REPORT TO THE CITY COUNCIL
FROM: NICHOLAS D. MASCIA, PE, Assistant City Manager
Office of Mayor & City Manager
DENIX ANBIAH, Capital Projects Director
Capital Projects Department
AARON A. AGUIRRE, Director
Parks, After School, Recreation and Community Services Department
BY: francisco V. magos II, PE, Assistant Director
Capital Projects Department, Utilities and On-Site Project Management Division
MIKE MOONEYHAM, PE, Licensed Professional Engineer
Capital Projects Department, Utilities and On-Site Project Management Division
SUBJECT
Title
Actions pertaining to the Senior Activity Center Project: (Council District 4)
1. ***RESOLUTION - Adopt the Second Amendment to the Annual Appropriation Resolution (AAR) No. 2025-179 appropriating $1,582,700 for the Senior Activity Center Project (Requires 5 Affirmative Votes) (Subject to Mayor’s Veto);
2. Approve Design-Build Contract Amendment No. 2 to the Progressive Design-Build Agreement with Integrated Community Development of Woodland Hills, California to increase the design-build fee by an amount not to exceed $514,647.00, add an Owner Contingency in an amount not to exceed $1,068,053.00, and modify contract terms related to the use of contingency funds. The total amended contract is an amount not to exceed $32,119,076.00.
Body
RECOMMENDATIONS
Staff recommends the City Council (1) adopt the Second Amendment to the AAR No. 2025-179 appropriating $1,582,700.00 for the Project, and (2) approve Design-Build Contract Amendment No. 2 to the Progressive Design-Build Agreement with Integrated Community Development (ICD) to increase the design-build fee by an amount not to exceed $514,647.00, add an Owner Contingency in an amount not to exceed $1,068,053.00, modify contract terms related to the use of contingency funds, and authorize the Capital Projects Director or designee to sign Design-Build Contract Amendment No. 2 on behalf of the City of Fresno (City).
EXECUTIVE SUMMARY
Council approved Design-Build Contract Amendment No. 1 for Phase Two of a Progressive Design-Build Agreement with ICD to provide design and construction services related to the Senior Activity Center Project (Project) on December 5, 2024. Due to unanticipated cost escalations since approval of Amendment No. 1, the Capital Projects Department (CPD) and Parks, After School, Recreation and Community Services (PARCS) Department now seek to amend the Progressive Design-Build Agreement with ICD to increase the total compensation by an amount not to exceed $1,582,700 and modify contract terms related to the use of contingency funds. Staff anticipate bringing a third amendment to City Council when funding becomes available no later than December 31, 2025, to further increase the Owner Contingency by $887,106.00.
The Progressive Design-Build Contract Amendment is funded through Fiscal Year 2026 Community Development Block Grant (CDBG) funds. Approval of the Second Amendment to the AAR will move the appropriation of CDBG funds to the PARCS Senior Activity Center.
BACKGROUND
In May 2023, Council approved the use of Fresno Municipal Code Section 4-502(d), Design-Build Qualification Method of procurement for the Project. Through a competitive, qualifications-based procurement process, the Department of Public Works (DPW) advertised a Request for Qualifications (RFQ), and ICD was selected as the Design-Builder for the Project. On July 20, 2023, Council awarded the Phase One Preconstruction Services portion of the Progressive Design-Build Agreement to ICD in the amount of $634,117. The Phase One Preconstruction Services portion of the Progressive Design-Build Contract was funded through Fiscal Year (FY) 2024 appropriations from Measure P Expenditure Category 2, New Neighborhood Parks: Senior and Youth Recreation Facilities.
In December 2024, Council approved Design-Build Contract Amendment No. 1 for Phase Two of a Progressive Design-Build Agreement with ICD to provide design and construction services to complete the Project. The Phase Two Construction Services portion of the Progressive Design-Build Agreement includes the completion of design services for the Project, the procurement of all materials and equipment for the Project, the performance of construction services for the Project, the start-up, testing, and commissioning of the Project, and the provision of warranty services. The total contract cost approved by Council and including Phase One and Phase Two of the Progressive Design-Build Agreement is an amount not to exceed $30,536,376.
During Phase Two negotiations, in order to facilitate the successful completion of the Project, and in good faith, ICD agreed to reductions of 2% for both design-build fees and project contingency funding. However, unanticipated and significant cost escalations beyond the control of ICD or the City have occurred since Council approval in December 2024 and proved prohibitive to the completion of the Project. In accordance with Article 10 of the General Conditions of the Progressive Design-Build Agreement, the City and ICD negotiated in good faith to resolve Project financial disputes and staff now presents Amendment No. 2 for Council approval. Amendment No. 2 includes an increase in the design-build fee from $2,058,588 to $2,573,235 and Owner Contingency funding in an amount not to exceed $1,068,053. The total increased compensation is an amount not to exceed $1,582,700 bringing the total contract cost to an amount not to exceed $32,119,076. Staff anticipate bringing a third amendment to City Council when funding becomes available no later than December 31, 2025, to further increase the Owner Contingency by $887,106.
In addition to increased compensation, Amendment No. 2 includes new contract stipulations regarding the use of the Owner Contingency funding. Amendment No. 2 is included as an attachment to the Council agenda item.
Staff recommends Council adopt Second Amendment to the AAR No. 2025-179 appropriating $1,582,700 for the Project, approve Design-Build Contract Amendment No. 2 to increase the total compensation in an amount not to exceed $1,582,700, modify contract terms related to the use of contingency funds, and authorize the Capital Projects Director or designee to sign a final Contract on behalf of the City.
The contract utilizes a modified Design-Build Institute of America (DBIA) standard Progressive Design-Build Agreement. The City Attorney’s Office has reviewed and approved the proposed Amendment No. 2 as to form.
Given that the Senior Activity Center Project is federally funded with FY26 CDBG funds and HUD Section 108 loan funds, the Community Workforce Agreement (PLA) is not applicable.
ENVIRONMENTAL FINDINGS
NEPA
Pursuant to the National Environmental Policy Act (NEPA) guidelines, a Phase I Environmental Site Assessment was completed and summarized in a report dated January 27, 2022. The NEPA review concluded a Finding of No Significant Impact. The Community Development Division received authorization to use grant funds from the U.S. Department of Housing and Urban Development on May 27, 2022, and has amended the review to include the additional CDBG funding.
CEQA
By the definition of the California Environmental Quality Act (CEQA) Guidelines Section 15378, the amendment of this progressive design-build agreement does not qualify as a “project” for the purpose of CEQA.
LOCAL PREFERENCE
Local preference does not apply. The Fresno Municipal Code does not require local preference for design-build and affordable housing projects.
FISCAL IMPACT
The Senior Activity Center Project is located in Council District 4. The Project is funded through a combination of Measure P Expenditure Category 2, HUD CDBG Section 108 Loan Funds, and General Funds appropriated in the FY25 Budget. The FY26 CDBG funds were appropriated in the FY26 Budget. The Second Amendment to the AAR No. 2025-179 will move the appropriation to the PARCS department Senior Activity Center project.
Attachments:
Second Amendment to the Annual Appropriation Resolution No. 2025-179
Amendment No. 2 to Progressive Design-Build Contract
Amendment No. 1 to Progressive Design-Build Contract
Original Design-Build Contract
Vicinity Map
Location Map