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HomeMy WebLinkAbout2014-08-20 e-packet SPECIAL MEETING S JOINT CITY COUNCIL AND no C') SUCCESSOR AGENCY tip YL OF THE CITY OF SOUTH SAN FRANCISCO P,O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: CI'I'Y IJAIJ, CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA WEDNESDAY, AUGUST 20, 2014 6:30 P.M, Purpose of the meeting: 1. Call to Order. 2, Roll Call. 3. Public Comments— comments are limited to items on the Special Meeting Agenda. 4, Agenda Review 5, Administrative Business: A Resolution awarding the construction contract to City Mechanical, Inc, of Hercules, California for the Energy Savings Upgrade Project at Magnolia Senior Center, Main Library and Orange Memorial Park Pool in an amount not to exceed $271,062,07. (Brian McMinn, Public Works Director) 6. Public Uses and other Property Disposition issues at the former Public Utilities Commission sites at El Camino Real and Chestnut Avenue. (Armando Sanchez, Housing Consultant & Jim Steele, Finance Director) 7, Adjournment. Deputy City Clerk S oR �staff__Re-Dort DATE: August 20, 2014 TO: Mayor and City Council FROM: Brian McMinn, Director of Public Works/City Engineer SUBJECT: A RESOLUTION AWARDING THE CONSTRUCTION CONTRACT TO CITY MECHANICAL, INC. OF HERCULES, CALIFORNIA FOR THE ENERGY SAVINGS UPGRADE PROJECT AT MAGNOLIA SENIOR CENTER,MAIN LIBRARY,AND ORANGE MEMORIAL PARK POOL IN AN AMOUNT NOT TO EXCEED $271,062.07 RECOMMENDATION It is recommended that the City Council adopt a resolution awarding the construction contract to City Mechanical, Inc. of Hercules, California for the Energy Savings Upgrade Project at Magnolia Senior Center,Main Library,and Orange Memorial Park Pool(Project No. pf1408) in an amount not to exceed $271,062.07. BACKGROUND/DISCUSSION On October 23,2013,the City Council adopted a resolution amending the FY 2013-2014 Capital Improvement Program by appropriating an additional $550,000 from the PG&E On-Bill Financing Program and$346,000 from the General Fund Reserves for the HVAC Replacement at Various City Buildings Project. In addition,it authorized the City Manager to execute agreements with PG&E for the participation in the 0% Interest On-Bill Financing Program. On July 9,2014,the City Council adopted three(3)resolutions related to Project No.pfl 408.One resolution awarded a Construction Contract to Thermal Mechanical, Inc, to replace 21 HVAC units and 4 fans at the MSB. Another resolution awarded a Consulting Services Agreement to Syserco, Inc. to design and install an Energy Monitoring System (EMS) at the MSB to monitor the new HVAC units and fans. The third resolution awarded a purchase agreement to California Hydronics Corporation to fabricate boiler and cooling tower equipment mounted.on a skid for the Magnolia Senior Center. This phase of the project will install the new skid mounted boiler,&cooling tower equipment and install five (5) new heat pumps that were scheduled for replacement in 2,009 and will not be accessible once the equipment skid is in place. The skid and skylight areas of the Magnolia Senior Center roof will also be weather sealed. The existing 1965 vintage boiler will be replaced at the Main Library and a Variable Frequency drive(VFD) for main air handler inotor will be installed. ILA VFD for the main pump motor will also be ins I talled at Orange Memorial Park Pool, Staff Report Subject: A RESOLUTION AWARDrNG THE CONSTRUCTION CONTRACT TO CITY MECHANICAL, INC. OF HERCULES, CALIFORNIA FOR THE ENERGY SAVINGS UPGRADE PROJECT AT MAGNOLIA SENIOR CENTER,MAIN LIBRARY,AND ORANGE MEMORIAL PARK POOL IN AN AMOUNT NOT TO EXCEED $271,062.07 Page 2 of 3 Staff advertised a Notice Inviting Bids for the project on July 11, 2014 and July 18, 2014. The project was also advertised on the c-Bidboard website. On July 23, 2014, a mandatory site visit was held and seven(7)mechanical contractors were present.Only four(4)mechanical contractors purchased the bid package. On August 13,201.4, staff received three(3)valid bids in response and one(1)nonresponsive bid. Staff has verified the low bidder's current contractor's license with the California Licensing Board. The following is a summary of all base bids received: City Mechanical, Inc. of Hercules, CA $271,062.07 Heathorn & Associates Contractors Inc., dba American Air $323,835.00 Conditioning, Plumbing & Heating Co., of San Leandro, CA O'Keeffe Mechanical Co., Inc., of San Francisco, CA $457,500.00 Thermal Mechanical, Inc. of Santa Clara, CA Nonresponsive Engineering Estimate $430,000.00 Shown below is the proposed project construction cost: City Mechanical, Inc., Base Construction Contract $271,062.07 Construction Contingency(20%) $ 54,212.41 Construction Inspection(Law&Associates,Skyline Engrg). $ 9,000.00 Construction Administration (5%) $ 13J53,00 Total Proposed Project Construction Budget $347,827.48 Since the project is City funded, there are no Disadvantaged Business Enterprise (DBE) requirements for this project. FUNDING Funding for this project is included in the City of South San Francisco's FY 2014-2015 Capital Improvement Program (Prof ectNo.pf1408)and sufficient funds are available to cover the project costs. CONCLUSION Approval of the resolution will allow the installation of the new energy savings equipment in place of older equipment that is overdue for replacement. The completed project will provide the Magnolia Senior Center with new boiler and cooling tower equipment,along with new roof areas. The Main Library will have a new boiler and a VFD on the air