Report to Mayor and City Council
Tuesday, February 20, 2018
Consent
SUBJECT:
Title
CONSIDER PAYMENT OF A REFUND TO THE LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY FOR PROJECT NO. 921 [MOU.P00F3119]: AVALON BOULEVARD INTERCHANGE MODIFICATION AT THE I-405 FREEWAY
Body
I. SUMMARY
The City’s FY 2009/10 Capital Improvement Program (CIP) included Project No. 921 - Avalon Boulevard interchange modifications at the I-405 freeway. The project involved reconfiguration of the existing on-ramps and off-ramps at Avalon Boulevard, and construction of a new southbound on-ramp from northbound Avalon Boulevard (Exhibit No. 1). The improvement also included the construction of direct access to Stadium Way at the southwest quadrant of this interchange, which will eventually connect to the 157-acre development site.
A Memorandum of Understanding (MOU) between the City of Carson and the Los Angeles County Metropolitan Transportation Authority (MTA) was executed in November 2011 to partially fund Project No. 921. The MTA is requesting a refund in the amount of $64,183.00 due to overpayment for Project No. 921: Avalon Boulevard Interchange Modification at the I-405 Freeway.
II. RECOMMENDATION
Recommendation
AUTHORIZE payment of a refund for Project No. 921: Avalon Boulevard Interchange Modification at the I-405 Freeway in the amount of $64,183.00 to the Los Angeles County Metropolitan Transportation Authority.
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III. ALTERNATIVES
1. DO NOT TAKE the recommended action.
2. TAKE another action the City Council deems appropriate, consistent with the requirements of the law.
IV. BACKGROUND
The City’s FY 2009/10 CIP included the Avalon Boulevard interchange modifications at the I-405 freeway under Project No. 921. The project involved reconfiguration of the existing on-ramps and off-ramps at Avalon Boulevard and construction of a new southbound on-ramp from northbound Avalon Boulevard. The improvement also constructed direct access to Stadium Way at the southwest quadrant of this interchange, which will eventually connect to the 157-acre development site.
At the time of award of the construction contract, the project was estimated to be $19.3M; which included the cost of design, construction management, construction, utility relocation, right-of-way acquisition, modification to California Department of Transportation (Caltrans) equipment, and publication. The project was funded through multiple sources. Caltrans obligated $769,125.00 for the design phase and $4,319,521.00 for the construction phase. The City also received $6,770,950.00 from the Los Angeles County Metropolitan Transit Authority 2009 Call for Projects for the construction phase of this project. The remaining $7,440,404.00 was funded by the Carson Successor Agency (formerly known as the Carson Redevelopment Agency (CRA)).
Per the MOU between the MTA and the City of Carson, the maximum reimbursable amount to the City is $6.7M, with a reimbursement rate of 23.25% of eligible construction cost (the initial reimbursement rate was adjusted and increased to 25.19% at the time of the award of construction contract). Aside from the payments to the contractor, other expenditures eligible or qualified for reimbursement were payments to the construction management firm, design, material testing, construction support, inspection, utility relocation, publication, and City staff time within the terms of the MOU. Prior to retiring, the staff member who was the Project Manager for the entire duration of this project, submitted five reimbursement requests and received $4,339,656.00 from MTA.
In late 2015, MTA conducted an audit of the project’s construction expenditures to determine the accuracy of the submitted reimbursement requests. The successor of the retired Project Manager was tasked with researching the project history, and providing numerous documents; such as construction and construction management contract documents, bid documents, copies of payments, and all financial reports relating to the construction phase of the project. MTA’s initial audit indicated an overpayment to the City in the amount of $124,775.00. This overpayment amount was based on the total construction cost of $16,918,312.00; of which $187,588.00 was deemed ineligible, which reduced the eligible construction cost down to $16,730,724.00. The eligible construction cost is reimbursable at a rate of 25.19%, or $4,214,881.00 (rounded). The difference between the amount of $4,339,656.00 paid by the MTA (as mentioned above), and the reimbursable amount of $4,214,881.00 (rounded), sums to an overpayment to the City of $124,775.00. However, staff did more research and convinced the MTA auditor that the total construction cost shall increase by $52,930.00; to a new total construction cost of $16,971,242.00. Doing the same calculation procedures, the MTA auditor reduced the overpayment amount by $13,334.00; bringing the overpayment to the City, down to $111,441.00. However, after more intensive research by City staff, and further discussions and negotiations with the MTA auditor, staff found vital information in the project files to further reduce the MTA auditor’s overpayment calculation.
It was determined that the abovementioned $187,588.00 is additional cost to the contractor due to overruns of some bid item quantities. Unlike the other change orders of the project (which had supporting change order forms), this additional cost was indicated and requested through Item No 4 of the City Council meeting on November 7, 2012 (Exhibit No. 2). The agenda item requested additional contingency, in the amount of $176,536.75; not the full amount of $187,588.00, due to a remaining balance to the original contingency at the time of the award of construction contract. Staff provided a copy of the particular agenda report to the MTA auditor immediately after it was discovered. The MTA auditor accepted the agenda report and recalculated the eligible construction cost from $16,730,724.00 to $16,971,242.00. Doing the same calculation procedures, the MTA auditor further reduced the overpayment amount by $47,258.00, which concludes to an overpayment amount of $64,183.00; this represents an overall 48.5% reduction from the initial calculations.
|
AUDIT RESULT SUMMARY |
|
RATE 25.19% |
A |
B |
C |
D |
E |
F |
|
Audit Calc Ver # |
Incurred Project Cost |
Ineligible Constrx Cost |
Allowable Project cost |
Reimbursable amount |
Payments to City |
Overpayment to City |
|
|
|
|
C = A - B |
C x 25.19% |
|
F = D - E |
|
1st |
16,918,312 |
187,588 |
16,730,724 |
4,214,881 |
4,339,656 |
-124,775 |
|
+/(-) |
52,930 |
|
|
|
|
(13,334) |
|
2nd |
16,971,242 |
187,588 |
16,783,654 |
4,228,215 |
4,339,656 |
-111,441 |
|
+/(-) |
|
|
|
|
|
(47,258) |
|
Final |
16,971,242 |
0 |
16,971,242 |
4,275,473 |
4,339,656 |
-64,183 |
The overpayment amount was calculated by the MTA auditor, and verified by staff. The MTA auditor deemed numerous reimbursement requests ineligible due to the fact that the expenditures were non-construction related and/or prior to the Notice to Proceed date for construction. It is requested that City Council authorize staff to refund the amount of $64,183.00 to the MTA for the overpayment of funds paid to the City.
V. FISCAL IMPACT
Funds in the amount of $125,000 were appropriated during the FY15-16, and subsequently carried forward to FY17-18, from the Coop Agreement Bond to account no. 84-70-999-981-8020/0092101 for Project No. 921. The city will refund $64,183 to MTA out of this account for MTA’s overpayment to the project. No additional appropriation is requested as part of this report.
VI. EXHIBITS
1. Location Map. (Pg. 4)
2. Staff Report, November 7, 2012, Item No. 4. (Pgs. 5-10)
Prepared by: Raymond Velasco, PE, Senior Civil Engineer