City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 9, 2025
Report #:2504-4519
TITLE
Approval of Amendment No. 1 to Contract No. C22183804 With Jacobs Engineering Group, Inc. to Increase the Contract Amount by $150,000 to $1,030,569, to Update the Hourly Rate Schedule, and to Extend the Contract Term to June 30, 2026 for Engineering Services During Construction; Amendment No. 2 to Contract No. C21179265E with Tanner Pacific, Inc. to Increase the Contract Amount by $245,095 to $1,097,595 for Construction Management Services, to add Exhibit C-2 Schedule of Rates, and to Extend the Contract Term to June 30, 2026; and Amendment No. 6 to Contract No. C21179265C with Carollo Engineers, Inc. to Increase the Contract Amount by $397,800 to $15,093,184 for Construction Management Services and to add Exhibit C-2 Schedule of Rates, Funded by Wastewater Treatment Enterprise Fund for the Joint Intercepting Sewer Rehabilitation (Phase 1) Project (WQ-24000); CEQA Status – Exempt under CEQA Guidelines Section 15301 (Repairs to Existing Facilities)
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute:
1) Amendment No. 1 to Contract No. C22183804 with Jacobs Engineering Group, Inc. to increase the contract amount by $150,000, to update the hourly rate schedule, and to extend the contract term from January 31, 2025 to June 30, 2026 to provide engineering services during the continuation of construction of the Joint Intercepting Sewer Rehabilitation (Phase 1) Project (WQ-24000). The revised total contract amount is not to exceed $1,030,569, including $909,063 for basic services and $121,506 for additional services;
2) Amendment No. 2 to Contract No. C21179265E with Tanner Pacific, Inc. to increase the contract amount by $245,095, to add Exhibit C-2 Schedule of Rates, and to Extend the Contract Term to June 30, 2026 to continue to provide construction management services for the Joint Intercepting Sewer Rehabilitation (Phase 1) Project (WQ-24000).
The revised total contract amount is not to exceed $1,097,595, including $970,095 for basic services and $127,500 for additional services; and
3) Amendment No. 6 to Contract No. C21179265C with Carollo Engineers, Inc. to increase the contract amount by $397,800 and add Exhibit C-2 Schedule of Rates to provide construction management services for the Joint Intercepting Sewer Rehabilitation (Phase 1) Project (WQ-24000). The revised total contract amount is not to exceed $15,093,184 including $13,558,923 for basic services and $1,534,261 for additional services.
EXECUTIVE SUMMARY
The Joint Intercepting Sewer Rehabilitation Phase 1 Project (Project) will install a structural liner within a critical 72-inch diameter sewer pipe that transports wastewater to the Regional Water Quality Control Plant. The new liner will prevent a potential collapse of the concrete pipe and extend the life of the sewer pipe by 25 to 50 years. Construction began in 2024 and has been delayed due to unforeseen site conditions and contractor-related issues. As a result, the anticipated completion date has been extended from September 30, 2024, to September 30, 2025.
The current authorized contract amounts and durations for engineering services and construction management are insufficient to support the extended timeline and complete the Project. Staff recommends Council approval of amendments to existing contracts to increase the contract amounts and to extend the contract terms, ensuring continued oversight of the construction work through Fiscal Years 2025 and 2026.
BACKGROUND
The Regional Water Quality Control Plant (RWQCP) owns and maintains a 72-inch diameter Joint Intercepting Sewer, which conveys raw sewage from Mountain View, Los Altos, Los Altos Hills, and a portion of Palo Alto. Attachment A provides a site map illustrating the Project location. There are other sewers leading to the RWQCP that are maintained by the Utilities Department, Stanford University, and the East Palo Alto Sanitary District.
On June 21, 2021, City Council approved five separate contracts (Contract Nos. C21179265A through C21179265E) with five firms, including Carollo Engineers, Inc. and Tanner Pacific, Inc. to provide on-call construction management and inspection services for various capital projects at the RWQCP.1
City Council awarded the design contract for the Project to Jacobs Engineering Group, Inc. on May 16, 2022, and the design was completed in August 2023.2 On December 11, 2023, City Council approved a funding agreement with partners, construction contract with SAK 1 City Council, June 21, 2021; SR #12324
https://portal.laserfiche.com/Portal/DocView.aspx?id=162659&repo=r-704298fc 2 City Council, May 16, 2022; Consent Item #7; SR #14164, https://portal.laserfiche.com/Portal/DocView.aspx?id=59483&repo=r-704298fc&searchid=a6f7c657-de00-4160- 95a6-a70fb8afcd04
Construction, LLC., and an amendment to the construction management services contract with Tanner Pacific, Inc. to provide construction management and inspection services. Extensive Project details are available in the December 11, 2023 report.3 The anticipated Project construction end date was September 30, 2024. The Project was delayed by the contractor and by unforeseen site conditions that resulted in the need to extend the construction substantial completion date to September 30, 2025.
