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HomeMy WebLinkAboutAgenda - 09-05-1995 - IX-B f t• 1 ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda ACTION AGENDA ITEM ABSTRACT Item No. Ix— B Meeting Date: September 5, 1995 SUBJECT: BID AWARD; CONTRACT APPROVAL; FUNDING APPROVAL; JAIL/COURTHOUSE ADDITION PROJECT and CONFIRMATION OF ADDITIONAL FUNDING FOR SHS DEPARTMENT: PURCHASING AND CENTRAL SERVICES PUBLIC HEARING: YES: NO: xx ATTACHMENT(S): INFORMATION CONTACT: Bid Tabulation PAM JONES, ext 2650 Report Telephone Number- Hillsborough 732-8181 Chapel Hill 967-9251 Mebane 227-2031 Durham 688-7331 PURPOSE,: To consider awarding a bid, approving a contract, contingent upon Attorney and Staff review and approving funding option for construction of the Jail/Courthouse Addition Project. BACKGROUND: A summary of pertinent information regarding this project is as follows: ► Bids were solicited for the Jail/Courthouse Addition project on May 23, June 8 and August 28, 1995 for construction of this project. ► The lowest base bid of $3,765,000 was submitted by Trafalgar House Construction (see attached bid tabulation from August 28). ► Further negotiations with the low bidder have reduced the bid amount to approximately $3,408,642 None of the recommended cost saving measures are expected to reduce the functionality of either facility. ► Capital Improvement Program (CIP) funds currently available are approximately $2.2 million, thereby leaving a funding deficit of the of approximately $1.2 million; this includes the cost saving reductions negotiated with Trafalgar House. ► In addition, funds should be considered for contingency and other expenses for which the Owner is responsible, such as soil testing, concrete testing, survey work, etc. As referenced on page 12 of this abstract, $299,910 is recommended, thereby bringing the total funds requested for private placement for the Jail/Courthouse project to $1.5 million. It should be noted that unused contingency funds at the completion of the Jail/Courthouse project could be used for other CIP projects. ► On a separate, but related issue, the Board has voiced support to seek private placement for an additional $500,000 for construction of the Southern Human Services Building as well. ` The addition of this amount would bring the total private placement funds sought to $2 million. If the Board chooses to seek private placement of funds for the Jail/Courthouse project, the revenue derived from the additional Federal Marshal inmates will significantly exceed the debt service payment on the $1.5 million. ► If the Board approves the funding scenario It is recommended that the project ordinance be modified in tandem with the final execution of the contract to reflect the entire contract obligation for the Jail/Courthouse Project This would allow the work to begin as quickly as contract documents are executed (within 30 days). 2 RECOMMENDATION: The Manager recommends that the Board take the following action: ► Award the bid to Trafalgar House Construction for an amount not to exceed $3,408,642;and ► Approve contracts,contingent upon Attorney and Staff review and authorize the Chair to sign on behalf of the Board;and ► Approve the proposed funding scenario and authorize Staff to prepare the appropriate budget modification documents for Board approval at a later meeting;and ► Authorize $500,000 additional funds for Southern Human Services Building to be obtained through private placement in early,1996. Total private placement funds$2 million. � z tn ::) � o � z 00 m Z � w Q V Q Q H � O O U 00 F � U a e a N I T U p :3 n U F � z t FQ m a a Q O G7 � i Cx W O > ° ' o � c � L 0 z N 48 � � � o �¢ m � � x }� d 0 � � o w � o r d C C14 a o � a � U � Q � J J dA > > aU aq oq z W F W Cj �Q W Ua�°ox U COQ S 1 p ° � O o zu tn as � v CIA 00 z ° 0 z E � px A � o z m a o W t ZM U w W ti A V K, Z J a �p U C � Q � V mm V o a4 U V v H U W o aAU � a x Q z C7 0o U O ° QO Sri � O Q� U � zz � � W A ° O � � �40 1 q \ J qt ai it d m �O J V � V H i-r x ara d a � a H � GTr � V C� ooU o � O N Q o z 0 � � o a ° N I W d N U � w w" d dq 8o V � Z p z � F Uq A a x a � z O a a � w w � ° U' o°o U S JAIL/COURTHOUSE PROJECT DISCUSSION OF OPTIONS AUGUST 28, 1995 Much of the last month has been spent exploring all known options regarding the construction of the Jail/Courthouse project. This report is intended to provide the following information: • Background information of project need; • An articulation of options we have explored and the results of our analysis; • Funding options for the additional money needed for the project; • Recommendation. Background There are two components of this project, the Jail addition and the addition of one courtroom for use by Superior Court. Courtroom This project was necessitated by the extreme overcrowding in the Court system, particularly as it regards the District Court system. The implementation of Administrative Court on Fridays has reduced the size of the Monday/Wednesday