City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: April 13, 2026
Report #:2601-5850
TITLE
Approval of Amendment Number 3 to Contract C21178333 with Black & Veatch, Inc., to increase the Contract Amount by $963,160 for a revised total not-to-exceed amount of $4,146,109, and to Extend the Contract Term to December 31, 2028, for the Local Advanced Water Purification System Project (WQ-19003); CEQA Status - Notice of Determination Adopted November 18, 2019
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute Amendment No. 3 to Contract C21178333 with Black & Veatch, Inc. to extend the contract term from December 31, 2027 to December 31, 2028 and to provide additional engineering services during construction of the Local Advanced Water Purification System Project (WQ-19003) in the amount of $963,160, including $875,600 for basic services and $87,560 for additional services. This amendment results in a revised total not-to-exceed contract amount of $4,146,109.
EXECUTIVE SUMMARY
This report recommends approval of Amendment No. 3 to Contract C21178333 with Black & Veatch, Inc. (Attachment A), to continue providing engineering services during construction of Phase I of the Local Advanced Water Purification System project (Local AWPS). The project will reduce the salinity of the recycled water produced at the Regional Water Quality Control Plant.
The original design contract assumed a construction duration of 18 months and a completion date of June 2024. However, construction solicitation was delayed due to approval of financing plans and a planning entitlement. Additionally, several changes to the project’s scope increased construction duration and, during construction solicitation, the construction duration in the construction contract was increased based on input from some bidders. Staff recommends that City Council approve Amendment No. 3 to add funds in the amount of $963,160 to the contract to address the delayed construction start date, additional construction duration, additional engineering services during construction associated with a larger volume of construction documents, and additional project management.
BACKGROUND
The RWQCP treats wastewater from a total of six communities (Partner Agencies) and produces approximately 230 million gallons per year of tertiary-treated recycled water for beneficial reuse.
On January 25, 2010, City Council approved the Recycled Water Salinity Reduction Policy, including a goal of reducing the recycled water salinity as measured by total dissolved solids (TDS) to under 600 parts per million (ppm).1 In the following years, the City and the other Partner Agencies completed several projects to reduce infiltration in the collection system. The repairs reduced the salts entering the RWQCP but not by enough to reach the target. In 2016, City Council approved the Preliminary Conceptual Design Report for a phased Local Salt Removal Facility (Local Advanced Water Purification System or Local AWPS).2 On March 8, 2021, City Council approved a contract with Black & Veatch to provide design and engineering services for the Local AWPS.3 The original contract assumed a design time of 12 months followed by a construction duration of 18 months. The estimated completion date of the project was June 2024.
Construction solicitation was delayed due to approval of financing plans and completion of the Site and Design planning entitlement review process.4,5 Staff requested a contract extension to cover construction solicitation and potentially construction phase without amending compensation because the construction status was still unknown. Amendment No. 1 to the contract was approved administratively and added hourly rates for 2023 through 2026. In June 2024, City Council approved Amendment No. 2 to extend the term through December 31, 2027.6
In May 2025, City Council approved Amendment No. 2 to the Recycled Water Supply Agreement with Mountain View and a construction contract with Anderson Pacific 1 City Council, January 25, 2010; Agenda Item #9, SR #111:10, https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2010/cmr-111-10.pdf
2 City Council, May 16, 2016; Agenda Item #6, SR #6458, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=78649&dbid=0&repo=PaloAlto&searchid=fd3f0cdf- 30d7-4e30-99a0-85894eadb24e&cr=1
3 City Council, March 8, 2021; Agenda Item #3, SR #11782, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86747&dbid=0&repo=PaloAlto 4 City Council, October 16, 2023; Agenda Item #10, SR #2308-1863, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82521&dbid=0&repo=PaloAlto&searchid=08a2adc7 -b7ad-47de-895d-b39465a23a1d
5 City Council, May 13, 2024; Agenda Item #11, SR #2404-2760, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82830&dbid=0&repo=PaloAlto 6 City Council, June 10, 2024; Agenda Item #8, SR #2404-2881, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82882&dbid=0&repo=PaloAlto&searchid=5ea5efc2- 682b-42ca-8087-78e4ec18320d
(C25193197). The construction notice to proceed was issued on June 18, 2025. At that time, Black & Veatch started providing engineering services during construction.13
ANALYSIS
Staff recommends extending contract C21178333 to December 31, 2028, and increasing compensation to Black & Veatch for additional engineering services during construction. The original contract with Black & Veatch assumed a construction duration of 18 months. During design and permitting, several changes to the project’s scope increased the construction duration. During construction solicitation, the construction duration was further increased to 36 months based on input from bidders. The new estimated completion date is May 2028.
