STAFF REPORT
Meeting Date:
September 23, 2025
CONSENT
11 SUBJECT: AWARD OF CONSTRUCTION CONTRACT FOR OLD TOP OF THE WORLD SEWER LIFT STATION REHABILITATION – PHASE 1
RECOMMENDATION: It is recommended that the City Council:
1. Award and authorize the City Manager to execute a contract with Arnaz Engineering Contractors, Inc., in the amount of $669,200, for construction of the Old Top of the World Sewer Lift Station Rehabilitation – Phase 1 project;
2. Award and authorize the City Manager to execute a task order with Lee + RO, in the amount of $226,158 to provide construction management and inspection services;
3. Authorize the City Manager to approve project-related expenses and contract change orders for unforeseen circumstances in an amount not to exceed $67,000; and
4. Find the project to be categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15302 of the CEQA Guidelines.
Appropriation: $0 Fund: N/A
Submitted By: .Mark McAvoy Approved: David A Kiff
Mark McAvoy, Director of Public
Works & Utilities
Dave Kiff, City Manager
SUMMARY OF THE MATTER
This report recommends that the City Council award a construction contract to Arnaz Engineering Contractors, Inc. (Arnaz) in the amount of $669,200 and authorize a task order with Lee + RO for construction management and inspection services for the Old Top of the World Sewer Lift Station Rehabilitation – Phase 1 project. The project will rehabilitate the aging and deteriorated sewer lift station, which has experienced repeated operational failures.
The total estimated project cost is $962,358, which is within the approved budget of $2,000,000. The project has been reviewed under CEQA and is categorically exempt pursuant to Section 15302 of the CEQA Guidelines. A Coastal Development Permit exemption was filed on May 1, 2025.
DISCUSSION
Background and Project Need
The Old Top of the World Sewer Lift Station, originally constructed in 1987, has deteriorated over time and experienced operational failures. The station has a history of frequent maintenance issues related to its pumps and is currently operating with a single standby engine-driven pump.
AWARD OF CONSTRUCTION CONTRACT FOR OLD TOP OF THE WORLD SEWER LIFT STATION REHABILITATION – PHASE 1
September 23, 2025
To restore the lift station to normal operating conditions as quickly as possible, improvements will be implemented in two phases. The first phase will focus on urgent repairs, including replacement of the existing pumps, installation of a new precast concrete vault with a bypass connection, minor electrical and instrumentation upgrades, and recoating of the existing concrete wet well. The proposed award of contract to Arnaz is for the first phase of work.
The second phase will address the remaining necessary improvements, primarily involving electrical and control systems. This work will include replacement of the generator, upgrades to the generator vault and access, full replacement of the electrical and instrumentation panels, and enhancements to site lighting and security features. Design for the second phase is scheduled to begin later this year.
Bid Process and Contractor Selection
Staff completed a public bid process for the project in accordance with California Public Contract Code requirements. On August 25, 2025, eight (8) bids were received. The following is a summary of the bids sorted by bid amount:
Table of Bid Results
Bidder Bid Amount
1. Arnaz Engineering Contractors, Inc. $669,200
2. GMZ Engineering Inc $873,000
3. Eastridge Engineering and Construction $889,325
4. Big Ben Inc. $907,706
5. Demo Leaders Inc $918,808
6. Ferreira Construction Co, Inc DBA Ferreira Coastal Construction $989,212
7. MMC, Inc $1,027,000
8. Houalla Enterprises, Ltd. $1,252,896
Following a review of the bids, staff determined that the lower bidder, Arnaz, is qualified, properly licensed, and their bid was determined to be responsive and responsible. Arnaz has successfully completed similar pump and lift station projects for Santa Ana, Anaheim, and Tustin. Staff recommends that the contract be awarded to Arnaz in the amount of $669,200 (Attachment 1). It is also recommended that funding be provided to cover change orders due to unforeseen conditions. These costs are not to exceed $67,000; therefore, it is recommended that the City Manager be authorized to approve change orders for unforeseen circumstances in the amount not to exceed $67,000. Construction is anticipated to begin in October 2025 and be completed by March 2026.
Construction Management and Inspection Services
The project will require construction management and inspection services to ensure contract compliance and public safety throughout construction. Proposals were requested from three on-call consultants that have existing agreements with the City: Accenture Infrastructure and Capital Projects, LLC, Lee + RO, and Ghirardelli Associates. The proposals were evaluated based on team qualifications, performance of similar work, and the ability to provide services within the required timeline. The proposal submitted by Lee + RO
AWARD OF CONSTRUCTION CONTRACT FOR OLD TOP OF THE WORLD SEWER LIFT STATION REHABILITATION – PHASE 1
September 23, 2025
ranked highest, and the proposed not-to-exceed fee of $226,158 is reasonable for the scope of work (Attachment 2). It is recommended that a task order be awarded to Lee + RO for construction management and inspection services, and that the City Manager be authorized to approve the associated task order to Lee + RO based on the terms of their On-Call Consultant Contract.
FINANCIAL ANALYSIS
The total estimated cost for Phase 1 of the Old Top of the World Sewer Lift Station Rehabilitation Project is $962,358. This includes:
• Construction Contract (Arnaz Engineering Contractors, Inc.): $669,200 • Construction Management & Inspection Services (Lee + RO): $226,158 • Contingency for Unforeseen Conditions: $67,000
There is an available budget of $1,962,802 for the project. No additional appropriation is requested.
ENVIRONMENTAL ANALYSIS
The project is categorically exempt under the State California Environmental Quality Act under CEQA Guidelines Section 15302, for replacement or reconstruction of existing utility systems and/or facility involving negligible or no expansion of capacity. The project is without risk of adverse environmental effects on coastal resources, including public access, and therefore does not require a CDP. Therefore, on May 1, 2025, a CDP Exemption was filed.
ATTACHMENTS
1. Construction Contract with Arnaz Engineering Contractors, Inc. (Pgs. 4-15)
2. Proposal for Construction Management and Inspection (Pgs. 16-52) Report Prepared By: Coordinated With:
Ulises Escalona, Senior Project Manager Thomas Perez, City Engineer Pierre Sawaya, Capital Program Manager