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Home My WebLink About10 TUSTIN RANCH ROAD EXTENSION-PHASE II~ A enda Item 10 ~- ~ AGENDA REPORT Reviewed: - City Manager Finance Director MEETING DATE TO: FROM: SUBJECT: DECEMBER 6, 2011 WILLIAM A. HUSTON, INTERIM CITY MANAGER AND EXECUTIVE DIRECTOR REDEVELOPMENT AGENCY AND PUBLIC WORKS DEPARTMENT TUSTIN RANCH ROAD EXTENSION PROJECT -PHASE 1 ADDITIONAL CONSTRUCTION CONTINGENCY AUTHORIZATION AND PHASE 2 AUTHORIZATION TO BID SUMMARY With Phase 1 well underway, a number of unknown subsurface conditions have been discovered through the grading/excavation operation to date. As a result, staff is recommending an additional contingency authorization for Phase 1 of 15% due to the extensive nature and ongoing potential for new discovery as work proceeds. Although some claims will be processed and handled through the City's Pollution and Remediation Legal Liability Insurance Policy, other instances of non- contaminated debris/excessively wet material removal will not qualify. The statutory limit pursuant to Public Contract Cade is 10°lo but for projects that are substantially complex and prone to higher environmentally challenging conditions, limits are often set higher to manage and mitigate the impact of such project related risks. Secondly, the plans and specifications for Tustin Ranch Road, Valencia Avenue, Park Avenue, and Legacy Road Phase 2 Roadway Improvements (CIP No. 70100, 70204, 70206, 70214, and 70215} are being finalized and expected to be ready to bid mid-December pending final approval of the proposed deep sewer installation in the LIFOC by the Department of the Navy and final plan set approval by the City Engineer. RECOMMENDATION 1. It is recommended that the City Council and Redevelopment Agency authorize an additional 15% construction contingency from undesignated unappropriated 2010 MCAS Tustin Tax Allocation Bond Fund {561 } proceeds for ongoing Phase 1 construction efforts and necessary change orders to complete the work for the Phase I Tustin Ranch Road grading and storm drain project (CIP No. 70100 and 70206}. 2. It is recommended that the City Council adopt Resolution No. 11-87 approving the plans and specifications for the Tustin Ranch Road, Valencia Avenue, Park Avenue, and Legacy Road Phase 2 Roadway Improvements Construction Project {CIP No. 70100, 70204, 70206, 70214, and 70215}, and authorize the City Clerk to advertise to receive bids, subject to final plan approval by the Department of Navy and the City Engineer, from the ten pre-qualified general contractors as approved by City Council on October 4, 2011. FISCAL IMPACT Sufficient funds have been budgeted and appropriated in this Fiscal Year 2011-2012 Capital Improvement Program for this project in the Tustin Ranch Road Extension Project (CIP No. 70100 Tustin Ranch Road Extension Project December 6, 2011 Page 2 and 70206), Valencia Avenue Project {CIP No. 70204}, Park Avenue Project (CIP No. 70214), and Legacy Road Project (CIP No. 70215). The engineer's estimate for the Phase 2 work is $25,827,005. The fund sources include developer contributions, IBC Settlement funds, the Irvine Ranch Water District, CFD 06-01 Fund (435) and the 2010 MCAS Tustin Tax Allocation Bond Fund (561). DISCUSSION The construction effort for the entire Tustin Ranch Road, Valencia Avenue, Park Avenue, and Legacy Road project is segregated into two phases. This was done to allow settlement to occur during fill placement and grading of the northerly overcrossing ramp prior to other street improvements being constructed. Project phasing also allows the bifurcation of dewatering costs associated with the storm drain installation versus those costs associated with sewer and water line installation which will be an IRWD reimbursable expense. Phase 7 /ssues The City Council and Tustin Community Redevelopment Agency awarded the contract for Phase 1 on July 19, 2011. Phase 1 of this project consists of clearing and grubbing, mass grading, retaining wall, and storm drain construction. That phase of the construction was awarded to Sandoval Pipeline Engineering on August 2, 2011. A total of seven change orders have been approved to date totaling $534,711. However, unanticipated subsurface conditions have been encountered during this Phase 1 impacting operations and costs. To-date these unanticipated conditions include the following: Discovery of numerous underground utility lines, valves, etc. not shown on historical maps and drawings which require removal and disposal. • Inadequate environmental characterization of the former MGAS Tustin by the Department of the Navy {"Navy") which has resulted in: o Discovery of buried burned debris near Legacy Road west of Tustin Ranch Road necessitating continued avoidance of grading operations in the immediate area while procedures for handling are finalized with the insurance carrier and the Navy. o Discovery of petroleum-based stained soil within Legacy Road east of Tustin Ranch Road necessitating continued avoidance of grading operations in the immediate area while procedures for handling are finalized with the insurance carrier and the Navy. o Discovery of cement-treated sails covered by a layer of topsoil in the vicinity of two historical helicopter pads necessitating crushing and pulverizing operations. In response to the City's notification of the