When the construction contract was awarded, staff expected that an amendment would be needed to cover the longer construction duration but did not yet have sufficient information to establish a revised budget. Staff has since received additional information allowing negotiation of the recommended amendment.
Staff recommends that City Council approve Amendment No. 3 to add funds in the amount of $963,160 to the contract to address the delayed construction start date, additional construction duration, and for:
1. Additional design services to reroute an existing sewer line that needed to be relocated
2. Additional bid period services associated with responding to bidder’s questions and issuing design addenda. During solicitation, 200 questions from prospective bidders were received, beyond the original budgeted amount.
3. Additional engineering services during construction associated with a larger volume of construction documents, engineering submittals and resubmittals, and requests for information from the contractor.
4. Additional project management services associated with the additional duration of the project.
5. Updated costs, accounting for increases in hourly rates for providing engineering services during construction for a longer period of time. The consultant agreed to hold their rates through the end of 2022 to help with the City’s finances during the COVID-19 pandemic. Consultant held the same rates through the end of 2023. With the revised contract expiration date, most of the engineering services during construction are being completed between 2025 and 2028 and the corresponding increase in cost has been significant.
Amendment No. 3 will revise the total contract amount for a not-to-exceed $4,146,109 including $3,769,190 for basic services and $376,919 for additional services. 13 City Council, May 19, 2025; Agenda Item #10, SR #2503-4327, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83405&dbid=0&repo=PaloAlto
FISCAL/RESOURCE IMPACT
Funding of $963,160 is available in the Local Advanced Water Purification System Capital Improvement Program project (WQ-19003) in the Wastewater Treatment Fund Adopted Fiscal Year 2026 Capital Budget. The cost of Black & Veatch’s additional engineering services during construction will cause the total approved budget from the City of Mountain View to be exceeded if all other project costs remain unchanged. These additional costs will be initially paid by the City from available project contingency and covered by external funding from Valley Water and the U.S. Bureau of Reclamation (USBR) grant proceeds. Staff will work to limit the use of construction contingency to stay within the overall approved budget. If the full construction contingency is ultimately needed, staff will coordinate with the City of Mountain View and will return to City Council with the required budget amendment.
STAKEHOLDER ENGAGEMENT
In addition to the study sessions and regular meetings with City Council noted above, staff held predesign and design workshops with project partners (Mountain View and Valley Water) to obtain stakeholder feedback throughout the process. Staff has provided updates on the project through Joint Recycled Water Meetings with Palo Alto Council Members, Mountain View Council Members, and Valley Water Board Members and through regular updates to the RWQCP Capital Improvement Program website. The staff report for the approval of the planning entitlement for May 13, 2024, City Council meeting describes the full stakeholder engagement process.15
ENVIRONMENTAL REVIEW
Council action on this item is within The City Council previously certified the Palo Alto Recycled Water Project Environmental Impact Report (EIR) to include implementation of the City of Palo Alto Recycled Water Project.16 17 The Local AWPS was identified as a potential mitigation measure in the previously adopted EIR.
An addendum to the EIR was prepared to evaluate the Local AWPS impacts; the addendum determined that the Local AWPS would not result in new or more severe significant impacts than those identified in the EIR (SCH 2011062037).
ATTACHMENTS
Attachment A: Amendment No. 3 to Contract C21178333 with Black & Veatch APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
15 City Council, May 13, 2024; Agenda Item #11, SR #2404-2760, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82830&dbid=0&repo=PaloAlto 16 City Council Resolution 9548; 2015;
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=53925&dbid=0&repo=PaloAlto 17 City Council Resolution 9549; 2015;
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=53928&dbid=0&repo=PaloAlto