City Council Study Session Agenda and Packet 2015 01 23

Home Browse Search

December 22, 2014 Kurt Kowar Director of Public Works City of Louisville 749 Main Street Louisville, CO 80027 Dear Mr. Kowar, As requested, I am providing a documented history of the development of the City of Louisville's new Public Works Facility project. Before I do that though, I would like to start by providing a relatively brief history of the construction industry over the past several years. This project was advertised in the RFP as a $6 million total cost project in 2012, which was during the heart of the Great Recession. From 2009 thru 2012 we saw construction prices drop as much as 30% from Pre - Recession construction costs. In 2014, construction costs began rising again rapidly as the Nation's economy rebounded from the Recession, and many shovel -ready projects that were put on hold in 2008/2009 hit the "GO button" to get these projects under construction. Locally, the housing construction industry is a prime example of going from zero to 60mph in a very short amount of time. This year alone we have seen close to 3% in construction escalation costs in Colorado and some of our GCs are even telling us that they are experiencing upwards of 1% escalation per month from some of their sub - contractors. In summary, when contractors are short- staffed and busy, costs increase. According to Turner Construction, one of the largest General Contractors in the US, we have returned to Pre - Recession construction pricing, and the construction cost index now essentially matches 2008's historic prices (source http://www.turnerconstruction.com/cost-index). Concerning your new Public Works facility, there has been some disconnect in the documentation of the decision making process throughout the project. My aim of this letter is to assist you in your discussions with the City Manager and City Council to help them understand how the current project under construction came to be. In addition, I am also proposing an increase to RNL's current Construction Administration fee, plus adding post construction services into our contract with the City, to increase our time construction administration services. A detailed description of existing versus proposed services and associated fees follows this letter, and covers our discussions of your expectations and RNL's involvement throughout construction. A BRIEF HISTORY OF THE DESIGN AND DECISION MAKING PROCESS Throughout the entire process we balanced the City's desire for an energy- efficient, civic, modestly design, highly functional new Public Works Facility that will meet immediate and future growth needs (10 years). Overall costs of the facility were discussed throughout each phase of the project, starting the very first week during the programming sessions. Programming interviews occurred in February 2013 with all key department staff members to establish our own program based on actual department needs utilizing our proven industry standards for bay sizing, mechanical spaces, circulation spaces, equipment and vehicle storage, etc. DENVER 111!..:1 • i Y. I H F- I 5,n I E F -274 CEVY ?11 Cr.) U20.,v T 303 23.5 ' -717 F 303 232 384E 4 LOS ANGELES PHOENIX