by the contractor.
The cost items which fall into the category of"Omitted Items" are reflected in eleven contract
change orders, and an additional seven bid items with actual quantities higher than shown in the
original bid sheet. The cost of most of these omitted items tends to be in the range of a few
thousand dollars each. Items such as these are typical of any construction project, and fully
expected in any construction project of this magnitude. The following summarizes the two most
significant ones.
Onsite electrical work. The item quantity sheet used by contractors for bidding purposes
contained numerous errors and items with incorrect quantities. The plans did not match the bid
sheet quantities for much of the electrical work. In order to compensate the contractor for the
actual work done according to the plans, a final quantity adjustment was negotiated with the
contractor with an additional cost of approximately $46,000.
Water pressure booster pump. It was determined during construction that neither the existing
water pressure of the domestic water system nor the anticipated water pressure of the future
recycled water system would be adequate for proper irrigation of the fields. The addition of a
water pressure booster pump would provide the additional needed water pressure, and was added
to the project at a cost of$48,366.
Design-Related Errors- $45,000
Approximately twenty contract change orders were needed for items of work not properly
addressed in the original plans and specifications. The omission of these items from the plans
generally resulted in an increase in project costs due to the fact that the design errors needed
addressing after construction had taken place.
An example of one such work item is the necessary addition of field drains. The original field
drains were installed according to the plans. Immediately after a subsequent rain, it was apparent
that the field was not draining properly in a couple of locations. Additional drains were installed
to fix the problem, but at a much higher cost than if these drains had been properly located
initially.
It is unknown at this time if the costs resulting from design-related errors is recoverable.
Although we have determined that these costs are the direct result of errors or omissions from the
plans and specifications prepared by the team of consultants, they represent about 1% of total
construction costs, and may be within the realm of what might reasonably be expected and
acceptable. Upon completion of the project, staff will further investigate this issue and will
pursue the recovery of these costs if it is determined to be appropriate.
Unknown Site Conditions- $17,000
Typical of any construction project, there have been unanticipated field conditions addressed
during construction. Items of this nature have included soft soil caused by a high groundwater
table, serpentine rock requiring special testing, handling and disposal; concrete and debris
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Budget Amendment: Damon-Garcia Sports Fields Page 4
requiring disposal, and other unanticipated field conditions which were addressed and paid for
through contract change orders.
Utility-Related Costs- $170,000
Although the project is a City project, it is in effect a development project, and is subject to all of
the same requirements of any private development project. An integral component to the
development of this property is the coordination with the private utility companies (PG&E and
SBC), which will serve the facility. Due to the complex nature of this project, the developer
(City) costs were a bit higher than that of a typical smaller development project. The specific
power requirements for the site required that the point of connection to the power grid be on the
opposite (east) side of Broad Street. This required a very expensive underground installation of
conduits, which needed to be bored underneath Broad Street to the location of service
connection.
Furthermore, new vaults and conduits were added along Broad Street and Industrial Way. All of
this utility-related construction was constructed according to the construction documents
provided by the PG&E and SBC. The costs associated with this work was paid for out of the
project contingency, and included construction costs of approximately $105,000, and direct
permit fees in the amount of$65,000.
Transfer to Design Account- $68,000
As the project progressed through construction, significant additions were made to the project..
The addition of the public improvement plans for Industrial Way, design of the water pressure
booster pump and the need for construction support were services provided by FIRMA, the
designer and lead consultant on this project. Amendments #3 and #4 to the agreement with
FIRMA reflect these_ additional services, and were approved by the Council on July 1, 2003 and
December 2, 2003. The total cost of services included in these two amendments was $68,000,
and was funded from the construction contingency.
Additional Cost Summary
The following summarizes added costs and supplemental funding requirements:
SupplementalAdded Costs and
Sand Field Expansion 70,000
CalTrans Permit Requirements 65,000
Omitted Items 170,000
-–---- ...... -..._._— ..... .... ...-... ... ..
Design Errors 45,000
Unknown Site Conditions 17,000
Utility Costs 170,000
Additional Design Costs _ 68,000
Other Change Orders_ and Contingencies 41,000
Total Added Costs 6469000
Current Contingency Budget 446,000
Supplemental Funding Needs $ 2009000
As discussed below in greater detail in the Fiscal Impact section, we recommend funding these
supplemental needs by transferring available balances from completed projects.
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Budget Amendment: Damon-Garcia Sports Fields Page 5
CONCURRENCES
The Parks & Recreation and Finance & Information Technology Directors concur with the CAO
recommendation.
FISCAL IMPACT
As part of the City's regular budget preparation process, we take a close look at the fiscal status
of all current CIP projects in order to surface funding that may be available in funding other
operating or capital needs.
This review has two components:
1. Projects that have been completed, all costs have been charged and they are under
budget. In this case,there are no policy or fiscal impacts associated with closing the projects
and "unlocking"the remaining budget balances for other purposes. This is the "low hanging
fruit" in the budget review process.
2. Projects that have not yet been initiated, funds are uncommitted and should be
reconsidered for funding given higher priorities since they were approved. Deleting
"lagging"projects is a tougher call. After detailed review by the CIP Review Committee and
the Budget Review Team, the CAO makes recommendations to the Council regarding
deletion of projects as appropriate as part of the Preliminary Budget.
