To: Honorable Mayor and Members of Town Council
From: Jeff Brauer, Parks and Recreation Director
Title
Discussion/Direction: Festival Park Bid Results
Body
________________________________________________________________________________
Executive Summary
The Castle Rock community has acknowledged the importance of Town strategic initiatives and the impact to quality of life as demonstrated through the 2015 Community Survey results. Economic development and supporting small town character are important components of these strategic initiatives. Downtown celebrations at Festival Park have been a significant contributor to small town character and quality of life for residents. As a result, Town Council, Castle Rock Economic Development (EDC), the Downtown Development Authority (DDA), the Downtown Alliance and the Downtown Merchants Association (DMA) have partnered in support of the expansion of Festival Park for the purpose of hosting community events and to attract downtown activities and retail business.
The redesign of Festival Park was developed through a public process involving community workshops, vision sessions and interactive presentations beginning in May of 2015. The design team selected for the project also worked with the DDA, DMA and individual property owners to explore design ideas and to address concerns.
The Downtown Master Plan anticipates significant growth in residential development and employment. In addition, the plan supports the attraction of individuals living and working in the downtown area by creating an environment where people want to work and live in a unique urban center. Great places like Festival Park are essential for the health and prosperity of such urban centers. A safe and clean urban park that serves a variety of people, Festival Park will boost the vitality of adjacent businesses and promote an active civic life as a public gathering place for work and respite.
Four bids for the Festival Park renovation project were received September 13, 2016 and the low responsive bid in the amount of $5,783,198 was provided by Mortenson Construction. This bid price in addition to permit, materials testing, design contingency and other costs outside of the construction contract result in the need for a total of $6,391,052 to complete the project. Funding in the amount of $4,500,000 is available in the 2016 budget for construction, so an additional $1,891,052 is needed to complete the project as designed. This information was presented to the DDA on September 15, 2016. The DDA convened a special meeting on September 22, 2016 and voted to provide additional funding to assist in bridging the gap.
|
Total additional amount needed |
$1,891,052 |
|
|
|
|
Cash funding from the DDA TIF Fund* |
$495,526 |
|
Loan from the General Fund to be paid with Line of Credit Funds generated by DDA TIF |
$450,000 |
|
Remaining DDA TIF funds in the General Fund from 2012-2014 collected TIF increment* |
$92,806 |
|
Contribution of funds from Unobligated General Fund balance |
$852,720 |
|
|
|
|
Total amount provided through scenario |
$1,891,052 |
*Appropriated in 2016
The purpose of this agenda item is to engage Council in a discussion regarding possible options to complete the Festival Park project in full or in part. Staff is presenting three options for consideration. The first is delay the project indefinitely. This option would result in the loss of significant design costs that were provided by the DDA through incremental tax funding (TIF) and a loss of considerable staff and resident hours committed to the project, but would replace approximately $2 million in various funds that could be used for other Town priorities. Town Council has the option to rebid the project using the existing construction documents at a later date.
The second option would be to work to remove major elements of the project until it matches the existing budget. In order to align the project with the existing budget, major program elements such as the bridge connections across Sellars Gulch, the landing pavilion, splash pad, restrooms and certain landscape materials and site furniture would need to be removed. Redesign would also be required to fill these spaces with something else, along with changes to permit submittals and review times, which may affect schedule. If this approach is taken, the park could still accommodate events on the lawn area and within Second Street but many of the amenities that would draw people to the area during nonevent days would not be present. If Council chooses to set a goal to reduce the additional funds needed to a specific amount, then staff would work with Mortenson Construction to reduce the contract with as little disruption to the design as possible. For instance, if the goal was to reduce the contract by $400,000, then the landscape materials, site furnishings and restroom building could be removed because these features could be purchased in the future, although costs could increase over time. If this approach is taken, it may also affect the DDA’s contribution, which would require additional reductions in the contract.
The third option is to take $852,720 from Unobligated General Fund balance to complete the project as designed. Staff is recommending that Council select option three. If Town Council selects this option, staff will present a construction contract for consideration on November 1, 2016.
If Council chooses to support the project at a lower cost, staff will meet with the design team and Mortenson Construction to determine how cuts can be incorporated and to negotiate a contract price for Council consideration on November 1, 2016.
Notification and Outreach Efforts
The master plan for Festival Park was presented to Town Council on October 20, 2015. A contract for final design, construction documents and contract administration based upon the master plan were approved on November 17, 2015. Design Workshop, the project design consultant, included an opinion of probable costs based on the master plan drawings of $4,791,611.
