HomeMy WebLinkAbout01 PUBLIC HEARING TUSTIN LEGACY FIRE STATIONMEETING DATE: MAY 15, 2012
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
SUBJECT: CONDUCT A PUBLIC HEARING AND ADOPT RESOLUTION NO, 12-41
FINDING THE TUSTIN LEGACY FIRE STATION PROJECT TO BE
SUBSTANTIALLY COMPLEX AND ESTABLISH A RETENTION AMOUNT OF
TEN PERCENT
SUMMARY
Adoption of Resolution No. 12-41 finds the Tustin Legacy Fire Station Project (CIP No.10048)
substantially complex for purposes of Public Contract Code Section 7201 and establishes a
contract payment retention amount of ten percent.
RECOMMENDATION
It is recommended that the City Council conduct a public hearing, respond to public comments,
and adopt Resolution No. 12-41 finding the Tustin Legacy Fire Station Project to be substantially
complex and establish a contract payment retention amount of ten percent.
FISCAL IMPACT
There is no fiscal impact to the City with adoption of this resolution.
DISCUSSION
Typically, construction contracts have a portion of most payments deducted from the progress
payment amount due to the Contractor. This amount is called retention and is included in the
project specifications. Traditionally, the retention amount is usually ten percent from each
approved progress payment until the amount paid of the original contract equals 50%. The City
may then, at its sole discretion, discontinue or reduce further retention on the original contract
value for all subsequent progress payments. Retention is a valuable cost control tool for three
reasons. First, it provides incentive for the Contractor to continue to complete the construction in
order to get the retention at the close-out of the contract. Second, it ensures that the construction
work is performed correctly since retention is not released until all items in the final inspection
correction list (punch-list) are corrected. Thirdly, in the event of financial difficulty or default by the
Contractor, retention monies can be used to pay subcontractors/suppliers or make corrections to
in-place work the Contractor does not correct.
In October 2011 the Governor signed into law S13 293 that modified Public Contracts Code Section
7201. Among other things, the new law restricts public agencies to only withhold five percent
retention for any contracts executed after January 1, 2012 instead of the normal ten percent.
Public entities are prohibited from requiring contractors to waive the protections of Section 7201.
The law will expire by its own terms on January 1, 2016.
Approve Resolution No. 12-41 Finding Legacy Fire Station Substantially Complex
May 15, 2012
Page 2
The law also provides an exception stipulating that a public agency may withhold greater than five
percent on specific projects where the governing body makes a finding at a public meeting prior to
bid of the project that the project is substantially complex and requires a higher retention. The
findings and the retention amount must be included in the bid documents.
City staff has determined that the Tustin Legacy Fire Station Project is substantially complex due to
the specialized building type supporting numerous specialized functions and security systems.
The fire station will be constructed to serve as an "essential services" building capable of providing
essential services to the public after a disaster and is thus subject to more stringent State Health
and Safety and Building Code requirements.
The Project will be constructed in a manner that will include optimization of energy efficient
features to achieve effective whole building performance in accordance with the Guiding Principles
for Sustainable New Construction required to meet the United States Green Building Council's
established Leadership in Energy and Environmental Design (LEED) program certification.
Notification of this item has been published in the Tustin News and posted outside of the City
Council chambers for public review. It is recommended that the City Council conduct a public
hearing, respond to public comments, and adopt Resolution No. 12-41. The findings presented in
the Resolution and the newly established retention of ten percent will be included in the bid
documents currently being prepared for construction of the Tustin Legacy Fire Station Project.
DOug(las & Stack, P.E.
