HomeMy Public PortalAbout2016.211 (10-04-16)RESOLUTION NO. 2016.211
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD
APPROVING THE APROPRIATION OF $149,963.85 TO COVER THE
RELEASE OF FUNDS WITHHELD PURSUANT TO A LABOR COMPLIANCE
INVESTIGATION BY THE DEPARTMENT OF INDUSTRIAL RELATION'S
LABOR COMMISSIONER (Case No. 40 -48908 -213) RELATED TO THE
CONSTRUCTION OF THE RICARDO LARA LINEAR PARK TO BE
DISTRIBUTED IN ACCORDANCE WITH THE SETTLEMENT AGREEMENT BY
AND BETWEEN CS LEGACY CONSTRUCTION INC., AND THE CITY OF
LYNWOOD, AND COSTS INCURRED TO PROCESS AND SETTLE SAID
LABOR DISPUTE
WHEREAS, on June 15, 2012, the California State Parks' Office of Grants
and Local Services (OGALS) awarded the City of Lynwood a grant for the
construction of the Lynwood Linear Park Project in the amount of $4,949,957; and
WHEREAS, on November 4, 2014 Council awarded the Linear Park
construction contract to CS Legacy Construction, Inc.; and
WHEREAS, on November 26, 2104 CS Legacy entered into a contract
with the City in the amount of $4,683,273.78 to construct the Lynwood Linear
Park, which began construction on December 1, 2014; and
WHEREAS, on January 11, 2016, the final progress payment for
construction of the linear park was submitted; and
WHEREAS, the final cost for the physical construction of the Ricardo Lara
Linear Park ( "Park ") project after quantities built were calculated, and a change
order was approved, came to $4,750,705.04; and
WHEREAS, ten percent of each progress payment, or a total of
$475,070.50, was retained for the project's final payment once the project is
complete and receives a Notice of Completion; and
WHEREAS, on January 27, 2016, staff received supplies and manuals for
the maintenance of the Park from CS Legacy indicating they were officially
removing their services from the Park and it was complete; and
WHEREAS, on February 1, 2016 the City received notice from the State
Labor Commissioner that CS Legacy was under investigation (Case No. 40-
48908 -213) for alleged Labor Compliance violations initiated by the project's
labor compliance firm, Contractor Compliance and Monitoring, Inc. (CCMI); and
WHEREAS, pursuant to the investigation, the City received a Notice of
Withholding from CCMI stating the City should withhold the amount of
$144,520.88 from the final payment to the Contractor which includes wage
penalties, liquidated damages and training funds; and
WHEREAS, pursuant to California Civil and Labor Code, Contractor shall
be paid amount due for work performed no more than 90 days after work is
completed provided the awarding body withholds and retains therefrom all
amounts required to satisfy any civil wage and penalty assessment issued by the
Labor Commissioner; and
WHEREAS, in conjunction with the Office of the City Attorney, it was
determined that the contract with CS Legacy should be amended to indicate that
the final payment will be provided to the Contractor at the conclusion of the
investigation in the amount to be determined pursuant to the findings of the
investigation, allowing a retention payment less the withholding to be made to the
Contractor in the amount of $330,549.62; and
WHEREAS, pursuant to a Release Agreement (Settlement) reviewed by
the City Attorney and determined to be in the best interest of the City and all
parties involved received on August 19, 2016, and fully executed on September
14, 2106, $54,531.50 is to be distributed in accordance with the guidance
provided by the Labor Counsel of record and subtracted from CS Legacy's final
payment; and
WHEREAS, the Department of Industrial Relation's (DIR) Labor
Commissioner or his or her designee will submit its release letter once the funds
are received by DIR in accordance with the Settlement Agreement; and
WHEREAS, upon the City's reception of the letter, the balance of the
withholding ($89.989.38) will be paid to CS Legacy per the 2nd Amended
Agreement by and between the City and CS Legacy; and
WHEREAS, in order to conduct said transactions, an appropriation of funds
in the amount of $149,963.85 must be approved by City Council; and
WHEREAS, the City Council of the City of Lynwood finds the appropriation
of said funds is in order to cover said costs and conclude all business regarding
labor dispute Case No. 40 -48908 -213.
