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HomeMy WebLinkAboutAgenda Item - 2020-01-07 - Number 14.1 - City Hall Project Update and Phase 1 GMP Increase for CM/GC 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us Subject: City Hall Project – Approve Increase in the Guaranteed Maximum Price using Project Contingency Meeting Date: January 7, 2020 Staff Member: Sidaro Sin, Redevelopment Manager Department: Redevelopment Agency Action Required Advisory Board/Commission Recommendation ☒ Motion ☐ Approval ☐ Public Hearing ☐ Denial ☐ Ordinance ☐ None Forwarded ☐ Resolution ☒ Not Applicable ☐ Information Only Comments: ☐ Council Direction ☐ Consent Agenda Staff Recommendation: Approve an increase in the Guaranteed Maximum Price using project contingency. Recommended Language for Motion: Authorize the LORA Executive Director to amend the existing contract with Balfour Beatty Construction, LLC dba Howard S. Wright by $1,147,015 to establish the new Guaranteed Maximum Price of $31,630,445 for the City Hall Project. Project / Issue Relates To: ☒Council Goals/Priorities ☒Adopted Master Plan(s) ☐Not Applicable EXECUTIVE SUMMARY The project is on schedule and within the budget approved by the Lake Oswego Redevelopment Agency Board (Board). In July, the Board approved an overall project budget of approximately $43 million and a Guaranteed Maximum Price (GMP) of $30.5 million for Phase 1 of the project (the new city hall building). The overall project budget included $4.5 million in contingency with the understanding that the Phase 1 GMP was based on 90% design plans. The Board is being asked to increase the GMP by $1.1 million using project contingency, which would bring the overall GMP to $31.6 million, but would not change the overall project budget. 14.1 Page 2 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us DISCUSSION In May, the Board authorized $8.1 million in early work which included site work, demolition and material procurement. With that approval, the project officially broke ground in June. In July the Board approved a $43 million overall project budget which among other things included a $30.5 million GMP for Phase 1 (new city hall), $2.9 million for Phase 2 (demolish existing city hall, new surface parking and civic plaza) and $4.5 million in contingency for hard and soft costs. Additionally, final plans were submitted and a building permit issued in August. Since then, major project milestones include the completion of the mass excavation and mat slab foundation, which both carried high construction cost risks because of unknown underground conditions. Over the last six months the project has been addressing design and construction impacts that have impacted the budget such as:  Design and construction costs associated with going from a 90% design to final design;  Additional exterior building and floor plan changes;  Value engineering items that were not able to be removed; and  Unforeseen site construction impacts. In all, these impacts add up to approximately $1.1 million ($150k contractor and $950k city contingency) which can be and was anticipated to be absorbed in the overall $4.5 million project contingency budget. It is also important to note that there was about $125,000 in cost reductions through the value engineering process which we will continue to pursue throughout the remainder of the project. A lot of the design related changes, such as fine-tuning floor plans and unforeseen site construction costs associated with excavation and foundations are front loaded and we would expect less of these types of cost impacts as the project progresses. Also reducing project risk as we move forward is the anticipated completion of the building information modeling at the end of January. This 3-D modelling project management tool allows the design and construction team to review the design for any conflicts in the floor plan, utilities and structural elements, catching any conflicts early on as opposed to addressing these conflicts in the field where they would greatly affect cost and schedule. Although we anticipate these construction cost risks to trend downward the further we get into the project, we still anticipate coming back to the Board for additional approvals that would impact the GMP including approval for Phase 2, (approximately $2.9 million) and additional changes in design or unforeseen construction impacts. Page 3 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.ci.oswego.or.us Upcoming schedule:  January 2020- Finish pouring the first-floor concrete deck which will enclose the basement level secured police parking and begin steel frame installation.  March - Topping out celebration, when the last steel beam is raised in place at the highest point of the building.  Spring - Phase 2 GMP Approval FISCAL IMPACT $43 million was approved in the FY 19-21 City and LORA budgets for this project. The amendment to the GMP does not increase the overall project budget. The $1.1 million can be absorbed in the $4.5 million contingency, which would leave a contingency balance of $3.4 million. RECOMMENDATION Approve the increase in the Guaranteed Maximum Price by using project contingency funds.