To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
Daniel Sailer, Public Works Director
From: Andrew Focht, Project Manager
Title
Resolution Approving the Second Amendment to the Services Agreement Amendment between the Town of Castle Rock and Stanley Consultants, Inc. for the Fifth Street Improvements Project
Body
________________________________________________________________________________
Executive Summary
Staff is seeking Town Council approval of a Service Agreement Amendment between the Town of Castle Rock and Stanley Consultants, Inc. for the Fifth Street Improvements Project design. The project has encountered a number of unanticipated challenges that can largely be attributed to; 1) budget/funding limitations and, 2) changing site conditions. Completing design, permitting and development of construction documents accounting for these challenges require additional design services amounting to $415K.
Fifth Street is a major arterial connecting local and regional travel between the easterly portions of Town and I-25. Design of the planned improvements began in 2021 and include; additional vehicle travel lanes, intersection improvements (roundabout at Woodlands Blvd., traffic signal at Valley Dr.), bike lanes, storm drainage improvements, water quality improvements, utility improvements, and sidewalks as illustrated in Attachment A.
The project team has substantially completed the overall design for the project, and is currently within the property acquisition phase as portions of the planned improvements cannot be constructed within current Town right-of-way. The Town is currently slated to receive $3.5M in federal grant funding for construction from the Denver Regional Council of Governments (DRCOG), but with diminishing revenue from development impact fees the full $27M estimated for construction of Fifth Street cannot be funded in any single budget year prior to 2028. Delaying to 2028 however would mean losing $3.5M in federal funding as award of a construction contract by 2025 must occur per our agreement. Based on this the construction needs to be divided into phases. The additional services will enable staff to implement construction phasing as illustrated in Attachment B, allowing a portion of improvements to be constructed in 2025. This scope will meet the grant obligations. The additional services also allow redesign for portions of the project where there have been substantial changes recently constructed by a landowner, that are not accounted for in the current design.
Notification and Outreach Efforts
A community centric process was employed during the project design phase in order to ensure the project improvements represent community vision and interests. Project open houses were held and online feedback was solicited to gain feedback on multiple design alternatives. At the end of this process, the preferred design was presented to Town Council in April 2022, where staff was directed to proceed (with design based on the proposed concept).
History of Past Town Council, Boards & Commissions, or Other Discussions
This project has been presented and adopted by Town Council in various forms within the last five years. In June 2021 Town Council approved a service agreement with Stanley Consultants to complete design of the project (the original agreement). Later, in April 2022 Town Council directed staff to proceed with design activities based on the recommended concept design. Finally, in September 2023 Town Council gave general authorization to begin the property acquisition phase (eminent domain ordinance).
Discussion
The project has encountered a number of unanticipated challenges that require additional design services to address. The challenges encountered can be classified into two categories: 1) budget/funding limitations and, 2) changing site conditions.
Budget/funding limitations
The current 5-year Capital Improvement Plan (CIP) does not allow for the full $27M construction of the Fifth Street Improvements project in any single budget year prior to 2028 given revenue forecast constraints. The Town largely funds capital improvement projects utilizing revenues generated by new development (impact fees). This source of revenue for the Town is highly dependent on new single-family housing that has experienced a decline starting in 2023. In addition, cost escalations for capital expenditures starting in 2021 have further constrained available funding for the project even considering $3.5M in grant funding assistance from DRCOG for construction.
It is currently forecasted that with the Town will have $12M in budget available for construction of the Fifth Street Improvements project starting 2025. It is proposed that the project design be updated in order to construct the improvements in two independently performed construction phases. Phase 1 would be constructed starting in 2025, and include the currently proposed improvements from the 4-corners project limits to the easterly end of the Valley Drive intersection, with a sidewalk and partial road widening to accommodate 2 east bound through lanes continuing to the Woodlands Blvd. intersection. Phase 1 includes:
* Widening to four vehicle through lanes (two in each direction) Between Valley Drive and Ridge Road,
* Sidewalk to complete a connection between Gilbert Street and Ridge Road
* Traffic Signal at the Valley Drive intersection
A depiction of the two construction phases is provided in Attachment B. Phase 2 would be constructed in 2028 for an estimated cost of $15M and include the remainder of the currently proposed scope not constructed within the phase 1 limits, including:
* A roundabout at the Woodlands Boulevard intersection,
* Widening to accommodate additional lanes and on-street bike lanes between Woodlands Blvd. and Valley Drive, and
* Adding a second sidewalk connection between Gilbert Street and Valley Drive.
