CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
7/14/2025
1 SUBJECT:
Adoption of a Resolution Approving Execution of Settlement Agreement between the City of Pacifica and W. E. Lyons Construction
RECOMMENDED ACTION:
Adopt the resolution approving execution of Settlement Agreement between the City of Pacifica and W. E. Lyons Construction.
STAFF CONTACT:
Michelle Marchetta Kenyon, City Attorney
[email protected]
Kevin Woodhouse, City Manager
(650) 738-7408
[email protected]
BACKGROUND/DISCUSSION:
On April 25, 2022, W.E. Lyons Construction (“Claimant”) was awarded the contract for construction of the Civic Center Campus facilities (“Project”) wherein W. E. Lyons acted as the general contractor. The dispute stems from an additional 40+ disputed change orders submitted by Claimant. The disputed issues include alleged unpaid contract balances, delays, delayed completion of the Project, compensable time extension requests and various unreimbursed extra work claims in the amount of $1,435,280.
The Parties, through their counsel, conferred in good faith and have now reached a proposed settlement for resolution of Claimant’s claims in the amount of $520,000 for its unpaid contract balances, delays, delayed completion of the Project, compensable time extension requests and various unreimbursed extra work related to the renovation of the Civic Center Campus facilities.
Under the negotiated settlement the City will pay to W.E. Lyons $520,000 and W.E. Lyons will release the City from all claims related to the Project.1 The approved budget authority for the renovation of the Civic Center Campus facilities was $10,807,828 of which $226,587.14 is remaining. There is also $309,000.15 in earned but withheld retention payments available to be used to pay the settlement amount. As a result, there is a total of $535,587.29 remaining in the Project which will cover the $520,000 settlement amount.
The Council is being asked to approve the terms of the proposed settlement as set forth in the settlement agreement included as Attachment 1 (“Settlement Agreement”). This settlement is being recommended for approval as it is within the budgeted amount for the renovation of the Civic Center Campus facilities project and avoids additional litigation costs. 1 The proposed settlement does not release W. E. Lyons from unknown claims arising from unexpired warranties and/or latent defects in the work performed and/or equipment or materials supplied by or for W. E. Lyons at the Project.
Pacifica City Council 2
July 14, 2025
ALTERNATIVE ACTION:
The Council could reject the Settlement Agreement which would result in claimant filing a complaint in San Mateo Superior Court which could expose the City to damages, including City’s legal defense costs alone which would likely exceed $400,000.
FISCAL IMPACT:
The monetary settlement amount is $520,000. The proposed settlement is within the budgeted amount for the renovation of the Civic Center Campus facilities project. If the settlement is not approved, W. E. Lyons Construction will likely file a lawsuit against the City claiming damages in excess of $1.4 million.
ORIGINATED BY:
City Manager's Office
City Attorney's Office
ATTACHMENT LIST:
Attachment 1 / Exhibit A: Settlement Agreement (PDF)
Pacifica City Council 3
July 14, 2025
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA APPROVING
EXECUTION OF A SETTLEMENT AGREEMENT BETWEEN THE CITY OF PACIFICA AND CLAIMANT, W. E. LYONS CONSTRUCTION
WHEREAS, the City and W. E. Lyons Construction entered into a contract dated April 25, 2022 for W. E. Lyons to supply and furnish certain labor, equipment and materials to and the performance of the work of improvement known as renovation of the Civic Center Campus facilities. Disputes arose between the City and W. E. Lyons Construction. W. E. Lyons Construction claims that it is entitled to unpaid contract balances, delays, delayed completion, compensable time extension requests and various unreimbursed extra work from the City. No litigation with respect to the claims has been commenced; and WHEREAS, the claims allege that W. E. Lyons Construction is entitled to unpaid contract balances, delays, delayed completion, compensable time extension requests and various unreimbursed extra work from the City related to the renovation of the Civic Center Campus facilities; and
WHEREAS, the City and W. E. Lyons Construction, through their attorneys, have negotiated a proposed settlement agreement pertaining to W. E. Lyons Construction’s claims for unpaid contract balances, delays, delayed completion, compensable time extension requests and various unreimbursed extra work related to the renovation of the Civic Center Campus facilities; and
WHEREAS, the Parties desire to enter into the settlement agreement attached hereto as Exhibit A to completely and finally resolve W. E. Lyons Construction’s claims for unpaid contract balances, delays, delayed completion, compensable time extension requests and various unreimbursed extra work from the City related to the renovation of the Civic Center Campus facilities; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pacifica hereby approves the settlement agreement attached hereto as Exhibit A and authorizes the City Manager to execute the Settlement Agreement between the City of Pacifica and Claimant W. E.
Lyons Construction in substantially the form attached hereto as Exhibit A, with minor revisions that may be approved by the City Manager and the City Attorney, and to execute any other necessary documents to effectuate the terms of the Settlement Agreement. • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 14th day of July, 2025, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
Pacifica City Council 4
July 14, 2025
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
_____________________________________________
Sue Beckmeyer, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney