AGENDA #4d
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Bids for Renovation and Financing of the Hargraves Recreation Center and A.D. Clark Pool Project
DATE: March 25, 2002
The attached Resolution A would accept the bid of the lowest responsive bidder, O.C. Mitchell Jr., Inc., for the renovation of the Hargraves Recreation Center and the A.D. Clark Pool, contingent upon the Local Government Commission’s approval of the proposed installment financing of the project. Resolution A would also authorize the Manager to approve change orders for this project as necessary up to a cumulative total of $110,000, but not to exceed the combined total project cost of $1,200,000, without additional Council action.
Resolution B would accept the lowest cost installment financing proposal submitted by Bank of America to finance this project over a ten year period, also contingent upon approval of the financing proposal by the Local Government Commission. The resolution would authorize the Manager, Finance Director, and Town Attorney to complete the steps necessary with Bank of America and the Local Government Commission to execute an installment financing agreement.
The attached budget ordinance would amend the current year’s Capital Improvements Fund budget to establish a project budget for this project in the amount of $1,200,000.
The 1999 Facilities Condition Assessment identified $493,000 in maintenance deficiencies at the Hargraves Recreation Center and $447,000 in maintenance deficiencies at the A.D. Clark Swimming Pool. The FY 2000 – 2015 Capital Improvements Program budget included two ten-year installment financed capital maintenance projects to address these deficiencies.
On June 19, 2001, the Town entered into a contact with GGA Architects for the architectural and engineering design work for a combined Hargraves/A.D. Clark renovation project. During the course of the design work the scope of the project increased in response to the need for various elements of work that were not identified in the facilities condition assessment including, some upgrades to attain a higher level of compliance with the Americans with Disabilities Act, asbestos floor tile adhesive abatement, improvements to kitchen facilities, improvements in building acoustics, expansion of storage areas, modernization of the bathhouse and repairs to the concrete plaza area. The addition of these elements of work plus architectural and engineering fees increased the estimate cost of the combined project from $940,000 to $1,200,000. A table summarizing the estimated project costs is attached.
The renovation project is anticipated to make substantial improvements to the condition of the Hargraves Recreation Center and the AD Clark Pool including meeting certain national and state standards.
Hargraves Recreation Center (Upstairs Area and Exterior): Work would include basic infrastructure and required Americans with Disabilities Act (ADA) improvements. We are planning to include the following in the bid documents:
· Replace electrical system
· Repair roof and siding
· Repair masonry
· New windows
· New doors
· Kitchen renovations
· Replace HVAC system
· Upgrade attic flooring
· Improved storage on main floor
· Accessible entry with ramp (ADA)
· Accessible restrooms (ADA)
· Refinish floor, walls, and ceiling
Hargraves Recreation Center (Day Care Area): Improvements to the downstairs (Holmes Child Care) portion of the Hargraves Center are anticipated to include the following:
· Replace electrical system
· New windows
· New doors
· Kitchen renovations
· Replace HVAC system
· Accessible restroom (ADA)
· Refinish floor, walls, and ceiling
A.D. Clark Pool: Pool and bathhouse improvements are primarily focused on meeting Americans with Disabilities Act (ADA) and State pool operator requirements.
· Add zero entry ramp into pool
· Replace retaining wall
· Enlarge deck around baby pool
· Expand pump shed for storage
· Replace pool liner
· Add new drain for baby pool
· Add new chlorination system
· Add water level controller
· Renovate plaza area between pool and Center
· Add new roof on bathhouse
· Raise the bathhouse ceiling
· Replace all bathhouse fixtures
· Replace all bathhouse doors
· Replace all bathhouse floor with new quarry tile
· Add passive lighting
· Add family changing area
Repairs to the day care area are intended to upgrade the facility according to State day care and Federal ADA requirements. The most significant regulatory improvements are anticipated for the kitchen and restroom facilities. These changes would benefit any provider of childcare services in this location.
Alternates:
Our solicitation for bids was structured with all critical elements of work in the base bid and several add-alternates to include necessary, but less critical elements of work. This format is commonly used when there is uncertainty about whether a project budget is sufficient to cover all of the contemplated work. The alternates may be accepted or declined depending upon the outcome of the bids. In this case we had six add-alternates. Alternate 1 was deleted prior to the bid. Alternates 2, 3, 4, and 6 were accepted and alternate 5 was rejected. A summary of the alternates is as follows:
1. Deleted prior to the bid.
2. Repairs to Plaza: Removes deteriorated, uneven, patchwork concrete slab and replaces with a new concrete surface. Recommended for acceptance.
