TITLE
Title
LEES CHAPEL TREATMENT CENTER RENOVATION GUARANTEED MAXIMUM PRICE CHANGE ORDER
end
SPONSOR
Sponsor
Eric Hilton
end
BACKGROUND
Background
On March 21, 2024, the Board of Commissioners awarded a Design-Build contract to Blum Construction (Blum) for Design Build services for the upfit of the Lees Chapel Treatment Center. This contract was to provide design and pre-construction services to develop a Guaranteed Maximum Price (GMP) amendment to the contract for the completion of the construction work described in the contract scope, in compliance with Department of Health Service Regulations (DHSR) requirements.
Blum has completed the design and bid processes necessary to assemble the GMP. The general scope of the GMP is to retrofit the facility to accommodate the facility requirements of the service provider to provide County residents needed treatment for substance use disorder and upfit the facility to provide the best cost-of-ownership option for the County. This upfit includes a new standby generator, new roof, new windows, updated lighting, new flooring, new HVAC equipment, new interior paint and interior space reconstruction to accommodate the needs of the treatment center. The design team has submitted the construction drawings for DHSR approval. The scope of any comments from DHSR is anticipated to be within the contingency amount shown below, based on the scope of the comments received during the design development phase.
Below is a summary of Blum's requested GMP change order.
Direct Costs $4,165,919
Design Fees $384,342
Insurance and Bonding $115,845
Contingency $171,887
Permitting $ 15,404
CM Fee $156,417
Less Previously Authorized
preconstruction/design fees ($437,090)
Change Order Amount $4,572,724
Blum performed outreach during the bid process to engage historically under-utilized (HUB) businesses. Their outreach effort resulted in an overall HUB participation of 20.7% of the cost of work amounting to approximately $862,767 of awards to HUB businesses. This exceeded the established goal of 17% HUB participation set by the County's MWBE office.
In addition to the GMP change order, there are items that will be supplied for the project by the County. These costs are summarized below:
Owner Supplied Equipment $137,200
Site Improvements $34,100
IT/Telecom $140,400
Commissioning and Testing $34,900
Insurance $20,200
Moving $15,000
Furniture $59,400
County staff recommends using a combination of McKinsey settlement funds ($199,451.87) and North Carolina Opioid Settlement funds ($4,814,472) for the full cost of this phase of the project, and authorizing the use of funding for a period running from February 6, 2025 to June 30, 2026. The activity is allowable under the Opioid Settlement in Exhibit A, Strategy 2 based on the planned use of the Lees Chapel facility to operate a recovery treatment program. The necessary opioid spending authorization for this activity in the amount of $4,814,472 is included with this item. McKinsey funds are restricted to use on activities similar to those described in the North Carolina Opioid Settlement MOA, but they do not require spending authorizations for use.
The capital project ordinance also needs to be amended to reflect this additional funding. The UNC School of Government issued new guidance on February 5, 2025, that local governments budget funds subject to the Opioid Settlement MOA (“MOA settlement funds”) entirely separately from any other funds when multiple fund types are used on a single project including by establishing separate capital project ordinances as necessary. Based on this guidance and staff’s recommendation to use McKinsey Opioid Settlement funds, which are separate from the State MOA, it is necessary to establish a second capital project ordinance in the amount of the McKinsey funds and to amend the existing ordinance for only the amount of the MOA settlement funds. The amended total of the existing project ordinance will be $4,814,472 and a new ordinance will be adopted in the amount of $199,452 for a total project increase across both ordinances of $5,013,924 from the current amount of $437,090.
end
BUDGET IMPACT
Budget Impact
General Fund
$199,452 Increase in Federal / State Funds (McKinsey Settlement Proceeds)
$199,452 Increase in appropriation to General Government
Opioid Settlement Fund
$4,814,472 Increase in Federal / State Funds (Opioid Settlement Proceeds)
$4,814,472 Increase in appropriation to Opioid Settlement Funds
County Building Construction Fund
Lees Chapel Residential Treatment Facility Renovation (Amend)
$4,814,472 Increase in Transfers from Other Funds (Opioid Settlement Fund)
$4,814,472 Increase in appropriation to Capital Project
Lees Chapel Residential Treatment Facility Renovation - McKinsey (Adopt)
$199,452 in Transfers from Other Funds (General Fund)
$199,452 in Appropriation to Capital Project
end
REQUESTED ACTION
Requested Action
Approve, in substantial form, the amendment of a Design-Build Contract GMP Change Order with Blum Construction in the amount of $4,572,724, and authorize staff to take the necessary measures to execute this contract;
Approve the attached Opioid Settlement Spending Resolution for the use of $4,814,472 in Opioid Settlement funds for Evidence-Based Addiction Treatment - Lees Chapel Renovation to fund the Lees Chapel Residential Treatment Facility Renovation under Exhibit A, Strategy 2, starting February 6, 2025 and ending June 30, 2026 to partially fund this contract;
Approve budget ordinance amendments to increase appropriations in the Opioid Settlement Fund by $4,814,472 with the same amount of additional revenue from Federal / State Funds (Opioid Settlement Proceeds) and in the General Fund by $199,452 with the same amount of additional revenue from Federal / State Funds (McKinsey Settlement Proceeds); and
Amend the Lees Chapel Residential Treatment Facility Renovation project ordinance to increase the project amount by $4,814,472 to be funded with Transfer from Other Funds (Opioid Settlement Fund) for $4,814,472 for the transfer of Opioid Settlement Proceeds from the Opioid Settlement Fund, and authorize any other necessary budget amendments needed to transfer funds into this project ordinance; and
Adopt a capital project ordinance for Lees Chapel Residential Treatment Facility Renovation - McKinsey in the amount of $199,452 to be funded with Transfer from Other Funds (General Fund) for $199,452 for the transfer of McKinsey Settlement Proceeds from the General Fund and authorize any other necessary budget amendments needed to transfer funds into this project ordinance.
end