HomeMy WebLinkAbout14 - Central Warehouse FloodFebruary 14, 2017
Agenda Item No. 14
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Anthony Nguyen, Purchasing Agent,
anguyen@newportbeachca.gov
PHONE: 949-644-3080
TITLE: Central Warehouse Flood
ABSTRACT:
On November 30, 2016, the City's Central Warehouse, located at the Corporate Yard,
592 Superior Avenue, experienced a flood due to the breaking of a fire riser pipe. The
water damaged portions of the Central Warehouse facility and offices resulting in the need
for emergency remediation and repair work focused primarily on the facility's flooring and
drywall areas. The required work to rehabilitate and repair the Central Warehouse is
complete and staff requests a budget amendment to offset the unforeseen expenses
related to this incident.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Approve Budget Amendment No. 17BA-024 increasing revenue estimates for the
insurance refund by $76,376.51 and increasing expenditure appropriations from
Unappropriated General Fund Balance by $90,775.40. The net fiscal impact to the
General Fund is a reduction in fund balance of $14,398.89. Please refer to the table
in the `Funding Requirements' section of this report for additional details regarding
expenditures and revenues related to this request.
14-1
Central Warehouse Flood
February 14, 2017
Page 2
FUNDING REQUIREMENTS:
The following table indicates the expenditures and revenues related to this incident:
WORK
ACCOUNT
ACCOUNT
EXPENDITURES
REVENUES
DESCRIPTION
DESCRIPTION
NUMBER
Emergency
Building Maintenance &
0109041-851016
$52,984.43
Cleanup
Repair
Fire Riser Pipe
Building Maintenance &
0109041-851016
$4,398.89
Repair
Repair
Phone Line
Information Technology
76420203-811008
$1,134.21
Repair
Professional Services
Central
Building Maintenance &
0109041-851016
$32,257.87
Warehouse
Repair
Repair
Insurance Claim
Facilities Maintenance
0109041-511050
$75,242.30
Refund
Private Refunds &
76420203-511050
$1,134.21
Rebates
TOTAL EXPENDITURES:
$90,775.40
TOTAL REVENUES:
$76,376.51
TOTAL FISCAL IMPACT (Reduction to General Fund
$14,398.89
Balance):
With the exception of a $10,000.00 insurance deductible and the repairs to the fire riser
pipe ($4,398.89), all other expenditures are reimbursable to the City. After factoring in all
expenditures and revenues from insurance reimbursement, the total fiscal impact from
this flood incident is $14,398.89.
DISCUSSION:
The Central Warehouse is located within the City's Corporate Yard, 592 Superior Avenue.
Operated by the Finance Department, this facility houses the City's warehouse inventory,
which includes tools and hardware; paper products; cleaning supplies; irrigation parts;
safety equipment; and piping supplies. Additionally, the Central Warehouse is also home
to the City's depository for surplus goods and materials. Contained within the Central
Warehouse are storage areas for the Recreation and Senior Services Department and
an office for Fire Department Support Services staff.
Early on the morning of November 30, 2016, a 3 -inch fire riser pipe sprung a leak below
grade and flooded the entire first floor of the Central Warehouse with 1-2 inches of water.
The Fire Department responded in order to shut the water off and minimize the damage.
Municipal Operations and Finance staff reported at 7 a.m. to begin assisting with the
cleanup and salvage efforts.
14-2
Central Warehouse Flood
February 14, 2017
Page 3
Due to their past efforts in assisting the City with similar incidents, American
Technologies, Inc. ("ATI") was called out to assess the damage and complete the initial
emergency work. ATI dried out the offices, removed contaminated materials, removed
all baseboards, cut out all affected drywall, cleaned and sanitized warehouse flooring,
and performed an inventory of all total loss items. ATI performed preliminary asbestos
testing as well, necessitated by the discovery of asbestos in the mastic under the tile of
the Central Warehouse office area. The emergency cleanup and ensuing salvage effort
was completed on December 20, 2016.
