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HomeMy WebLinkAbout~Master - Ames Public Library Board of Trustees Minutes of the Regular Meeting 01/05/2012Ames Public Library Board of Trustees Minutes of the Special Meeting January 5, 2012 The Ames Public Library (APL) Board of Trustees met in special session on Thursday, January 5, 2012, in the City Hall Council Chambers at 515 Clark Avenue with Budd, Campbell, Luckett, Manus, Meier, Rawlins, Schill, and Stow in attendance. Bradley was absent. Library Director Art Weeks and Assistant Library Director Lynne Carey were also present. Library Architect Jeff Scherer participated by telephone. Call to Order: Board President Luckett called the meeting to order at 7:00 p.m. Discussion about Construction Delivery for Library Renewal Project: Trustee Manus stated that the committee’s task was to consider different methods of construction delivery. She described the methodology used and distributed a packet containing notes from meetings, cell phone conversations, e-mail, letters from the architect, and information provided by industry professionals. Manus explained that the architect’s third letter (dated January 5) had not been received when the committee began preparing its packet, so the written recommendation only referenced two. She stated that the November 15 letter seemed to be somewhat neutral and the architect did not recommend any approach. However, during December 13 meeting, when the decision matrix was being developed, the group was of the understanding that the architect was somewhat more in favor of the General Contractor method. She said the committee had asked to speak to the architect, but learned that he was on vacation. They were also unsure as to whether or not providing this kind of assistance was included in the scope of the library’s contract with him. A second letter was received from the architect on December 30, which was clearly a recommendation for the “Construction Manager as Advisor” (CMa) approach. Manus said the committee members found this somewhat alarming, because they had not realized he had a preference. Also, he was out of the country and could not speak with them at that point. Manus said that this morning the committee found another letter had come in. She said this raised a red flag regarding objectivity because the committee had not asked the architect for a recommendation. Manus said the committee represented a very diverse perspective and she had personally preferred the CMa model at first, because of her experience in the private sector and because she knows the strengths of her own teams. However, since this project will take place in the public arena, she has come to prefer the other model. In deciding this, she said the committee looked most closely at owner’s risk, completion of the project, and scope of the project. Trustee Meier said the committee felt that its fiduciary responsibility, when working with taxpayer’s dollars, was to minimize the owner’s (the library’s and the city’s) risk. She said that with a general contractor (GC) there would be one point of responsibility. If something went wrong, the contractor would resolve the problems; with a CMa, it would be the owner’s responsibility. Meier also said she prefers to know what the cost will be from the beginning, and under the GC method, the board will know if they are going to come in within the budget at the time of bid opening, although she acknowledged that there will almost certainly be change orders. Meier said that with a GC, the library would also have only one contract, one performance bond, and one pay estimate each month. Under a CMa, it would have multiple contracts and multiple contractors, each one with a performance bond. Manus added that Norm Rudi, a former architect, told the committee that there was not much precedence for legal issues related to the CM option for public projects because it has not been used much for them. The lack of legal history was another issue that led the committee to believe that its fiduciary role was better protected under the general contractor method. On the second consideration – to bring the project in on time, under budget, and with precision – Meier said the committee got the same feel from several professionals that the library could get good quality and completion of the project from either method. Manus said that when the matrix was formulated at the meeting on December 13, she had the sense that the quality would be superior under the CMa approach, but she now feels both quality and integrity will be met under the GC model. Luckett asked about the bold font on some of the plusses and minuses on the committee’s matrix. Meier said that instead of using numbers, the committee used heavier symbols. Trustee Budd said the committee also looked at the complexity of the project. For a large, complex project a construction manager would be used; for a smaller one, a general contractor was fine. While a $15 million dollar project is a large one for the library, in the scope of things, it’s somewhere in the middle range. He added that the amount of funding and the budget are very close; the $18 million bond plus