ITEM 4. 14
CITY MANAGER' SREPORT
OCTOBER 13, 2025 CITY COUNCIL REGULAR MEETING
ITEM: ACCEPT PUBLIC IMPROVEMENTS CONSTRUCTED BY
DSS COMPANY DBA KNIFE RIVER CONSTRUCTION
FOR LOUISE AVENUE AND MCKINLEY AVENUE
INTERSECTION IMPROVEMENTS, CIP PS 15- 02 AND
APPROVE PROJECT BUDGET AMENDMENT
RECOMMENDATION: Adopt Resolution to Accept Public Improvements Constructed by DSS Company dba Knife River
Construction for Louise Avenue and McKinley
Avenue, CIP PS 15- 02, Authorize the Filing of a
Notice of Completion, Release of Contract Retention
Release of Performance and Payment Bonds, and
Approve Project Budget Amendment
SUMMARY:
DSS Company, doing business as Knife River Construction ( Knife River), has successfully completed construction of Capital Improvement Project ( CIP) PS 15- 02 Louise Avenue and McKinley Avenue Intersection Improvements ( Project). The scope of work included the widening of Louise Avenue, modifications to lane configurations on McKinley Avenue, and upgrades to the existing traffic signal at the intersection.
City staff have conducted final inspections, and the City Engineer has confirmed that all improvements were completed in accordance with the approved plans and specifications. Knife River has submitted all necessary lien releases, verifying that subcontractors and suppliers have been paid in full. Additionally, Knife River provided a one- year warranty bond, equal to 10% of the construction contract amount, to ensure the continued integrity of the improvements.
Staff request that City Council accept the improvements completed by Knife River for the Project and authorize the following actions:
Filing of a Notice of Completion with the San Joaquin County Clerk; and Release of contract retention in the amount of $ 164, 560 to Knife River, to occur within forty-ive (45) days following the recording of the Notice of Completion; and
Release of the performance and payment bonds associated with the Project.
The Project currently reflects a
funding shortfall of $ 53, 113, attributed to additional services required during construction. These services included geotechnical work, recycled water line repairs, and design of new sidewalk, curb, and gutter along McKinley Avenue. The shortfall also includes the purchase of street light poles and luminaires for the newly constructed sidewalk.
CITY MANAGER' S REPORT PAGE 2
OCTOBER 13, 2025 CITY COUNCIL REGULAR MEETING
ACCEPT PUBLIC IMPROVEMENTS CONSTRUCTED BY DSS COMPANY DBA
KNIFE RIVER CONSTRUCTION FOR LOUISE AVENUE AND MCKINLEY AVENUE INTERSECTION IMPROVEMENTS, CIP PS 15- 02 AND APPROVE PROJECT
BUDGET AMENDMENT
To address this shortfall and close out the project, staff is requesting that City Council approve a budget amendment transferring $ 53, 113 from the General Fund Street Repair Reserves ( Fund 1010) to the CIP Project Fund ( Fund 3310).
BACKGROUND:
On October 9, 2023, City Council approved a construction contract with Knife River for construction of CIP PS 15- 02. The original scope of work consisted of widening Louise Avenue, modifying lane configurations along McKinley Avenue and upgrading the existing traffic signal at the intersection.
Knife River has completed construction of the Project. City staff conducted a final inspection, and the City Engineer has determined that all improvements were completed in accordance with the approved plans and specifications.
The construction costs referenced below capture all expenditures from Knife River.
A. Construction Contract Amount
B. Approved Change Order 1
C. Approved Change Order 2
D. Approved Change Order 3
E. Approved Change Order 4
2, 720, 378
2, 550
388, 179
1, 540
S 178, 546
Total Knife River Construction Cost $ 3, 291, 193
Staff requests City Council accept the public improvements constructed by Knife River for the Project. Staff also requests City Council authorize the filing of a Notice of Completion with the San Joaquin County Clerk, the release of contract retention to Knife River in the amount of $ 164, 560 within forty-ive (45) days after the recording of the Notice of Completion, and the release of performance and payment bonds.