NOW, THEREFORE, THE CITY COUNCIL DOES HEREBY DETERMINE
AND RESOLVE AS FOLLOWS:
Section 1. That the City hereby approves the appropriation of
$149,963.83 to cover costs incurred related to Case No. 40 -48908 -213 as
follows:
N
• Settlement Agreement — of the $54,531.50, a check for $41,206.50
shall given to CCMI to resolve unpaid wages and training fees;
$500 shall be remitted to CCMI check processing and tracking for
said workers; $12,825 shall be remitted to the City of Lynwood for
penalties.
• Release of Retainer — $89,989.38 shall be released to CS Legacy
Construction pursuant to and in accordance with the 2nd Amended
Agreement by and between CS Legacy and the City of Lynwood.
• An appropriation of $5,442.97 shall be made to cover balance of
the fees for labor compliance services incurred by CCMI, pursuant
to the existing Agreement by and between Onward Engineering
and the City of Lynwood.
Section 2. City Council hereby directs Finance to take the necessary
steps to adjust budget documents to reflect the authorized appropriation for use
on art design work at the Lynwood Linear Park and to perform the following
transfer:
Transfer from
Transfer to
Prop 84 Park Grant- Rev
Prop 84 Park Grant — Exp.
Account # 3782.51.32155
Account # 3782.51.208.62015
Amount $149,963.85
Amount: $149,963.85
Section 3. That the City authorizes the Mayor, or appointed designee to
execute any agreements or documents to effectuate the final payments resulting
from Settlement of Case No. 40 -48908 -213, in the amount of $149,963.85 in
accordance with Labor Commission investigation, and subsequent fees for labor
compliance services in a form approved by the City Attorney.
Section 4. This Resolution shall become effective immediately upon its
adoption.
Section 5. The City Clerk shall certify as to the adoption of this City
Council Resolution.
2016.
PASSED, APPROVED, AND ADOPTED THIS 4h DAY OF OCTOBER,
[THIS SPACE INTENTIONALLY LEFT BLANK]
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ATTEST:
aria City Clerk
- '
APPROVED AS TO FORM:
bk.w
David A. Garcia,
City Attorney
Edwin Hernandez,
Mayor
,
T Arnoldo Beltran,
City Manager
TO
Andre Uuprek�ripi
Development, Compliance and
Enforcement Services Director
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STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, do hereby
certify that the foregoing Resolution was passed and ado�ted by the City Council
of the City of Lynwood at a regular meeting held on the 4t day of October, 2016,
and passed by the following vote:
AYES: COUNCIL MEMBERS ALATORRE,
SOLACHE AND MAYOR HERNANDEZ
NOES: NONE
ABSENT: MAYOR PRO TEM CASTRO
ABSTAIN: NONE
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
SANTILLAN -BEAS,
I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, and the
Clerk of the City Council of said City, do hereby certify that the above foregoing is
a full, true and correct copy of Resolution No. 2016.211 on file in my office and
that said Resolution was adopted on the date and by the vote therein stated.
Dated this 4th day of October, 2016.
11 ifle-�'
inonez, City
5
R]l1LEAS131 AC�RktLNllGNT
This Agreement is made by the CITY OF LYNWOOD, (hereafter " AGENCY") in favor
of C,S. LEGACY CONSTRUCTION (hereinafter C.S. LEGACY), SAL CAL
CONSTRUCTION AND VA & SONS WELDING (hereafter referred to collectively as the
"CONTRACTORS ") with reference to the following facts:
RECITAL
1. The AGENCY served Notice of Withholding of Contract Payments on January 25,
2016 upon CONTRACT012S, claiming unpaid wages of $60,076.94, unpaid training of
$692.00 and a total of $23,675.00 of 1813 and 1775 penalties to be due and owing by
CONTRACTOR as a result of alleged violations of the California Labor Code on a
public works project awarded by the AGENCY known as Lynwood Linear Park.