courts, however, the Friday courts are far in excess of the District courtroom capacity (82). While the District and Superior Court Judges have worked well together to coordinate the use of the Superior Courtroom in the New Courthouse when District Court dockets were out of sight, the problem has not been eliminated, nor does it show signs of diminishing in the future. The courtroom to be built will be specifically for Superior Court and the large courtroom in the New Courthouse currently assigned for Superior Court will be designated for District Court. The Old Courthouse courtroom will continue to be used for Superior Court as well. Jail The problem with the Jail has gotten worse in the past few months. Average daily population is at 118; the rated capacity of the Jail is 71. The Sheriff has decreased the number of Federal inmates which he is holding, which in turn reduces the revenue we will receive. While the pre-trial release program funded through the Criminal Justice Partnership Act is in its infancy, there has been minimum impact of the program on the daily population to date. As is the case in the Court numbers, there are no signs of future population decreases. Overcrowding is not a matter to be dealt with lightly. It's impact makes us vulnerable in a number of areas. There may be increased incidences of altercations among inmates, staff stress is increased and the potential for other inmate situations is increased when the population is significantly over capacity. The entire $2,000,000 allocated to this project comes from the Federal Marshal's office and guarantees them 75 beds for 15 years. Our Actions To Date The Jail and Courthouse projects were combined for bidding purposes. This proved a very successful approach in the Government Services Center/Tax and Records Renovation projects. By combining projects you may expect to experience savings not only in materials needed (volume buying), but more importantly in the supervision of the job by the contractors superintendent. Since both jobs would be under one contractor, the supervision cost is significantly decreased. J A 1 / Bids were solicited for this project first on May 23, 1995. Under NC Statues three bids per discipline (general, plumbing, electrical and mechanical) must be received in order to open. Response was insufficient to open. Bids were re-solicited for opening on June 8, 1995, at which time only one general contractor bid as a single prime contract. Under a single prime contract, the general is the only contractor and all others are subcontracted by him. Bids may be opened on the second solicitation regardless of the number received. Bids were opened with the resulting bid $3,944,684 in excess of the budget available; the Board rejected these bids on June 28, 1995. Bids were solicited a third time for opening on August 28, 1995, with the Trafalgar House submitting a single-prime bid with the lowest base bid of$3,765,000. This solicitation yielded two general contract single-prime bids as well as a full set of multi-prime contract bids. It is notable that the single prime bid submitted by Trafalgar House was lower than the combined multi-prime bids as well ($3,933,587). OPTIONS CONSIDERED The following options for constructing the Jail/Courthouse project have been explored. The advantages and disadvantages to each are cited as follows: Option 1. Split the project and re-bid. Advantages. • There would probably be sufficient bidders for the Courthouse project, however, it continues to be doubtful that they would come in under the amount appropriated. Disadvantages. • Duplicate costs. To split the project will require duplicate effort on all personnel related fronts, including the architect's inspection schedule, the contractors superintendent set up and the County staff contract administration and inspection. Each of these equate to more dollars than would be the case under a combined project. • Staging area (materials stored for use on the project)would be more extensive. By having both projects under one contract the materials could be stored together, thereby requiring less area for staging. Since space is at a premium in this area, any opportunity to minimize the amount needed is an important consideration. • Time. Re-directing the specifications and drawings to split the projects and then to re- solicit bids would cost us at least an additional 60-90 days. This time table would put us into a questionable time of year for good building weather as well. Option 2. Re-bid the project no earlier than first quarter-1996. Advantages. • There is no certainty that we would have any better luck finding contractors to bid in January, 1996. In addition, it is important to note that correctional facility construction is a specialized field and not all contractors will be interested nor qualified to perform the service, thereby limiting our field of solicitation to an even greater degree. /D Disadvantages: • Construction costs. There is a very real possibility that construction costs could escalate further. The most recent trends seem to indicate that costs could increase by 8-12% by January 1, 1996 and then level off to inflationary increases thereafter. While this is a smaller increase than what we have seen in the past year, it is still an increase and would require even more money than what we have now. • Time. Overcrowding is the rule rather than the exception at the jail right now. As pointed out earlier in this document, we are averaging 118 inmates in a 71 inmate capacity jail. This consistent significant overcrowding makes us vulnerable to various inmate problems. 