When the Project Improvement Plans were originally approved, the nearby properties at Louise Avenue and McKinley Avenue were undeveloped. During construction, these parcels were developed and installed frontage improvements, including new sidewalks. To maintain continuous pedestrian access, the Project required additional design services and related tasks to complete the sidewalk along McKinley Avenue.
These tasks also included geotechnical services, repairs to recycled water infrastructure, and the purchase and installation of streetlight poles and luminaires for the newly constructed sidewalk.
On July 8, 2024, City Council approved the additional scope of work and increased the Project budget by allocating an additional $ 300, 00 in contingency funding.
CITY MANAGER' S REPORT PAGE 3
OCTOBER 13, 2025 CITY COUNCIL REGULAR MEETING
ACCEPT PUBLIC IMPROVEMENTS CONSTRUCTED BY DSS COMPANY DBA
KNIFE RIVER CONSTRUCTION FOR LOUISE AVENUE AND MCKINLEY AVENUE INTERSECTION IMPROVEMENTS, CIP PS 15- 02 AND APPROVE PROJECT
BUDGET AMENDMENT
REASON FOR RECOMMENDATION:
Upon City Council' s acceptance of the improvements, the performance and payment bonds ( Bond No. 190- 053- 728/ 10785651) will be released and replaced with a oneyear warranty bond in the amount of $329, 119 (Bond No. 190- 053- 728/ 107885651).
The warranty bond ensures coverage for any necessary repairs or replacements due to defective materials or workmanship discovered within one year from the date of acceptance.
FISCAL IMPACT:
The construction contract was originally approved for $ 2, 720, 378, with an allocated contingency of $272, 038. During construction, change orders totaling $ 570, 815 were issued to Knife River, bringing the total contract cost to $ 3, 291, 193. The initial contingency, along with a supplemental allocation of $ 300, 00, resulted in a total available contingency of $ 572, 038 —sufficient to cover the approved change orders and contract with Knife River.
However, CIP PS 15- 02 currently reflects a net shortfall of $ 53, 113 due to unanticipated costs associated with additional design and construction work required to complete the new sidewalk along McKinley Avenue. To address this shortfall, staff is requesting City Council approval of a budget amendment to transfer $ 53, 113 from the General Fund Street Repair Reserves ( Fund 1010) to the CIP Project Fund ( Fund 3310) as outlined below:
Decrease Street Reserves
1010- 251- 03-0
Increase Transfer Out
1010- 9900-90- 9010
Increase Transfer In
3310- 9900- 393- 0000
Increase Appropriation
3310- 8000- 420- 10
PS 15- 02
PS 15- 02
53, 113
53, 113
53, 113
53, 113
CITY MANAGER' S REPORT PAGE 4
OCTOBER 13, 2025 CITY COUNCIL REGULAR MEETING
ACCEPT PUBLIC IMPROVEMENTS CONSTRUCTED BY DSS COMPANY DBA
KNIFE RIVER CONSTRUCTION FOR LOUISE AVENUE AND MCKINLEY AVENUE INTERSECTION IMPROVEMENTS, CIP PS 15- 02 AND APPROVE PROJECT
BUDGET AMENDMENT
ATTACHMENTS:
A. Resolution to Accept Public Improvements Constructed by DSS Company dba Knife River Construction for Louise Avenue and McKinley Avenue, CIP PS 15- 02, Authorize the Filing of a Notice of Completion, Release of Contract Retention Release of Performance and Payment Bonds, and Approve Project Budget Amendment
