To: HONORABLE MAYOR AND From: Katy Allen

CITY COUNCIL James R. Helmer

Subject: HOSTETTER ROAD Date: 10-06-03

IMPROVEMENT PROJECT

Council District: 4

RECOMMENDATION

Report on bids and award of contract for the Hostetter Road Improvement Project to the low bidder, Grade Tech Inc., in the amount of $177,870, and approval of a contingency in the amount of $18,000.

CEQA: Negative Declaration, PP 87-05-128.

BACKGROUND

Hostetter Road is designated in the City’s General Plan as an arterial street. Currently Hostetter Road is not a through street between Sierra Creek Way to Stone Creek Drive. An existing orchard obstructs this section of Hostetter Road. Pedestrian and vehicular traffic has to detour around the orchard through residential streets.

The Hostetter Road Improvement Project provides construction of an interim 44-foot wide two-lane street connecting Hostetter Road from Sierra Creek Way to Stone Creek Drive (map attached). Improvements include permanent asphalt concrete (AC) travel way, temporary AC sidewalk on the south side, temporary AC berm, temporary storm drainage system and a temporary streetlight. These street improvements will provide through access for both pedestrian and vehicular traffic along Hostetter Road. Full street improvements will be completed with the future development of the orchard property, and a portion of the current project cost will be reimbursable per the City's Reimbursement Ordinance.

Completion of the Hostetter Road Improvement Project will improve the quality of life for the surrounding neighborhood. In addition, the street extension will provide continuity in the City’s arterial street network that improves traffic safety, traffic circulation and convenience for motorists and pedestrians in the neighborhood.

Construction is scheduled to begin in January 2004 with completion in August 2004.

ANALYSIS

In order to construct Hostetter Road in conformance with the City’s General Plan, right-of-way must be acquired. The property acquisition included the purchase of 0.33 acre for street improvements and two Temporary Construction Easements (TCE). The City acquired the necessary right-of-way and two TCEs for this project on September 15, 2003. The purpose of these TCEs is for construction of street improvements on the southerly property and the demolition of an existing house that is located both partially within the Hostetter Road right-of-way and within private property. The street improvement TCE is for one year (expires September 14, 2004), and the demolition TCE is for 60 days (expires November 13, 2003).

In order to meet the established project schedule, the existing house will be demolished under a Minor Construction Contract prior to the issuance of the Notice to Proceed for the Hostetter Road Improvement Project. The demolition work is scheduled for completion in early November. The engineer's cost estimate for this Minor Construction Contract is $40,000.

Within the acquired right-of way, PG&E facilities must be relocated prior to start of work. PG&E indicated to the City that it would take a minimum of six months for them to complete the engineering and actual relocation of its utilities. An application was sent to PG&E in May 2003 to initiate the engineering phase of the relocation work, and a contract will be executed in October for the actual relocation work. The relocation work is scheduled for completion in early December. PG&E provided an estimate for the relocation work for approximately $25,000.

The estimated project delivery cost, less land acquisition cost, is 39 percent of the project total. This is attributed to the project being re-scoped. The original project included land acquisition for the ultimate right-of-way width of 90 feet that accommodates two lanes of traffic each direction, construction of public improvements such as curb, gutter, sidewalk, AC pavement, electroliers, storm and sanitary sewers. The plans and specifications to construct the above improvements were at 90 percent completion when it was determined that the actual cost to acquire the necessary right-of-way exceeded the original budget. As a result, the project was re-scoped which resulted in reduction of the area to be acquired for proposed right of way as well as the improvements to be constructed. This information is summarized in the Cost Implications section of this memo.

Bids were received on September 25, 2003 with the following results:

Contractor	Total Bid	Variance Amount	Over/(Under) Percent
Engineer’s Estimate	$394,500	----	----
Wattis Construction, Inc. (San José, CA)	267,277	($127,223)	(32)
Granite Rock Co. / Pavex Div. (San José, CA)	242,575	($151,925)	(39)
Granite Construction Company (San José, CA)	222,675	($171,825)	(44)
O' Grady Paving, Inc. (Mountain View, CA)	216,200	($178,300)	(45)
Top Grade Construction, Inc. (Livermore, CA)	209,885	($184,615)	(47)
O.C. Jones & Son, Inc. (Berkeley, CA)	179,125	($215,375)	(55)
Grade Tech Inc. (Castro Valley, CA)	177,870	($216,630)	(55 )

The low bid submitted by Grade Tech Inc. is 55 percent below the Engineer’s Estimate. This low bid may be attributed by the extreme competitiveness for this type of work due to the current economic situation. Staff has reviewed the bid documents and found them to be in order.

Traffic calming measures for the neighborhood will be incorporated with a separate phase of the project.

Council Policy provides for a standard contingency of five percent on public works street projects. However, on this project a contingency of ten percent is being requested because of unknown subsurface conditions.

PUBLIC OUTREACH

To solicit contractors, this project was listed on the City’s Internet Bid Line and advertised in the San Jose Post Record. Bid packages for all public works construction projects are provided to various contractor organizations and builder’s exchanges.

COORDINATION

This project and memo have been coordinated with the City Attorney's Office, the Departments of Finance and Planning, Building and Code Enforcement, the City Attorney’s Office and the City Manager’s Budget Office.

COST IMPLICATIONS

1. AMOUNT OF RECOMMENDATION: $177,870

2. COST OF PROJECT:

Land Acquisition (including staff cost & professional services)	$ 690,400
Project Development (10%)	18,000
Original Design Cost	106,700
Re-scoped Design & Construction Management	69,500
Construction	177,870
Contingency	18,000
TOTAL	$1,080,470

3. SOURCE OF FUNDING: Building & Structure Construction Tax

4. FISCAL IMPACT: This project is consistent with the Council-approved Budget Strategy Economic Recovery section in that it will spur construction spending in our local economy. This project will have no impact on the general fund operating budget.

BUDGET REFERENCE

Fund #	Appn. #	Appn. Name	RC #	Total Appn.	Amt. for Contract	2003-04 Adopted Budget Page	Last Budget Action (Date, Ord.No.)
429	4714	Hostetter Road: Sierra Creek to Stone Creek	075140	$1,500,000	$177,870	p. 810

CEQA

Negative Declaration, PP 87-05-128.

KATY ALLEN JAMES R. HELMER

Director, Public Works Department Director, Transportation Department