For City Council Meeting [January 12, 2021]
TO: Honorable Mayor and City Council
APPROVAL: Sean Grayson, Acting City Manager
FROM: Michael Tahan, Interim Public Works Director
Title
Request City Council to 1) Accept Public Improvements; 2) Authorize the reimbursement to Lewis-Hillwood Rialto Company, LLC (LHR) in the amount of $537,514.60; 3) Certify Final Project Costs of $2,150,058.43 for the Public Improvements; 4) Approve a Transfer of the balance from the Laurel/Walnut/Locust Escrow account into the Airport Escrow Account; 5) Approve GASB 34 Report; and 6) Authorize the Interim City Engineer to record a Notice of Completion, all related to the Construction Reimbursement Agreement by and between the City of Rialto and Lewis-Hillwood Rialto Company, LLC (LHR) for the Laurel/Walnut/Locust Improvements.
(ACTION)
Body
BACKGROUND
On October 13, 2015, the City approved a Construction Reimbursement Agreement (“Agreement”) with Lewis-Hillwood Rialto Company, LLC (“LHR”) for construction of the Laurel/Walnut/Locust Improvements (“Project”). The Agreement authorized LHR to bid, award contract(s), manage and construct the Project in accordance with procedures established in the Agreement. The Project included water, storm drain, roadway and dry utility improvements. The City monitored the bidding process to ensure competitive bidding and fair pricing. LHR reviewed, approved and submitted all payment requests and invoices to the City for payment processing. The staff report from the October 13, 2015, meeting is attached hereto as Attachment 1.
The Agreement authorized LHR to bid, award contract(s), manage and construct the Project in accordance with procedures established in the Agreement. The Project authorized reimbursements related to the following improvements:
1. Street Improvements. Construction of public roadway improvements within the right-of-way of Laurel Avenue, Walnut Avenue, and Locust Avenue. In the case of Locust Avenue, the street improvements shall only consist of those certain improvements which are not eligible for the Regional Traffic Fee reimbursement (i.e., streetlights and sidewalks).
2. Water System Improvements. Construction of a new water main in Locust Avenue from Miro Way to Renaissance Parkway in accordance with the plans and specifications prepared by Fontana Water Company.
3. Dry Utilities. Construction of any dry utility improvements in Laurel Avenue, Walnut Avenue, and Locust Avenue, required by the utility company or deemed necessary by the City and Developer.
4. Storm Drain Improvements. Construction of any interim storm drain basins required on the east side of Locust Avenue as part of the construction of Locust Avenue as approved by the City of Rialto.
On December 1, 2015, the City executed Joint Escrow Instructions between the City of Rialto, LHR, and First American Trust FSB. On January 13, 2016, the City deposited the amount of $4,616,534 in the Laurel/Walnut/Locust Escrow Account using funding from the Airport Escrow Account. The City Council authorized the contributions in accordance with Article VI of the Second Amended and Restated Contract of Sale.
ANALYSIS/DISCUSSION
Required Public Improvements
Lewis-Hillwood Rialto Company, LLC (LHR) completed fee credit eligible work on December 18, 2017. Table 1 below summarizes the estimated costs of certain Required Public Improvements.
Table 1
Laurel/Walnut/Locust Avenue Improvements Summary of Estimated Cost
Lewis-Hillwood Rialto Company, LLC (LHR) has provided the City with evidence of the actual costs of constructing the various public improvements and requested reconciliation of all credits and reimbursements in accordance with the Construction Reimbursement Agreement.
Public Works Department staff completed the review of the construction costs and invoices submitted by Lewis-Hillwood Rialto Company, LLC (LHR) for reimbursement in accordance with the Construction Reimbursement Agreement. Public Works reviewed and verified the construction costs for the improvements and determined them to be fair and reasonable given the scope of work.
A Notice of Completion for the project will be filed with the County Recorder’s Office for the Laurel/Walnut/Locust Improvements.
Final Costs and Reimbursement:
On January 19, 2018, Lewis-Hillwood Rialto Company, LLC (LHR) submitted a reimbursement request in the amount of $2,150,058.43, with Hard Costs of $1,998,030.24, Soft Costs of $32,208.41 and Developer Fees in the amount of $119,819.78 for the Laurel/Walnut/Locust Improvements. See Attached Attachment 2.
On May 18, 2018, the City submitted a draw request to First American Trust FSB to pay $1,612,543.82 against the claim of $2,150,058.43 and First American Trust FSB paid the claim to LHR on June 7, 2018. The request provided a progress payment representing 75% of the requested reimbursement as a partial payment. The balance of the claim in the amount of $537,514.61 remains outstanding and is the subject of this reconciliation report and is summarized in Table 2 below.
Table 2: Reimbursement Summary
Public Works staff and Lewis-Hillwood Rialto Company, LLC (LHR) concurred with the final reimbursement in the amount of $537,514.61.
ENVIRONMENTAL IMPACT
The construction of the Alder Avenue Improvements was analyzed as part of the Program Environmental Impact Report (EIR) for the Renaissance Specific Plan and California Environmental Quality Act (CEQA) review for the I-210 Logistics I and I-210 Logistics II projects.
On November 8, 2010, the City certified the EIR for the Renaissance Specific Plan and on November 10, 2010, filed the Notice of Determination for the EIR.
GENERAL PLAN CONSISTENCY
The City of Rialto has identified several goals and objectives within the City’s recently adopted General Plan through which the City looks to improve the community. The proposed action is consistent with the following goals and objectives contained in the General Plan:
Goal 3-1: Strengthen and diversify the economic base and employment opportunities and maintain a positive business climate.
Policy 3-1.2: Encourage a variety of businesses to locate in Rialto, including retail, high technology, professional services, clean industries, logistics-based businesses, and restaurants/entertainment uses to promote the development of a diversified local economy.
Goal 3-3: Attract, expand, and retain commercial and industrial businesses to reduce blighted conditions and encourage job growth.
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
Policy 3-6.1: Coordinate all development proposals with other affected public entities to ensure the provision of adequate public facilities and infrastructure services.
Goal 3-7: Upgrade public infrastructure as an inducement to promote private investment.
LEGAL REVIEW
The City Attorney has reviewed and supports this staff report.
FINANCIAL IMPACT
Operating Budget Impact
The City must maintain the Laurel/Walnut/Locust Improvements adding to its annual maintenance costs. The short-term impacts will be nominal due to the condition of the improvements.
Capital Improvement Budget Impact
The City will request a release of the $537,514.61 deposit balance from the Laurel/Walnut/Locust Escrow Account and will return the unused deposit balance to the Airport Escrow Account.
The Finance Department will add the new improvements to the City’s fixed asset system in compliance with Governmental Accounting Standard Board (GASB) 34 Standards for Financial Reporting of Infrastructure Assets. The GASB 34 Report is attached hereto as Attachment 3.
Licensing
A Business License application and payment of a Business License tax is not required for this action.
RECOMMENDATION
Staff recommends that the City Council:
• Accept the Public Improvements constructed on behalf of the City of Rialto by Lewis Hillwood Rialto LLC.
• Authorize the reimbursement to Lewis-Hillwood Rialto LLC in the amount of $537,514.61.
• Certify Final Project Costs of $2,150,058.43 for the Public Improvements.
• Approve a Transfer of the balance from the Laurel/Walnut/Locust Escrow account into the Airport Escrow Account.
• Approve the GASB 34 Report for the Laurel/Walnut/Locust Improvements.
• Authorize the Interim City Engineer to record a Notice of Completion with the County Recorder’s Office for the Laurel/Walnut/Locust Improvements.