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File No.: 15.05-210
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: ROGER G. HARDGRAVE
Date:
February 20,1997
Subject: Rejection of Bid ; Authorization to Refund
Deposit--- Sale of Pioneer Cemetery
ORIGINAL (Bidder:Loewen Group International, Inc.)
Dept: Public Works / Engineering
Synopsis of Previous Council Action:
11-06-95 - Resolution No. 95-387 adopted, authorizing American Cemetery to represent City in Sale of Pioneer
Cemetery .
03-18-96 - Resolution No. 96-62 adopted establishing minimum sale price and giving notice inviting bids.
05-05-96 - Bid from Loewen rejected and authorization granted to re-advertise.
06-03-96 - Bid from Loewen accepted contingent upon successful negotiation of a sales agreement.
10-07-96 - Resolution No. 96-292 adopted extending close of escrow.
12-02-96 - Authorization to transfer $13,200 from then "Unappropriated Reserve" account to "Other
Professional Services" to finance cost of initial environmental assessment by GEOSEC, Inc.,
for Pioneer Cemetery.
Recommended Motion:
That the Bid from Loewen Group International, in the amount of $926,513.00 for the purchase of Pioneer
Cemetery be rejected and that authorization be granted to return the bid deposit of $92,652.00.
cc: Fred Wilson, Acting City Administrator
Barbara Pachon, Director of Finance
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Contact Person:
Les FOl!assv
Phone: 5026
Supporting data attached: Staff Report
Ward:
FUNDING REQUIREMENTS:
Amount: $92,652.00 (Bid Deposit)
Source (Accl. No.) 772-301-2301
(Accl. Description) Trust Accounts
Finance:
Council Notes:
03-03-97
03 ~3 h 7
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Agenda Item No. /7
'CiTY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
On May 23,1996, Loewen Group International, Inc., submitted the only bid for purchasing the Pioneer
Memorial Cemetery. The bid in the amount of$926,513.00, was made, and accepted by the City, contingent upon
the City and Loewen successfully negotiating a sales agreement. A deposit of $92,652 was submitted by Loewen
and placed into an escrow account contingent upon the City refunding the deposit in the event that a mutually
acceptable sales agreement cannot be reached.
Phase I and II Environmental Assessments were conducted by Loewen's consultants. These assessments
identified large amounts of trash and debris, primarily consisting of building and construction debris over an area
consisting of approximately 5 acres of the 28 acres of Cemetery property. This area is not presently used for
burials but is an area of future expansion. As a result, the City determined that a more detailed study was needed
and , after the issuance of Request for proposals to four consulting firms, selected the firm of GEO SEC, Inc., to
provide the necessary services.
Based upon the investigations performed by GEO SEC and additional information submitted by Loewen's
Environmental consultant, it was determined that remedial actions, mainly to remove debris, would be necessary.
Loewen has concerns about the aesthetics of using debris filled land as a burial site.
GEO SEC provided the City with a preliminary estimate of cost for cleanup in the range of $767,600 to
$919,600. Since the costs of cleanup approaches and may even exceed the sales price, the net gain from the sale,
if any, would be nominal. Thus, the need for further negotiations are unnecessary since Loewen will not accept
the property in its present condition.
The possibility of a long-term lease of the cemetery to the Loewen Group was also seriously explored.
Under a lease arrangement, the lessee would pay a fixed amount annually in return for the right to operate the
cemetery aI'ld profit from all sales. Unfortunately, the Loewen Group determined that a lease arrangement is not
acceptable at this time due to liability concerns.
The deposit of $92,650 was placed into an escrow account and will be released to the bidder by the Escrow
Company' and tllus, will have no impact on the General Fund.
We therefol'e recommend that Loewen's bid for purchase of the cemetery be rejected and their deposit of
$92,650 be refunded.