To:
CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM
Honorable Mayor and Council Members
FROM: Jacki Scott, Public Works Director/City Engineer
January 20, 2026 DATE:
SUBJECT: Approval of Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering, for the Annual Residential Overlay Program Fiscal Year 2025-26
RECOMMENDATION
Staff recommends that the City Council:
1. Approve Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering to provide engineering design services for the Annual Residential Overlay Program Fiscal Year 2025-26 for a not-to-exceed amount of $67,220;
2. Approve a not-to-exceed 15% contingency of the total contract in the amount of $10,083 for unforeseen conditions or extra work and authorize the Public Works Director/City Engineer to approve the additional work, for a total not-to-exceed contract amount of $77,303 if needed; and,
3. Authorize the City Manager to execute Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering, subject to the City Attorney making non-substantive changes.
BACKGROUND
The City of Laguna Niguel is responsible for maintaining approximately 141 miles of streets, comprised of approximately 104 miles of local streets and approximately 37 miles of arterials. In order to maintain City streets in good condition, the City Council adopted the Pavement Management Program, a work plan that identifies deficiencies and recommends projects to improve the Pavement Condition Index (PCI) of City streets, on June 1, 2021.
The Pavement Management Program includes annual residential overlay, annual arterial overlay, and biennial residential slurry seal. The goal of the program is to improve the citywide PCI year over year, ultimately bringing the citywide PCI up to 80 or greater.
Investing in the City's street system saves money because it costs less to maintain streets
in good condition than to repair those that have failed, satisfies Maintenance of Effort reporting requirements for the Orange County Transportation Authority, and meets the needs of the community.
As part of the Pavement Management Program, the City has committed to completing asphalt overlay construction within residential neighborhoods on a biennial basis. The annual residential overlay program for both Fiscal Years 2025-26 and 2026-27 will be combined into one project for efficiency and cost savings. The 2025-26 and 2026-27 program will include the following streets located within the Beacon Hill neighborhood:
Richmond Hill, Copps Hill Street, Alcott Place, Middleton Place, Tremount Way, and Callender Court. These streets were selected because their average PCI is 57, which is considered a poor condition, and they have a substantial number of failing pavement sections in need of extensive repairs. Bidding of this project is anticipated to occur in summer 2026. A vicinity map for the project is provided in Attachment "A".
The engineering design will also include the following improvements : pavement grinding and removal, asphalt pavement overlay, adjustment of surface utilities to final pavement grade, and roadway marking, striping and signage. Completion of the Annual Residential Overlay Program supports City Council Goal 4 (Infrastructure and Technology) of the City's adopted Strategic Plan.
ANALYSIS
Following City Council adoption of the Fiscal Year 2025-26 CIP budget in June 2025, staff issued a Request for Proposals (RFP) to identify the most qualified consultant to provide engineering design, prepare plans and specifications, and provide construction support services. The RFP was sent to seven consultant firms on the City's On-Call Professional Services List.
In response to the RFP, only one proposal was received, from Derek J. McGregor, Inc. dba DMc Engineering. The proposal was evaluated based on the following four criteria:
(1) Qualifications of Key Personnel, (2) Project Approach, (3) Experience, and (4) Cost.
Pursuant to Laguna Niguel Municipal Code Section 3-6-8, professional services contracts shall be awarded on the basis of the demonstrated competence of the service providers, and on the service provider's professional qualifications necessary for the satisfactory performance of the services required, and on the fairness and reasonableness of the cost of the services to the City and shall not be awarded solely on the basis of cost.
After a thorough review of the proposal received and based on all relevant factors, staff has determined that Derek J. McGregor, Inc. dba DMc Engineering represents a favorable overall value to provide the requested services. Derek J. McGregor, Inc. dba DMc Engineering was selected for its highly qualified staff, methodology, extensive experience providing similar services, and cost. In addition, Derek J. McGregor, Inc. dba DMc Engineering provided engineering design services for the City's Fiscal Year 2023- 24 Residential Overlay Program on-time and on-budget.
