HomeMy WebLinkAbout2008/01/08 Item 9
CITY COUNCIL
AGENDA STATEMENT
::$"!f:.. CIIT OF
~"'< ".... (HULA VISTA
ITEM TITLE:
SUBMITTED BY:
REVIEWED BY:
BACKGROUND
1/8/08, Item l
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE SECOND AMENDMENT TO
THE CIVIC CENTER DESIGN BUILD AGREEMENT WITH
HIGHLAND PARTNERSHIP, INC. FOR THE CIVIC CENTER
RENOVATION PROJECT TO INCREASE THE GUARANTEED
MAXIMUM PRICE FOR PHASE 3 OF THE PROJECT BY
$1,699,515 AND AUTHORIZING THE MAYOR TO SIGN THE
SECOND AMENDMENT
DIRECTOR OF ENGINEERING AND GENERAL SERVICES A~
DIRECTOR OF FINANCE /'~t I^- MoL \J .
CITY MANAGER ,t;.- <;; 'T
ASSISTANT CITY MANAGER SI
4/5THS VOTE: YES D NO [!]
In July of2001, the City Council approved a master plan for the renovation of the Civic Center.
On February 18, 2003, the City Council approved a Design Build Agreement ("Agreement")
with Highland Partnership, Inc. ("HPI") to design and construct the project. On August 3, 2004,
the City Council approved the Guaranteed Maximum Price ("GMP") of the project at
$38,346,000. The GMP reflects the amount to be paid to the design builder for design and
construction. The total project budget approved by City Council on August 3, 2004 was
$50,148,000.
On February 20, 2007, the City Council approved the funding of Phase 3 of the Civic Center
proj ect and appropriated funds therefore. Phase 3 of the proj ect includes the renovation of the
former police department building, the demolition of the Legislative Office Building and the
Community Development Building and the construction of the additional parking and
landscaped areas. The renovated former police department building will house the Human
Resources Department, Redevelopment Agency and Housing Authority, Recreation Department,
Information Technology Systems Department, Office of Conservation and Environmental
Services, a portion of the Building and Planning Department and the Chu1a Vista Employees
Credit Union. Phase 3 is funded by a combination of the Public Facility Development Impact
Fee Fund (93.68%) and the General Fund (6.32%). The approved budget for Phase 3 is
$15,015,000 and was funded using only cash on hand.
9-1
1/8/08, Item~
Page 2 of 12
Since construction commenced on Phase 3, a number of issues have arisen which have caused
the project budget to be adversely impacted. The major issues are the discovery of unexpected
and significant amounts of asbestos in the building, significant enhancement to the City's
computer server rooms and associated equipment upgrades, changes in floor plans on the first
floor and the expansion of use of the basement with the planned relocation of Planning and
Building staff out of their leased space in the Eastlake Business Center into the basement.
ENVIRONMENTAL REVIEW
The project has been approved under a Mitigated Negative Declaration, IS-04-013.
RECOMMENDATION
That Council adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
None.
DISCUSSION
Proiect Descrivtion
The Civic Center project has three construction phases. Phase I was the demolition and
reconstruction of City Hall. That phase was substantially completed in November of 2005.
Phase 2 was the renovation of the Public Services Building ("PSB"). That phase was
substantially completed in January of 2007. The final phase is the renovation of the former police
department building and the demolition of the Legislative Office Building and Community
Development Building. The total project budget for the project that the Council approved on
August 3, 2004 is $50,148,000. The GMP, the portion that is paid to the City's Design Builder,
HPI, for this project, is $38,346,000. The GMP covers all design and construction related costs
of the project. The remaining funds in the budget beyond the GMP are utilized for a variety of
purposes including furniture, fixtures and equipment, project insurance, staff time, consultant
services, etc.
As stated above, the first phase of the project was substantially completed in November 2005.
The phase included the demolition of the 18,300 square foot City Hall and construction of the
new facility. The actual cost of Phase I was $22,233,610 which translates into $542,390 below
the approved budget.
In an effort to make the multi-year, multi-phase project as fiscally efficient as possible, the
design costs for Phases 2 and 3 and the vast maj ority of the proj ect insurance costs were all
included in Phase 1. Additionally, some materials such as doors, flooring, ceiling tiles, etc. were
purchased for all three phases during Phase I.
Phase 2 included the renovation of the 29,700 square foot Public Services Building (PSB). The
Budget that was approved for Phase 2 was $12,357,000. In addition to that, $542,390 of the
Phase I savings was transferred into Phase 2, bringing the total Phase 2 budget up to
$12,899,390. Phase 2 has now been closed out with a total cost of $12,728,068. The net result
of the first two phases was a combined budget of $35,133,000 and a total expenditure of
9-2
1/8/08, Item--9-
Page 3 of 12
$34,961,678, leaving an available balance of $171,322. Table 1 below summarizes the total
budgets for Phases 1 and 2.
Table I. Phase 1 and Phase Two Budget Summary
Phase
Phase 1
Phase 2
* Approved budget for Phase 2 includes carryover of savings from Phase 1.
Phase 3 Chanf!es
Immediately after Phase 2 was completed, Phase 3 commenced. As stated above the approved
budget for Phase 3 is $15,015,000 and some expenses for Phase 3 were paid in earlier phases.
Attachment 1 is the staff report that was presented to City Council and approved on February 20,
2007 regarding these issues. Shortly after staff was relocated out of the former police
department building and work commenced, a significant asbestos issue was discovered. An
environmental review of all of the buildings in the complex had been done prior to any
construction commencing. The reports, which the City contracted for directly and provided to
HPI, noted that there would be some asbestos present, however, it turned out that the problem
was far more extensive than was anticipated. This discovery led to a suspension of work while
an asbestos mitigation plan was developed and submitted to the appropriate governmental
agencies for approval.
At the same time that the asbestos plans were being developed, the Administration Department
informed the General Services Department that it wished to close the satellite building
inspection/plan check office in the Eastlake Business Park and relocate that operation to the
Civic Center. This relocation would enable the City to terminate and/or allow the office space
lease agreement it has to expire. The only place in the Civic Center that these staff can be
housed is the un-programmed area of the basement of the former police department. Our design
build agreement and project budget did not contain any funds for the design and construction of
this space as it was intended that it to be roughed in and then utilized at some point in the future
when necessary.
Another significant change was the improvements to the ITS server room and purchase of
dedicated HV AC equipment for the computer room areas. Soon after work started on the
building, it became clear that the existing utilities and lines, including drainage lines, that ran
through the computer server area would need to be adjusted and/or removed. This prompted a
more comprehensive review of the computer rooms and the determination that a reworking of
that space would be of long-term benefit to the City. Also, in order to protect the equipment
which continued to be the City's central technology center, portable HV AC units needed to be
utilized. As we investigated the needs of the ITS department, it was determined that it would be
a much more secure and safer environment for the equipment if we provided dedicated,
exclusive HV AC systems. This proved to be a good decision as the City has experienced
minimal service disruptions and no loss of data during the course of construction.
9-3
1/8/08, Item~
Page 4 of 12
With respect to plan check changes, the changes discussed above required the submission of
revised plans. Also, during the course of the project, building and fire codes have evolved and
changed prompting some changes to the plans from the original construction documents.
There have also been a number of other changes that the Engineering and General Services
Department have been instructed to undertake that were not part of the City's original scope or
were changes to the original scope that resulted in cost increases. Table 2 below provides a
summary of the approved project budget for Phase 3. Table 3 below provides a summary of the
cost additive changes. As the table indicates, we have described those changes that we would
have normally expected to be paid out of the approved project contingency, those changes that
were not typical contingency items but were also not a result of City generated scope increases
and those changes that were the result of scope changes that the City directed.
