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CITY OF COLTON AGENDA REPORT FOR THE CITY COUNCIL MEETING OF SEPTEMBER 16, 2008 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: MARITZA TAPIR; INTERIM PUBLIC WORKS DIRECTOR ITEM #19 SUBJECT: APPROVE DRAFT TAKE OVER AGREEMENT BETWEEN THE CITY AND FIRST NATIONAL INSURANCE COMPANY OF AMERICA (SURETY FOR CONTRACTOR HARRIS CONSTRUCTION) FOR THE COMPLETION OF THE RANDALL BASIN PROJECT DATE: SEPTEMBER 10, 2008 BACKGROUND: As a result of the construction of the San Bernardino County Arrowhead Regional Medical Center in the City of Colton, the San Bernardino County Flood Control District (District) was conditioned to enlarge the capacity of the Randall Basin to accept additional flows and construct the improvements necessary for a detention basin. Randall Basin fronts Randall Avenue and lies within the cities of Colton and San Bernardino; the northern half of the basin lies within the jurisdiction of the City of San Bernardino and the southern half lies in the City of Colton. To obtain an increased capacity for the basin the following scope of work will be necessary: 1) excavation of approximately four (4) feet of sediment in the existing Randall Basin to increase the area of the basin bottom by 1.07 acres 2) relocation of the existing southern basin embankment fifteen (15) feet to the north 3) construction of a concrete outlet 4) construction of a spillway 5) installation of a 48 -inch RCP inlet structure within the basin and 6) installation of a 66 -inch RCP outlet structure within the basin. On September 18, 2007, Council approved the final draft of a Cooperative Agreement between the City of Colton, City of San Bernardino and San Bernardino County Flood Control District. This agreement established a cost share relationship for the construction of the needed improvements to Randall Basin between the three entities listed above. In addition, the agreement states once the identified improvements to Randall Basin are completed they will be maintained by the San Bernardino County Flood Control District. On February 5, 2008, Council action awarded a construction agreement to Harris Construction, in the amount of $673,931. Harris Construction has completed approximately 50% of the project. ANALYSIS/DISCUSSION: After experiencing subsequent delays in completion of project milestones staff forwarded a letter to Harris Construction dated July 30, 2008, attached as Exhibit B. The letter informed Harris Construction that the City was looking to terminate their existing agreement due to the ongoing delay experienced on the Randall Basin Project. Harris Construction met with us and informed us that they were having financial difficulties and would be contacting their surety, First National Insurance Company of America, to oversee completion of the contracted work. First National immediately contacted the City to discuss options for completion of the Project. Thus, there have been minimal delays in the Project thus far. Attached as Exhibit A, is a draft take over agreement between the City and First National Insurance Company