title
ADOPT A RESOLUTION AUTHORIZING A REIMBURSEMENT AGREEMENT WITH H. D. ARNAIZ CORPORATION FOR DESIGN, CONSTRUCTION, CONSTRUCTION MANAGEMENT, AND PROJECT MANAGEMENT SERVICES FOR THE NORTHEAST STOCKTON WATER TRANSMISSION MAIN
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Authorize a reimbursement agreement with H. D. Arnaiz Corporation, Inc. in the estimated amount of $15,817,379.38 for design, construction, construction management, and project management services for the Northeast Stockton Water Transmission Main (Exhibit 1 to the Resolution).
2. Authorize the reappropriation of $7,299,000 from the capital project West, East and South Bear Creek Oversizing Reimbursements (UH21001) to the Cannery Park Water Transmission Reimbursement Project (UH24003).
It is further recommended that the City Manager be authorized to take all necessary and appropriate actions to carry out the purpose and intent of this resolution.
body
Summary
The City of Stockton North Water System planned expansion will accommodate the development of industrial, commercial, and residential property, and the need for increased fire suppression water supplies in northeast Stockton. A reimbursement agreement with H. D. Arnaiz Corporation will provide the most expeditious method to complete the design, construction, and installation of improvements to the North Water System (Improvements).
The amount for design services shall not exceed $650,000 and will be reimbursed in accordance with the Public Facilities Fee Program. The total reimbursement amount, including design services, is estimated to be $15,817,379.38.
Once the Plans and Specifications are approved and a selected contractor has been identified through a competitive bidding process, the developer may proceed with the construction and installation of the Improvements.
DISCUSSION
Background
The City of Stockton Water Master Plan Update was adopted by the City Council on February 23, 2021. The Water Master Plan Update identified, in part, large water transmission pipelines necessary to support the growth of industrial, commercial, and residential development in northeast Stockton.
The current project mostly consists of the construction of a 24-inch water transmission main along West Lane between Bear Creek and Eight Mile Road; a 24-inch water transmission main along Eight Mile Road between West Lane and the State Route 99 West Frontage Road; and a 24-inch water transmission main along the State Route 99 West Frontage Road between Eight Mile Road and PFC Jesse Mizener Street (see Attachment A). The construction of the Improvements will provide the necessary potable and fire suppression water supplies for future industrial, commercial, and residential development projects in northeast Stockton.
The H. D. Arnaiz Corporation (the “Developer”) is requesting reimbursement in accordance with the Public Facilities Fee Program. The City Council adopted Resolution No. 2019-10-08-1104 entitled Public Facilities Fee Program Administrative Guidelines ("Guidelines") specify when a developer is eligible for a credit or reimbursement of public facilities fees. The City has identified the installation of the Improvements as included in the Public Facilities Fee Program, and thus the cost of the design, construction, and installation of the improvements are eligible for reimbursement pursuant to the Public Facilities Fee Program guidelines.
Present Situation
To expedite the expansion of the City of Stockton North Water System, the Improvements are proposed to be constructed in a design-bid-build arrangement through a reimbursement agreement with the Developer. The Developer has the knowledge and experience necessary to prepare plans and specifications for the design, construction, and installation of the waterline.
Once the City Council approves the reimbursement agreement, the Developer will provide for the design of the Improvements. The amount for design services shall not exceed $650,000.
Following the Director of Municipal Utilities (“Director”) approval of the Plans and Specifications, the Developer shall solicit a minimum of three competitive proposals (the “Proposals”) from construction companies experienced with pipeline and well construction, for the construction and installation of the Improvements. The Developer will provide copies of the Proposals to the Director.
After a comprehensive review of the Proposals by the Developer and consultation with the Director, the Developer shall select a construction company (the “Selected Contractor”) to negotiate final costs and contractual terms and conditions.
Once the Plans and Specifications are approved by the Director, and the Selected Contractor has been identified, the Director is authorized to direct the Developer to proceed with the construction and installation of the Improvements.
After the Notice to Proceed has been issued by the Director, the Developer shall contract with the Selected Contractor for the construction and installation of the Improvements. The Selected Contractor shall furnish the City with original certificates for Commercial General Liability, Commercial Business Automobile Policy, Worker’s Compensation Insurance, and Builder’s Risk Insurance in the amounts specified and approved by City. The Selected Contractor shall include City and Developer as additional insured under the insurance policies referenced above.