Table 2. Approved Design and Construction Budget for Phase 3
Total Desi n Builders Costs
Pro' ect Insurance
Total Phase 3 Costs
9-4
$785,000
$10,000
$83,000
$166,000
$409,000
$142,000
$200,000
$739,000
$6,689,000
$1,419,000
$415,000
$11,057,000
$3,012,000
$946,000
$15,015,000
1/8/08, IteDl~
Page 5 of 12
Table 3. Cost Additive Changes
IteDl
Cost
NorDlal
Contingency
IteDl
City Generated
Scope Change
Site Utili Increases
ITS-Enhanced AC/Server RooDl Work
Plan Check Chan es
Sewer PUDl Location*
Lobb Ceilin Modifications**
First Floor Plan Changes
(Rearranging for Credit Union and several City
de ts.
Roof Drain/Slo e Issues
Eastlake Staff Relocation
Asbestos AbateDlent
Re lenishDlent of DB Contin enc ***
Pro. ect Insurance Increase
$33,980
$289,959
$171,123
$75,194
$2,398
$151,202
$100,884
$401,200
$876,642
$141,299
$18,400
Yes
No
No
No
No
No
Yes
No
No
No
* While this is shown as an added cost, it was known when the City's FY 2007-08 CIP
Budget was approved and sufficient sewer funds were appropriated at that time to cover this
item.
** The amount depicted is for design costs only. Construction costs will be able to be
covered within the replenishment of the DB Contingency.
*** It is hoped that not all of this replenishment will be needed, however, we will be
demolishing two older buildings that may have environmental issues we're not aware of at
present, therefore, we feel it is prudent to fully refund the contingency. Any funds not expended
will be returned to the City's funds.
Table 4 below breaks down the gross costs into the normal contingency items, those items that a
contingency would not typically cover but were not City generated scope changes and the City
scope changes.
9-5
1/8/08, Iteml
Page 6 of 12
Table 4. Summary of Cost Changes
As Table 4 indicates, the project would have come in within the 2004 approved budget but for
the asbestos and city generated scope changes. In fact, we believe that there is a chance that the
project may have been slightly under budget since we had an original project contingency of
$415,000 and would have tapped into it for only $137,262 as of today. As stated above, there is
still quite a bit of work to do and the demolition of the Community Development and Legislative
Office buildings could still create some cost issues.
To further analyze the fiscal status of Phase 3, if we were to assume the full expenditure of the
approved project budget and the asbestos remediation costs of $876,642, we would have been
6% over budget. With respect to the entire project, had all costs associated with all three phases
been spent, plus the asbestos costs, the project would be 1.75% over budget.
GMP Adiustment
The preceding discussion focused on the total project costs, which are ultimately what's most
important. The GMP only relates to those costs in the project that are payable to the design
builder. As such the amendment to the GMP is a somewhat different amount. As stated earlier,
the approved GMP for the entire project is $38,346,000. There have been no changes to the
GMP to date. The cost additive increases discussed within this report result in a net need to
increase the GMP by $1,699,515. Table 5 below summarizes how the GMP adjustment was
calculated and Attachment 2 is a copy of Prime Contract Change Order #05 that details how the
above amount has been determined.
Table 5. Summary of GMP Adjustment
Item
$8,428,488
$261,422
$8,689,910
Amended Phase 3 GMP
A roved Non Cost Additive Transfers
Current Phase 3 GMP
Committed Costs to Date
General Conditions
Total Costs to Date
Asbestos Abatement
Various Construction Cost Increases
$876,642
$1,225,940
9-6
1/8/08, 1tem~
Page 7 of 12
Previous I Committed Costs
Variance To Hard Costs From Bud
Civic Center Budf!et Status
As indicated in Tables 3 and 4, the total cost of changes to Phase 3 is $2,741,351. As prior staff
reports have indicated, there were some savings from the first two phases of the project. Those
savings have been brought forward from phase to phase. It is important to note that the
Guaranteed Maximum Price (GMP) and total project budget for the entire project was
established on August 3, 2004. That price was set when construction costs, particularly material
costs, were escalating significantly. The Design Build Contract did provide for automatic GMP
increases based on recognized construction cost indexes. None of those automatic GMP
increases have been sought by HPI nor are any anticipated. The Building Cost Index for the Los
Angeles area (San Diego is not tracked independently by the Engineering News Record) has
increased 16% since 2004. Had HPI requested the increases that the contract allows, the GMP
could potentially have already increased by $6,135,360 ($38,346,000*.16) for the base project
as compared to the $1,699,515 increase currently requested that includes non-DB generated
changes.
As the Civic Center project is a multi-phased project with several distinct funding sources, there
are funds that have not been expended in the cash accounts and the bond financed accounts for
Phases 1 and 2 that are available to be utilized to offset the Phase 3 increases. Table 6 below
provides a surmnary of funds available within the project that can be utilized to offset the Phase
3 cost increases.
Table 6. Funds Available in Civic Center Project (GG-139, GG-200 and GG-300)
Pro' ect Cost Increases
Phase 2 Bond Proceeds
Phase 3 Sewer Funds
Phase 3 Ci Furniture Allowance
EOC Pro'ect Transfer GG-189
$171,322
$75,194
$1,150,421
$6,714
Imvacts of These Intra-Proiect Transfers
Transferring the City's entire furniture and staff time reimbursement budget over to the hard
construction side of the project means that while the construction of the building can be
completed, it carmot be furnished, therefore, it carmot be occupied. It also means that the
General Fund will see a reduced amount of reimbursement of staff time charges, resulting in
budgetary shortfalls from revenues from a number of departments, but most prominently the
Engineering and General Services Department. The option of utilizing existing furniture
scattered throughout the Community Development, Ken Lee and Legislative Office Building is
9-7
1/8/08, Item~
Page 8 of 12
not workable since the design of the former police building, and, in particular, the electrical, data
and communication plans assume that wiring in workstations will run through the furniture itself
as it does in City Hall and the Public Services Building. The hodgepodge of furniture in those
buildings does not support that sort of design. Assuming that sufficient funds to purchase and
install the fumiture are appropriated to the project during the normal budget adoption process in
June of 2008, the City would then be in a position to order furniture on July I, 2008. Typically
there is a 90-day timeframe between placing the order and delivery plus an additional several
weeks for installation. Under a most positive scenario, the building will be completed in May of
2008 and the furniture installed and the building ready for occupancy sometime in October of
2008. This scenario would push back the completion of the site work into early 2009.
In the event that funds were not appropriated during the fiscal year 2008-09 budget process, we
would not be able to furnish the building and relocate the planned staff to the building. This will
leave the building essentially vacant for some undetermined amount of time and vulnerable to
vandalism. The City's computer center is in the basement of the building and contains millions
of dollars of equipment. The risk of damage to that facility is undoubtedly higher if the building
is vacant and the potential loss to the city in terms of equipment damage and loss of productivity
for staff due to that damage is significant. The issues discussed below with respect to site
conditions and ADA access will also be applicable to this scenario of not funding the furniture
portion of the project during the annual budget process.
Imoacts of Proiect Termination
Should this resolution not be adopted, the first significant impact to the project would be the
immediate suspension of the project by the City. The City's design build agreement allows it to
suspend the job for up to ninety days. Upon such an action, HPI could submit a request for a
change to either the GMP and/or the contract time. At the end of the ninety days, should the City
not reauthorize the restart of work, HPI could terminate the agreement upon ten days written
notice.
An alternative to suspension would be the immediate termination of the contract by the City.
The City may, upon giving a minimum of seven days notice, terminate the contract for
convenience. HPI will be entitled to just and equitable compensation for any satisfactory work
completed to the effective date of the termination. Upon termination, the City Manager may
direct HPI to take any action that may be necessary for the protection and preservation of
property related to the project which would include securing the building in a quasi-vacant and
semi-finished condition for an undetermined amount of time.
