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HomeMy WebLinkAboutAgenda Statement 1977/12/13 Item 26_ h 11 T Ur ht1ULF'~; V 1 J I H 26 COUNCIL AGENDA STATEMENT Item No. For meeting of 12-13-77 ITEM TITLE Resolution #8932: Appropriating Funds for Civic Center Project Representative, Author?_zinc~ Staff=: to Proceed with Renovation of City Hall and Accepting Report on Possible Construction Project Overrun- SUBMITTED BY Director of Public works/City Engineer ,, 1 rv flU ITEM EXPLANATION (4/5TH'S VOTE REQUIRED *YES~ NO ) *(FOR REPORT RECOMMENDATION NO. 2 ONLY) 6Vhen bids were received on October 27, 1977 for the construction contract of the Civic Center renovation, the contract amount was $1,983,000 which was 30% higher than the architect's estimate of $1,523,389. A Council Conference was held on Thursday, November 3, 1977, at which time various funding sources for the construction contract were discussed. At the November 8, 1977 meeting, Council appropriated the approximately $68,000 required to amend the previously budgeted amount in order to cover the contract. At the November $, 1977 meeting, I indicated to Council that I would re- port back within 30 to 60 days concerning the funding of the cost over- runs for the Civic Center renovation and for other projects. It was realized at that meeting that cost overruns might occur not only on the renovation project but on many other budgeted projects, in that additional funds required for the renovation project might be competing with funds required for cost overruns on other projects. Included with this Agenda Statement is a report which details the overruns on several projects. It is concluded that funds are presently available to carry out the projects at this time. It is anticipated that all projects can be constructed in their entirety this year if the Council is willing to use all of the money available to them. :ph JY- Agreement Resolution x EXHIBITS Ordinance Plat Notification List Other (Report) ENVIRONMENTAL DOCUMENT: Attached Submitted on FINANCIAL IMPACT Funds required for project representative, $1.9,000, are available from the unappropriated balance of Federal Revenue Sharing. STAFF RECOMMENDLT_ION Accept report with staff recommendations. BOARD/COMMISSION RECOMMENDATION AppF~OVED 1/ ~, 1.~ COUNCIL ACTION C ~ i`- :,;; ~ ~i 1 G na.ted _ ............................... December 8, 1977 File No. JY-017 TO: The Honorable Mayor and City Council VIA: Lane F. Cole, City Manager FROM: W. J. Robens, Director of Public Works SUBJECT: Report on Possible Construction Project Overruns BACKGROUND When bids were received on October 27, 1977 for the construction contract of the Civic Center renovation, the contract amount was $1,983,000 which was 30% higher than the architect's estimate of $1,523,389. A Council Conference was held on Thursday, November 3, 1977, at which time various funding sources for the construction contract were discussed. At that time Council appropriated the ap- proximately $68,000 required to amend the previously budgeted amount in order to cover the contract. The Director of Public Works indi- cated that he would be back to Council within thirty to sixty days to discuss possible methods of reducing the Civic Center construc- tion costs and also other projects that have been budgeted for Fiscal Year 1977-78 and for which the estimated amount is now higher than the budgeted amount. RECOMMENDATIONS It is recommended that: (1) the City Council authorize the con- struction of the plaza, fountain and arcade with the Civic Center renovation project, (2) the City Council appropriate $19,000 for a previously approved agreement with the project representative, (3) the City Council authorize staff to proceed with the renovation of City Hall -- staff will negotiate the contract with the Architect and come back to Council at a later time to appropriate funds as necessary, and (4) the City Council take no other action concerning the funding of other projects at this time. DISCUSSION This report will discuss various projects for which the current estimate for construction is higher than the amount budgeted in the Fiscal Year 1977-78 budget. The report will also discuss possible funding sources for these projects. Civic Center Renovation The first project to be discussed is the entire Civic Center reno- vation. When the application was submitted to EDA, it was antici- pated that all three buildings (the old library, old