Title
Recommendation to Authorize the City Manager to Execute an Agreement with Andrew M. Jordan, Inc., DBA A&B Construction, in a Not to Exceed Amount of $31,277,673, for the Alameda Point Reuse Area Infrastructure Replacement Phase 1 and Phase 2, No. P.W. 11-19-55; and
Adoption of Resolution Amending the Capital Improvement Program Budget by Increasing Revenue and Expenditure Appropriations in the Alameda Point Backbone Infrastructure Capital Improvement Project (C75000) by $5,790,913 from Available Fund Balance in the Alameda Point/Base Reuse Fund (290) to Construct the Alameda Point Reuse Area Infrastructure Replacement Phase 1 and 2, No. P.W. 11-19-55. (Public Works 31041520)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Backbone infrastructure will be replaced in Alameda Point’s Adaptive Reuse Area (Reuse Area) through the City of Alameda’s (City) Capital Improvement Program with funding from the sale of buildings in the Reuse Area. Currently, the City owns and is responsible for the water distribution and other utilities at Alameda Point. The utilities were installed by the Navy and the majority of the systems are over 70 years old and in disrepair.
Five properties at Alameda Point have sold to date, generating $31 million in proceeds. Pursuant to an agreement with the East Bay Municipal Utility District (EBMUD), the City is required to replace the water system in the Reuse Area in three defined phases. The obligation to undertake the water system replacement work in each phase is triggered by the sale of a building within that phase. The properties previously sold, as shown in Exhibit 1, were located in Phases 1 and 2 and therefore the water system is required to be replaced in Phases 1 and 2. In 2017, based on available and projected building sale revenue, the City Council awarded an engineering design services contract that included all three phases of the water system and the design for all backbone infrastructure in the first phase of the Reuse Area only. Backbone infrastructure includes new sewer, storm, joint trench, street lighting, landscaping, and complete streets with bike and pedestrian facilities.
After managing through the complexities of redeveloping the Reuse Area, including coordination with multiple utility providers, regulatory entities, and environmental challenges, the first portion of the project designed to bring new infrastructure into the Reuse Area is ready to commence. The project includes new EBMUD water facilities and all backbone infrastructure improvements in Phase 1 and only the water improvements in Phase 2, as shown in Exhibit 1. Available funding could not support all backbone infrastructure improvements in Phase 2. Staff recommends adoption of a resolution amending the capital budget and the award of the proposed construction contract to Andrew M. Jordan, Inc., DBA A&B Construction.
BACKGROUND
On February 4, 2014, upon acquisition of major portions of Alameda Point from the United States Navy (Navy), the City Council approved the necessary planning documents for redevelopment of Alameda Point, including the Master Infrastructure Plan (MIP). The approved MIP, including recent amendments, provides the master plan for the phased replacement of all of the Navy’s outdated and substandard utility infrastructure, including water, sewer, storm drain, electrical, gas, telecommunications, and surface street improvements at Alameda Point. Pursuant to the MIP, new infrastructure will be implemented differently in the Reuse Area than in the development areas to address the specific infrastructure requirements needed to preserve the “Historic District” within the Reuse Area. Since the Reuse Area is comprised of the Historic District that constrains the new development process, the buildings within the Reuse Area are planned to be sold and reused incrementally to private property owners on a parcel-by-parcel basis. Upon receipt of funds from the sale of the properties within the Reuse Area, the City oversees the logical implementation of the new infrastructure in the Reuse Area.
Currently, the City owns the water distribution facilities at Alameda Point, which connect to EBMUD’s system at four master meters. The water facilities were installed by the Navy and the majority of the system is over 70 years old and in disrepair. On May 2, 1997, the City entered into the Joint Exercise of Powers Agreement (JPA) with EBMUD for the operation and maintenance of the water distribution facilities at Alameda Point. The JPA was amended five times, most recently in 2010, and expired March 31, 2017. On April 18, 2017, the City Council approved a six-month short-term Maintenance Agreement with EBMUD to provide continued services while the City and EBMUD negotiated the terms of a Water Infrastructure Agreement addressing the incremental development and phased infrastructure implementation in the Reuse Area.
On June 6, 2017, the City Council approved, and on June 14, 2017 EBMUD signed, a Ten-Year Water Infrastructure Agreement with the City (Agreement) (Exhibit 2). Pursuant to EBMUD Regulations Governing Water Service to Customers (Regulations), private property owners within EBMUD’s potable water service area must be an EBMUD customer with direct access to EBMUD water infrastructure. However, the Agreement allows the City to sell parcels in the Reuse Area to private property owners in advance of these owners being EBMUD customers, so long as the City remains in compliance with the terms of this Agreement. The Agreement requires the City to build out the water system replacements in the Reuse Area in phases, as shown in Exhibit C of the Agreement, and in accordance with the conditions and milestones contained in the Agreement.
Five properties have sold to date in the Reuse Area generating $31 million in revenue. Four sold properties are in Phase 1 and one property in Phase 2. Under the Agreement, the City’s obligation to construct the water system in both phases has been triggered and the City must replace the old system with new EBMUD facilities. Based on the potential for building sale revenue, on October 17, 2017, the City Council awarded a design services contract to include water design and design of all backbone infrastructure in Phase 1. This first infrastructure project, therefore, includes new water, sewer, storm, joint trench, street lighting, landscaping, and complete streets with bike and pedestrian facilities within Phase 1 and only the water improvements in Phase 1.
