|
Agenda Item: 12(c) |
Prepared By: Jeffrey E. Poteet |
|
Business: City Council Item |
Department: Water and Sewer |
Subject:
Title
Award of Contract to Seagate Development Group, LLC for the Construction of a New Collection and Distribution Building and Covered Open Storage Structure in the Amount of $5,661,542.00 - Jeffrey E. Poteet, General Manager, Water & Sewer Department
Body
BACKGROUND:
The Collection and Distribution (C&D) team currently operates from a rented temporary trailer situated at the South Water Treatment Plant (SWTP), under a temporary use permit that expired ten years ago and cannot be renewed. The SWTP property is surrounded by residential properties in a residential single-family zoned area (RSF-4) and operates under a conditional use permit for water treatment and storage uses only. The conditional use permit does not encompass repair crew operations or staging of heavy equipment and construction material. Additionally, the existing trailer lacks adequate facilities such as meeting room, staging areas, dining areas, locker rooms, and showers for the staff.
Recognizing these challenges, on January 24, 2022, the City Council approved the relocation and the design of a new building facility including a covered open storage structure to be accommodated in the North Water Treatment Plant located at 807 East Elkcam Circle. The North Water Treatment Plant (NWTP) property is zoned C-5, Commercial, which allows for repair crew operations and staging area for equipment and materials.
The design was completed in March 2023, the construction bid documents were published on March 31, 2023, and the bid opening took place on March 30, 2023. The City received three submittals but two were disqualified due to the lack of information. The City only received one responsible bidder in the amount of $6,398,777. The City rejected the bids due to the lack of competition as per Section 2-260 (a) (6) of the purchasing ordinance.
This project was sent out to bid again on October 15, 2023. Out of 396 contractors and suppliers notified, 30 downloaded the bid package, and the City received a total of four bids on December 14, 2023. Each bid included a $350,000 owner initiated contingency for unforeseen expenses. Rycon Construction was disqualified due to a missing document in their submission.
Upon thorough examination of the submitted proposals, the staff has determined that three out of the four submittals align with the bid request, with Seagate Development Group presenting the most cost-effective solution. It is the staff’s recommendation to grant the construction contract to the Seagate Development Group for the construction of the C&D building and covered open storage structure.
While the construction contract covers the fundamental building costs, it's essential to note that there are additional ancillary expenses associated with this project. These include expenses for permitting, impact fees, capitalized personnel, and building furnishings, totaling an estimated $334,000. These costs are not incorporated into the construction contract and will be supplementary to the project budget. Furthermore, it is the staff’s recommendation to have the City Council waive the Water and Sewer (W&S) impact fees as allowed by the City Code.
The allocated funding in the W&S capital program for the construction of this project stands at $3,195,627. Currently, there is approximately $14,000,000 in the W&S Department's unrestricted reserve account, which will comfortably accommodate the $2,800,000 shortfall required to fully fund the construction and ancillary costs of this project. As part of the City's financial strategy, it is customary to maintain the unrestricted reserves at a level equivalent to 25% of the operating budget for emergencies, translating to approximately $7,000,000. Following the reappropriation of the necessary funds, the unrestricted reserve account will hold an amount equivalent to roughly 35% of the W&S Department's operating budget. This strategic move ensures a robust financial position for the department even after project expenditures.
FUNDING SOURCE / FISCAL IMPACT:
The funding for this project will utilize two sources: the Water and Sewer Capital Improvement Fund (431) and unrestricted reserve. General ledger accounts 431-5300-5360-606200-16247 and 431-5300-5360-606200-19007 have a total $3,195,627 earmarked for this project, of which $2,861,542 is allocated for the construction contract, with the remaining $334,085 available for the ancillary expenses. The remaining funding required ($2,800,000) will be sourced from the water and sewer unrestricted reserve account.
RECOMMENDATION:
Authorize the City Manager to execute a contract with Seagate Development Group, LLC for the construction of a new Collections and Distribution Building and Covered Open Storage Structure in the Amount of $ 5,661,542.00 (including $350,000 in contingency). Staff recommend waiving the water and sewer impact fees to be imposed per City Code, Section 52-137, as it is a water and sewer public facility.
POTENTIAL MOTION:
“Authorize the City Manager to execute a contract with Seagate Development Group, LLC for the construction of a new Collection and Distribution Building and Covered Open Storage Structure in the Amount of $ 5,661,542.00 and waive the Water and Sewer impact fees for this project.”