post office and City Hall) would be renovated during the course of the project. Approximately $2,016,000 was budgeted to cover the cost of this project. The construction portion of the old library/post office renovation, however, was approximately $450,000 over the estimated amount. On November 3 and November 8, Council was forwarded a two- page attachment that listed various cost estimates for the entire Honorable Mayor and, -2- .December 8', 1977 City Council project, three options to follow during the project and a listing of possible funding sources. That attachment is again appended to this report. The $250,000 estimate for City Hall renovation is a bare-bones renovation that will consist primarily of mechanical and electrical improvements to City Hall with approximately $35,000 set aside for the interior renovation of the building. As the City has re- quested that EDA delete City Hall from the project as was origin- ally defined, City forces will be able to do some of the work on City Hall. This $250,000 estimate is not a detailed estimate as the architectural/engineering plans and specifications for the building have not been prepared. It is therefore subject to later change. As was discussed during the Council Conference of November 3, Robert G. Fisher Company, the contractor doing the construction portion on the old library/post office, has agreed to allow the City a 1000 price deduct for the deletion of various items in the contract. He has further agreed to allow two representatives, the architect and a City representative, to examine his cost estimates to ensure that the City receives the actual 100 deduction. The items that might be deleted from the construction contract without significantly al- tering the function of the buildings themselves, were the plaza, fountain, arcade and plaza furniture. The total amount to be saved by deleting these items is $148,000. If Council anticipates the eventual construction of the plaza, ar- cade and fountain, it would be more cost effective to leave those items in the current contract. Possible funding sources for the entire project are indicated on Page 2 of the attachment. Various funding sources will be detailed toward the end of this report af- ter other projects which may have cost overruns have been discussed. Third Avenue Street Improvements In the Fiscal Year 1977-78 budget, Council appropriated $325,000 from Special Capital Outlay for street improvements on Third Avenue between "E" and "F". The latest engineer's estimate, prepared on October 13, 1977, is $435,000. The Community Development Depart- ment intends to bid the project with three alternatives. The first will be the entire project, "E" to "F" Streets. The second would be to do everything on Third Avenue between Davidson and "F" Street. The approximate estimate for this is very close to the $325,000 that has been budgeted. The third alternate is to do the entire project between "E" and "F" Streets with certain deductive items. The estimate for this is approximately $394,000. When bids are re- ceived, staff will have a better idea of exactly how much the over- run will be. It is currently anticipated that any overruns in Third Avenue could be funded as follows: Some additional funding, approximately $50,000, is eligible for Gas Tax funds for installa- tion of the storm drain and traffic signal at Davidson and "F" Street. The remainder could come from the unappropriated balance of Federal Revenue Sharing. Honorable Mayor and -3- .December ~, 1977 City Council Other C.I.P. Projects RS-5, the concrete-lined channel to be installed south of East Naples and west of Monserate, for which $74,400 was originally budgeted, currently has an estimate of $14,000 higher. RS-6, the construction of a storm drain on Marl Court at East Reinstra Street, for which $14,000 was originally budgeted, now has an estimated construction cost of $3,000 higher. GT-74 which is for purchase of right-of-way on Telegraph Canyon Road in conjunction with El Rancho del Rey Unit No. 5, was origin- ally budgeted at $156,000. Latest information from the City's agent, Sam Blick, indicates that the actual City share will be closer to $200,000, which means that an additional $44,000 will have to be budgeted for this project. The current "F" Street widening project, which has a total of $332,000 budgeted in GT-53 and GT-75, now has an estimate of $375,000. During the course of the project and upon completion, the