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SR 06-11-2019 8B City Council Report City Council Meeting: June 11, 2019 Agenda Item: 8.B 1 of 18 To: Mayor and City Council From: Susan Cline, Director, Public Works, Architecture Services Subject: First Modification to Guaranteed Maximum Price Contract with Hathaway Dinwiddie Construction Company and Award RFP to Twining Consulting for Deputy and Material Testing Inspection Services for City Yards Modernization Project Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to negotiate and execute a Guaranteed Maximum Price (GMP) first amendment to Design-Build Contract No. 10371(CCS) in the amount of $37,000,000 with Hathaway Dinwiddie Construction Company, a California-based company, for construction services for laying underground foundations and site utility work for the City Yards Modernization – Package A Project for the Public Works Department. This will result in a five-year amended agreement with a new total amount not to exceed $47,000,000; 2. Award RFP#SP2396 to Twining Consulting, a California-based company, to provide deputy and material testing inspection services for the City Yards Modernization for the Public Works Department; 3. Authorize the City Manager to negotiate and execute an agreement with Twining Consulting in an amount not to exceed $888,216 (including a 20% contingency) over a four-year period; 4. Authorize the Director of Public Works to issue any necessary change orders to complete additional work within contract authority. 5. Adopt a Resolution Declaring the City’s Intent to Reimburse Expenditures from the Proceeds of Obligations to be Issued by the City of Santa Monica, a Related Party or Other Affiliate, and Approving Certain Related Actions. Executive Summary After more than a decade of planning, the City is poised to initiate construction of the first phase of the City Yards Modernization Project. The City Yards, located at 2500 Michigan Ave., is a 14.7-acre site owned and operated by the City of Santa Monica. For 70 years, the City Yards has served as the City’s primary base for City maintenance services, including Water; Resource Recovery and 2 of 18 Recycling; Fleet Maintenance; Fire Training as well as storage facilities; and other industrial uses since the 1940s. Over that time, Santa Monica’s population and workforce have grown, there have been consistently increasing updates in technology, and the City has completely overhauled the equipment and practices used for ser vicing our citywide infrastructure. Simply put, the City Yards is the heart of our public works functions – and this overworked 70-year-old heart is long overdue for major surgery. While there have been a series of piecemeal updates to the Yards, over the years the site has become woefully outdated, unsafe and a poor fit for today’s operational demands. This impairs operational efficiency and productivity. Modernizing the City Yards will facilitate improved service to the community replacing outdated facilities with ones that are designed for the needs of today and the decades ahead. It will also enable the Yards to be better neighbors to the surrounding industrial, commercial and residential areas in the vicinity by opening up portions of the facility to the community through modern design. The City Yards Modernization Project involves phased demolition of the existing structures and construction of new buildings on the site to improve operating efficiencies through co-location of staff who are currently scattered among several buildings throughout the site; reconfiguring site circulation for the safety of people traveling on- site by all transit modes; advancing sustainability initiatives through a goal of Net Zero Energy use and Net Zero Water use (e.g., no increase in energy or water use); enhancing community resilience by having facilities that meet current building standards; and providing an asset that enhances the neighboring community by opening up Michigan Avenue in line with the Michigan Avenue Greenway Plan . Additionally, the new Administration building will include a public counter that will serve as a one-stop shop for community members to request services, pay fees for goods and services and conduct operations-related business (block party approvals, composting bin purchases, construction waste management plan review, etc.). 3 of 18 On October 25, 2016, the City Council authorized the City Manager to execute a contract with Hathaway Dinwiddie Construction Company for design services for the City Yards Modernization – Package A (CYM) in the amount not to exceed $10,000,000 (including an 8% contingency). Although a final design and guaranteed maximum price will not be available until the latter part of the year, staff recommends executing a first amendment to the GMP contract with Hathaway Dinwiddie to start construction services for CYM – Package A. This work would involve laying underground foundations and site utility work in the amount of $37,000,000 (includes contingency) for a total contract amount not to exceed $47,000,000. By moving forward with this early scope ahead of completing the full design, the project timeline is reduced by six months, which is estimated to save $4 to $5 million in construction market escalation costs. While construction is proceeding, the design-builder will complete the design documents and staff will negotiate a final GMP amendment 2 covering the complete costs for construction. Staff anticipat es recommending GMP amendment 2 by December 2019. In addition, staff recommends Twining Consulting to provide deputy and material testing inspection services in an amount not to exceed $888,216 (including a 20% contingency). 