As more detailed information became available through the development of construction documents, staff and the design team became concerned that the opinion of probable cost was too low, based upon the overall scope of amenities, stream stabilization and complexity of working within an extremely limited space. When construction documents reached 60% of completion, staff directed the design team to obtain a professional estimate and MW Golden Constructors was hired for this purpose. MW Golden completed their estimate in May and valued Festival Park improvements at $7.8 million. This information was presented to the design team and communicated to the DDA in a prioritization discussion. This led the team to make changes to lower priority items such as the small but expensive playground features and to alter certain finishes that would not significantly impact the design in an attempt to better align the project with available funds. Plan changes were made but the project was not re-estimated due to cost and time constraints. Festival Park was publicly bid using the Town’s e-purchasing website on August 10, 2016.
Seven general contractors attended the mandatory pre-bid meeting the week following the bid date. All contractors expressed concern with meeting the bid schedule and a one week extension was added. One final bid extension was also granted on the scheduled bid opening day after several contractors expressed concerns that they were having difficulty obtaining pricing from subcontractors. Ultimately, four general contractors submitted the following bid pricing to this complex project in an extremely challenging bid environment.
|
Contractor |
Bid Price |
|
Mortenson Construction |
$5,783,198 |
|
MW Golden Constructors |
$6,949,404 |
|
Rocky Mountain Excavating |
$7,841,579 |
|
White Construction |
$9,718,167 |
Mortenson Construction submitted the low responsive bid for the project; however, there are additional costs that will be incurred that fall outside of the construction contract. The following list provides detail related to these items:
|
Description |
Cost |
|
Materials Testing |
$30,000 |
|
Permits and System Development Fees (allowance) |
$100,000 |
|
Dry Utility Relocation (Century Link, Black Hills, Xfinity) (allowance) |
$53,000 |
|
Design Contingency 5% |
$290,860 |
|
Town Hall Sidewalk Tie-in (allowance) |
$100,000 |
|
Total |
$573,860 |
The additional costs listed above that fall outside of the construction contract will be fully defined between the contract and start date for the project. These costs include moving dry utilities during construction, permit and system development fees paid to the Development Services Enterprise and a materials testing contract that will be held by the Town to ensure quality of soil preparation, concrete and other materials. A sidewalk tie-in to the Town Hall parking lot is also included because retaining walls and railings will be required to make the connection. This sidewalk was not a part of the bid documents because the Town Hall addition drawings were not complete during the Festival Park bid process. Finally, a combined owner’s / design contingency of 5% is included. The American Institute of Architects’ best practices recommends holding design contingency in the amount of 5%-10% for the purposes of resolving unforeseen issues during construction and to account for errors and omissions in the construction documents. For instance, the project has been sent to various internal and federal agencies for permit review. If these agencies require a change to the plans, it could increase the cost of development that is not included in the bid price, whether that be related to a floodplain regulation, building or code requirement. The team is recommending holding 5% in design contingency for this purpose. In addition to the design contingency, the existing bid amount includes a 5% construction contingency that would be available to address extreme weather, undiscovered geotechnical issues such as buried debris from past flooding events and the potential for flooding damage within the creek. Contingencies could be lowered to reduce project cost, but it may come with increased risk.
History of Past Town Council, Boards & Commissions, or Other Discussions
On September 21, 2016, the Castle Rock Parks and Recreation Commission unanimously made a recommendation to Town Council to support the construction of Festival Park as designed.
Discussion
Staff is seeking direction from Town Council as to how the Town should proceed with the project and is presenting the following options for consideration.
Option One - Delay the project for future consideration.
Council may decide that the costs of moving forward with the plan outweigh the benefits of moving forward with the project. If this is the case, the DDA would have invested costs in the amount of $414,000, as the DDA funded the design process for Festival Park. This total does not include the additional costs of time that staff and community spent on the project. The remaining $65,000 of the $471,000 Design Workshop contract was for construction observation and has not been expended. In addition, the developer of the Riverwalk project has stated that the Town and the DDA’s investment in Festival Park was important to the project. Whether or not moving forward would have a negative effect on the Riverwalk project is unknown. If Council decides not to move forward, then $2 million in combined revenue in the Conservation Trust Fund, Parks Capital Fund, General Long Term Planning and Storm Water Fund could be returned to various balances to fund other Town priorities.
Option Two - Do not allocate additional funding but still work to complete the budget within available funds.
