HomeMy WebLinkAboutStaff Report 318-07City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER
JULY 23, 2007
DEPARTMENT: PUBLIC WORKS
CMR:318:07
13
APPROVAL OF A MEMORANDUM OF UNDERSTANDING BET’WEEN
THE CITIES OF SUNNYVALE, MOUNTAIN VIEW AND PALO ALTO
FOR THE SMART STATION MATERIALS RECOVERY FACILITY
PROCESSING SYSTEM EQUIPMENT REPLACEMENT PROJECT
RECOMMENDATION
Staff recommends that Council authorize the City Manager to sign the attached memorandum of
agreement between the cities of Palo Alto (Attachment A), Sunnyvale (Attachment B), and
Mountain View (Attachment C) to proceed with the Sunnyvale Materials Recovery and Transfer
(SMART) Station Materials Recovery Facility (MRF) equipment replacement project including
the funding mechanism for the project.
BACKGROUND
On October 7, 1991, Council approved a Memorandum of Agreemem creating a partnership
between the cities of Sunnyvale, Mountain View and Palo Alto to construct and operate the
SMART Station. In October 1993 the SMART Station began operation. After years of heavy
usage, key components of the SMART Station materials recovery facility (MRF) equipment are
showing excessive wear and are in need of replacemem. In 2004/05 the partner cities approved a
project to replace the SMART MRF equipment with a budget of $5,000,000, and a revised
engineer’s estimate of $8,889,075 was prepared in January 2007. An analysis by the City of
Sunnyvale staff of that estimate and the efficiencies gained from proceeding with the project
showed sufficient value to justify the replacement of the MRF equipmem. In January 2006, the
City of Sunnyvale’s City Council awarded a contract to URS engineers to provide design, plans
and specifications for this project.
DISCUSSION
Bid specifications were prepared by the City of Sunnyvale staff based on plans and specifications
prepared by URS. A notice inviting bids was published on January 17, 2007. Two responsive
bids were received on March 14, 2007:
Bidder
Monterey Mechanical, Oakland
D.W. Nicholson
Additive
Base Bid
$12,397,800
$18,673,000
Altemate
$600,000
$549,000
Total Bid
$12,997,800
$19,222,000
CMR:318:07 Page 1 of 4
Both bids were significantly above the engineer’s estimate (see Attachment D for more detail on
bids). The base bid includes all concrete and steel construction, mechanical, electrical, plumbing
and equipment (trommels, screens, conveyors and baler) and equipment installation. The
additive alternate includes the addition of "sorting rooms", enclosing the platforms where
manual sorting will be performed by the workers. These enclosed sorting rooms are equipped
with HVAC units to provide conditioned air and ventilation to the sorting areas.
The cost of the project (including contingencies and design expenditures to date) will be
$14,781,768 to the partner cities of which Palo Alto’s share is $2,017,836. When completed, the
replacement equipment will produce financial benefits that include: 1) reduced SMART Station
operating costs; 2) reduced landfill disposal cost; and 3) increased recycling revenues that will
return an estimated net benefit of $18.5 million over the life of the project.
The SMART Station Capital Equipment fund includes $5,175,000 for the SMART Station MRF
Equipment Replacement project. An additional $9,486,768 is needed to meet the total project
cost. The City of Sunnyvale is asking each City to sign the attached memorandum of agreement
to:
1)
2)
Use the existing reserves in the capital equipment fund in the amount of $5,175,000
(less design costs incurred and encumbered to date) for this project, and
Fund the remaining project costs, estimated to be $9,486,768, through the issuance of
revenue bonds (or other cost-effective financing available) or through a combination
of a cash contribution by Mountain View and a smaller bond issue, debt service, of
which would be paid solely by Sunnyvale and Palo Alto.
As in the past, debt service will be apportioned as described in the MOU, with each city’s share
as follows:
Sunnyvale 55.28%
Mountain View 23.45%
Palo Alto 21.27%
The following is each cities share to fund the remaining project ($9,486,768) cost:
Surmyvale
Mountain View
Palo Alto
$ 5,244,285
$ 2,224,647
$ 2,017,836
ALTERNATIVES TO STAFF RECOMMENDATION
Alternatives to this recommendation are noted in Attachment D, City of Sunnyvale, CMR,
Award of Bid FO612-58 SMART Station Materials Recovery Facility (MRF) Processing System
Equipment Replacement project, dated: 07/10/2007.
RESOURCE IMPACT
With the City of Mountain View funding its share of project costs in cash, the cities of
Sunnyvale and Palo Alto will fund the remaining costs by issuing debt. While it had been Palo
Alto’s intention to use cash when the City’s cost was at the $5M project cost estimate level,
CMR:318:07 Page 2 of 4
Refuse Fund reserves are not large enough to fund the new- bid price and therefore debt financing
is necessary for Palo Alto as well as Sunnyvale. The City of Sunnyvale is taking the lead on
issuing bonds and intends to privately place bonds with a bank in order to minimize bond
issuance costs.
The par amount of the bondsis expected to total $8.20 million. Palo Alto’s share of the principal
is $2.28 million. Based on a 14 year amortization period and an estimated interest rate of 4.75
percent (subject to change based on market conditions at time of issuance), Palo Alto’s share of
debt service is expected to total $223,000 annually. Funds have been appropriated in the 2008-
09 Adopted Budget and funds will have to be appropriated in future budgets to cover this
expense.
POLICY IMPLICATIONS
This is consistent with the City’s Comprehensive Plan that contains the following policy:
Natural Environment-Solid and Hazardous Waste
N-54: Continue to develop long-term solid waste management programs that include safe and
environmentally sound disposal methods such as the SMART Station.
TIMELINE
If all three partner cities agree to these terms, the City of Sunnyvale is estimated to award the
project on July 24, 2007. The project would then begin August 2007 and have 330 days to be
completed (July 2008).
ENVIRONMENTAL REVIEW
This project is exempt under the California Environmental Quality Act.
ATTACHMENTS
Attachment A: Memorandum of agreement for the City of Palo Alto related to the SMART
Station Materials Recovery Facility Processing System Equipment Replacement
project.
Attachment B:Memorandum of agreement for the City of Sunnyvale related to the SMART
Station Materials Recovery Facility Processing System Equipment Replacement
project.
Attachment C: Memorandum of agreement for the City of Mountain View related to the
SMART Station Materials Recovery Facility Processing System Equipment
Replacement project.
Attachment D: City of Sunnyvale, CMR, Award of bid FO612-58 SMART Station Materials
Recovery Facility (MRF) Processing System Equipment Replacement project,
dated: 7/10/2007.
PREPARED BY:
RUSSELL REISERER
Solid Waste Manager
CMR:318:07 Page 3 of 4
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
GLENN S. ROBERTS
Director of Pub!ic~
EMILY HAR_~S 0~
Assistant City Manage~
CMR:318:07 Page 4 of 4
ATTACHMENT A
Materials Recovery Facility (MRF) Equipment Replacement Project
The purpose of this memor-andum_is_to.document concurrence.~by..the_Cities of
Mountain View, Palo Alto and Sunnyvale (the "Partner Cities") to proceed with
the SMART Station Materials Recovery Facility (MRF) Equipment Replacement
Project in fiscal year 2007/2008 and their agreement with the method for
funding this project.
Details of the project are outlined in the attached "Report to SMART Station
Directors; Materials Recovery Facility. (MRF) Equipment Replacement Project"
dated May 22, 2007.
In summary, in 2004/05 the partner cities approved a project to replace the
SMART MRF equipment with a budget amount of $5,000,000. The project was
intended to be funded through the SMART Capital Equipment Replacement
Fund, and in 2005/06 and 2006/07 the capital contributions of the cities were
adjusted upward in the near term to provide the necessary funding. In
January 2007 the project was put out for bid and in March 2007 two bids were
received. The lowest responsive bid was returned in the amount of
$12,997,800. With construction contingency, design and construction
oversight costs the total project is expected to cost $ 14,661,768. Reserves
available in the SMART Capital Equipment Replacement Fund are $5,175,000,
and are insufficient to fund this project.
The net present value (NPV) at the $14.7 million project cost demonstrates that
project returns a positive net present value of $4.8 million through the term of
the MOU. The payback period is 12 years and the estimated cost savings over
15 years are more than $34 million compared to projected costs without the
new MRF equipment.
The cities recognize the financial benefits of going forward with this project and
agree to use debt or an equivalent funding instrument to fund the difference
between capital fund reserves and actual project costs. As in the past, debt
service will be paid by the partner cities and apportioned to each city as
outlined in the MOU. The amount for design, construction and construction
management to be funded through the issuance of revenue bonds is projected
to be $9,486,768. The estimated annual debt service over 15 years is
$1,1oo,ooo.
The cities agree to proceed with the SMART MRF equipment replacement
project, and to fund the project in the following manner:
1)Using existing reserves in the capital equipment fund in the amount of
$5,175,000 (less design costs incurred and encumbered to date),
2)Fund the remaining project costs, estimated to be $9,486,768, through
the issuance of revenue bonds (or other cost-effective financing available)
Materials Recovery- Facility (MRF) Equipment Replacement Project
Page 2 of 2
or through a combination of a cash contribution by Mountain View and a
smaller bond issue, debt service on which would be paid solely by
Sunnyvale and Palo Alto.
As in the past, the cash contribution or repayment of debt service will be
apportioned as described in the MOU, with each city’s share as follows:
Mountain View 23.45%
Palo Alto 21.27%
Sunnyvale 55.28%
If Mountain View chooses not to participate in the long-term financing for the
project, Mountain View will fund its share of the estimated unfunded project
cost through a cash contribution of $2,224,647 to the SMART Station capital
equipment replacement fund. This contribution will be made by Mountain
View on or before the date that Sunnyvale issues bonds, or other financing
vehicle, for the project (expected to occur prior to the end of calendar year
2007) and within 30 days of a request by Sunnyvale.
