2011030707 - Project 10-21 - MG Construction - 123 W. Main Street Building ImprovementsMEETING DATE: 03/07/11
ITEM NO:
COUNCIL AGENDA REPORT
�g 6AS0
DATE: MARCH 2, 2011
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: PPW JOB NO. 10 -21 — 123 EAST MAIN STREET BUILDING
IMPROVEMENTS
A. AUTHORIZE THE TOWN MANAGER TO EXECUTE A
CONSTRUCTION CONTRACT WITH MG CONSTRUCTORS &
ENGINEERS INC. IN AN AMOUNT NOT TO EXCEED $62,654.19.
B. AUTHORIZE STAFF TO EXECUTE FUTURE CHANGE ORDERS TO
THE CONSTRUCTION CONTRACT AS NECESSARY IN AN AMOUNT
UP TO $7,000.00
C. AUTHORIZE REVENUE AND EXPENDITURE BUDGET ADJUSTMENT
ESTABLISHING THE 123 EAST MAIN STREET REHABILITATION
PROJECT IN THE AMOUNT OF $69,654.19 (INCLUDING
CONTINGENCY), TO BE FULLY REIMBURSED TO THE TOWN BY
THE LOS GATOS SARATOGA RECREATION DEPARTMENT.
D. AUTHORIZE THE TOWN MANAGER TO EXECUTE A
REIMBURSEMENT AGREEMENT WITH THE LOS GATOS SARATOGA
RECREATION DEPARTMENT TO FULLY REIMBURSE THE TOWN
FOR ALL CONSTRUCTION COSTS.
RECOMMENDATIONS
1. Authorize the Town Manager to execute a construction contract with MG Constructors &
Engineers Inc. in an amount not to exceed $62,654.19.
2. Authorize staff to executive future change orders to the construction contract as necessary
in an amount up to $7,000.00
3. Authorize revenue and expenditure budget adjustment establishing the 123 East Main
Street Rehabilitation Project in the amount of $69,654.19 (including contingency) to be
fully reimbursed to the Town by the Los Gatos Saratoga Recreation Department.
4. Authorize the Town Manager to execute a reimbursement with the Los Gatos Saratoga
Recreation Department to fully reimburse the Town for all construction costs.
PREPARED BY : TODD CAPURSO
Director of Parks and Public Works
Reviewed by: J5)-Assistant Town Manager Town Attorney
Clerk Administrator 7 \�,ance Community Development
N:TPW\MANAGEMENT \COUNCIL \COUNCIL REPORTS\2011 Reports \March 7 \PPWIO 21 123EMainSt Bldglmprvmnls.Awardll.doex
PAGE 2
MARCH 2, 2011
MAYOR AND TOWN COUNCIL
SUBJECT: PPW JOB NO. 10 -21 -123 MAIN STREET BUILDING IMPROVEMENTS
BACKGROUND
Los Gatos Saratoga Recreation Department (LGSR) leases the property located at 123 East Main
Sheet from the Town of Los Gatos, to utilize as their main office and operations building. As
part of their lease agreement, and with approval from the Town, LGSR can elect to perform
tenant improvements at their cost.
The Town recently became aware that LGSR was considering making substantial improvements
to the interior of the facility. The scope of the proposed project includes the removal and
construction of new interior walls, repairs to the ceiling, new windows and doors, installation of
new carpets, and painting. Due to the scope of work as well as staff experience with the public
contract bid and award process, it was determined that this project should be managed by the
Town of Los Gatos Department of Parks and Public Works. While the architectural design was
performed by an architectural designer hired by LGSR, Town staff used the design plans to
conduct the public bid process.
While the contract will be managed by the Town, the building improvements will be funded by
LGSR. To accomplish this, staff is proposing that the Town Council authorize the Town
Manager to execute a reimbursement agreement between the Town and LGSR (separate from
their lease agreement) to reimburse the Town for the full cost of the proposed building
improvements.
DISCUSSION
For projects under a $100,000 construction cost, the Town's informal bid process allows staff to
prepare a scope of work, plans and specifications, solicit bids from a minimum of three
contractors, and award the contract to the lowest bidder.
Staff solicited bids from four construction companies for this project. On January 5, 2011, two
bids were received and the firm of TI Management Group was declared the lowest bidder for the
project. On January 18, 2011, the Town Council awarded a construction contract to TI
Management Group for this project. During the execution of the contract, TI Management Group
informed the Town that they could not furnish construction bonds for the project as required by
public bidding law. Despite efforts to resolve this issue, an acceptable resolution could not be
reached and on February 7, 2011, the Town Council rejected all bids received and authorized
staff to rebid the project.
Staff has worked with representatives from LGSR and the project architect on refining the
project scope of work and details in anticipation to rebid the project. The new bid package
includes the project base bid plus five (5) add alternatives that LGSR can choose from to include
in the project depending on the final bid costs.
Staff using the Town informal bid process solicited new bids for the project from construction
contractors and on March 2, 2011 Six (6) bids were received for the project (See Bid Sunnmary —
Attachment 1).
PAGE 3
MARCH 2, 2011
MAYOR AND TOWN COUNCIL
SUBJECT: PPW JOB NO. 10-21-123 MAIN STREET BUILDING IMPROVEMENTS
DISCUSSION (con't)
Staff reviewed the bid results with LGSR representatives and it was determined that the final
project that will accommodate the operational and financial needs of LGSR is the base bid plus
all five (5) add - alternatives. The firm of MG Constructors & Engineers Inc. is the lowest
responsible bidder for this project and has confirmed their availability and resources to perform
the improvements.
CONCLUSION
Staff recommends that the Town Council authorize the Town Manager to execute a construction
contract with MG Constructors & Engineers Inc. in an amount not to exceed $62,654.19 which
includes the base bid and all five (5) add - alternatives for the project.
Additionally, due to the variables associated with this particular type of construction, it is further
recommended that the Town Council authorize staff to execute future change orders to the
construction contract as necessary in an amount up to $7000 for additional quantities of work
that may exceed those included in the original contract. Corresponding revenue and expenditure
budget adjustments are also being recommended as part of their report in order to allow for the
transfer of funds between the Town and LGSR.
Additionally, a reimbursement agreement is being prepared for execution between the Town and
LGSR for this project. Council authorization is required for the Town Manager to enter into this
agreement.
ENVIRONMENTAL ASSESSMENT
This is a project as defined under CEQA but is Categorically Exempt (Section 15301c). A
Notice of Exemption will not be filed.
FISCAL IMPACT
Sufficient funds are available upon approval of the budget authorization by Town Council for the
project budget of $69,654.19 (including $7000 of contingency) which is fully funded through the
Reimbursement Agreement between the Town and the Los Gatos Saratoga Recreation
Department.
Attachments
1. Bid Swumary
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