HomeMy WebLinkAboutStaff Report 2405-2973CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, June 10, 2024
Council Chambers & Hybrid
4:00 PM
Agenda Item
5.Approval of a Finding that the Fire Station No. 4 Replacement Project (CIP PE-18004) is
"Substantially Complex" Under Public Contract Code Section 7201 and Direction to
Increase the Retention Schedule From Five Percent to Ten Percent; CEQA Status – Exempt
Under Section 15061(b)(2)
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 10, 2024
Report #:2405-2973
TITLE
Approval of a Finding that the Fire Station No. 4 Replacement Project (CIP PE-18004) is
"Substantially Complex" Under Public Contract Code Section 7201 and Direction to Increase the
Retention Schedule From Five Percent to Ten Percent; CEQA Status – Exempt Under Section
15061(b)(2)
RECOMMENDATION
Staff recommends that Council:
1. Approve a finding that the proposed Fire Station No. 4 Replacement Project is
“substantially complex” under Public Contract Code Section 7201 based on the reasons
set forth in the staff report; and
2. Direct this project to be advertised for bid with a retention amount of ten
percent (10%).
BACKGROUND
Public Contract Code Section 7201 requires public agencies to limit contract retention on
public works projects to 5% unless the project is found to be “substantially complex” and
therefore requires a higher retention amount. Retention is a contractual withholding of money
from payments to the contractor by the City to cover any unexpected expenses, such as stop
payment notices or poor workmanship, that may occur before the project is complete and
accepted. The standard procedure is to return the retention once the following occurs: work is
completed, the contractor provides the maintenance bond, the City accepts the project, and
the stop payment notice period expires.
Public Contract Code Section 7201(b)(1) generally caps the retention amount that may be
withheld at five percent (5%) of the contract price. However, Section 7201(b)(4) permits
an awarding agency to withhold in excess of 5% on specific projects where the governing
body approves a finding, during a properly noticed and normally scheduled public hearing and
prior to bidding, that the project is substantially complex and therefore requires a higher
retention amount. Section 7201(5) requires such a finding to “include a description of the
specific project and why it is a unique project that is not regularly, customarily, or routinely
performed by the agency or licensed contractors.” The awarding entity must include in the bid
documents details explaining the basis for the finding and the actual retention amount. Staff
will include this information in the bid documents.
ANALYSIS
The Fire Station No. 4 Replacement Project is part of the 2014 Council Infrastructure Plan. Fire
Station No. 4 is located at 3600 Middlefield Road. The existing Fire Station No. 4 was built in
1953 and does not currently meet the current and future needs of the Fire Department. Due to
the growth of the community and advancements in fire safety services, the existing building no
longer meets current seismic, accessibility, or regulatory code requirements that are required
to meet the Essential Services Buildings Seismic Safety Act (ESBSSA). The new Fire Station No. 4
is approximately 8,000 square feet and will house a crew of five personnel and the following
apparatus: a fire engine, an ambulance, and a reserve engine. The new station design will
include two drive-through apparatus bays and a separate reserve bay, living quarters,
bedrooms for the crew, exercise room, Captain’s office, and training room. The building will be
a one-story, LEED-certified building.
The construction contractor will be required to subcontract for numerous specialties including
structural steel, fire sprinklers, backup power, communication systems, and ventilation
systems. The project will require the coordination of multiple construction disciplines while
maintaining right-of-way access within a heavily used intersection by pedestrians, bicyclists,
and students.
City staff has determined and recommends that Council find that the Fire Station No. 4
Replacement Project is “substantially complex” and therefore requires a higher retention
amount of 10%, based on the large amount of work required, the multi-faceted nature of the
project, complex communication systems, and the numerous specialized disciplines and trades
involved in the construction. The City Clerk has published the required notice of this hearing in
the newspaper starting on May 31, 2024.
The retention will be released as described in the City of Palo Alto’s standard contract
General Conditions Section 9.8.1 which states, “Upon receipt of notice from Contractor that the
Work is ready for final inspection, City will make such inspection. The City will file a Notice
of Completion (NOC) with the County Clerk within ten (10) days after Acceptance by the
City. Thirty-five (35) Days after filing the NOC, the City may release the final retention provided
the requirements in this paragraph are met.”
Staff plans to issue an IFB for the Fire Station No. 4 Replacement project in July 2024.
Construction of Fire Station No. 4 is expected to begin in fall 2024 with completion anticipated
in winter 2026.
FISCAL/RESOURCE IMPACT
There are no resource impacts associated with finding the project “substantially complex”.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement is not applicable to this staff report.
ENVIRONMENTAL REVIEW
Council action on this item is exempt from the California Environmental Quality Act (CEQA)
review under section 15061(b)(2) of the CEQA Guidelines because the Fire Station No. 4
Replacement Project is categorically exempt under CEQA Guidelines Sections 15302 and 15303
and is not barred by one of the exceptions set forth in Section 15300.2. A notice of CEQA
exemption was filed on October 26, 2023.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer