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CITY COUNCIL AGENDA REPORT
City of Anaheim
DEPARTMENT OF PUBLIC WORKS
DATE: AUGUST 20, 2024
FROM: DEPARTMENT OF PUBLIC WORKS
SUBJECT: UPDATE TO THE DELEGATION OF AUTHORITY TO
EXECUTE CHANGE ORDERS ON PUBLIC WORKS, REVISING
LIMITATIONS THEREON AND RESCINDING RESOLUTION
NO. 2017-047
ATTACHMENT (Y/N): YES ITEM # 11
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Resolution, update the delegation of authority to the Director of Public Works and the City Manager to execute change orders on public works, revising limitations thereon and rescinding Resolution No. 2017-047.
DISCUSSION:
At the March 7, 2017 City Council meeting, City staff recommended rescinding Resolution No. 88R-124 and established limited delegation of authority to address the concern of adequate oversight and approval of high cost change orders on large-scale projects without the specific prior consent of City Council. The adopted modifications outlined in Resolution No. 2017-047 established a maximum $250,000 limit on the authority of the Public Works Director to approve and execute any individual change order, and required additional approval by the City Manager to execute individual change orders in an amount greater than $250,000 but less than $400,000 and to report such change orders at the next available City Council meeting.
Staff is recommending further modifications to the Director of Public Works or designee’s approval authority noted in Resolution No. 2017-047 as follows:
Clarify that the limits for change order authority are for change orders with a contract cost increase.
For change orders for a contract in excess of $100,000 shall not collectively exceed an amount equal to $50,000 or 10% of the total contract price as set forth in the contract, whichever is greater.
Update the notification to the City Manager for contracts that exceeded 50% of the change order authority and cumulatively add $250,000 to the original contract amount.
Update to the Delegation of Authority to Execute Change Orders on Public Works, Revising Limitations Thereon and Rescinding Resolution No. 2017-047
August 20, 2024
Add authority for the approval of the final contract change order for any amount that serves to provide a net decrease of the contract amount as part of the contractor’s final pay quantities.
All other authority delegated to the Director of Public Works and City Manager noted per Resolution No. 2017-047 remain unchanged.
The proposed updates to the resolution omit the need to agendize contract change orders:
When the change order amount does not increase the original contract amount originally approved by City Council.
When the 10% contract change is exceeded for smaller projects between $100,000 and $500,000.
The proposed changes in this resolution do not expand the authority already granted to the Public Works Director and City Manager under Resolution No. 2017-047. Instead, these changes aim to better align with the original intent of Resolution No. 2017-047 by preserving the same level of authority while updating administrative procedures to reflect more prudent practices observed over the past six years.
IMPACT ON BUDGET:
There is no budgetary impact associated with these actions.
Respectfully submitted,
Rudy Emami
Director of Public Works
Attachment:
1. Resolution