For projects in the first category, this is largely a technical and analytical exercise to insure that
all costs have in fact been paid, and that there are no outstanding encumbrances or other fiscal
commitments. As such, there are no policy impacts associated with this review. However, as
noted above, this is not the case for projects in the second category: deleting previously approved
projects is solely a Council decision to make, and is typically surfaced as part of the budget
process.
For these reasons, the CIP Review Committee had already been tasked with performing this
review as part of the 2004-05 budget process, which was "jump-started" by a few weeks once the
Damon-Garcia funding shortfall surfaced. Based on the CIP Review Committee's detailed
review of the fiscal status of CIP projects as part of the 2004-05 budget process, the following
summarizes the available budget balances for completed projects funded by the General Fund or
Parkland Development Fund, which can be used in funding the Damon-Garcia sports fields
without adversely impacting the City's fiscal condition or other projects:
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Budget Amendment: Damon-Garcia Sports Fields Page 6
Completed CIP Pro-jects As of April 2004
Project Expended/ Balance
Budget Encumbered Remaining "
e ne ral Fund--
Rodriguez
und Rodriguez Adobe Park Turf Installation 169,000 74;971 94,029
........... ...
Arterial Street Sign Replacement 224,000 -_181,350 42,650
Downtown Property Purchase (John's Battery Shop) 400,000 .385,770 14,230
NARF Studies (General Fund Share) 70,000 63,164 6,836
Fire Engine Lights 17,000 mm 14,128 2,872
Downtown Storm Drain Improvements 115,600 113,557 2,043
Murray Adobe 91,400 90,000 1,400
Mission Plaza Expansion:Creekwalk (Construction) 522,100 501,235 20,865
--- - ......._.._........-- -- .--._...................................._.__--
Citywide Network Improvements 34,100 33,874 226
Police Facilities Master Plan 50,000 ;963
10,929
__-----.-. - --
Fire Extrication Tool 40,000
Other Completed Projects As of March 31, 2004 38,341
Parkland Development Fund 55;357
Mission Plaza Ekpansion: Creekwalk (Construction) 80,300 77,051 3,249
Throop Park Restrooms 119 300 117,192 2,108
Other Completed Projects As of March 31, 2004 1,806
TOTAL _ 52 11
As reflected above, $245,200 is available from completed projects, which is $45,200 more than
required to fund the sports fields shortfall. Accordingly, we recommend closing these project
accounts and transferring the balances as follows:
1. $200,000 to the Damon-Garcia sports fields project.
2. $45,200 to the CIP Reserve, which currently has no funding, in better positioning us for the
2004-05 budget process.
Additional CIP Project Review As Part of the 2004-05 Budget. As discussed above,this review
process typically has two components: identifying the available funding from completed
projects; and evaluating uncommitted budget balances from "lagging" projects for other
purposes. Given the need to identify funding options for the Damon-Garcia sports fields, the
CIP Review Committee "fast-tracked" its review of the "completed" projects category.
However, the Committee is continuing its evaluation of lagging projects, and our
recommendation regarding these will be presented to the Council as part of the 2004-05 budget
process. Moreover, there are several completed projects where more research is needed (and
underway) to confirm that all costs have been paid before closing current budget balances. Any
additional funding resources resulting from this research will also be presented to the Council in
June 2004 as part of the 2004-05 budget process.
Revised Project Costs and Funding Sources
The following summarize the current and proposed project budget and funding sources:
Budget Amendment: Damon-Garcia Sports Fields Page 7
Current Proposed Variance
Project Bi d"get "
Land Acquisition 2,247,600 2,2471600 -
Study and Design _ 531,900 531,900 -
Construction 3,741,500 3,941,500 200,000
Construction Management 40,000 40,000 -
...............__..._....................................._..... ........._._......__._._......._._...._.._...._........ ....._..-. —..... .
_..........-- --._.....----........___...............—.._._.__............................. ....1'76,000 176,000
Development Impact Fees -
Public Art 401000 40,000 -
Total Project Costs $69777, $6,977,000 $200,000
000
Funding Sources
1999 Lease Revenue Bonds (General Fund) 5,676,800 5,676,800 -
Public Art In-Lieu Account (General Fund) — 20,000 — 20,000 -
Transfer from Completed Projects - _ -
Capital Outlay Fund (General Fund) 194,600 194,600
Parkland Development Fund (Park In-Lieu Fees) 5,400 5,400
Parkland Development Fund:Park In-Lieu Fees 664,200 664,200 -
Developer Fees 25,000 25,000 -
State Grants:Proposition 12 �— 391,000 _ 391,000 -
Total Funding Sources $6,777,000 $659779000 $2009000
ALTERNATIVES
I. Do Not Approve the Additional Funds. Of the items identified as the reason for the cost
increase, only expanding the sand fields was an optional cost, which the Council previously
approved in May 2003. All of the other items listed are integral to the project.
Unfortunately,they were not identified early enough to include in the original bid.
2. Fund the Supplemental Costs in a Different Manner. The shortfall could be funded by a
new appropriation from General Fund balance, or by transferring funds from other projects
that have not yet been initiated. However, we believe that funding the shortfall through
existing resources from favorable balances in completed projects is the best option in
mitigating fiscal and service impacts.
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