If Mountain View elects to fund its share of the project costs through an up-
front cash contribution as described above, the cities of Palo Alto and
Sunnyvale agree to participate in the debt service based on the percentages
shown below, which reflect the adjustments in the two cities’ capital shares in
the MOU after excluding Mountain View:
Palo Alto
Sunnyvale
Shares of Debt Service
Without Mountain View
27.79%
72.21%
100.00%
The City of Sunnywale will be responsible for securing the financing required.
The amount financed will include costs associated with the issuance of the
bonds including fees for bond counsel, disclosure counsel, underwriting and
insurance costs. As is currently done, each participating city’s share will be
paid in accordance with the repayment schedule set forth by the bond
underwriter.
City of Palo Alto
By:
Date:
ATTACHMENT B
Materials Recovery Facility (MRF) Equipment Replacement Project
The purpose of this memorandum is to document concurrence by the Cities of
Mountain View, Palo Alto and Sunnyvale (the "Partner Cities") to proceed with
the SMART Station Materials Recovery Facility (MRF) Equipment Replacement
Project in fiscal year 2007/2008 and their agreement with the method for
funding this project.
Details of the project are outlined in the attached "Report to SMART Station
Directors; Materials Recovery Facility (MRF) Equipment Replacement Project~
dated May 22, 2007.
In summary, in 2004/05 the partner cities approved a project to replace the
SMART MRF equipment with a budget amount of $5,000,000. The project was
intended to be funded through the SMART Capital Equipment Replacement
Fund, and in 2005/06 and 2006/07 the capital contributions of the cities were
adjusted upward in the near term to provide the necessary funding. In
January 2007 the project was put out for bid and in March 2007 two bids were
received. The lowest responsive bid was returned in the amount of
$12,997,800. With construction contingency, design and construction
oversight costs the total project is expected to cost $ 14,661,768. Reserves
available in the SMART Capital Equipment Replacement Fund are $5,175,000,
and are insufficient to fund this project.
The net present value (NPV) at the $14.7 million project cost demonstrates that
project returns a positive net present value of $4.8 million through the term of
the MOU. The payback period is 12 years and the estimated cost savings over
15 years are more than $34 million compared to projected costs without the
new MRF equipment.
The cities recognize the financial benefits of going forward with this project and
agree to use debt or an equivalent funding instrument to fund the difference
between capital fund reserves and actual project costs. As in the past, debt
service will be paid by the partner cities and apportioned to each city as
outlined in the MOU. The amount for design, construction and construction
management to be funded through the issuance of revenue bonds is projected
to be $9,486,768. The estimated annual debt service over 15 years is
$1,100,000.
The cities agree to proceed with the SMART MRF equipment replacement
project, and to fund the project in the following manner:
1)Using existing reserves in the capital equipment fund in the amount of
$5,175,000 (less design costs incurred and encumbered to date),
2)Fund the remaining project costs, estimated to be $9,486,768, through
the issuance of revenue bonds (or other cost-effective financing available)
Materials Recovery Facility (MRF) Equipment Replacement Project
Page 2 of 2
or through a combination of a cash contribution by Mountain View and a
smaller bond issue, debt service on which would be paid solely by
Sunnyvale and Palo Alto.
As in the past, the cash contribution or repayment of debt service will be
apportioned as described in the MOU, with each city’s share as follows:
Mountain View 23.45%
Palo Alto 21.27%
Sunnyvale 55.28%
If Mountain View chooses not to participate in the long-term financing for the
project, Mountain View will fund its share of the estimated unfunded project
cost through a cash contribution of $2,224,647 to the SMART Station capital
equipment replacement fund. This contribution will be made by Mountain
View on or before the date that Sunnyvale issues bonds, or other financing
vehicle, for the project (expected to occur prior to the end of calendar year
2007) and within 30 days of a request by Sunnyvale.
If Mountain View elects to fund its share of the project costs through an up-
front cash contribution as described above, the cities of Palo Alto and
Sunnyvale agree to participate in the debt service based on the percentages
shown below, which reflect the adjustments in the two cities’ capital shares in
the MOU after excluding Mountain View:
Palo Alto
Sunnyvale
Shares of Debt Service
Without Mountain View
27.79%
72.21%
100.00%
The City of Sunnyvale will be responsible for securing the financing required.
The amount f’manced will include costs associated with the issuance of the
bonds including fees for bond counsel, disclosure counsel, underwriting and
insurance costs. As is currendy done, each participating city’s share will be
paid in accordance with the repayment schedule set forth by the bond
underwriter.
City of Sunnyvale
By:
Date:
ATTACHMENT C
Details of the project are outllued iu the attached "Iqepor~ to SMART Station
Directors; Mat~ Recovery Faci~ty (MRF) Equipment RepLacement Project~
dated May 2~, ~007.
In summary, in 2004/05 the partner cities approved a proJec~ to replace the
SMART MRF.~equlpment with a budget amoun~ of $5,000,000, The projecz was
mtended te be funded through the SMART Capital Equipmant Replacement
Fund. and ir~ 2005/06 and 2006/07 the capital contributions of the cities were
adjusted upward in the nmar ter~n to provide the necessary funding, in
January ~007 the project was put out for bid and in March 2007 two bids were
received. The lowest responsive bid was returned tn the amount of
$12.997,800. W~th constraetion contingency, design and construction
oversight costs the tota!’project ts expected to cost @ 14.661,768. Reserves
available Ir~ the SMa!~f Capital Equip~nt Replaceznent F1mnd are $5,175,000~
and are ~r~suf~cient to fund this project.
The cities recogO.tze the gnancial benefits of going for0zard v~th t~s project ~d
a~ee to use debt or ~ eq~v~ent ~g ~s~~t to ~d ~e d~erenee
hereon capit~ ~d testes ~d ac~ project costs. ~ ~ ~e past, debt
sense ~ be pod by ~ p~ c~es ~d appo~oned t0 ea~ ~ ~
ou~ed ~ ~e MOU, ~e ~o~t for des~, cons~c~sn ~d ccns~c~on
~~ement to be ~ded ~ou~ ~e ~su~ce of r~enue bonds ~s projected
to be S9,486,768. ~e ~s~ted ~u~ debt se~ae over 15 ye~s ~s
sl,loo,ooo,
The climes agree to proceed with the SMART MRF equipment replacement
project, and to fund the project in the followlug mazmm-:
1)Usin~ existing reserves in the capital equipment fund in the amount of
$5,175,000 (less design costs incurred and encumbered to date),
2]Fund the rema/nmg project costs, estimated to be. $9,486,768, through
t!%e issuance of. revenue bonds (or other cost-effective fnuaz~c~ng available)
or through a combination of a cash contribution by Ivfoumt~in View and a
smaller bond Issl/e, debt service on which would be paid solely by
Sunnyvale and Palo A/to.
Materials Recovery Fmcfllty~(MRF) Equipman~ Replace~nen~ Project
~ge 2 of 2
As in the pa~t, the cash contribution or rep~y~ent of deb~ service ~ be
apportioned as described in t.he MOU, with each atW’a share as fo~1ows:
Mou.~Ca~.n View
l:’alo Alto
Sunnyvale
23,45%
21.27%
55.28%
If Mountain Vi~ chooses not to partlcipat= in She Ioz~g-term financing for the
project, Mountain View will fund its share of the estiz~a~ed unfunded project
cost through a cash contribution of ~2,224,647 to ~he SMART Station capital
eqmpment replacement fund. This contrlbutton will be made by Mountain
view on or be.fore the date that Sunnyvale issues bonds, or other fmancLng
vehicle, for L1ae project (expected ~to occur prior to the end of calendar year
2007) and within 30 days of a ~-equest by Sunnyvale.
If Mountmiu view elects to fund iL~ share of t.he project costs 1~hrough an up-
Set c~h con~bu~on as deseMbed above, ~e ~es of P~o ~to ~d
S~~e a~e to pa~ipate ~ ~e debt se~ce based on ~e 9ercen~es
sho~ bel~, w~ reflect ~e adj~en~ ~n ~e ~o c~cs’ cap~ sh~es ~
~e MOU ~er ex~ud~g Moun~ View:
Palo Alto
Sunnyvale
Shares of Debt Service
W~0ut Mou~ .~ View
27,79%
72.21%
00.00%
The City Of Sum%yvale will be respons~ble for scc~g ~e ~c~ req~ed.
~ ~o~t ~ced ~ ~ude costs assorted ~ ~e issu~ce of ~e
bonds ~clu~g fees for bond co~, ~s~os~e co~s~, ~de~~g ~d
~~ce cos~. ~ iS c~fly done, ea~ p~olpa~g ~’s shoe ~ be
p~d ~ accord~ce ~ the ~pa~ s~ed~e set fo~ ~ the bond
City of Mountain View
Kevin C. Du~ar~ City Manager
Date:~
ATTACHMENT D
REPORT TO MAYOR AND COUNCIL NO: 07-199
Council Meeting: July 10, 2007
SUBJECT: Award of Bid FO612-58 SMART Station® Materials Recovery
Facility (MRF) Processing System Equipment Replacement Project
REPORT IN BRIEF
Approval is requested for the award of a contract to Monterey Mechanical
Company of Oakland for the replacement of the SMART Station® Materials
Processing System Equipment (Project #PR-06/02-08).
The cost of the project (including contingencies and design expenditures to
date) will be $14,781,768. When completed, the replacement equipment will
produce financial benefits t_hat include:
¯Reduced SMART Station operating costs
¯Reduced landfill disposal costs
¯Increased recycling revenues
In addition, the equipment will increase the amount of the incoming refuse that
is recycled and not disposed at the Kirby Canyon landfill.
By the end of the term of the SMART Station’s Memorandum of Understanding
(MOU), this project:will return an estimated net benefit of $18.5 million.
Moving ahead with the project supports the solid waste policy goals of all three
SMART Station cities (Palo Alto, Mountain View and Sunnyvale). Because the
benefits of the-project extend into the future, debt funding is recommended for
the project cost that exceeds currently available funding. This funding
mechanism provides an equitable distribution of costs and benefits to
ratepayers.