4 of 18 Background The City took ownership of the site in the 1940s and constructed three buildings to house City Yards operations. Buildings included a small garbage transfer station and gas station, an auto repair and maintenance shop with two vehicle lifts, and a broom repair and blacksmith shop. Facilities shops, crew space and administrative space were sized to accommodate the staffing levels at the time, which were significantly lower than present-day levels. The balance of the site was occupied by a warehouse and open equipment storage bays. When additional shop, maintenance, or office space was needed, the existing warehouse and open equipment storage bays were converted and reconfigured to accommodate these needs. 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. This property has been used as a base for a majority of the City’s field maintenance operations, storage facilities, and other industrial uses since that time. Recognizing the need for a new vision of the City Yards, City Council directed staff to prepare a master plan for the site in 1996. Several iterations and updates were prepared over the subsequent 19 years, and in 2015 Council approved the City Yards Master Plan and directed staff to proceed with the selection of a design-build team to begin implementation. In July 2016, staff presented to Council the feasibility analysis and concept design for implementing the first phase of the masterplan along with the financial options based on a project cost of $114 million. By October 2016 Council directed staff to proceed with the design phase of the project, which also triggered the formal review of the environmental impacts of the project. The Environmental Impact Report was certified by the Planning Commission in January 2019. Past Council Actions 10/08/96 (Attachment A) Recommendation to Authorize the City Manager to Negotiate and Execute a Professional Services Contract for the Preparation of a Master Plan for the Corporation Yard 10/24/00 (Attachment B) Recommendation to Approve in Concept Two Proposed Corporation Yards Master Plan Alternatives 10/13/09 (Attachment C) Corporate Yard Master Plan Design Contract 12/16/14 Professional Services Agreement for Corporation Yards 5 of 18 (Attachment D) Parking Study 01/27/15 (Attachment E) City Yards Masterplan Approval 07/28/15 (Attachment F) Professional Services Agreement for Concept Design and Feasibility Analysis for the City Yards Stage I 05/24/16 (Attachment G) Consultant for Mulituser Microgrid Design Services under California Energy Commission Grant 07/12/16 (Attachment H) City Yards Modernization Concept Design Recommendation 10/25/16 (Attachment I) Award Design Contract for the City Yards Modernization Project 01/10/17 (Attachment J) Award of Agreements for Surveying Services and Environmental Consulting Services at the City Yards Discussion The existing buildings at the City Yards range in age, with the oldest structures being in place for over 70 years. Most of the buildings have been converted from their original intended uses, and several buildings are temporary structures that are now permanently housing critical City operations. The buildings at the City Yards do not meet current code requirements for seismic safety, fire safety, or energy and water use. In addition, because the City Yards has been modified and expanded over the years in a piecemeal fashion to address changing operational needs, the site does not adequately provide safe working space for the approximate 300 staff members currently occupying the site, does not provide safe pedestrian and vehicular circulation, and does not meet the storage and space needs for the current operations at the site, which include the following: • Facilities Maintenance (trades shops) • Custodial Services • Street Maintenance • Fleet Maintenance • Traffic Operations • Resource Recovery and Recycling (RRR) • Water and Wastewater Operations • Household Hazardous Waste Disposal 6 of 18 • Printshop • Fire Department Training Area • Rosie’s Girls • Recycling Collection and Transfer Facility (operated by a private vendor) Package A Scope of Work On July 12, 2016, the City Council approved the City Yards Master Plan, which encompasses the entire 14.7-acre City Yards area. Staff intends to implement the Master Plan in three phases over the next decade. This contract amendment with Hathaway Dinwiddie is for partial construction of Package A, the first phase of the Master Plan. Package A is an irregularly shaped portion in the center of the parcel consisting of 6.76 acres (294,656 square feet) out of the total 14.7-acre parcel and indicated by the aqua / blue border shown in Figure 1 below. Figure 1: City Yards Modernization Project – Package A Site Plan Package A includes demolition of 13 existing structures and construction of six new buildings totaling 56,137 square feet, a covered fuel island, and 147 parking spots for City vehicles. 