tv [untitled] May 17, 2015 3:00pm-3:31pm PDT
plus the 18 million we are awarded to fix. our total budget for the remaining trade packages and that includes the savings from the [inaudible] is $156 million. the remaining packages is $163 million there will be additional funding needed $173 million with the packages if they come in higher we will need more if they come in lower it will be less than that. left to receiving last year that is above budget. cng cost need to be augmented. the cng budget fee $700 million based on an award of $510 million the
contingency is $36 million based on the -- there will be additional funding for $4.10 million for the cost. the budget numbers i'm sharing with you does not include the rooftop park -- we expect the bidses is june 30th. we're also negotiating with on board contractors and plumbing for rooftop park i reported last month we would have [inaudible] today or this month we need a little bit more time work with negotiating with the contractors we're expecting to have these in
two weeks another item that was not shared with you in march was an additional funding we will need for the over sight contract. as part of our efforts right now we reviewed the contracts look add the estimated risks for them and for soft costs and potential for risks, as needed. reviewed the foe rt on the materials and performed the estimated completion exercise and the public contract that needs augmentation as the construction over sight. our budget was $46 million the budget was based on fabrication inspection for steel at two different sites single shift right now it's six sites in
three different states so that results in an additional cost of 20 million dollarses. and another $9 million for second and third shift work in the fields and dennis will go over the next slides in detail in background on that. the storage contract is 65% [inaudible] or contract documents estimates the estimate came in 2.7 million more our budget is 15.9 million for construction. we continue to work on the risk exercise we had two measurement meetings over estimate of completion our risk manager is doinghe bottoms up analysis right now using the
monte carlo and use a cop down model. we expect to have the results in the next 2-3 weeks the results will advise us on how much replenishment construction reserves we need for the budget with that i will turn it over to dennis so talk about the [inaudible]. >> morning directors. wanted to take an opportunity for a few minutes to explain the line item cmo from the previous slide and go into more detail cmo contract is awarded the june 10th, 2010. for $35 million. to next year june 27th. 2016 the current cemo budget of july 20302016 is 30
million collar dollars as we go through the process identified current rate to date and projecting out what is going to be needed. we don't want the cmo to be on board through the end of construction we have a substantial completion with the end of 2017 then with follow up activities mid 2018 would be the proper time to extend the need for cmo taking into canadaaccount for that. and the 20 million total for the cmo this is a difference of 29 million dollarses from the budget. in identifying that noticing that it got into ne goegsuations with the cmo to discuss contract there are construction rep one of the main
primaries from webcor obayashi on this project. of that quality element it's the welding inspections of the fabrication that is a significant portion of this you can break it down into three various areas the first one being the steel fabrication welding inspection that is $3.8 million as mark noted two facility a single shift that is determined at the time not having the location of where the fabrication sites would be. and [inaudible] was not on board at the time back when the projections were made now when you project out the six facile seas which are spread out throughout three states adding our 6th one here in stock ton we have san bernardino stock ton
and the one near oregon combine to have six separate facilities one element that cannot be determined you have the fabricator on site the fabricatorses are large they're not a normal p shop they're ten football field size facilities depending on where they have their facilities and fabrication that will determine how many inspectors you need. that adds to it. on top of that as noted by steve roll scasta is doing a whole schedule they're adding multiple shifts that's why we're adding a 6th facility that includes additional inspectors that projected to be $20 million for the quality element of the
project. second bullet has to do with the cmo and additional scopes that have been added over the entire life this is projected through 2018 as well. our holding schedule second and third shifts have been utilized by the contractor that was not in the original scope as well. so it's prudent to have one set of eyes from turner out there from the second shift one set of eyes for the third shift that's what we have for each one of those and also the claims assistance and change orders adds up to the 7 million that is over the entire life of the contract through 2018 is projected then the last $12 million is compellation of our waterproofing inspection we anticipate for the water rooftop park sgh we want to ensure we
have good waterproof product up there and the project and partnering there is 10 to 12 mislanous items adding to $2 million that's the background to where this number is coming from. this is information for now but i anticipate coming back in july to the board to request contract approvalment for the cmo not only for time but also for the amount as well. thank you. >> go ahead. >> just for that inspection number is pretty bind boggling. $20 million on to have of what was something that was $30 million contract all of the inspection this is inspection above and beyond what is in the base contracts on percentage terms it's mind boggling. the
question is how many inspectors are we talking about and for what duration of time? >> the amount of inspectors this is where the original budget was 9 million dollarses of the original 38.5 now it's projected out to be about $29 million total for all of the i-fi happenings to be the subcontractor that does this the projection was $1,600 a month for welding inspection now it's 35-36 hundred hours per month which includes premium time the premium time is the component that is the most costly when you meet with the isi they have -- they're being as [inaudible] as we can get them by doing a couple of thing they use