Staff is recommending that Council award the contract to Monterey Mechanical
Company and direct staff to prepare to issue revenue bonds or similar debt
instruments in the amount necessary to fund the project.
’Issued by the City Manager
Template rev. 03/07
Award of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 2 of 12
BACKGROUND
The SMART Station materials recovery facihty (MRF) equipment line was
designed in 1992 and began operation in 1994. The MRF line is the key
mechanical component of the SMART Station. It mechanically separates
incoming refuse by size to prepare it for hand sorting to remove recyclable
materials. The purchase price for this MRF line was $6.3 million in FY
1993/94. By using the MRF line in combination with other diversion
techniques, the contract operators of the SMART Station have typically diverted
from disposal about 18% of the refuse delivered to SMART¢.
After years of heavy usage, key components of the MRF equipment are showing
excessive wear and downtime and are in need of replacement. In 2005, a
project to replace the MRF equipment was reviewed and approved by the City
Council with a budget of $5 milhon. In January 2006, Council awarded a
contract to the engineering firm URS Corporation to provide design, plans and
specifications for this project.
The MRF line at the SMART Station was one of the first of its kind in California
and was quite advanced at the time it was installed. The URS design
essentially replaces the current MRF line, taking advantage of advances in
technology that will make it more efficient and effective than the current MRF
line.
For example, size separation is currently performed by large, vibratory "finger
screens." These screens shake so as to bounce the refuse and perform a crude
separation by object size. Over time, the shaking motion essentially tears the
screens apart, resulting in more and more down time for repairs. In the new
design, size separation of smaller and larger items is performed by "disk
screens" and "trommels." Disk screens consist of fields of rotating steel disks
that provide better functionality and less downtime than f’mger screens. A
trommel is a large, rotating drum containing openings through which objects in
targeted size ranges are separated. Both of these technologies have become
standard technology in MRF installations that have been built throughout the
country in the 15 years since the current SMART MRF was designed.
Another example is how the old and new designs deal with plastic bags (one of
the biggest challenges at SMART is opening plastic bags so that the recyclable
materials inside, can be recycled). The existing MRF includes an impractical,
poorly designed thermal bag opener that has never worked properly. The new
design incorporates knives into the rotating trommels, which tear open the
plastic bags. This design has proven to be successful in similar facilities and is
easily maintained.
A~ard of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 3 of 12
These are just two examples of how the project design replicates the essential
functions of the current MRF but uses technology that draws on the past 15
years of recycling industry experience.
An update on the status of this project was provided to the City Council on
December 19, 2006 (RTC No. 06-406). In summary, the original cost
estimate that established the project budget at $5 million was generated
in October 2004, more than two years ago. A subsequent engineer’s estimate
in June 2006 estimated the project cost at $8.8 million. Worldwide demand for
steel, concrete and other construction materials has pushed their prices to
unprecedented levels and has made it unusually difficult to estimate bids on
projects of this type and scale.
In order to obtain an accurate project cost, the project was put out to bid in
January 2007. The bid process required that the bids not expire until July 12,
2007 to allow for the extra time required to gain consensus among the SMART
Station cities.
t~XIS’I’II~I(I I~OLIC¥
Solid Waste Sub-Element
Goal 3.2B: Reduce solid waste disposal to 50% or less of the amount
generated in !990 (as adjusted to reflect population and economic change)
in the most cost-effective manner.
Policy 3.2D.2: Reduce the amount of refuse being disposed, generate
recycling revenues, and minimize truck travel to the disposal site through
use of the Sunnyvale Materials Recovery and Transfer (SMART) Station.
Goal 3.2F: Maintain sound financial strategies and practices that ~1
enable the City to provide comprehensive solid waste management services
to the community while keeping refuse rates at or below countywide
averages for cities using cost of service pricing.
Fiscal Policies -7.1C Capital Improvement Policies
Policy C.1.3: High priority should be given to replacing capital
improvements prior to the time that they have deteriorated to the point
where they are hazardous, incur high maintenance costs, negatively affect
property values, or no longer serve their intended purposes.
Fiscal Policies: 7.11, 1.1: Enterprise Fund Policies
Award of Bid F0612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 4 of 12
Policy 7.11.1b.1: Capital improvements associated with the existing
infrastructure of a utility should be primarily funded from two sources: rate
revenue and debt financing.
Policy 7.11.1b.5: Bonded debt
improvements as appropriate to:
¯
financing should be used for capital
Make cost recovery of an asset more consistent with its
useful life
Equitably assign cost over multiple generations of customers
who use the assets
Smooth near-term rate impacts of the project
DISCUSSION
Bid specifications were prepared by Public Works and Purchasing staff, based
on plans and specifications prepared by URS. The notice inviting bids was
published in The Sun on January 17, 2007. Direct notice was distributed to
eight mechanical engineering contractors. The bid package was distributed to
Bay Area Builders Exchanges and information about the project was broadcast
to potential contractors through the DemandStar by Onvia public procurement
network, and 21 contractors requested documents.
Two sealed bids were received and publicly opened on March 14, 2007.
bids were responsive:
Additive
Bidder Base Bid Alternate Total Bid
Both
Engineer’s Estimate $ 8,889,075 $0"
(June 2006)
$ 8,889,075
Monterey Mechanical,
of Oakland
$12,397,800 $ 600,000 $12,997,800
D.W. Nicholson,
of Hayward
$18,673,000 $ 549,000
*Engineer’s estimate included the additive alternate in the base bid
$19,222,000
The base bid includes all concrete and steel construction, mechanical,
electrical, plumbing and equipment (trommels, screens, conveyors and baler)
and equipment installation. The additive alternate includes the addition of
~sorting rooms~ enclosing the platforms where manual sorting will be
performed by the workers. These enclosed sorting rooms, similar to those in
the current SMART MRF lines, are equipped with Heating Ventilation and Air
Award of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 5 of 12
Conditioning (HVAC) units to improve worker comfort and productivity by
providing conditioned air and ventilation to the sorting areas.
The difference between the actuai bids and the engineer’s estimate is primarily
attributed to sharp increases in the costs of construction and raw materials
over the past year. According to the Engineering News Record (ENR), the
construction cost index (CCI) increased 17% between 2004 and 2006. The CCI
measures a combination of raw materials and labor. The largest component of
this increase is raw material prices, which have risen sharply, particularly the
price of steel, which is the predominant raw material in this project. ENR
reports that prices for steel have increased by 31.3%, 12.6% and 9.6% in 2004,
2005 and 2006, respectively. This is a cumulative steel cost increase of 62%
over three years. Analysis of the low bid versus the engineer’s estimate shows
the largest differences in the categories of "structural steel" at $925,000, and
"equipment" $1,744,000. In addition, the engineer’s estimate assumed that
pre-engineered enclosures would be used for the sort rooms. After the detailed
design was completed, it became apparent that the enclosures would have to
be built on site, increasing costs by $475,000. These three items account for
$3.1 million, more than 82% of the increase over the engineer’s estimate. Staff
attributes the additional increase to the fact that t_here are a limited number of
bidders quailed to do this work (only two bids were received) and that work is
plentiful in the region at this time.
Staff recommends acceptance of the bid from Monterey Mechanical, of
Oakland, the lowest responsive and responsible bidder.
A determination was made that this project will have no significant effect on
the environment in accordance with California Environmental Quality Act
(CEQA) guidelines for categorically exempt projects.
Ol~tier~s fer lt/II~l~ ~klUil~ment
Staff considered two options prior to recommending the replacement of the
existing equipment, as follows:
De !Vet Rel~lace !~lrR~" F_~uil~ment
One option is to continue to operate the current MRF equipment. Under this
option, the City (through the maintenance and repair services provided by the
operator) would "band aid" the components that are most problematic (two
vibratory screens and the Rotary Materials Separator). Assuming this can be
done for seven more years, the cost for additional replacement parts is
estimated at approximately $1 million. When the equipment or integral
components are beyond repair, the City could simply cease to recover material
from the refuse and transfer all refuse to the landf~. This loss in recovered
Award of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July !0, 2007
Page 6 of 12
tonnage from Municipal Solid Waste (MSW) is projected to be about 40,000
tons per year. While this option represents some potential savings, as a large
portion of the operation would be shut down and therefore would reduce
operating and labor costs, the option represents the highest cost to the cities,
because an additional 40,000 tons per year would be sent to the landfill at
costs exceeding $2 million annually. Such a shift from recycling to disposal
would not be desirable in light of the City’s interest in promoting sustainability
and environmental quality.
Replace Equipment in 2007/2008
Under this recommended option, Council would award the contract to
Monterey Mechanical and replace the equipment in 2007/2008. The project
costs would be funded through a combination of funds from the existing capital
equipment replacement fund, contributions from the partner cities and
proceeds from the sale of solid waste revenue bonds or similar debt
instruments.
It is important to note that simply delaying the equipment replacement would
essentially be a more expensive version of replacing the equipment now, as
material prices would most likely only climb in the future.
Relationship of Project to Cost of New SMART Operator Agreement
On February 13, 2007, Council awarded to Bay Counties Waste Services the
contract for operation of the SMART Station from 2008-2014 (RTC 07-049).
The efficiency and condition of the MRF equipment has significant impacts on
the cost of operating the SMART Station and the revenues that the operator will
earn from sales of the materials recycled at the SMART Station. The proposed
MRF line is more efficient and thus will reduce operator labor costs. By
increasing the a_mount recycled, it will increase recycling revenues shared ~dth
the operator and reduce the quantity of residue and the cost of hauling
residues to the Kirby Canyon landfill. Thus, the Request for Proposals (RFP)
that led to the award of the operating contract anticipated that this new
equipment line would be installed.
However, the RFP also preserved the City’s options with regard to the MRF
project by asking proposers to propose a contingent annual payment for
operations with the existing equipment.
