09-0721_M.S. CONSTRUCTION_D1_Agenda Report • • CRA 7/21/2009
AGENDA REPORT D1
TO: Joe Tait, Interim Executive Directo q,
FROM: Douglas Dumhart, Economic Development Manager
SUBJECT: Consideration of Change Order No. 2 to the Construction Contract with
M.S. Construction Management Group, Change Order No. 1 to the
Personal Service Agreement with MTGL Inc., and Appropriation of
Additional Funding for the Affordable Housing Development Project Little
Hollywood Phase Il. (Council Priority No. 4A).
RECOMMENDATION:
By motion,
1. Approve, and direct the Interim Executive Director to sign Change Order No.
2 to the Construction Contract with M.S. Construction Management Group for
an addition of $56,158.20 to the existing contract, for additional work
performed due to field conditions; and,
2. Approve, and direct the Interim Executive Director to sign Change Order No.
1 to the Personal Service Agreement with MTGL, Inc. for an addition of
$14,300 to the existing contract, for additional soils monitoring necessary due
to field conditions; and,
3. Approve the appropriation of $100,000 from Housing Bond Proceeds to the
Little Hollywood Construction Project.
SUMMARY:
The Community Redevelopment Agency (the "Agency') Board approved the
construction contract for Little Hollywood Phase II on January 20, 2009, and authorized
a budget of $2.68 million for the project.
The project is slightly ahead of schedule and is approximately 70% complete. Staff
anticipates that the approval of these two change orders and an appropriation of
$100,000 to the project budget are needed to complete the remaining work.
BACKGROUND:
The Agency established a $2.68 million budget for the project to cover the construction,
project monitoring, permit and development fees, and a contingency. A summary of the
budget is as follows:
Agenda Report • • July 21, 2009
Page 2
Construction Contract $2,083,853.33
Monitoring Tasks $94,851.50
City Fees $300,518.42
Contingency _ -- ._-- __.. _... ._. $200,000.00
Total Fee Cost $2,679,223.25
Construction has moved swiftly over the past six months, and the project is expected to
complete earlier than estimated. Although construction has proceeded smoothly,
activities impacting the budget have been unavoidable. The primary activity which
impacted the budget was the payment of Utility Fees not originally included within the
fee assessment. These fees resulted in an immediate use of $129,431.47 of the
contingency funds. Additionally, the contingency has been used for an Orange County
Flood Control permit, a Gas Company installation fee, and a construction change order
totaling $24,425.96. Due to the site conditions and construction processes, the
construction contractor and geotechnical monitor have requested change orders which
exceed the remaining contingency funding. A breakdown of the contingency use is as
follows:
Contingency $200,000.00
Utilities Fee $129,431.47
OCFCD Permit $2,773.94
MTGL, Inc. Change Order No. 1 $14,300.00
The Gas Company Utility $3,409.81
M.S. Construction Change Order No. 1 $24,425.96
M.S. Construction Change Order No. 2 _ $56,158,20 �_�
Sub Total _ <$230,499.38>
TOTAL <$ 30,499.38>
Two requests have been received from contractors for change orders which will adjust
the budget allowance. The first is from M.S. Construction Management Group ("M.S.C.")
for $56,158.20, and the second is from MTGL Inc. for $14,300. It is anticipated that
$100,000 will be sufficient funding to accommodate these and any future requests.
Staff recommends the approval of the two requested change orders and appropriation
of $100,000 from the Affordable Housing Project fund for the remaining tasks in the
Little Hollywood Phase II Project.
M.S. Construction Management Group Request:
M.S. Construction Management Group has provided the Agency with excellent service
over the past six months. The construction company has communicated all successes
Agenda Report • • July 21, 2009
Page 3
and concerns throughout the project and has cooperated well with the City inspectors,
geotechnical and archeological monitors, and project manager. M.S.C.'s work ethic has
allowed the project to move forward successfully.
It is common for construction projects to experience situations which necessitate field
changes. Situations have arisen through the Little Hollywood Phase II Project requiring
changes to ensure the success of the project. M.S.C. has worked to find resolutions to
the changes and has striven to prevent postponement of construction. The following
table details the required construction changes, and the fiscal impact of each change.
M.S.C.'s proposed change order has been included in the report as Attachment 1.