handler motor. Lastly,the Orange Park Pool will have a new VFD installed on the pool's main pump motor. Staff Report Subject: A RESOLUT10N AWARDING THE CONSTRUCTION CONTRACT TO CITY MECHANICAL, INC. OF HERCULES, CALIFORNIA FOR THE ENERGY SAVINGS UPGRADE PROJECT AT MAGNOLIA SENIOR CENTER,MAIN LIBRARY,AND ORANGE MEMORIAL PARK POOL IN AN AMOUNT NOT TO EXCEED $271,062.07 Page 3 of 3 A By Approved: Brian McMinn Mike Futrell Director of Public Works/City Engineer City Manager Attachment: Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AWARDING THE CONSTRUCTION CONTRACT TO CITY MECHANICAL, INC. OF HERCULES, CALIFORNIA FOR THE ENERGY SAVINGS UPGRADE PROJECT AT MAGNOLIA SENIOR CENTER, MAIN LIBRARY, AND ORANGE MEMORIAL PARK POOLIN AN AMOUNT NOT TO EXCEED $271,062.07 WHEREAS, City of South San Francisco ("City") staff issued a Notice Inviting Bids for the Energy Savings Upgrade Project ("Project") and on August 13, 2014, received three (3) valid bids in response; and WHEREAS, City Mechanical, Inc. ("CMI") of Hercules, California, was the lowest responsible bidder-, and WHEREAS, staff recommends awarding the construction contract to City Mechanical, Inc, of Hercules, California in an amount not to exceed $271,062.07; and WHEREAS, funding for the Project is included in the City of South Sail Francisco's 2014-2015 Capital Improvement Program ("CIP") and sufficient funds have been allocated to cover the project cost. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of South San Francisco that the City Council hereby awards the construction contract for the Energy Savings Upgrade Project to CMI of Hercules, California in an amount not to exceed $271,062.07 conditioned on CMI's timely execution of the Project contract and submission of all required documents, including but not limited to, certificates of insurance and endorsements, in accordance with the Project documents. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco authorizes the Finance Department to establish the Project Budget consistent with the information contained in the staff report. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the documents on behalf of the City upon timely submission by CMI's signed contract and all other documents, subject to approval as to form by the City Attorney. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the day of 2014 by the following vote-, AYES: NOES: ABSTAIN, ABSENT: ATTEST: City Clerk -2- e ", H � o Report Staff DATE: August 20, 2014 TO: Members of the City Council and Successor Agency Board FROM: Jim Steele, Finance Director SUBJECT: PUBLIC USES AND OTHER PROPERTY DISPOSITION ISSUES AT THE FORMER PUBLIC UTILITIES COMMISSION SITES AT EL CAMINO REAL AND CHESTNUT AVENUE RECOMMENDATION It is recommended that the City Council and Successor Agency Board review the information in this staff report and provide direction to staff on next steps for considering public uses at the former Public Utilities Commission (PUC) sites adjacent to El Camino Real and Chestnut Avenue. BACKGROUND/DISCUSSION Introduction: In January 2008,the former Redevelopment Agency(RDA)purchased vacant land parcels owned by the San Francisco Public Utilities Commission (PUC) adjacent to El Camino Real and Chestnut Avenue. The PUC sites are shown in an aerial photograph in Attachment 1. Those sites had been intended to be used by the RDA, prior to its dissolution by the State, for financing public infrastructure and/or public facilities as part of a mixed use, transit oriented development. Public amenities that could have been considered included a new main library, an expanded Municipal Services Building and/or recreational facilities.With the dissolution of redevelopment in California by the State, however,the available financial tools to the City to include public facilities have been severely reduced. The RDA Oversight Board("the Board")has approved an RDA Long Range Properties Management Plan (LRPMP), and that Plan is being reviewed by the State Department of Finance (DOF). The LRPMP contains a component that authorizes the Successor Agency to retain the former PUC parcels for a period of time in order to obtain a master developer in order to redevelop the sites.In presenting the LRPMP,Successor Agency staff made the argument to the Oversight Board that the parcels would be worth far more to the taxing entities if they were redeveloped in a consistent fashion by one property owner/one master developer. Such a unified development would provide for a more uniform Staff Report Subject: Public Uses and other Property Disposition Issues at the former PUC Sites Page 2 of 5 and cohesive redevelopment,potentially encouraging developers to bid more in order to build a more intensive mixed use, transit oriented development. Given that the real estate market has heated up dramatically in the last year,the timing is good for a mixed use development to begin to take shape. In the LRPMP filed with the State, several renderings/drawings of the potential development at the PUC parcels include a City library (see Attachment 2). Another view of that location is shown on Attachment 3. Those drawings were conceptual in nature; staff believes, however, that due to the narrow shape and elevation of the parcel near El Camino Real and Chestnut Avenue, a developer cannot economically build on that particular parcel, and therefore a developer would prefer to not utilize that parcel as part of a mixed use development. Due to the proximity to parking,new public community facilities might very well be feasibly built at this