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HomeMy WebLinkAboutAddendum to the North Seventh Urban Renewal Board Budget Amendment - added 9-22-11 Commission Memorandum REPORT TO:           Honorable Mayor and City Commission              FROM:                      Keri Thorpe, Assistant Planner Tim McHarg, Planning Director Anna Rosenberry, Finance Director SUBJECT:              ADDENDUM to Staff Report provided for Annual Work Plan and Budget Amendment for the North 7th Avenue Urban Renewal Board (NSURB) MEETING DATE: September 26, 2011  AGENDA ITEM TYPE: Action Item RECOMMENDATION:  Approve the NSURB Annual Work Plan and Budget Amendment for Fiscal Year 2012. Consider, discuss and provide direction on the two options for the method of expenditure of the funds requested as part of the budget amendment relative to the application of the City’s purchasing policy. RECOMMENDED MOTION: Based upon the information provided, I move to approve the N. 7th Avenue Urban Renewal Board’s Amendment to their Annual Work Plan and Budget for Fiscal Year 2012 as recommended by Staff under Option #1 (or #2) BACKGROUND: Following the initial submittal of packet materials, Staff decided to prepare an addendum to provide the Commission with additional information and options when considering NSURB’s request. Because of the time sensitive nature of the NSURB request and a compressed schedule between NSURB and City Commission meetings, Staff had limited time to fully prepare the packet materials. Staff requests that the Commission consider this as an exception to the normal procedure for preparation and distribution of Staff reports. NSURB’s request to amend their FY2012 Work Plan and Budget raises the unresolved issue of whether or not NSURB needs to follow the City’s Purchasing Policy. While what the NSURB wishes to spend the money on is not in question, the method by which they wish to spend it is. NSURB feels this project addresses a special circumstance in the District which warrants deviating from programs/procedures already established by the NSURB. Specifically, this circumstance is described as follows: The project is essentially ready to go and will provide sidewalk where currently there is none; The need for a sidewalk in front of Uhaul has been a priority for the NSURB from the board’s inception; and, It is important to get this work done this fall so pedestrians on N. 7th Avenue don’t have to endure the existing unsafe situation through another winter season. The City’s purchasing policy has been established for two reasons relative to the use of public funds for procurement and contracting for goods and services. The first is specifically to ensure that the City conforms to all of the requirements of the Montana Code Annotated. The second is generally to ensure that the City addresses issues of fairness, risk and liability. Staff is concerned that the NSURB budget amendment request does not conform to the City’s purchasing policy or standard NSURB program guidelines. The Purchasing Policy states that “Any board or committee given independent purchasing authority by law or by the City Commission, including the Library Board of Trustees, the Parking Commission, the several Business Improvement Districts and urban renewal agencies should comply, to the greatest extent possible, with the requirements of the policy.” The use of the word “should” instead of “shall” indicates some flexibility in how NSURB chooses to conduct their purchasing authority. While Staff recognizes this flexibility, concerns regarding the City’s liability, lack of indemnity, fairness in the bidding process and absence of the City’s non-discrimination clause still remain. Generally, when the City contracts to have work completed in the public right of way with public money, both parties enter into a contract addressing the aforementioned concerns. Should the Commission approve this budget amendment with no additional guidance or direction from the Commission regarding the method of expenditure, there are potential consequences. As such, Staff requests that the Commission consider the following options when making your motion and vote on the proposed budget amendment. Option #1: The Commission may approve the amendment to the NSURB’s FY2012 Work Plan and Budget with the condition that NSURB shall require UHAUL to enter into an Agreement that addresses the potential concerns. Specifically, the following language shall be included in the Agreement: The NSURB has determined that the lesser of and not to exceed 65% or $50,000 of the project costs, and only those costs located in the public right of way, may be reimbursable if completed, inspected and deemed acceptable to the City staff. Documentation of the costs for the work completed shall be provided and UHAUL’s portion shall be separated from the NSURB (public) portion. Itemized invoices shall be provided. The improvements shall be completed as conditioned in Sketch Plan #Z-11XXX (project number to be assigned upon submittal of the sketch plan application). UHAUL agrees to undertake the Project using only contractors and subcontractors who are licensed and bonded to do business in the City of Bozeman. That applicant will ensure that the contract(s) will be awarded in an appropriate manner that will not encourage favoritism or bias nor substantially diminish competition, by conducting the process in such a manner that only qualified contractors will be eligible, and that the award will be based upon experience and expertise of the applicants. UHAUL agrees that grant funds shall not be paid until project completion. In addition, UHAUL agrees to complete construction of the Project by [Insert Date], in accordance with the plans and materials submitted within the Sketch Plan application pursuant to the aforementioned design plan as presented to the NSURB. In addition, UHAUL agrees that any incomplete landscaping improvements must be financially guaranteed as outlined by the Improvements Agreement with the City of Bozeman and must be installed by [Insert Date] or by the due date specified by the Improvements Agreement, whichever comes first. In addition, UHAUL agrees that they may not use the grant as financial guarantee for any outstanding site