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HomeMy WebLinkAboutMinutes - City Council - 1981-05-26 195 City Council Special Meeting Police Dept. & Council Chambers Redding, California May 26 , 1981 12 : 00 Noon 1111 The meeting was called to order by Mayor Pugh with the follow- ing Council Members present: Demsher, Fulton, Gard, and Kirkpatrick. Also present were City Manager Brickwood, Assistant City Manager Courtney, City Attorney Hays, Public Works Director Arness , Planning and Community Development Director Perry, Electric Director Simpson, Superintendent-Electric Mix, and City Clerk Richter. AWARD OF BID - Bid Schedule No. 1287 , Hydroelectric Generation System, Whiskeytown Dam Electric Director Simpson reviewed his memorandum to Council dated May 22 , 1981. He stated that the Electric Department recommends the award of Bid Schedule No. 1287 , hydroelectric generation system at Whiskeytown Dam, be made to the Brown- Boveri Corporation in the amount of $2 , 939 ,525 , not including sales tax or escalation. Escalation for the project is quoted at $22 , 920 per month after October of 1982 . Mr. Simpson advised that the recommendation is based on a technical evaluation made by the City of Redding Electric Department and an independent technical evaluation made by the International Engineering Company of San Francisco. Both evaluations conclude that Brown-Boveri Corporation has provided the only technically complete bid. He noted that the double turbine proposed by Brown-Boveri is much more flexible than the I/ turbine proposed by the Jaxon Enterprises and General Electric Company. Mr. Simpson explained that the water flow from Whiskeytown varies from 50 to 200 cubic feet per second, and • the double turbine is sized to work with this variation and take full advantage of the water flow. He advised that the bid is in two parts : 1) $47 ,600 to prepare the necessary documents to apply for the necessary licenses from the Federal Energy Regulatory Commission; and 2) Final design, construction, installation, start-up, and testing for the project. The contractor will proceed with the second phase of the project only after the second notice is authorized by the City. Mr. Simpson stated that the award amount as stated above includes an estimate for site construction of $600 , 000 based on First Quarter, 1981 prices. The estimate is a valid estimate in the opinion of the Electric Department. The sales tax applicable to the bid will not exceed $105 , 220 . It is the recommendation of the Electric Department that Council award this project to the Brown-Boveri Corporation and authorize staff to notify them to proceed. Howard Kirkpatrick asked for clarification of the escalation clause in the Brown-Boveri bid and of the fact that Brown- Boveri apparently does have the appropriate State license to construct the project. Mr. Simpson explained that staff has asked that escalation costs be shown. Because of the length of time to complete the project, it would not be feasible to ask for a firm price. He added that until October of 1982 , there is no escalation. 5/26/81 196 After that time, the Brown-Boveri bid will escalate $22 , 920 per month. Mr. Simpson noted that that escalation does not include the $600 , 000 of civil construction work that would escalate beginning at the time we let the bid. He noted that all bidders provide for escalation after October, 1982 . Mr. Simpson asked that the City Attorney address Mr. Kirkpatrick ' s question regarding the requirement for certain State licenses. City Attorney Hays stated that the specifications asked that the contractor on the project be properly licensed. However, the contractor' s licensing laws in the State of California state that said requirements do not apply to any construction carried on within any site , the title of which rests with the Federal Government. Mr. Hays advised that the subject property is totally within property that is Federally owned. Mr. Simpson advised that in the Brown-Boveri bid, the $600 , 000 amount was listed as an estimate and staff has determined that it is reasonable to firm that bid at $600 , 000 . Mrs. Gard questioned the notation in the report from Interna- tional Engineering that there were minor errors in the Brown- Boveri bid which needed to be clarified, and asked if this had been done. Mr. Simpson stated that bidders are required to provide a workable project. He expects no problems in clarification. In response to an inquiry from Dr. Fulton, Mr. Simpson advised that a firm price was not requested in the initial call for bids. Dr. Fulton also asked if this is a recommendation for open-ended bids. Mr. Simpson stated that staff can reasonably project what the escalation