parcel that would not be optimal for private investment in residential or commercial development. See Attachment 4 for a conceptual drawing of what a potential mixed use project at the PUC site might look like,including a library as an example of a possible public amenity. Staff believes that a public facility at this site,like a library, could increase the market value of the overall development,as it would take a parcel that is of limited value to a developer and convert it to a desirable use to complement private development. Under any scenario presented below for public uses at the PUC site, it is assumed that a master developer can be persuaded through the negotiation process to reserve or deed or transfer title of the less desirable site to the City for public use.Because those parcels are believed not to be desirable by a developer from an economic standpoint, staff believes there would be little or no opposition from taxing entities and/or the Oversight Board to the City's retaining those parcels. By potentially receiving the title to the parcels in question,the City could control future development of public use on those specific parcels. There are financing and other challenges that the City will face in utilizing the parcels for public use. The purpose of this staff report,therefore,is to generate Successor Agency and Council discussion on next steps,given the competing priorities for public dollars that the Council will likelybe considering. Discussion: Initial New Infrastructure Investment Required Any private redevelopment of the former PUC site would increase traffic and would require extending Oak Avenue ("the extension") through the PUC property to El Camino Real across from Arroyo Drive. (See Attachment 2). Traffic at the El Camino-Chestnut intersection is already heavy, and adding a major new development there would further strain the intersection. For this reason, the General Plan specifically identifies the need for the extension.The extension will require two bridges; one over Colma Creek and one over the BART right of way. Therefore, the extension will be expensive,with a very preliminary estimate from several years ago of between $12 million and$15 million. There are several ways that the City can negotiate the costs of financing the extension with a future PUC property developer.One mechanism that cities have used extensively in California in the past is Staff Report Subject: Public Uses and other Property Disposition Issues at the former PUC Sites Page 3 of 5 called a Mello Roos Community Facilities Districts (CFD). i.Under a CFD, the City can attach the cost of public infrastructure needed for that development onto the property through a special tax.That tax would ultimately get passed along to tenants in the form of higher rent. While a recent court case in Southern California related to CFDs needs further review, staff believes that the CFD mechanism should be considered as a way of having the road extension financed with non-General Fund revenues. (See footnote 1). No decision or further discussion on this mechanism is required at this time; staff points this mechanism out only to assure the Council that staff is aware of the need for funding the extension and will incorporate options into any future discussions with potential developers. Staff believes the cost of $12-$15 million for the Oak Avenue extension, if passed onto to the developer and not funded by a CFD, will substantially limit the number of additional financial obligations the City might otherwise consider adding through the negotiation process to the development. Additional development requirements (such as substantial financial support for constructing a community facility) could make the project economically infeasible for developers. Therefore,if the City were to contemplate more extensive community facilities,the City would likely have to finance most of those using City dollars. For the Council/Board's information, the current budget includes $100,000 in consultant services for use in redeveloping the PUC site; those funds could be used to acquire a real estate financial consultant to help analyze the potential extra funding for community facilities that could economically be provided by the developer. MinimumiBase Level of Public Uses of the PUC Site After funding the Oak Avenue extension,staff suggests that any development of the PUC site should necessarily incorporate walking trails/connections from El Camino Real to Centennial Way,including pedestrian/landscaping/public open space amenities. Staff believes this is a priority because such improvements would be relatively modest in cost, and would build on the community amenities already in place at Centennial Way.If the Oak Avenue extension is constructed,it will be necessary to re-route the segment of Centennial Way that currently runs through the PUC site to ensure that the linear park remains a continuous pathway without a gap.While cost estimates are not available,staff believes that the cost for these walking/open space amenities would be relatively modest compared to uses that require facility construction, and could likely be achieved exclusively with City funds/reserves and potential grants. Staff believes some consideration should also be given to the provision of some type of active parks and recreation amenity, such as a playground, to serve new residents in the area, particularly since the adjacent neighborhood, Sunshine Gardens, is already deficient in public playgrounds.Park-in-lieu fees generated