B. Notice of Completion - Louise Avenue and McKinley Avenue Intersection Improvements, CIP PS 15- 02
CITY MANAGER' SREPORT PAGE 5
OCTOBER 13, 2025 CITY COUNCIL REGULAR MEETING
ACCEPT PUBLIC IMPROVEMENTS CONSTRUCTED BY DSS COMPANY DBA
KNIFE RIVER CONSTRUCTION FOR LOUISE AVENUE AND MCKINLEY AVENUE INTERSECTION IMPROVEMENTS, CIP PS 15- 02 AND APPROVE PROJECT
BUDGET AMENDMENT
APPROVALS:
0,- 3o- 2-o2t
Ang ca
Associate Engineer
Bra Taylor
City Engineer
Date
Date
4/ o/ zO7, s
10/ (9/ 2az
Cari James Date
Finance Director
Michael King Date
Assistant City Manager
Salvador Navarrete Date
City Attorney
lv• 7•Z$
9 • 30 •ZoZS
Stephen J. Salvatore Date
City Manager
RESOLUTION NO. 25 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP TO ACCEPT
PUBLIC IMPROVEMENTS CONSTRUCTED BY DSS COMPANY DBA KNIFE
RIVER CONSTRUCTION FOR LOUISE AVENUE AND MCKINLEY AVENUE INTERSECTION IMPROVEMENTS, CIP PS 15- 02, AUTHORIZE THE FILING OF
A NOTICE OF COMPLETION, THE RELEASE OF CONTRACT RETENTION, AND
THE RELEASE OF PERFORMANCE AND PAYMENT BONDS, AND APPROVE
PROJECT BUDGET AMENDMENT
WHEREAS, DSS Company, doing business as Knife River Construction ( Knife River), has successfully completed construction of Capital Improvement Project ( CIP) PS 15- 02 Louise Avenue and McKinley Avenue Intersection Improvements ( Project); and
WHEREAS, the scope of work included the widening of Louise Avenue, modifications to lane configurations on McKinley Avenue, and upgrades to the existing traffic signal at the intersection; and
WHEREAS, City staff have conducted final inspections, and the City Engineer has confirmed that all improvements were completed in accordance with the approved plans and specifications; and
WHEREAS, Knife River has submitted all necessary lien releases, verifying that subcontractors and suppliers have been paid in full. Additionally, Knife River provided a one- year warranty bond, equal to 10% of the construction contract amount, to ensure the continued integrity of the improvements; and WHEREAS, staff request City Council accept the public improvements constructed by Knife River for the Project; and
WHEREAS, staff also request City Council authorize the filing of a Notice of Completion with the San Joaquin County Clerk, the release of contract retention to Knife River in the amount of $164, 560 within forty-ive (45) days after the recording of the Notice of Completion, and the release of performance and payment bonds; and WHEREAS, upon City Council' s
acceptance of the improvements, the
performance and payment bonds ( Bond No. 190- 053- 728/ 107885651) will be released and replaced with a one- year warranty bond in the amount of $ 329, 119 Bond No. 190- 053- 728/ 10785651); and
WHEREAS, the warranty bond ensures coverage for any necessary repairs or replacements due to defective materials or workmanship discovered within one year from the date of acceptance; and
WHEREAS, when the Project Improvement Plans were originally approved, the nearby properties at Louise Avenue and McKinley Avenue were undeveloped.
