Council Agenda - City of Burbank

Tuesday, June 12, 2007

Agenda Item - 3

 

 
                                       Burbank Water and Power

                                                 MEMORANDUM
 
 

 

DATE: June 12, 2007
TO: Mary J. Alvord, City Manager
FROM: Ronald E. Davis, General Manager, BWP
SUBJECT:

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING AND AUTHORIZING THE GENERAL MANAGER OF BURBANK WATER AND POWER TO EXECUTE A CONSTRUCTION AGREEMENT WITH ICON WEST, INC. FOR TENANT IMPROVEMENTS TO THE LIGHT FLEET BUILDING IN AN AMOUNT NOT-TO-EXCEED $828,950.

 

PURPOSE

 

Staff seeks the approval of the Burbank City Council (Council) to authorize Burbank Water and Power (BWP) to enter into the attached Construction Agreement with Icon West, Inc. (Icon West) for a firm, lump-sum cost of $828,950 to make certain tenant improvements to the former Light Fleet Building within the BWP Campus.

 

BACKGROUND

 

The tenant improvements are part of a wider BWP campus improvement plan. BWP has developed a Campus Master Plan for their facilities located between Magnolia Boulevard (northern perimeter) and Olive Avenue (southern perimeter); and between Lake Street (western perimeter) and the Western Flood Control Channel (eastern perimeter).  Several factors prompted BWP to develop the plan:

  • The need to consolidate substandard service facilities into a modern service center

  • The Water Division service activities are within an old brick building that requires seismic improvements, but bringing it up to code is impractical.

  • Line Section work spaces are within a space that has shed-under-shed construction, which is a fire hazard.

  • Communication Section work spaces are within a deteriorating modular building that was meant to be temporary, but has, in fact, been in place for 16 years.

  • The need to replace the existing BWP Warehouse

  • It has uneven and unsound flooring, and its useable space is too small.

  • It cannot be modified to meet seismic code.

  • The need to improve traffic circulation, making it more safe and efficient

  • The need to accommodate the Lake 1 Unit (now completed), the Magnolia Power Project (now completed), and to provide for other on-site generation needs

  • The need to improve workflows, particularly between warehouse and field operations

  • The need to improve employee parking, and to incorporate solar panels

  • The need to build a replacement Burbank Station within the BWP Campus

  • The need to strengthen campus security

Of immediate concern are the substandard facilities�aging modular buildings dating from 1991�that house the Communications Section, which oversees the City�s radio and phone systems. The plan is to relocate the Communications Section to the Olive Avenue side of the campus, within a renovated facility; the former Light Fleet Building.

 

An independent architectural firm, McLean & Schultz, has prepared the drawings for the tenant improvements to the Light Fleet Building.  The improvements are principally to create office and working spaces suitable for maintaining the City�s phone and radio systems, as well as installing mobile radios in various vehicles, including police cars and fire engines. The tenant improvements are straightforward, modest in scope, and interfere minimally with BWP operations.

 

Relocating the Communications Shop is on the critical path to the timely completion of the Replacement Service Center/Warehouse. The modular buildings lie within the future site of the Replacement Warehouse/Service Center, a critical campus improvement scheduled for completion in January 2009. To meet this completion target, the modular buildings need to be removed from the future site by January 2008. Moving the Communication Section to an interim location would take nearly as much time and effort as renovating their permanent facility, given the communication and network circuits that need to be reconnected.

 

Staff favors the approach of beginning the tenant improvement work on the former Light Fleet Building as quickly as possible, in order to relocate the Communication Section just once in a timely fashion. For the past year-and-a-half, the Light Fleet Building housed the Burbank Tournament of Roses Association (BTORA), which moved into BWP�s Auxiliary Warehouse last month. To accomplish the tenant improvements, staff proposes to engage Icon West, a contractor currently renovating BWP�s Main Administration Building.

 

Since January 2007, Icon West has been immediately available to do the tenant improvements to the Light Fleet Building. Icon West, which had been selected after a competitive bid process, is currently renovating BWP�s Main Administration Building. Icon West has the overall capability to perform the required tenant improvement work within BWP�s required time frame, and at a fair and reasonable cost.

 

Council had authorized BWP to enter negotiations with Icon West for Tenant Improvements to the Light Fleet Building. Staff needs separate Council authorization if the not-to-exceed amount is more than $740,000. On March 6, 2007, Council  authorized the BWP General Manager to negotiate price, terms, and conditions of a  construction agreement with Icon West for certain tenant improvements to BWP�s Light Fleet Building in an amount not-to-exceed $740,000 and further authorized execution of said agreement. Icon West completed a detailed take-off of the work required and the not-to-exceed amount needs to be increased to $828,950.

 

ANALYSIS

 

The cost of the tenant improvements is $828,950, $89,000 higher (12.0%) than originally budgeted.  Unfortunately, this result continues to reflect the ongoing trend of increased construction costs throughout Southern California. The alternative to accepting the Icon West proposal is to go out for competitive bidding.  On the �pro� side, accepting the Icon West proposal offers the following potential advantages:

  • Icon West continues to perform well since the start of construction (January 4, 2007), and has successfully completed one of the most challenging phases of the BWP Administration Building renovation - the extensive renovation of the basement level. The tenant improvements to the Light Fleet Building are considerably less challenging.