Staff recommends that the City Council approve Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering to provide engineering design services for the Annual Residential Overlay Program Fiscal Year 2025-26 for a not-to-exceed amount of $67,220 (Attachment "B"). In addition, Amendment No. 4 will include a not-to-exceed 15% contingency in the amount of $10,083 for unforeseen conditions or extra work for a total not-to-exceed contract amount of $77,303.
ALTERNATIVES CONSIDERED
1. The City Council may direct staff to reject the proposal and rebid the RFP for engineering design services for the Annual Residential Overlay Program Fiscal Year 2025-26. Staff believes that reissuing the RFP will not result in more desirable proposals.
2. The City Council may decide not to approve Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering. This alternative is not recommended as the roadway infrastructure would remain in its current condition and would likely further deteriorate until the project is completed at a future date.
FISCAL REVIEW
The Fiscal Year 2025-26 CIP budget contains sufficient funds for Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering.
LEGAL REVIEW
The City Attorney's Office has reviewed the Amendment and has approved the document as to form.
CONCLUSION
Staff recommends that the City Council:
1. Approve Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering to provide engineering design services for the Annual Residential Overlay Program Fiscal Year 2025-26 for a not-to-exceed amount of $67,220;
2. Approve a not-to-exceed 15% contingency of the total contract in the amount of $10,083 for unforeseen conditions or extra work and authorize the Public Works Director/City Engineer to approve the additional work, for a total not-to-exceed contract amount of $77,303 if needed; and,
3. Authorize the City Manager to execute Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering, subject to the City Attorney making non-substantive changes.
Page4
Works Director/City Engineer
Attachments:
A. Vicinity Map
8. Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering
ATTACHMENT A
Vicinity Map
VICINITY MAP
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LEGEND
Annual Residential Overlay Program
Fiscal Year 2025-26
Project Area
ATTACHMENT B
Amendment No. 4 to the On-Call Professional Services Agreement with Derek J. McGregor, Inc. dba DMc Engineering
AMENDMENT NO. 4 TO AGREEMENT FOR ON-CALL PROFESSIONAL SERVICES
BETWEEN CITY OF LAGUNA NIGUEL AND
DEREK J. MCGREGOR, INC.
THIS AMENDMENT NO. 4 TO AGREEMENT FOR ON-CALL PROFESSIONAL SERVICES ("Amendment No. 4") is made and entered into _______ by and between the CITY OF LAGUNA NIGUEL , a California municipal corporation ("City") and Derek J.
McGregor, Inc. dba DMc Engineering , a California corporation ("Consultant "). City and Consultant may be referred to individually as "Party" or collectively as "Parties ."
RECITALS
1. City and Consultant entered into an on-call professional services agreement on July 1, 2025 to provide on-call professional civil engineering design services ("Agreement "). The initial term of the Agreement terminates on June 30, 2026.
2. City has requested Civil Engineering design services for the Residential Overlay Program Fiscal Year 2025-2026 Project ("Project") from the Consultant pursuant to the terms of the Agreement.
3. Consultant submitted a written project proposal for the specific services requested above ("Project Proposal ") pursuant to the terms of the Agreement.
4. Consultant has the qualifications and experience to render the requested services.
5. City and Consultant have entered into amendment(s) to the Agreement as detailed in "Prior Amendments to Agreement" attached hereto as Exhibit E-4.
6. City and Consultant now desire to enter into Amendment No. 4 to the Agreement for the performance by Consultant of the requested services for the Project.
AGREEMENT
In consideration of the mutual promises and covenants made by the Parties and contained herein and other consideration , the value and adequacy of which are hereby acknowledged, the Parties agree as follows:
1. Project Term. This Amendment No. 4 shall become effective as of the date stated above and, unless earlier terminated in accordance with Article 7 of the Agreement , shall continue in effect until the services described in the Project Proposal is completed.