3. Interior Walls Main Floor: Provides enhanced storage space and isolates the TV/Game Room from the main general-purpose rooms. Recommended for acceptance.
4. ADA Improvements to Asphalt Drive: Reshapes and regrades the transition between the main parking lost and the sidewalk to improve handicapped access. Recommended for acceptance.
5. Pool Fencing: Replaces the industrial chain-link fence with a more decorative security fence. Recommended for rejection.
6. Add 2nd Drain to Baby Pool: Enhances safety at the wading pool. Recommended for acceptance.
Funding: A resolution declaring the Town’s intent to reimburse expenses for the Hargraves Recreation Center and A. D. Clark Pool and Bathhouse project through an installment financing contract was adopted by the Council on April 23, 2001. That resolution set the maximum principle amount to be financed for the project, and was amended by the Council on February 11, 2002, to an amount not to exceed $1.2 million.
A public hearing was held on February 25, 2002 to receive comments from citizens on the proposed use of an installment contract to finance Hargraves Center and A. D. Clark Pool and Bathhouse renovations. Upon conclusion of the public hearing the Council adopted a resolution approving the use of installment financing for this project and authorizing the Manager, Finance Director, and Attorney to file an application with the North Carolina Local Government Commission for approval of the Project and the proposed financing contract.
DISCUSSION AND EVALUATION OF CONSTRUCTION BIDS
Based on the plans and specifications for this project prepared by GGA Architects, Chapel Hill, North Carolina, bids were solicited from general contractors on a single-prime basis. The notice to bidders was published in the February 3, 2002 edition of The Chapel Hill Newspaper and the January 31, 2002 edition of The Challenger Newspaper. The notice was also mailed to 41 minority business organizations, 72 minority general contractors and 63 other general contractors.
Eight bids were received and opened on March 7, 2002 at 3:00 p.m. The bid results are as follows:
|
Contractor |
Base Bid |
Alt. 2 Concrete repairs to the plaza |
Alt. 3 Partition walls on main floor |
Alt. 4 ADA improve-ments to asphalt drive |
Alt. 5 Pool Fencing |
Alt. 6 Add 2nd floor drain to baby pool |
Base Bid plus Alternates 2,3,4, and 6 |
|
O.C. Mitchell |
$888,000 |
$7,100 |
$4,381 |
$7,500 |
$19,426 |
$1,000 |
$907,981 |
|
Accord |
$880,353 |
$66,320 |
$11,045 |
$9,899 |
$18,674 |
$2,585 |
$970,202 |
|
Keck |
$923,798 |
$39,900 |
$21,900 |
$4,300 |
$19,000 |
$850 |
$990,748 |
|
Voight |
$963,782 |
$31,619 |
$22,525 |
$19,895 |
$19,427 |
$834 |
$1,038,655 |
|
Force |
$973,957 |
$30,841 |
$19,253 |
$11,175 |
$21,735 |
$4,415 |
$1,039,641 |
|
Patriot |
$1,009,500 |
$20,500 |
$13,000 |
$6,000 |
$18,500 |
$800 |
$1,049,800 |
|
Poythress |
$1,062,000 |
$28,000 |
$13,500 |
$8,500 |
$20,000 |
$850 |
$1,112,850 |
|
Progressive |
$1,063,000 |
$37,800 |
$19,000 |
$8,100 |
$20,000 |
$1,000 |
$1,128,900 |
We have reviewed the bids with the project architect and concluded that the lowest responsive bidder is O.C. Mitchell Jr., Inc. for the base bid, alternate 2, alternate 3, alternate 4 and alternate 6 for the amount of $907,981. We recommend that the Town reject all bids for the fencing covered by alternate # 5. If there are funds remaining at the end of this project we would consider installation of the fencing either by change order or under a separate contract.
We contacted references who spoke to the low bidder’s financial status, stability, reputation; and to the quality and timeliness of its work, responsiveness to the clients and sensitivity to neighbors of the construction. Based on this information, we believe that O.C. Mitchell is responsible as well as the lowest responsive bidder.
