GILROY
– An unhappy City Council voted to reject bids for Gilroy’s
planned new police station Monday after a study session that
revealed the three bids – all at least $8 million over engineers’
cost estimates – were actually on par with a separate third-party
quote.
GILROY – An unhappy City Council voted to reject bids for Gilroy’s planned new police station Monday after a study session that revealed the three bids – all at least $8 million over engineers’ cost estimates – were actually on par with a separate third-party quote.
What will happen to the station as currently proposed is unclear – save a probable year’s delay in construction. However, architects and consultants have recommended changes to both the way the project is put out to bid and also to design elements, mainly an underground parking garage.
Whether the current architect, WLC Architects, will last long enough to see those recommendations through is another issue yet to be decided.
“The question I have is ‘Is this the right team for the project?’ ” said Councilman Craig Gartman, who criticized WLC Monday for “oversights” on basic points and city staff for failing to bring issues to the Council’s attention. “It’s very complex – are they in over their heads?”
In a candid “clear the air” session Monday, Council heard why all three bids for the 48,500-square foot station building and an underground parking garage below it came in more than $8 million – or nearly 50 percent – higher than engineers’ estimates of $17,835,0000.
Larry Wolff, principal at WLC, apologized profusely to the Council in a letter and a presentation Monday for what he called a “devastating” difference between the estimates and bids. He said he believes the majority of the city’s goals for the station can still be met, although some modifications need to be made.
“It’s like a sandwich,” he said. “We have a lot of excess bread we need to get rid of, but we need to save the meat.”
Written reports and explanations by WLC and Harris Associates, a construction management firm, pointed to both procedural and structural issues in the high bid amounts.
The stunner for Councilmembers seemed to be the revelation that an outside firm had previously estimated the costs for the building and parking garage at approximately $25,182,000 at 90 percent completion – much higher than WLC’s estimate at 100 percent. Councilmembers and City Administrator Jay Baksa were apparently unaware of the quote.
Wolff said he “agonized” over the difference, but that he couldn’t find anything that justified the higher third-party cost estimate after a review of historic costs for other projects and an attempt by engineers to secure exact numbers for individual elements. Wolff said he didn’t want to make large cuts in the project based on uncertainty.
But Councilmembers felt the gap should have prompted caution – and disclosure.
“It seems to me that that (gap) was ignored,” Mayor Tom Springer said. “A red flag should have gone off. Other red flags should have gone off.”
Both WLC and Harris also pointed to bidding process items that probably helped to lower the number of firms that could bid on the project – thus reducing competitiveness and raising costs.
Both said requirements for the amount of work the general contractor itself – and not subcontractors – would perform should be lowered from the current 25 percent to 15 percent, and lower if possible. The higher number probably prevented some contractors from bidding, officials said.
Both also said the current construction timeline of 19 months could be too aggressive, noting several contractors wanted 20 to 24 months.
Meanwhile, Harris officials said several pre-bid comments and questions from contractors apparently went unanswered, prompting companies to insert extra “contingency” money in the bids. WLC disagreed, noting that all three bids came in relatively close.
Wolff also said engineering requirements on the building were changed from a less restrictive “Type 2” construction type to a “Type 1” during plan checks – changes that were not accounted for in the firm’s final estimate.
Eliminating the second level of the parking garage would lower those construction requirements again and also reduce concrete, steel and mechanical systems costs, Wolff said, saving the city at least $4.7 million.
“We got way deeper – no pun intended – than we ever wanted to,” he said of the garage.
Eliminating the building’s second floor and simplifying the roof would save another $2 million, Wolff wrote.
Harris also raised the possibility of modifying the parking garage and downsizing the above-ground building, although it did not go into specifics in light of further review and discussion.
Monday’s session was the second time this year that Councilmembers have had harsh words for the handling of the cost-estimating process, although in the past they have also praised the architect’s conduct in gathering public input. In February, several Councilmembers criticized undisclosed costs and cost increases that produced a nearly 25 percent jump in estimates for the overall project.
Although Councilman Bob Dillon seemed to secure a tentative commitment from Wolff to perform at least some of the rectifying work for free, Dillon indicated the firm is definitely not out of hot water.
“I’d say we’re fairly close to firing him … ” Dillon said in an interview. “The only thing that will save Mr. Wolff is the idea that we don’t want to spend the time and money to get someone else to do it.”
Wolff told the Councilmembers he would also think about terminating the relationship if he was in their position.
“It’s hard to sit here and give you assurances when I don’t have anything to base those assurances on … ,” he said. “I do believe we can get this project back on track.”
In the short term, Council agreed to wait six weeks while architects and officials craft a timeline that lays out how the city will proceed with a future review of the station design. Officials want to identify how changes would affect the police department and the overall Civic Center.
“If we start backing off certain things, we need to understand the tradeoffs,” Baksa said. “That will take some time.”
All parties seemed to agree that cutting off parts of the “intricate, complex” station design is not a simple matter. Certain elements – mainly the parking garage – are meant to serve the entire future Civic Center complex, which lies in the midst of a built-out residential area. The city will likely have to reopen the environmental impact report approved for the center.
The second floor of the two-story underground garage is expected to free up spaces elsewhere for citizens to park nearer an expanded library and senior center and meet 2023 parking demand for the civic buildings. The question now is whether engineering for the underground garage is so complex that it’s not a value compared to building surface parking or an above-ground garage – which officials have said could require the purchase and demolition of surrounding land or homes.
Redesigning or eliminating the garage “could lessen the price of the police station, but it just shifts the cost or moves it out,” Baksa said. “But that could be good.”
The city apparently hasn’t increased its construction management staff recently despite undertaking an unprecedented suite of four new capital projects, including a new fire station, corporation yard and sports complex. A new library is also in the works depending on the outcome of a state grant application.
Construction of the station could have begun as early as this month and finished by early 2005 without the bid issues, officials said.
The bids currently in question do not include several other portions of the police and parking project. Including demolition, infrastructure, construction, architectural and engineering services and construction management, the total cost for the project was estimated in February at nearly $25 million dollars – if bids for the building and garage came in at WLC estimates.
Some infrastructure is also expected to serve the overall civic center.