7 of 18 The Administration building (11,737 sq. ft., 17-19 ft. In height) will consolidate staff from Facilities Maintenance, RRR and Street Maintenance into an efficient, open-plan office. This is in line with how the City Services Building and all new staff workplaces are being designed to foster collaboration and implement 21st Century Governance. The building will incorporate a welcoming public plaza and lobby that will serve as the main point of contact for the community, as well as a new gender-universal locker and shower facility that is available to all city staff. The Fleet building (30,949 sq. ft., 35 ft. in height) provides a series of several well-lit service bays and is a larger volume space to allow for vehicle lifts and associated service equipment. Offices and crew facilities on a partial second floor include windows to provide views into the service bays for supervisors to monitor work activity. The building is lower in height along Delaware Street to house parts and equipment storage. The four Facilities buildings (2,800 sq. ft. each, 17-19 ft. in height) will house the following: • Facilities 1: Employee Lunch Room/Community Meeting Room • Facilities 2: Rosie’s Girls Camp/Community Program and Meeting Space • Facilities 3: Carpentry Crew Workshop • Facilities 4: Paint Crew Workshop The buildings alternate with working courtyards along Michigan Avenue, increasing permeability and allowing views into the City Yards. The buildings will be built farther from the property line to accommodate wider sidewalks and the planting of shrubbery and trees along the street will improve the pedestrian experience. The east and west facades allow daylight and views into the shops from the street, and the courtyards are covered by large solar panels. Project Benefits The City Yards project provides the operational, functional, and employee safety improvements necessary to provide exemplary service in a state-of-the-art facility, while also improving the public experience and implementing extensive sustainability 8 of 18 strategies. The design responds to the “working yards” nature of the facility and uses durable, industrial materials in a thoughtful and appropriate manner that recognizes the project as an important civic institution. Understanding the transitioning nature of Michigan Avenue and the future improvements being contemplated at Bergamot Station, the project will provide an open, inviting public realm along the street that integrates more meaningfully with the community, which was expressed as a desire by the community during the design process. The City Yards Master Plan identified a number of opportunities to improve the infrastructure and operations of the existing site: 1. The existing facilities are outdated and unsafe. • The existing structures are not seismically sound. As the hub of the City’s operations, City Yards structures must be able to continue operating in the aftermath of an earthquake. • The existing structures do not meet current occupational health and safety (OSHA) requirements or fire/life/safety standards (e.g., lack of fire sprinklers, inadequate emergency exits, inadequate fall protection for maintenance workers), putting staff at risk. The new structures at the City Yards are being designed to meet all OSHA and fire/life/safety standards to ensure a safe, healthy work environment for City staff and visitors. • Currently there is no central locker room, which requires field staff to access showers and restrooms in different areas of City Yards and change into their work clothes in their work areas. Female field staff have inadequate restroom facilities and only one shower on-site. The project includes construction of a new, centralized, gender-universal locker room and shower facility available equally to all city employees. • Through the master-planning process, the City has analyzed the current and future space needs of critical City maintenance and operational functions. The new City Yards facilities are being appropriately sized to meet the City’s current and future service requirements. The site will continue to host 9 of 18 programs such as Rosie’s Girls Camp, the Trades Intern Program, free compost giveaways, and community shredding events. 