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3.
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| Finance Committee |
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| Subject: |
| Additional Appropriation for Alley Rehabilitation Projects (Project Nos. 7319, 7320 and 7321) |
| RECOMMENDATION |
1. Adopt Resolution to appropriate an additional $185,000 from the Measure M Fund (260); and
2. Increase construction contingency from 10% to 45%. |
| BACKGROUND/DISCUSSION |
On July 7, 2020, the City Council awarded a construction contract to the R. J. Noble Company (Contractor) in the amount of $458,507.50 and approved a construction contingency of $45,850.75 for the Alley Rehabilitation Projects (Project Nos. 7319, 7320, and 7321). These projects will rehabilitate the alley west of Flower Avenue between Date Street and Imperial Highway (PN 7319); the alley west of Sycamore Avenue between Elm Street and Date Street (PN 7320); and the alley west of Walnut Avenue between Acacia Street and Fir Street (PN 7321), since the existing pavement has exceeded its service life and is in poor condition. The selection of these alleys was based on their rankings in accordance with the City's Pavement Management Plan (PMP) and were combined into a single project to benefit from economies of scale and save time in project administration.
The rehabilitation of the alleys began construction in September 2020 and was anticipated to be completed by October 2020. However, during construction, the Contractor encountered unforeseen conditions on the alley associated with PN 7320 that is resulting in significant delays and additional costs. The unforeseen conditions are related to shallow water service laterals which require hand digging, realignment of water services, and additional pipe fittings. Additionally, the Contractor encountered an 18” and 30” corrugated metal pipe (CMP) utilized for storm water just below the existing asphalt section.
After encountering the unforeseen conditions and the 30” CMP storm drain pipe. It was determined that due to the condition of the storm drain pipe, it is not salvageable. Thus, it is necessary to install a new reinforced concrete pipe (RCP) for storm water purposes and reroute the conflicting water services. These unforeseen conditions resulted in a complete halt of production for PN 7320 and an altering of the construction schedule to continue with work on the other two alleys to provide less disruption to the residents and reopen the other alleys sooner. At this time, the alley for PN 7319 has been completed.
With the need to remove and replace the storm drain pipe and the miscellaneous other items to complete PN 7320, staff requested a cost proposal from the Contractor. The Contractor submitted a cost in the amount of $313,960 to complete the necessary repairs. Staff feels the quote from Contractor is excessively high and is seeking other bids. To date, we have received a bid from another contractor for approximately $110,000 and expect additional bids by next week. Concurrently, staff will continue negotiating with the Contractor to try to lower their bid to be more competitive. Having the R. J. Noble Company complete the work is still the preferred option since they're already onsite and will result in the least amount of delays.
However, staff can’t proceed with expediting the work under either scenario without acquiring additional funding for the extra work. At this time, staff expects that the total amount needed to adequately pay for the extra work and project administration is $185,000. Staff would typically bring forth a complete change order with final dollar amounts for City Council approval, but given the time sensitivity, we are requesting for funding ahead of time in order to proceed with the work immediately upon receiving an acceptable bid. All final accounting for this project including all the extra work will be provided as part of the final report to City Council that normally comes at the completion of a project.
In addition, since the project plans did not reasonably identify the utilities in question, staff worked with our contract design engineer to assess how the City could be made whole for the omission. As a result, it was found that the storm drain pipe was inadvertently overlooked due to the simple nature of the scope of the project. Consequently, the design engineer has agreed to pay for the premium up-charge for this storm drain change order by not including this work in the formal bid process by providing city with in-kind services.
Therefore, staff is requesting the City Council consider appropriating an additional $185,000 to the project budget. The new anticipated project completion date is November 2020, weather permitting. |
| SUMMARY/FISCAL IMPACT |
The total approved budget for the Project was $515,000 with funding coming from a combination of Measure M ($165,000) and Gas Tax ($350,000) funds. Staff is requesting the City Council consider an additional $185,000 from Measure M Fund (260) which will be transferred from the Country Lane Street Improvements, CIP 7323 (CIP 7323). Staff identified CIP 7323 due to the engineering estimate received to be below the budgeted amount. This additional funding will cover the cost of current proposed change orders to date and any anticipated potential change order work. Therefore, a resolution appropriating the added funds from Measure M Fund (260) to the Project is attached for City Council consideration and approval. There is no General Fund impact from this action. The following table provides a breakdown of the construction, construction engineering, and project administration budget with the requested additional funds:
| Project Expenditure |
Approved Budget |
Requested Funds |
Total |
| Construction Contract |
$458,507.50 |
$0 |
$458,507.50 |
| Contingency |
$45,850.75 |
$160,000.00 |
$205,850.75 |
| Subtotal |
$504,358.25 |
$160,000.00 |
$664,358.25 |
| Construction Engineering |
$28,248.00 |
$15,000.00 |
$53,248.00 |
| Total |
$532,606.25 |
$185,000.00 |
$717,606.25 |
The Project encountered unforeseen conditions including a shallow storm drain line and other unanticipated work that resulted in additional costs that exceeded the Project contingency and schedule delays. Therefore, staff is requesting the City Council consider increasing the Project contingency for change orders from 10% to 45% ($205,850.75) and add $185,000 to the Project budget. |
| RESPECTFULLY SUBMITTED |
William Gallardo, City Manager
Prepared by: Michael S. Ho, P.E. Deputy Director of Public Work/City Engineer
Concurrence: Tony Olmos, P.E., Public Works Director |
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