TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Scott Agajanian, Economic Development Director
PREPARED BY: Martha Coleman, Management Analyst
SUBJECT:
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Authorize the City Manager to Approve Two Amended Purchase Orders and Change Orders for the Murrieta Innovation Center Project
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RECOMMENDATION
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Authorize the reallocation of funding within the current budget for project completion, specifically for construction and construction management; and
Authorize the City Manager to approve an amended purchase order and task budget for RWBID Construction Management LLC, as well as a change order and a purchase for the general contractor, Optima RPM, Inc.
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PRIOR ACTION/VOTE
On February 18, 2025, the City Council approved a construction contract with Optima RPM, Inc., for the Murrieta Innovation Center (MIC) tenant improvement project, for a total not-to-exceed amount of $3,668,059.37. The City Council also approved a $155,000 purchase order for RWBID Construction Management, LLC, to provide construction management services, including labor compliance, for the MIC tenant improvements. Lastly, the City Council also approved an additional contingency of $324,888.84 for unanticipated expenditures, bringing the total construction budget to $4,147,948.21 (Vote: 5-0).
CITY COUNCIL GOAL
Aggressively pursue economic development.
DISCUSSION
In 2022, the City was awarded grant funding from the U.S. Economic Development Agency (EDA) for the purpose of constructing a wet lab, dry lab, and additional tenant improvements to renovate the Murrieta Innovation Center into a best-in-class life science start-up incubator and a driver for job creation in Southwest Riverside County. The design was complete at the end of 2024, and construction began by Optima RPM, Inc. in March 2025.
The initial construction estimate projected project completion in October 2025. However, as work has progressed, unforeseen site conditions and necessary adjustments to the interior improvements have emerged, requiring use of additional contingency funding to complete the project as planned.
Multiple change orders have resulted in the use of a substantial percentage of the current contingency budget; however, sufficient contingency funds remain for the necessary amendment to the task budget and purchase orders (The table in the fiscal impact section provides an overview of project funding sources and uses). The prior change orders have also had an impact on the progress of the project, which has extended the anticipated project completion date to the beginning of the second quarter of 2026, necessitating the item before the City Council to authorize additional project management services.
FISCAL IMPACT
Staff recommends that the City Council approve the reallocation described above and authorize the City Manager to approve amendments to the purchase orders for project construction and construction management, not to exceed $235,254.79, to ensure the completion of the tenant improvements at the Murrieta Innovation Center.
The table below outlines the existing budget, the funding sources, and the additional funding requested.
The EDA grant is reimbursable in nature, requiring the City to expend funds prior to requesting reimbursement. The costs related to construction, construction management, and labor compliance are eligible expenses to be funded with the EDA grant. Additionally, Impact Southwest Riverside County is funding 50% of the grant’s required match. Staff has begun invoicing Impact Southwest Riverside County for its share of the matching funds and will continue to do so.
ATTACHMENTS
None.