Aside from contractual issues, the most obvious impact, from the public's perspective, would be
the aesthetic issues surrounding having a boarded up building with security fencing around it on
the Civic Center campus.
While considering all of the discussion of the actual building costs, it is important to keep in
mind that, based on the November 2006 Public Facilities Development Impact Fee (PFDIF)
Update, the funding of the construction of the project was modified to have the PFDIF provide
88.7% of the total cost. Shutting down the project now will have no positive impact on the
general fund. In fact, besides the likely general fund costs that would be needed to make interim
improvements to the site and the existing buildings as discussed below, there would also be a
negative impact to the general fund in terms ofless staff time being reimbursed from the proj ect.
9-8
1/8/08, Item---B.-
Page 9 of 12
While the possibility exists that there would be a reduction in staff levels with the termination of
the project, that is not a given as there would need to be staff oversight of the remedial projects
that would need to move forward to make the complex safe and ADA compliant.
In assessing the impacts of shutting the final phase down at this point, it is crucial to also
consider the many other impacts besides what would seem the obvious financial ramifications to
the project as it's contracted today. As indicated above, the guaranteed maximum price for the
entire Civic Center project was established in August of 2004. A significant value engineering
effort was undertaken to establish that GMP for what was going to be a multi-phase four-year
construction project. That GMP was established just as material costs for construction projects
were starting to escalate sharply. By setting the GMP at that time, we essentially locked in our
costs in 2004 dollars and have managed to avoid the significant run-up in costs that virtually
every major construction project has experienced over the past three years. A termination of the
contract at this point essentially rips up the GMP as it exists today. Since we don't have any
sense of when the project would restart should it be stopped and how we would contract for the
completion of the project, it is very difficult to estimate how much our costs would rise upon
restart. We think a doubling of our remaining costs would be a conservative estimate if the
project is shut down for even just a few years.
Leaving aside construction cost run-ups, there are other direct project related considerations to
take into account. The City employs a project management consultant on this project, Kip
Howard of Allegis Development Services, Inc. Mr. Howard has direct experience on projects
that were shut down during construction. Mr. Howard was retained to restart the Four Season's
Aviara Hotel and Resort project in Carlsbad after it had been shutdown at approximately 25%
completion. Mr. Howard has indicated that significant expenses were incurred on that project
upon restart and that we would see the same.
One of the items that A viara experienced was that their HV AC system had to be removed and
replaced, including equipment and duct-work due to concerns over the fear of promoting
Legionnaires Disease. Rodents, birds and air-borne particulates had found their way into the
system despite best efforts to prevent that kind of infestation and infiltration. In that case, the
roof and exterior skin of the building was not watertight. We would obviously not want to make
that mistake. The building at present is not watertight and we would take the necessary steps to
make it so should work stop. Site drainage has not been completed and infiltration of sitting
rainwater is possible, especially over the long term. These problems could lead to placing our
technology center at risk as well as compromise our newly installed HV AC system. A
significant time period of inactivity makes both of those possibilities more likely. Mr. Howard
has also advised that we need to consider other issues that could have significant impacts on the
costs of completing the building at some time in the future. Among those issues are the
possibility of regulatory changes to life-safety, ADA and seismic codes that could cause re-
design and additional construction costs.
There are also significant issues to consider within the complex that would arise should the
building not be completed. This is a fairly long list and we have not attempted as yet to develop
cost estimates. It would be fair to assume that regardless of the costs, they would be a general
fund obligation. These are not in any order of importance and many will require significant
analysis to quantify the impacts:
9-9
1/8/08, Item2
Page 10 of12
> Inadequate ADA compliance (walkways and parking) for both the public and staff.
> Inadequate parking in the complex resulting in staff and the public continuing to park in
the surrounding neighborhoods.
> Unoccupied building would be an eyesore in the Civic Center complex and provide an
attraction for vagrants.
> Storm water and NPDES issues, as the site drainage system is incomplete.
> Restrooms, code compliant emergency access, ADA compliant access would need to be
completed in Building 300 for ITS staff who would still nelld to go there as the City's
technology hub will remain in the basement.
> Loss of energy incentives from SDG&E as part of the Savings By Design program.
> May require the continued and possible extension of lease for space in Eastlake for
Planning and Building staff.
> May require the continued lease of temporary office trailers for staff currently so housed
who are destined for Building 300. Power supplying the trailers in the Ken Lee parking
lot is temporary and would need to be upgraded.
> Would require the continued occupancy of the Community Development, Legislative and
Ken Lee Buildings. Virtually no maintenance has been done in these buildings for
several years. All of them have existing deficiencies related to ADA requirements,
deteriorating HV AC systems, poor exterior lighting, poor flooring, security and roof
problems.
> The Civic Center's Emergency Generator loop would not be completed.
> The Civic Center's internal building communications, security and HV AC control system
would not be completed.
> There would likely be significant morale and productivity issues as some staff continues
to occupy sub-standard space.
> Ongoing security of the vacant building would be problematic.
> Potential for conflict between ITS staff and unauthorized personnel in the vacant
building.
> ITS staff would continue to be scattered around the complex unless the interior spaces of
the existing buildings was reorganized.
There is a key point that needs to be emphasized. A project termination is not a no cost option.
The City would need to contract with HPI or some other contractor to make the building secure.
It is furthermore unlikely that those costs would be PFDIF eligible, which then renders them a
general fund obligation. During construction HPI has retained the services of a professional
security firm to patrol the site in the evenings and on weekends to protect their work and
materials. We have had multiple incidents of vandalism and theft in the building as it has been
renovated. Vacant buildings make attractive targets.
The bullet items above mention issues related to Americans With Disabilities Act issues. Since
the site is an active construction site, we are permitted to not be in compliance, provided, of
course, that the improvements when completed, will be fully compliant. Shutting down the
project eliminates that construction site exception and the City would need to then bring all
accessible areas up to ADA standards. This too would not likely be a PFDIF eligible cost.
Lastly, as stated above, the City's computer center will still be operating in the basement of the
building. Since there will be staff in the building, it must be compliant with ADA, including the
elevator. It also must have finished restroom facilities. A project termination would not absolve
the City of the need to finish the interior of the building to at least those minimum levels.
9-10
1/8/08, Item3-
Page 11 of12
With respect to the 'Eastlake Staff Relocation' item, these costs are related to the relocation of
the Planning & Building Department's Inspections and Plan Review staff from the Eastern
Permit Center to the Civic Center complex. The PFDIF program has always assumed the
eventual closing of the Eastern Permit Center. In the 1999 PFDIF Update, it was assumed that
the staff housed at this satellite office would be relocated to the new Corporation Yard upon the
project's completion. Since that time, staff has determined that sufficient space is not available
to house these employees at the Yard as previously planned. It is therefore the recommendation
of staff that suitable space be constructed to house these functions in the basement of the former
Police Facility. While this decision is anticipated to add $401,200 to the cost of Phase 3, this
amount will be offset by the elimination of annual lease payments for the satellite office. Upon
expiration of the lease agreement on December 3,2009, the closure of the Eastern Permit Center
will generate annual savings of $129,360. The payback on this decision is less than four years,
typically considered a very positive and advantageous pay back timeframe.
Total Pro/eet Budf!et Summary
Table 7 below provides a summary of the total budget history of the project, assuming that the
recommendations contained within this report are enacted. Since the project is multi-phased and
contains several funding components, Table 6 relates actual expenditures to the budgets
established in the August 2004 GMP. This gives a more apples to apples comparison of budget
to actual expenditures. The total delta reflects a 3% overage, an enviable result given the
complexity and duration of the project.