DISCUSSION
To solicit the maximum number of bids and most competitive price, plans and specifications were provided on December 3, 2021, to 16 separate builders’ exchanges throughout the Bay Area. In addition, notices were placed on the City’s web page and published on December 10, 2021, in the Alameda Journal. After a bidding period of 46 days, four (4) contractors submitted bids. Bids were opened on January 18, 2022, with the following results:
|
Bidder |
Location |
Bid |
|
A&B Construction |
Berkeley, CA |
$28,434,248 |
|
Mcguire and Hester |
Alameda, CA |
$29,828,738 |
|
Garney Construction |
Tracy, CA |
$33,328,251 |
|
Desilva Gates |
Dublin, CA |
$35,655,655 |
Public Works staff contacted references provided by the low bidder and received positive feedback on the ability of the company to meet the project requirements and the quality and timeliness of their work. Staff recommends awarding a contract to A&B Construction for a total amount of $31,277,673, which includes a 10% contingency. The contractor is not guaranteed any of the contingency amount and the use of the contingency will be at the sole discretion of the City for work not originally anticipated in the plans and specifications. This project is subject to the City’s Project Stabilization Agreement, which includes requirements for local workforce development. The contract is attached as Exhibit 3.
Staff initially considered selling Building 92 in late 2018. The building sale proceeds were expected to be available prior to the award of the contract for this Reuse Area construction project. However, as a result of changes made to the Surplus Lands Act in 2019, the sale and marketing of Building 92 was delayed. The City has now complied with the Surplus Lands Act noticing requirements and because it did not receive an offer to purchase Building 92 from any interested party, may now proceed with the sale of Building 92. The most recent appraisal for Building 92 dated September 2018 valued the property at $7.2 million. An appraisal update is underway and the building is expected to be sold later this year. To continue advancing this important construction project, staff requests $5,477,673 from the existing fund balance in the Alameda Point/Base Reuse Fund (290) be allocated to the Alameda Point Backbone Infrastructure Capital Improvement Project (C75000). When the sale of Building 92 is completed, sale proceeds from Building 92 will be deposited in the Alameda Point/Base Reuse Fund to repay this advance. The balance of the sale proceeds will be allocated to the Alameda Point Backbone Infrastructure Capital Improvement Project at a later date for additional phased infrastructure in the Reuse Area.
ALTERNATIVES
• Award the construction contract, as presented.
• Direct staff to adjust the amount of work in this project.
• Do not award the project and provide different direction to staff.
FINANCIAL IMPACT
The Alameda Point Backbone Infrastructure Capital Improvement Project (C75000) was established in 2017 to receive building sale proceeds from the Reuse Area to fund construction of the backbone improvements. Below is a summary table of appropriations and project costs.
|
Project C75000 |
|
|
Existing Appropriations |
$31,071,364 |
|
Existing Expenditures/Encumbrances |
($4,084,604) |
|
Projected Expenditures for Construction |
($1,500,000) |
|
Available Project Balance |
$25,486,760 |
|
Proposed Construction Contract |
$31,277,673 |
|
Requested Appropriations |
$5,790,913 |
Expenditures and encumbrances to date include services for civil design; environmental sampling and consult; fees to EBMUD, Alameda Municipal Power, and PG&E for design, inspection, or material costs, and other minor project costs. The construction period for this Base Reuse project is two and one half years. Projected expenditures during construction include construction management, inspection, and testing.
Staff recommends allocating a total of $5,790,913 from the fund balance of the Alameda Point/Base Reuse Fund (290) to Alameda Point Backbone Infrastructure Capital Improvement Project (C75000) to allow this construction contract to be awarded and to provide available funding for all projected costs of construction.
Revenue from the upcoming sale of Building 92 will be deposited to the Alameda Point/Base Reuse Fund upon completion of the purchase and sale transaction. As building sale proceeds in the Reuse Area are to be used for backbone infrastructure, the sale proceeds in excess of this advance appropriation will also be allocated to the Alameda Point Backbone Infrastructure Capital Improvement Project for additional phased infrastructure in the Reuse Area.
There is no impact to the General Fund as a result of this action.
MUNICIPAL CODE/POLICY DOCUMENT CROSS-REFERENCE
This action complies with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City certified the Alameda Point Final Environmental Impact Report (EIR) in compliance with the California Environmental Quality Act (CEQA). The Final EIR evaluates the environmental impacts of redevelopment and reuse of the lands at Alameda Point consistent with the Alameda Point Zoning Ordinance and MIP, which included the Reuse Area.
CLIMATE IMPACT
This project constructs complete streets, which include capture and treatment of 100% of the stormwater runoff and provides for safe multi-modal travel.
RECOMMENDATION
Authorize the City Manager to execute an agreement with Andrew M. Jordan, Inc. DBA A&B Construction, in a not to exceed amount of $31,277,673, for the Alameda Point reuse area infrastructure replacement phase 1 and phase 2, No. P.W. 11-19-55; and
Adoption of resolution amending the capital budget by increasing revenue and expenditure appropriations in the Alameda Point Backbone Infrastructure Capital Improvement Project (C75000) by $5,790,913 from available fund balance in the Alameda Point/Base Reuse Fund (290).
CITY MANAGER RECOMMENDATION
The City Manager concurs with the Public Works Director’s recommendation for City Council to approve the contract to A&B Construction in an amount not to exceed $31,277,673.Respectfully submitted,
Erin Smith, Public Works Director
Financial Impact section reviewed,
Gerry Beaudin, Assistant City Manager/Interim Finance Director
Exhibits:
1. Reuse Area Phasing Map
2. Ten-Year Water Infrastructure Agreement between City and EBMUD
3. Contract with Andrew M. Jordan, Inc. DBA A&B Construction
cc: Eric Levitt, City Manager