Award of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 7 of 12
The selected proposer, Bay Counties Waste Services, proposed:
Annual Co st - Existing MRF $ t 0,847,8641
Annual Cost - New MRF $10,191,072
Annual Payment Savings with New MRF $656,792
A similar savings was seen from the other proposer, GT/Zanker:
Annual Cost - Existing MRF $11,361,8261
Annual Cost- New MRF $10,895,657
Annual Payment Savings with New MRF $466,169
Council consideration of how to proceed with regard to the MRF equipment
replacement capital project is separate from its February 13, 2007 action
awarding the next contract for SMART Station operation. Staff would be
presenting the MRF equipment project to Council at this time regardless of
which operator was selected.
Relationship of Project to ’~Ptarmigan" C&D Sorting Equipment
This project for replacement of the materials recovery equipment is also
separate from the "Ptarmigan" (construction and demolition) equipment issue
discussed on February 13 in the context of awarding the next SMART
operations contract. The proposed location, targeted waste stream, and
functions of the Ptarmigan are different from those of both the existing and
proposed MRF equipment. As directed by Council, staff is discussing
construction and demolition sorting equipment options with Bay Counties
Waste Services, which is actively working on a proposal to be brought back to
Council for consideration.
FISCAL IMPACT
The estimated financial impacts of this project were reflected in the long-term
financial plans for the Solid Waste and SMART Station funds as well as in the
adopted budget and refuse rates for Fiscal Year 2007/08 and were reviewed at
the May 24, 2007 Budget Workshop. Additionally, the impacts were discussed
in the Report to Council on utility rate adjustments.
Staff prepared a financial analysis to compare the impact of awarding the
contract, as shown in the adopted budget, to the impact of not awarding the
contract and not replacing the MRF equipment. This analysis compared
several elements, including capital costs, ongoing operating costs and revenues
and one-time cost and revenue changes during construction. All these factors
Contract costs are displayed in 2006/07 dollars.
Award of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 8 of 12
are accounted for in the compa~son shown in Table 1, below. The analysis
shows that proceeding with the project results in a net benefit of $18.5 million
over 15 years, as compared to the alternative of not awarding the contract.
Table I - 15-Year Comparison of Alternatives
No MRF
Replacement
(Alternative 4)
Replace in
2007/2008
(Alternative I)
SMART OPERATING COSTS $212,503,599 $210,740,941
LANDFILL DISPOSAL COSTS
Capital Rpl. Fund
Debt Service
Host Fee
Total Expenses
Revenues
TOTAL NET EXPENSE - SMART
Increase from recommended
Alternative
$205,899,277 $172,817,060
$1,000,000 $4,180,000
-$ 11,051,980
$16,112,826 $ 16,112,826
$435,515,702 $414,902,806
$(51,340,554)$(49,196,063)
$384,175,148 $365,706,743
18,468,404
Capital Costs
The Fiscal Year 2006/07 Adopted budget includes $5,175,000 for the SMART
Station MRF Equipment Replacement Project. This item is one of many
components of Project 811250 (SMART Station Equipment Replacement), which
covers replacement and refurbishment of various pieces of equipment at the
SMART Station throughout the life of the facility. It is currently projected that
this amount (less the design costs already incurred) will be approved for
carryover to FY 2007/08. This amount specified for MRF Equipment
Replacement is insufficient to meet the recommended bid amount and
additional project costs. (As noted previously, the amount shown for the low
bid includes $600,000 for the sort room enclosures additive alternate, which
staff is recommending be included in the project.) An additional $9,606,768
Award of Bid FO612-58 SMART Station® Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10.. 2007
Page 9 of 12
(total project cost of $14,781,768, less the $5,175,000
project) is needed to meet the total project costs as follows:
Monterey Mechanical Bid $12,997,800
Construction Contingency (10% of bid price)$1,299,780
Expenditures 2005-06 (Engineering & Design)$128,958
Expenditures 2006-07 (Engineering, Design, Bid)$153,230
Engineering Costs/Construction Oversight $82,000
Bond issue costs $120,000
$ 14,781,768Total Project Costs
budgeted for this
Additional funding for $9,606,768 is not available through current SMART
Station Capital fund reserves. The City of Mountain View has decided to pay its
share as a cash contribution from its solid waste reserve funds. As of the date
this RTC was drafted, the City of Palo Alto was considering whether to take a
similar approach. It is recommended that any monies needed after cash
contributions by the partner cities be raised through the issuance of Solid
Waste Revenue bonds or similar debt instruments in order to minimize the
impact on garbage rates and spread the costs to users on a more equitable,
long-term basis. Assuming Palo Alto participates in the debt financing,
Sunnyvale’s estimated share of the debt service would be approximately
$570,000 per year. Staff will return to council requesting authorization for sale
of the bonds or similar debt instruments and recommends that the necessary
budget modification be acted on at that time to reflect the fmal numbers after
details of the financing have been finalized.
One-time Costs During Construction
During construction, it is projected that the Cities wil! experience a one-time
expense of $!.7 million due to reduced landi’~l diversion and lost recycling
revenues. The operator’s costs will be reduced while materials recovery
operations are curtailed during construction. The operations contract includes
a provision that passes this savings, estimated to be $318,381, on to the cities.
These factors are included in operations numbers provided in the analysis in
Table 1.
Ongoing Operating Cost Savings and Increased Revenues
The proposed new equipment provides increased mechanized separation,
thereby reducing the number of personnel required to sort materials manually.
The agreement with the new SMART operator for the term’ beginning in 2008
includes an annual .payment from the City that assumes that the new
equipment is installed. To preserve the City’s options, the agreement also
includes an annual payment that presumes that the existing equipment
Award of Bid FO612-58 SMART Station® Materials Recovery Facili~ (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 10 of 12
remains in use. The annual payment to the operator is $656,792 higher if the
new equipment is not installed.
In addition, it is projected that the new equipment will facilitate increased
recovery of materials from the waste stream thereby decreasing solid waste
delivered to the landfill. This increased recovery of materials from the waste
stream will generate increased revenues projected to average $795,000 per
year. Under the diversion incentive terms of the 2008-2014 operating contract,
the cities receive 50% of these revenues if refuse diversion is at 25%. These
revenues and cost savings have been accounted for in Table 1. Year to year
details are provided in Attachment A.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s
official notice bulletin board, posting of the agenda and report on the City web
page. This report is also available at the Sunnyvale Public Library and the City
Clerk’s Office.
The partner cities, Mountain View and Palo Alto, have been part of the project
design process and have been provided with an analysis of the bids and staff’s
reasons for the recommendations in this report. On June 12, 2007, the
Mountain View City Council authorized its staff to state its concurrence with
the recommendation to proceed with the project and its agreement to pay its
share of the project cost. As of the date of the drafting of this RTC, Palo Alto’s
concurrence and agreement were pending. Staff will advise Council of Palo
Alto’s input when that information becomes available. Although the MOU
provides Sunnyvale with substantial powers with regard to SMART Station
decision-making, staff does not recommend awarding this construction
contract unless all three cities agree that the project should proceed.
Award of Bid FO612-58 SMART Station~ Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 11 of 12
ALTERNATIVF_~
Contingent upon concurrence and agreement by City of Palo Alto, award
a contract, in substantially the same form as the attached Contract Draft
#1, to Monterey Mechanical Company and in an amount not to exceed
$14,297,580 ($12,997,800 for base bid plus sort rooms additive
alternate plus contingency of $1,299,780).
Contingent upon concurrence and agreement by City of Palo Alto, award
a contract, in substantially the same form as the attached Contract Draft
#2, to Monterey Mechanical Company and in an amount not to exceed
$13,637,580 (base bid of $12,397,800 plus contingency of $1,239,780).
3.Direct staff to prepare to issue revenue bonds or similar debt
instruments in the amount necessary to fund the project.
4. Reject all bids and do not award a contract.
5. Other action as directed by Council.
Award of Bid FO612-58 SMa}~ Stafion~:’ Materials Recovery Facility (MRF) Processing System Equipment
Replacement Project
July 10, 2007
Page 12 of 12
RECOMMENDATION
Staff recommends Alternatives #1 and #3: Contingent upon concurrence and
agreement by City of Palo Alto, award a contract to Monterey Mechanical Company
in an amount not to exceed $14,297,580 ($12,997,800 plus contingency of
$1,299,780) and direct staff to prepare to issue revenue bonds or similar debt
instruments in the amount necessary to fund the project.
This recommendation is based on the following information:
This alternative provides a net benefit to the SMART Station cities of $18.5 million
compared to not awarding the contract. Timing is appropriate since this
equipment has a projected 15-year life, which is close to the remaining term of the
MOU. Debt service would be paid over the next 15 years and provide an equitable
distribution of costs and benefits to ratepayers. If the project were instead funded
with cash, that would require a significant short-term increase in refuse collection
rates. This would charge current ratepayers for the project, and then return the
benefits to future ratepayers.
The new MRF design incorporates equipment that has proven to be successful in
diverting recyclable materials from municipal solid waste. It features additional
mechanical separation to reduc.e the need for manual separation by sorting
personnel. In addition, the new equipment is projected to increase diversion.
All three cities are relying on the continued success of SMART Station MRF
operations to maintain their current diversion levels. A delay in equipment
replacement is projected to decrease diversion over the next several years. If MRF
operations shut down for an indefinite period of time, the cities would lose 40,000
tons annually in diversion and associated revenues and send that material to the
landf~ at a cost in excess of $2 million per year.
Reviewed by:
Marvin A. Rose, Director, Public Works
Prepared by: Mark Bowers, Solid Waste Program Manager
Reviewed by:
Mary Bradley, Director~ Finance
Approved by:
Amy Chan, City Manager
ATTACHMENTS
A)Year by Year Detail of Options
B)Draft General Construction Contract # 1
C)Draft General Construction Contract #2
<
DRAFT CONTRACT #1
ATTACHMENT B
GENERAL CONSTRUCTION CONTRACT
THIS CONTRACT dated is by and between the CITY OF
SUNNYVALE, a municipal corporation of the State of California ("Owner") and Monterey
Mechanical Company, a California corporation ("Contractor").
