Financial- Salem, City of (Streetscape)

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A JOINT PROJECT BY ~~~;; ° ', March 29, 1999 The Honorable Mike Swaim Mayor, City of Salem Salem Civic Center 555 Liberty St. SE Salem, OR 97301 MARION COUNTY SUPPORT SERVICES DEPARTMENT Marion County Re: City of Salem Streetscape funding for the Courthouse Square project Board of Commissioners Randall Franke Patti Milne Mike Ryan Dear Mayor Swaim, We are writing to you to seek your assistance in resolving an issue which is of Salem Area Mass both fiscal and substantive concern to our respective jurisdictions. Transit District As you know, we have completed the bidding phase of the Courthouse Square Board of Directors Luis Caraballo project and have awarded the bid for construction to Pence/Kelly Construction, Kenneth "Casey" Campbell of Salem. At City stafF s request, we included in that bidding a detailed Marcia Kelley Dennis Koho breakdown of the streetscape cost elements. Eric Swenson Nancy Towslee ~•~ weprecnt Unfortunately as it turns out, the low overall bidder on the project- `°`~--.- Pence/Kelly-was the highest "bidder" on the streetscape portion of the project. This has brought about a difficult situation for the County and the Transit District, and the City as well. Through our own purchasing rules, not to mention Federal Transit Administration regulations, we were obligated to award the project to the low bidder, even though the streetscape element of the project was the highest (the Pence/Kelly bid for streetscape was $1,711,751...the lowest streetscape bid in the range was $1,174,530) Faced with this dilemma, City staff made an administrative decision to incorporate a process of averaging all six bids on the streetscape, and allowed the County and District an allowance of 120% of that average as a basis for payment. In so doing, the partnership is left $247,000 short of the revenue needed to pay the actual bid cost of Pence/Kelly. We feel that the City's process of averaging bid costs is unreasonable given the nature of the bidding process that was used, and is not consistent with the original intent of the City's agreement to provide for the actual costs of streetscape, up to a maximum of $2 million. While we very much appreciate the cooperation and work effort that City staff has provided us in trying to resolve this issue, we feel that the product that has resulted violates the previous agreements between the City and our jurisdictions, and are asking that you review the City's position. ,~