improvements for which the Improvements Agreement is entered. UHAUL agrees to indemnify and hold NSURB and the City of Bozeman harmless from any and all legal liability, claims or actions resulting from any occurrence arising out of, or related to, the Project including, but not limited to, hazardous materials contamination of the air, soil, or groundwater. Hazardous materials shall include asbestos, petroleum products, and any other material or chemical that has been found to be hazardous to humans, animals, or plants by the State of Montana or the United States Environmental Protection Agency. UHAUL will not discriminate on the basis of race, color, religion, creed, political ideas, sex, age, marital status, national origin or disability in employment or provision of services. UHAUL shall be subject to and comply with Title VI of the Civil Rights Act of 1964; Section 140, Title 2, United States Code, and all regulations promulgated thereunder. Upon completion of Project construction, UHAUL shall timely provide the NSURB with copies of paid invoices for labor and materials used on the Project. In addition, UHAUL shall inspect and approve the work and notify the NSURB by submitting a letter requesting the funds which states that the project is satisfactorily completed and compliant with all terms and conditions of the participation agreement. This Agreement may be amended in writing if any of the conditions herein stated are altered, subject to the review and written approval of all parties hereto. The project must undergo and pass all required and necessary inspections by the City of Bozeman and any other applicable federal, state and local agency in addition to any other inspections required by law to be completed prior to completion of the Project and before the grant is dispersed. The NSURB and the City of Bozeman shall have no civil liability whatsoever for any of UHAUL’s actions, omissions, or undertakings related to this project. UHAUL accepts and agrees to be responsible to ensure all contractor or sub-contractors have adequate liability, worker’s compensation, and property insurance for any work performed on the Project.       In Staff’s analysis, Option #1 allows for flexibility in the expenditure of public money while ensuring some protections for both the NSURB and the City. Provided UHAUL is willing to sign the agreement, the work may still happen this construction season. This option allows for flexible application of the City’s purchasing policy while ensuring conformance with the specific and general purposes of the policy. The Commission should carefully consider whether or not they are comfortable with this approach because boards with similar purchasing authority may wish to conduct business in a similarly flexible manner. The Commission should consider whether or not they feel any real or perceived risk, liability or unfairness is created by this approach. The Commission should also articulate how this is a special circumstance and why the importance of these improvements warrants deviating from the City’s purchasing policy and the programs already established by the NSURB. Option #2: The Commission approves the amendment to the NSURB’s FY2012 Work Plan and Budget with the condition that NSURB shall suggest that UHAUL apply for an N7Rehab grant in conjunction with formal Sketch Plan review, for the work to be completed on their property and outside the public right of way and public access easement. Concurrently, NSURB staff shall prepare a bid packet and complete the request of bid (RFB) process for the public portion of the project. This shall be done pursuant to the City’s standard operating procedures and as required by the City’s purchasing policy. In this option, UHAUL would apply for N7Rehab funds for their portion of the project (front yard landscaping and sprinkler installation). The application is made in conjunction with the formal Sketch Plan review. These improvements are construction eligible under N7Rehab because the site is deficient in landscaping. NSURB, if it chooses, could award UHAUL up to 15% of their project costs. UHAUL must enter into a participation agreement per the N7Rehab guidelines. The conditions of the agreement are much like those presented in Option #1. Once UHAUL has completed their improvements (pulled back the trucks and installed the front yard landscaping and sprinkler system) and provided any easement necessary to complete the public portion, NSURB will complete the sidewalk construction and boulevard landscaping just as they have on other properties in the District willing to grant easements (e.g. Scrubby’s, Speedy Glass and Van’s IGA). These improvements could be completed under a separate RFB or included with the lighting and related sidewalk improvements for which the NSURB has already contracted with Morrison-Maierle to design, provide construction drawings and construction management. In Staff’s analysis, Option #2 provides protections to the City and the NSURB already in place through full compliance with the City’s purchasing policy. It ensures that TIF money that otherwise would have gone to the City, County and School District is used in accordance with the City’s purchasing policies. It ensures a fair and competitive process open to all businesses who provide these types of services and that the public work is completed for lowest price by a responsible bidder. If the NSURB chooses to complete the project in conjunction with the light installations, then the location of boulevard trees and lights can be coordinated. However, UHAUL’s representative, Brett Potter, has indicated that his client will not be supportive of this approach and that splitting the project will make it unattractive to bidders. It may ultimately cost the District more money with this approach because N7Rehab funds are being expended in addition to the costs spent in the public right of way. There will be additional mobilization costs. NSURB is also not supportive of this approach because it will delay construction of the sidewalk and installation of the boulevard landscaping until next year. As stated in the staff report provided with our original packet materials for this agenda item, UHAUL plans to begin work October 15th.