RECITALS:
The parties to this Contract have mutually covenanted and agreed, as follows:
1. The Contract Documents. The complete Contract consists of the
following documents: Notice Inviting Bids; Instructions to Bidders; Performance Bond and
Payment Bond; Guaranty; City of Sunnyvale Standard Specifications for Public Works
Construction, 2006 Edition; City of Sunnyvale Standard Details for Public Works
Construction, 2006 Edition; Plans and Specifications, "SMART STATION MATERIALS
PROCESSING SYSTEM EQUIPMENT REPLACEMENT PROJECT, Project No. PR-
06/02-08, Invitation for Bids No. F0612-58", including three (3) Addenda; OSHA, and
other standards and codes as outlined in the Specifications. These documents are all
incorporated by reference. The documents comprising the complete contract are
collectively referred to as the Contract Documents.
Any and all obligations of the Owner and the Contractor are fully set forth and
described therein.
All of the above documents are intended to cooperate so that any work called for
in one and not mentioned in the. other or vice versa is to be executed the same as if
mentioned in all documents.
2. The Work. Contractor agrees to furnish all tools, equipment, apparatus,
facilities, labor, transportation, and material necessary to perform and complete in a
good and workmanlike manner, the work of removal of existing processing equipment
and structures, and the design, fabrication, supply and installation of new processing
equipment as called for, and in the manner designated in, and in strict conformity with,
the Plans and Specifications prelSared by URS Corporation/RRT Design & Construction
and adopted by the Owner. These Plans and Specifications are entitled respectively,
SMART STATION MATERIALS PROCESSING SYSTEM EQUIPMENT REPLACEMENT
PROJECT, Project No. PR-06/02-08.
It is understood and agreed that tools, equipment, apparatus, facilities, labor,
transportation, and material shall be furnished and work performed and completed as
required in the Plans and Specifications under the sole direction and control of the
Contractor, and subject to inspection and approval of the Owner, or its representatives.
The Owner hereby designates as its representative for the purpose of this contract the
Senior Civil Engineer for Construction or an employee of the Owner who will be
designated in writing by the Director of Public Works.
3. Contract Price. The Owner agrees to pay and the Contractor agrees to
accept, in full payment for the work above agreed to be done, the lump sum of Twelve
Million Nine Hundred Ninety Seven Thousand Eight Hundred and NO/100 Dollars
($12,997,800.00) subject to additions and deductions as provided in the Contract
Documents and in accordance with Contract Documents. The sum includes base bid and
accepted Additive Alternate 1.
4. Permits; Compliance with Law. Contractor shall, at its expense, obtain all
necessary permits and licenses, easements, etc., for the construction of the project,
give all necessary notices, pay all fees required by law, and comply with all laws,
ordinances, rules and regulations relating to the work and to the preservation of the
public health and safety. ~
5. Inspection by Owner. Contractor shall at all times maintain proper facilities
and provide safe access for inspection by the Owner to all parts of the work, and to the
shops wherein the work is in preparation. Where the Specifications require work to be
specially tested or approved, it shall not be tested or covered up without timely notice to
the Owner of its readiness for inspection and without the approval thereof or consent
thereto by the latter. Should any such work be covered up without such notice,
approval, or consent, it must, if required by Owner, be uncovered for examination at the
Contractor’s expense.
6. Extra or Additional Work and Changes. Should Owner at any time during
the progress of the work request any alterations, deviations, additions or omissions from
the Specifications or Plans or other Contract Documents it shall be at liberty to do so,
and the same shall in no way affect or make void the contract, but will be added to or
deducted from the amount of the contract price, as the case may be, by a fair and
reasonable valuation, agreed to ~n writing between the parties hereto. No extra work
shall be performed or change be made unless in pursuance of a written order from the
Director of Public Works or authorized, representative, stating that the extra work or
change is authorized and no claim for an addition to the contract sum shall be valid
unless so ordered.
7. Time for Completion. All work under this contract shall be completed before
the expiration three hundred (300) calendar days from the date specified in the Notice to
Proceed.
If Contractor shall be delayed in the work by the acts or neglect of Owner, or its
employees or those under it by contract or otherwise, or by changes ordered in the
work, or by strikes, lockouts by others, fire, unusual delay in transportation, unavoidable
casualties or any causes beyond the Contractor’s control, or by delay authorized by the
Owner, or by any cause which the Owner shall decide to justify the delay, then the time
of completion shall be extended for such reasonable time as the Owner may decide.
This provision does not exclude the recovery of damages for delay by either
party under other provisions.
8. Inspection and Testing of Materials. Contractor shall notify Owner a
sufficient time in advance of the manufacture or production of materials, to be supplied
under this contract, in order that,rthe Owner may arrange for mill or factory inspection
and testing of same, if Owner reqL~ests such notice from Contractor.
9. Termination for Breach, etc. If Contractor should file a bankruptcy petition
and/or be adjudged a bankrupt, or if Contractor should make a general assignment for
the benefit of creditors, or if a receiver should be appointed on account of insolvency, or
if Contractor or any subcontractors should violate any of the provisions of the Contract,
Owner may serve written notice upon Contractor and its surety of Owner’s intention to
terminate the Contract. The notice shall contain the reasons for such intention to
terminate the Contract, and, unless within ten days after serving such notice, such
violation shall cease and satisfactory arrangements for correction thereof be made,
upon the expiration of the ten days, the Contract shall cease and terminate. In the
event of any such termination, Owner shall immediately serve written notice thereof
upon the surety and the Contractor, and the surety shall have the right to take over and
perform the Contract; provided, however that, if the surety within fifteen days after the
serving upon it of notice of termination does not give Owner written notice of its intention
to take over and perform the Contract or does not commence performance thereof
within thirty days from the date of the serving of such notice, Owner may take over the
work and prosecute the same to completion by contract or by any other method it may
deem advisable, for the account and at the expense of Contractor, and Contractor and
its surety shall be liable to Owner for any excess cost occasioned Owner thereby; and in
such event Owner may without liability for so doing take possession of and utilize in
completing the work, such materials, appliances, plant and other property belonging to
Contractor as may be on the site of the work and necessary therefor.
10. Owner’s Right to Withhold Certain Amounts and Make Application
Thereof. In addition to the amount which Owner may retain under Paragraph 21 until
the final completion and acceptance of all work covered by the Contract, Owner may
withhold from payment to Contractor such amount or amounts as in its judgment may
be necessary to pay just claims against Contractor or any subcontractors for labor and
services rendered and materials furnished in and about the work. Owner may apply
such withheld amount or amounts to the payment of such claims in its discretion. In so
doing Owner shall be deemed the agent of Contractor and any payment so made by
Owner shall be considered as a payment made under the Contract by Owner to the
Contractor and Owner shall not be liable to Contractor for any such payment made in
good faith. Such payment may be made without prior judicial determination of the claim
or claims.
11. Notice and Service Thereof. All notices required pursuant to this Contract
shall be communicated in writing, and shall be delivered in person, by commercial
courier or by first class or priority/ mail delivered by the United States Postal Service.
Transmission of notice by facsimile or by telephone may be deemed sufficient if the
requirement for wdtten notice is waived, in writing, by the receiving party. Notices
delivered in person shall be deemed communicated as of actual receipt. Notices sent
by mail or courier service shall be deemed communicated as of three days after mailing
or dispatch, unless that date is a date on which there is no mail or delivery service, in
which case communication shall be deemed to occur the next mail service or delivery
day. The burden of proof of compliance with this requirement for written notice shall be
on the sending party. All notices sent pursuant to this Contract shall be addressed as
follows:
Owner:City of Sunnyvale
Department of Public Works
Construction Contract Administrator
P. O. Box 3707
Sunnyvale, CA 94088-3707
Contractor:Monterey Mechanical Company
Attn: James Troup
8275 San Leandro Street
Oakland, CA 94621
12. Assignment of Contract. Neither the Contract, nor any part thereof, nor
moneys due or to become due thereunder may be assigned by Contractor without the
prior written approval of Owner.
13. Compliance with Specifications of Materials. Whenever in the
Specifications, any material or process is indicated or specified by patent or proprietary
name, or by name of manufacturer, such Specifications must be met by Contractor,
unless Owner agrees in writing to some other material, process or article offered by
Contractor which is equal in all respects to the one specified.
14. Contract Security. Contractor shall furnish a surety bond in an amount at
least equal to 100 per cent of the contract price as security for the faithful performance
of this Contract. Contractor shall also furnish a separate surety bond in an amount at
least equal to 100 percent of the contract price as security for the payment of all
persons for furnishing materials, provisions, provender, or other supplies, or teams,
used in, upon, for or about the performance of the work contracted to be done, or for
performing any work or labor thereon of any kind, and for the payment of amounts due
under the Unemployment Insurance Code with respect to such work or labor in
connection with this Contract, and for the payment of a reasonable attorney’s fee to be
fixed by the court in case suit is brought upon the bond.
15. Insurance: ContractOr shall not commence work under this Contract until all
insurance required under this paragraph has been obtained and such insurance has
been approved by the Owner, nor shall Contractor allow any subcontractor to
commence work on a subcontract until all similar insurance required of the
subcontractor has been so obtained and approved. Contractor shall furnish the Owner
with satisfactory proof of the carriage of insurance required, and there shall be a specific
contractual liability endorsement extending the Contractor’s coverage to include the
contractual liability assumed by tb.e Contractor pursuant to this Contract and particularly
paragraph 16 hereof. Any policy of insurance required of the Contractor under this
Contract shall also contain an endorsement providing that thirty (30) days’ notice must
be given in writing to the Owner of any pending change in the limits of liability or of any
cancellation or modification of the policy. Insurance carrier shall be California-admitted.