City will receive approximately $207,000 in FAU funds which will then be pumped back into Gas Tax funds. However, when the contract is let, the City must have the entire amount appropriated. We will therefore require an additional $43,000 in Gas Tax Funds. There may be other CIP projects to be funded with Community Develop- ment Block Grant Funds and Park Acquisition and Development Funds that may have cost overruns. However, there will be enough money in Block Grant Local Option Funds to cover Block Grant shortfalls and it is not anticipated that funds other than Park Acquisition and Development Funds would be used to fund any shortfalls in those projects. Some of the projects currently budgeted under current and previous year Gas Tax Funds may, upon receipt of bids, be higher than the estimated amount. However, since design is not completed on these projects, the amount of overrun, if any, is not known. Funding Sources for Project Overruns At the current time there is approximately $100,000 in unappropri- ated Gas Tax Funds which can be used to fund the shortfall for the Telegraph Canyon Road right-of-way acquisition and "F" Street widening. There will also be about $14,000 originally budgeted for the construction of traffic signals on "L" Street (GT-78) which will probably not be required unless unforeseen contingencies occur during that construction project. The current unappropriated balances of Federal Revenue Sharing Funds is $349,000 and of Residential Construction Tax is $136,000. As detailed on Page 2 of the attachment, if RS-9, Brandywine/Orange Avenue extension, and RS-11, the Orange Avenue Fire Station, are not constructed this year, an additional $235,000 will be available in Revenue Sharing for project overruns. Additionally, Revenue Sharing funded projects that are budgeted for Fiscal Year 1977-78 but will not be constructed during Fiscal Year 1977-78 (RS-3, Orange Honorable Mayor and 4 December 8, 1977 City Council Avenue acquisition, Third to Albany, and RS-10, Center) would make available another $201,000 in A summary of those funding sources is on Page 2 Salary for Civic Center Project Representative Senior Citizens Revenue Sharing. of the attachment. As indicated at the November 3 and November 8 meetings, $19,000 is required for the salary of the project representative for Civic Center renovation. As the agreement with the project representa- tive has been previously approved by the Council and the project representative has started work, $19,000 should be appropriated at this meeting. CONCLUSIONS Exhibit B, attached, displays known cost overruns of $663,000. It also shows available funding in Gas Tax, Residential Construc- tion Tax, and Revenue Sharing of $$34,800. The amount remaining for other project cost overruns this year or to be available for other projects which the Council wants to fund this year or next year would be $171,800. At the present time, we foresee no major additional changes to budgeted projects which would require additional funding in the near future. However, the way bids have been coming in, I do not have a strong feeling of confidence as to what might happen in the next six months. At this meeting (or the next meeting), it is important that the City Council make a decision concerning the plaza, fountain and arcade; because, in January, the contractor will withdraw his offer of 1000 credit for deduct items. He has scheduled work on the plaza to begin on January 16, 1978. If Council wishes to have a completed plaza area which is signi- ficantly and dramatically different from the plaza today, then it is my recommendation that the Council authorize the contractor to proceed with the construction in that area as bid. I make this recommendation because it is my expectation that, even with a high bid, in one, two or three years whenever Council wishes to go ahead, the construction costs would approximate or exceed the cost as scheduled today anyway. Furthermore, I am aware of no reason why money would be more available in the future than it is now. Also, at this time, construction in the area can be better integrated with the overall construction and the incon- venience for citizens and employees using City Hall would occur just during one period rather than during two periods. If the City Council does not want a significant or dramatic change in the area in front of City Hall, then it would be my recommendation to not go ahead