ANALYSIS
The Project encountered delays early in the construction due to the contractor’s failure to submit required construction document submittals in accordance with the baseline schedule and by unforeseen site conditions. The late submittals prevented timely review and approval by the Engineer of Record (Jacobs Engineering), delaying the start of several key construction activities and disrupting the planned sequence of work. In parallel, unforeseen site conditions— such as unanticipated subsurface obstructions—required additional investigation, coordination, and adjustments to construction methods, further contributing to the delay.
The contractor attempted to recover the schedule through overtime work and resequencing of activities. However, a late-stage change to their bypass pumping system approach, combined with the earlier delays, left insufficient time to complete all critical contractual work—including installation of the pipe liner—within the 2024 dry season window. Due to environmental and operational constraints, work that involves bypassing sewer flows must be confined to the dry season, when wet-weather flows are minimal and more easily managed. These seasonal limitations significantly restrict when construction can safely and effectively proceed.
City Response and Schedule Adjustment
On September 13, 2024, the contractor formally requested to continue work into the wetter fall months. The City denied the request due to bypass pumping system limitations in handling wet weather flows. This resulted in deferral of the remaining work to the 2025 dry season. The contractual substantial completion date was extended from September 30, 2024 to September 30, 2025, with no cost increase. Work completed by early October 2024 was properly secured, and the western Byxbee Park trail was restored and reopened to the public on November 2, 2024.
In March 2025, the contractor reclosed the trail and resumed the sewer bypass system installation to continue with the repairs. Site and trail restoration is expected in September 2025. The trail is scheduled to reopen by November 30, 2025. To mitigate such issues going 3 City Council, December 11, 2023; Consent Item #2; SR #2308-1879, https://portal.laserfiche.com/Portal/DocView.aspx?id=69362&repo=r-704298fc forward, staff has implemented more frequent construction schedule reviews and increased coordination with consultants and contractors to strengthen oversight and accountability.
Impacts on Project Oversight
While SAK Construction, the construction contractor, is expected to complete their contractual work within the contract amount, the delays have led to unanticipated costs for project oversight. Specifically, Jacobs Engineering and Tanner Pacific were required to provide continued services beyond their original contract durations. Additionally, Carollo Engineers is anticipated to supplement construction management staffing for this Project with specialized resident engineer services. Carollo Engineers’ services will improve efficiency as their staff is currently on-site providing construction management services for the 12kV Electrical Power Distribution Loop Upgrades Project and the Secondary Treatment Upgrades Project, which require coordination with this project.
To ensure continued oversight and support through the extended construction period, staff reviewed the scope of additional services required and negotiated the amendment amounts with each consultant to align with the revised Project schedule and budget. The recommended contract amendments (Attachments C, D, and E) are summarized in Table 1 below:
Table 1: Contract Amendments
Consultant Contract No. Amend-
ment No. Description Increased
Amount
Revised Total
Contract
Amount
Jacobs
Engineering
Group, Inc.
C22183804 No. 1
Engineering services
during construction;
extend term to June
30, 2026
$150,000
$1,030,569
($909,063 for basic
services; $121,506 for
additional services)
Tanner
Pacific, Inc. C21179265E No. 2
Continued
construction
management
services through
extended project
schedule
$245,095
$1,097,595
($970,095 for basic
services; $127,500 for
additional services)
Carollo
Engineers,
Inc.
C21179265C No. 6
Additional on-site
specialty resident
engineer for 2025
construction season
$397,800
$15,093,184
($13,558,923 for basic
services; $1,534,261 for
additional services)
FISCAL/RESOURCE IMPACT
Funding for the recommended contract amendments in this report is available in the Fiscal Year 2025 Adopted Wastewater Treatment Fund Capital Budget Joint Intercepting Sewer Rehabilitation (Phase 1) project (WQ-24000). Mountain View, Palo Alto, Los Altos, and Los Altos Hills will fund the Project in accordance with the percentages shown in Table 2. The apportioned partners’ share of the cost will be in accordance with previous partner agreements with Mountain View, Los Altos, Los Altos Hills, and Palo Alto. The issues with the project were discussed with the partners in the November 2024 partners meeting, including the cost increase and the need for amendments to the funding agreements which, for efficiency, will be bundled with a future partner amendment in the Fall of 2025. Stanford and East Palo Alto Sanitary District do not have any direct share of the pipeline relining project. Palo Alto’s share of the Project is 18.24% of the total expense, as shown in Table 2.