2. The City Yards Modernization Project will improve the customer experience and promote operational efficiencies. • The current site can be confusing and unwelcoming to both the public and staff unfamiliar with the City Yards. The lack of clearly defined boundaries between large industrial vehicles and pedestrians poses a risk to everyone. By significantly improving site circulation and creating protected pedestrian pathways, the project will establish a safe environment for all who visit. • Currently, community members must go to various buildings or trailers at the City Yards to conduct business. The new administration building will bring all the administrative groups together under one roof to increase collaboration and productivity among operating divisions and will include a public counter (one-stop shop) where community members can request services, pay fees for goods and services and conduct operations-related business (e.g., block party approvals, composting bin purchases, construction waste managem ent plan review, etc.). • One of the proposed buildings along Michigan Avenue is designated as an afterhours community space that will include a meeting room, kitchen, restroom and outdoor covered courtyard, all of which will be available for use by reservation to residents and community groups. Additional community events educating the public on the zero-waste initiative and water self- sufficiency goals are envisioned to take place in the new community meeting room. 3. The City Yards Modernization Project contains features that will move the community closer to its sustainability goals. • The existing site is almost entirely impermeable, capturing none of the storm water runoff. The project involves construction of an underground tank that can hold up to 140,000 gallons of storm water runoff, and a purification 10 of 18 system that will allow for reuse of the storm water for landscape irrigation and flushing toilets. This will improve beach water quality by preventing storm water at the City Yards from draining into the Santa Monica Bay and will significantly reduce the water demand of the facility, helping the City to achieve its goal of water self-sufficiency by 2023. • The existing buildings do not have high efficiency electrical or mechanical systems. By combining efficient, new building design with solar components, the City will be able to pursue buildings that can produce as much energy as they consume. Project Status The CYM Project was bid and contracted by the City as a design-build or integrated project. This means the designers and construction team are coordinating early and throughout the design phase, resulting in savings during the construction phase. In addition, staff is proposing a “fast-tracked” project delivery process where demolition, site utility relocation, and construction of underground foundations proceed prior to completing the full design of the project. This would reduce the overall project timeline by six months, which would save the City in excess of $4 million by avoiding construction market escalation costs. The authorized budget for the design and construction of the CYM Package A remains at the previously approved amount of $114,621,195. The updated total budget of the project, explained in more detail in Table 1 below, has been revised to include the grant- funded Microgrid Design Study and the City-mandated allocation to the Percent for Art Program that were not part of the original project scope. Table 1: Cost Breakdown Description Council Date City Yards Modernization Project– Package A Feasibility Study 7/12/16 $970,200 Design-Build: Design Services 10/25/16 $10,000,000 Design-Build Amendment 1: Construction 5/28/19 $37,000,000 11 of 18 GMP (Foundation and Site Work Only) Design-Build Amendment 2: Construction GMP (Complete Package A) Anticipated 12/10/19 $60,000,000 Direct Owner Costs (miscellaneous expenses such as inspections and other unforeseen work needed) Various $6,650,995 Project Sub-Total $114,621,195 Microgrid Design Study* 1/10/17 $372,857 Percent For Art* TBD $1,140,000 Grand Total $116,134,052 *Separate deliverables not included as part of the original project scope Staff recommends amending the existing contract with the Hathaway Dinwiddie design - build team for GMP amendment 1, construction services for laying underground foundations and site utility work, to capitalize on the construction savings to be realized from the design-build and fast-tracked processes. While construction begins, the design-builder will complete the design documents and negotiate a final GMP amendment 2 with staff covering the complete costs for construction. Staff anticipates recommending GMP amendment 2 by December 2019. At that time, the source of additional funding will be identified as well. Alternatives While staff is confident that the project can be delivered within the approved budget through a fast-tracked project delivery process, authorizing GMP amendment 1 includes inherent risk because the final cost of the project will be uncertain until final design is completed, which will not occur until after GMP amendment 1 work is authorized. Should the City Council prefer the cost certainty of a completed design package and total cost of construction, the Council could defer moving forward at this time. In that scenario, staff would spend the next six months completing the design and negotiating a final construction price with the contractor. Staff would then come back to the City Council in December of 2019 to ask for approval of a GMP for all construction services and issuance of lease-revenue bonds. Due to construction escalation in the current market, staff anticipates a delay in the start of construction would increase the total cost of construction between $4 to $5 million. 