experienced welders so they can keep track of more welding fields at the time i was not able to interpret back then they have very large bays you can only assume for some areas if you have a welding inspector he can do one area the type of welds we have a 90% inspection rate they're large welds they're three inch thick some of them. they're not excreted they're built up in sections so you have more welders on a site. so on some facilities [inaudible] for example has 43 welders that are on site continuously building and we have four inspectors to keep track of those those four
inspectors continue on working 4 and nine hour shifts is it better to have other weld inspectors or not we have shop inspectorses of 21 isi inspectors going around the clock right now that is based on the number of facilities and the layout of the shop. so that's where it has added. we did not have the benefit of scansta they have had to schedule mitigation that is added to the issue frankly it's taking them longer to weld than they anticipated as well. >> so for this we're tripling the subcontract through this process going from 9 to 29 million. generally when you negotiate change orders you don't get as good costs. i realize it wouldn't be ideal to have multiple inspections given this tripling of the volume did
you all consider competing the additional inspection work as opposed to just negotiating with the existing sub? >> steve i will bring up steve he was in the middle of the negotiation with isi. >> to begin with this is not a lump some number they work on an hourly basis the rates are termed by the engineer's union for the most part we have a couple of folks that are consultants that have a didn't rates but it's union rates and benefits and they get on top of that a 9% fee we're talking about reducing and a company audited overhead rate. the only additional cost to the rate is the specific tests the case of concrete and those prices were
vetted at the beginning of the project as much as i would like to say there is competition the only place i can see savings is if someone gave us a slightly better overhead rate. again this is annest made jack told us we're anticipating a drop off in september of inspectors this is the upside what we're told for the final inspection is some of it is the on going inspections of the field now 24 with the stock ton that dennis mentioned. we now have four for the concrete and prepour inspections related to impax concrete and reenforcing steel and wielding
in the field. >> hopefully we can negotiate a lower fee. >> a 30 million contract would have been different. >> with the help of the tjpa we will go back into negotiations absolutely. >> thank you. >> i will turn the next slide go to sara. >> so this slide shows the funding source line for the current bunlt 1.899. you can also see in the next column the sources for a budget update they are planned sales parcel f sponsor shift as maria mentioned proposals are due in the fall. csb funds is a small amount for the transit security grant in the future as a reminder any
increase to the safe home budget must be fully funded to meet obligation for bridge lone in order to get down the tiff loan -- when the actual sale price for pal sr. f is known and sponsor ships are known we will be able to increase our contingency or delete litigation measures if additional funding is available. and the fiscal year budget on the capital size is a cash flow size we have talked about the operating budget you will see the final operating budget next month i i don't anticipate change from earlier. we would take the projected expenditureses and capture those in a fiscal year
budget we have four major categories you will see on the slide we will have a draft with the fiscal and program budget? june and the final in july. with that all three of us are available to answer questions . >> how much of the 15 loan has been taken down. >> none. we will satisfy the conditions at the end of this year when we blows on block 5 and 8 and we have the bridge loan as the one year lock out period hopefully january 22, 2016, we will drop it down and repay the bridge loan. >> so it sounds to me the requirement of tifia to take it down to be fully funded is driving a lie. >> that is correct.
>> one of the things that may be controversial from a couple of discussions i have had is putting in the new amount is the sponsor ship that has never been in the budget before. whether or not that should go into capital as opposed to operating which is what it was assumed prior we need to have a discussion at some point about the policy. >> i imagine that would also be determined by the proposals that may be the particular proposer is interested in funding capital or a particular proposer is interested in operations that is dictated by the proposals we receive. >> it's not dictated by us whatever gives us the money dictates. i don't believe we included sponsor ship and operating. i want to clarify
that. so it would be dictated by whoever provides the money. >> so we're going to leave it to the sponsors to come in october suppose how they want the money spent and where? >> that is typically how it's done. >> we have to have full funding to take out tifi a. the land sale we will know the land sale in december. >> september. >> excuse me. september. and this doesn't amount to much. and the melarose what discussion are going on there that we determined? >> we meet regularly with the controllers office after the cfd
process we're going through the exercise of looking at risks and updating phase one budget. the cfd is recognized as full funding by tifia we look at what we need for phase d parcel f is higher than minimum based price we will need less proceedses for phase one. >> when do we have to show tifia we're fully funded? >> at the end of the year when we make the draw request it's cfd of full funding . >> so at the end of this year? >> correct. >> so we don't know yet depending on the discussions with the bft money as to whether or not the sponsor ship would be necessary to become fully funded?
