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HomeMy WebLinkAboutDMCC Resolution No. 171-2025 (Approving Use Of Link Bus Rapid Transit Contingency Funding)DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. 171-2025 A RESOLUTION APPROVING USE OF LINK BUS RAPID TRANSIT CONTINGENCY FUNDING The following Resolution was offered by Kim Norton, seconded by James Campbell. BACKGROUND RECITALS A. In the 2025 Five Year Capital Improvement Plan (the “2025 CIP”) approved by the Destination Medical Center Corporation (“DMCC”) on September 26, 2024 per Resolution No. 154-2024, the DMCC approved $13,740,000 in general contingency funding (the “Contingency Funding”) for the Link Bus Rapid Transit (“BRT”). The approved Contingency Funding augments existing contingency budgets provided for various portions of the BRT project. As a result of the increase in the Contingency Funding, the DMCC imposed a condition in connection with its approval requiring that “[t]he additional contingency funds of $13,740,000 will be expended based on criteria developed at the direction of the DMCC board and following approval by the DMCC and City staff made prior to use.” B. As a result of the approved Contingency Funding, the DMCC approved on December 5, 2024 per Resolution No. 156-2024, criteria for the preservation and use, approval, and reporting of the Contingency Funding (the “BRT Contingency Criteria”). C. Staff of the City of Rochester (the “City”) are in receipt of projects bids for completion of various components of the BRT project, including bids for architecture, the vehicle maintenance facility, and public restrooms located at the West Transit Village, all as further detailed in the attached Exhibit A (the “Project Bids”). D. In connection with the Project Bids, and in accordance with the BRT Contingency Criteria, City staff and the Destination Medical Center Economic Development Agency (the “EDA”) requests that the DMCC authorize use of $9,750,000 of the Contingency Funding (the “Draw) towards the costs set forth within the Project Bids. E. Staff of the City and the EDA now request that the DMCC approve the Draw. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the DMCC Board of Directors that the DMCC approves the Draw based on the following findings: 1. The Draw is to provide aid in support of the implementation of the BRT project which is a public infrastructure project within the meaning of Minnesota Statutes, Section 469.40, subdivision 11, located within the Development District and constituent with the Development Plan adopted by the DMCC on April 23, 2015, as amended. 2 2. The Draw is being reviewed and approved by the DMCC pursuant to the requirements of the BRT Contingency Criteria. BE IT FURTHER RESOLVED, that the approval of the Draw is expressly subject to the following conditions: 1. Use of the Draw is subject to the requirements set forth in the BRT Contingency Criteria and continued compliance with said criteria. 2. Use of the Draw must not be utilized for payment of the costs pursuant to the Project Bids unless any until any other specific contingency budgets associated with the Project Bids are fully expended. 3. The City shall provide written updates to the DMCC Board of Directors at each subsequent meeting of the DMCC Board of Directors with respect to the use of the Draw, as described and required by the BRT Contingency Criteria. BE IT FURTHER RESOLVED, that the Chair or the Treasurer of the DMCC is hereby authorized and directed to transmit this Resolution to the City and to take such actions as are necessary or convenient to effectuate the findings and approvals of this Resolution. 31602013v2 The question was on the adoption of the Resolution and there were YEAS and---NAYS,as follows:--- BOARD OF DIRECTORS Destination Medical Center Corporation YEA Douglas M.Baker,Jr. James R.Campbell Kim Norton Randy Schubring Mark Thein Pamela Wheelock Paul D.Williams RESOLUTION ADOPTED on May 22,2025. ATTEST:&A ~ Pamela Wheelock,Chair Destination Medical Center Corporation NAY OTHER 7 0 X X X X X X X EXHIBIT A LINK Bus Rapid Transit: Bids, Budget, and Timeline To: DMCC Board of Directors From: DMC EDA Date: May 16, 2025 Request of the board of directors: Recommend authorizing City of Rochester to expend, if required, up to $9.75M of approved contingency funding to secure project bids and contracts, in accordance with approved LINK BRT contingency use guidelines. Background: A multi-modal mobility strategy for the DMC has been developed and includes the implementation of a Link BRT a Bus Rapid Transit system, which is the priority focus of DMC’s mobility infrastructure investments. Project Update: Link BRT Vehicle Procurement - City, DMC and Mayo Clinic are currently working with New Flyer of America on optimizing interior vehicle design. - The first bus will begin being built in April – with a delivery date of June 2025. 12 buses in total will be delivered by the end of 2026. Bidding Process The City of Rochester recently encountered complications with the bidding process for the Link BRT project. As a result, the City Council made the decision to reject all bids. To address the challenges and streamline the procurement process, the project scope was divided into two volumes. Volume B: This portion of the project was re-released for bidding, and bids were opened in mid-April. The results came back favorable, indicating strong interest and alignment with project expectations. Volume C: This portion of the bid is scheduled to be released for bidding, following a value engineering exercise, in May. Budget 2020 2021 2022 2023 2024 2025 2026 Tot al County Transit Aid 1,548,800 2,100,800 4,155,534 3,419,779 3,718,569 4,948,292 2,821,558 22,713,332 State Transit Aid 2,323,200 3,151,200 10,388,836 5,129,668 5,577,854 21,162,437 4,232,337 51,965,532 GSIA --2,040,277 9,092,566 ---11,132,843 Water ----150,000 --150,000 Sewer ----225,000 --225,000 Assessment ------- Federal -200,000 2,100,000 107,000 24,700,000 60,110,000 -84,917,168 3,872,000 5,452,000 18,684,647 17,749,013 34,371,423 86,220,729 7,053,895 171,103,875 Total Budget Through 2026 170,794,308 Total