(hereafter the "PROJECT")
2. C.S. Legacy and Sal Cal Construction both filed a Request for Review, which is now
pending a Request for Review. OD Legal Case No. 16- 0120 -11WII the Office of the
Director, Department oflndustrial Relations.
3. The AGENCY and C.S. LEGACY have agreed to resolve clahns concerning the
Notice of Withholding and DLSE Case No,16- 0120 -PWH as follows:
a. The AGENCY shall perinanently retain ttre total stun of $54,531.50 from
funds currently being Withheld from CS Legacy on the PROJECT and will
rclease CONTRACTORS from any and all claims by AGENCY for wages
and related penalties arising out of the PROJECT including but not limited to
unpaid prevailing wages, hnining fund contributions, liquidated damages
under Labor Code section 1742.1, and penalties under Labor Code sections
1775 and 1813 (including interest, costs and attorney fees) , resulting from
H
any work perforated by workers who were oa,ployed by VA & SONS
WELDING on the PROJECT(hereafice "CLAIMS") .
AGREEMENT
NOW, THEREFORE:
1. The AGENCY shall see that proper restitution is paid to the affected worker-,
pursuant to the laws and regulations set fort], in the Labor Codo and promulgated by
the California Department of Indusirial Relations from the fiords retained by the City.
2. CS Legacy and Sal Cal Construction, by signing this agreement, stipulates that each
is withdrawing its Request for Review, Further CS Legacy and Sal Cal Construction
shall notify the USE in writing that it is withdrawing its Request for Review not
later than August 24, 2016.
3. In consideration of payment set forth above, the AGENCY release CONTRACTORS
of all claims relating to prevailing wage compliance as set forth i, (lie Notice of
Withholding and Case No. 16- 0120 -PWH as set forth above,
It is understood and agreed that this settlement involves the compromise of disputed
claims and that CONTRACTOR disputes all claims ofAGENCY.
Nothing is this agreement shall prohibit aay of the CONTRACTORS named in this
agreement from assorting claims ofindenmification or contributions from each other.
This agreement is a negotiated settlement and the dralling of the agreement shall not be
construed In favor or against any particular party.
2
E
'Cilia agreement may be executed in countetparls And a signautre nnnsmitted
electronieaity shall bo deemed to he binding as if the miglnAl.
(late:
))ftfC: lea 1� Q
Date: \— `y l
Approved its to fomt:
SRI CA) Constrttcllon
City of I.ygivood
voG,r I IZERNICK 1 SfICRAK, LLP
Date: _
Stephan H. Andraninn, Esq.
Cor C.S. Legacy Construction
ShupsanDehnore Greeme LLh
z
This agreement may be executed in counterparts and a signature transmitted
electronically shall be deemed to be binding as If the original.
Date: CS Legacy
Date: Sal Cal Construction
Date: 9 _ t , , t y City of Lynwood
Approved as to form:
VOLT I RESNICI{ I SIITRAX,LLP
Date: p6-, ZLt. 2016
Stephan II. Andranlan, Esq.
for C.S. Legacy Contraction
Simpson Delmore Greene LLP
Date:'
JphJ Simpson, Escl:
for Sal Cal Constraction
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SECOND AMENDMENT TO
AGREEMENT
This SECOND AMENDMENT TO 'PHIS C ONSTRUCTION AGREEMENT ("Second
Amendment!I is made as of April 5, 2016 by and between the City of Lynwood, a public body,
corporate and politic ( "City ") and CS Legacy Construction Inc, ("Contractor ")_ City and
Contractor are sometimes hereinafter individually referred to as a "Party" and collectively
referred to as the "Parties."
RECITALS
WHEREAS, on November 4, 2014, by Coun it Resolution No. 2014.199 the City
selected Contractor by way of formal bid process for a general construction of the City of
Lynwood's Linear Walking Park (Park); and
WHEREAS, on November 26, 2014 the City en Bred into an Agreement with Contractor
in the amount of $4,683,273.78 for the development of said Park; and
WHEREAS, On December 1, 2014, Contractor mmenced construction of the Park; and
WHEREAS, the City determined that the unfor een circumstances were identified which
justified the need for an appropriation of additional fun in the amount of $67,431.26 was in order
to complete the Linear Park Project; and
WHEREAS, on January 21, 2016, a First Amendment to the Agreement was executed to
increase the original contract amount to $4,750,705.04.