Council may be interested in moving the project forward, but not willing to commit additional funding, instead saving reserves for higher priority projects. Eliminating $1,891,052 would require a redesign of the project in order to meet the current $4.5 million budget because as items are removed, something must be put in their place. Town Council may consider removing the following elements to meet the current budget.
|
Project element |
Cost of element |
|
Overlook pavilion structure and footings |
$453,400 |
|
Restrooms |
$130,000 |
|
Bridges over Sellars Gulch |
$200,000 |
|
Splash pad |
$567,300 |
|
Reduce or remove landscape and site furniture |
$250,000 |
|
Total Cost |
$1,600,700 |
While the totals above do not add up to the $1,891,052 shortfall, the resulting reduction in fees, cost to connect the park to the Town Hall parking lot and reduction in contingency as an overall percentage, would bring the project within budget. However, the elements listed include some of the most desired components as indicated during the public outreach process and by the DDA.
Removing these options would require design modifications that could be accomplished by the planned project construction start in early 2017. However, permit and other review processes may create some delay that could affect the planned November 1, 2017 completion date. Another option for Council would be to eliminate a major portion of the project, such as the connection to Town Hall and work along Sellars Gulch. An additional study would be required to better understand the total cost impact, but elimination of all work in this area could bring the project within budget. If this approach is taken, redesign and federal permit requirements would delay the project so that completion could not occur by the scheduled completion date of November 1, 2017.
If Council does not wish to make major changes to the program, but would like to reduce cost, some savings could be achieved by removing items such as the overall quantities of landscape materials, such as trees and shrubs or site furniture, as these items could be installed at a later date. Only $250,000 to $300,000 in savings could be achieved if this approach is taken.
Option Three - Allocate additional funding to complete the project.
In order to complete the project as designed and on schedule, Town Council would need to allocate an additional $852,720 from Unobligated General Fund balance. The remaining funding required to reach the $1,891,052 has been pledged by the DDA. See the table below for funding gap and proposed sources:
|
Total additional amount needed |
$1,891,052 |
|
|
|
|
Cash funding from the DDA TIF Fund* |
$495,526 |
|
Loan from the General Fund to be paid with Line of Credit Funds generated by DDA TIF |
$450,000 |
|
Remaining DDA TIF funds in the General Fund from 2012-2014 collected TIF increment* |
$92,806 |
|
Contribution of funds from Unobligated General Fund balance |
$852,720 |
|
|
|
|
Total amount provided through scenario |
$1,891,052 |
*Appropriated in 2016
Budget Impact
The project budget was established for the 2016 budget year based on funds available to complete the project and the design team’s opinion of probable cost. Project funding was derived from the following sources:
|
Funding Sources: |
|
|
Conservation Trust Fund |
$ 950,000 |
|
DDA TIF Fund debt capacity |
$2,500,000 |
|
General Fund DDA TIF - From $1.2 M |
$ 500,000 |
|
Parks and Recreation Capital Fund - end of 2016 |
$ 300,000 |
|
General Long Term Planning Fund |
$ 500,000 |
|
Stormwater contribution |
$ 250,000 |
|
Total Funding Sources |
$5,000,000 |
Of the original budget, $471,000 was set aside for design and contract administration, which leaves approximately $4.5 million for construction. The total bid price including costs that fall outside of the construction contract is $6,391,052, which will require an additional $1,891,052 in project funding to complete the project as designed and within the current schedule. See Attachment A Festival Park Bid Tabulation for detail.
Staff Recommendation
Staff is recommending support of option three. More than half of the overall funding for the project is derived from the DDA. This opportunity will not exist on any other Town park project and will allow the project to be developed to a quality commensurate for the vision established for Downtown. In addition, as discussed in the bid results section, the low bid provided by Mortenson Construction was over $1 million less than the next closest bid. If the project were delayed or rebid, future pricing may not be as favorable due to market conditions. If $1 million worth of improvements is removed from the plans and the project was rebid, the result may be a cost that is close to the current bid price but with fewer amenities. The current bid by Mortenson represents a good value. Finally, this park was developed with unprecedented public input from residents and business owners. It will also act as a catalyst for surrounding downtown development and is the epicenter for many successful downtown events. It is staff’s opinion that moving forward with the project as designed represents the best value and option to the community.
If Town Council selects this option, staff will present a construction contract for consideration on November 1, 2016. If Council chooses to support the project at a lower cost, staff will meet with the design team and Mortenson Construction to determine how cuts can be incorporated and to negotiate a contract price for future consideration on November 1, 2016.
Proposed Motion
“I move to support Option One to delay the Festival Park project for future consideration.”
“I move to support Option Two directing staff to reduce the scope of the project within the current available budget.”
“I move to support Option Three to take $852,720 from Unobligated General Fund balance to complete the project as bid.”
Attachments
Attachment A Festival Park Bid Tabulation