2. Consultant Project Proposal. The Project Proposal from Consultant , for this Amendment No. 4, shall be incorporated herein by this reference as though fully set forth herein.
The Scope of Services shall include the scope of services or work included in the Project Proposal.
In the event of any inconsistency or any conflict between the terms of the Project Proposal , and the Agreement or this Amendment No. 4, the terms of the Agreement or this Amendment No. 4, respectively , shall govern. No other terms and conditions from the Project Proposal , other than -1-
description of scope of services or work, shall apply to this Amendment No. 4 or the Agreement , unless specifically agreed to by City in writing .
3. Project Scope of Services. In compliance with all terms and conditions of the Agreement and this Amendment No. 4, Consultant shall provide on an as-needed basis those services specified in the "Scope of Services" attached hereto as Exhibit A-4 and incorporated herein by this reference, which may be referred to herein as the "services" or "work" hereunder.
4. Project Special Requirements. Additional terms and conditions of this Amendment No. 4, if any, which are made a part hereof are set forth in the "Special Requirements " attached hereto as Exhibit B-4 and incorporated herein by this reference . In the event of a conflict between the provisions of Exhibit B-4, and any other provisions of this Amendment No. 4 or the Agreement , the provisions of Exhibit B-4 shall govern.
5. Project Compensation and Contract Sum. Subject to any limitations set forth in the Agreement and this Amendment No. 4, City agrees to pay Consultant the amounts specified in the "Schedule of Compensation " attached hereto as Exhibit C-4 and incorporated herein by this reference. The total compensation (excluding the Contingency Sum), including reimbursement for actual expenses , shall not exceed Sixty-Seven Thousand Two Hundred Twenty Dollars ($67,220) ("Compensation Sum"). This Amendment No. 4 includes a contingency amount equal to 15 percent of the Compensation Sum ("Contingency Sum") to account solely for additional work, or unforeseen conditions , related to the services. The total compensation (including the Contingency Sum), including reimbursement for actual expenses , shall not exceed Seventy-Seven Thousand Three Hundred Three Dollars ($77,303) ("Contract Sum"), unless additional compensation is approved pursuant to Section 1.5 of the Agreement. The Consultant shall obtain written approval from the City for any use of the Contingency Sum. Compensation may include reimbursement , for actual and necessary expenditures , if both specified in either the Schedule of Compensation (Exhibit C-4 to this Amendment) or the Schedule of On-Call Compensation (Exhibit C to the Agreement ), as well as approved by City in advance. The Contract Sum shall include the attendance of Consultant at all project meetings reasonably deemed necessary by City. Consultant agrees that if Consultant becomes aware of any facts, circumstances , technique s, or events that may or will materially increase or decrease the cost of the work or services , Consultant shall promptly notify the City Representative of said fact, circumstance , technique or event and the estimated increased or decreased cost related thereto.
6. Project Schedule of Performance. Consultant shall commence as-needed services pursuant to this Amendment No. 4 upon receipt of a written notice to proceed pursuant to Exhibit A-4 and shall perform all services within the time period(s) established in the "Schedule of Performance " attached hereto as Exhibit D-4 and incorporated herein by this reference ( and as applicable the "Schedule of Performance " attached as Exhibit D to the Agreement ).
7. Prior Amendments to Agreement. Prior amendments to the Agreement, if any, are itemized in "Prior Amendments to Agreement ," attached hereto as Exhibit E-4 and incorporated herein by this reference.
8. Consultant Representative for Project. The Consultant Representative for the work or services under this Amendment No. 4 is Derek McGregor , President , 949-753-9393 , dmcgregor @dmceng.com , who is authorized to act on Consultant's behalf with respect to the work -2-
or services specified herein and to make all decisions in connection therewith. It is expressly understood that the experience, knowledge , capability and reputation of the representative was a substantial inducement for City to enter into this Amendment No. 4 to the Agreement. Therefore, the representative shall be responsible during the term of this Amendment No. 4 for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder.