contributions and pledges bring the library very close to $20 million, but there is no latitude to overrun the budget. Budd said that in addition to delivering a quality library in a cost-effective manner, the committee wants to have it completed on time so the temporary quarters can be vacated in as short a time as possible. Manus drew the trustees’ attention to the meeting notes of November 30 (in Exhibit 1), where Dean McCormick indicated that Iowa State would employ a construction manager for projects in the $20-$25 million range. She also pointed to a brief summary document about how ISU determines a delivery method (in Exhibit 3). She said that while this project is complicated, it is not so complex that a CM is necessary. That said, Manus said the committee does recommend some sort of project management or owner’s representative to assist the library staff. She went on to say that the committee realized that the architect has a major stake in this and will need to be completely on board with the chosen method. The library will need to look over the AIA documents and clearly outline responsibilities and the scope of the contracts. Manus said that it took many meetings, much work, and a lot of learning before the committee members felt they had gleaned enough information to make an informed decision. They wanted to go on record as saying that both approaches would work – it’s not a black and white decision – but they feel general contractor approach with some sort of owner’s representative, contract manager, or project manager would be best. On behalf of the board, Luckett thanked the committee for its efforts and all the work they put into learning about the issue. Trustee Campbell asked if the committee could tease out the differences between contract management and an owner’s representative. Manus said the committee felt it could be left totally up to staff how they want someone to help. The committee agreed there was not enough expertise within the library, but the Executive Director would be able to figure out what type of advisor would work best for himself or his team. Architect Jeff Scherer stated that he wanted to make sure it was clear that the committee understood that a CM does not require there be multiple bid awards. He said a construction manager can bid to one general contractor, and then the CM would act as a more experienced representative during construction. Scherer also apologized if his second letter came across wrongly to the committee. He said no other library he has ever worked with has given this much scrutiny to the delivery method. He said that if the committee wanted to spend additional taxpayer money in helping him do his work or helping library, he felt the work should be done by an extremely capable party. A CM’s work could be organized to meet the needs of the library and, in his opinion, the people working as CMs can do the work at a higher standard and provide a higher level of scrutiny and care for the benefit of the taxpayer. Luckett asked where the risk would be to the library under the Owner/Architect Agreement with a construction manager. Scherer said the word “construction manager” was the wrong term. In that agreement, it refers to someone who would be helping with pre-construction services only. Then MS&R would issue the bids to the low pool, the general contractor would then get a contract and carry out its work. The only role the construction manager would play then would be as a consultant (CMa) – which would be similar to that of an owner’s rep, but the CMa would have greater expertise. In the interest of full disclosure, Scherer stated that he had hired a construction manager to help with schematic design and prepare cost estimates. Regardless of the direction in which APL goes forward, MS&R will continue to have cost estimating done. He said that if the library wants to hire an Owner’s Rep to do certain tasks, they need to sit down and decide what those tasks would be. If those tasks would be better done by a CM as Advisor, that is what he would recommend. The bid could still be issued as a single prime contract. Schill asked Scherer if he could summarize the difference. Scherer said he agrees with committee’s recommendation. The library can decide what kind of owner’s rep it needs in order to satisfy its needs for help as the work gets carried out. Who does that work is a matter of semantics. Scherer said his firm would issue an RFP for the position with the scope defined. They would hope that some of the respondents would be construction managers who would do that work as the owner’s advisor. His experience is that a CM who has experience with multiple bids may apply for this type of position. Schill asked if there was any advantage to hiring someone who is local and has a vested interest, whether he is a Construction Manager as Advisor or Owner’s Representative. Scherer said that, ideally, the board would want someone local who is qualified. If there is something that goes wrong, the resolution of risk or exposure to risk always follows the insurance. MS&R has professional liability insurance whereas an Owner’s Representative (OR) will not. An OR will only offer