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SR-202-003 /' Y . . b-U JAN 1 0 1989 Santa Monica, California GS:CP:pier council Meeting: January 10, 1989 .;!t?Z - C1?J 3 To: Mayor and City Council From: City staff Subject: Recommendation to Appropriate Funds from the General Fund Capital Improvement Reserve to Implement the Municipal Pier Reconstruction Contract INTRODUCTION This report recommends that the city council appropriate funds from the General Fund Capital Improvement Reserve to allow implementation of a negotiated contract with Kiewit Pacific Corporation for reconstruction of the Municipal Pier. BACKGROUND On October 25, 198B, the City Council approved a staff recommendation to reject all bids for the Municipal Pier reconstruction project and authorized the City Manager to negotiate and execute a contract for the project. This action by the city Council was necessary as the lowest competitive bid received by the City for the project was approximately $7.5 million, which exceeded the available budget by about $2.7 million. It was the opinion of staff at that time that a final contract could be negotiated for between $5.5 and $6.0 million. 1 b-U JAN 1 0 1SB9 e . During the past two months, staff has met on numerous occasions with all contractors who expressed interest in the project. As a result of this complex negotiating process, the City has arrived at a contract agreement with Kiewit Pacific corporation in the amount of $6.35 million, a $1.15 million reduction over their original bid which was the lowest bid received by the city in the original competition. The City was able to negotiate this reduction in the contract amount due primarily to the following reasons: 1. The incorporation of minor modifications in the structural design of the Municipal pier substructure which do not impact either the strength or the visual aesthetics of the Pier: 2. A critical and thorough review by the city of all elements of the original bid submitted by Kiewit Pacific which resulted in the paring back of unsubstantiated cost/profit assumptions contained in their original proposal. FISCAL/BUDGET IMPACT Since the negotiated Municipal pier contract exceeds the amount currently budgeted in the pier ClP budget for reconstruction, it is necessary for Council to appropriate additional funds from the General Fund capital Improvement Reserve in order to provide adequate funds for implementation of the reconstruction contract. The final budget for the Municipal pier project is presented below. 2 e . Construction Contract (Kiewit Pacific) $ 6,353,000 Project/construction Management 211,000 Engineering/Geotechnical Consultant 40,000 Contingency 300,000 TOTAL BUDGET $ 6,904,000 Less: Available pier Reconstruction Funds 4,733,535 FUNDS NEEDED $ 2,170,465 To fully finance this project, it is proposed that $2,170,465 be appropriated to the Municipal Pier reconstruction account from the General Fund Capital Improvement Reserve. RECOMMENDATIONS It is respectfully recommended that the City Council appropriate $2,170,465 from the General Fund Capital Improvement Reserves to the Municipal pier Reconstruction account number 30-740-625-000- 940. Prepared by: stanley Scholl, Director of General Services craig Perkins, Administrative Services Manager 3