* Storm drainage improvements between Gilbert Street and Woodlands Blvd, and
* Median installation between Rock Street and Valley Drive.
Changing site conditions
The Fifth Street Improvements project spans a uniquely challenging area within Town limits. There are more than 30 adjacent private property parcels that abut to portions of the project. A number of these properties have undergone changes since 2021 (when design commenced). Two properties (accounting for a significant length of the Fifth Street project) have undergone substantial change. These areas of the project must be surveyed, and redesigned in consideration of recent construction. In addition, there are four major utility companies that have major facilities within the Town right-of-way within the project area including; CORE Electric, Black Hills Energy, Century Link and Comcast. A number of utility projects have been completed by utility companies within the project limits since design began. The newly relocated facilities must be surveyed and incorporated into design in order to meet state laws regarding utility protections. The proposed service agreement amendment enables the staff to address this.
The additional design services in this proposed agreement amendment will be complete over the course of one year and includes the performance of additional survey, design, design modifications, rephasing, resubmittal of 90% design, and submittal of final construction documents for phase 1. Phase 1 construction documents will be ready for advertising for construction bids by the end of this year. Phase 2 construction documents and deliverables will be developed to a "shelf ready" level, but will require an additional design activity in 2027 in order to fully update construction documents in consideration of changing conditions that may crop up over the course of construction of Phase 1. Holding off on "finalizing" the phase 2 design and construction documents will allow staff to develop higher quality and more accurate phase 2 construction package, leading to reduced risk of cost increases during construction of phase 2.
Schedule
Estimated construction timeframes are:
Phase 1 construction 2025
Phase 2 construction 2028-2029
These are contingent on revenue constraints.
Budget Impact
Construction
Phase 1 and 2 construction costs are estimated to be $12M and $15M respectively. Implementing a phased construction approach is estimated to increase overall construction cost by $1-2M (4-8%) due to inflation and efficiencies that will be lost (multiple mobilizations, and set-up costs).
The overall increase in construction cost is however offset by the anticipated $3.5M in federal funding for construction awarded by DRCOG, which may be revoked should the construction not commence in a timely manner.
Design
Approval of the proposed amendment will increase the design contract (and purchase order) by $415K for a total of $1.915M. There are sufficient funds in the transportation capital account to fund this increase. A forthcoming budget amendment will formally increase the project's budget as shown below. The overall project budget and costs are summarized in Table 1 and 2 below.
TABLE 1: Project Preconstruction Budget
Design
$ 1,915,000
ROW
$ 1,200,000
Total
$ 3,115,000
The original design encumbrance was $1.5M, which included $112K Town Managed contingency. The contingency has been expended by Town staff to 1) ensure the appropriate level of effort was employed when evaluating/proposing alternative designs and, 2) meet stringent Castle Rock Water requirements for water quality improvements.
Staff Recommendation
Staff recommends the Town Council approve the resolution as introduced by title. This resolution was presented to the Public Works Commission on August 5, 2024, whom unanimously resolved "Public Works Commission Recommends Town Council approve the Resolution as introduced by Title with the following change of reevaluating funding opportunities to complete the project before the timeline".
What the Commission desires with this recommendation is to have the project constructed within one phase. Public Works staff conveyed to the Commission that the reasoning for the two construction phases is to retain the existing $3.5 Million federal grant. In order to complete this project in one construction phase, the project would need to be pushed out toward the end of the existing Five Year Construction Improvement Program due to revenue projections. The Town would lose this funding if this were to occur. In order to advance the second construction phase to next year along with the first phase, $15.0 Million would be needed, which is not available.
Proposed Motion
"I move that Town Council approve the Resolution as Introduced by title."
Alternative Motions:
"I move to approve the resolution as introduced by title with the following changes ______"
"I move to continue this item to a future Town Council meeting date"
Attachments
Resolution
Contract
Attachment A: Fifth Street Improvements Project design
Attachment B: Construction Phasing
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