by housing development on the site could be a source of funding for these improvements. More extensive and expensive Public Uses of the PUC Site and Funding Context/Other Council 1 Under a CFD,the City could negotiate with the developer that a condition of the development of the sites be that the developer,after purchasing the property,consent to establishing a CFD for the properties.Because a CFD has to be approved by a majority of property owners in that District,in this case,one property owner,a CFD could feasibly be adopted. CFD's can issue bonds to fund the infrastructure, in this case the extension,to be paid back on the property owner's property tax bills over a number of years.Note that the cost is borne by the property owner over time,and likely passed along to tenants through higher rents. Staff Report Subject: Public Uses and other Property Disposition Issues at the former PUC Sites Page 4of5 Facility Priorities Additional public improvements beyond those mentioned above would likely require both the construction of City building facilities and associated public parking,perhaps a parking garage, and would therefore be expensive. The discussion below is an attempt to generate Board/Council discussion on two areas: the extent of public improvements desired at the PUC site,and the type of financing the Council would want to pay for those improvements. In order to fully weigh financing options for the PUC site,a discussion of other important public facility needs throughout the City is warranted as well as use of financing mechanisms such as taxes, that are limited, and it would be important for the Council to consider all citywide new facility needs. The following are the major new facility needs and approximate costs that staff has gleaned as priorities from the City Council in recent years, and are shown on the map on Attachment 8: • A new Main Library$50-60 million; • The relocation and upgrades to the Caltrain station $50 million; • An expansion to the Conference Center$100 million plus; • A Performing Arts or other public cultural facility$10-30 million. Financial/budget context/Voter approval for tax increases As recent five year projections show, rising Ca1PERS retirement rates over the next five years will exceed revenue growth over that time period, even with new development on the horizon. In a summary graph shown to Council at a May 21,2014 study session 2,staffprojects an ongoing General Fund deficit of over$1.0 million by 2018-19,even after new development scenarios are built in,and without restoring funding for needed infrastructure maintenance and without restoring positions and services cut in the last decade (Attachment 5). Absent a much higher pace of new development in South San Francisco than anticipated in the five year projection,the ability to fund the CalPERS costs will require some level of budget/service level reductions, fee increases, or some combination of budget cuts and revenue increases. Further action would be needed on top of those efforts to fund ongoing infrastructure needs at a sustainable level, and/or to add back positions or public services(park maintenance,facility maintenance)cut over the last decade. It is within this financial context that any new taxes to fund new public facilities would need to be considered by the City Council. Types of tax funding to consider The following are the types of tax measures the Council could consider for funding the public improvements listed above, and are shown on Attachment 6 with approximations of the level of tax increases needed to fund various levels of bond financing of public facilities the Council may consider. Attachment 7 also shows the rough costs for the facilities above. 2 Staff presented the Council with a realistic development build out option for the next five years which assumes the completion of Centennial Plaza,the Ford properties redevelopment,completion of Brittania Cove in 2017-18,a new business hotel near the Conference Center at West Harris,and completion of a new parking structure by Simms Development.On attachment 5,the line in red has all of these growth assumptions,and still shows an operating deficit of over$1.0 million in 2018-19. Staff Report Subject: Public Uses and other Property Disposition Issues at the former PUC Sites Page 5 of 5 General Obligation Bonds Parcel Tax '/ cent Sales Tax Transient Occupancy Tax (TOT) increase Parking Tax increase Tax Increment Financing District for the PUC Development Business License Tax increase CONCLUSION The Board/Council has the opportunity to facilitate a major development at the former PUC sites,and also has the opportunity to fold in public uses. The funding of those public uses would need to compete for new tax revenues with other City Council priorities. Additional Council discussion and direction is needed on priorities for new facilities and the types of taxes that may be considered. The Mayor may also want to appoint a subcommittee to work with staff to discuss these issues further. By: � ApproveYeFutrell Jim Steel Finance irector ager Attachments: Attachment 1: Aerial photograph of PUC sites and surrounding area. Attachment 2: Aerial photograph of PUC site development shown in LRPMP with Library site highlighted. Attachment 3: Alternative view of aerial photograph of PUC sites with Schematic Overlay. Attachment 4: Conceptual drawing of mixed use at PUC site. Attachment 5: Five Year General Fund Forecast for deficits due to CalPERS rate increases. 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