Item 6-C
Council Meeting: August 10, 1999 Santa Monica, California
To: Mayor and City Council
From: City Staff
Subject: Recommendation to Adopt a Resolution to Waive Public Bidding Procedures for Construction of Community Space at 1525 Euclid Street.
INTRODUCTION
This report recommends that the City Council adopt a resolution with findings to waive the bidding procedures for the 933 square foot City-owned community space to be developed in conjunction with the 13 unit United Cerebral Palsy (UCP) Housing project at 1525 Euclid Street.
BACKGROUND
In April 1999 the City of Santa Monica purchased the property at 1525 Euclid Street for development as affordable housing and a community meeting space. Built in 1928, the 1525 Euclid building is the oldest remaining governmental facility in the City, formerly housing the County Mental Health Center, and as such is eligible for listing in the National Register of Historic Places. The affordable housing portion of the project, 13 units accessible to persons with disabilities, will be primarily funded from HUD with supplementary funding through a loan from the Housing Trust Funds. The City will develop, own and operate the 933 square foot community room space as a public facility at the estimated cost of $100,000.
DISCUSSION
Section 2.24.071 of the Municipal Code requires that every contract involving an expenditure of more than $25,000 for public works projects, including the construction of public facilities, be let to the lowest bidder. In the proposed project, only the community space is subject to the City
=s bidding requirements under Municipal Code Section 2.24.071, as the City will own and operate the space as a community facility. The housing project is not a public works project and, instead of open public bidding, UCP will use an informal bidding process for the general contractor, as is the standard practice for HUD-financed projects. If the City must apply its bidding requirements to the community space, different contractors may likely be selected to construct each of the two project improvements.The disadvantages of having separate contractors for each of the projects have to do with coordination, timing and liability, which in turn affect costs. Those implications are described in greater detail below.
Coordination and Costs
The 1525 Euclid Street Project involves hazardous material (asbestos) mitigation and construction of many interrelated systems between the community space and housing project, each of which will require careful coordination. If this coordination is not done properly, it will cost the project time and money. For example, prior to rehabilitation, asbestos must be removed from both the community room and in housing areas. In addition, conduits for plumbing, sewer, and electrical service to the community meeting space will come directly from the housing project. The relationship between the two uses in the building and institution of measures to ensure proper coordination is best accomplished by a single general contractor.
Additionally, a single general contractor for both the housing, community room and landscaping components of the project will help to ensure consistency in applying preservation standards during construction.
Project Schedule and Timing
The timely development of the proposed project is important for several reasons. First, the housing portion of the project must be started in the fall to meet a HUD funding deadline. Second, there will be construction cost savings for the entire project (including the community space) if the project is built in one phase this fiscal year. Third, if a separate contractor selection process occurs for the community space, the time involved could potentially delay the beginning of the housing project.
Bonding and Liability
If two separate contractors are used, it is likely that the contractor for the community space would be unwilling to accept the work of the contractor for the housing project or independently guarantee their work in the community space. With a single general contractor, related systems in the community space and the housing project would be
Aseamless@ thereby allowing for a clear delineation of responsibility for liability and bonding purposes.Contractor Bidding
Waiving the City
=s bidding requirements does not mean that the project would not be competitively bid. The developer would obtain bids from three or four general contractors, and enter into a negotiated general contract with a one who is qualified and cost-effective. This contractor would be required to obtain a minimum of three competitive bids for each line item in the development budget.FINANCIAL/BUDGETARY IMPACTS
This recommendation would have no budgetary impact. Funding for the community space improvements and landscaping was approved in the FY 99-00 CIP budget.
RECOMMENDATIONS
Staff recommends that the City Council adopt the attached Resolution authorizing the City Manager to waive the bidding procedures otherwise required by Section 2.24.071 on the basis that the services necessary to construct the community space at 1525 Euclid Street can be purchased more economically on the open market and with reduced liability and safety concerns.
Prepared by:
Barbara Stinchfield, Director Community and Cultural Services
Jeff Mathieu, Director of Resource Management
Karen Ginsberg, Assistant to the Director, CCS
Robert Moncrief, Housing and Redevelopment Manager
Brett Horner, Senior Administrative Analyst, CCS
Mike Strader, Senior Development Analyst, Housing
Marsha Moutrie, City Attorney
Linda Mills, Deputy City Attorney
Attachment A: Resolution of the City Council Authorizing a Waiver of Bidding Requirements for Public Works Projects Pursuant to Municipal Code Section 2.24.071(d)(1) for Construction of the Community Space at 1525 Euclid Street