Title
Recommendation to Award a Contract in the Amount of $7,960,608, Including Contingencies, to Alten Construction for Construction of the Emergency Operations Center, No. P.W. 06-14-23 and Fire Station 3, No. P.W. 12-14-18; to Appropriate Anticipated Loan Proceeds from IBank and to Appropriate 2003 A&B Tax Allocation Bonds Unspent Bond Proceeds. (Public Works 319)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Recommendation to Award a Contract in the Amount of $7,960,608, Including Contingencies, to Alten Construction for Construction of the Emergency Operations Center, No. P.W. 06-14-23 and Fire Station 3, No. P.W. 12-14-18; to Appropriate Anticipated Loan Proceeds from IBank and to Appropriate 2003 A&B Tax Allocation Bonds Unspent Bond Proceeds
BACKGROUND
The City of Alameda intends to construct a new Fire Station 3 to replace the one located at 1709 Grand Street which was deemed seismically unsafe and obsolete in the year 2000. The new fire station will be constructed on the same site, and in conjunction with, the approved Emergency Operations Center (EOC). The EOC will be located at 1809 Grand Street and the Fire Station at 1625 Buena Vista Avenue.
In June, 2012, the Public Works Department entered into a contract with Brown Reynolds Watford Architects (BRW) to conduct a feasibility study for both the EOC and Fire Station 3. The consultant, together with City staff, facilitated three community meetings in the fall 2012, focusing on operations, space needs, and site arrangement of both structures. On July 9, 2013, a fourth community meeting was conducted to present potential design concepts.
On October 15, 2013 the Public Works Department entered into a contract with BRW for schematic and final design, preparation of construction documents, and assistance during the bidding and construction phases of the EOC only. It was determined at that time that the EOC could proceed ahead of Fire Station 3.
In April 2014, the Public Works Department, in conjunction with the Fire Department, issued a Request for Proposal for design services and contract administration for Fire Station 3. Five consultants submitted proposals. Three firms were short-listed and interviewed. In June 2014, the City Council awarded the contract to BRW in the amount of $431,200, including contingencies, for the design of Fire Station 3.
The City Council approved the plans and specifications for the Emergency Operations Center (EOC) on September 2, 2014 and separately for Fire Station 3 on March 3, 2015.
The combined project includes:
1. Perimeter site and street improvements including utility tie-ins and curb cuts for both the EOC and Fire Station 3;
2. On-site improvements integral for the operation of the EOC. This includes the driveway approaches, parking lot improvements, perimeter fencing and gates, site lighting, and landscape;
3. The completion of the EOC including all finishes, fixtures, and equipment for a facility that is ready for occupancy; and
4. The replacement of Fire Station 3 will accommodate firefighting operation activities, firefighter living quarters, apparatus bays, a conference room, and a public lobby with public restrooms. The facility is designed to accommodate one engine company, storage for one truck company, and an ambulance in reserve status. The fire station's office, living quarters, public lobby, and public restrooms would be situated along Buena Vista Avenue. Outdoor vehicle service areas consisting of concrete pads would be located at the front and rear of the apparatus bays to facilitate inspections, servicing, cleaning, and fueling. Fire trucks would enter the bays from Hibbard Street and exit onto Grand Street.
DISCUSSION
On August 1, 2014, the Public Works Department sent out notices of Statements of Qualification (SOQ) to prequalify contractors to bid on the EOC project, No. P.W. 06-14-23. On August 28, 2014, the City announced the three general contractors that were qualified to bid for the EOC project.
On September 3, 2014, the bid invitations were issued. After the bids were due and received, Public Works received a bid protest from Alten Construction. Following the bid protest process, the Public Works Department decided to reject all bids and to combine the construction of the EOC project with Fire Station 3. It was determined that combining the projects would help the City save money in completing both projects.
At the March 3, 2015 meeting, staff recommended that the City bid both projects because late winter/early spring is when contractors are looking for work and prices are more favorable. As discussed above, the EOC was fully approved and funded. Partial funding for Fire Station 3 had been identified with the remainder being sought through a loan from the Infrastructure Bank and Economic Development Bank (IBank).
Staff felt it was prudent to submit a call for bids prior to receiving final IBank approval based on the favorable bidding environment. Delay would have increased the cost of construction. Per the bid, the contractors were required to hold their prices for a period of 60 days since that was the anticipated timeframe for loan approval. The IBank financing was unanimously approved on April 28, 2015.