  • Icon West is already on-site and its immediate availability makes it easier for BWP to move the Communication Shop out of its old facilities before January 2008:

  • June 12�Council considers approving contract with Icon West in the amount of $828,950 to do the tenant improvements

  • June 17�Lead paint and asbestos remediation completed (by separate BWP contractor)

  • June 18�Icon West begins tenant improvements

  • December 18�Icon West finishes tenant improvements

  • December 30�Communication Shop moves in.

After the Communication Shop moves in, BWP will demolish the modular buildings, clearing the way for the construction of the Replacement Service Center/Warehouse.

 

The major �con� is the possibility that a competitive bid process might result in a lower contract price.

 

It is possible to achieve a reasonable proposal from Icon West. Although Icon West�s proposal is on a firm, lump-sum basis, they nevertheless provided BWP and Clifford Development Group, Inc. (CDG) with the necessary information to do a detailed review. BWP and CDG reviewed Icon West�s cost estimates for overhead, profit, and contractor�s contingency to assure they were at reasonable Project levels. They reviewed the schedule to assure that the work could be completed within the required time frame.  BWP and CDG concluded that this proposal is reasonable for a project of this size and complexity and that a separate competitive bidding effort would not result in any significant cost advantage for the City:

  • Icon West was the low competitive bidder for the Administration Building Remodel Project. The proposed $138 per-square-foot cost ($828,950 divided by 6,000 square feet) of doing the tenant improvements for the Light Fleet Building is well within the expected cost range for a building of this type and size.

  • Icon West is already providing tenant improvement work on site and should keep its mobilization costs to a minimum.

  • Terms and conditions of the Construction Agreement are the same as for the tenant improvements to the Administration Building.

  • BWP electricians will identify and upgrade old electrical circuits as needed; work that would represent a major cost factor and cost uncertainty.  This is a similar effort they are providing for the BWP Administration Building.

  • BWP will also handle any required hazardous materials remediation separately; work that would represent a major cost uncertainty.  This is a similar effort being provided for the BWP Administration Building.

BWP maintains that it has positioned itself and Icon West to avoid contractor-initiated change orders and to meet schedule based on the current good working relationship that has been developed over the last four months.

 

Formal bidding, while delaying the tenant improvements, may not achieve a better price proposal. Construction activity within Los Angeles County, most notably the nine billion dollar effort to build facilities for Los Angeles Unified School District, already occupies many general contractors. In today�s busy construction market, tenant improvement work that is less than one million dollars will probably attract limited interest.

 

Fund 535, an internal service fund for the City�s radio and phone systems, is supporting the tenant improvements. Fund 535�s budget includes tenant improvements to the Light Fleet Building. The current 2006/07 Fund 535 Budget provides $740,000. The proposed FY 2007/08 Fund 535 Budget provides an additional $190,000 for a total of $930,000. The $930,000 amount covers the $828,950 cost and also effectively provides a $101,050 project contingency.

 

The Fund 535 Executive Committee reviewed and approved recommending the tenant improvements at its March 22, 2007 meeting. The Fund 535 Executive Committee (City Manager, Assistant City Manager, BWP General Manager, Finance Director, Fire Chief, Information Technology Director, and Police Chief) reviews Fund 535 activities and makes recommendations to the City Council on matters requiring Council approval.

 

CONCLUSION

 

Staff recommends that a finding be made under Charter Section 54 that it is in the City�s best interests to waive formal bidding and authorize direct negotiations with Icon West for these tenant improvements.

 

FISCAL IMPACT

 

The fiscal impact of entering into a contract with Icon West is positive because BWP thereby has the best chance of completing the tenant improvements to the Light Fleet Building within schedule and for less than the $930,000 available project budget funds.  In addition, there is an undefined, yet presumably substantial cost benefit in facilitating the efficient and timely completion of the new Warehouse/Service Center Project.

 

RECOMMENDATION

 

Staff recommends that the City Council authorize the BWP General Manager to enter into a Construction Agreement with Icon West at or below $828,950 to complete certain tenant improvements to BWP�s former Light Fleet Building. If the Council concurs, the appropriate action would be a motion to adopt the Resolution entitled:

 

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING AND AUTHORIZING THE GENERAL MANAGER OF BURBANK WATER AND POWER TO EXECUTE A CONSTRUCTION AGREEMENT WITH ICON WEST, INC. FOR CERTAIN TENANT IMPROVEMENTS TO BWP�S LIGHT FLEET BUILDING IN AN AMOUNT NOT-TO-EXCEED $828,950.

 

RED:GLS:jg

 

Attachment

 

c:         Fund 535 Executive Committee

            R. Morillo                    

            P. Herman                   

            B. Liu

            W. Hutchings

            J. Cassidy

            D. Gibbons                  

 

 

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