During construction, these parcels were developed and frontage improvements, including new sidewalks; and
WHEREAS, to maintain continuous pedestrian access, the Project required additional design services and related tasks to complete the sidewalk along McKinley Avenue. These tasks also included geotechnical services, repairs to recycled water infrastructure, and the purchase and installation of streetlight poles and luminaires for the newly constructed sidewalk; and
WHEREAS, on July 8, 2024, City Council approved the additional scope of work and increased the Project budget by allocating an additional $ 300, 00 in contingency funding; and
WHEREAS, the construction contract was originally approved for $ 2, 720, 378, with an allocated contingency of $ 272, 038. During construction, change orders totaling $ 570, 815 were issued to Knife River, bringing the total contract cost to 3, 291, 193; and
WHEREAS, the initial contingency, along with a supplemental allocation of 300, 00, resulted in a total available contingency of $ 572, 038 —sufficient to cover the approved change orders and contract with Knife River; and WHEREAS, however, CIP PS 15- 02 currently reflects a net shortfall of $53, 113 due to unanticipated costs associated with additional design and construction work required to complete the new sidewalk along McKinley Avenue; and WHEREAS, to address this shortfall, staff is requesting City Council approval of a budget amendment to transfer $ 53, 113 from the General Fund Street Repair Reserves ( Fund 1010) to the CIP Project Fund ( Fund 3310) as outlined below:
Decrease Street Reserves
1010- 251- 03-0
Increase Transfer Out
1010- 9900-90- 9010
Increase Transfer In
3310- 9900- 393- 0000
Increase Appropriation
3310- 8000- 420- 100
PS 15- 02
PS 15- 02
53, 113
53, 113
53, 113
53, 113
NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Lathrop does hereby accept the public improvements constructed by DSS Company dba Knife River Construction for Louise Avenue and McKinley Avenue Intersection Improvements, CIP PS 15- 02; and
BE IT FURTHER RESOLVED, that the City Council of the City of Lathrop authorizes the filing of the Notice of Completion with the San Joaquin County Clerk, release of contract retention to Knife River in the amount of $ 164, 560 within fortyfive ( 45) days after the recording of the Notice of Completion, and release of performance and payment bonds; and
BE IT FURTHER RESOLVED, that the City Council of the City of Lathrop hereby approves a Project budget amendment transferring $53, 113 from the General Fund Street Repair Reserves ( 1010) to the CIP Project ( 3310) as detailed above.
The foregoing resolution was passed and adopted this 13th day of October 2025, by the following vote of the City Council, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Paul Akinjo, Mayor
ATTEST: APPROVED AS TO FORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney
RECORDING REQUESTED BY, AND
WHEN RECORDED MAIL TO:
CITY OF LATHROP
ATTN: CITY CLERK
390 TOWNE CENTRE DRIVE
LATHROP, CA 95330
Exempt from payment ofrecording fees ( GC 11922)
ATTACHMENT
rTmg
SPACE ABOVE THIS LINE FOR RECORDER' SUSE
NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN:
1. That the interest or estate stated in paragraph 3 herein in the real property herein described is owned by:
NAME STREET AND NO. CITY STATE
City of Lathrop 390 Towne Centre Drive Lathrop CA 95330 If more than one owner of the interest stated, the name and address of each must be stated)
2. That the full name and address of the owner of said interest or estate, if there is only one owner, and that the full names and addresses of all the co -owners who own said interest or estate as tenants in common, as joint tenants, or otherwise, if there is more than one owner, are set forth in the preceding paragraph.
3. That the nature of the title of stated owner, or if more than one owner, then of the stated owner and co - owners is fee title (e.g. fee title, leasehold, joint tenancy, etc.).
4. That on the 13th day of October 2025 a work of improvement on the real property herein described was completed.
5. That the name of the original contractor, if any, for said work of improvement was: DSS Company dba Knife River Construction.
6. That the name and address of the transferor is:
NAME STREET AND NO.
DSS Company dba 655 W. Clay Street
Knife River Construction
CITY STATE
Stockton CA
7. That the real property herein referred to is situated in the City of Lathrop County of San Joaquin, State of California, and is described as follows:
CIP PS 15- 02 Louise Avenue and McKinley Avenue Intersection Improvements That the undersigned has knowledge ofthe contents herein and states under penalty of perjury that the foregoing is true and correct.
CITY OF LATHROP
By:
By:
Stephen J. SalvatoreCity Manager Date
Teresa Vargas, City Clerk Date
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by the NOTICE OF COMPLETION dated October 13, 2025 by DSS Company dba Knife River Construction to the City ofLathrop, a political corporation and/ or governmental agency, is hereby accepted by the undersigned officer or agent on behalf of the City Council pursuant to authority conferred by minute action of the City Council adopted on October 13, 2025, and the grantee consents to recordation thereof by its duly authorized officer.
Dated By
Stephen J. Salvatore, City Manager
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