The Royal Oak City Commission recently approved change orders totaling $659,640.38 above the original not-to-exceed bid of $15,554,000 from Macomb Township-based Colasanti Construction Services for the 11 Mile Road parking deck that is part of the city’s large-scale civic center project.

The Royal Oak City Commission recently approved change orders totaling $659,640.38 above the original not-to-exceed bid of $15,554,000 from Macomb Township-based Colasanti Construction Services for the 11 Mile Road parking deck that is part of the city’s large-scale civic center project.

Photo by Sarah Wojcik


New parking deck costs exceed guaranteed maximum price

By: Sarah Wojcik | Royal Oak Review | Published February 26, 2019

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ROYAL OAK — On Feb. 11, the Royal Oak City Commission approved seven change orders totaling $659,640.38 for the 11 Mile Road parking structure that exceeded the construction management guaranteed maximum price contract with Colasanti Construction Services.

On April 23, 2018, the City Commission granted the parking deck construction project and related streetscape to Colasanti Construction Services, of Macomb Township, for a cost not to exceed $15,554,000.

Colasanti’s bid was based on designs for the recently opened Second Street parking deck because construction documents for the 11 Mile Road parking structure were not complete at the time bids were due, according to a city memo.

Officials said multiple factors contributed to the costs that exceeded the guaranteed maximum price cited in the contract.

“These change orders are attributable to work that was either excluded in the original scope of services or added to the scope by the city as the project went forward,” Royal Oak Economic Development Manager Todd Fenton said at the Feb. 11 meeting. “The actual budget for the parking garage is $18.1 million, and we have budgeted for an owner’s contingency for unforeseen circumstances.”

The owner’s contingency balance started at $877,000. With the approval of the change orders, a balance of $217,359.62 remained.

As part of the motion approving the change orders, the City Commission acknowledged the remaining owner’s contingency amount of $217,359.62 and authorized staff to issue additional purchase orders to Colasanti Construction Services for change orders necessary to complete the construction of the structure, as long as they do not exceed the remaining balance.

“Even with the increase that we are requesting today, the budget was built to absorb that increase and we will still come in under budget,” Fenton said. “We’re looking at four more months of work, and we’ll probably be about $200,000 under budget.”

Chris Becker, of the city’s real estate adviser, Plante Moran CRESA, said design changes due to unforeseen circumstances, contaminated soil removal and replacement, concrete removal, water service conflicts, library streetscape improvements on 11 Mile, decorative alley lights, power connectivity, sidewalk expansion, material changes, and more contributed to the increased costs.

The first of the change orders date back to Sept. 10.

Commissioner Randy LeVasseur questioned why the change orders weren’t brought to the commission earlier, and Fenton said they occurred within the purchase order approved in the construction management contract.

“This is not atypical,” Fenton said.

Commissioner Melanie Macey said she felt like there was a lot put in front of her, that she had a lot of questions and wished she had more time to digest the information.

Commissioner Patricia Paruch requested that officials with the civic center project give the City Commission a monthly report on the status of all of the buildings and change orders in the civic center project “just so that we don’t run into another situation where they’re kind of bundled into a six-month period like this one.”

“Because it is overwhelming, you have this instance where you have people who have their own motives out there who are going to make this into some huge issue because it’s an election year,” Paruch said. “I definitely think it’s all justified.”

She said she would like project officials to regularly present what is going to happen and why.

“It’s going to happen with the police station and the City Hall. You’re going to run into things you never anticipate, like renovating an old house,” Paruch said. “We haven’t done a big construction project as a city for 40 years, so this is new, but it’s pretty typical.”

She said that the parking structure is funded by revenue bonds that are supported by parking fees, not the general fund, so it is not taxpayer-supported.

Several residents and former city officials expressed concern about the approval of the change orders during the public comment portion of the Feb. 11 meeting.

During the April 23, 2018, City Commission meeting, the commission also granted the three-part civic building construction management contract to joint contractors Colasanti Specialty Services and O’Brien Construction, of Troy, for a cost not to exceed $2,807,292.

Because the city accepted both of the bids by Colasanti, the company offered a $248,000 alternate savings.

The total construction cost of the 32,000-square-foot City Hall, the 42,000-square-foot Police Department, the 2-acre downtown park and the connectivity project is estimated at $36.9 million, according to the bid proposal.

The city is funding the civic center project through bonds.

Commissioner Kyle DuBuc, Paruch, Mayor Pro Tem Sharlan Douglas and Mayor Michael Fournier voted to approve the change orders and owner’s contingency update. Commissioner Kim Gibbs, LeVasseur and Macey cast “nay” votes.

To view the full list of change orders, visit www.romi.gov and search “Eleven Mile Parking Structure CO February 11, 2019.” For more information, call the Royal Oak Economic Development Department at (248) 246-3208.

 

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