04-06-2004 CC RPT 18 - Laserfiche WebLink

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CITy OF RIVERSIDE CITY COUNCIL MEMORANDUM People Serving People WARD 1 Riverside ~lI-Amertca Cllt~ 1998 HONORABLE MAYOR AND CITY COUNCIL DATE: Apr±l 6, 2004 ITEM NO: 18 SUBJECT: BID NO. 6123 --PAl APPROPRIATION AND THE PUBLIC PARKING BACKGROUND: ~KING GARAGE 6, CONTRACT AWARD~ SUPPLEMENT.Al AUTHORIZATION OF A LOAN FROM THE GENERAL FUND TO FUND The City opened bids for the construcl ion of Parking Garage No. 6 on February 11,2004. There were five bids received ranging in price fron~ $12,740,000 to $14,595,000. The Iow bidder was Kajima Construction Services, Inc. and thei~ ~id of $12,740,000 was 19% over the Engineer's Estimate of $10,700,000. City staff and the Citys Iconsultants have reviewed the submitted bids and believe that it is in the best interest of the City to awarc~ the project to the Iow bidder. There are several identifiable issues tl~at caused the bids to come in higher than anticipated. First and foremost, the construction industry is ~xperiencing extreme volatility in the current steel market. In as r0uch as this project involves close to j~,000,000 pounds of reinforcing steel and the cos! of steel went up dramatically from $0.50 per pound to ~0.90 per pound between the time of the Engineer s Estimate and the time of bid opening, this resulted ir~an increase of approximately $900,000. In addition, the bidders all anticipate another increase in steel prices pdor to being able to "lock-in" their price and allowed for that increase in their bids. In addition, as is the case for all businesses throughout this state, Worker s Compensation insurance has risen dr.~matically and this increased cost is reflected in the higher bids. Coupling these two factors with the added cost of the expedited construction schedule we desij'.ed on this project provides adequate explanation as to the higher than anticipated bids. Based on these factors, staff and the City's consultants do not FISCAL IMPACT.: The estimated cost for the right-of-wa estimated at $16.3 million. In addition approximately 7.8 percent of the const ~elieve that rebiding this project would result in lower bids. acquisition, design, construction and contract administration is staff believes it is prudent to retain a $1 million contingency, or ~ction cost. This brings the total required funding to $17.3 million. The City Council pr,e, viously approved $15 million in certificates of participation (COP's) to finance the structure. The COP s are to be repaid with the parking revenues and rent from the first floor office space. Since the COP's have been sold, it is r~ot practicable to increase the bond issue to account for the $2.3 million short fall. Staff has explored s~veral options to cover the anticipated $2.3 million shortfall including; use of the existing $1.8 million fund balance in the Public Parking Fund or a short term loan from either the City's General Fund cabh reserves or an Enterprise Fund. Staff believes the best approach is to L~se $1.3 million from the Public Parking Fund to cover the base cost of $16.3 million in known project Oosts and leave approximately $500,000 unappropriated in the Public Parking Fund. Should any unexpected work be encountered during construction, staff is requesting City Council to approve a lo,an from the General Fund reserves in an amount not to exceed $1 million to be repaid within three years to cover any funding shortage. 18-1