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SR 10-25-2016 3E Ci ty Council Report Cit y Council Meeting : October 25, 2016 Agenda Item: 3.E 1 of 12 To: Mayor and City Council From: Susan Cline, Director , Public Works, Architecture Services Subject: Award Design Contract for the City Yards Modernization Project Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to execute a contract with Hathaway Dinwiddie Construction Company, a California -based company, for design services for the City Yards Modernization in the amount of $10,000,000 (which includes an 8% contingency); and 2. Authorize the Director of Public Works to issue any necessary change orders to complete additional work within contract authority. Executive Summary On July 12, 2016, Council authorized staff to negotiate a Guaranteed Maximum Price (GMP) with design -build contractor Hathaway Dinwiddie Constructi on Company for design services for Phasing Package A (Attachment A) of the City Yards Modernization Project. This phase includes a new Fleet Maintenance building, Facilities Management, Resource Recovery and Recycling, Street Maintenance and Custodial Ser vices Administration Building, Traffic and Facilities Shop s as well as Wash Bays and Fuel Islands . Staff recommends a contract be awarded to Hathaway Dinwiddie Construction Company for design services in an amount not to exceed $10 ,000,000 (including an 8% contingency). Additionally, $1,700,000 will be spent on associated direct owner costs in the design phase for surveys, permits, fees and management . All funds are included in the FY 2016 -18 Capital Improvement Program Budget. T his is a design -build, or i ntegrated project delivery , meaning that the designers and construction team are coordinating early in the design phase, resulting in savings during the construction phase. The overall cost estimate for the City Yards Modernization Project Phasing Package A remain s $114 million. Background City Yards Site Characteristics and Considerations The City Yards is a 14.7 -acre site owned and operated by the City of Santa Monica located at 2500 Michigan Avenue, near the intersection of 24 th Street and Michigan Av enue. The City took ownership of the site in the late 1940s and constructed three buildings to house City Yards operations occupying the land between Michigan Avenue 2 of 12 and the former Santa Monica Rubbish disposal pit. The buildings were designed by Consulti ng Engineers Parker Zehnder and Associates to accommodate the needs and program requirements of the City at that time . Buildings included a small garbage transfer station and gas station, an auto repair and maintenance shop with two vehicle lifts, and a br oom repair and blacksmith shop. Facilities shops, crew space and administrative space w ere sized to accommodate the staffing levels at the time. The balance of the site was occupied by a warehouse and open equipment storage bays. This property has been use d as a base for a majority of the City’s field maintenance operations, storage facilities, and other industrial uses since then. City Yards circa 1954 These same three City Yards buildings from the 1940 s still house a majority of the City’s 3 of 12 field mainte nance operations today. P rogram needs have changed through the years, and the City Yards was adapted as -needed for various City functions resulting in an expedient but inef ficient utilization of space. As additional shop space , maintenance space or office space was needed, the existing warehouse and open equipment storage bays were converted and reconfigured to accommodate these needs. Changing populations, growth, updates in technology, and differing service requirements have resulted in a series of haph azard updates throughout the site. This reconfiguration of old buildings is the result of a decades -long process of “making do” with a facility that the City outgrew many years prior . The original building envelopes and substandard structure s remain in pl ace at City Yards today. Some structures were installed as temporary trailers that became permanent housing for critical functions. These buildings have exceeded their expected service life and can no longer be utilized to support the current City Yards functions safely . City Yards functions include : Facilities Maintenance Custodial Services Street Maintenance Fleet Maintenance Traffic Operations Resource Recovery and Recycling Water and Wastewater Operations Household Hazardous Waste Fire Department Training Area The City Yards operates seven days a week and houses significantly more functions and employees than it was designed to accommodate. The scope and breadth of the operating divisions has evolved over time. Functional needs and space requirements are no longer met by the facilities for any of the operations housed at the City Yards. Deficiencies include inadequate maintenance shop space, vehicle hoists, and covered maintenance area for heavy duty vehicles . This results in th e need to perform some vehicle maintenance outside the fleet shop space , creating site circulation constraints and hazardous conditions. Further deficiencies include inadequate employee restroom/locker facilities ; limited parking for fleet, employee, and v isitor vehicles ; 4 of 12 storage and traffic circulation constraints ; and inadequate customer service facilities to serve members of the public at the various City Yards offices. In addition, a private recycling facility of rudimentary design utilizes a substanti al portion of the site. Santa Monica is a rare municipality that performs ma