Construction of a Requirement for equestrian bridge from
bioswale. Item originally excluded from specs. $ 11,037.91
!Rip-Rap
' (LH )
Additional Water Gas line along Ramos St. required water line $ 5,168.78
Line Work detour (LH #5)
:Additional Headwall Requirement for pipe inlets to bioswale. Item $ 2,721.29
j& Pipe Gates originally excluded from specs. (LH #6)
Additional Gas Line Requirement for gas connection, per The Gas $ 32,293.56
Trenching Co. (LH #7)
Raise Existing 'Manhole, originally to be removed, required to $ 4,936.66
Manhole to Grade be raised to finished grade 4 ft. LH #9
TOTALS $ 56,158.20
The addition of the rip-rap, and headwalls, not originally included in the specifications,
are necessary for site drainage, and the health and safety of future residents. The three
field changes were unavoidable due to the site conditions and unexpected gas line
characteristics.
MTGL Inc. Request:
The preliminary steps of the Little Hollywood Phase II Project included a geotechnical
assessment of the site. This initial assessment recommended certain grading and
backfilling requirements for residential use on the site. Due to the recommendations it
was determined a geotechnical firm would be contracted to monitor the following tasks:
• Trenching and installation of sewer lines, storm drains, water lines and dry
utilities;
• Rough and precise grading of the site;
• Foundation and anchor bolt stability; and,
• On site pavement.
MTGL, Inc. provided the Agency with a proposal which satisfied the geotechnical
Agenda Report • • July 21, 2009
Page 4
monitoring needs of the Little Hollywood Phase II Project for $14,450. This proposal
was for 200 hours at "On-Call as Needed" bases.
On June 9, 2009, MTGL Inc. provided staff with a budget impact letter (Attachment 2)
indicating that an additional 168.5 hours of monitoring had been utilized over the
originally anticipated 200 hours, and that an estimated 24 additional hours would be
required for the completion of the project. These time overages have resulted in
$14,300 in excess of the original budget. MTGL Inc. related to staff that the initial
professional proposal was misjudged due to the rate of work being done on the site, the
on-site conditions, and the highly liquefiable site conditions encountered during the
construction phase. MTGL's proposed change order has been included as Attachment 3
for review.
Staff appreciated MTGL Inc.'s efforts to maintain the construction schedule and
momentum. Throughout the project MTGL Inc. has worked with the contractor to ensure
the most efficient monitoring and assisted in reducing postponement.
Funding Allocation:
Fiscal Year 2008-2009 Little Hollywood Phase II Project budget included approximately
$2.68 million for remaining architectural and engineering tasks, construction contract,
construction monitoring, organizational fees, and a 10% contingency. The contingency
funds will be expended with the approval of the second change order with M.S.C. and
the request from MTGL Inc.
The Little Hollywood Phase II Project is about 70% complete and additional contingency
may be necessary for the final 30% of the project. Staff is recommending an additional
$100,000 be allocated to the project's construction fund to accommodate the current
change order requests and any unforeseen future requests.
The below table identifies the Project Tasks, Expenses to Date and the Task Status.
Construction Contract $1,380,768.08 74% Complete
Monitoring Tasks $41,715.00 44% Complete
City Fees $300,518.42 100% Complete
Contingency $160,041.18 80% Complete
Total Project $1,883,042.88 70% Complete
NOTIFICATION:
• M.S. Construction Management Group: Mike Saghafi, President
• MTGL, Inc.: Steven Koch, Vice President
Agenda Report • • July 21, 2009
Page 5
RECOMMENDATION:
By motion,
1. Approve, and direct the Interim Executive Director to sign Change Order No.
2 to the Construction Contract with M.S. Construction Management Group for
an addition of $56,158.20 to the existing contract, for additional work
performed due to field conditions; and,
2. Approve, and direct the Interim Executive Director to sign Change Order No.
1 to the Personal Service Agreement with MTGL, Inc. for an addition of
$14,300 to the existing contract, for additional soils monitoring necessary due
to field conditions; and,
3. Approve the appropriation of $100,000 from Housing Bond Proceeds to the
Little Hollywood Construction Project.
Respectfully submitted, Prepared by,
Douglas Dumhart, 4Lauraitoikt2
Economic Development Manager Housing/Redevelopment Coordinator
Attachments: 1, M.S. Construction Management Group Change Order No. 2
2, MTGL, Inc. Budget Impact Letter
3, MTGL, Inc. Change Order No. 1