Navy of these site conditions, the Navy has responded that the identified soil conditions do not require any further action by the Navy pursuant to their statutory obligations under the Comprehensive Environmental Response, Compensation, and Liability Act {CERCLA). While the City andlor its current environmental insurance underwriter will continue to pursue with the Navy potential reimbursements for required remediation through all legal means, construction cannot be realistically halted in the meantime without huge construction delays being within the City's responsibility under the existing Phase I contract. S:\City Council Itemsl2011 Council ItemslTRR Extension Phase I Contingency & II Advertisement.docx Tustin Ranch Road Extension Project December 6, 2011 Page 3 • Discovery of wet,saturated soils well above volumes originally anticipated from review of sail boring logs and historical groundwater data. Contract quantities have already been exceeded for the work within Tustin Ranch Road, Legacy Road, and Park Avenue, and grading of the pad areas near Warner Avenue and Edinger Avenue have yet to be completed until an assessment of additional wet soil removals can be estimated. The majority of potential extra work lies within the two pad areas for early development opportunity and that portion of Tustin Ranch Road within the Lease In Furtherance of Conveyance ("LIFCO") area between the City and Department of the Navy ("Navy"). Navy approval of the contractor's environmental work plan and dewatering plan within the LIFCO area is pending. Consequently, Phase 1 work within this special LIFOC is still pending. For the most part, grading activities outside the LIFOC area have been completed by the contractor, namely that portion of Tustin Ranch Road, Legacy Road, and Park Avenue. However, a portion of petroleum-based soil remediation still remains in Legacy Road. The limits of this removal are still being determined. Contingency exposure to complete Phase 1 as planned is projected at $2.6million. Staff will work closely with our construction manager and general contractor for full cost containment within budgetary authority and report back to City Council should further policy direction andlor action be necessary. However, what is important to again reinforce is that the City in assuming construction responsibilities at the former MCAS Tustin is dealing with unknown and unusual conditions that cannot always be accurately predicted. As the Council. and Agency are aware, the California Supreme Court recently issued several orders in California Redevelopment Association v. Matosantos (S194&612) that stayed certain sections of AB 1X 26 and AB 1X 27. The stay limits the Agency's authority to act and carry out certain obligations and enjoins the Agency's authority to act as to new contracts, programs and projects. However, based on the advice of the City's bond counsel, Brian Quint, change orders to projects for which the Agency would be performing pursuant to an enforceable obligation contained on the Agency's Revised Enforceable Obligations Schedule (Revised FOPS) and Recognized Obligation Schedule would not be considered a new contract, program and project and would be an acceptable expenditure of Agency resources. Recognizing the potential for change orders, the Agency did identify in the Revised FOPS and in the Recognized Obligation Schedule that the anticipated contract expenditure for the Phase I project was an estimate, given that all change order amounts were unknown at the time. Further, failure to approve the subject change order authorization at this time would damage and be harmful to the overall completion of the Project and ensuring that the City meets all required health and safety and engineering standards. Phase 2 The City Council and Tustin Community Redevelopment Agency at its meeting on July 19, 2011 approved aPre-Qualification Package for the Phase 2 Project. A list of pre-qualified licensed contractors for the Phase 2 project was approved by the City Council on October 4, 2011. Phase 2 will complete construction of the remaining underground utility work, sound walls, and street and landscape improvements, including the Edinger AvenuelRailroad bridge overcrossing. As the Council and Agency is aware, the primary source of funding far the Phase 2 Project is 2010 MCAS Tustin Tax Allocation Bond proceeds which were issued primarily for the purpose of construction of the Project. However, given the current California Supreme Court stay of certain portions of AB 1'X 26 and AB 1X 27, the Agency is prohibited from undertaking certain actions S:\City Council Items\2011 Council Items\TRR Extension Phase 1 Contingency & II Advertisement.docx Tustin Ranch Road Extension Project December 6, 2011 Page 4 including, but not limited to, incurring further indebtedness and engaging in redevelopment activities, including entering into contracts, provided that there are no restrictions on the performance of enforceable obligations as the term is defined in the new laws. While the Agency did include the Phase 2 Project in the Original EOPS and the Revised FOPS and also identified the Phase 2 project on the Recognized Obligation Payment Schedule adopted by the Agency on September 20, 2011, legal advice has provided that the Agency should not enter into any new contracts until the issue of