Table 2: Cost Share
Item Unit Mountain
View Palo Alto Los Altos Los Altos
Hills Total
Trunk Line
Cost Share % 62.50% 18.24% 15.00% 4.26% 100%
A small proportion of the construction scope inside the RWQCP is being paid by all Partners and therefore the corresponding construction management portion will be billed similarly. Refer to Attachment B, Table B-2.
The proposed amendments to add funds ($792,895 not-to-exceed total for contracts with Tanner Pacific, Jacobs Engineering and Carollo Engineers) will increase the total estimated Joint Intercepting Sewer Rehabilitation (Phase 1) project cost from $8.9 million to $9.7 million. The Carollo Engineers construction management contract supports multiple projects at the RWQCP.
Final cost share will be calculated after Project completion based on the actual cost incurred and wastewater flows and strength contributed by each partner for 2024 and 2025. Table 3 shows the estimated total project construction expenses. See Attachment B for a detailed cost breakdown.
Table 3: Not-to-Exceed Cost for Partners
Partner Agency
Total Cost,
Based on Construction
Bid and Construction
Manager's Proposed Fee
Schedule Pre- 2024
Total
Additional
Needed
Total Cost,
Updated in 2025
Due to
Construction Delay
and the Need for
Additional Services
City of Mountain View $5,159,619 $464,998 $5,624,617
City of Palo Alto $1,947,106 $167,459 $2,114,565
City of Los Altos $1,262,089 $113,311 $1,375,400
Town of Los Altos Hills $338,516 $30,747 $369,264
East Palo Alto Sanitary
District $104,904 $7,548 $112,452
Stanford University $122,736 $8,831 $131,567
Total, Not-to-Exceed: $8,934,970 $792,895 $9,727,865
STAKEHOLDER ENGAGEMENT
This Project is part of the RWQCP’s major capital improvement program funded by the City of Palo Alto and its five partners. The five partner agencies are regularly consulted regarding both the need for and the progress of wastewater treatment capital work. With respect to Palo Alto itself, the open meetings on the budget process serve as the main vehicle for engaging the community on both new projects such as this and associated rate impacts.
In addition, staff has coordinated with the Community Services Department and other Public Works Department staff to coordinate construction activities, bypass pumping, access, and trail detours in parkland and at the closed landfill. Before the start of construction, staff presented the Project to the City’s Parks and Recreation Commission on February 28, 2023.2 Recommendations received from the commissioners were incorporated into the Project’s contract documents. On February 25, 2025, staff updated the Parks and Recreation Commission on the construction progress and explained the need to close the trail on the western edge of Byxbee Park to isolate the construction area and to protect the public.3
ENVIRONMENTAL REVIEW
The construction of this Project has been determined to be exempt from CEQA under CEQA Guidelines Section 15301, subsection (b) as it involves the repair and maintenance of an existing publicly-owned utility used to provide sewerage treatment services with no expansion on the existing facility. A Notice of Exemption was submitted to and recorded by the State Clearing House and Santa Clara County Clerk-Recorder’s Office on August 7, 2023 (File No.
ENV24700).
ATTACHMENTS
Attachment A: Site Map Showing the Pipe Alignment and Project Phases Attachment B: Partner Agencies Cost Share Summary
Attachment C: Amendment No. 1 to Contract No. C22183804 with Jacobs Engineering Group, Inc.
Attachment D: Amendment No. 2 to Contract No. C21179265E with Tanner Pacific, Inc.
Attachment E: Amendment No. 6 to Contract No. C21179265C with Carollo Engineers, Inc.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
2 Parks and Recreation Commission, February 28, 2023; Agenda Item #4; https://portal.laserfiche.com/Portal/DocView.aspx?id=66704&repo=r-704298fc 3 Parks and Recreation Commission, February 25, 2025; Business Item #3; SR #2502-4115; https://portal.laserfiche.com/Portal/DocView.aspx?id=143371&repo=r-704298fc