Esimated Cosrs 309,567 Balance of Funds DMC CIP LINK BRT Budget Approvals By Year Adopted Business Forward Construction Mitigation The project team is using the Business Forward strategy as they prepare for construction. Project team members are meeting with stakeholders impacted by the construction to gather information as outline in the Business Forward strategy. This information will help to inform future phasing, communications and wayfinding strategies needed during construction. The project team is working closely with Zan, a conduction communications firm that focusing on communication strategies related to transportation construction mitigation and Storefront Mastery, a firm that focusing on strengthening neighborhoods and businesses during construction. Both strategies align with the Business Forward methodology. The DMCC-approved LINK BRT contingency use guidelines follow this memorandum. Fulfilling the DMC Vision, Mission, and/or Goals: DMC EDA Staff are working in collaboration with the City staff and the consultant team, SRF, with a continued focus on the goal of creating a world-class experience that centers equity of access and foregrounds BRT as a desirable consumer choice. Timeline: It is anticipated that Link BRT will officially open Q2 of 2027. Destination Medical Center To: DMCC Board of Directors From: DMC EDA Date: May 16, 2027 RE: Approved Criteria for the Use of Link Bus Rapid Transit Contingency Funding The 2025 DMC Capital Improvement Program (CIP) includes $13,740,000 in general contingency funding for the Link Bus Rapid Transit (BRT) project sourced from DMC transit aid. This stand-alone contingency budget augments existing contingency budgets that are assigned to various elements of the BRT project. Because of this increase in the project budget, the DMCC required that “(t)he additional contingency funds of $13,740,000 will be expended based on criteria developed at the direction of the DMCC board and following approval by DMC and City staff made prior to use.” This memorandum describes approved criteria for the preservation and use, approval, anticipated expenditures, and reporting of contingency funds. 1.Preservation and use of contingency funds. Contingency funding allocated to various elements of the BRT project should serve as the first source of funding for immediate project needs, with stand-alone contingency funding as a “replenishment” source if needed. Additionally, staff understand that it is the preference of the DMCC board of directors to complete the BRT project without expending stand-alone contingency funds if possible. Careful management of the project budget may permit these DMC transit funds to be reallocated to other transit initiatives following the close-out of this project. 2.Contingency use approval. Prior to the expenditure of the stand-alone contingency funding, the BRT project team should report to the DMCC board of directors on the status of the project budget, including the use of other contingency budgets, and the necessity to use stand-alone contingency funding. If the use of contingency funding is approved by the DMCC, City staff may proceed to negotiate individual project change orders. 3.Anticipated expenditures. If the use of stand-alone contingency funds is recommended, staff anticipate that expenditures will generally be related to: 1) project elements that are deemed necessary for the project to continue, 2) are intended to provide for project optimization, 3) or serve to mitigate the impact of construction through “Business Forward” strategies: i.Necessary: Necessary change orders will detail scopes of work that are required to complete the project’s stated purpose as approved by the DMCC. Such change orders typically involve work needed to address time-sensitive and unforeseen field conditions, or adjustments with adjacent public infrastructure or private property to ensure a fully functional, resilient, and high-quality project. For necessary change orders, staff would propose a per-order expenditure limit of $350,000. Destination Medical Center ii.Optimization: Optimization change orders will detail scopes of work that are intended to improve the project and long-term public experience beyond what was described in the as-awarded project scope of work. Such change orders typically involve work that is intended to improve the user experience, decrease long-term operating and maintenance costs, or leverage construction activity to make other timely and prudent infrastructure improvements. For optimization change orders, staff would propose a per- order expenditure limit of $150,000, with the aggregate total of optimization change orders not to exceed $2,000,000. iii.Business Forward: Business Forward change orders will detail scopes of work that are intended to reduce the impact of construction on individuals and properties in proximity to project construction activities through improved project phasing, communications, and programming/activation. For Business Forward change orders staff would propose an aggregate total not to exceed $750,000. 4.Reporting. Whether stand-alone contingency funding is approved for use or not, City project management staff shall provide a written BRT project update at each regular DMCC board of directors meeting. The update will detail: i. Any factors that may impact the on-time completion of the project, such as construction or procurement delays ii. Upcoming project milestones iii. Any factors that may impact the on-budget completion of the project iv. A summary of all project change orders to include, at minimum, the approval date, scope of work, and amount of the change order v. The status of project funding, to include any use of the contingency funding allocated to specific project elements, including: 1. Guideway and Track Elements 2. Stations, Stops, Terminals, Intermodal 3. Support Facilities: Yards, Shops, Admin. Buildings 4. Sitework & Special Conditions 5. Systems 6. Right-of-Way, Land, Acquisition Costs 7. Business Forward engagement and construction mitigation 8. Professional Services vi. Additional foreseeable uses of contingency funding