the Supreme Court stay on portions of AB 1X 26 and AB 1X 27 have been resolved. However, to ensure that the Phase 2 project stays on schedule, the City would not be precluded at this time from proceeding with advertisement of bids limited to those pre-qualified contractors selected by the City Council on October 4, 2011. It is anticipated that a decision on the outcome of AB 1X26 and AB 1X 27 would be forthcoming sometime in early January. If such a decision affects the ability of the Agency to enter into a contract for the Phase 2 Project which was intended to be funded with the 2010 MCAS Tustin Bond funds, staff will return to the Agency and City Council with a potential strategy for moving the Phase 2 project forward. Provided that the Agency and Gity are not legally constrained from proceeding with entering into a contract for the Phase 2 Project, a preliminary tentative schedule for construction of Phase 2 of this project would be as follows: • Authorization to Advertise for Bids .................................................12/612011 • First Legal Advertisement ............................................................1211512011 • Second legal Advertisement .......................................................12/22/2011 • Bid Opening ..................................................................................1/30/2012 • Tentative Award of Contract .......................................................... 2/28/2012 • Tentative Start Construction .......................................................... 3/2012012 • Estimated Completion Phase 2 Construction ...................................5/112013 _ _ i Christine A. Shingleton Assistant City Manager D~oulas S, Stack, P.E. ~r~ctor of Public Works/City Engineer ~,r Attachment 1: Resolution No. 11-87 S:\City Council Items52011 Council Items\TRR Extension Phase I Contingency & II Advertisement.docx RESOLUTION NO. 11-87 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA APPROVING PLANS AND SPECIFICATIONS FOR THE TUSTIN RANCH ROAD, VALENICA AVENUE, PARK AVENUE, AND LEGACY ROAD PHASE 2 ROADWAY IMPROVEMENTS CONSTRUCTION PROJECT (CIP NO. 70100, 70204, 70206, 70214 AND 70215), AND AUTHORIZING ADVERTISEMENT FOR BIDS WHEREAS, it is the intention of the City Council of the City of Tustin, California to contract for the Tustin Ranch Road, Valencia Avenue, Park Avenue, and Legacy Road Phase 2 Roadway Improvements Construction Project (CIP No. 70100, 70204, 70206, 70214, and 70215); and WHEREAS, the City Engineer has presented plans and specifications for the construction of said work; and WHEREAS, on January 16, 2001, the City of Tustin certified the Program Final Environmental Impact Statement/Environmental Impact Report (FEIS/EIR) for the reuse and disposal of MCAS Tustin; on December 6, 2004, the City Council adopted Resolution Na. 04-77 approving the Final Supplemental #1 to Final EIS/EIR; and on April 3, 2006, the City Council adopted Resolution No. 06-43 approving an Addendum to the FEIS/EIR. The FEIS/EIR, its Final Supplemental #1 to FEIS/EIR, and its Addendum is a program EIR under the California Environmental Quality Act ("CEQA"). The FEIS/FEIR and its Addendum considered the potential environmental impacts associated with development on the former Marine Corps Air Station, Tustin; and WHEREAS, an Environmental Analysis Checklist has been prepared and concluded that the proposed project does not result in any new significant environmental impacts, substantial changes, or a substantial increase in the severity of any previously identified significant impacts in the FEIS/EIR, Supplemental #1 to FEIS/EIR, and Addendum, and moreover, no new information of substantial importance has surfaced since certification of the FEIS/EIR, Supplemental #1 to FEIS/EIR, and Addendum; and WHEREAS, on August 2, 2011, the City of Tustin awarded the grading and storm drain phase 1 work to Sandoval Pipeline Engineering; and WHEREAS, on October 4, 2011, the City of Tustin pre-qualified ten general contractors as eligible to bid this phase 2 work; NOW, THEREFORE, BE IT RESOLVED that the plans and specifications presented this day, pending final approval of the proposed deep sewer installation in the LIFOC by the Department of the Navy and final plan set approval by the City Engineer, are hereby approved as the plans and specifications far: Resolution 11-87 Page 1 of 2 Tustin Ranch Road, Valencia Avenue, Park Avenue, and Legacy Road Phase 2 Roadway Improvements Construction Project (CIP No. 70100, 70204, 70206, 70214, and 70215) BE IT FURTHER RESOLVED that the City Clerk is hereby authorized and directed to advertise as required by law for the receipt of sealed bids or proposals from the ten pre-qualified general contractors for the performance of the work specified in the aforesaid plans and specifications. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 6t" day of December, 2011. ATTEST: Pamela Stoker City Clerk STATE OF CALIFORNIA ) GOUNTY OF ORANGE ) SS CITY OF TUSTIN ) Jerry Amante, Mayor I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council is five; that the above and foregoing Resolution No. 11-40 was duly and regularly passed and adopted at a regular meeting of the City Council held on the 7t" day of June, 2011 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: PAMELA STOKER, City Clerk Resolution 11-87 Page 2 of 2