DATE: May 19, 2025
TO: President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, District Manager
Marlene Subhashini, Assistant District Manager
FROM: Andrew Brozyna, Director of Public Works
Laura Galli, Engineering Manager
Ryan Marquez, Senior Engineer
DEPARTMENT: Public Works Department
SUBJECT: APPROVE CONTINGENCY AND BUDGET INCREASE FOR CIP 405-660 WATER TANKS AND FACILITIES IMPROVEMENT
PROJECT IN THE AMOUNT OF $75,000
RECOMMENDATION
It is recommended that the Board of Directors of the Estero Municipal Improvement District (EMID), adopt the attached resolution (Attachment 1) authorizing:
1. An appropriation in the amount of $75,000 to the Water Tanks & Facilities Improvement Project (CIP 405-660) from the reserve balance in Water CIP Fund (405); and
2. An increase in construction contingency for CIP 405-660 in the amount of $75,000 with authorization given to the District Manager or his designee to execute contract change orders up to the contingency amount.
EXECUTIVE SUMMARY
CIP 405-660 includes various needed maintenance and improvements on EMID’s water storage tanks and water booster pump station, and the installation of an automatic flushing device on Baffin Street to maintain water quality.
On November 6, 2023, the District Board adopted EMID Resolution No. 3748 approving a construction agreement with Manito Construction in the amount of $4,353,252 and established a contingency in the amount of $640,000 for CIP 405-660.
As construction progressed, five (5) contract change orders (CCOs) were executed for unforeseen out of scope items. During potholing for installing seismic joints on the discharge lines of the Water Booster Pump Station, it became apparent that a large change in scope is required. The project does not have enough contingency to cover the costs to address this work. While the change order and schedule are being finalized, staff is requesting additional project contingency to execute the change order and finish the project.
An additional $75,000 of budget and contingency authority is expected to be sufficient to cover the change order and provide a buffer in case unforeseen issues arise that require staff to authorize work swiftly. The installation of the seismic joints is anticipated to take approximately four weeks to install and is the last major portion of work for the project. With Board approval, construction is anticipated to be complete by mid-July 2025.
BACKGROUND
CIP 405-660 is comprised of the following four projects that were previously identified in the capital improvement project budgets: (a) 405-660 Remove and Recoat Water Tanks 1, 2, and 3 (2016-2017); (b) 405-670 Water Quality Dosing and Tank Improvements (2017-2018); (c) 405-687 Seismic Improvements at Water Booster Pump Station (2019- 2020); and (d) 405-688 Seismic Improvements at Water Tanks 1, 2, and 3 (2019-2020).
On November 6, 2023, the District Board adopted EMID Resolution No. 3748 approving a construction agreement with Manito Construction in the amount of $4,353,252 ($4,270,502 for CIP 660, and $82,750 for CIP 690), and established a contingency in the amount of $640,000. CIP 690 addresses some seismic improvements at the Lagoon Pump Station and was combined with CIP 660 as a time and cost saving measure.
Construction began in January 2024 and was expected to be completed in February 2025 but has been extended into July 2025. Four (4) CCOs #1, 2, 4, & 5 have been issued to date on CIP 660 totaling $324,981.23. One (1) CCO #3 has been issued to date on CIP 690 for a credit in the amount of $11,094.55.
Multiple unforeseen circumstances have arisen during construction over the last year that led to the five (5) contract change orders.
1. CCO #1 included revisions to the fiber-reinforced polymer seismic upgrades at the Water Booster Pump Station, along with cost credits for relocating sampling cabinets closer to the roadway—reducing trenching—and for substituting the originally specified exterior coating system. Credit (-$13,996.00)
2. CCO #2 provided a credit for eliminating a sample line at Tank 4, and added scope to address extensive tank corrosion repairs encountered during prep work for new coating, and rerouted conduit around unforeseen underground obstructions. ($83,567.63)
3. CCO #3 (CIP 690) covered the costs for additional materials for two flexible expansion joints at the Lagoon Pump Station offset by a credit for removing unneeded flexible joints on the fuel lines. Credit (-$11,094.55)
4. CCO #4 addressed expanded corrosion repair efforts along the interior roofing system and rafters of Tank 3, added site paving, replaced the existing wood grating with custom fabricated aluminum grating at the Booster Pump Station, included installation of vortex breakers in all three tanks, and credited the removal of sump installations in Tanks 1 and 2. ($97,878.09)
5. CCO #5 addressed the remediation of oily water seeping from beneath the foundation of Tank 1, further patch welding corroded sections on Tank 3, drain modifications on Tanks 1 and 2, a design change to natural gas line flexible joints at the Water Booster Pump Station, additional coating for Tank 1, and expanded site paving to regrade the perimeter of Tanks 1 and 2 to ensure proper drainage. ($157,531.51)
ANALYSIS
The project currently has three (3) outstanding potential change orders (PCOs) estimated at $300,000-$330,000. Two of them—removal of a portion of the oil beneath Tank 1 and manway remediation on Tank 3—are anticipated to total approximately $28,000. The third involves the fabrication, coating/lining, and installation of custom pipe fittings to accommodate the installation of two 20-inch diameter flexible expansion joints. This PCO has substantial scope increase which includes additional deep trenching and shoring, large diameter specialty fabricated and installed steel pipe, and installation of flexible joints on the large diameter water lines. This PCO is still under negotiation, however it is estimated to range between $260-$290k. There is approximately $280,000 remaining in the project contingency. With the outstanding PCO’s, the project budget is short by approximately $40,000.
Additional contingency is required to cover the remaining PCOs to complete the project.
As is typical of underground work, actual conditions cannot be verified until excavation is complete, and installation of the piping is underway. Given the uncertainty associated with this critical and aging infrastructure, staff believe it is prudent to increase the contingency beyond what is currently estimated for the remaining three (3) PCOs.
Without this additional buffer, there is a risk of incurring delay charges if changes cannot be approved in a timely manner. Increased budget will come from the Water CIP reserve balance, which has sufficient balance to cover the increase.
CEQA
Categorically Exempt pursuant to Section 15301(b) – Existing Facilities.
FISCAL IMPACT
The table below includes the projected funding expenditures.
Item Amount
Approved Project Budget $ 5,800,000
Anticipated Expenditures
Professional Services Agreement – Consor (dba Murray
Smith) $ 798,686
Professional Design Services -- Contingency $ 40,000 Construction Contract – Manito $ 4,270,502 Executed Change Orders No. 1, 2, 4 & 5 $ 324,982 Project Budget Adjustment between CIPs $ 35,400 Estimated Potential Change Orders $ 318,000 Misc (programmer, printing, advertising, CEQA filing, etc.) $ 50,000 Total Expenditures $ 5,837,570
Budget Shortfall $ 37,570
Formal action will be an appropriation in the amount of $75,000 to the Water Tanks & Facilities Improvement Project (CIP 405-660) from the reserve balance in Water CIP Fund (405). The appropriation would cover the budget shortfall and provide additional contingency in the event any additional unforeseen conditions arise allowing staff to react quickly. The current fund balance for Water CIP Fund 405 is roughly $3 million, more than enough to accommodate this additional budget. The revised project contingency would be $715,000 (16.7% of the construction contract) and the new project budget would be $5,875,000.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 – EMID Resolution