The Developer requests reimbursement of actual costs incurred for services including design, construction, construction management, and project management. The City has identified the project costs as eligible for reimbursement pursuant to the Public Facilities Fee Program guidelines.
The Total Estimated Reimbursement amount can be summarized as follows:
|
Site Preparation |
$348,375.00 |
|
Water System |
$8,931,550.00 |
|
Street Work |
$1,227,700.00 |
|
Miscellaneous |
$620,000.00 |
|
Contingency (20%) |
$2,225,525.00 |
|
Plan Check Fee (4%) |
$445,105.00 |
|
Inspection Fee (4.5%) |
$500,743.13 |
|
Construction Management (3%) |
$333,828.75 |
|
Construction Staking |
$62,000.00 |
|
Project Bond (2% Premium) |
$222,552.50 |
|
Permitting/Observation |
$100,000.00 |
|
Permitting/CEQA |
$150,000.00 |
|
|
|
|
Total Construction Cost |
$15,167,379.38 |
|
|
|
|
Design Cost |
$650,000.00 |
|
|
|
|
Total Estimated Reimbursement |
$15,817,379.38 |
The Northeast Stockton Water Transmission Main Project is anticipated to be completed in the spring of 2026.
Local Employment Ordinance
The contract amount is over $100,000 and subject to the City’s Local Employment Ordinance (Stockton Municipal Code Section 3.68.095), which requires that “all City contracts for public works or improvements of the estimated value or City subsidy of $100,000 or more shall contain provisions pursuant to which the contractor promises to make a good faith effort, with the assistance of local labor union hiring halls or community organizations designated by the City to employ qualified individuals who are, and have been for one year prior to the effective date of the contract, residents of Stockton in sufficient numbers so that no less than 50 percent of the contractor’s total construction workforce, including any subcontractor workforce, measured in labor work hours, is comprised of Stockton residents.”
On July 26, 2016, the City Council adopted a Community Workforce and Training Agreement (CWTA). The CWTA became effective August 25, 2016, and applies to all Public Works projects over $1 million that are bid after that date. The CWTA specifies several conditions that must be met by contractors and employers awarded public works or improvement contracts with the City of Stockton valued at $1 million or more. CWTA requirements include, among other conditions, preconstruction conferences for coordination, recognition of union(s) as the sole bargaining representative, requirements for contractors and employers to use union referral systems, and apprentice programs to develop adequate numbers of competent workers, including that 50 percent of apprentices employed on the project are from Stockton or San Joaquin County. The CWTA will apply to this project because the estimated repair services cost is more than $1 million.
Environmental Clearance
The proposed Reimbursement Agreement does not require additional environmental review from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3), (General Rule/Common Sense Exemption) and pursuant to Section 15162 (Subsequent EIRs and Negative Declarations). Per Section 15061, the proposed monetary agreement involves defining the financial payments for construction work (waterlines) associated with the previously approved Tra Vigne Subdivision Project (SCH# 2016022061) and Cannery Park Mixed Use Project (SCH #2003042022) and will not result in a new project and/or physical change to the environment. Per Section 15162, construction work described in the financial agreement will not result in new construction or a change to the certified Environmental Impact Reports (EIR) associated with those projects. Therefore, no further environmental review is required pursuant to CEQA Sections Section 15061(b)(3), (General Rule/Common Sense Exemption) and pursuant to Section 15162 (Subsequent EIRs and Negative Declarations).
FINANCIAL SUMMARY
Funds will be reappropriated in the current fiscal year from the previously approved capital project West, East and South Bear Creek Oversizing Reimbursements (UH21001) to the Cannery Park Water Transmission Reimbursement Project (UH24003). The remaining funds will be budgeted in the upcoming FY 2024 - 2029 CIP.
|
PROJECT |
Amount |
|
UH24003 - Northeast Stockton Water Transmission Main |
$2,600,000.00 |
|
UH21001 - West, East and South Bear Creek Oversizing Reimbursements |
$7,299,000.00 |
|
Delta Water Supply Project Connection Fee Fund |
$5,918,379.38 |
|
TOTAL |
$15,817,379.38 |
Work described in project UH21001 will be completed as part of the Northeast Stockton Water Transmission Main, project UH24003. Staff recommends that the City Council approve the transfer of $7,299,000 from project UH21001 to project UH24003, closing out project UH21001.
This action has no impact on the General Fund or any other unrestricted funds.
Attachment A- Project Map