0 Revenue. Again, as I pointed out earlier in this document, the Sheriff has had to reduce the number of Federal inmates held in order to reduce the Jail population. The County is reimbursed $49.96 per inmate per day for each Federal inmate. As a point of reference, the loss of just five inmates per day would reflect a revenue decrease of over$90,000 per year. Option 3. Scratch both projects and wait to build under the recommendations brought forward by the Justice Facility Study Group. Advantages: • None apparent. Disadvantages: 0 Continued significant court and Jail overcrowding. Potential legal action by Judge against Commissioners which would force the construction of additional court facilities. The Jail operation could face similar sanctions as well. • Continued over crowding in Jail.. • Lose $2 million in Federal Marshal funds; • Future construction would cost us more in the long run; the problems will not go away. Option 4. Assess whether there are current Capital Improvements Program (CIP) projects which are no longer a priority and from which funding could be shifted. The results of this assessment indicated that funding is necessary for all projects currently in the CIP; obtaining additional funds for the Jail/Courthouse project from this source is not practical. Option 5. Attempt to solicit other bidders and re-bid by end of Summer, 1995. Since the bids were solicited the first time there was an indication from another bidder that they would be interested in submitting a bid. The expectation was that by creating a more intensive level of competition a more positive bid price would result. This in fact was the case. The low bid submitted by Trafalgar House on August 28, 1995 ($3,765,000) was approximately$180,000 lower than the bids earlier received. You will note, however, that the lower bid significantly exceeds funding currently available for this project ($2,208,552). In an effort to bring the bid amount closer in line with the funds available, Grier- Fripp and the low bidder, Trafalgar House Construction, have identified a list of potential areas for cost savings without functional modification of either facility . Modifications to the project which are recommended include the following: • Revising backfill material used; • Tap into existing utilities rather than having temporary service installed; • Use a landscaped berm rather than a retaining wall on the northern perimeter of the Jail addition; • Eliminate trusses on Jail roof design. (Hillsborough Historic District Commission approval would be required, however the alternate design is very similar so the probability of acceptance is good. This item represents in excess of$100,000 cost savings.); • Change hot water capacity for Jail; • Install electrical switchboard to accommodate the new addition to the Jail rather than future expansion; • Modify light fixtures and ballasts (increases energy efficiency); 0 Modify HVAC system to allow manual dampers; • Modify the contract time from 14 months to 10 months. As mentioned earlier, the qualifications and experience of a correctional facility contractor are important. We are fortunate that Trafalgar House has constructed other North Carolina prison facilities and has worked with Grier-Fripp as well. As a note of background, Trafalgar House Construction is British owned and is one of the largest construction companies in the world . As a point of reference for resources, they own the bonding company which would write the performance bond for this job. They have offices world-wide, including one in RTP. Don Combs, I"senior Vice President of Operations, is responsible for operations east of the Mississippi River and lives in Hillsborough. Further, Trafalgar House has indicated that they can build both projects in 10 months, rather than the 14 months it was estimated to take originally. The Architect indicates that with their significant pool of resources this is quite possible for them to do. Advantages. • One Contractor, reliable, experienced in Jail construction, excellent resources. Economical purchasing by combining our materials purchases with other prison work they have on-going; • One contract to administer, so the lines of communication and responsible parties would be clear; • Most expedient completion time line of any of the options earlier set forth. 