The topics came up during the redevelopment agency's portion of the Tuesday agenda, when the council – sitting jointly as the city's redevelopment agency board – received updates on projects from city Redevelopment Manager Richard Knoll.
Knoll gave a status report on negotiations with Ukiah-based Rau and Associates on the engineering of the city's Downtown Improvement Project Phase II, which is aimed at upgrading sidewalks, streets, lighting and other features of the core downtown area.
He also submitted a staff request to get the council's go ahead to negotiate a contract with Quincy Engineering of Sacramento for the Lakeport Boulevard/South Main Street Intersection Study Project's engineering.
The council and redevelopment agency selected Rau and Associates on Nov. 3 to do the multimillion-dollar downtown improvement project's design.
The company's proposed fee for the work initially was $342,600 plus $7,200 for bid assistance and $157,000 for construction services, Knoll reported.
Knoll said the city asked the firm to sharpen its pencils and revise the bid, which they did, dropping it to $311,630, or about 7.5 percent of the project cost, which is below the 10 percent range that's normal for such projects, he said.
On its own, the company also did a probable cost analysis of the project, Knoll said.
“They've done a lot of work,” he said.
That analysis estimated the the project would cost $4.3 million, or $4.7 million with the cost of engineering – well above the $2.5 million city staff had estimated, Knoll said.
The company also reduced the scope of the project, which won't extend as far as the Soper-Reese Community Theatre, located at the corner of Martin and S. Main Street, Knoll said.
“We feel confident we are close to what it will take to design the project,” said Knoll.
What the project ultimately will cost is “an issue for another day,” said Knoll, who said staff wanted to have the project fully designed at the $311,000 price tag. He noted Rau and Associates also had brought on a design team from Berkeley to assist in the project, and staff has checked the firms' references.
Mayor Jim Irwin said he was under the impression that if the cost didn't meet their budget they would look at other consultants on the city's list.
Knoll said that wasn't the plan; rather, he said the goal was to select Rau and Associates and negotiate a contract. If that wasn't possible, they would consider other bidders.
“We've got an obligation since they have been selected to negotiate in good faith and come up with a contract, and that's what we're doing,” Knoll said.
Knoll said the budget was based on a number – $2.5 million – that has turned out to be inaccurate.
Councilman Ron Bertsch also was concerned about the difference in the staff estimate and that provided by Rau and Associates. He said they weren't even sure about some of the proposed aspects, including bulbouts and street lamps, and they should consider other proposals.
City Engineer Scott Harter said the $2.5 million number was a very rough estimate. It's not even really a budget number, he said, adding that the scope of the project has grown. The agency, he added, can negotiate the scope down.
The first priority, Harter said, is to identify the most qualified engineer, and the company is proposing reasonable costs for engineering considering the scope.
“Even though we can't afford it?” Bertsch asked.
“That is up to the agency to decide,” said Harter.
Knoll interjected, explaining that there hasn't been a determination that the agency can't afford it.
“We're not addressing the construction costs tonight,” but rather the engineering costs associated with designing the entire project, Knoll said.
If, when they bid the project, they determine the agency has insufficient funding, they can modify its scope, he said.
The only reason they were given the cost estimates for the project was so the council could see the comparison. “We don't know what it's going to cost to build it,” Knoll said.
Knoll said the agency nets about $600,000 in tax increment funding a year, plus they have an existing balance of bond proceeds that will put them in the ballpark of the project's cost estimates. However, they can later reduce the scope.
“Are we going to have enough money? Well, we don't know yet,” he said.
However, the staff wanted to get the project designed so they can at least have the plans on the shelf and bid them and make a determination about whether or not they can fund the whole project or will need to modify it.
He said Rau and Associates' proposal is a fair one based on what it currently entails.
The council wasn't required to take action. Before the discussion ended, Knoll told the council that George Rau said if they want him to reduce his fee to $250,000, he can do that he must reduce the scope.
“We don't think that's prudent from a staff perspective,” Knoll said.
