Memorandum                    

City of Lawrence

City Manager’s Office

 

TO:

Mayor and City Commission

FROM:

David L. Corliss, City Manager

DATE:

March 23, 2015

RE:

Staff Response to Rock Chalk Park Audit information from McDonald & Associates dated March 19, 2015

 

On January 20, 2015, the City Commission approved an agreement with McDonald and Associates to perform and audit of Rock Chalk Park. Their report addresses two objectives:

·      Whether the infrastructure construction work was delivered in accordance with the development agreement; and

·      Whether the City’s expenditures for infrastructure (hard and soft costs) were in compliance with the development agreement.

 

The conclusion of the audit indicates that the shared infrastructure was constructed in compliance with the Development Agreement and the costs are the same as presented in the Staff Memo of June 4 2013 in regards to the development agreement.  Additionally, the updated revised audit arrives at the exact same remaining payment total as the City staff memo outlined in December 2014. 

 

As indicated in the March 19, 2015 cover letter provided by McDonald & Associates, as-built plans were not completed for this project.  As-built plans are typically done at the completion of a city project. They would include a survey of the project and identify any changes to the plans that were constructed. The Rock Chalk Park project is a hybrid of public and private improvements.  Again, a public improvement project typically includes as-built plans.  However, private projects involve a site plan only.  For the Rock Chalk Park project, the City has a set of public improvement plans for the construction of George Williams Way and Rock Chalk Drive (public streets).  The interior improvements (parking lots, interior streets, sidewalks and multi-use path/trail) were constructed from the approved site plan, which is standard for site developments that are privately constructed.  The Site Plan has been revised to reflect the as-built site changes.

 

Comments on Project Costs: 

Attached is a spreadsheet including costs for the Sports Pavilion, Architect Fees, Land Purchase and payment to RCP:

 

 

 

 

 

Concrete Quantities and Batch Ticket Issue:

On March 6, McDonald & Associates provided the attached memo on Concrete Installed Quantity Testing. The auditor was provided 706 tickets of which they reviewed a sample of  481. City staff found additional batch tickets that had not been provided to the auditor and on March 9, the Director of Public Works provided the attached memo with respect to all the batch tickets. The batch tickets indicated that 16,469 cubic yards of concrete was delivered to the site. The quantity of concrete that was measured and installed to City specifications is 15,689 cubic yards. The difference could be attributed to several items including waste, rework, and how the contractor built the improvements.

 

Subsequently, Public Works Department staff has continued to review our inspection logs and reports. It has been discussed that a reduction in payment is being made due to coring of GWW and the results providing a depth of less than required. Review of the cores (attached spread sheet and map) that the City took also indicates several areas of a depth in excess of the required thickness. The City is not paying for this additional thickness but it could account for some of the difference between the ordered and measured quantities. It is typical for more concrete to be delivered to a project than called for in the plans.  Staff reviewed other recently completed projects to compare the amount of concrete delivered versus the plan quantity:

-          PW 1314 Wakarusa – (through 12/31/14)

-          plan quantity 5128 cubic yards

-          Measured quantity 5072 cubic yards

-          delivered quantity 5680 cubic yards

-          12% more concrete delivered to the site than measured and paid

 

-          PW1208 23rd and Iowa (this project has State and Federal Funds)

-          plan quantity 3890 cubic yards

-          Measured quantity 3849 cubic yards

-          Delivered quantity 4423 cubic yards

-          15% more concrete delivered to the site than measured and paid

-           

A reasonable conclusion can be made that with respect to the Rock Chalk Park project, the amount paid for the installed concrete was reasonable and appropriate. 

 

In an effort to provide full transparency with all project-related documents, Public Works staff is also posting the full inspection records for the project.  These are notes from the city inspectors taken during their review of the infrastructure project.

 

Payment Recommendation and Punch-List Item Status:

The audit presents that the amount available to pay for infrastructure improvements based upon the Development Agreement is: 

 

Maximum of Development Agreement

$            22,500,000

Less:

 

Less Total Recreation Center Construction

$            10,500,000-

Less Purchase Price

$                 784,050-

Less Recreation Center Architect’s Fee

$                 925,000-

Additional funds appropriated through change orders approved by the City Commission

$                 161,654

Assist Foundation Contribution

$               1,000,000

Balance Available for infrastructure

$             11,452,604

 

Based on the infrastructure cap and payments made to date the City has a remaining balance owed per the Development Agreement of:

 

Total Available for Infrastructure Cost

$        11,452,604.00

City Payments

$        10,359,633.23

Pending Payment Remaining

$          1,092,970.77

 

As with any project, toward the end, there are various items that remain to be completed, called a punch-list.  Following is the status of the punch-list items for the Rock Chalk Park project:

 

Repainting of the crosswalks has also been completed.

 

Some of the painting of the parking stalls has become worn and need to be restriped. The parking stalls are only painted and will require annual maintenance, which is normal in parking lots.

 

Due to these punch-list items being completed, it is recommended that the City make the final payment and approve the claim to Bliss LLC in the amount of $1,092,971 immediately.  Should the payment/claim be approved by the City Commission on March 24, 2015, the payment check would be cut the following day.

 

Comments on Audit Recommendations and Additional Staff Recommendations regarding Future Projects: 

The Auditor has made several recommendations.  Staff has reviewed these recommendations and provides the responses below:   

  1. Execute the Final Acceptance document as described in the agreement. 

Staff recommends that the final acceptance document be executed along with the final payment and claim on the project.

 

  1. Consider obtaining as-built drawings (record drawings) so that the record of what was installed and the location of same can be more easily ascertained should there be a need for this information in the future.

City Staff will develop a set of as built drawings.

 

  1. Consider paying an amount up to the total described in the development agreement plus additive change orders.

City staff recommends the final payment outlined in this memo. 

 

  1. To improve transparency and accountability, require job cost accounting on future projects. 

Staff will review construction contracts for appropriate language and bring forward possible changes to city’s purchasing policy for City Commission consideration.

 

  1. Add specific audit language to construction contracts and examine all records providing cost and installed quantities. 

Staff will review construction contracts for appropriate language.

 

  1. Take steps to assure contracts are fully understood and that task assignment is addressed.

Staff will take additional steps in regard to contract management, including the steps outlined above, a comprehensive review of all contract documents and construction inspection and accountability measures, including an open checklist for payments, job cost accounting, quantity accounting, inspection records and other related items.

  1.  On future projects, gain assurance that all work is contracted.

Staff recommends that future construction projects be bid.

 

Staff also suggests that a policy regarding handling of batch tickets for projects should be considered.  Attached is a draft policy on Batch Tickets Accounting for consideration.

 

Also, staff will conduct an internal review of the project to review lessons learned.