The flooding also resulted in the need for other repairs. To accomplish the repairs to the
3 -inch fire riser pipe (the main cause of the flood), the City called upon Pacific Plumbing
Co., a contractor that is currently under an on-call contract with the City for plumbing and
pipe repair services. During the week of December 2, 2016, the contractor repaired the
fire riser pipe and surrounding concrete area. The phone line running to the fire alarm
control panel in the Central Warehouse also needed repairs. This work was performed by
PCC Network Solutions, a telecommunications contractor with experience servicing the
cabling network at the City's Corporate Yard. The flooding also resulted in a loss of
warehouse stock supplies, estimated at $300.00. The minimal nature of this loss can be
attributed to two factors: the rapid response of staff to the flooding and Central Warehouse
staff's adherence to best practices of storing items on pallets and moving them onto
storage racks immediately upon receipt. These procedures led to most warehouse stock
items being placed above the water level and out of harm's way.
Following the emergency cleanup, salvage and pipe repair, the City needed to retain a
contractor to carry out the building repair portion of the project, entailing replacing
insulation and portions of the drywall that were cut out, replacing flooring and repainting
walls. The City exercised due diligence by soliciting pricing proposals from ATI as well as
other contractors currently under contract with the City for this type of service. Staff
ultimately retained ATI for the building repair portion of the project due to their cost being
the lowest of all proposed, as well as their excellent work history in servicing the City's
facilities during similar circumstances.
Staff has worked very closely with the City's insurance adjuster, McLaren's, to ensure all
work performed on this project meets insurance claim reimbursement standards.
Pursuant to the City's insurance policy, the City carries coverage with a $10,000
deductible. All worked described in this report ties to one loss/incident so the single
$10,000 deductible applies to all emergency cleanup, salvage and repairs to the building
and telephone lines. The City's policy excludes the $4,398.89 of repairs to the direct
cause of the flood, which was identified as the fire riser pipe. All expenditures, less the
deductible and fire riser pipe repairs, shall be reimbursed to the City.
14-3
Central Warehouse Flood
February 14, 2017
Page 4
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Budget Amendment No. 17BA-024
14-4
Attachment A
Budget Amendment 17BA-024
14-5
City of Newport Beach
BUDGET AMENDMENT
2016-17
EFFECT ON
BUDGETARY FUND BALANCE:
X
Increase Revenue Estimates
X
Increase Expenditure Appropriations AND
0109041
Transfer Budget Appropriations
SOURCE:
Number
851016
from existing budget appropriations
X
from additional estimated revenues
X
from unappropriated fund balance
EXPLANATION:
NO. BA- 17BA-024
AMOUNT:1 $90,775.40
Increase in Budgetary Fund Balance
X Decrease in Budgetary Fund Balance
No effect on Budgetary Fund Balance
This budget amendment is requested to provide for the follovving:
To increase revenue estimates and expenditure appropriations due to insurance claim submission for the City's
Central Warehouse flood damage, rehabilitation and repair.
ACCOUNTING ENTRY:
BUDGETARYFUND BALANCE
Fund
010
REVENUE ,ESTIMATES
Org
0109041
76420203
Object Description
300000 General Fund - Fund Balance
0!ject Description
511050 Facilities Maintenance - Private Refunds
511050 Information Technology - Private Refunds
EXPENDITURE APPROPRIATIONS
Signed:
Signed:
Financial Approval: Finance Director
Administrative Approval: City Manager
Signed:
City Council Approval: City Clerk
Amount
Debit Credit
$14,398.89
$75,242.30
$1,134.21
Automatic System Entry.
$89,641.19
$1,134.21
Date
Date
Date
14-6
Description
Org
Number
0109041
Facilities Maintenance
Object
Number
851016
Building Maintenance
Org
Number
76420203
Information Technology
Object
Number
811008
Services Professional
Signed:
Signed:
Financial Approval: Finance Director
Administrative Approval: City Manager
Signed:
City Council Approval: City Clerk
Amount
Debit Credit
$14,398.89
$75,242.30
$1,134.21
Automatic System Entry.
$89,641.19
$1,134.21
Date
Date
Date
14-6