0 Construction now would save us money in the long term. • 10 month construction time rather than 14 month construction time would let us realize revenue from Federal inmates four months sooner. • The original scope of the project would be left intact. Disadvantages: • Would require more funds than are currently available. FUNDING PROPOSAL: Funds available in CIP now $2,208,552 Bid amount less recommended modifications $3,408,642 Project contingency(estimated approximately 8%) and other owner expenses (such as testing, survey, etc.) $ 299,910 Deficit $1,500,000 We have pretty much exhausted the pay-as-you-go resources, so these were not considered as an option for additional funding of this project. We do have a stream of revenue however, which is attached permanently to this project as long as Federal inmates are housed in the Jail. Although our current agreement with the Federal Marshal's office is for 45 beds, we held an average of 25-30 Federal inmates in f.y. 1994-95, which yielded approximately$537,000 in revenue. The CAP agreement ($2,000,000 grant) which will be in effect upon completion of the expansion will allow the Marshal's office a maximum of 75 beds per day for 15 years. I have spoken at length with the Marshal's office, both in Greensboro and in Washington D.C. and they indicate that when Orange County opens they will consolidate inmates held in other smaller surrounding Jails into ours. Their goal in the Middle District is to hold prisoners only in three Jails; Forsyth, Guilford and Orange Counties. While they are not likely to keep 75 prisoners in Orange County, the number will significantly increase from what is kept now. The potential revenue from the additional 30 beds (75-45) is approximately$638,239 per year, bringing our total revenue potential from Federal inmates to over$1 million per year. As demonstrated in the accompanying table, however, you will note that at the current per diem rate of$49.96 per day we would need to house only 11 Federal inmates to totally offset the debt service payment associated with the $1.5 million necessary to complete this project. The table further indicates that as the debt service amount decreases, the number of inmates necessary to "break even" decreases as well. �3 Assuming private placement of$1,500,000 the estimated payment schedule (per Finance Director) will be: Assumptions: 15 year term (this is also the term of the CAP agreement with Federal Marshal) 6.75% interest rate $1,500,000 principal amount Semi-annual payments YEAR PRINCIPAL PAYMENT PRINCIPAL INTEREST Number of BALANCE (JaiUCths.only) PAID(JaiUCths. (JaiUCths.only) Federal (JaiUCths.only) only) inmates needed daily to totally offset debt service cost** 1 $1,500,000.00 $201,250.00 $100,000.00 $101,250.00 11 2 I $1,400,000.00 $194,500.00 $100,000.00 $94,500.00 11 3 I $1,300,000.00 $187,750.00 $100,000.00 $87,750.00 10 4 $1,200,000.00 $181,000.00 $100,000.00 $81,000.00 10 5 $1,100,000.00 $174,250.00 $100,000.00 $74,250.00 10 6 I $1,000,000.00 $167,500.00 $100,000.00 $67,500.00 9 7 I $900,000.00 $160,750.00 $100,000.00 $60,750.00 9 8 $800,000.00 $154,000.00 $100,000.00 $54,000.00 8 9 $700,000.00 $147,250.00 $100,000.00 $47,250.00 8 10 I $600,000.00 $140,500.00 $100,000.00 $40,500.00 8 11 I $500,000.00 $133,750.00 $100,000.00 $33,750.00 7 12 $400,000.00 $127,000.00 $100,000.00 $27,000.00 7 13 $300,000.00 $120,250.00 $100,000.00 $20,250.00 7 14 I $200,000.00 $113,500.00 $100,000.00 $13,500.00 6 15 I $100,000.00 $106,750.00 $100,000.00 $6,750.00 6 Totals $2,310,000.00 $1,500,000.00 $810,000.00 **NOTE: Number of inmates needed to totally offset debt service is based on current per diem of$49.96. This amount is reviewed and adjusted upward at least annually. RECOMMENDATIONS: • Exercise option 5; Accept the low bid submitted by Trafalgar House Construction as modified by the cost saving measures cited above. (Contract amount not to exceed $3,408,642.) • Approve contracts contingent upon Attorney and Staff review in order that project can move along as expeditiously as possible; • Seek private placement for the additional funds needed (approximately $1,500,000 for JaiUCourthouse). Note: In order to maintain the bank qualification which allows us to obtain lowest interest rates possible, the private placement of funds cannot occur until after January 1, 1996. However, it is recommended that the Board authorize Staff to develop a project ordinance to add funds to the Jail/Courthouse Project at this time so contracts can be authorized for the project total. • Use additional Federal revenue to pay debt service for the private placement funds for the Jail/Courthouse project. • Note: On a separate, but related issue the Board should further note that private placement funds sought in January, 1996 would total $2 million, which would include the $500,000 previously committed to complete the Southern Human Services Project. Additional debt service payment for this amount would range from approximately $67,000 for the first year to $35,500 in year fifteen.