12 of 18 Adopting this more traditional approach would mean that depending on how much higher the final numbers are, staff would then have to work with the contractor to eliminate additional elements from the scope of the project to bring the cost back within the Council-approved budget. Public Engagement Public input has played an important part in shaping the master planning process. In total, the City Yards project has held seven community meetings to gather input and provide community updates to the process, as well as being discussed at eight public boards, commissions, and council meetings over the past four years. In early 2016, staff held two community meetings for the City Yards Modernization feasibility analysis and concept design recommendations. On February 1, 2016, the design-build team and City staff held the first community 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 provide information about the project, answer questions, and collect public input in general and from members of the adjacent community near the City Yards. Attendees had an opportunity to discuss their ideas along with their responses to the project’s goals. The design-build team documented the public comments received and attempted to visualize and prioritize these comments. The intended outcome was to understand what the community wants (or doesn’t want) in the development of the project. The following are some of the specific comments from the community: • Provide learning programs for broader groups • Consciousness of the level of disruption to the neighbors • Provide opportunities for public art • Connection to adjacent neighborhood to northeast/ provide connection from the mobile home park to Bergamot 13 of 18 • Mindfulness of overlap between pedestrians / cars / heavy equipment moving in and out of site • Allow for more visibility into the City Yards - celebrate the functions there • Enhance Michigan Street - Street trees, planting 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 resources • Composting opportunities The results of the first community meeting influenced the City Yards concept designs, and as a follow-up, a second community meeting was held on March 16, 2016. The design-build team and staff presented the updated concept design options, and the community offered more feedback based upon their evaluation of these options. Based on this community feedback, the design response features greater emphasis on creating a visually open site that allows the public to view City Yards operations in action. On October 24, 2016, a third community meeting was held to discuss additional options for the master plan. This meeting focused largely on the eastern portion of the property and the possibility of bringing additional program elements to the City Yards site and better ways to incorporate the project with the adjacent Gandara Park. Due to concerns of local residents and evaluation of the feasibility along with associated costs of further changes, additional programming options were not pursued. One year later on October 12, 2017, staff attended a Pico Neighborhood Association meeting to provide updates about the project, followed by a separate meeting with residents of the Mountain View Mobile Home Park on October 17, 2017 to discuss the same topic. On November 30, 2017, a public scoping meeting was held as part of the 14 of 18 Environmental Impact Report (EIR) prepared for the project. This meeting was another opportunity for the public to provide input and concerns related to the possible impacts of the project. Following these initial public input meetings and the preparation of the draft EIR document, staff presented the CYM Package A designs at public meetings of the Architectural Review Board (ARB) on September 28, 2018 and April 15, 2019, and the Planning Commission on December 15, 2018 and January 16, 2019. In each of these meetings, ARB Members and Planning Commissioners provided feedback that was incorporated into the current design of the project . Both bodies supported the Package A design, and the Planning Commission certified the project’s Environmental Impact Report during the January 2019 meeting. In May 2019, an addendum to the certified EIR was issued that studied the impacts of a recycling buyback center and a separate recycling processing and transfer station being added into the master plan. Public Works staff has already contacted the adjacent neighbors and will continue to provide updates on timelines, setting expectations, and establishing lines of communications for the duration of construction. The Public Works communications team is also planning other outreach activities that include engaging with the public at farmers markets, publishing a blog article on the City’s website to provide the community with an overview of the project, submitting a know-before-you-go (KBUG) notification in the Santa Monica Daily Press in the event that construction activities may impact the public’s ability to travel or use the public right of way, and scheduling regular social media posts about the project. Finally, Public Works staff will collaborate with Community and Cultural Services (CCS) staff throughout the remaining design process to collect public input and feedback on the project’s public art component. Environmental Status The City Yards Master Plan Final EIR [SCH #2017111053] was certified by the Planning Commission on January 16, 2019. 