WHEREAS, on January 27, 2016, staff r ceived supplies and manuals for the
maintenance of the Park from CS Legacy indicating th y were officially removing their services
from the Park and it was complete, subject to a final i pection; and
WHEREAS, on February 1, 2016 the Cityl received notice from the State Labor
Commissioner that CS Legacy was under investigatiol for alleged Labor Compliance violations
related to said project, and i
WHEREAS, pursuant to the investigation, a 140tice of Withholding was issued staring
the amount to be withheld from contractor's payme' t is $144,520.88 which includes wage
penalties, liquidated damages and training funds; and
WHEREAS, it is agreed that the circumstances et forth herein justify the need for a second
amendment to original Agreement to authorize payme it to Contractor for work completed, less
the stated withholding amount pursuant to the ongoing abor compliance in accordance with State
Code and an allowable proportional retention for any ir complete items.
NOW, THEREFORE, in consideration of perfo' ance by the Parties of the covenants and
conditions herein contained, the Parties hereto agree as follows:
1. Contract Price. Section 2 of the original A7
amended in its entirety so that it shall read as follows:
"I1. CONTRAC r
A. The City agrees to pay, and the Contractor
outlined in the Contract Documents, the Cc
subject to additions and deductions, it any, r
Documents. Progress payments shall not be me
days, nor shall progress payments paid be in
Contract Price at time of completion. Except a.
the Notice of Withholding of Contract Payme:
processed thirty -five (35) days after the City 1
except for the allowable proportional reten
Substantial Completion lists (Punch -List) f
Contractor may, upon Contractor's written req
at Contractor's expense, deposit substitute se
Section 16430, and as authorized by Public (
retention monies withheld to insure performan
B. Payment of undisputed amounts due under thi:
due hereunder, is contingent upon the Contract
release by the Contractor of all claims age
Agreement related to those amounts. Disp
specifically excluded by Contractor from the
final or otherwise, shall operate to release the t
arising under this Agreement or the bonds a
payment shall be construed as an acceptanea
improper materials."
C. Notwithstanding the provisions of Section IIA,
1727(a), before making final payments to the c
Amendment, First Amendment, and initial .
retain the amount(s) required to satisfy any Gil
the Labor Commissioner in accordance with C
1771.6. Due to the current Notice of Wlthhol
Project, the amount of $144,520.88 shall be
City until receipt of a writing from the Labor
or fraction thereof and an appropriate notice t
2. Full Force and Effect. The Parties further
in this Amendment, the terms of the.original Agre
force and effect.
entitled "Contract Price" shall be
to accept as fall payment for the Work
Price of Four lYlilion Seven hundred
Fe in accordance with said Contract
more often than once each thirty (30)
cess of ninety percent (90 %) of the
,ecified below in section C, regarding
final payment to Contractor will be
recorded the Notice of Completion,
i 'for any disputed amount on the
a October 2015 and March 2016.
it, and approved by the City Council,
ities, as stated in Government Code
tract Code, Section 22300, in lieu of
:ement, including the final payment
nishing to the City an unconditional
the City arising by virtue of this
claims in stated amounts may be
>peration of any release. No payment,
antractor or its sureties from obligations
d warranties furnished hereunder. No
of any of the Work or of defective or
irsuant to California Labor Code Section
itractor of money due under this Second
�reement, the City shall withhold and
wage and penalty assessment issued by
ifornia Labor Code sections 1771.5 and
rg of Contract Payments, related to this
:hheld and will not be disbursed by the
ammissioner authorizing such payment
t the issue has been resolved.
that, except as specifically provided
shall remain unchanged and in full
IKVnWWS VYHMMOF, theParties have exwutedthis4oeethehtas ofthedates.writtmbelow.
ATTM-
APPROVED AS TO FORM,
TAFOXA 8c G Aui A
✓j�!
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navia arcis
City Attorney
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CS LEGACY CONSTRUMON, INC
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