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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: September 14, 2026
Report #:2603-6104
TITLE
Approval of Contract Number C27197641 with A3 Pipeline in the Amount Not-to-Exceed $2,466,255 for the Sewer Lateral Replacement Project (WC-99013) at various locations across the City; Authorization for the City Manager or Designee to Negotiate and Execute Related Change Orders Not-to-Exceed $246,626 for a Total Not-to-Exceed Amount of $2,712,881 for a Three-Year Term. CEQA Status: Exempt under CEQA Guidelines 15302 (Replacement or Reconstruction of Existing Facilities).
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute contract C27197641 with A3 Pipeline1 in an amount Not-to-Exceed $2,466,255 for the Sewer Lateral Replacement Project (WC-99013) at various locations across the City for a Three- Year Term; and
2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with A3 Pipeline for related additional but unforeseen work, in an amount not-to-exceed $246,626 or 10% of the contract amount. The total authorized not-to-exceed amount is $2,712,881.
EXECUTIVE SUMMARY
The Sewer Lateral Replacement Project (WC-99013) is part of the City Council-approved Capital Improvement Program (CIP) intended to improve the reliability of the City's wastewater collection system, address known defects, reduce the risk of sanitary sewer overflows, and reduce recurring maintenance activities.
1 Contract C27197641 with A3 Pipeline https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2026/august/c27197641-sewer-lateral-final.pdf
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The project focuses on replacing deteriorated public sewer laterals, which are the portions of the sewer laterals that extend from the public sewer main to the property line, and are referred to herein as the public sewer lateral.
The Sanitary Sewer Management Plan’s Sewer Overflows Alternative Program (SOAP) prioritized 210 public sewer laterals for replacement, based on severity of structural defects and frequency of maintenance work orders. The prioritized public sewer laterals were grouped into three sets of 70 public sewer laterals to support a Three-Year construction project, with approximately 70 public sewer laterals anticipated to be replaced each year. The City anticipates starting construction in September 2026 and completing the three-year construction project in June 2029.
BACKGROUND
The City of Palo Alto owns and operates a wastewater collection system that conveys wastewater from residential and commercial properties to the City of Palo Alto Regional Water Quality Control Plant (RWQCP). Sewer laterals provide the connection between individual properties and the wastewater collection system sewer main. The City is responsible for maintaining the public portion of the sewer lateral which is the portion of the sewer lateral that extends from the public sewer main to the property line, referred to herein as the public sewer lateral.
Over time, sewer laterals can deteriorate due to aging materials, root intrusion, ground movement, and other factors. Many of the existing, unimproved sewer laterals, whose age ranges from 30 to over 80 years, were constructed of materials such as vitrified clay pipe (VCP), acrylonitrile butadiene styrene (ABS), polyvinyl chloride (PVC), or asbestos concrete pipe (ACP).
These material types are more susceptible to deterioration over time including defects like cracks, fractures, and joint failures. These defects can result in requiring additional maintenance, and increased potential for backups or sanitary sewer overflows. Furthermore, these defects can allow stormwater inflow and groundwater infiltration (I&I) flows into the public sewer mains which further increase likelihood of sanitary sewer overflows and increased flows to be treated at the RWQCP.
Staff reviewed Sewer Overflows Alternative Program (SOAP) work order data and inspection records for approximately 2,454 public sewer laterals to identify sewer laterals with frequent maintenance needs or documented structural defects. From SOAP, 210 public sewer laterals were prioritized to improve system reliability and reduce recurring maintenance. Deteriorated public sewer laterals will be replaced with high-density polyethylene (HDPE) pipe, which provides improved durability, resistance to root intrusion and ground movement, and reduced I&I.
The 210 prioritized public sewer laterals were grouped into three sets of 70 laterals to support a three-year construction project. The first set of 70 laterals, which have experienced the highest number of work orders and the most severe structural defects, are recommended for 7 4
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replacement in the first year of the program, with the remaining laterals planned for replacement in subsequent years.
ANALYSIS
Project Description
The project will replace approximately 210 deteriorated laterals with HDPE pipe using either an open trench or pipe bursting installation method. In addition to pipe replacement, construction also includes reconnection to the public sewer main, excavation and backfill, restoration of pavement, landscaping, and other surface improvements disturbed during construction.