advice. Scherer said that because he has the insurance, he has the responsibility. So he wants to make sure that the advice of whoever is advising the city is sound and he can trust it as a second or third opinion. Scherer said that the minute he takes that advice, he becomes legally liable for taking that action. If someone advises the board during the process and that advice leads to a mistake, Scherer said it would be very difficult in a court of law for someone without experience to accept the liability. For those reasons, he wants the best team possible – one that understands the general contractor’s role and legal responsibility to the owner – to be advising the library. Meier stated that if there is a problem with a single prime contractor, it becomes the GC’s problem. Scherer agreed that there is one entity that has responsibility, but noted that the contractor has contracts with all his subs. If there is something that goes wrong and there is a lawsuit, the subs will be brought in through the GC. Scherer stated that, like the committee, he could recommend a single general contractor. The only difference in his opinion is that he prefers that the OR role be done by a Construction Manager as Advisor. Manus said the committee was more focused on the delivery method than the support function. Scherer said the building project relies on non-destructive assumptions – for example, they are not going to spend money to bring in a rig and do all new soil borings – so certain issues will have to be carefully defined. If APL has a CM as Advisor, that person will be able to more carefully describe the general conditions and make it clear what the bid does and does not include. Scherer stressed that MS&R has a high level of experience and a firm from Marshalltown that was part of the original work plan will be on the Ames site. He said that if the committee is recommending that they sit down with staff to determine what an advisor does and what the architect does, they would create a matrix and clearly set forth all the duties and responsibilities. However, he cautioned that this cannot be delayed much longer. The economy is changing, more and more proposals are coming out; he is anxious to get this moving before the economy shifts too much. Luckett concurred with Scherer’s last point. Weeks said he felt there were more points of agreement than points of contention. He commended the committee for the level of scrutiny it had applied to this task. He said he was pleased about the community’s vote of support and will make sure that the project is done well. He mostly wants to make the best spending decisions so as to channel as much of the money as possible into the construction. Weeks explained that ISU uses Construction Managers as Advisor at a higher (cost) level because they have a staff of professionals available. He also said he has a great deal of respect for Norm Rudi, who mentioned that there was not a lot of CM history related to public projects. Weeks said that most Iowa libraries would use a general contractor because they are small. The larger libraries, such as Cedar Rapids, Davenport, Des Moines, and Marshalltown, have incorporated the CMa model, so he wanted to determine why they did not go the GC route. Weeks said that since Ames Public Library does not have the expertise in house, he saw that some assistance would be required. The CM agent idea is attractive to him because the Owner’s Rep advises management but does not have authority to change things. The CM agent does have authority to direct the work at a level the OR can’t. Furthermore, he had some concern about going with the GC model because the library will not know who will come in with the low bid whereas, under the CM process, he would be assured of getting someone he knew he could work with. In the end, Weeks said, he knows we’ll end up with a great project. He was concerned that an Owner’s Rep is an advisor that just adds a layer to the people that are already in place. The Construction Management agent would be a stronger voice in managing the project without burdening library administration with the decision-making that would come from an advisor such as an Owner’s Representative. Rawlins asked if committee had based its decision on the General Contractor with Construction Manager as Advisor agreement in mind. Meier said they were mostly concerned with getting delivery under a GC. Manus added that they are comfortable with having a CMa. Budd agreed, stating that someone needs to make sure the work is being done properly and the billing is correct, and staff still has a library to run. What the committee did not want was someone splitting up the job into multiple pieces and getting five to seven percent to do it. Scherer stated that when there is a CMa who issues multiple bids, there is no added financial burden because the General Contractor’s management fees are being moved to the Construction Manager, who administers the project. Weeks said that Budd was referring to the fact that the CM needs to get paid. He said the committee was given a figure of 5-10% of the cost of construction – but not as an add-on to the construction cost; it would be