Table 7. Project Budget Summary
Phase
Actual/Projected
Ex enditures
Savings/(Shortfall)
Other Potential Issues
The only other sigoificant issue that potentially could affect the total project budget is the
incorporation of an Events Monitoring Center in the basement of the building. The basement
includes a large training room that has a moveable wall that allows flexibility in terms of the size
of the space. The City Manager has directed staff to enable this space to be utilized as an Events
Monitoring Center in the event of an emergency or some other event. The room will provide the
City with an area in the Civic Center that can be used as an interim Emergency Operations
Center. The room and, in fact, the entire building, do not meet minimum seismic standards for
an essential services building. It has been the long-term plan of the City that when Fire Station
No.1 is reconstructed it would include a formal Emergency Operations Center. Fire Station No.
I would be constructed to the necessary seismic standards to be classified as an essential services
building.
9-11
1/8/08, Item....3.-
Page 12 of 12
DECISION MAKER CONFLICTS
Staff has reviewed the property holdings of the City Council and has found a conflict exists, in
that Councilmember Jerry Rindone has holdings within 500 feet of the boundaries of the
property which is the subj ect of this action.
FISCAL IMPACT
The fiscal impact of this action is described in detail above. Phase 3 of the Civic Center project
is funded by the PFDIF and the General Fund. Most of the cost additive changes are direct
construction costs and, based on the March 2006 PFDIF Update, 100% of the those costs are
PFDIF eligible. With respect to project insurance, those costs are 93.68% PFDIF eligible. Upon
completion of Phase 3, the final split of the project's cost between the PFDIF and the General
fund will be calculated. No additional appropriations are requested at this time.
Due to the significant slow down in the housing market, we anticipate that an interfund loan or
bond restructuring may be necessary in order to avoid a deficit in the PFDIF fund at the end of
the current fiscal year. The Finance Department is currently working with bond counsel and the
City's financial advisor to review the various refunding options for both the General Fund and
PFDIF fund. A separate recommendation will be brought forward for Council consideration
regarding this matter.
The current PFDIF fee is sufficient to offset these construction and potential fmancing costs
without increasing the amount charged to developers.
Prepared by: Jack Griffin, Director of General Services
Maria Kachadoorian, Director of Finance
M:\General Services\GS Administration\Council Agenda\Civic Center\Phase III GG300\December 2007 GMP Adjustment 1 0808 draft version
3-strevisions2.doc
Attachment t; February 20, 2007 Staff Report
Attachment 2: Prime Contract Change Order #05
9-12
-- r
,
AM- a.c "-""lJ.1 \
CITY COUNCIL
AGENDA STATEMENT
~Vf::. CfTYOF
"~CHULA VISTA
2120/07, Item ~
SUBMITIED BY:
RESOLUTION APPROPRIATING FUNDS FROM THE
PUBLIC FACILITIES DEVELOPMENT IMPAc:r FEE FUND FOR
THE CONSTRUc:rrON OF PHASE 3 OF THE CMC CENTER
RENOV A TrON PROJECT (00-300)
DIRECTOR OF GENERAL SERVICE&1:~
DIRECTOR OF FlNffCE rf f"I-- Mt.-\.j .
CITY MANAGER II
ITEM TITLE:
REVIEWED BY:
4/5THS VOTE: YES ~ NO 0
BACKGROUND
In July of2ool, the City Council approved a master plan for the renovation of the Civic Center.
On February 18, 2003, the City Council approved a Design Build Agreement ("Agreement")
with Highland Partnership, Inc. (''HPr') to design and construct the project. On August 3, 2004,
the City Council approved the Guaranteed Maximum Price ("GMP") of the project at
$38,346,000. The GMP reflects the amount to be paid to the design builder for design and
construction. The total project budget approved by City Council on August 3, 2004 was
$50,148,000. This action appropriates the funds to construct the third and final phase of the
project in accordance with those previous City Council actions.
Phase 3 of the Civic Center project is funded by a combination of the Public Facility
Development Impact Fee Fund (88.87%) and the General Fund (11.13%). The first two phases
of the project have been completed in accordance with the budget approved by the City Council.
The Public Facility Development hnpact Fee Fund ("PFDIF") was established to fund a number
of specific projects in the City, including the Civic Center Renovations. The PFDIF funds may
only be used for those projects specifically approved by the City Council in the ordinance
establishing the PFDIF and its subsequent amendments.
Phase 3 of the project includes the renovation of the former police department building, the
demolition of the Legislative Office Building and the Community Development Building and the
construction of the additional parking and landscaped areas. The renovated former police
department building will house the Human Resources Department, Community Development
Department, Recreation Department, Information Technology Systems Department, a portion of
the Building and PIanning Department and the Chula Vista Employees Credit Union.
ENVIRONMENTAL REVIEW
The project has been approved under a Mitigated Negative Declaration, rS-04-013.
)0-1
9:-13
1/20/07, ItemlO....-
Palle20f7
RECOMMENDATION
That Council adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
None.
DISCUSSION
Proiect DescrirJtion
The Civic Center project has three construction phases. Phase I was the demolition and
reconstruction of City Hall. ThaI phase was substantially completed in November of 2005.
Phase 2 was the renovation of the Public Services Building C"PSB"). That phase was
substantially completed in January of2oo7. The final phase is the renovation of the former police
department building and the demolition of the Legislative Office Building and Community
Development Building. The total project budget for the project that the Council approved on
August 3, 2004 is $50,148,000. The OMP, the portion that is paid to the City's Design Builder,
HPI, for this project, is $38,346,000. The OMP covers all design and construction related costs
of the project. The remaining funds in the budget beyond the OMP are utilized for a variety of
purposes including furniture, fixtures and equipment, project insurance, staff time, consultant
services, etc.
As stated above, the first phase of the project was substantially completed in November 2005.
The phase included the demolition of the 18,300 square foot City Hall and construction of the
new facility. The actual cost of Phase 1 was $22,233,610 which translates into $542,390 below
the approved budget.
In an effort to make the multi-year, multi-phase project as fiscally efficient as possible, the
design costs for Phases 2 and 3 and the vast majority of the project insurance costs were all
included in Phase 1. Additionally, some materials such as doors, flooring, ceiling tiles, etc. were
purchased for all three phases during Phase I. The addition of these costs brought the total Phase
1 budget up to $25,283,854. Through January 17, 2007, the total amount expended for Phase 1
was $24,793,162. Staff is in the process of closing Phase 1 and does not expect any additional
expenditures.
Phase 2 included the renovation of the 29,700 square foot Public. Services Building (PSB). The
Budget that was approved for Phase 2 was $12,357,000. In addition to that, $537,823 of the
Phase 1 savings was transferred into Phase 2, bringing the total Phase 2 budget up to
$12,894,823. While there are still some outstanding bills to be paid, it appears that the final cost
of Phase 2 will be $12,807,465 which translates into $87,358 below the approved budget.
At the time thai Phase 2 was financed, Council also approved the addition of some Phase 3 costs.
The financing included all of the Phase 2 costs incurred during Phase 2 and reimbursement of
some of the costs in Phase I for Phases 2 and 3 that were not part of the Phase 1 financing.
Table 1 below provides a summary of bow the Phase 2 bond proceeds have been expended:
/~'r
9-14
2120/07, ltem~
Page 3 of7
Table 1.