15 of 18 Consultant Selection – Deputy and Material Inspection Services RFQual Data RFQual Posting Date RFQual Posted On RFQual Advertised In (City Charter & Municipal Code) # of Vendors Downloaded # of Submittals Received Date Publicly Opened 10/10/2017 City's Online Bidding Site Santa Monica Daily Press 38 12 10/24/2017 Pre-qualified List Selection Criteria AECOM California Testing & Inspection Municipal Code SMMC 2.24.073 CTE Group Delta Evaluation Criteria Training/credentials/experience, competence/skill, ability to perform services promptly, sufficiency of financial/other resources, character/reputation, and price. Koury MTG Ninyo & Moore Smith Emery Twining United Heider Wildan Justification to Short-List Responses to the RFQ were reviewed by a selection panel of staff from the Public Works Department. Staff selected 11 firms as pre-qualified and eligible to compete in future bids over a three-year period; the pre-qualified list will expire on November 14, 2020. 16 of 18 RFP Data RFP Posting Date RFP Posted On RFP Advertised In (City Charter & Municipal Code) # of Vendors Downloaded # of Submittals Received Date Publicly Opened 03/22/2019 City's Online Bidding Site N/A 4 3 04/09/2019 RFPs Received Selection Criteria AECOM Municipal Code SMMC 2.24.073 United Heider Evaluation Criteria Training/credentials/experience, competence/skill, ability to perform services promptly, sufficiency of financial/other resources, character/reputation, and price. Twining Justification to Award Twining’s proposal included wide-ranging experience and demonstrated the competency of their team of registered Civil and Geotechnical Engineers and numerous inspectors holding multiple certifications. Twining’s proposal also included their reputable corporate structure and excellent references on prior completion of similar projects. Based on this criteria and criteria in SMMC 2.24.073, staff recommends Twining Consulting as the best qualified firm to provide deputy and material testing inspection services for the City Yards Modernization Project. Project and Public Outreach Schedule Key upcoming milestones of the project and public outreach effort are listed below. 1. June 11, 2019 – Present to City Council a proposal for a first amendment to the contract for the construction of underground foundations and site utility work. Continue public outreach to notify the community of the potential upcoming construction project, provide staff contact information during construction and answer frequently asked questions. Staff intends to continue public outreach efforts until the end of construction so that the community can raise questions or concerns regarding the ongoing progress of the construction phase of the project. 17 of 18 2. July 1, 2019 – Pending Council approval, begin demolition and construction of underground foundations and site utility work along the southern portion of the facility, adjacent to Delaware and Frank streets. 3. Fall 2019 – Complete final design and pricing for all scopes of work. 4. December 2019 - Request Council approval of a second amendment for all remaining construction services and issuance of the lease-revenue bonds. 5. End of 2023 – Complete construction of the City Yards Modernization – Package A Project. Financial Impacts and Budget Actions Staff seeks authority to increase the amount of the GMP agreement with Hathaway Dinwiddie for construction services for CYM – Package A. GMP Agreement Modification Request Agreement # Current Authorized Amount Modified Request Amount FY 2018-19 Budget CIP Account # Total Revised Contract Amount 10371 $10,000,000 $37,000,000 C0105410.689000 $47,000,000 Future year funding is contingent on Council budget approval. Staff is recommending executing the underground foundations and site utility scope now to capitalize on current construction rates using the existing budget already appropriated. Staff anticipates returning to Council in December 2019 for GMP amendment 2 that will contract for the full scope of completing Package A , identify the recommended funding sources, and request budget appropriations for the remaining $64,640,000 required to complete the project. Funding for GMP amendment 2 is expected to be provided through the issuance of Lease Revenue Bonds by the Santa Monica Public Financing Authority together with budget appropriations from certain City enterprise funds. A final financing plan for the remaining Package A costs and request to approve the issuance of Lease Revenue Bonds will be presented to the City Council in December 