ny of these services in -house. The community has come to expect these services, but achieving high performance standards is difficult with substandard facilities. City Yards Mast er Plan History On October 8, 1996 , Council authorized a Professional Services Agreement with RNL Interplan, Inc. (RNL) for preparation of a Master Plan for t he City Yards that would address the physical reorganization, renovation and rehabilitation needs of the City Yards. Between 2000 and 2009, Council changed direction in regards to the City operating a transfer facility at the City Yards. Current direction by Council is for the City to operate resource recovery transfer services through a contracted third -party provider. On October 24, 2000 , Council approved t he two proposed City Yards Master Plan alternatives in concept. One concept included the continued operation of a City - designed and constructed transfer station, while the second concept assumed contracted transfer station services with a third -party provi der. On November 12, 2002 , Council authorized a Professional Services Agreement with RNL to complete full design and engineering services for a multi -phase construction process for the City Yards Master Plan Project anticipated to begin in 2005 and to be c ompleted in 2010, including a City -operat ed transfer facility . However, subsequent changes in City Yard s use s and space constraints necessitated an update to the City Yards Master Plan. On October 13, 2009 , Council authorized a Professional Services Agreement with RNL to update the City Yards Master Plan approved in 2000. The update was substantially completed in July 2010; however, the plan was not presented to Council due to additional scope requirements that required further Master Plan modifications, addressed in four subsequent modifications on September 13, 2011, February 14, 2012, September 11, 2012 and June 25, 2013 . 5 of 12 On December 16, 2014 , Council authorized a Professional Services Agreement with International Parking Design, Inc. to prepare a parking study for the City Yards. The study reviewed financing o ptions, economics, parking demand, and viability of a shared parking solution on the City Yards site. Parking is not a part of the Package A scope of work, but will be addressed in the future in coordination with adjacent private development at the Bergamo t Arts Center. On January 27, 2015 , Council approved the updated City Yards Master Plan by RNL in concept and authorized staff to issue a request for bids to contract with a design -build team for the initial concept design, cost estimation services and feasibility analysis , and to prepare a financing plan for the initial phases of the City Yards Modernization Project . On July 28, 2015 , Council authorized staff to negotiate and execute a professional services agreement with Hathaway Dinwiddie Construction Company (along with Miller Hull Partnership as the architect ure firm) for these services. On July 12, 2016 , Council authorized the City Manager to negotiate a design Guaranteed Max imum Price (GMP) with design -build contractor Hathaway Dinwiddie Construction Company (HDCC), a California -based company, for design services that include s schematic design, design development, construction documents, project management, and cost estimatin g for the City Yards Modernization Project in accordance with the proposed “Zipper” Concept/Phasing Package A. The HDCC agreement represents three phases of this design -build project process: 1) feasibility and concept design ; 2) project design ; and 3) co nstruction. The first phase has been completed, and the GMP for the design phase is herein presented for Council approval. After project design is completed, the construction (GMP) amendment would be presented to Council for approval. New Water Treatment Plant In support of the City’s water self -sufficiency goals, a new water treatment plant (Olympic Treatment Plant) is planned to be located within the City Yards on the eastern 6 of 12 portion of the site. Feasibility analysis is underway for this portion of the site, which will proceed separately , but in coordination with the City Yards Modernization Phasing Package A project. The work on this eastern portion of the City Yards site is envisioned to include the Olympic Treatment Plant, Water Resources and Public L andscape administrative offices, and Gandara Park reconfiguration. On August 12, 2014 , Council authorized Black & Veatch to design and install a pilot treatm ent unit to study the different treatment technologies available to produce California Division of Drinking Water (DDW)-approved drinking water in the Olympic Well Field. The pilot treatment unit was staged at the City Yards due to its close proximity to s ource water and due to the availability of City -owned land being considered for the siting of a water treatment plant. The pilot study was completed in summer of 2016 and the study report will be completed in fall of 2016 . The pilot study report will inclu de the preliminary design criteria for the water trea t ment plant . On July 12, 2016 , Council authorized the City Manager to modify the agreement with Hathaway Dinwiddie Construction Company (HDCC) to provide additional conceptual design scope of work related to the Olympic Treatment Plant, Water Resources, Gandara Park and Public Landscape project components. Sustainabili ty Framework for the City Yards Modernization Project All components of the City Yards Modernization Project, including the water treatment plant, will proceed in a highly sustainable