For purposes of this Amendment, the representative may not be replaced nor may their responsibilities be substantially reduced by Consultant without the express written approval of City.
9. Continuing Effect of the Agreement. Except as amended by this Amendment No. 4, all provisions of the Agreement shall remain unchanged and in full force and effect. From and after the date of this Amendment No. 4, whenever the term "Agreement " appears in the Agreement , it shall mean the Agreement, as amended by this Amendment No. 4.
10. Affirmation of the Agreement. City and Consultant each ratify and reaffirm each and every one of the respective rights and obligations arising under the Agreement. Each Party represents and warrants to the other that the Agreement is currently an effective, valid, and binding obligation .
11. Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment.
12. Authority. The persons executing this Amendment No. 4 on behalf of the Parties hereto warrant that (i) such Party is duly organized and existing , (ii) they are duly authorized to execute and deliver this Amendment No. 4 on behalf of said Party, (iii) by so executing this Amendment, such Party is formally bound to the provisions of this Amendment, and (iv) entering into this Amendment No. 4 does not violate any provision of any other agreement to which said Party is bound.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 4 on the date and year first-above written.
ATTEST:
Marissa J. Asistin, City Clerk
APPROVED AS TO FORM BY THE
CITY ATTORNEY FOR THE
CITY OF LAGUNA NIGUEL,
CALIFORNIA:
Scott C. Smith, City Attorney
CITY:
CITY OF LAGUNA NIGUEL, a California
municipal corporation
Tamara S. Letourneau, City Manager
CONSULTANT:
Derek J. McGregor, Inc. dba DMc Engineering,
a California corporation
By:--------------
Name:
Title:
By: ______________ _
Name:
Title:
Address: ------------
Two corporate officer signatures required when Consultant is a corporation , with one signature required from each of the following groups: 1) Chairperson of the Board, President or any Vice President; and 2) Secretary, any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. (Cal. Corp. Code§ 313.) APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE
BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO CONSULT ANT'S BUSINESS ENTITY.
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EXHIBIT A-4
SCOPE OF SERVICES
I. All work product is subject to review and acceptance by City, and must be revised by Consultant without additional charge to City until found satisfactory and accepted by City.
II. Consultant will perform services described in the Project Proposal.
A-4
EXHIBIT B-4
SPECIAL REQUIREMENTS
(Superseding Template)
NOT APPLICABLE
B-4
EXHIBIT C-4
SCHEDULE OF COMPENSATION
I. City will compensate Consultant for the services performed upon submission of a valid invoice, as described in Section 2.2 of the Agreement.
II. The total compensation for the services provided pursuant to this Amendment No. 4 shall not exceed the total of the Contract Sum, as provided in Section 5 of this Amendment No. 4.
III. Consultant will be compensated for services provided pursuant to this Amendment No. 4 pursuant to the fees and rates in Exhibit C of the Agreement and in accordance with description in the Project Proposal.
C-4
EXHIBIT D-4
SCHEDULE OF PERFORMANCE
I. Consultant shall perform all services and deliver all work products timely in accordance with the schedule described in the Project Proposal.
D-4
EXHIBIT E-4
PRIOR AMENDMENTS TO AGREEMENT
1. Amendment No. 1 to Agreement , executed on July 1, 2023, provides Private Development Plan Checking services on an as-needed multiyear basis from Consultant to City for not to-exceed Sum (or Aggregate Contract Sum) of $330,000.
2. Amendment No. 2 to Agreement , executed on March 16, 2024, provides Civil Engineering design services for the Residential Overlay Program Fiscal Year 2023/2024 Project for a not-to-exceed Contract Sum of $69,230.
3. Amendment No. 3 to Agreement, executed on December 29, 2025, provides monument preservation and surveying services for a not-to-exceed Contract Sum of $29,670.
E-4