will be, based on when construction should begin and labor statistics, so that an unreasonable escalation figure would be apparent. In response to an inquiry from Mrs. Gard regarding the E. I .R. procedure for the project, Mr. Simpson advised that the environ- mental concerns on the project are minor and may be satisfied with a negative declaration or environmental assessment. This will be determined in the first phase of the project with the preliminary engineering and preparation of FERC licensing documents. Mr. Simpson explained that the Federal Energy Regulatory Commission makes the environmental determination as it relates to the City of Redding receiving the license. Councilman Fulton inquired about the local firms who bid on the project and Mr. Simpson advised that these bids were not technically complete , escalation was higher per month, and the over-all bids were higher. Mayor Pugh thanked the Electric Department for its review of the bids. He stated that Brown-Boveri has an excellent record and is a highly reputable firm. He also thanked the staff of International Engineering for their helpful report. Ron Munk, Jaxon Enterprises, disputed the recommendation of the Electric Department and International Engineering Company. He stated that this was an "end-result bid" and the successful contractor is required to guarantee performance of his design. 5/26/81 ; 197 It is a turn-key project. He stated that everything incor- porated in the design must be submitted to the City and Water Resources for approval. Mr. Munk felt that because of this provision, the technical aspects of the bids are almost irrele- vant. Mr. Munk further noted that the bid specifications clearly state that the appropriate contractors licenses are required. In regard to price, Mr. Munk stated that the specifications ask for a lump sum amount for construction work and they were the only bidders to comply with this requirement. He stated that, had they known they should bid according to 1981 prices, their bid could have been lower also. In response to an inquiry from Councilman Kirkpatrick, Mr. Munk advised that the bid specifications required a lump sum figure firm until October of 1982 ; that the provision for escalation was there in the event that approval of all agencies was not obtained by that date. He stated that inflation of labor costs, equipment costs, and interest rates are risks assumed by his firm. Mr. Simpson advised that Brown-Boveri did not submit a total firm bid on the civil construction portion of the project, but submitted an estimate which, based on current figures , could be firmed at $600 , 000 until October of 1982 , and even with the escalation estimates, would be lower than any other bids . Mr. Kirkpatrick asked if the amount could exceed $600 , 000 and the City Attorney advised that it could; however, given the standard for escalation, the amount can be firmed and will not exceed the bid from Jaxon Enterprises. He noted that there is about a $1 million difference in the bids. Mr. Hays advised, in staff' s judgment, there would still be a very large gap between the bids of Jaxon Enterprises and Brown-Boveri . Mr. Kirkpatrick asked if any bids should have been accepted without the appropriate licenses. Mr. Hays stated that the • specifications read two ways and that an addendum was added so that CH2M Hill could submit a bid. He also noted that standard language dealing with street jobs was inadvertently left in the bid specifications. Mr. Hays assured that the contractor for the job will have the proper licenses. Mrs. Gard asked the City Attorney if he is satisfied that all legal requirements have been met for the award of bid on the project. Mr. Hays advised that Council is within its authority to award the bid and that Brown-Boveri meets all the necessary require- ments and could be awarded the bid for the project. Mrs. Gard asked if the escalation clause following October 1982 , would remain in accordance with the Labor statistics , and Mr. Simpson advised that they would revert to the standard escalation provision and would amount to $27 ,000 per month for the Brown-Boveri bid, while Jaxon Enterprises escalates $37 , 000 per month. Mr. Munk stated that the bid specifications should be issued so that everyone is bidding on exactly the same basis. Jack Kenealy, attorney representing Jaxon Enterprises, stated he feels Mr. Simpson is reading something into the bids . 