CITY COUNCIL: Resolution Awarding a Bid to Monterey Peninsula Engineering for Del Mar Parking Lot Improvements & Tank Replacement Project

Meeting Date: September 13, 2011
Prepared by: John Goss

City Council
Agenda Item Summary

Name: Consideration of a Resolution awarding a bid to Monterey Peninsula Engineering (MPE) for the Del Mar Parking Lot Improvements and Tank Replacement Project in the amount of $526,010.

Description: On August 16, 2011, the City opened bids for the Del Mar Parking Lot Improvements and Tank Replacement Project construction. This project involves repaving the Del Mar Parking Lot area at the foot of Ocean Avenue and replacing two 10,000-gallon tanks with a new 25,000-gallon tank in the same area. Three companies bid on this project, all of which were responsive: Granite Rock (Pavex), with a total bid amount of $583,830; Don Chapin Company, with a total bid of $554,890; and the lowest
bidder, MPE, at $526,010. The City had budgeted $471,308 for this project -- $54,702 less than the lowest bid.

Overall Cost:
City Funds: $526,010.
It is recommended that the difference from the budgeted amount either come from the unbudgeted $40,000 from the Truck Impact Fee increase with an additional transfer of $14,702 from the Capital Reserves, or transfer the full amount from Capital Reserves.
Grant Funds: N/A

Staff Recommendation: It is recommended that Council award the bid to MPE for the Del Mar Paving and Tank Project in the amount of $526,010. Further, it is recommended that the difference from the originally budgeted amount be offset from the unbudgeted $40,000 in the Truck Impact Fee increase with the additional $14,702 coming from Capital Reserves. Council can eliminate the $14,702 from Capital Reserves in awarding the second street project in October.

Important Considerations: The amount budgeted for this project was based on the bids received, but rejected, last February. According to the City Engineer, in the intervening months, the price of asphalt jumped, which explains the higher bid prices. It is not recommended to rebid this project for a third time, since that would likely further delay construction for several months and could result in even higher costs.
Decision Record: Council approved the Del Mar Parking Lot Improvements and Tank Replacement Project as part of the FY 2011-12 Capital Improvement Budget.

Reviewed:

_______________________________ __________________________
John Goss, Interim City Administrator Date

TO: MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: INTERIM CITY ADMINISTRATOR JOHN GOSS
MEETING DATE: SEPTEMBER 13, 2011
SUBJECT: CONSIDERATION OF A RESOLUTION AWARDING A BID TO MONTEREY PENINSULA ENGINEERING (MPE) FOR THE DEL MAR PARKING LOT IMPROVEMENTS AND TANK REPLACEMENT PROJECT IN THE AMOUNT OF $526,010______________________________________________________________

On August 16, 2011, the City opened bids for the construction of the Del Mar Parking Lot Improvements and Tank Replacement Project. This project involves repaving the Del Mar Parking Lot area at the foot of Ocean Avenue and replacing two 10,000-gallon tanks with a new 25,000- gallon tank in the same area. It is expected that the construction schedule will require 60 working days (12 weeks). During the project 90% of the parking lot will be open while the tank is installed. Also, the planter portion of the
job will take approximately two weeks, during which time half the parking lot will be closed. Further, it is estimated that the entire parking lot will be unavailable for approximately two days during construction. This project was reviewed by the California Coastal Commission, the Forest and Beach Commission, and the Planning Commission in addition to City Council.

The notice to bidders was published on July 28 and August 3, 2011. The City Engineer said all three bids received on August 16 were accurate, complete and responsive. The bids were:

Firm Paving Tank Total Bid__
Granite Rock (Pavex) $267,700 $ 316,130 $583,830
Don Chapin Company 242,890 312,000 554,890
Monterey Pen. Engineering (MPE) 253,010 273,000 526,010
Budgeted Amount $ 241,308 $ 230,000 $ 471,308

There were two Add Alternatives: the installation of a permeable paver sidewalk and a permeable driveway apron. The cost to complete this additional work by the low bidder is $107,750. Since there are inadequate funds in the budget for this work, it is recommended this work be deferred and not included in the current bid award.

The amount budgeted for this project was based on bids received, but rejected, last February. A major reason for the higher bids was a spike in the price of asphalt. Unfortunately, an increase in bids frequently occurs when an initial bid is rejected and the project is re-bid. It is not recommended to re-bid this project a third time, since that could further delay construction for several months after the rainy season ends and would possibly result in even higher costs.

Funding
The low bid of $526,010 is $54,702 more than the amount included in the FY 2011-12 Capital Budget for this project. It appears that the City Council has two choices to fund this difference. One is to transfer funds from Capital Reserves. The other, is to use the projected additional, unbudgeted $40,000 from the recently improved increase in the Truck Impact Fee to finance this difference, along with a transfer of $14,702 from Capital Reserves.

It should be kept in mind that this latter transfer may be unnecessary since the City will be bidding seven street projects this month, totaling an estimated $297,978. Two things can happen: One, is that the bids will be low enough to make the $14,702 transfer unnecessary. Or, if that does not occur, the City can discuss with the apparent low bidder the possibility of deleting one or two of the projects to avoid using Capital Reserve funds.

In any case, the City does have options to award the Del Mar Paving project at this time and it is recommended that the City proceed with this work. Further, in other portions of the Capital Budget, the City has achieved savings with another Capital project. There will be a savings in the First Murphy House project of $8,935 ($21,000 budget vs. $12,065 contract award).

Recommendation
It is recommended that the City Council approve the resolution and award the bid to MPE in the amount of $526,010 to construct the Del Mar Paving and Tank project. It also is recommended that $40,000 from the Truck Impact Fee increase be budgeted for this project. Whether or not additional action will be needed to cover this higher bid amount can be determined when the second street project is bid in September.

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION 2011-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA
AWARDING A BID TO MONTEREY PENINSULA ENGINEERING (MPE) FOR THE DEL MAR PARKING LOT IMPROVEMENTS AND TANK REPLACEMENT PROJECT IN THE AMOUNT OF $526,010

WHEREAS, the improvements to the Del Mar parking lot and the tank replacement were rated as a high priority projects by the City Council; and

WHEREAS, these two projects were approved as part of the City’s Capital Budget; and

WHEREAS, three bids were received for the project on August 16, 2011 and the low bidder was Monterey Peninsula Engineering (MPE) for a bid price of $526,010; and

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA does hereby:

1. Award the bid for construction to Monterey Peninsula Engineering in the amount of $526,010.

2. Allocate an unbudgeted $40,000 from the Truck Impact Fee increase toward this project and transfer $14,702 from Capital Reserves to fund the difference in budgeted amount and the lowest bid price.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA
this 13th day of September 2011 by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:

SIGNED,

_____________________
SUE McCLOUD, MAYOR

ATTEST:

_____________________
Heidi Burch, City Clerk