Bond
Proceeds
"?I ,~i!I~F~!~~:~~n' 1;ltJ~:~:j~ F
Expenditure
Amount
Running
Balance
517,183,964 Startin Balance
NIC rovements
Pbase I Reimbursements for Phase 2 and 3
Phase 2 Costs less reimbursement
Phase 3 Costs less reimbursement
Bond Proceeds Available to Move Forward
50
51824,736
53,046,293
. $11,044,005
5263,665
$17,183,964
$15,359,228
$12,312,935
$1,268,930
$1,005,265
$1,005,265
With the substantial completion of Phase 2 in January of 2007, the City is ready to move on to
Phase 3. This phase includes the renovation of the fonner police department, the demolition of
the Community Development Building and the Legislative Office Building and the construction
of additional parking and landscaped areas. Housed on the first floor of the renovated building
will be the Human Resources Department, Community Development Department, Recreation
Department, a portion of the Building and Planning Department and the ChuJa Vista Employees
Credit Union. The basement will be home to the Information Technology Services Department
(ITS), a large conference/training room, additional conference rooms, storage areas, gym and
locker room and an un-programmed area that will be "roughed in". This un-programmed area
will be able to be easily finished if the City finds the need to use that space in the future.
From an architectural perspective, the building will be renovated on the exterior to complement
the architecture of the new City Hall and renovated PSB. The' elevation facing the PSB will
contain the same tower and archway elements that will complete the lIew public open space area
in the center of the complex. The existing exterior walls of the building will be modified to
provide windows similar to City Hall and PSB.
The interior of the building will also be significantly modified. The main feature of the interior
of the building will be a 36 foot by 36 foot "atrium" in the center of the building. Above the
atrium, there is an existing clearstory, thus natural light will be able to penetrate all the way into
the basement of the building. Public aCcess to the building will b'e switched from the side of the
building facing Fourth Avenue to the building elevation facing City Hall.
Pro/ect Schedule
The design build agreement between the City and HPI called for a start date of February 19,
2007 and substantial completion by May 7,2008 for Phase 3. Substantial completion means that
the building is operational and open for business. Final completion is called for by August 6,
2008. By the final completion date, the Community Development and Legislative Office
buildings win have been removed and the parking and landscape areas will be complete. It is
both staff and HPI's goal to deliver the project on schedule. It should be noted, however, that the
schedule for the completion of Phase 2 was about five weeks later than originally planned. This
was principally caused by two maj or factors, the presence of unsuitable soils beneath the area
where the former Council Chambers were located and the need to undertake a greater effort in
renovating the roof of the building. These slight delays trickle through the project into the third
phase. In an effort to recover as much time as possible, some work in the basement of the former
police department was started in January of2007. The pllIpose of this work was to provide some
areas for the ITS Department to relocate equipment. ./ tJ... ~
9-15
2120/07, Item...lO..-
Page 4 of7
Pro/eet FU1Idinf!
As briefly discussed above, the project has proceeded within the budgeted amounts approved by
Council on August 3, 2004. It is staff's belief that upon completion of Phase 3, the project will
have been delivered within the budget that was approved. Table 2 below provides a brief
summary of the budget status of all three phases. .
Table 2.
522,776,000
512,357,000
$15,015,000
~:,~~,_:I~~!f:1~~
:,.;;('5,{.,~~~~;""
,"" ,"',' "..; ,., .,',"" .. ...
:~i,~' .,'~~~t~?~~;~~;:.e~~;:,':~~:,:~~;\:;, .,,1,
City Hall
Public Services Building
Fonner Police Facility
522,233,610
512,807,465
515,015,000
$542,390
(5450,465)
50
:,';;}r\~';:';,:~~~~~i~1t'?~':'}I:;'I:"~~~~~:~:,j,~~i;::::,:~j:~~~~~;,~~;,t,4t! ;~;j;,;:rj,\~'J;~~B)';;i.~"~{;,;;;
With respect to Phase 2, we are confident tha1 we will receive credits on our insurance costs.
While the amount and timing of these credits are unknown as of this date, any credit will reduce
the overage depicted above, We also expect to receive rebates from San Diego Gas and Electric
for the 30kwH photovoltaic system installed on the roof of the PSB.
As described earlier, the City has already financed a portion of Phase 3 of the project with the
financing of Phase 2, Also, as discussed above, the City has already incurred some costs for Phase
3. Table 3 below provides a breakdown and the amounts and in which phase the early Phase 3
expenditures occurred,
Table 3.
'. ",";,~3::'i::;%~r'"., '''':.::..;ij",~;:';'~;I~,~}!{~;~~3;i1..-'i.~1&~t;,:"\
Design Builder Costs:
Design of Building
Design of Temp , Renov,
Development Staff Costs
DIB Fixed Fee (Design)
DIB Fixed Fee (Construction)
ConstrUCtion Allowances
Demolition and Construction 5155,201
DID Costs Sub-Total 51,199,201
City Budgeted Allowances: 576,.369
Project Insurance: 5898,726
::.;~':~"~~~/~~:,',~~.;':i~'.::~_i:',1~~~::f;:.:~:;~,~:\:;:,::;~."t:'~tfl~:i:~ ;'I::~t,::;'~;::~;~-;):" ~~;:~1~~!~::~ :,)
5785,000
510,000
583,000
$166,000
5785,000
510,000
$83,000
5166,000
541,175 $41,175
527,015 527,015
$47,011 5202,212
5115,201 51,314,402
591,485 5167,854
'i;r;;.?,::~~~:i:;:)'(:,:~\\~,~~,,;,,:;;;;, /~~ If
9:-16
2120/07, Item..lQ....
Page 5 of7
In terms of how Phase 3 will actually be paid for, the plan for that has changed since the beginning
of the project. Originally, the City planned to finance all three phases of the project. During the
course of 2006, the City entered into negotiations with the development commwrity with respect to
the updating of the PFDIF. The development community was very desirous of seeing the City nol
finance Phase 3. The eventual update of the PFDIF thai the City Council approved. in November of
2006 contemp1ated the City paying for Pbase 3 as il went, Le. not financing it. Based on the
November 2006 PFDIF update, Phase 3 of the Civic Center will be funded as follows;
PFDlF - 88.87"10 of construction and 79.27% of financing (portion financed with Phase 2)
General Fund - 11.13% of construction and 20.73% of financing.
Given that the total cost of Phase 3 has been approved at $15,015,000, that means that the PFDlF
share of the Phase is $13,343,830 and General Fund share is $1,671,170. As described above, some
Phase 3 costs have already occurred and a portion of the Phase 2 financing reimbursed the City for
those costs. Table 4 below summarizes the amount necessary to fully fund and complete the
project.
As Table 4 below indicates, the remaining funds needed to complete Phase 3 is $12,586,744. Of the
amount, $1,005,268 of Phase 2 bond proceeds are available for Phase 3. This then requires an
additionai appropriation of $11,581,476. Staff recommends appropriating the remaining PFDIF
share now. The general fund's share of this amount will be $1,337,031. Since the draw-down
schedule contemplates drawing the funds at a rate of 8.3% of the project monthly, the general fund
share will not be needed until the finall.S months of the project. With a final completion date of
August 6, 2008 as discussed above, the general fund component will not be required until late in
Fiscal Year 2008 or early in Fiscal Year 2009. It is anticipated that the General Fund's sbarewill be
derived from an internai loan from the PFDIF paid back over 20 years at an interest rate of 5%.
This type of repayment schedule would require an annual General Fund appropriation of
approximately $135,000 starting in FY 2009. This loan will be addressed during the Fiscal Year
2008 Budget process.
Table 4.
