Agenda Item No. 10
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: August 28, 2023 FROM: Matthew Bronson, City Manager
PREPARED BY: Gabriel Munoz-Morris, Acting Public Works Director/City Engineer SUBJECT: Sewer Upgrades Project (CIP 5002) Rejection of All Bids
RECOMMENDATION
Reject all bids for the Sewer Upgrades Project (CIP 5002) and provide direction to staff to modify the project and re-advertise for bids as soon as possible.
BACKGROUND
The City’s Sewer Master Plan was last updated in 2019 and identified deficiencies in the City’s existing sewer collection system. Some of the deficiencies identified require upgrades to meet the existing and future demands on the City’s sewer system. Staff prepared a multi-project plan to address the most critical deficiencies for existing and future flows which started with the upgrade of the segments in CIP 5002. Those segments include:
• Manhattan Avenue (from the west end to South 4th Street) • South 4th Street (from Manhattan Avenue to West Grand Avenue) • Rockaway Avenue (from South 4th Street to South 9th Street) • North 8th Street (from West Grand Avenue to Ramona Avenue) • Ramona Avenue (from North 8th Street to North 9th Street) • North 9th Street (from Ramona Avenue to Atlantic City Avenue) The project includes upsizing existing 8”, 10”, and 12” vitrified clay sewer mains to new 10”, 12”, and 18” HDPE sewer mains through a combination of pipe bursting and open-trench construction.
These upgrades provide the necessary capacity in the City’s sewer collection system to eliminate existing deficiencies and meet future demands.
In a concurrent effort, staff also identified a potential sewer system extension that could be included in this project as a way of further extending available sewer lines to properties remaining on septic with no option to connect to City sewer. This extension includes new 8” PVC sewer mains on Griffin Street (from Calvin Court to Highland Way) and Highland Way (from Griffin Street to approximately 949 Highland Way). This extension project would provide connection availability to seven properties that do not currently have City sewer available. Staff had the design of this sewer extension included in the project scope to reduce costs of sewer extension by having a contractor performing this work in conjunction with the larger sewer upgrade project.
Staff solicited bids for the project from the list of pre-qualified contractors on June 22, 2023. Bids were due on July 27, 2023. The estimated cost for construction for this project was $2.9 million.
The low bid received from Specialty Construction Inc. was $4.1 million. When budgeting for a construction contingency of 10% and construction management services, the estimated total project cost is $4.8 million which is significantly beyond the budget for this project.
Staff Report: Reject All Bids – Sewer Upgrades Project (CIP 5002) Page 2 August 28, 2023
Staff performed a bid evaluation and met with contractors and design professionals to better understand the reasoning for the increased costs of construction. The cost of labor, materials, and trucking have greatly increased in the last 12 to 24 months which has impacted prices across the construction industry. Staff reached out to other agencies with recent bid openings and confirmed these increases are industry-wide and do not show signs of reversing. Staff believes it is possible to move forward with a modified version of this project by removing the sewer extension work on Griffin Street and Highland Way and the sewer upgrade work on Rockaway Avenue from South 4th Street to South 9th Street. The sewer extension work is not a critical deficiency at this time and can be pursued via a future project. The upgrade work on Rockaway Avenue, while important, can also be removed from this project at this time.
However, the work on North 9th Street must be completed now ahead of the Measure K-14 paving project that is currently in design, which includes North 9th Street, to avoid delays in that project’s schedule. The work on Manhattan Avenue and South 4th Street is the most critical for the City’s entire sewer system as those lines carry sewer flows for the majority of the city and are the connection point to the South San Luis Obispo County Sanitation District sewer trunk main which leads to the District’s wastewater treatment plan in Oceano. The work on Rockaway Avenue can be delayed to the next phase of the City’s sewer upgrade project without any immediate impact to the City’s system as long as the segments on Manhattan Avenue and South 4th Street are upgraded now. The removal of the sewer extension work on Griffin Street and Highland Way and sewer upgrade work on Rockaway Avenue will reduce the project construction cost by approximately $1-1.2 million which will allow the City to move forward with the project.
FISCAL IMPACT
There is no fiscal impact of rejecting all bids at this time. After the project is modified and readvertised, and new bids are received for the modified project, staff will request authorization to award the project to the lowest bidder at that time. The City is currently working with a utility rate consultant to conduct a rate study for the Wastewater Fund to establish utility rates sufficient to cover costs including capital improvement projects and staff will present this study to the Council on September 5. The estimated life of this project is 50 years and the reduced scope of the project is estimated to cost $3.6 million, including construction cost, construction contingency, and construction management. Due to the longer estimated life and the significant cost of the project, the rate study includes funding to finance the total cost of the project, spreading the cost over time and minimizing the burden on the current rate payers.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Reject all bids, direct staff to modify the project, and re-advertise the project as soon as possible; or
2. Provide staff with alternative direction
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Bid results
Bid Opening Date: Thursday, July 27, 2023 @ 2:00 p.m.
Bids for: Sewer System Upgrades Project_CIP 5002
Sealed Bids Received from:
No. Company Name & Address Total Base Bid
(Page 7)
1 Raminha Construction, Inc.
11505 Halcon Road
Atascadero, CA 93422
$6,671,930.00
2 J.R. Filanc Construction Co., Inc.
740 North Andreasen Drive
Escondido, CA 92029
$4,467,249.00
3 Specialty Construction, Inc.
645 Clarion Court
San Luis Obispo, CA 93401
$4,106,446.00
4 5
6 7
*Bid results are subject to verification by engineering.
City of Grover Beach Bid Opening Results
7/27/2023 1 of 1
Attachment 1