The Council’s policy requires that Council approval is necessary for change orders for construction contracts which, cumulatively total more than 10% of the contract or $50,000, whichever is less. Because this project involves the renovation of aging facilities, we anticipate that unexpected conditions will be discovered and that change orders will be necessary, quite possibly totaling more than $50,000. In order to minimize project delays associated with change order administration, our recommended resolution includes authorization for the Manager to approve change orders up to a total of $110,000, but not to exceed the combined total project cost of $1,200,000, without additional Council action.
FINANCING FOR THE PROJECT
A Request for Financing Proposals was distributed to financial institutions on March 13, to be returned to the Town by March 18. The proposals for financing requested a fixed interest rate and even principal payments over a ten-year period. After initial consideration and approval by the Council, the financing proposals must also be approved by the Local Government Commission.
On March 18, five responsive proposals were received from financial institutions as follows:
|
Financial Institution |
Interest Rate |
Principal & Interest |
Fees (not to exceed) |
Total Cost |
|
4.53% |
1,485,390 |
$ 4,500 |
1,486,890 |
|
|
First Union |
4.69% |
1,495,470 |
$ 5,000 |
1,500,470 |
|
Branch Banking & Trust |
4.71% |
1,496,730 |
$ 4,600 |
1,501,330 |
|
Ashford Capital Corporation, Inc. |
5.08% |
1,520,040 |
5,000 |
1,525,040 |
|
5.46% |
1,543,980 |
- |
1,543,980 |
|
|
Non-responsive |
|
|
|
Based on the above proposals, Bank of America offers the lowest interest rate and total cost with a bid of 4.53% for the ten-year term.
The attached resolution would authorize the Manager and Finance Director to enter into an installment-purchase contract with Bank of America for this project, subject to final approving of the financing by the N. C. Local Government Commission. The resolution confirms that the Town does not expect to issue more than $10 million in tax-exempt debt during the calendar year. This expectation allows financial institutions to bid lower rates for governmental installment-purchase contracts.
Upon approval by the Council, the resolution would be forwarded to the Local Government Commission for consideration on April 2, 2002.
In accord with generally accepted accounting principles, a budget ordinance would be necessary for this project, showing the full capital expenditure of $1.2 million and offset by revenues of $1.2 million from the proceeds of the financing loan. The attached budget ordinance would amend the budget to establish such a project budget. Attachment 1 presents a line item budget including 1% of the cost of design and construction allocated for public art that would be installed as part of this improvement project.
That the Council:
· Adopt attached Resolution A accepting the lowest responsive bid including the base bid, alternate 2, alternate 3, alternate 4 and alternate 6 for the amount of $907,981 from O.C. Mitchell, Jr., Inc., subject to approval of a financing contract by the Local Government Commission, and authorizing the Manager to approve change orders for this project as necessary up to a cumulative total of $110,000, but not to exceed the combined total project cost or $1,200,000, without additional Council action.
· Adopt attached Resolution B authorizing the Manager and Finance Director to execute the proposed installment-purchase agreement with Bank of America for this project, subject to approval of the financing by the Local Government Commission.
· Adopt the attached budget ordinance amending the current Capital Improvements Fund budget to establish a project budget for the Hargraves Center and A. D. Clarke Pool in the amount of $1,200,000 as discussed above.