.' "\">>': '::f>~~::.~I'ti'--r '.. - :.;~";':1'~1\:~:'\i'.:::: ~.:{~~[~~~~:~)i'f~:-~li~~ ~t;~~!:~~22.:;;:;i:~~'~<~-~:~';.i.,~_r" :::':~'1-~~'::: '~t'~:}~h;;:::':~':<:~3' . ~~
;:,: " ~~p oD:":;;'. r, ,'-- ::'?<l~: ;~';~~~'J;,~~~~~~~j~ :j.,~j;:~:-~;~~~~~~,q~~~'-::~:,:',:~'~ ::"~,~! .~j'~', ..~~. ,""
"d 'd "i';'-"-';:".:.Di@get:"":'i:",;:,~el\."4~.IIl..'":: -'~et
: ~:~\.:~:..:i:i .':.;f~ ~ '."/:: ':': ,~',;~ i~~:~J~~:<i~/,\~:~?'~:;~18~,:;~
-,~ -. _ TO$Jilt' ..,.,-,
,~!;"~":" '<-.~..:~'~: _f"':~~j~~
"'il . ~ '~.u~\'.~1~\ ".-,,~
$11,057,000
$3,012,000
$946,000
$1,314,402
$167,854
$973,726
$9,742,598
$2,844,146
o
Design Builder Costs
City Budgeted Allowances
Project Insurance
:~, . -;,:~~::~~t'lt':~.!';J:;~~~;~::::-'i; ,'". '::. ;:'
.11)'.' ~5~J'"
,. ,',~~t~::1~i~1f';'}"?:'
Since the project was started, there have been some changes to the uses of buildings. The main
change was the decision to have lbe Community Development Department housed in the former
police department instead of in the PSB as originally planned. In 9rder to make lbat change work / /! _ .::.
from a space perspective, the originai plan to have a portion of the Engineering Department located (if .--,
9-17
2120/07, Item.J!L
Page 6 of7
in the fonner police department was changed and the entire Engineering Department is now located
in the PSB. This change occurred in early 2006 after a reorganization of the Engineering
Department. This change enabled the Community Development Department to have additional
space that it would need and also allow the Engineering Department to be kept together in the PSB.
This change has had a number of impacts on the project. First, some redesign of the interior space
plan was necessary in Phase 2 to eliminate Community Development and enlarge Engineering.
Similar redesign will occur in Phase 3. The more signifi.cant issue from a cost and logistic
perspective is that the General Services Department never anticipated having to find an alternate
location for Community Development. The plan in terms of interim moves of staff within the
complex was that the Human Resources Department would occupy the Community Development
Building and Legislative Office Building during Phase 3 construction. Those buildings would have
been vacated by the Community Development Department as they moved into the PSB. That was
the original plan.
With the change of plans, we needed to find a place to house both Community Development and
Human Resources during Phase 3. A number of options were explored including; leasing office
space off-site, utilizing the old public works center at F St. and Woodlawn Ave., scattering staff
throughout a nmnber of areas or leasing portable office space. Based on cost, II1mimizing public
inconvenience and mainWning departmental efficiencies, it was determined that the best way to go
was to lease portable office space and place those facilities in the rear of the Ken Lee parking lot. It
was further determined that it would be better to relocate Community Development to that space
even though it required an additional move. The reason for this is' that Human Resources handles
significantly more public traffic than Community Development and the Community Development
Building already had a counter/public waiting area as well as public parking mediately in front of
the building. We expect the cost of this effort to be approximately $205,000 ($45,000 for
construction and $160,000 for lease ($ I O,OOOImonth). It is our goal at this point in time to not
modify the proj ect budget for Phase 3, however, given how tight the budget on Phase 2 was, it
would not be terribly surprising if a minor budget adjustment may be necessary.
DECISION MAKER CONFLICTS
Staff has reviewed the property holdings of the City Council and has found a conflict exists, in
that Councilmember Jerry Rindone has holdings within 500 feet of the boundaries of the
property which is the subj ect of this action.
FISCAL IMPACT
The fiscal impact of the project is as described above in the discussion regarding the split in the
costs of the project between the PFDlF and General Fund. As discussed above the general fund
share of Phase 3 will not be needed until late in Fiscal Year 2008. Staff is recommending
appropriating the full share of the PFDlF obligation at this time. It is anticipated that the General
Fund's share will be derived from an internal loan from the PFDlF paid back over 20 years at an
interest rate of 5% (approximately $135,000 annually beginning in FY09) and will be addressed
during the FY 2008 budget process.
The projected Fiscal Year 2007 fund balance of the PFDlF is $15.8 million. This amount is
sufficient to pay the costs of Phase 3 of the Civic Center as well as meet the PFDlF's existing
debt service obligations. At the end of the project there will be a remaining fund balance of $5.1
million.
jO-(:;
9-18
I ~--
2120/07, Item.J.D....
Page 7 of7
From an operational standpoint, the building will include new mechanical equipment that will be
significantly more energy efficient than the existing equipment. Also, the City is participating in
the Savings By Design program with SDG&E and is attempting to comply with the City's
energy conservation policy of exceeding California Title 24 standards by 20%.
From a maintenance and custodial perspective, once the building is complete, and the
Community Development and Legislative Office Building arc removed, General Services will
attempt to analyze the demands the new building will create on those functions. It should be
noted that during the entire Civic Center project, custodial and building maintenance staff levels
have remained static since one building has been out of service the entire time. Obviously, this
will not be case at the conclusion of Phase 3. Given the shifting square footages and elimination
of the two smaller, less efficient buildings, its difficult to assess what the actual demands will be
until we are actually in the remodeled building and observe how the buildings operate as a
complex. One lesson that we have learned is that there is significantly higher demand for the use
of our buildings from outside the City given their usability, audio-visual capabilities, comfort
and attractiveness.
From the perspective of other departments in the complex there should not be any fiscal impact
as their staffing levels are not materially impacted. It is hoped, that given the new equipment,
shared counter spaces and more logical placing of departments that there will be increased
efficiencies among the departments in the complex. Whether those efficiencies will he able to be
quantified in terms of cost savings is something that those resident departments will have to
analyze once they've had sufficient time to become accustomed to the finished complex.
Prepared by; Jack GriffUJ, Director a/General Services
Maria KachadlJorlan. Diredor of Finance
M:\Ocr1enl Services\GS Administntion\COl./IIcil Apda.\Civic Center\Phaae In 00 JOO\Civic Center Phase 3 rmal.doc
/~-7
9-19
$ Highland
Prime Contract Change Order #05
A '\\" ,\"'-t z..
CDent cay OfCI'WI Via
271 Fourth Avenue
ChJa VlItI. CA 9191Q
Project: Civic Canter Compiax
AtWnUon: J.::k Grtnnn. ctredOr G.lwral Servtces
I<lp H_ .....b o...lopment_
DItIt: OctobIIr 26. 2001
GMP Per Prime Contract Amendmenl.August 3, 2004 (Componenl: A, B & C)
In eccardanCe with ClUa VIlla CivIc CenIer CaJI1lIex Design J Build
-
SedIon 15: Chlnge In GMP and Contract Tlme. Item No. 115.2.5 The CIty
1III'f.1n 1tl1OI. d\ICrMIOn, R)Ultthe GMP OI'Contl'IIctT1rne for any
un:llspull!ld amount or time allOClated with the ChInge Order or Addmor.!
$eNlcel.
