DATE:
October 1, 2024
TO:
Mayor and Council Members
FROM:
Rachel Molina, City Manager
BY:
Cassandra Sanchez, Director of Public Works / City Engineer Tina Souza, Senior Project Manager
SUBJECT:
Sully-Miller Contracting Co. Construction Contract Change Orders and Contract Amendment
RECOMMENDED ACTION
It is recommended that the City Council approve and authorize the City Manager or designee to execute an amendment to the contract with Sully Miller Contracting Co. (SMCC) for $6,232,244, plus a 10% contingency of $623,224 for a revised not-to-exceed contract amount of $48,562,661 for the construction of the Ranchero Road Corridor Widening Project, Phase III.
Additionally, it is recommended that the City Council adopt Resolution 2024-50 appropriating $6,855,468 ($6,232,244 contract amendment and $623,224 contingency).
BACKGROUND
The Ranchero Corridor Widening Project, Phase III (Project) consisting of improvements to widen the five-mile roadway segment of Ranchero Road from two lanes to five lanes from Seventh Avenue westerly to approximately Royal View Lane, has been the City’s highest priority for roadway capital construction.
On November 4, 2021, the City entered into a contract with Sully-Miller Contracting Company for construction of the Ranchero Road Corridor Widening Project, Phase III (C.O. Nos. 7094, 7131, 7146, 7139, 7154). The Project began construction in April 2022. Waterline relocations and roadway improvements are complete with the exception of minor incidental items. However, the bridge over the aqueduct has not commenced construction.
ISSUES/ANALYSIS
The Project has faced unanticipated challenges throughout construction such as severe storm events, utility conflicts, material delays, the need for additional environmental services, and other unforeseen factors. However, most notably, there was a significant delay in receiving the final Department of Water Resources (DWR) permit to proceed with construction of the bridge over the aqueduct.
While construction of the waterline relocation and roadway plan phases are complete with the exception of some minor tasks, the start of construction for the bridge over the aqueduct phase is pending; Once the bridge is under construction, the Project will continue into 2025 through the project close-out phase.
Since the project bid in 2021, with the inflation seen across the nation, construction costs have increased. The lengthy delay in ability to commence bridge work necessitates a cost escalation adjustment amendment to the contract bid items associated with the bridge in the amount of $5,014,335 in addition to the following two Contract Change Orders of $950,161 for a total of $5,964,496 to continue with construction.
The contractor was not able to perform the bridge work concurrent with the rest of the project resulting Contract Change Orders for bridge related items:
Additional trucking and other impacted portions of work for non-concurrent activities. For example, stockpiling materials for use on the bridge and trucking from those stockpiles.
Shoring changes.
Additionally, the following are three additional pending Contract Change Orders outside the original scope of work that require authorization and additional increase to the contract with an estimated total of $267,748:
Monthly storage of sleeve material as well as girder storage until these items can be shipped for installation immediately upon arrival.
Traffic control at the bridge until the detour is implemented for demolition and additional message boards for the hard closure at the bridge.
The cost adjustments in addition to the pending change orders bring the additional construction cost to $6,232,244, plus a 10% contingency of $623,224 for a total of $6,855,468.
Continuing construction with the Project and the Ranchero Road Aqueduct Crossing portion of the corridor is dependent on an amendment to the contract and a budget appropriation.
Staff is requesting that City Council approve a contract amendment to increase the contract to include the cost adjustments and Contract Change Orders. The original contract authority is $41,707,193 for the Project. The total increase to the contract is $6,855,468, bringing the total not to exceed contract amount to $48,562,661. As the project nears completion in Fiscal Year (FY) 2025-26, staff will provide a detailed reconciliation of the total costs and necessary contingency amount to the City Council.
CITY GOAL SUPPORTED BY THIS ITEM
Capital Improvement - Continually evaluate capital improvement priorities.
FISCAL IMPACT
The FY 2024-25 Capital Improvement Program (CIP) Budget includes $11,666,020 for the Ranchero Road Corridor project, of which $10,384,262 was allocated to the aqueduct crossing. As mentioned in this staff report, an additional $6,855,468 will be needed to complete the project. The following table details the funding sources:
Should the City Council approve the contract change order and Resolution No. 2024-25, the City will use three different funds for the appropriation request of $8,093,019. As the bridge will serve to convey stormwater, the City will use a portion of its ARPA funds as the bridge becomes a component of the City’s stormwater conveyance system. Additionally, included in Fund 504 (reimbursement fund) is $750,000 of the County ARPA funds. Finally, the City plans to use Measure I to pay the remaining funds. Funding is subject to change depending on funding sources and available amounts as the project progresses.
ALTERNATIVE(S)
Do not move forward with bridge construction.
Provide alternative direction to staff.
ATTACHMENT(S)
Resolution No. 2024-50
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the Mayor and Council Members
Sully-Miller Contracting Co. Construction Contract Change Orders and Contract Amendment October 1, 2024