That the City Council:
A. Approve the Plans and Specifications for the Annual Arterial Street Rehabilitation Fiscal Year 2019-2020, City Project No. 5-R-19 (“Project”);

B. Approve to award construction contract for the Annual Arterial Street Rehabilitation Fiscal Year 2019-2020, City Project No. 5-R-19 to EBS General Engineering, Inc., of Corona, California, in the amount of $2,144,751 and reject all other bids;

C. Approve the re-allocation of $1,481,122 of funding to complete this Project as described in the Fiscal Impact section of this report; and,

D. Approve and authorize the City Manager to execute an agreement with EBS General Engineering, Inc., of Corona, California, in the amount of $2,144,751 and authorize staff to issue a purchase order to EBS General Engineering, Inc. of Corona, California, in the amount of $2,573,701; which includes a twenty percent (20%) contingency.

The proposed construction for the City's Annual Arterial Street Rehabilitation FY 2019-2020, City Project No. 5-R-19 (“Project”) includes pavement grinding, resurfacing the streets using rubberized asphalt concrete, localized pavement reconstruction, reconstruction of sidewalks, curb and gutter, curb ramps, and drive approaches, as well as painting traffic striping and markings, utility adjustments, and traffic loop installation on 14 City streets and street segments, as identified on the attached list. 

 
The Project was advertised in the Orange County Register and the City received a total of eight bids for the Project, with the following results: 

  

After reviewing the bids and conducting a thorough analysis, staff determined that EBS General Engineering, Inc., of Corona, California, submitted the lowest responsive bid in the amount of $2,144,751.  Staff reviewed work references provided by EBS General Engineering and found them to be satisfactory.

The lowest bid came in approximately 55% higher than the Engineer’s estimate.  Staff has found bids to be significantly above budget due to the recent surge of material prices such as oil, gas, and concrete, as well as escalating labor costs. In order to provide sufficient funding to complete this project, staff recommends that the City Council authorize staff to re-allocate $1,481,122 of Measure M2 Fair Share funds as well as funding from SB1 - Road Maintenance and Rehabilitation Act (RMRA) Funds.  While the allocation of these funds will provide sufficient resources to complete this project, continued higher than anticipated cost of construction materials and labor will likely impact the City's ability to fully fund future projects at the rate previously anticipated.

As part of the approved Fiscal Year 2019-2020 CIP Budget, the Annual Arterial Street Rehabilitation FY 2019-2020 was budgeted using SB1/RMRA funds in the amount of $1,007,932 and Measure M2 Fair Share funds in the amount of $377,068 for a total project budget amount of $1,385,000.  After taking into account costs related to project design for this project ($163,736), there remains an available balance of $1,221,264 for project construction.

Due to the higher than anticipated estimated project cost of $2,866,122, staff recommends that the City Council authorize staff to re-allocate $1,481,122 from available Measure M2 Fair Share funds and SB1/RMRA funds to the Project to fully fund the construction, construction management, inspection, and material testing costs. The proposed re-allocation amounts are as follows: 1) $330,063 of Measure M2 Fair Share funds and $354,439 of SB1/RMRA funds (a combined amount of $684,502) from savings realized on the recently completed Residential Street Rehabilitation FY 20-21 Project, and 2) $796,620 of Measure M2 Fair Share funds from the Residential Street Rehabilitation FY 2019-2020 Project.  If approved, the revised Project budget with the proposed funding allocations will be as follows: