Business Agenda Item 4g
STAFF REPORT
Consent Agenda Item
DATE: July 20, 2026
TO: Honorable Mayor and Council Members
FROM: Brian Issa, Public Works Director
THROUGH: Amy Nilsen, City Manager
SUBJECT: Approve an $83,690 Supplemental Budget Request and Authorize the City Manager to Execute a Task Order with GHD, Inc. Under the City's Existing On-Call Professional Services Agreement for Preparation of the City of Fortuna Water System Master Plan.
STAFF RECOMMENDATION:
The Public Works Department recommends that the City Council approve an $83,690 Supplemental Budget Request and authorize the City Manager to execute a task order with GHD, Inc. under the City's existing Professional Services Agreement for preparation of the City of Fortuna Water System Master Plan.
EXECUTIVE SUMMARY:
The City's existing Water System Master Plan was completed in 2005 and no longer reflects the current configuration, operational practices, growth patterns, regulatory environment, or capital planning needs of the City's water system. Through a competitive Request for Proposals (RFP) process released only to the City's engineering on-call consultants, the City solicited proposals to prepare a comprehensive Water System Master Plan that will serve as both a planning document and a practical decision-support tool for future capital improvement planning.
The requested scope of work includes development of an updated hydraulic model, preparation of a prioritized 5-year and 20-year Capital Improvement Program (CIP), evaluation of long-term water system capacity needs, documentation of normal and alternative operating configurations.
Also included is an evaluation of replacement options for the Drake Hill hydropneumatic system, and a comprehensive assessment of Vancil Reservoir which has shown signs of deterioration of the roof structure and is currently operated below capacity due to ongoing leaks in the liner and (despite multiple attempts to repair) and past difficulties retaining disinfection residual when operated at full pool. The project is also intended to provide City staff with GIS-based tools and project prioritization methodologies that can be updated and reused annually during CIP development and budget preparation.
Two proposals were received in response to the RFP. Following evaluation by a review committee consisting of City staff, GHD, Inc. was determined to be the highest-ranked proposer. The committee found that GHD's proposal demonstrated a strong understanding of the City's objectives, extensive municipal water master planning experience, familiarity with the City's infrastructure and GIS systems, and a practical approach for developing a long-term planning tool that can be integrated into future capital improvement planning efforts. Because GHD is already Business Agenda Item 4g
under contract with the City as an engineering on-call consultant, the project will be awarded through a task order under the City's existing Professional Services Agreement with GHD.
The adopted Fiscal Year 2026-27 Water Capital Projects budget includes $200,000 for completion of the Water System Master Plan. Final proposals received exceeded the original budget estimate with the winning proposal fee coming in at $257,900. The attached Supplemental Budget Request provides an additional appropriation of $83,690 which includes 10% contingency, increasing the total project budget from $200,000 to $283,690.
The project schedule calls for work to be completed within approximately twelve months of starting work. Completion of the Water System Master Plan will provide the City with a current planning framework for evaluating infrastructure needs, prioritizing system improvements, supporting future rate and impact fee studies, coordinating infrastructure investments with future development, and positioning priority projects for future grant and loan funding opportunities.
COUNCIL STRATEGIC VISION ALIGNMENT:
This project supports several elements of the City Council's Strategic Vision, including:
• Maintaining and improving critical public infrastructure. • Promoting fiscally responsible long-range asset management and capital planning. • Ensuring reliable delivery of essential water services. • Supporting sustainable community growth through proactive infrastructure planning. • Positioning the City to compete for future state and federal infrastructure funding.
FINANCIAL IMPACT:
The Supplemental Budget Request in the amount of $83,690 will be funded with Water Fund reserves and appropriated to Professional Services account 500-6025-6000. This action will increase the total project budget for preparation of the Water System Master Plan from $200,000 to $283,690. The GHD task order amount does not include the 10 percent contingency; the contingency is included only in the overall project budget authorization.
ALTERNATIVES TO STAFF RECOMMENDATION:
1. Do Not Approve the Task Order. This option would delay development of an updated Water System Master Plan and limit the City's ability to proactively identify, prioritize, and fund future water system improvements.
2. Direct Staff to Rebid the Project outside of the pool of existing on-call consultants. Two competitive proposals were received through the RFP process released only to the City's engineering on-call consultants, and the proposals were within approximately one percent of each other. Given the specific tasks included in project including development of alternative operating conditions and structural inspection of Vancil Reservoir, the proposed cost is not unreasonable. The parity of the two bids received provides high certainty that the proposed fee is appropriate for the scope and market. Rebidding would likely delay completion of the project and may not result in lower costs.
3. Delay the Project. Delaying the Water System Master Plan would postpone planning efforts needed to support CIP development, infrastructure investment decisions, future rate studies, development review activities, and grant funding pursuits.
Business Agenda Item 4g
RECOMMENDED COUNCIL ACTION:
Approve a motion to:
1. Approve the Supplemental Budget Request in the amount of $83,690; and
2. Authorize the City Manager to execute a task order with GHD, Inc. under the City's existing Professional Services Agreement for preparation of the City of Fortuna Water System Master Plan in the amount of $257,900. Roll Call vote.
ATTACHMENTS:
1. GHD Proposal
2. Supplemental Budget Request (SBR)