""""""",A.CItyH.. GMP
CftyHall construction uvtngll ~ Trantferto Component B. PS8
CIty Hall FlIJlll coati
ComponsntB -PSB GMP
Tnnferfrom City Hall (tHlIIocate88,331 ofllw 480,138 to 08 ftxecI fees)
TlWlIfertD Design l!!IulIderflxed flea for added dulgn services
PSB l"8lIlsad Total
PSS cClnltnldkln savings. TranlfBrto Componetrl: C . Old PO
PSB Final COlts
c~nentC.ClldPD GMP
Tranafetfrom PSS (r&-IIIlocate 54,343 of the 110,354\0 DB f\Qd. tees)
Tl'8nsfv 10 CeI/gn BuId... ftxed feu for added design seNic&s
Old PO~1aecI Total (wIt/'lOUI r1Iimbl.lraeblesof$142.0(0)
fotalA,BIC
Total Change Order Number 05
Contract Summary
Origh'lli QMP per Firat Amendment to eMc c.ar Cellgn BuId Agrwement
GMP Cost Priorte tN. Change Order
Haw GMP k'lcIudlngthla ChlIr'G8 Order
~ T1lre wHl be cMnged by'" Change Color ("".n'ar day$)
Vartence from onglnal GMP to new QMI='
mIN" pereentaQe
David H. Cecil
Ser'lIOl Pfcject u..ger
I<lpHoward
Allegll OllNelopment SeNlces
__n
Dlrectct GeneI3l Servtces
9-.2.0
17,980,ooQ
~O,13e
17.499.884
9,451,000
391,805
84,331
0,031,136
.110,354
e,82O,182
10,915,000
55,011
64,343
11,025,364
38,3<48,000
38,3046.000
40,045.~15
o
1.BSO,515
4.4%
38,346,000
38,348,000
1.B99,S15
RESOLUTION NO. 2007-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE SECOND AMENDMENT
TO CIVIC CENTER DESIGN BUILD AGREEMENT WITH
HIGHLAND PARTNERSHIP, INe. FOR THE CIVIC CENTER
RENOVATION PROJECT TO INCREASE THE
GUARANTEED MAXIMUM PRICE FOR PHASE 3 OF THE
PROJECT BY $1,699,515 AND AUTHORIZING THE MAYOR
TO SIGN THE SECOND AMENDMENT.
WHEREAS, in July 2001, the City Council approved a master plan for the renovation of
the Civil Center; and
WHEREAS, on February 18,2003, the City Council approved a Design Build Agreement
with Highland Partnership, Inc. for the Civic Center Renovation Project ("the Project"); and
WHEREAS, pursuant to the Agreement, the Project will be constructed in three
components; Components A (Phase I), Component B (Phase 2), and Component C (Phases 3)
and Phase I and 2 are substantially completed; and
WHEREAS, Phase 3 of the Project involves the renovation of the former police
department building, the demolition of the Legislative Office Building and Community
Development Building, and the construction of the additional parking and landscaped areas; and
WHEREAS, on August 3, 2004, the City Council approved the First Amendment to Civic
Center Design Build Agreement which, among other things, set the Guaranteed Maximum Price
("GMP") for Component A for an amount not to exceed $17,980,000; for Component B for an
amount not to exceed $9,451,000, and for Component C for an amount not to exceed
$10,915,000, for a total GMP of $38,346,000; and
WHEREAS, as construction of Phase 3 began, staff has encountered significant asbestos
issues and a number of other changes; and
WHEREAS, staff desires to further amend the Civic Center Design Build Agreement by
increasing the GMP for Component C (Phase 3) by $1,699,515 for a total GMP of $40,045,515
to reflect increased costs for Phase 3 of the Project; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula Vista
as follows:
1. That it approves the Second Amendment to Civic Center Design Build Agreement with
Highland Partnership, Inc. for the Civic Center Renovation Project increasing the
Guaranteed Maximum Price of Component C (Phase 3) of the Project by $1,669,515 for
a total GMP of $40,035,515.
9-21
Resolution No. 2007-
Page 2
2. That it authorizes the Mayor to sign the Second Amendment to Civic Center Design
Build Agreement.
Presented by
Approved as to form by
Jack Griffin
Director of Engineering and
General Services
~..a ~C>-J i~ L!~ ~
Ann Moore
City Attorney
H:\ENGINEER\RESOS\Resos2008\OI-08-08\Civic Center-Second Amendment to DB-Increase aMP - ec.doc
9-22
THE ATTACHED AGREElYfENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON AFPROV AL BY
THE CITY COUNCIL
'4~t>-/d. -/~r
Ann Moore
City Attorney
Dated: itJ-../ 13/ i) 7
I I
Second Amendment to
Civic Center Design Build Agreement
between
City of Chula Vista
and
Highland Partnership, Inc.
9-23
SECOND AMENDMENT TO
crnc CENTER
DESIGN BUILD AGREEMENT
This Second Amendment to the Civic Center Design Build Agreement is entered into this
18th day of December 2007, by and between the City of Chula Vista, a municipal
corporation (City) and Highland Partnership, Inc. (Design Builder or DIB).
RECITALS
A. In July 2001, the City Council approved a master plan for the renovation of the
Chula Vista Civic Center.
B. The City Council approved a Design Build Agreement with Highland Partnership,
Inc. for the Civic Center Renovation Project (Project) on February 18,2003 (Agreement).
The Agreement contemplated that the construction of the renovations of the Civic Center
would be accomplished in three components (now referred to as Phases): Component A
(Phase I), Component B (Phase 2), and Component C (Phase 3).
C. Pursuant to section 6.4.1 of that Agreement, the Guaranteed Maximum Price
(GMP) was not to exceed $28,081,000.
D. The City Council approved the First Amendment to Civic Center Design Build
Agreement on August 3, 2004. A copy of the First Amendment to Civic Center Design
Build Agreement is attached to this Agreement as Exhibit A.
E. The First Amendment to Civic Center Design Build Agreement set the GMP for
Component A for an amount not to exceed $17,980,000; for Compom;nt B for an amount
not to exceed $9,451,000; and for Component C for an amount not to exceed
$10,915,000, except as adjusted pursuant to Section 6 of the First Amendment to Civic
Center Design Build Agreement, for a total GMP of $38,346,000.
F. As construction began on Phase 3, City staff encountered significant asbestos
abatement issues and determined that the plans should be modified due to a number of
City-generated changes in scope.
G. The City staff and DIB have reviewed and agreed to the increased costs and desire
to increase the GMP for Component C (Phase 3) by $1,699,515.
AGREEMENT
In consideration of the mutual promises and covenants contained in this Second
Amendment to Civic Center Design Build Agreement, the Parties agree as follows:
1. Section 1: General Scope of Work to Be Performed by DIB. Subsection 1.3.1
is deleted in its entirety and replaced with the following:
9-24
"Perform all services, work and obligations as described herein for the
not to exceed Guaranteed Maximum Price ("GMP") determined
pursuant to Section 6.4 of this Agreement. The GMP shall not exceed
the amount of Forty Million Forty-Five Thousand Five Hundred and
Fourteen and no cents ($40,045,514) which shall include all Hard
Construction Costs necessary to provide a fully completed and
functional Project including, but not limited to, the cost for all labor,
equipment, material and the D/B Fixed Fee which includes fees and
expenses of any type, including all expenses under this agreement,
associated with completing the Project, whether on-site or off-site, and
the D/B Contingency Fund. Any costs incurred by D/B in excess of
said GMP shall be the responsibility of the D/B unless a Change Order
is approved by the City pursuant to Section 15 of this Agreement. All
funds remaining in the GMP at completion of the Project shall belong
to the City.
2. Section 6. Subsection 6.4.2. Delete the first paragraph of section 6.4.2 in its
entirety and replace with the following:
"The GMP for component B shall not exceed $9,451,000 and the GMP
for component C shall not exceed $12,614,514 except as adjusted as
follows:"
All other terms of the Civic Center Design Build Agreement, as modified by the First
Amendment to the Civic Center Design Build Agreement and this Second Amendment to
the Civic Center Design Build Agreement, shall remain in full force and effect.
[END OF AGREEMENT. NEXT PAGE IS SIGNATURE PAGE.]
9-i25
J:v.tromey\El.ISA\AGRESMENTS\Civil;: Center Design Build Agreement Second Amendment :0 increase GMP.doc
Signature Page to
the Second Amendment to the
Civic Center Design Build Agreement
CITY OF CHULA VISTA
HIGHLAND PARTNERSHIP, INC.
Cheryl Cox
Mayor
f-~~ a
"',..! I' .' __.
