City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: October 6, 2025
Report #:2507-5009
TITLE
Approval of Construction Contract No. C25195264 with Precision Engineering, Inc. in the Amount Not-to-Exceed $6,842,121 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders for Related Additional but Unforeseen Work that May Develop During the Project Up to a Not-to-Exceed Amount of $684,212 for the Hamilton Avenue Capacity Upgrades Project (SD-25000), and Approval of a Budget Amendment in the Stormwater Management Fund; CEQA Status – Exempt under CEQA Guidelines Section 15301(c)
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute Construction Contract No. C25195264 with Precision Engineering, Inc. in the amount not-to-exceed $6,842,121 for the Hamilton Avenue Capacity Upgrades Project (SD-25000);
2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with Precision Engineering, Inc. for related additional but unforeseen work that may develop during the project, the total value of which shall not exceed $684,212; and
3. Amend the Fiscal Year 2026 Budget Appropriation for the Stormwater Management Fund (requires a 2/3 vote) by:
a. Increasing the expense appropriation for the Hamilton Avenue Capacity Upgrades project (SD-25000) by $625,000; and
b. Decreasing the Stormwater Management Fund balance by $625,000.
EXECUTIVE SUMMARY
Hamilton Avenue from Center Drive to Rhodes Drive is prone to flooding due to an undersized storm drain system. The 2015 Storm Drain Master Plan identified upsizes to the storm system at Hamilton Avenue as a high priority project, and this project is included among the 13 high
priority capital projects in the 2017 Stormwater Management ballot measure. The Hamilton Avenue Capacity Upgrades project will install larger storm pipes and manholes to convey the storm runoff from a 10-year storm event. Construction bids were solicited through OpenGov and four bids were received. The construction contract is being awarded to the lowest responsible bidder. A budget amendment in the Stormwater Management Fund is needed to fully fund the contract.
BACKGROUND
The 2015 Storm Drain Master Plan identified projects throughout the City to convey a 10-year storm event. In 2017, voters approved a ballot measure to continue the Stormwater Management Fee to implement 13 new storm drain Capital Improvement Program (CIP) projects to upgrade and improve the storm drain system in Palo Alto. Three of the 13 projects are completed. Loma Verde Avenue Trunk Line Improvement Project (SD-19000) was completed in 2020, and East Meadow Drive Capacity Upgrades (SD-22000) and East Meadow Circle Connection to Adobe Creek Pump Station (SD-26000) were both completed in June 2024.
Three projects, Corporation Way System Upgrades and Pump Station (SD-21000), West Bayshore Road Pump Station (SD-20000), and West Bayshore Road Trunk Line Improvements (SD-23000) started construction in June 2025 and will be completed by Fall 2026.
The Hamilton Avenue Capacity Upgrades Project (SD-25000), the seventh project, extends from Center Drive to Rhodes Drive and was identified as a high-priority improvement. Currently, runoff from the 1400 block of Hamilton Avenue is collected through the storm drain network and flows west through pipes on Newell Road towards the Channing Avenue storm drain.
Runoff from 1500 through 1700 blocks flows south towards Greer Road. The existing storm drains on Hamilton Avenue vary from 12 to 21 inches in diameter. This network is undersized and lacks the capacity to convey the runoff from a 10-year storm event. In addition, a section of the 1500 block of Hamilton Avenue does not have any storm drains or inlets. Runoff from this area flows along the gutter pan to the nearest inlet on Madison Way.
The project will upsize the existing 12-inch pipe, between Center Drive and Newell Drive and replace associated manholes and catch basins. At Newell Road the project will introduce a bypass. A new, deeper 48-inch pipe will intercept runoff and direct it to the south on Hamilton Avenue rather than west toward Channing Avenue. The project will install new 48-inch pipes between Newell Road and Madison Way. The 48-inch pipes continue past Madison Way and direct runoff towards the 96-inch line near Greer Road. The proposed upgrades and re-direction of flows at Newell Road intersection will reduce the flooding that occurs during large storm events. While the project is not specifically designed to accommodate potential flood waters from any overflowing of San Francisquito Creek, it does significantly increase the storm drain system’s capacity to convey such water to the San Francisquito Creek pump station. The pump station, completed in 2011 with a pumping capacity of 300 cubic feet per second (cfs), allows stormwater to be pumped into San Francisquito Creek even during high tide events. The current capacity of the Hamilton Avenue storm drain line is 15-20 cfs, while the new system will have a capacity of 90 cfs. Following the New Year’s Eve 2022 San Francisquito Creek flooding event, staff reprioritized the project to be built sooner, in recognition of its ability to partially mitigate the impacts of any future Creek flooding that may occur before the Reach 2 flood control project is completed.
The project includes installing 100 linear feet of 36-inch pipe on Center Drive starting at Hamilton Avenue going towards Dana Avenue. This segment is part of the Center Drive Capacity Upgrades project, another of the projects approved by voters that is currently scheduled for Fiscal Year 2027. The segment was advanced to coordinate with the Office of Transportation’s project to construct new concrete median islands and redesign the traffic circle at the Hamilton Avenue, Southwood Drive and Center Drive intersection.
Due to pipe upgrades, the directly connected catch basins will have to be removed and replaced. The large increases in pipe size include possible utility relocations of the street light conduits due to their proximity to the proposed gravity storm drain lines.