Dire or t Public Works/City Engineer
Attachment(s): 1. Resolution No. 12-41
2. Project Location Map
SACity Council ltems12012 Council Iterns\Adopt Reso 12-41 Finding Legacy Fire Station Substantially Complex.docx
ATTACHMENT 1
RESOLUTION NO. 12-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUSTIN, CALIFORNIA, FINDING THE TUSTIN
LEGACY FIRE STATION PROJECT TO BE
SUBSTANTIALLY COMPLEX FOR PURPOSES OF
PUBLIC CONTRACT CODE SECTION 7201 AND
ESTABLISHING A RETENTION AMOUNT OF TEN
PERCENT
WHEREAS, Public Contract Code section 7201(b)(1) provides that, with respect
to public works contracts entered into on or after January 1, 2012, between a public
entity and an original contractor, (i) the retention proceeds withheld from any payment
by the public entity from the original contractor shall not exceed five percent (5%) of the
payment and (ii) the total retention proceeds withheld by the public entity from the
original contractor shall not exceed five percent (5%) of the contract price; and
WHEREAS, Public Contract Code section 7201(b)(4) provides that,
notwithstanding this limitation, the retention proceeds withheld from any payment by a
city from the original contractor may exceed five percent (5%) on a specific project
where the governing body of the city has approved a finding during a properly noticed
and normally scheduled public hearing and prior to bid that the project is substantially
complex and therefore requires a higher retention amount than five percent (5%) and
the city includes both this finding and the actual retention amount in the bid documents
for the project;
WHEREAS, the City of Tustin intends to competitively bid and award a contract
for construction of the Tustin Legacy Fire Station — Relocation of Station #37 Project
(the "Project"); and
WHEREAS, City staff has determined that the Project is a substantially complex
project for purposes of requiring a retention amount greater than five percent (5%) and
that such a larger retention amount is necessary to ensure the Project is timely
completed and to maximize the protection of the City's finances given the complexity of
the Project; and
WHEREAS, on May 15, 2012, at a regularly and properly noticed meeting, the
Tustin City Council held a duly noticed public hearing to consider and determine
whether the Project is substantially complex and thus requires a higher retention
amount than five percent (5%), and at which all interested persons were given an
opportunity to be heard; and
WHEREAS, the City Council duly considered all information, reports, and oral
and written public comments presented at the public hearing.
850759.1
NOW THEREFORE, the City Council of the City of Tustin hereby resolves as
follows:
Section 1. The above recitals are true and correct.
Section 2. Based on all available information, including, but not limited to, reports,
analyses, presentations by City staff, and/or public comment reviewed by the City
Council in connection herewith, and pursuant to Public Contracts Code section
7201(b)(4), the City Council hereby finds and determines that the Project is substantially
complex and therefore requires a retention amount higher than five percent (5%). The
facts upon which this finding are based include, but are not limited to, the following:
a. The Project consists of construction of an approximately 9,600 square foot
fire station facility, which is a specialized building type supporting
numerous specialized functions and security systems.
b. The fire station will be constructed to serve as an "essential services"
building following a disaster and is thus subject to more stringent State
Health and Safety and Building Code requirements applicable to "essential
services" buildings.
C. The Project needs to be constructed in a manner that will facilitate
achievement of SEED certification.
Section 3. The City Council hereby approves an actual retention amount ten percent
(10%) for the Project and approves the withholding of retention proceeds in an amount
up to ten percent (10%) of each payment to the original contractor and of the total
contract price.
Section 4. The findings set forth in Section 2 and the actual retention amount shall be
included in the bid documents for the Project.
Section 5. If any provision, section, subsection, sentence, clause, phrase or word of
this Resolution is for any reason held to be invalid by a court of competent jurisdiction,
such decision shall not affect the validity of the remaining portions of this Resolution.
The City Council hereby declares that it would have passed and adopted this
Resolution, and each and all provisions hereof, irrespective of the fact that one or more
provisions may be declared invalid.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Tustin, California, held on the 15th day of May, 2012.
850759.1
JOHN NIELSEN,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA
COUNTY OF ORANGE ss.
CITY OF TUSTIN
1, PAMELA STOKER, City Clerk of the City of Tustin, hereby certify that the
foregoing resolution was duly adopted by the City of Tustin at its regular meeting held
on the 15 day of May, 2012, and that it was so adopted by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER,
City Clerk, City of Tustin
850759.1
ATTACHMENT 2
VICINITY MAP
Tustin Legacy Fire Station
Relocation of Station # 37
ie (CIP No. 10048)
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FILE: CIP- 10048.dwg