Notifications and Work Restrictions
The City anticipates starting construction in September 2026. The construction hours for this project are typically 8:00 AM to 5:00 PM, Monday through Friday. Streets with non-standard construction hours may have a 9:00 AM to 4:00 PM schedule. Depending on location and coordination with Public Works within high-traffic areas, construction time may be subject to additional restrictions, including potential construction breaks as required by the City.
The Contractor will schedule work to avoid construction activities along City-designated school routes during the first week of school in August 2027 and August 2028 and shall coordinate with the City for any additional location-specific restrictions.
The Contractor will coordinate with property owners and businesses within the project area to facilitate the replacement of public sewer laterals and minimize disruption. Before construction, the Contractor shall provide advanced notification to affected properties.
The City will distribute project notices a minimum of 30 days before the start of construction and will provide project information through the City’s website.
Solicitation Process
On April 23, 2026, the City posted a notice inviting formal bids (IFB) for the Sewer Lateral Replacement Project on OpenGov, the City's eprocurement system. The bid due date was May 19, 2026.
Table 1: Summary of Invitation for Bids
Project Bid Name/Number Sewer Lateral Replacement
Project (IFB-197641)
Proposed Length of Project 3-years
Number of Bid Packages downloaded by
Contractors 45
Total Days to Respond to Bid 44
Pre-Bid Meeting Yes (non-mandatory)
Number of Company Attendees at Pre-Bid
Meeting 7
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Number of Bids Received: 5
Public Link to Solicitation
https://procurement.opengov.co
m/portal/palo-alto-
ca/projects/258907
Base Bid Engineers Estimate $2,870,000
Base Bid Price for 3 years
(Basis for Bid Award)
From a low of $2,466,255 to a
high of $3,809,125
Base plus Supplementary Bid for 3 years
(Basis for Bid Evaluation)
From a low of $3,110,815 to a
high of $5,070,625
Bids were received from five bidders, as listed in the attached Bid Summary (Attachment B) and were reviewed for responsiveness and responsibility in accordance with City procurement requirements. Staff determined that all bids were responsive and responsible. Staff recommends awarding the contract to A3 Pipeline as the lowest responsive and responsible bidder in the amount of $2,466,255. A contingency of $246,626 (10%) is included to allow for timely resolution of unforeseen conditions, such as subsurface conflicts and/or site constraints, to keep the project on schedule.
Staff confirmed that A3 Pipeline holds an active license with the Contractor’s State License Board and is registered and in good standing with the Department of Industrial Relations (DIR).
Staff also contacted the listed references for A3 Pipeline and found that they performed satisfactorily on past construction projects for other clients.
FISCAL/RESOURCE IMPACT
Funding for the first year of the contract is available in the FY 2027 Wastewater Collection Fund capital budget under CIP Sewer Lateral Replacement Project (WC-99013). Funding for subsequent years is subject to annual budget approvals by City Council and satisfactory performance by the Contractor.
STAKEHOLDER ENGAGEMENT
The project has been coordinated with internal City departments, including Public Works, Utilities Operations and Transportation, to align construction activities and minimize impacts to the public. Work locations have been reviewed to identify potential constraints such as school routes, arterial streets, and business areas.
Property owners and residents within the project area will be notified in advance of construction activities. Notifications will be distributed prior to start of work and the Contractor will be responsible for providing project notices and coordinating access as needed. Additional communication may include updates through the City’s website and other communication channels.
Construction activities will be scheduled to minimize disruptions to residents, businesses and traffic. The Contractor will be required to comply with all applicable traffic control 7 4
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requirements, work hour restrictions and coordination with City staff throughout the duration of the project.
ENVIRONMENTAL REVIEW
The Sewer Lateral Replacement Project is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Guidelines Section 15302(c), which applies to the replacement or reconstruction of existing utility systems and facilities involving negligible or no expansion of capacity.
The project consists of replacing existing sewer laterals within the public right-of-way and will not result in significant increase in capacity or change in use. Therefore, no further environmental review is required.
ATTACHMENTS
Attachment A: Contract C27197641 with A3 Pipeline
Attachment B: Sewer Lateral Replacement Project Bid Summary APPROVED BY:
Alan Kurotori, Utilities Director
Staff: Nelson Schlater, Water, Gas, and Wastewater Engineering Manager