manner in order to turn the City’s industrial campus in to a valued comm unity asset. On May 24, 2016 , Council authorized a grant award of $1 ,487,609 from the California Energy Commission for t he Santa Monica Advanced Energy District project proposal. The project will integrate a small, localized energy grid (a microgrid) consisting of onsite renewable energy generation and energy storage based at the City Yards and Bergamot Arts Station. The pr oject will utilize four strategies to establish a multi -user microgrid. First, the City will own and operate its own microgrid, serving the City Yards facility. Second, the City will work with Worthe Development Group at the City -owned 7 of 12 Bergamot Arts Statio n, to develop appropriate regulations and incentives through the entitlement and development agreement process and establish a unique public/private partnership model. Third, a master plan over this area will be developed to delineate the integration and i nterconnection between the City, the public, and the utility. And finally, the City will explore the value of its role as a Community Choice Aggregator to incentivize, construct , and generate retail power supply. On July 12, 2016 , i n addition to approving the City Yards feasibility analysis and proposed concept/phasing options, Council authorized the City Manager to regis ter the City Yards as an eco -dist rict with EcoDistricts Protocol, and s taff reported that the design -build team would establish Envision certification targets as sustainability standards for the City Yards Modernization Project. Discussion T he City Yards stands to be redeveloped sensitively to meet both the needs of City operations located at City Yards and to be a good neighbor for the surrounding community . Design work for the City Yards Modernization Project will proceed within the framework of both th e EcoDistricts Protocol and the Envision sustainability infrastructure certification, with the aim of maximizing the sustainability and community benefit of the project. The EcoDistricts Protocol is a process -based collaboration framework that promotes t he neighborhood/district -scale as the ideal size to achieve “deeper green” sustainable development that cannot normally be achieved within a single green building. Opportunities to implement innovative community programming and to resource share could tran scend project site boundaries. Examples include partnering the operations at City Yards and artists at Bergamot to upcycle goods found in the local waste stream as art; increasing the amount of training and services for the public via the shared use Commun ity Room housing Rosie’s Girls ; or collectively creating a sense of place by making a bioregional library or gallery space. Emphasis will be placed on defining goals for three overarching imperatives: 8 of 12  Equity  Resilience  Cli mate Protection As well as goals for six priorities:  Place  Prosperity  Health and Wellbeing  Connectivity  Living Infrastructure  Resource Restoration These imperatives and priorities align well wit h existing City priorities and will provide a natural connection to ongoing efforts such as the Sustainable City Plan and the Well - Being Index. The EcoDistrict protocol will also provide a framework to ensure effective collaboration with surrounding land u ses and efforts, including but not limited to the City’s own water treatment plant, Water and Public Landscape administrative offices, reconfigured Gandara park, the Bergamot Arts Center, Ishihara Park, Pico and Memorial Park neighborhood plans, and the Su stainable Water Master Plan. In addition to pursuing EcoDistrict certification, the design -build team will also pursue the Envision rating system for the City Yards Modernization project. Envision was determined a more appropriate rating system than the LEED rating system for this project type. Envision facilitates the development and maintenance of sustainable infrastructure and aims to improve the performance and resiliency of physical infrastructure. The rating system uses criteria from six categories for project certification: Quality of Life; Leadership; Resource Allocation; Natural World; Climate; and Risk. Achieving Envision certification would demonstrate the City’s commitment to sustainable leadership by being one of the first municipal corporate yards projects in the country certified under the rating system. Design Costs 9 of 12 Staff recommends a contract be awarded to Hathaway Dinwiddie Construction Company for a design services Guaranteed Maximum Price (GMP ) in an amount not to exceed $10,000,000 . Included in this GMP is a n 8% contingency and $750,000 for subcontractor pre -construction services , which is pulled from the construction budget . The net design fee amounts to 10% of the anticipated construction cost which is within the industry standard for projects of this type. The d esign fee includes services by 14 consultants for architectural and engineering services, schematic design, design development, construction documents, project management and cost estimating of Phasing Package A of the Cit y Yards Modernization Project. Staff would return to Council for review and comment s during the schematic design phase and when the construction documents are completed for authorization construction financing, and GMP amendment to authorize construction s ervices . In addition to design contract costs, $1,700,000 in direct owner costs is included in the FY 2016 -18 Capital Improvement Program budget for direct owner costs in the design phase. Direct owner