Council to Consider New Contractor for Environmental Innovation Center

After royally screwing up the Environmental Innovation Center (EIC) project, the city’s trying to clean up the mess by hiring a financially stable contractor. The City Council will consider a takeover agreement with Liberty Mutual Insurance Company when it meets Tuesday. The change from Applegate Johnston, Inc., which filed for bankruptcy after extensive delays and overrun expenses, will cost the city an extra $1 million. The $11 million project is already $1.6 million over budget and more than a half-year behind schedule.

The EIC lies on a 4.2-acre lot at 1608 Las Plumas Ave. The second phase of the project involves renovating a 65-year-old, 46,000-sq.-foot warehouse and building a new 10,000-sq.-foot hazardous waste drop-off center.

When the city asked for bids a couple years ago, the shaky economy led contractors to aggressively underbid jobs to get work, the city says. For the environmental center, all nine bids came under the engineer’s estimate of $12.5 million. The five lowest bids came in at around 8 percent less than that estimate. Applegate Johnston submitted a bid at 14 percent below the estimate, getting the gig with an $11.094 million bid in May 2011, according to a city memo.

The city overlooked Applegate Johnston’s checkered record to quickly close the deal and meet a deadline to nab partial funding for the center through New Markets Tax Credits. Construction was supposed to wrap up last December but dragged on through early summer—until contractors walked off the job completely. Applegate’s website went down. Its phone lines went dead. The company then declared bankruptcy.

“At the time the city awarded the construction contract, staff expressed concerns about the ability of [Applegate] to timely complete the work; however, staff could not have anticipated that a little over two years later [Applegate] would abandon the job and declare bankruptcy,” Public Works Director David Sykes and Environmental Service Director Kerrie Romanow write in a memo.

The new completion date is set for sometime next year. Maybe. The contract hasn’t yet been amended to reflect that projection.

More from the San Jose City Council agenda for September 17, 2013:

• The city will give another $635,000 to Health Trust’s Destination: Home, a program to help the homeless in San Jose. The money pays for some move-in costs for street-dwellers who find a permanent home and for three case managers who work with 60 of San Jose’s chronically homeless residents. The total contract is now set at $1.045 million.

• San Jose’s airport might get some new concessionaires: a Red Mango froyo joint, Einstein Bagels and a Sip Savvy bar.

• San Jose’s current-year budget added $500,000 to the airport’s marketing programs, which Mayor Chuck Reed and some of his council colleagues think should be used to pay a couple consulting firms to boost awareness about the airport’s on-time record and accessibility.

• Some of a $268,167 federal law enforcement grant will pay for 200 pistols ($80,000) for two academies and the range unit and 10 digital trunk radios ($65,608) for first-responders. Some will pay for overtime ($27,002) to officers who teach parents of at-risk teens how to modify their behavior. The county gets a little more than $68,000 of it. The rest ($27,817) will pay for the police department to actually administer the grant.

• Remember when the city lifted council candidates’ voluntary expenditure limits back in August? Well the city’s Ethics Commission has a few more elections-related recommendations, one of which is to amend the August ordinance that allows candidates to pay off post-election campaign debt using personal funds but not specify how much of that money they may deposit.

“We believe that the most cautious approach is to adopt a revised ordinance that sets out when a candidate may deposit funds, but not how much one can deposit of his or her own funds to avoid a perceived burden on political speech,” reads the memo coordinated by the commission and City Attorney Richard Doyle.

The proposed revision to the Aug. 20 ordinance keeps the 45-day post-election debt payoff deadline, but removes the 5 percent cap on the amount deposited.

• A couple years ago, a city audit found that San Jose’s disability retirement program was in dire need of reform. There were too many incidents of people retiring on disability in their 30s and 40s, the report said. The city addressed the problem in its Measure B reform, but it led the Santa Clara Civil Grand Jury this year to investigate disability retirements in other agencies within the county. The grand jury mostly unearthed problems in Gilroy, Palo Alto and Morgan Hill. Here’s the report, in which San Jose doesn’t really respond to the recommendations and findings because they apply to those other cities. Interesting background, though.

Rolling up the city’s recycling bills with the countywide property tax bill would save the city $28 million over the next nine years. Yup. That’s $3.2 million a year just for streamlining invoices.

• To qualify for future funding, the city has to submit a report to the U.S. Office of Housing and Urban Development about how it spent $12 million in current-year federal affordable housing grants from the agency. To sum it up, the city moved forward with construction of 36 affordable apartment complexes, offered remodeling help to 543 low-income households, provided 240 chronically homeless temporary housing subsidies, offered case management to 1,682 homeless youth and families, and gave 3,081 homes and businesses code enforcement help to eliminate blight in several neighborhoods.

• The San Jose-Santa Clara Regional Wastewater Facility has a five-year capital improvement plan of $725 million. The city doesn’t have the staff or time to deal with a project that big, so it’s asking the council to extend a contract with MWH Americas, Inc., a consulting service, to oversee the plan. The five-year consulting contract is not to exceed $39 million, per this memo.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: 408.535.1260

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


    • Yep, you’re right Mr. Interesting.
      And the City not only burns it’s own taxpayer’s dollars but those of the State and the Fed as well.  People conveniently forget to factor this in when they scoff at claims that we’re overspending.
      What freeloaders our city’s departments have become- shamelessly taking advantage of their crazy, senile old Uncle Sam, who’s actually broke but keeps on taking out mortgages on his house so he can still feel like a bigshot throwing his money around.

  1. But wait if we just keep blaming bloated pensions and not the billions owed in RDA and shady deals people will never know…. Who needs public safety when we have garden hoses and the right to bear arms?

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