(j. David Gardner
ATTEST:
Ian Gill
City Clerk
Approved as to form by:
Ann Moore
City Attorney
9.2.26
l:\Attomey\EUSAIAGREEMENTS\Civic Center De$"ign Build Agrel:lTll:nt So:ond Amendment te inl;l"ellSe GMP,doc
EXHIBIT "A"
FIRST AMENDMENT TO
CMC CENTER
DESIGN BUILD AGREEl\.ffiNT
This First Amendment is made and entered into this 3rd day of August, 2004, by and
between the City of Chula Vista (herein "City"), amunicipal corporation, and Highland
Partnership, Inc. ("Design Builder or DIB"). City and DIB are sometimes hereinafter
referred to as Parties ("Parties'~.
RECITALS
WHEREAS, the Parties entered into an Agreement ("Original Agreement") on
February 18,2003 for the construction of necessary improvements at the City's Civic
Center; and
WHEREAS, since that Agreement was executed, the Parties have proceeded
forward on the design of these improvements; and
WHEREAS, during the development of these designs, the scope of portions of the
project have evolved in a maimer not originally contemplated by the Parties; and
WHEREAS, the City has determined that significant value and efficiency will be
gained by modifying the scope of the project.
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein the Parties agree that the following sections of the Original Agreement shal1 be
amended as follows:
1. Section 1.3.1 be amended to read as follows:
"Perform all services, work and obligations as described herein for the not to
exceed Guaranteed Maximum Price ("GMP'~ determined pursuant to Section 6.4 of this
Agreement. The GMP shall not exceed the amount of Thirty-eight Million Three
Hundred and Forty-Six Thousand and no cents ($38,346,000) which shall include all
Hard Construction Costs necessary to provide a fully completed and functional Project
including, but not limited to, the cost for all labor, equipment, material and the DIB Fixed
Fee which includes fees and expenses of any type, including all expenses under this
agreement, associated with completing the Project, whether on-site or off-site, and the
DIB Contingency Fund. Any costs incurred by DIB in excess of said GMP shall be the
responsibility of the D/B unless a Change Order is approved by the City pursuant to
9-27
Section 15 oftbis Agreement. All funds remaining in the GMP at completion of the
Project shall belong to the City.
2. Section 1.3.2.2 shall be amended to read as follows:
"Achieve "Substantial Completion" (as defined in Section 17.1) of Phase IV
component A 371 calendar days from the issuance of Notice to Proceed with said
component, and "Final Completion" (as defined in Section 17.3) no later than 462
calendar days from issuance of Notice to Proceed."
Section 1.3.2.2 (repeated) shall be renumbered as Section 1.3.2.3 and amended to read as
follows:
"Achieve "Substantial Completion" (as defined in Section 17.1) of Phase IV
component B 339 calendar days from the issuance of Notice to Proceed with said
component, and "Final Completion" (as defined in Section 17.3) no later than 430
calendar days from issuance of Notice to Proceed."
3. Section 1.3.2.3 shall be renumbered as Section 1.3.2.4 and amended to read as
follows:
"Achieve "Substantial Completion" (as defined in Section 17.1) of Phase IV
component C 444 calendar days from the issuance of Notice to Proceed with said
component, and "Final Completion" (as defined in Section 17.3) no later than 535
calendar days from issuance of Notice to Proceed."
4. Section 6.4 shall be amended to read as follows:
"Subsequent to the approval of the DDD, D/B shall, as directed by the City prior
to the issuance of a building permit, submit a GMP for approval by City. The GMP shall
include all Hard Construction Costs (including those portions ofFF &E for which D/B is
responsible pursuant to FF &E Matrix), D/B Contingency Fund, and D/B Fixed Fee for
the complete design and construction of the entire Project as specified in the approved
DDD, as amended; provided that;"
5. Section 6.4.1 shall be amended to read as follows:
. "The GMP for component A shall not exceed $17,980,000.
6. Section 6.4.2 shall be added to read as follows:
"6.4.2 The GMP for component B shall not exceed $9,451,000 and the
GMP'for component C shall not exceed $10,915,000 except as
adjusted as follows:
9-28
If, during the period of time from the City's approval of the
GMP until the component (s) B or C full building permit is
obtained ("Permit Time"), the Engineering News Record
20 City Building Construction Cost Index (BCl) average
over an annual basis or a portion thereof increases more
than 3 % on an annualized basis for the Permit Time, the
City shall take one or more of the following actions: I)
Increase the GMP through equivalent addition to DIB's
contingency equal to the difference between the 3%
annualized increase and the actual increase reflected in the
BCl at the time of issuance of a notice to proceed for each
phase, 2) Instruct the DIB to recommend to the City and
implement, after approval by the City, of compensatory
value engineering reductions, 3) the City may initiate the
termination provisions as prescribed in Section 26 of this
agreement, and 4) the City may make internal project
budget adjustments to manage the out of the ordinary cost
increases.
7. Section 6.4.2 of the Original Agreement shall be renumbered as 6.4.3
)
8.
Section 6.4.3 of the Original Agreement shall be renumbered as 6.4.4
9. Section 6.4.4 of the Original Agreement shall be renumbered as 6.4.5
10. Section 6.4.5 of the Original Agreement shall be renumbered as 6.4.6
II. Section 8.1.1.1 shall be amended to read as follows:
"Component A shall included minor tenant improvements necessary to make the
existing police building functional for its intended purpose, the temporary relocation of
all current City Hall occupants to the former Police building; demolition of the existing
City Hall; and construction of a new City Hall building, including a new Council
Chambers, consistent with the approved CD's, Master Plan (as amended), Basis of
Design, and FF &E Matrix; and relocation of appropriate departments into the new City
Hall."
12. Section 8.1.1.2 shall be amended to read as follows:
"Component B shall include the relocation of all occupants of the Public Services
Building ("PSB"), refurbishments of the PSB including all office space and site work
immediately surrounding the PSB consistent with the approved CD's, Master Plan (as
amended), Basis of Design and FF&E Matrix and relocation of appropriate departments
and staff into the refurbished PSB."
9-29
13. Section 14.1 shall be amended to read as follows:
"Except as otherwise expressly provided in this Agreement, as full and complete
compensation for performance of all services and obligations under this Agreement, D/B
shall be compensated ("D/B Fixed Fee") at a fixed sum equal to $7,617,000. That
portion of the D/B Fixed Fee earned with each Phase and component of the services is
listed in Exhibit 1 of this Addendum. Unless otherwise expressly provided in this
Agreement, DIB Fixed Fee shall include full compensation for all costs of any type
incurred by DIB in performing all services and obligations under this Agreement,
including but not limited to the following:"
14. Section 18.1 shall be amended to read as follows:
"The "Contract Time" shall be the number of calendar days stated in Section 1.3.2
for D/B to achieve Substantial Completion for each phase or component therein.
The total contract time shall not exceed 1,427 days from the issuance ofaNotice
to Proceed identified in Section 1.3.2.2."
15. The following Exhibits shall be replaced with the amended Exhibits attached
hereto:
Exhibit 2
Exhibit 3
Exhibit 6
Exhibit 8
Exhibit 9
14. Except as expressly provided herein all other provisions of the Original
Agreement shall remain in full force and effect.
9-30
Jul-/T-<004 09:54
From-HIGHLAND PARTNERSHIP INC,
619498/970
T-44T P.00//002 F-404
SIGNATURE PAGE TO
THE FIRST AMENDMENT TO THE
CMC CENTER DESIGN BUll.D AGREEMENT
CITY OF CHULA VISTA
HI-GHLAND PARTNERSHIP, INC.
~~~
\j:David Gardner
Stephen Padilla, Mayor
Susan Bigelow, City Clerk
Ian Gill
ATTEST:
Approved as to form by
Ann Moore, City Attorney
9-31