(a) Compensation Insurance and Employer’s Liability Insurance. Contractor
shall take out and maintain during the life of this Contract Workers’ Compensation
Insurance and Employer’s Liability Insurance for all of employees employed at the site
of the project and, in case any work is sublet, Contractor shall require the subcontractor
similarly to provide Workers’ Compensation Insurance and Employer’s Liability
Insurance for all of the latter’s employees unless such employees are covered by the
protection afforded by Contractor~:
In signing this Contract, Contractor makes the following certification, required by
Section 1861 of the Labor Code:
"1 am aware of the provision of Section 3700 of the
Labor Code which require every employer to be insured
against liability for ,workers’ compensation or to undertake
self-insurance in accordance with the provisions of that
code, and I will comply with such provisions before
commencing the performance of the work of this contract."
(b) General Liability Insurance. Contractor, at its own cost and expense, shall
maintain personal injury liability and property damage insurance for the period covered
by the Contract in the amount of Two Million Dollars ($2,000,000.00) per occurrence.
Such coverage shall include, but shall not be limited to, protection against claims arising
therefrom, and damage to property resulting from activities contemplated under this
Contract. Such insurance shall be with insurers and under forms of policies satisfactory
in all respects to the Owner and shall provide that notice must be given to Owner at
least thirty (30) days prior to cancellation or material change. The following
endorsements shall be attached to the policy:
Policy shall cover on an "occurrence" basis. Policy must cover
personal injuries as well as bodily injuries. Exclusion of
contractual liability must be eliminated from personal injury
endorsement. Broad form property damage endorsement must be
attached. Owner is to be named as an additional insured on any
contracts of insurance under this paragraph (b). Coverage shall
not extend to any indemnity coverage for the active negligence of
the additional insured in any case where an agreement to
indemnify the additional insured would be invalid under
Subdivision (b) of Section 2782 of the Civil Code. The policies of
insurance shall be considered primary insurance before any
policies of insurance maintained by Owner.
(c) Automobile Liability. Contractor, at its own cost and expense, shall
maintain automobile insurance for the period covered by the Contract in the amount of
One Million Dollars ($1,000,000.00) combined single limit coverage
16. Hold Harmless. Contractor agrees to defend, save, indemnify and hold
harmless Owner and all its officers, employees, and agents, against any and all liability,
claims, judgments, or demands, including demands arising from injuries or death of
persons (Contractor’s employees included) and damage to property, arising directly or
indirectly out of the obligations herein undertaken or out of the operations conducted by
Contractor, save and except claims or litigation arising through the active negligence Or
willful misconduct of Owner, or of Owner’s officials, agents, employees, servants, or
independent contractors who are directly responsible to Owner. Contractor shall make
good and reimburse Owner for any expenditures, including reasonable attorneys’ fees,
Owner may make by reason of such claim or litigation, and, if requested by Owner,
Contractor shall defend any such suits at the sole cost and expense of Contractor.
17. Hours of Work. Eight hours of labor during any one calendar day and forty
hours of labor during any one calendar week shall constitute the maximum hours of
service upon all work done hereunder, and it is expressly stipulated that no laborer,
worker, or mechanic employed at any time by the Contractor or by any subcontractor or
subcontractors under this Contract, upon the work or upon any part of the work
contemplated by this Contract, shall be required or permitted to work thereon more than
eight hours during any one calendar day and forty hours during any one calendar week,
except, as provided by Section 1815 of the Labor Code of the State of California, work
performed by employees of contractors in excess of eight hours per day and forty hours
during any one week shall be permitted upon public work upon compensation for all
hours worked in excess of eight hours per day at not less than one and one-half times
the basic rate of pay. It is further expressly stipulated that for each and every violation
of Sections 1811-1815, inclusive, of the Labor Code of the State of California, all the
provisions whereof are deemed to be incorporated herein, Contractor shall forfeit, as a
penalty to Owner, fifty dollars ($50.00) for each laborer, worker, or mechanic employed
in the execution of this Contract by Contractor, or by any subcontractor under this
Contract, for each calendar day during which the laborer, worker, or mechanic is
required or permitted to work more than eight hours in any one calendar day and forty
hours in any one calendar week in violation of the provisions of the Sections of the
Labor Code.
Contractor, and each subcontractor, shall, in accordance with California Labor
Code Section 1776 or as the same may be later amended, keep accurate payroll records
showing the name, address, social security number, work classification, straight time and
overtime hours worked each day and week, and the actual per diem wages paid to each
journeyman, apprentice, worker, or other employee employed by him or her in connection
with work under this agreement. Each payroll record shall contain or be verified by a
written declaration under penalty of perjury, in accordance with Labor Code Section
1776(a). Such payroll records shall be made available at all reasonable times at the
Contractor’s principal office to the persons authorized to inspect such records pursuant to
Labor Code Section 1776. A certified copy of all payroll records shall be made available
for inspection or fumished upon ~ request to a representative of the Division of Labor
Standards Enforcement, and the Division of Apprenticeship Standards of the Department
of Industrial Relations, as well as to the Owner’s representative. In the event the
Contractor or a Subcontractor fails to comply in a timely manner within ten days to a
written notice requesting the records, such contractor or subcontractor shall forfeit twenty-
five dollars ($25.00)for each calendar day, or portion thereof, for each worker, until strict
compliance is effectuated, in accordance with Labor Code Section 1776(g).
18. Wage Rates. Pursuant to the Labor Code of the State of California, or any
applicable local law, Owner has ascertained the general prevailing rate per diem wages
and rates for holidays, and overtime work in the city, for each craft, classification or type
of laborer, worker, or mechanic needed to execute this Contract. Owner has adopted,
by reference, the general prevailing rate of wages applicable to the work to be done
under the Contract, as adopted and published by the Division of Labor Standards
Enforcement and Labor Statistics and Research of the State of California, Department
of Industrial Relations, to which, reference is hereby made for a full and detailed
description. A copy of the prevailing wage rates may be reviewed in the office of the
Director of Public Works, City of Sunnyvale, 456 West Olive Avenue, Sunnyvale,
California. Wage rates can also be obtained through the City’s Website at
www.ci.sunnyvale.ca.us/purchasii~g/prevailingwages.htm. Neither the notice inviting
bids nor this Contract shall constitute a representation of fact as to the prevailing wage
rates upon which the Contractor or any subcontractor may base any claim against
Owner.
It shall be mandatory upon Contractor and upon any subcontractor to pay not
less than the specified rates to all laborers, workers, and mechanics employed in the
execution of the Contract. It is further expressly stipulated that Contractor shall, as a
penalty to Owner, forfeit fifty dollars ($50.00) for each calendar day, or portion thereof,
for each laborer, worker, or mechanic paid less then the stipulated prevailing rates for
any work done under this Contract by Contractor or by any subcontractor; and
Contractor agrees to comply with all provisions of Section 1775 of the Labor Code.
In case it becomes necessary for Contractor or any subcontractor to employ on
the project under-this Contract any person in a trade or occupation (except executives,
supervisory, administrative, cleric,al, or other non-manual workers as such) for which no
minimum wage rate is herein specified, Contractor shall immediately notify Owner who
will promptly thereafter determine the prevailing rate for such additional trade or
occupation and shall furnish Contractor with the minimum rate based thereon. The
minimum rate thus furnished shall be applicable as a minimum for such trade or
occupation from the time of the initial employment of the person affected and during the
continuance of such employment.
t9. Accident Prevention. Precaution shall be exercised at all times for the
protection of persons (including employees) and property. The safety provisions of
applicable laws, building and construction codes shall be observed. Machinery,
equipment, and other hazards shall be guarded or eliminated in accordance with the
safety provisions of the Construction Safety Orders issued by the Industrial Accident
Commission of the State of California.
20. Contractor’s Guarantee. Owner shall not, in any way or manner, be
answerable or suffer loss, damage, expense or-liability for any loss or damage that may
happen to the building, work, or equipment or any part thereof, or in, on, or about the
same during its construction and before acceptance. Contractor unqualifiedly
guarantees the first-class quality of all workmanship and of all materials, apparatus, and
equipment used or installed by Contractor or by any subcontractor or supplier in the
project which is the subject of this Contract, unless a lesser quality is expressly
authorized in the Plans and Specifications, in which event Contractor unqualifiedly
guarantees such lesser quality; and that the work as performed by Contractor will
conform with the Plans and Specifications or any written authorized deviations
therefrom. In case of any defect in work, materials, apparatus or equipment, whether
latent or patent, revealed to Owner within one year of the date of acceptance of
completion of this Contract by Owner, Contractor will forthwith remedy such defect or
defects without cost to Owner.
2’1. Liquidated Damage, s. Time shall be the essence of this Contract. If
Contractor fails to complete, within the time fixed for such completion, the entire work
mentioned and described and contracted to be done and performed, Contractor shall
become liable to Owner for liquidated damages in the sum of Four thousand Three
Hundred ($4,300), for each and every calendar day during which work shall remain
uncompleted beyond such time fixed for completion or any lawful extension thereof. The
amount specified as liquidated damages is presumed to be the amount of damage
sustained by Owner since it would be impracticable or extremely difficult to fix the actual
damage; and the amount of liq,uidated damages may be deducted by Owner from
moneys due Contractor hereunder, or its assigns and successors at the time of
completion, and Contractor, or its assigns and successors at the time of completion,
and its sureties shall be liable to Owner for any excess.
22. Additional Provisions.
None.
IN WITNESS WHEREOF, two identical counterparts of this contract, each of
which shall for all purposed be deemed an original thereof, have been duly executed by
the parties.
CITY OF SUNNYVALE
a Municipal Corporation, Owner
Monterey Mechanical Company
Contractor
License No. 388361
By
City Manager
By.
Title
By
Title
Attest:
By
City Clerk
(SEAL)
APPROVED AS TO FORM:
City Attomey
(Notice:The signatures of the Contractor’s
acknowledged before a notary.)
officers on this contract must be
ACKNOWLEDGMENT
State of California
County of
On
personally appeared
)
)
before me,
personally known to me (or proved to me on the basis of satisfactory evidence)to be
the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/shelthey executed the same in his/herltheir authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature (SEAL)
DRAFT CONTRACT #2
ATTACHMENT C
GENERAL CONSTRUCTION CONTRACT
THIS CONTRACT dated ~ is by and between the CITY OF
SUNNYVALE, a municipal corporation of the State of California ("Owner") and Monterey
Mechanical Company, a California corporation ("Contractor").
