SR-202-003
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JAN 1 0 1989
Santa Monica, California
GS:CP:pier
council Meeting: January 10, 1989
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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.
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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.
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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
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