buried into the lower price of the contractors and the architect. Scherer said he is happy to work in whatever capacity is needed and MS&R has experience with all kinds of models. He apologized again for the red flag that went up with his second letter. It came up the night before he left on vacation and he was trying to offer a way to move forward. He didn’t mean for it to add extra work for the committee. Manus said it was more a matter that the committee had not been able to talk to him and was surprised when the letter arrived, and she felt it was not transparent. Weeks accepted responsibility for the misunderstanding. He said he originally requested general information from the architect, but he asked if he could make a recommendation in the second letter to help move the committee along. Scherer added that Weeks did not dictate the recommendation and the reasons he cited in his letter are correct. Based on the committee’s recommendation, though, he is ready to tailor the benefits of what he recommended to the outcome the committee wants. Luckett thanked Scherer for taking time out of his vacation to assist the board. He asked if anyone in the audience cared to ask questions. Harold Pike, 2715 Valley View, asked the architect for clarification on the mark-up of general contractor versus the cost of a construction manager. Scherer stated that, as he understands it, the General Contractor’s superintendent role and that of administering the subcontractors and the markup on the subs goes away in a multiple prime bid because the cost of that administration is borne by the Construction Manager. When the CM as advisor only helps with a single prime GC bid, there would be additional cost for the Construction Manager because the General Contractor would continue to include his mark-up in the overall cost. Pike asked Scherer how he knew the GC would include any mark-up at all. Scherer said that he did not know, for a fact, all GC’s methodologies, but said that if a contractor chooses not to include mark-up, the bid of the multiple primes will reveal what the final price is going to be. He said that some cities require the GC to submit the bids of the low three sub-bidders. Pike stated that general conditions would be cheaper under a general contractor. He added that if the library considered going multiple contract and wanted each one to be bonded, it might not get local contractors to bid because they can’t get bonded. He urged the Library Board to keep the project to a single prime contract. Mike Espeset, Story Construction, 300 S. Bell Avenue complimented the committee on having a good grip on a topic that lay people don’t deal with every day. He stated that he feels the library project is a little more complex than some and that there may be options not on the table. He said he did feel the process would be simplified if the library were vacated and all the work were done at once. Espeset compared the decision on the delivery method to one a person might make when faced with doing taxes. Someone who has had complex transactions and a lot of changes might seek professional counsel, while others prefer to purchase Turbo Tax. He stated that on a project like the library’s, he felt there was wisdom in getting counsel. Architects bring their gifts to the project and a construction manager is helpful in executing good process on the job site. He said he appreciates the thoroughness of the decision-making process. While the board needs to make a decision now, he said they would not fully appreciate the importance of the decision until 12-15 months from now. Luckett stated that he would like to call for a special meeting on Thursday, January 12, at 7 p.m., but Campbell, Manus, and Stow said they would be unavailable. Since Bradley was not present, there was discussion about whether or not it would be possible to arrange for absentee ballots. Weeks suggested that the Iowa open meetings law and the City Attorney should be consulted about the procedure. It was finally agreed that the meeting would be held on Monday night at the library. Manus asked if the architect could prepare a letter based on the committee’s approach, with a summary of the pros and cons of a Construction Manager as Advisor for staff support. Scherer stated that he would work on a statement that evening. He added that the approval rating given the library project by Ames voters was the highest of any referendum he had been involved with in 30 years, and he was proud to be part of it. Trustee Comments: Campbell complimented the committee for doing such a wonderful, thorough job. Stow agreed with Campbell. He complimented the committee for its due diligence, said he loved the fiduciary focus, and felt they had done the job the electorate expects. Luckett also commended committee. Adjournment: Moved by Manus, seconded by Bradley, to adjourn at 8:28 p.m. Motion approved unanimously. The next special meeting was tentatively set on Monday, January 9, at 7:00 p.m. in the Dale H. Ross Board Room of the Ames Public Library, 515 Douglas Avenue. The next regular meeting will be on Thursday, January 19, 2012, at 7:00 p.m., in the City Council Chambers, 515 Clark Avenue.