with the plaza, fountain and ar- cade. It would be possible then in the future to redesign the area so that construction costs could be significantly reduced. This would require new landscape plans. Savings of $50,000 to $100,000 might result dependent upon the scope of a future project. honorable Mayor and 5 December.8, 1977 City Council Decisions on the other projects discussed in this report need not be made at this time. It is clear that money is available to com- plete all of the projects as originally budgeted, if that is Coun- cil's decision. Since most of the projects seem to be high prior- ity projects, I would recommend that no specific actions be taken on those projects at this time. Nonetheless, I recommend that future approval of additional funding for any of the projects be given only after careful consideration and understanding of the priorities since the balance of available funds for Capital Pro- jects will be significantly lower than expected. This will cer- tainly impact projects programmed but not budgeted in the approved Six-Year Capital Improvement Program. DCB:ph RENOVATION FUNDING FUNDS REQUIRED FOR ENTIRE PROJECT Construction Contract for Old Library/Post Office $1,983,000 (Actual Bid) Furniture for Old Library/Post Office (Estimate as $ 180,000 of 12/76 + 9o CPI increase) Project Coordinator's Salary $ 19,000 Sub-Total for Old Library/Post Office City Hall Renovation (Option B) TOTAL /EXHIBIT A $2,182,000 250,000 $2,432,000 OPTION lA - Award the construction contract in full, as bid. Additional funds would have to be appropriated. (See Page 2 for possible sources) Construction Contract (Actual Bid) $1,983,000 2~ Contingency 39,660 Amount for Contract $2,022,660 Currently Appropriated (See Page 2) $1,,954,323 SHORTFALL $ 68,337 OPTION 1B - Award the contract as bid, but reduce the amount through deductive change orders. Contract as bid plus contingency Delete Plaza Delete Fountain Delete Arcade Delete Plaza Furniture Total to be Deleted Amount of Contract Currently Appropriated Remaining Amount $ 71,000 $ 42,000 $ 21,000 $ 14,000 $2,022,660 $ 148, 000 $1,874,660 " ~~ $1,954,323 $ 79,663 OPTION 2 - Reject bids and rebid contract using Old Library/Post Office as the base and the plaza, fountain, arcade and plaza furniture as additives. -~- - *Yage -~ .~ ~- _ ~ ~ . _ ~ ~- ' FUNDS AVAILABLE Previously Budgeted for Renovation $1,231,853 EDA Grant $ 722,470 Sub-Total Currently Appropriated Funds CIP Projects Budgeted for FY 77-78 That Will Not be Constructed RS- 9 Brandywine/Orange Avenue Extension $ 100,000 RS-11 Orange Avenue Fire Station $ 135,800 Sub-Total $ 235,800 Unappropraited Balance of: Revenue Sharing $ 417,000 Residential Construction Tax $ 136,000 Sub-Total $ 553,000 Sub-Total Funds Available Not Appropriated Sub-Total CIP Projects Budgeted for FY 77-78 That Will Not Be Constructed During FY 77-78 RS- 3 Orange Avenue R/W Acquisition Third to Albany $ 103,000 RS-10 Senior Citizen Center $ 98,100 Sub-Total TOTAL $1,954,323 $ 788,800 $2,743,123 r ~nl _ ~ n(1 $2,944,223 __ y .. /EXHIBIT B/ POSSIBLE C.I.P. EXPENDITURES AND REVENUE SOURCES r:NOti•rv FUi1DS nE~UIRED OVER BUDGET Civic Center Renovation *Furniture for Old Library/ Post Office *Project Coordinator's Salary Sub-Total City Hall Renovation Total Civic Center Renovation Third Avenue Street Improve- ments (Full Project) ($50,000 eligible for Gas Tax) RS-5, Concrete Channel, south of E. Naples, west of Monserate ($0 eligible for Gas Tax) RS-6, Storm Drain, Marl Court at East Rienstra ($3,000 eligible for Gas Tax) GT-74, Telegraph Canyon Road right-of-way, E1 Rancho del Rey #5 ($44,000 eligible for Gas Tax) GT-53 & 75, "F" Street Widening ($43,000 eligible for Gas Tax) TOTAL *These funds are required whether or not City Hall is renovated. FUNDING SOURCES Gas Tax $180,000 Unappropriated Gas Tax $100,000 Balance 19,000 GT-78, "L" St. Traffic 14,000 Signals Excess $199,000 Gas Tax Sub-Total $114,000 250,000 Residential Construction $449,000 Tax 110,000 Unappropriated Balance $136,000 Revenue Sharin 14,000 Unappropriated Balance $349,000 RS-9 Brandywine/Orange 100,000 Avenue Extension 3,000 RS-11 Orange Avenue Fire 135,800 Station 44 000 ~ Revenue Sharing Sub- $584,800 Total 43,000 $663,000 TOTAL C.I.P. PROJECTS BUDGETED FOR FY 77-78 THAT WILL NOT BE CON- STRUCTED DURING FY 77-78 RS-3 Orange Ave. right-of-way acquisition Third to Albany RS-10 Senior Citizen Center TOTAL $834,800 $103,000 98,100 $201,100