RECITALS:
The parties to this Contract have mutually covenanted and agreed, as follows:
1. The Contract Documents. The complete Contract consists of the
following documents: Notice Inviting Bids; Instructions to Bidders; Performance Bond and
Payment Bond; Guaranty; City of Sunnyvale Standard Specifications for Public Works
Construction, 2006 Edition; City of Sunnyvale Standard Details for Public Works
Construction, 2006 Edition; Plans and Specifications, "SMART STATION MATERIALS
PROCESSING SYSTEM EQUIPMENT REPLACEMENT PROJECT, Project No. PR-
06/02-08, Invitation for Bids No. F0612-58", including three. (3) Addenda; OSHA, and
other standards and codes as outlined in the Specifications. These documents are all
incorporated by reference. The documents comprising the complete contract are
collectively referred to as the Contract Documents.
Any and all obligations of the Owner and the Contractor are fully set forth and
described therein.
All of the above documents are intended to cooperate so that any work called for
in one and not mentioned in the other or vice versa is to be executed the same as if
mentioned in all documents.
2. The Work. Contractor agrees to furnish all tools, equipment, apparatus,
facilities, labor, transportation, and material necessary to perform and complete in a
good and workmanlike manner, the work of removal of existing processing equipment
and structures, and the design, fabrication, supply and installation of new processing
equipment as called for, and in the manner~designated in, and in strict conformity with,
the Plans and Specifications prepared by URS Corporation/RRT Design & Construction
and adopted by the Owner. These Plans and Specifications are entitled respectively,
SMART STATION MATERIALS PROCESSING SYSTEM EQUIPMENT REPLACEMENT
PROJECT, Project No. PR-06/02-08.
It is understood and agreed that tools, equipment, apparatus, facilities, labor,
transportation, and material shall be furnished and work performed and completed as
required in the Plans and Specifications under the sole direction and control of the
Contractor, and subject to inspection and approval of the Owner, or its representatives.
The Owner hereby designates as its representative for the purpose of this contract the
Senior Civil Engineer for Construction or an employee of the Owner who will be
designated in writing by the Director of Public Works.
3. Contract Price. The Owner agrees to pay and the Contractor agrees to
accept, in full payment for the work above agreed to be done, the lump sum of Twelve
Million .Three Hundred Ninety Seven Thousand Eight Hundred and NO/100 Dollars
($12,397,800.00) subject to additions and deductions as provided in the Contract
Documents and in accordance with Contract Documents. The sum includes base bid
ONLY.
4. Permits; Compliance. with Law. Contractor shall, at its expense; obtain all
necessary permits and licenses, easements, etc., for the construction of the project,
give all necessary notices, pay all fees required by law, and comply with all laws,
ordinances, rules and regulations relating to the work and to the preservation of the
public health and safety.
5. Inspection by Owner. Contractor shall at all times maintain proper facilities
and provide safe access for inspection by the Owner to all parts of the work, and to the
shops wherein the work is in preparation. Where the Specifications require work to be
specially tested or approved, it shall not be tested or covered up without timely notice to
the Owner of its readiness for inspection and without the approval thereof or consent
thereto by the latter. Should any such work be covered up without such notice,
approval, or consent, it must, if re, quired by Owner, be uncovered for examination at the
Contractor’s expense.
6. Extra or Additional Work and Changes. Should Owner at any time during
the progress of the work request any alterations, deviations, additions or omissions from
the Specifications or Plans or other Contract Documents it shall be at liberty to do so,
and the same shall in no way affect or make void the contract, but will be added to or
deducted from the amount of the contract price, as the case may be, by a fair and
reasonable valuation, agreed to in writing between the parties hereto. No extra work
shall be performed or change bemade unless in pursuance of a written order from the
Director of Public Works or authorized representative, stating that the extra work or
change is authorized and no claim for an addition to the contract sum shall be valid
unless so ordered.
7. Time for Completion. All work under this contract shall be completed before
the expiration three hundred (300) calendar days from the date specified in the Notice to
Proceed. ~
If Contractor shall be delayed in the work by the acts or neglect of Owner, or its
employees or those under it by contract or otherwise, or by changes ordered in the
work, or by strikes, lockouts by others, fire, unusual delay in transportation, unavoidable
casualties or any causes beyond the Contractor’s control, or by delay authorized by the
Owner, or by any cause which the Owner shall decide to justify the delay, then the time
of completion shall be extended for such reasonable time as the Owner may decide.
This provision does not exclude the recovery of damages for delay by either
party under other provisions.
8. Inspection and Testing of Materials. Contractor shall notify Owner a
sufficient time in advance of the manufacture or production of materials, to be supplied
under this contract, in order that the Owner may arrange for mill or factory inspection
and testing of same, if Owner requests such notice from Contractor.
9. Termination for Breach, etc. If Contractor should file a bankruptcy petition
and/or be adjudged a bankrupt, or if Contractor should make a general assignment for
the benefit of creditors, or if a receiver should be appointed on account of insolvency, or
if Contractor or any subcontractors should violate any of the provisions of the Contract,
Owner may serve written notice upon Contractor and its surety of Owner’s intention to
terminate the Contract. The notice shall contain the reasons for such intention to
terminate the Contract, and, unless within ten days after serving such notice, such
violation shall cease and satisfactory arrangements for correction thereof be made,
upon the expiration of the ten days, the Contract shall cease and terminate. In the
event of any such termination, Owner shall immediately serve written notice thereof
upon the surety and the Contractor, and the surety shall have the right to take over and
perform the Contract; provided, however that, if the surety within fifteen days after the
serving upon it of notice of termination does not give Owner written notice of its intention
to take over and perform the Contract or does not commence performance thereof
within thirty days from the date of the serving of such notice, Owner may take over the
work and prosecute the same to !completion by contract or by any Other method it may
deem advisable, for the account and at the expense of Contractor, and Contractor and
its surety shall be liable to Owner for any excess cost occasioned Owner thereby, and in
such event Owner may without liability for so doing take possession of and utilize in
completing the work, such materials, appliances, plant and other property belonging to
Contractor as may be on the site of the work and necessary therefor.
10. Owner’s Right to Withhold Certain Amounts and Make Application
Thereof. In addition to the amount which Owner may retain under Paragraph 21 until
the final completion and acceptance of all work covered by the Contract, Owner may
withhold from payment to Contractor such amount or amounts as in its judgment may
be necessary to pay just claims against Contractor or any subcontractors for labor and
services rendered and materials furnished in and about the work. Owner may apply
such withheld amount or amounts to the payment of such claims in its discretion. In so
doing Owner shall be deemed the agent of Contractor and any payment so made by
Owner shall be considered as a~ payment made under the Contract by Owner to the
Contractor and Owner shall not be liable to Contractor for any such payment made in
good faith. Such payment may be made without prior judicial determination of the claim
or claims.
11. Notice and Service Thereof. All notices required pursuant to this Contract
shall be communicated~ in writing, and shall be delivered in person, by commercial
courier or by first class or priority mail delivered by the United States Postal Service.
Transmission of notice by facsim, ile or by telephone may be deemed sufficient if the
requirement for written notice iS waived, in wdting, by the receiving party. Notices
delivered in person shall be deemed communicated as of actual receipt. Notices sent
by mail or courier service shall be deemed communicated as of three days after mailing
or dispatch, unless that date is a date on which there is no mail or delivery service, in
which case communication shall be deemed to occur the next mail service or delivery
day. The burden of proof of compliance with this requirement for written notice shall be
on the sending party. All notices sent pursuant to this Contract shall be addressed as
follows:
Owner:City of Sunnyvale
Department of Public Works
Construction Contract Administrator
P. O. Box 3707
Sunnyvale, CA 94088-3707
Contractor:Monterey Mechanical Company
Attn: James Troup
8275 San Leandro Street
Oakla,nd, CA 94621
12. Assignment of Contract. Neither the Contract, nor any part thereof, nor
moneys due or to become due thereunder may be assigned by Contractor without the
prior written approval of Owner.
13. Compliance with Specifications of Materials. Whenever in the
Specifications, any material or process is indicated or specified by patent or proprietary
name, or by name of manufactu, rer, such Specifications must be met by Contractor,
unless Owner agrees in writing to some other material, process or article offered by
Contractor which is equal in all respects to the one specified.
14. Contract Security. Contractor shall furnish a surety bond in an amount at
least equal to 100 per cent of the contract price as security for the faithful performance
of this Contract. Contractor shall also furnish a separate surety-bond in an amount at
least equal to 100 percent of the contract price as security for the payment of all
persons for furnishing materials, provisions, provender, or other supplies, or teams,
used in, upon, for. or about the performance of the work contracted to be done, or for
performing any work or labor thereon of any kind, and for the payment of amounts due
under the Unemployment Insurance Code with respect to such work or labor in
connection with this Contract, and for the payment of a reasonable attorney’s fee to be
fixed by the court in case suit is brought upon the bond.
15. Insurance. Contractor shall not commence work under this Contract until all
insurance required under this paragraph has been obtained and such insurance has
been approved by the Owner, nor shall Contractor allow any subcontractor to
commence work on a subcontract until all similar insurance required of the
subcontractor has been so obtained and approved. Contractor shall furnish the Owner
with satisfactory proof of the carriage of insurance required, and there shall be a specific
contractual liability endorsement extending the Contractor’s coverage to include the
contractual liability assumed by the Contractor pursuant to this Contract and particularly
paragraph 16 hereof. Any policy of insurance required of the Contractor under this
Contract shall also contain an endorsement providing that thirty (30) days’ notice must
be given in writing to the Owner of any pending change in the limits of liability or of any
cancellation or modification of the policy. Insurance carder shall be California-admitted.