ATTACHMENT
1. Line item budget (p. 10).
RESOLUTION A
A RESOLUTION ACCEPTING BIDS AND AWARDING THE CONTRACT FOR THE HARGRAVES RECREATIONS CENTER AND A.D. CLARK POOL RENOVATION PROJECT (2002-3-25/R-4a)
WHEREAS, the Town of Chapel Hill has solicited formal bids by advertisement in the February 3, 2002 edition of The Chapel Hill Newspaper in accordance with G.S. 143-128 for the renovation of the Hargraves Recreations Center and A.D. Clark Pool; and
WHEREAS, the following bids were received and opened on March 7, 2002:
|
Contractor |
Base Bid |
Alt. 2 Concrete repairs to the plaza |
Alt. 3 Partition walls on main floor |
Alt. 4 ADA improve-ments to asphalt drive |
Alt. 5 Pool Fencing |
Alt. 6 Add 2nd floor drain to baby pool |
Base Bid plus Alternates 2,3,4, and 6 |
|
O.C. Mitchell |
$888,000 |
$7,100 |
$4,381 |
$7,500 |
$19,426 |
$1,000 |
$907,981 |
|
Accord |
$880,353 |
$66,320 |
$11,045 |
$9,899 |
$18,674 |
$2,585 |
$970,202 |
|
Keck |
$923,798 |
$39,900 |
$21,900 |
$4,300 |
$19,000 |
$850 |
$990,748 |
|
Voight |
$963,782 |
$31,619 |
$22,525 |
$19,895 |
$19,427 |
$834 |
$1,038,655 |
|
Force |
$973,957 |
$30,841 |
$19,253 |
$11,175 |
$21,735 |
$4,415 |
$1,039,641 |
|
Patriot |
$1,009,500 |
$20,500 |
$13,000 |
$6,000 |
$18,500 |
$800 |
$1,049,800 |
|
Poythress |
$1,062,000 |
$28,000 |
$13,500 |
$8,500 |
$20,000 |
$850 |
$1,112,850 |
|
Progressive |
$1,063,000 |
$37,800 |
$19,000 |
$8,100 |
$20,000 |
$1,000 |
$1,128,900 |
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town accepts the bid of and awards the contract, subject to approval of an installment financing contract by the Local Government Commission, to the lowest responsive bidder, O.C. Mitchell Jr., Inc., general contractor for base bid, alternate 2, alternate 3, alternate 4 and alternate 6 for the amount of $907,981.
BE IT FURTHER RESOLVED by the Town Council that, because this project is a renovation of aging facilities and is expected to uncover unexpected conditions, the Town Manager is authorized to approve change orders up to $110,000, but not to exceed the combined total project cost of $1,200,000, without additional approval from the Town Council.
This the 25th day of March, 2002.
RESOLUTION B
A RESOLUTION AUTHORIZING THE TOWN MANAGER TO EXECUTE A FINANCING CONTRACT FOR RENOVATIONS TO THE HARGRAVES CENTER AND THE A.D. CLARK POOL AND BATHHOUSE FOR THE 2001-2002 FISCAL YEAR (2002-03-25/R-4b)
WHEREAS, the Town of Chapel Hill solicited and received competitive proposals from financial institutions for the renovation of the Hargraves Center and the A.D. Clark Pool and Bathhouse; and
WHEREAS, Bank of America offers the lowest total interest and principal cost of $1,485,390 for the 10-year term contract;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to enter into a contract with Bank of America on behalf of the Town for the financing of the renovations of the Hargraves Center and the A. D. Clark Pool and Bathhouse at a fixed interest rate of 4.53%;
BE IT FURTHER RESOLVED, that the aforesaid contracts between the Town of Chapel Hill and Bank of America and the Town of Chapel Hill and O.C. Mitchell Jr., Inc. together with the amounts to be paid thereunder, be and the same are hereby designated as qualified tax-exempt obligations of the Town of Chapel Hill for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
BE IT FURTHER RESOLVED, that the Council does not reasonably expect that the Purchaser (and any subordinate entities) will issue more than $10,000,000 in qualified tax-exempt obligations pursuant to such Sections 265(b)(3)(ii) during the current calendar year.
This the 25th day of March, 2002.
AN ORDINANCE TO AMEND “THE ORDINANCE CONCERNING APPROPRIATIONS AND THE RAISING OF REVENUE FOR THE FISCAL YEAR BEGINNING JULY 1, 2001 (2002-03-25/O-1.1)
BE IT ORDAINED by the Council of the Town of Chapel Hill that the Budget Ordinance entitled “An Ordinance Concerning Appropriations and the Raising of Revenue for the Fiscal Year Beginning July 1, 2001” as duly adopted on June 25, 2001 and the same is hereby amended as follows:
ARTICLE I
Current Revised
APPROPRIATIONS Budget Increase Decrease Budget
CAPITAL
IMPROVEMENTS FUND 1,460,051 1,200,000 2,660,051
ARTICLE II
Current Revised
REVENUE Budget Increase Decrease Budget
CAPITAL
IMPROVEMENTS FUND 1,460,051 1,200,000 2,660,051
This the 25th day of March, 2002.
ATTACHMENT 1
Hargraves Recreation Center and A.D. Clark Pool
Renovation Project Cost Summary
|
Architectural and Engineering Fees |
$136,725 |
|
Asbestos Testing and Remediation |
$34,450 |
|
Construction |
$907,981 |
|
Miscellaneous Charges |
$8,481 |
|
Public Art: 1% of the project costs above. |
$10,876 |
|
Contingency |
$101,487 |
|
Total |
$1,200,000 |