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Approval of the Agency will be obtained by Marion County/Salem Area Transit prior to ~~ award of a construction contract for the items to be funded by the Agency. Following Council action staff met with representatives of the County and Transit District reviewing the criteria for participation, including the need for line item bidding. Examples of bid formats for prior streetscape construction were~separately furnished the project architect. On December 28, 1998, final draft of the Participation Agreement was furnished to the County and Transit District. On December 31, 1998, the representatives confirmed that the agreement was generally consistent with their expectations. ~ On January 4, 1999, the date scheduled for bid advertising, staff was advised that plans, specifications, and bid forms would be delivered for Agency review. At that time it was learned that the project was intended to be bid as one lump sum with the cost of participation items to be identified by the contractor after a lump sum contract was awarded. Staff immediately notified the County and Transit District representatives that a lump sum bid was unacceptable and line item bids must be provided for elements of Agency participation. The County and Transit District acknowledged the requirement for line item bids and worked with staff to develop an acceptable bid format to be issued as a bid addendum in an attempt to avoid a delay in scheduled bid opening of February 4, 1999. On January 25, 1999, the project coordinator was notified in writing of the Agency acceptance of the revised bid format, with minor modifications. On February 3, 1999, immediately preceding bid opening, County and Transit District representatives met with staff expressing their concern that the successful bidder may not necessarily be the lowest bidder for the elements of Agency participation. This fact had been previously anticipated by City staff and provisions were provided in the Intergovernmental Agreement reserving the right of the Agency to designate an acceptable level of participation if bid amounts were found unreasonable. City staff was concerned that an imbalanced bid could be submitted increasing the Agency funded bid items, proportionately lowering the County/Transit District bid items. Such a bid structure would increase the likelihood of awarding bid alternate (non- Agency) items, but at the expense of the Agency. To prevent this potential shift of project costs to the Agency, it was agreed that an acceptable level of Agency participation would be to compare the bid for Agency line items to all other bids received, and to cap Agency participation to 120% of the median (middle) price of all bids received. On February 5, 1999, bid tabulation sheets were furnished to the Agency and analyzed. The apparent low bidder fo~ the project, Pence/Kelly Construction, also submitted the highest bid for elements of Agency participation. The cost bid for general conditions and streetscape improvement was 504% and 149% ~espectively of the median bid of all bidders. On February 12, 1999, the project coordinator was notified in writing of the Agency analysis and acceptable level of participation consistent with the terms of the Agreement and the conclusions of the February 3 meeting (Attachment B). The notice clearly indicated that the maximum participation for the elements bid was $1,067,096, or $247,883 less than the amount bid by Pence/Kelly Construction. Request for Funding Increase - Courthouse Square May 3, 1999