Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Sam Lin, Interim Director, Project Development Unit
Subject: North County Wellness Center Project Budget and Contingency Increase
RECOMMENDATION:
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Adopt a resolution authorizing:
A) An increase to the total project budget for the North County Wellness Center Project of $2,000,000, to $140,000,000; and
B) The County Executive, or designee, to execute amendments and change orders to the agreement with XL Construction for the construction of the North County Wellness Center Project, that increase the agreement by 10 percent or $10,200,000 above prior authority for a revised total not-to-exceed amount of $112,200,000.
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BACKGROUND:
The North County Wellness Center (formerly South San Francisco Wellness Center) will be located at 1024 Mission Road, South San Francisco and will house the Medical Clinic, Human Services Agency, District Attorney, Tax Collector, and other County Departments, to be determined.
The Project, which is being delivered by union labor, comprises demolition of the Probation Building, temporary relocation of the Probation and Tax Collector functions to on-site modular units, and construction of the new Wellness Center.
The new Center will be a strategic County outpost creating a one stop shop for residents needing services that are convenient to public transportation, like BART and SamTrans. The Health Department projects that the new clinic, with expanded space and staffing, will provide medical services to approximately 34,000 patients annually.
The facility, designed by the architect SmithGroup, will be approximately 77,000 square feet with surface parking for the public and staff. The building will be constructed of cross-laminated-timber, all-electric, and designed to target LEED Gold certification. Photovoltaic arrays will be installed to offset building electricity consumption, reducing its carbon footprint.
In May 2019, this Board approved a construction management agreement with XL Construction that covered preconstruction work and anticipated indirect Project costs. The agreement contemplates establishment of a final agreement value through competitive procurement of subcontracts.
The Project resumed after a pause during the COVID-19 global pandemic and on March 12, 2024, this Board authorized an amendment to the agreement with XL Construction establishing a not-to-exceed contract value of $102,040,610. The amendment incorporated, with limited exceptions, competitively bid trade subcontracts, general conditions, general requirements, bonds, insurance, taxes, and certain allowances, including allowances for tenant improvements for spaces with an identified tenant.
The Project has largely completed design, permitting, and horizontal construction and vertical construction is underway including installation of the mass timber structure.
DISCUSSION:
The accompanying resolution authorizes an increase in the amount of the agreement with XL Construction due to, inter alia, the costs and risks posed by tariffs, unanticipated site and market conditions, post-permit requests by authorities having jurisdiction, and necessary owner-initiated scope and design changes.
Unanticipated conditions costs include: (1) a county-controlled allowance for tariff impacts; (2) a revised foundation system and delays due to underground conditions; (3) removal of Pacific Gas and Electric (PG&E) infrastructure and associated delays; (4) additional fire safety requirements required by authorities having jurisdiction; and (5) cost-escalation.
Necessary owner-initiated scope and design changes include: (1) increased generator capacity; (2) increased electric vehicle charging stations; (3) security upgrades; (4) dental suite updates to improve service provision; and (5) partial buildout of 9,700 square feet of unassigned shell space on Level 3 to reduce renovation costs for the future County tenant. Costs for some of these modifications are paid for by the requesting County entity through the Appropriation Transfer Requests (ATRs) authorized by this Resolution and will authorize the budget increase.
Unanticipated conditions, reasonable scope modifications, post-permit requests by authorities having jurisdiction, and associated schedule impacts are common in highly complex construction projects. Despite the additional uncertainty created by unpredictable national trade policies, the Project Team and its County partners will continue to work diligently to minimize additional costs, capture savings where feasible, and develop solutions and strategies that are timely, effective, and fiscally responsible.
County Attorney has reviewed and approved the Resolution as to form.
COMMUNITY IMPACT STATEMENT
The County of San Mateo is dedicated to ensuring access to quality health care and human services. This project provides access to service areas identified through demographic assessment as in need of improved access to care. The facility will provide a new and inviting space for residents to obtain health, dental, optometry, and human services all of which will positively impact health outcomes.
FISCAL IMPACT:
The North County Wellness Center total budget of $140,000,000 is comprised of $128,000,000 in FY 2024-25 capital projects Non-Departmental Services, $10,000,000 in Measure K, and $2,000,000 in aggregate contributions from the Health System, Human Services Agency, District Attorney, and Sustainability Department. The value of the Department contributions will be rolled over and trued-up in the FY 2025-26 Adopted Budget.