(a) Compensation Insurance and Employer’s Liability Insurance. Contractor
shall take out and maintain during the life of this Contract Workers’ Compensation
Insurance and Employer’s Liability Insurance for all of employees employed at the site
of the project and, in case any work is sublet, Contractor shall require the subcontractor
similarly to provide Workers’ Compensation Insurance and Employer’s Liability
Insurance for all of the latter’s employees unless such employees are covered by the
protection afforded by Contractor.
In signing this Contract, Contractor makes the following certification, required by
Section 1861 of the Labor Code:
"1 am aware of the provision of Section 3700 of the
Labor Code which require every employer to be insured
against liability for workers’ compensation or to undertake
self-insurance in accordance with the provisions of that
code, and I will !comply with such provisions before
commencing the performance of the work of this contract."
(b) General Liability Insurance. Contractor, at its own cost and expense, shall
maintain personal injury liability and property damage insurance for the period covered
by the Contract in the amount of Two Million Dollars ($2,000,000.00) per occurrence.
Such coverage shall include, but shall not be limited to, protection against claims arising
therefrom, and damage to property resulting from activities contemplated under this
Contract. Such insurance shall be with insurers and under forms of policies satisfactory
in all respects to the Owner and shall provide that notice must be given to Owner at
least thirty (30) days prior to cancellation or material change. The following
endorsements shall be attached to the policy:
Policy shall cover on an "occurrence" basis. Policy must cover
personal injuries as well as bodily injuries. Exclusion of
contractual liability must be eliminated from personal injury
endorsement. Broa’d form property damage endorsement must be
attached. Owner is to be named as an additional insured on any
contracts of insurance under this paragraph (b). Coverage shall
not extend to any indemnity coverage for the active negligence of
the additional insured in any case where an agreement to
indemnify the additional insured would be invalid under
Subdivision (b) of Section 2782 of the Civil Code. The policies of
insurance shall be considered primary insurance before any
¯policies of ~nsurance maintained by Owner.
(c) Automobile Liability. Contractor, at its own cost and expense, shall
maintain automobile insurance for the period covered by the Contract in the amount of
One Million Dollars ($1,000,000.00) combined single limit coverage
16. Hold Harmless. Contractor agrees to defend, save, indemnify and hold
harmless Owner and all its officers, employees, and agents, against any and all liability,
claims, judgments, or demands,! including demands arising from injuries or death of
persons (Contractor’s employees included) and damage to property, arising directly or
indirectly out of the obligations herein undertaken or out of the operations conducted by
Contractor, save and except claims or litigation arising through the active negligence or
willful misconduct of Owner, or of Owner’s officials, agents, employees, servants, or
independent contractors who are directly responsible to Owner. Contractor shall make
good and reimburse Owner for any expenditures, including reasonable attorneys’ fees,
Owner may make by reason of such claim or litigation, and, if requested by Owner,
Contractor shall defend any such suits at the sole cost and expense of Contractor.
17. Hours of Work. Eight hours of labor during any one calendar day and forty
hours of labor during any one calendar week shall constitute the maximum hours of
1service upon all work done hereunder, and it is expressly stipulated that no laborer,
worker, or mechanic employed at any time by the Contractor or by any subcontractor or
subcontractors under this Contract, upon the work or upon any part of the work
contemplated by this Contract, shall be required or permitted to work thereon more than
eight hours during any one calendar day and forty hours during any one calendar week,
except, as provided by Section 1815 of the Labor Code of the State of California, work
performed by employees of contractors in excess of eight hours per day and forty hours
during any one week shall be p,ermitted upon public work upon compensation for all
hours worked in excess of eight hours per day at not less than one and one-half times
the basic rate of pay. It is further expressly stipulated that for each and every violation
of Sections 1811-1815, inclusive, of the Labor Code of the State of California, all the
provisions whereof are deemed to be incorporated herein, Contractor shall forfeit, as a
penalty to Owner, fifty dollars ($50.00) for each laborer, worker, or mechanic employed
in the execution of this Contract by Contractor, or by any subcontractor under this
Contract, for each calendar day during which the laborer, worker, or mechanic is
required or permitted to work mo,re than eight hours in any one calendar day and forty
hours in any one calendar week in violation of the provisions of the Sections of the
Labor Code.
Contractor, and each subcontractor, shall, in accordance with California Labor
Code Section 1776 or as the same may be later amended, keep accurate payroll records
showing the name, address, social security number, work classification, straight time and
overtime hours worked each day and week, and the actual per diem wages paid to each
journeyman, apprentice, worker, o,r other employee employed by him or her in connection
with work under this agreement. Each payroll record shall contain or be verified by a
written declaration under penalty of perjury, in accordance with Labor Code Section
1776(a). Such payroll records shall be made available at all reasonable times at the
Contractor’s principal office to the persons authorized to inspect such records pursuant to
Labor Code Section 1776. A certified copy of all payroll records shall be made available
for inspection or furnished upon request to a representative of the Division of Labor
Standards Enforcement, and the Division of Apprenticeship Standards of the Department
of Industrial Relations, as well as to the Owner’s representative, in the event the
Contractor or a Subcontractor fails to comply in a timely manner within ten days to a
written notice requesting the records, such contractor or subcontractor shall forfeit twenty-
five dollars ($25.00) for each calendar day, or portion thereof, for each worker, until strict
compliance is effectuated, in accordance with Labor Code Section 1776(g).
18. Wage Rates. Pursuant to the Labor Code of the State of California, or any
applicable local law, Owner has ascertained the general prevailing rate per diem wages
and rates for holidays, and overtime work in the city, for each craft, classification or type
of laborer, worker, or mechanic needed to execute this Contract. Owner has adopted,
by reference, the general prevailing rate of wages applicable to the work to be done
under the Contract, as adopted and published by the Division of Labor Standards
Enforcement and Labor Statistics and Research of the State of California, Department
of Industrial Relations, to which reference is hereby made for a full and detailed
description. A copy of the prevailing wage rates may be reviewed in the office of the
Director of Public Works, City of Sunnyvale, 456 West Olive Avenue, .Sunnyvale,
California. Wage rates can also be obtained through the City’s Website at
www.ci.sunnyvale.ca.us/purchasing/prevailingwages.htm. Neither the notice inviting
bids nor this Contract shall constitute a representation of fact as to the prevailing wage
rates upon which the Contractor or any subcontractor may base any claim against
Owner.
It shall be mandatory upon Contractor and upon any subcontractor to pay not
less than the specified rates to all laborers, workers, and mechanics employed in the
execution -of the Contract. It is further expressly stipulated that Contractor shall, as a
penalty to Owner, forfeit fifty dollars ($50.00) for each calendar day, or portion thereof,
for each laborer, worker, or mechanic paid less then the stipulated prevailing rates for
any work done under this Contract by Contractor or by any subcontractor; and
Contractor agrees to comply with all provisions of Section 1775 of the Labor Code.
In case it becomes necessary for Contractor or any subcontractor to employ on
the project under this Contract any person in a trade or occupation (except executives,
supervisory, administrative, clerical, or other non-manual workers as such) for which no
minimum wage rate is herein specified, Contractor shall immediately notify Owner who
will promptly thereafter determine the prevailing rate for such additional trade or
occupation and shall furnish Contractor with the minimum rate based thereon. The
minimum rate thus furnished shall be applicable as a minimum for such trade or
occupation from the time of the initial employment of the person affected and during the
continuance of such employment.
19. Accident Prevention. Precaution shall be exercised at all times for the
protection of persons (including employees) and property. The safety provisions of
applicable laws, building and construction codes shall be observed. Machinery,
equipment, and other hazards shall be guarded or eliminated in accordance with the
safety provisions of the Construction Safety Orders issued by the Industrial Accident
Commission of the State of California.
20. Contractor’s Guarantee. Owner shall not, in any way or manner, be
answerable or suffer loss, damage, expense or liability for any loss or damage that may
happen to the building, work, or equipment or any part thereof, or in, on, or about the
same during its construction and before acceptance. Contractor unqualifiedly
guarantees the first-class quality 0f all workmanship and of all materials, apparatus, and
equipment used or installed by Contractor or by any subcontractor or supplier in the
project which is the subject of this Contract, unless a lesser quality is expressly
authorized in the Plans and Specifications, in which event Contractor unqualifiedly
guarantees such lesser quality; and that the work as performed by Contractor will
conform with the Plans and Specifications or any written authorized deviations
therefrom. In case of any defect in work, materials, apparatus or equipment, whether
latent or patent, revealed to Owner within one year of the date of acceptance of
completion of this Contract by Owner, Contractor will forthwith remedy such defect or
defects without cost to Owner.
21. Liquidated Damages. Time shall be the essence of this Contract. If
Contractor fails to complete, within the time fixed for such completion, the entire work
mentioned and described and contracted to be done and performed, Contractor shall
become liable to Owner for liqu!dated damages in the sum of Four thousand Three
Hundred ($4,300), for each and every calendar day during which work shall remain
uncompleted beyond such time fixed for completion or any lawful extension thereof. The
amount specified as liquidated damages is presumed to be the amount of damage
sustained by Owner since it would be impracticable or extremely difficult to fix the actual
damage; and the amount of liquidated damages may be deducted by Owner from
moneys due Contractor hereunder, or its assigns and successors at the time of
completion, and Contractor, or its assigns and successors at the time of completion,
and its sureties shall be liable to Owner for any excess.
22. Additional Provisions.
None.
IN WITNESS WHEREOF, two identical counterparts of this contract, each of
which shall for all purposed be deemed an original thereof, have been duly executed by
the parties.
CITY OF SUNNYVALE
a Municipal Corporation, Owner
Monterey Mechanical Company
Contractor
License No. 388361
By
Attest:
City Manager
By.
Title
By.
Title
By
City Clerk
(SEAL)
APPROVED AS TO FORM:
City Attomey
(Notice:The signatures of the Contractor’s
acknowledged before a notary.)
officers on this contract must be