costs include: environmental impact report preparatio n, site and utility surveys, fiber network hub design, utility relocation, project management, and design contingency in the event that plans for the adjacent water treatment plant and associated uses impact the City Yards Phasing Package A scope of work. In addition to standard costs, in this case the direct owner funds will also cover community engagement and registration related to the EcoDistrict protocol and Envision . T his is a design -build, or integrated project, meaning that designers and construc tion team are coordinating early in the project design phase , resulting in savings during the construction phase. The overall cost for the design and construction of the City Yards Modernization Project Phasing Package A (Attachment A) remain s at $114 mill ion. Public Outreach Two community meetings were held to conduct public outreach in early 2016 for the City Yards Modernization feasibility analysis and concept design recommendations. In 10 of 12 February 2016, the design -build team and City staff held a commun ity meeting at Virginia Avenue Park to present the project vision and goals for improving the essential city services based out of the City Yards facilities. The purpose of this initial community outreach meeting was to hear the hopes, dreams , and concerns of the adjacent community near the City Yards. A ttendees had an opportunity to discuss their ideas along with their responses to the project’s goals. The design -build team documented the public comment received and attempted to visualize and prioritize th ese comments. The intended outcome was to understand what the community wants (or doesn’t want) in the development of the project. Following are some of the specific comments from the community: Provide learning programs for broader groups Consciousn ess of the level of disruption to the neighbors Provide opportunities for public art Use the City Yards project to enhance Stewart St. Park and solve some of the current challenges there Connection to adjacent neighborhood to NE/ provide connection from the mobile home park to Bergamot Mindfulness of overlap between pedestrians / cars / heavy equipment moving in & out of site Allow for more visibility into the City Yards - celebrate the functions there Enhance Michigan Street - Street trees, pl anting buffer Community Room Provide more space to Rosie’s Girls (a community program) Pursue net -positive energy Produce electricity for the neighborhood Focus on opportunities for water re -use Greater operational efficiency to conserve resour ces Composting opportunities The results of the first community meeting influenced the City Yards concept design s, and a s a follow -up, a second community meeting was held in March 2016. The design - build team and staff presented the updated concept desig n options , and the community offered more feedback based upon their evaluation of the concept design options . If Council authorizes the design phase to commence for the City Yards Modernization Project , further community outreach would occur during the des ign process of Phasing Package A. Next Steps 11 of 12 S taff anticipates the following project timeline: Schematic design - fall 2016 - spring 2017 Design development , regulatory approvals - spring 2017 - winter 2017 Co nstruction documentation - winter 2017 - summer 2018 Return to Council for authorization of a Guaranteed Maximum Price for construction and to approve construction financing - summer 2018 Site prepara tion and start of construction - fall 2018 Estimated completion of construction - summer 2021 Additionally, based on Council direction on July 12, 2016 , the design -build team will provide additional feasibility and concept design scope of work related to the Olympic Water Treatment Plant, Water Resources Administrative Offices , Public Lands cape relocation from Colorado Yards, and the reconfiguration of Gandara Park . Staff will return to Council with the updated feasibility analysis after the conclusion of this work. Financial Impacts and Budget Actions The contract to be awarded to HDCC i s for an amount not to exceed $10,000,000 . Additionally, direct owner costs for design phase work are $1,700,000 . Funds are available in the FY 2016 -17 Capital Improvement Program budget in account C014028.589000. The previously approved feasibility ana lysis provided an estimated cost in the amount of $114 million to complete the design and construction of Phasing Package A. The FY16 - 18 CIP biennial budget appropriated $11.7 million in Charnock settlement funds in FY 2016 -17 to fully fund the design phas e, and $38.3 million in remaining available Charnock settlement funds in FY 2017 -18 to partially fund project construction. The unfunded construction budget is estimated to be $64 million and is proposed to be bond financed . The General Fund would not bear the full burden of debt service ; c osts would be allocated to other funds with associated operations at the City Yards, including Resource, Recovery and Recycling and the Vehicle Management Fund. A djacent Water and Wastewater plans are anticipated to be fu nded with Gillete/Boeing settlement funds, though cost estimates are pending. Staff will return to Council with more detailed cost estimates and financing plans for both the City Yards construction and for the adjacent Water Treatment Plant and associated project components. 12 of 12 Prepared By: Tom Afschar, Architect Approved Forwarded to Council Attachments: A. Phasing Package A Reference:    Contract  No. 10371   (CCS)