ANALYSIS
Project Description
The project limits are Hamilton Avenue from Center Drive to Rhodes Drive, depicted on the attached Location Map (Attachment A). Staff recommends the approval of Contract No.
C251952641 for the construction of the Hamilton Avenue Capacity Upgrades Project.
The work under this contract includes the installation of 2,084 linear feet of 48-inch diameter pipe, and 1,604 linear feet of dual parallel storm drains consisting of 24-inch and 36-inch pipes on Hamilton Avenue. Pipe replacement in the streets requires additional contract work such as pavement restoration, striping, replacement of sidewalk, curb and gutter, and curb ramps due to the location of the work. Although the project has been designed to avoid utilities conflicts, the contract includes an allowance for the cost of potential utility service relocations in locations where the existing utilities services (water, gas, cable, electric and sanitary sewer) may conflict with the installation of the new storm drain pipes. The project will also remove six small storm drain manholes, and replace them with either larger junction boxes or larger manholes, and modify one existing junction box located near the intersection of Rhodes Drive and Hamilton Avenue.
The work on Center Drive includes the installation of 100 linear feet of 36-inch pipe and two manholes. The project also includes removal and replacement of one curb ramp, and segments 1 Precision Engineering, Inc. Hamilton Avenue Capacity Upgrades Project Contract No. C25195264 https://www.paloalto.gov/files/assets/public/v/1/public-works/staff-reports-all/2025/precision-engineering- hamilton-ave-capacity-upgrades-c26195264.pdf
of curb and gutter, and sidewalk.
Solicitation Process
On July 25, 2025, an Invitation for Bids (IFB) for the Hamilton Avenue Capacity Upgrades Project was posted on OpenGov. A non-mandatory pre-bid meeting was held on August 4, 2025, within the 21-day bidding period. Nine bidders attended the pre-bid meeting to discuss the project.
The invitation for bids was structured to select the lowest bidder using the base bid. Bids were received from four qualified contractors on August 15, 2025, as listed on the attached Bid Summary (Attachment B).
Table 1: Summary of Invitation for Bids
Project Bid Name / Number Hamilton Avenue Capacity Upgrades Project SD-25000, IFB No. 195264
Proposed Length of Project 10 Months (303 Calendar Days) Pre-Bid Meeting Yes
Number of Company Attendees at Pre-Bid Meeting 9
Number of Bids Received 4
Base Bid Price Range $6,842,121 - $13,356,000
Public Link Solicitation https://procurement.opengov.com/portal/palo-alto- ca/projects/186570
Bids ranged from $6,842,121 to $13,356,000 and from 1% to 98% over the engineer’s estimate of $6,745,897. Staff reviewed the bids submitted and recommends acceptance of the base bid submitted by Precision Engineering, Inc. in the amount of $6,842,121, and that Precision Engineering, Inc. be declared the lowest responsible bidder. The construction contingency amount of $684,212, which equals 10% of the contract value, is requested for related, additional, but unforeseen work which may develop during the project, implemented via City- approved Change Order.
The solicitation included an add-alternate bid item to rehabilitate the storm drain system along Alester Avenue and between Hamilton and Dana Avenue. Precisions Engineering, Inc.’s bid for the add-alternate work was 257% over the engineer’s estimate. This scope of work is not included in the recommended contract. Staff will bid this work separately in the winter to allow the work to be performed in summer while school is not in session.
Staff confirmed with the Contractor's State License Board that the contractor has an active license on file. Staff also contacted the listed references for Precision Engineering, Inc. and found that they performed satisfactorily on past construction projects for other clients and the City.
FISCAL/RESOURCE IMPACT
Partial funding for the contract recommended in this report is available in the Fiscal Year 2026 Adopted Stormwater Management Fund Capital Budget for the Hamilton Avenue Capacity Upgrades project (SD-25000). To fully fund the contract, staff recommends increasing the appropriation for Fiscal Year 2026 in the Hamilton Avenue Capacity Upgrades Project (SD- 25000) by $625,000 and decreasing the balance of the Stormwater Management Fund by $625,000.
Staff has reviewed funding in the Stormwater Management Fund and anticipates being able to complete the remaining 6 of the 13 ballot measure projects with the projected funding through the duration of the ballot measure. However, if projects come in higher than the 2015 Storm Drain Master plan estimates that were included in the ballot measure, staff may need to consider adjusting funding for annual rehabilitation and replacement projects and reprioritizing the remaining 6 projects that have not started design, as well as assessing other non-capital budget appropriations in this fund.
STAKEHOLDER ENGAGEMENT
Staff presented to the Stormwater Management Oversight Committee on the progress of the design of the Hamilton Avenue Capacity Upgrades project. Once the construction contract is awarded, staff will continue to notify and update the Storm Water Management Oversight Committee during construction.
Extensive public outreach will be conducted before and during the construction phase to keep the community informed throughout the process, including flyers sent to adjacent residences, schools, and businesses, and notices posted online on Nextdoor and the City’s website.
ENVIRONMENTAL REVIEW
This project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15301 (d) (repair, maintenance and/or minor alteration of existing facilities and 15302 (c) (replacement of existing structures) of the CEQA Guidelines and no further environmental review is necessary.
ATTACHMENTS
Attachment A: Location Map
Attachment B: Bid Summary
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer