City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: June 16, 2025
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution 2025-43 Notice to Proceed with Gateway Pacific Contractors for the Industrial Wastewater Treatment Facility and Task Order #3 with Dudek Consulting and Task Order #4 with MNS Engineers
RECOMMENDATION
Staff recommends that the City Council consider and adopt Resolution 2025-43, A Resolution of the City Council of the City of Gonzales Authorizing Issuance of a Notice to Proceed with Construction with Gateway Pacific Contractors for the Industrial Wastewater Treatment Facility, Authorizing Task Order #3 under a Master Service Agreement with Dudek Consulting for Design Support during Construction, and Authorizing Task Order #4 under a Master Service Agreement with MNS Engineers for Construction Management and Inspection Services.
BACKGROUND
The City’s Municipal Wastewater Treatment Plant (MWWTP) operates under a Waste Discharge Permit from the Central Coast Regional Water Quality Control Board. The MWWTP has a permitted capacity of
1.3 million gallons/day (MGD) and current sewer flows to the plant are approximately 1.2 MGD.
Therefore, the MWWTP is near its permitted capacity and for several years has struggled to comply with the 2006 Discharge Permit requirements as the MWWTP wasn’t designed to treat the amount of ag-wash water it receives. The ag-wash water is approximately 75% of the wastewater treated at the MWWTP and ag-wash water contains cleansers and sanitizers that disrupt the biological treatment process.
Through the preparation of a Long-Term Wastewater Management Plan, the City determined that construction of an Industrial Wastewater (IW) System was the most cost effective and expedient approach to expand the City’s wastewater system. The IW System will collect the ag-wash water discharged from the three large processing facilities in the Business Park (Taylor Farms, Del Monte and Braga Fresh) and AGENDA
ITEM
17 convey the flows to a new IW Treatment Facility to be constructed on City-owned property just east of the MWWTP.
The construction documents (plans, technical specifications, and cost estimate) for the Industrial Wastewater Treatment Facility were prepared by Dudek Consulting. The project was issued for public bid on January 15, 2025. On February 26, 2025, the City received bids from six contractors. City staff and MNS Engineers (WW/IW Program Manager) reviewed the bids and determined that the lowest responsive and responsible bid was submitted by Gateway Pacific Contractors. As the City needed to award the contract within 90 days of the bid opening, at the May 19, 2025 meeting, the City Council awarded the construction contract to the low bidder, Gateway Pacific Contractors.
The following table provides a breakdown of the estimated costs and funding to complete the IW System:
Project Costs and Funding
CONSTRUCTION
Collection System $7,991,000 (1)
IWTF $23,584,000 (2)
Other Ancillary Work $175,000
Subtotal = $31,750,000
CONSULTANT COSTS - Planning/Design Phase
Pretreatment Program $20,000
Finalize Design $60,000
Engineering Services During Bidding/Award Phase $220,000 Easements for IW Pipeline $260,000
CONSULTANT COSTS - Construction Phase
Engineering Services During Construction $1,472,000
Program Management $400,000
Construction Management $2,860,000
Environmental $350,000
Subtotal = $5,642,000
Legal and Financial Costs $200,000
TOTAL = $37,592,000
FUNDING
SRF Loan $28,884,000
Sewer Impact Fees $2,750,000
DEFICIT = $5,958,000
(1) Includes 5.0% Contingency
(2) Includes 7.5% Contingency
After the bid opening for the IW Treatment Facility, staff estimated there was a funding gap of approximately $6,000,000 to complete the project. On March 18, 2025, a $6M loan amendment request was submitted to the State Water Resources Control Board (SWRCB) to supplement the City’s $29M State Revolving Fund (SRF) loan to cover the increased costs of the project. The $6M increase will be repaid by City sewer rates.
The City’s $6M loan amendment request was reviewed by SWRCB financial staff based on updated financial reports provided by the City Finance Director. On May 30, 2025 SWRCB staff emailed City staff that the financial review was completed and the City’s requested $6M loan amendment was approved!
REVIEW AND ANALYSIS
SWRCB staff advised City staff to issue the Notice to Proceed with Construction to Gateway Pacific in parallel with SWRCB staff preparing the SFR Amendment agreement which will take three to four months. Therefore, City staff recommends that the City Council authorize staff to issue the Notice to Proceed for construction of the IW Treatment Facility to expedite its completion.
In addition to issuing the Notice to Proceed to Gateway Pacific, staff recommends that the following Task Orders are authorized for professional services to support the construction of the IW Treatment Facility:
1. Authorize Task Order #3 under a Master Service Agreement with Dudek Consulting for Design Support during Construction in the amount of $1,342,037 including a contingency budget of $175,049 per their February 28, 2025 letter proposal
2. Authorize Task Order #4 under a Master Service Agreement with MNS Engineers for Construction Management and Inspection in the amount of $2,485,223 including a contingency budget of $173,387 per their February 25, 2025 letter proposal.
The schedule for the project is in the table below:
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.
Explain: This project supports our vision by making improvements to the wastewater system to increase its capacity for residential and industrial development.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: Maintaining and improving the wastewater treatment plant enhances the community’s quality of life by providing for treatment and safe disposal of the City’s wastewater.
Date/Time
Award Construction Contract at City Council Meeting May 19, 2025 Construction Contract Executed June 10, 2025
Notice to Proceed (tentative) July 1, 2025
Contractor Mobilization (tentative) August 15, 2025
Construction Complete (tentative) Spring 2027
City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: See Vision above.
ALTERNATIVES
The City Council could wait until the $6M SRF Amendment is fully executed to authorize the issuance of the Notice to Proceed for Construction. Staff doesn’t recommend this due to the need to expedite completion of the IW System.
BUDGET IMPACT
This contract will be funded with the Sewer Rates and Sewer Impact funds.
CONCLUSIONS
Staff recommends that the City Council consider and adopt Resolution 2025-43, A Resolution of the City Council of the City of Gonzales Authorizing Issuance of a Notice to Proceed with Construction with Gateway Pacific Contractors for the Industrial Wastewater Treatment Facility, Authorizing Task Order #3 under a Master Service Agreement with Dudek Consulting for Design Support during Construction, and Authorizing Task Order #4 under a Master Service Agreement with MNS Engineers for Construction Management and Inspection Services.
Attachments:
1. Aerial showing IW Pipeline and IW Treatment Facility
2. Resolution No. 2025-43
3. Notice to Proceed with Construction to Gateway Pacific Contractors
4. Task Order #3 with Dudek for Design Support Services
5. Task Order #4 with MNS Engineers for Construction Management/ Inspection Services