5/26/81 198 Mr. Kenealy stated that the escalation clause does not come into effect unless construction is delayed beyond October of 1982 . He noted that Brown-Boveri ' s escalation does not end in 1982 but continues until the project is completed. He objected to the fact that Brown-Boveri did not give a lump sum amount. Mr. Kenealy stated that with the type of escalation clause in the Brown-Boveri bid, the City assumes the risks rather than the contractor. Mr. Kenealy also felt it is fundamentally unfair to ask for a lump sum bid and subsequently award the bid to someone who did not comply with the terms of the bid specifications. Mr. Kenealy stated that since plans are reviewed by a number of Government agencies and changes are required throughout the project, he did not agree that Jaxon Enterprise' s bid could be considered technically incomplete. Mayor Pugh asked if, assuming the International Engineering report is correct that a double Francis turbine would be necessary, would Jaxon Enterprises be willing provide it without asking for additional money. Mr. Kenealy stated it is not certain that the single turbine cannot meet the production schedule called for in the bid. Mr. Munk responded that his staff has not had adequate time to respond to each technical point discussed in the report. He did state that the specifications require that a certain number of killowatt hours of power be produced and if that can be produced with a single turbine and this can be proven, the City • cannot require a double turbine. In response to an inquiry from Mrs. Gard, Mr. Hays advised that the time line for awarding the bid is Monday, June 1. Mayor Pugh noted that Council is going to award a bid to the company who is willing to provide the best turbine, with the longest life and quality of the project as well as for the lowest bid. The evaluation of all bids includes the long range • quality of the project. Mr. Munk stated that the firm they have selected to provide the turbine has been in business for over 80 years and is world renowned. They are willing to guarantee that it will produce the required killowatts of power. He further noted that Collins Electric, their electric subcontractor, has done most of the hydroelectric power projects in the state. City Attorney Hays advised that there is disagreement regarding the Jaxon bid. He does not see the Jaxon bid as a firm bid. Caveats, are made on certain items . They make the statement • that testing of water flows will be done with equipment already installed at the dam. The equipment they refer to is not in existence and would therefore be an additional expense. Mr. Munk stated that this equipment is shown on drawings obtained from the U. S. Department of Reclamation. Mr. Hays advised that our people say that they were never built. Councilman Kirkpatrick commented that bidding requirements should be standardized and in the future, bid specifications 5/26/81 199 for projects such as this should be reviewed by staff before being sent out. In response to an inquiry from Mrs. Gard, City Attorney Hays advised that the bidding procedure was changed at the request of CH2M Hill and the time for submitting bids was extended. Councilman Demsher stated he is not certain he is ready to make any decision at this time but proposed that the meeting be continued until Wednesday or Thursday to give Council Members time to meet with staff to discuss some of their areas of concern. Mrs. Gard stated she would like to have some background infor- mation on International Engineering. MOTION: Made by Councilman Demsher, seconded by Councilman Kirkpatrick that consideration of the award of bid for Bid Schedule No. 1287 , Hydroelectric Generating Plant at Whiskey- town Dam, be continued to 6 : 00 P.M. , Thursday, May 28 , 1981 , in the City Council Chambers. The Vote: Unanimous Ayes AWARD OF CONTRACT - Preliminary Engineering, Lake Redding Power Project Electric Director Simpson reviewed his memorandum to Council dated May 22 , 1981. He stated that the City has a Preliminary Permit for the Lake Redding Power Project and is pursuing the necessary steps to file an application for licensing with the Federal Energy Regulatory Commission. The Bechtel Corporation has submitted to the City of Redding a proposed contract for providing this design. He noted this did not include environ- mental work and some geotechnical work. 12 Mr. Simpson advised that the maximum on this contract is lute $100 , 000 , and funds were budgeted for this project in the 1980-81 budget. It is the recommendation of the Electric Director that this contract be approved and that the Mayor be authorized to sign. MOTION: Made by Councilwoman Gard, seconded by Councilman Demsher approving the recommendation of the Electric Director as hereinabove stated. The Vote : Unanimous Ayes ADJOURNMENT There being no further business, at the hour of 1: 00 P.M. , Mayor Pugh declared the meeting adjourned to 6 : 00 P.M. , May 28 , 1981. APPROVED: ayo ATTEST: City Clerk 5/26/81