2019 or early 2020. US Treasury Regulations require that in order for the City to use tax-exempt bond proceeds 18 of 18 to reimburse expenditures made prior to the issuance of the bonds the City must first declare its official intent to do so. As the City will be incurring construction expenditures on the Project in advance of bond issuance, reimbursement of some amount of prior expenditures could be a component of the financing plan. Approval of the Resolution of intent to use the bond proceeds for reimbursement at this time will provide the flexibility to structure the use of bond proceeds in the most efficient manner. Prepared By: Sebastian Felbeck, Senior Construction Manager Approved Forwarded to Council Attachments: A. October 10, 1996 Staff Report (Web Link) B. October 24, 2000 Staff Report (Web Link) C. October 13, 2009 Staff Report (Web Link) D. December 16, 2014 Staff Report (Web Link) E. January 27, 2015 Staff Report (Web Link) F. July 28, 2015 Staff Report (Web Link) G. May 24, 2016 Staff Report (Web Link) H. July 12, 2016 Staff Report (Web Link) I. October 25, 2016 Staff Report (Web Link) J. January 10, 2017 Staff Report (Web Link) K. Hathaway Dinwiddie Construction Oaks Initiative Disclosure Form L. Twining Consulting Oaks Initiative Dislcosure Form M. Reso - PW - City Yards - Modification - 06.11.2019 N. City Yards Plans and Renderings O. PowerPoint Presentation 1 City Council Meeting June 11, 2019 Santa Monica, California RESOLUTION NUMBER _________ (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA DECLARING THE CITY’S OFFICIAL INTENT TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF OBLIGATIONS TO BE ISSUED BY THE CITY OF SANTA MONICA, A RELATED PARTY OR OTHER AFFILIATE, AND APPROVING CERTAIN RELATED ACTIONS WHEREAS, the City of Santa Monica, California (the “City”), or an affiliate or related party to the City, including the Santa Monica Public Financing Authority (any such party, including the City, the “Issuer”), expects to undertake the construction and development of the City Yards project (the “Project”), using revenues, proceeds from bonds or other borrowing, and/or other funds; and WHEREAS, the Issuer expects to pay certain expenditures related to the Project prior to the issuance of debt (such expenditures, the “Reimbursement Expenditures”); and WHEREAS, the Issuer reasonably expects to issue obligations in an amount not to exceed $65,000,000 (the “Obligations”) and to use all or a portion of the proceeds of the Obligations to reimburse the Reimbursement Expenditures that are paid before the date of issuance or delivery of the Obligations; and WHEREAS, United States Treasury Regulations Section 1.150-2 provides generally that proceeds of tax-exempt obligations are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of 2 issuance of such obligations unless certain procedures are followed, among which is a requirement that (with certain exceptions), prior to the payment of any such expenditure, the issuer must declare its official intent to reimburse such expenditure with proceeds of such obligations; and WHEREAS, it is in the public interest and for the public benefit that the City declare its official intent to use all or a portion of the proceeds of the Obligation s to reimburse the Reimbursement Expenditures that are paid by the Issuer before the date of issuance of the Obligations; and WHEREAS, proceeds of the Obligations will be allocated to the Reimbursement Expenditures no later than eighteen (18) months after the later of (i) the date the cost is paid, or (ii) the date the Project (or each component thereof) is placed in service or abandoned, but in no event more than three (3) years after the cost is paid. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA MONICA AS FOLLOWS: SECTION 1. The above recitals are true and correct. SECTION 2. The City hereby declares its official intent to use all or a portion of the proceeds of the Obligations to reimburse the Reimbursement Expenditures that a re paid before the date of issuance of the Obligations. SECTION 3. The City hereby declares that it reasonably expects (i) to pay the Reimbursement Expenditures prior to the date of issuance of the Obligations and (ii) to use all or a portion of the proceeds of the Obligations for reimbursement of the Reimbursement Expenditures that are paid by the Issuer before the date of issuance of the Obligations. This declaration is made solely for purposes of establishing compliance 3 with the requirements of United States Treasury Regulations Section 1.150-2. This declaration does not bind the City or the Issuer to make any expenditure, incur any indebtedness, or proceed with the Project. SECTION 4. All actions heretofore taken by the officers, employees and agents of the City with respect to the actions set forth above are hereby approved, confirmed and ratified. SECTION 5. The City Clerk shall certify to the adoption of this Resolution and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: _________________________ LANE DILG City Attorney CITY COUNCIL PRESENTATION JUNE 11, 2019 RECYCLING VENDOR PW ADMINISTRATION