After a bidding period of 21 days, the bids were opened on March 24, 2015. The bid result for the construction of both structures is as follows:
Bidder |
Location |
Bid Amount |
Alten Construction |
Richmond, CA |
$7,596,000 |
Sausal Corporation |
San Leandro, CA |
$7,764,200 |
S. J. Amoroso Construction |
Redwood Shores, CA |
$7,997,000 |
On April 2, 2015, the City received a bid protest from Sausal Corporation, the second low bidder alleging that Alten Construction, the low bidder, had submitted a defective bid. On April 8, 2015, Alten Construction timely responded to the bid protest, denying that their bid was defective and explaining why their bid complied with the bid requirements. After a thorough review of the bid requirements, the bid protest and the response, the City Attorney's Office concluded that the bid protest was without merit and rejected it on that basis. The rejection letter was sent to all bidders on April 20, 2015.
Since all three bidders were prequalified to bid, staff recommends awarding a contract to the lowest bidder, Alten Construction, for the amount of $7,960,608, which includes a 5% contingency. The contractor is not guaranteed any of the contingency amount and use of the contingency will be at the sole discretion of the City for work not originally anticipated in the plans and specifications. The specifications also inform the successful bidder that they shall pay not less than the prevailing rate of per diem wages as determined by the Director of the California Department of Industrial Relations. A copy of the contract is attached as Exhibit 1.
ALTERNATIVES
There has been discussion regarding combining the two structures into one three-story facility. This proposal would require abandoning the existing plans and specifications for both structures, which totaled $523,417. This alternative proposal would require the development of new plans and specifications. This creates additional expense for design and time to re-engage the neighborhood, thereby delaying the project start for at least another two years.
The Architect has developed an initial cost and feasibility analysis for this proposed alternative design which is attached as Exhibit 2. Based on this analysis, the total construction cost is anticipated to increase from $7,470,500 to $9,295,750. This additional cost is due to the elements required to increase the building height from 29.5 to 45 feet, including the required steel beam structure for a 3-story building; elevator height change from 12 to 30 feet; and increased mechanical systems. The building cost increases from $532 / square foot to $600 / square foot. The total estimated increase is $1,825,250.
FINANCIAL IMPACT
In July 2014, the City Council approved sources of funding Fire Station 3 as follows:
Facility Maintenance Fund (706) $ 400,000
Capital Project 91344 (EOC and Fire Station 3) FY13-14 $ 341,000
Internal Loan from Equipment Replacement $ 809,000
Proceeds from sale of 1703 Grand Street $ 450,000
IBank Loan $3,000,000
Subtotal $5,000,000
Other funding sources approved by the City Council:
Capital Project 9061401 (EOC and Fire Station 3) FY11-12 $ 400,000
2003 A Tax Allocation Bonds unspent proceeds * $ 863,000
Refinancing of City's 2013 COPS - EOC construction FY13-14 $3,000,000
Subtotal $4,263,000
Total Available Sources $9,263,000
*Pursuant to the Amended Agreement Regarding Expenditures of Excess Bond Proceeds dated October 22, 2014.
The City entered in to an agreement with BRW to design the new Fire Station and the Emergency Operations Center. As of mid-April, the City incurred cumulative $706,800 in pre-engineering and design costs. The remaining available project balance for construction and other related costs is $8,556,200.
The General Fund will be impacted in the future by repayment of the IBank Loan (estimated at 2.29% over 20 years) and to the extent necessary an internal loan from the Equipment Replacement Fund (3% over 20 years). Total estimated additional debt service is anticipated not to exceed $300,000 annually, $5.3 million over the 20 year term. These costs are anticipated to be offset by approximately $50,000 of annual savings from removal of the need to lease staff housing quarters and energy savings from the new Fire Station 3. The General Fund will also pay for the IBank loan origination fee estimated at $30,000 and an annual fee of 0.3% of outstanding principal balance estimated at $96,000 over 20 year term.
The 2003 A&B Tax Allocation Bonds (TABs) unspent proceeds are available to the City pursuant to the Amended Agreement Regarding Expenditures of Excess Bond Proceeds dated October 22, 2014. These proceeds are being used consistent with the State Redevelopment Law. The Successor Agency refinanced the 2003 TABs in 2014. The debt service payments are reported on the Successor Agency Recognized Obligation Payment Schedule and are repaid from Redevelopment Property Tax Trust Fund.
In addition, after consulting with the City's bond counsel, staff has determined that proceeds from the 2013 COPs refinancing can be spent on both the EOC and Fire Station 3. However a bond disclosure statement would be required to be filed to notice this change in the use of funds.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Municipal Code.
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), this project is categorically exempt under CEQA guidelines section 15332, In-Fill Development Project.
RECOMMENDATION
Award a contract in the amount of $7,960,608, including contingencies, to Alten Construction for construction of the EOC, No. P.W. 06-14-23 and Fire Station 3, No. P.W. 12-14-18; to Appropriate Anticipated Loan Proceeds from IBank and to Appropriate 2003 A&B Tax Allocation Bonds Unspent Bond Proceeds.
Respectfully submitted,
Doug Long, Fire Chief
Bob Haun, Interim Assistant City Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Contract
2. Architectural Services for Fire Station #3 - Alternative Design Review