Scott De Leon, owner of DeLeon Engineering – which made a proposal on the project and was ranked third – said the team he assembled to do the project was the same one that designed Petaluma's downtown phase two improvement project. His estimates showed he could do the project for the city's budgeted amount.
Eric Heppen of Ruzicka Associates also put in a proposal on the project, noting their budget for design was “significantly less” than Rau and Associates. If he were making such cost changes to a proposal, he would give much greater detail, he said.
Heppen felt Rau's proposal was lacking in several ways, and he believed that the project can be done for $2.5 million.
Jill Ruzicka, daughter of Ruzicka Associates owner Cliff Ruzicka, said she understands small community economies and small businesses, and she asked the council why they would send such a large amount of money out of the county when qualified businesses here can do the work.
She said for every dollar spent locally, it increases by a factor of four to seven, which would increase that $311,000 up to $1.2 million or $2.2 million as it cycles through the local economy. “Maybe we could get some roads paved with that,” she said.”
Ruzicka also took issue with the use of “most qualified” in referring to Rau and Associates, noting that Ruzicka Associates and DeLeon also were qualified, and she went on to list a number of projects her father's firm has successfully completed around Lake County.
“We need to start applying 'shop locally' to our professional services providers,” she said.
Ruzicka added, “Can we really afford not to go locally? Is that really in the best interest of this city?”
Irwin asked Knoll to bring Rau's contract to the council next month.
Staff explains rules for choosing consultants
Moving next to the South Main Street and Lakeport Boulevard intersection project, Knoll said the agency requested proposals from qualified engineers, and there are two designs under way to deal with the busy intersection – a roundabout and a traffic signal.
He said funding for the study is available, but funding for construction isn't available at this point.
The request for proposals was sent to seven engineering firms, including one from Lake County.
“Why don't you put costs into this thing?” asked Councilman Roy Parmentier. “I have to agree with Jill. Why do we want to send money out of the county?”
With respect to professional services contracts, said Knoll, “It's been the way the city has operated for many, many years.” Rather that making cost the top priority, they focus on the most qualified firm to do the work.
Harter said that's consistent with Caltrans rules, which have driven the city's consultant selection process. When dealing with state and federal funding for transportation projects, Harter said they're not allowed to consider cost.
In a professional proposal request, however, cost can be considered, and Harter pointed out that the county recently has modified its policies to allow for cost to be part of the scoring. The emphasis is selecting the most qualified and knowledgeable firm.
“It's not that we can't change our process in going forward where the funding source allows,” he said.
Staff has submitted questions to the city's redevelopment attorney about whether or not they can consider cost when dealing with redevelopment funds, and whether they face the same limitations as they would with state funds, Harter said.
“Obviously, this thing keeps coming up,” said Irwin, who asked to have the cost consideration discussion placed on a January agenda. At that time he also wants to look at when local preference would be allowed, and give the council a chance to act on it.
Harter said City Attorney Steve Brookes is working on a city purchasing policy, and he added that he felt it was important to have a written policy to protect the city.
Knoll suggested the council direct its new city manager to develop a formal policy on how they want proposals and requests for qualifications from firms to be ranked and rated. He said the city has been operating under an unwritten but consistent policy with respect to such proposals, with cost and local preference not being factors.
The council voted 3-2, with Bertsch and Lyons voting no, to approve Quincy Engineering's contract.
In other action Tuesday, the council approved receiving and allocating Supplemental Law Enforcement Services Funds, which usually total about $100,000 for Lakeport Police although Kevin Burke, the city's police chief and interim city manager, said the amount hasn't been determined. Burke also received council approval of a resolution to direct city staff to work with the county on what he called an innovative alternate energy and energy efficiency financing program.
The council also approved updates to the city's contract with Lakeport Disposal, the city's franchise trash hauler; established a committee to work on Measure C; and finished working out details with National Grant Services for grant writing services for the city.
Burke told the council that all 10 top candidates for the city manager's job have agreed to come to the city for a Jan. 11 round of interviews with two community panels that have been selected.
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