>> let me try and put it this way. just to make up numbers that have 0 basis in reality say we recommend budget increase of $100 because the minimum price for parcel f is $100 then parcel f sold for 150 and we got a $50 sponsor ship proposal. we could then at that point increase the budget by an additional $150 -- $200 -- i'm terrible at mat. [laughter]. >> you got the wrong job. >> no i have calculators with tape. you could increase the budget by that additional $100.50 from parcel 50 and 50 from sponsor ship. i know mark
and dennis behind me would like to have more contingency available than we are recommending in the budget update or you need 100 dollarses less from the cfd that layout of funds can be determined later this year that's why i said we will be recommending a budget that has a reasonable amount of contingency but perhaps not super robust level of contingency that a construction manager might want with 100% confidence does that make sense? >> yeah. yeah ed? >> a few questions. the retail is that expectation go to operations? >> yes that would go to operations. >> okay next question 160 millions or so for trade packages sorry if you said this
when do we expect those to come in? those bids? >> the end of june we will have all of them in with the exception of the bus source facility and ip network so we have the interior finishes a $20 million package coming next thursday then june 9th is the civil work package. then june 30th. is the rooftop park. then we also by middle of june, we will have the numbers of the awning as well as the glass walls which are a 2-step process as well as pealings by june meetings, we should have all with the exception of the rooftop park. >> will the risk analysis be done by then as well.
>> yes. we are open to have it by now, in two weeks we will have it. >> if we were to vote in july on the expenditure side we have a fairly pull if i canture and on the revenue side there are things coming later in the year it seems like it's less a matter of exactly wa we end up on sponsor ship on parcel f it's how much we're pulling from other sources that could be phase two. to that end it could be helpful. as we go along if you could show us what was originally envisioned from phase two from landfills and melarus what trade offs we can see easily how much we're pulling from phase two to the extent landfills are coming in what we initiately anticipated and that's helpful that is not necessarily drawing.
>> so i guess my last question kind of back to schedule and burn rate i would think that a project of this size at full construction is probably an order of 10 million a month of all the kind of pile up of extended overhead. so roughly it's got to be in the many millions of dollars. >> half of that. >> 5 million? >> so every month we can do better than the current schedule we can save on the order of $5 million are we looking at acceleration trade offs? it sounds like we're doing some already in terms of dubt shifts where it might be cheaper to pay over time and premiums so we can bring the whole substantial completion and final completion back? >> yeah as we go forward we're looking at that the first thing
we did last year is to look at the bus ramp p then beyond that the june estimate is 30 months or 36 months to do it. like an 18 month duration because at the beginning the bus ramp is a critical path item at that time once the fabrication settles down we know scafska is gogoing to be able to keep up with the work and be certain when we see see it complete. we will look at the trade package and see how can we contact them it's a balancing act you know we have to pick the critical path one if you shorten one you will [inaudible] so we have to find out the critical path items which ones we can compact that
is an on going effort your point is well taken. the cost to operate the budget is quite a bit and any savings earlier is a total savings . >> thank you. >> lee? >> just two quick questions on the expenditure side. where is the anticipated repayment and interest for tifia? >> that is actually not in the capital budget because it's a long term loan. the revenue is not in the capital budget that is source for payment. >> for the operations on the annual basis? >> correct. >> i think you might have presented this before but there is a total estimate. >> yeah tax increment revenue projected are between 9 hundred
and 1 billion it's anticipated that would not be needed to repay the phase one loan and could be leveraged for phase two as well. >> and i'm assuming the reserve and contingency amount is to be determined because it's a risk assessment. >> yes. >> we're waiting for the recommendation of the risk manager to let us know what is the 50% cost at this level what will be the 30% and so forth. we're looking at the numbers to come up with 58 model as well as the montecarlo model. >> we get that reserve in the contingency amount. >> we have identified all of the nonrisks and give us the [inaudible] ones.
>> any other questions? >> thank you. we want to emphasize the importance of this project in addition to safety it's quality assurance and control on this program is critical it's a lot of driving of the budget as this point as well we will strive to endeavor and work with steve webcor on the scheduled [inaudible] that only works if it doesn't sacrifice quality i want to point that out as something that is important to us and to our cac as well. >> i will member new members of the public have commented -- >> so the remaining issue you think we're within the budget that are coming in? i'm getting
concerned if we see escalations . >> it's really unknown we know for the package we have three pairs at this point when we had the 3 or 4 on this project we were within the u.s. estimate for the rooftop package we have four prequalified bidders we have two bidders that are engaged webcor obayashi to third as well. i need to mention for the rooftop package we started with four bidders then the three bidders of the four expressed disinterest because they have other work to do. the remaining with one potential bidder we extended the visual