DATE: August 3, 2026
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager
FROM: Andrew Brozyna, Director of Public Works
Laura Galli, Engineering Manager
Francine Magno, Senior Civil Engineer
Jerrick Carandang, Associate Civil Engineer
DEPARTMENT: Public Works
SUBJECT: Approval of Construction Contingency Increase for the Street Rehabilitation Project (2025-2026) (CIP 301-726) in the Amount of $175,000
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution authorizing an increase to the construction contingency for CIP 301-726 in the amount of $175,000 with authorization given to the City Manager or his designee to execute contract change orders up to the increased contingency amount.
EXECUTIVE SUMMARY
CIP 301-726 focuses on street rehabilitation efforts on Foster City Blvd. from E. Hillsdale Blvd to Beach Park Blvd and a portion of Altair Ave near E. Hillsdale Blvd Construction bids came in significantly lower than the engineer’s estimate, resulting in available budget capacity within the project. Staff recommends using these available funds to maximize the value of the project by adding additional roadway improvement scope items to the Contractor’s scope while taking advantage of the Contractor’s competitive bid unit pricing.
To implement the additional scope, change orders are issued to the Contractor. Change orders are funded via construction contingency. To preserve the construction contingency
for its intended purpose of addressing unforeseen conditions during construction, staff recommend increasing the construction contingency by $175,000, an amount equal to the cost of the added scope. This increase offsets the cost of the added scope and ensures adequate contingency remains available for unforeseen field conditions for the original project scope. Construction started in July and is anticipated to be completed by the end of September 2026.
BACKGROUND
CIP 301-726 consists of street rehabilitation in the form of asphalt milling, asphalt overlays, and base repairs along Foster City Blvd and a portion of Altair Ave. The base bid includes the section of Foster City Blvd from E. Hillsdale Blvd to Marlin Ave and a portion of Altair Ave adjacent to East Hillsdale Blvd. Bid Alternate 1 includes the section of Foster City Blvd from Marlin Ave to Beach Park Blvd.
On January 20, 2026, the City Council adopted City Resolution No. 2026-003 approving the plans and specifications for CIP 301-726 and authorizing the call for bids.
Thirteen (13) bids were received and opened on Wednesday, February 18, 2026. QA Constructors, Inc. submitted the apparent low responsive base bid in the amount of $1,031,894.90. The base bid total was significantly lower than the engineer’s estimate.
Due to these favorable unit bid prices, the City exercised the option to award both the base bid amount and bid alternate 1 in the amount of $253,218.50. As such, on March 16, 2026, the City Council adopted City Resolution No. 2026-022 approving a construction agreement with QA Constructors, Inc. in the amount of $1,285,113.40 and established a contingency in the amount of $128,000 for CIP 301-726.
ANALYSIS
Construction bids for CIP 301-726 were significantly lower than the engineer's estimate, resulting in approximately $500,000 in available budget capacity even after the award of the base bid and bid alternate 1. Staff evaluated opportunities to maximize the value of the project by incorporating additional roadway improvements while utilizing the Contractor’s competitively bid unit prices.
The proposed additional work includes:
Installation of four (4) ADA-compliant curb ramps at the intersections of Balclutha Drive and Ranger Circle (Cost: $54,000) - (CCO #1)
Upgrade from standard crosswalks to high-visibility crosswalks along Foster City Blvd to further improve pedestrian safety and visibility (Projected cost: $50,000- 78,000) - (PCO under staff review)
Additional pavement dig-outs at known problem areas within the City. The specific location identified for repair is on Turnstone Court (Projected cost:
$34,000-$40,000) - (PCO under staff review)
The estimated cost of the additional work is approximately $175,000; however this amount is subject to negotiation and may be reduced prior to execution of a change order.
Because this work will be added to the construction contract through a change order, staff recommends increasing the construction contingency by $175,000. This action will give the City Manager the authority and discretion to issue change orders up to the revised contingency amount of $303,000, which includes the original construction contingency ($128,000) plus the proposed $175,000 for the added scope items. This approach allows the project to utilize the available budget capacity to complete additional improvements, while preserving the construction contingency for its intended purpose of addressing unforeseen conditions encountered during construction in a timely manner.
The proposed contingency increase can be accommodated within the existing project budget and does not require additional appropriation.
CALIFORNIA ENVIRONMENTAL QUALITY ACT
On January 20, 2026, the City Council found that this project was categorically exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15301 (CEQA Cat Ex Class 1, Existing Facilities).
FISCAL IMPACT
The fiscal impact of this action is $175,000, providing additional construction contingency to pay for additional scope items while preserving the previously approved construction contingency to address unforeseen conditions that could occur through the course of construction for the original project scope of work. The revised project contingency would be $303,000 (21.7% of the construction contract). Funding is available in the approved project budget.
Item Amount
Approved Project Budget $ 2,228,263.00
Anticipated Expenditures
Construction Contract – QA Contractors $ 1,395,750.40 Construction Contingency $ 128,000.00
Construction Management – CSG $ 174,069.00
Construction Management Contingency $ 17,500.00 Misc (programmer, printing, advertising, CEQA filing, etc.) $ 4,155.53 Total Expected Expenditures $ 1,719,474.93
BUDGET REMAINING $ 508,788.07
Item Amount
Additional Budget Capacity $ 508,788.07
Projected Improvements Cost (contingency increase) $ 175,000.00 BUDGET REMAINING with additional scope $ 333,788.07
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENT
Attachment 1 - Resolution