PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.F
Meeting Date: August 19, 2025
TITLE:
Authorization for Change Orders #1 and #2 with Souza Engineering Contracting, Inc. dba Souza Construction and Notice of Completion for the Oak Park Medical Plaza Parking Lot Repair Project
RECOMMENDATION:
1. Adopt a Resolution authorizing the City Manager to execute Change Order #1 in the amount of $50,356.41 and Change Order #2 in the amount of ($25,435.30) for a total net increase of $24,921.11 with Souza Engineering Contracting, Inc. dba Souza Construction for the Oak Park Medical Plaza Parking Lot Repair Project;
2. Accept the Oak Park Medical Plaza Parking Lot Repair Project as complete;
3. Authorize the City Manager to sign, and the City Clerk to record, a Notice of Completion for the project.
DISCUSSION:
On April 1, 2025, the City Council awarded a contract to Souza Engineering Contracting, Inc. dba Souza Construction (Souza Construction) for the removal and replacement of damaged asphalt and sub-base in the privately-owned parking lot located at 901 N. Oak Park Boulevard. The parking lot was damaged when a valve that is part of City-owned water infrastructure that runs beneath the parking lot ruptured.
During the course of construction, the contractor was unable to achieve required compaction of the soils due to an unexpected amount of water underground. Additional measures were required of the contractor that resulted in a change in the character of the work, slowing progress and increasing costs. The additional work was completed by Souza Construction on a time and materials basis.
Construction of the project is now complete, and the contractor has provided its documentation of the actual cost of the added work. The total cost of the proposed Change Order #1 is $50,356.41. Change Order #2 is a balancing change order which accounts for underruns in actual quantities of several bid items, resulting in a contract deduction of ($25,435.30). The net increase from both change orders is $24,921.11, bringing the total construction contract amount to $132,442.11.
Conclusion and Recommendation
Staff recommends the Council adopt a resolution (Attachment 1) authorizing the City Manager to execute Change Order #1 (Attachment 2) and Change Order #2 (Attachment 3) to the existing Souza Construction contract. Souza Construction has completed the contracted services, and the Oak Park Medical Plaza Parking Lot Repair Project has been completed in accordance with the plans, specifications and contract documents. Staff also recommends that the City Council accept the project as complete Council Agenda 8-19-2025 9.F-1
and authorize the Notice of Completion (Attachment 4) to be recorded at the County Clerk’s office.
FISCAL IMPACT:
The fiscal impact of adopting the attached resolution and approving Change Orders #1 and #2 is an additional $24,921.11. There is sufficient budget in the Fiscal Year (FY) 2026 Water Construction Fund North Oak Park Repair project account to support this cost.
ATTACHMENTS:
1. Resolution
2. Change Order #1
3. Change Order #2
4. Notice of Completion
Prepared by:
Erin Olsen, Senior Management Analyst
Submitted by: Rosemarie Gaglione, PE, Director of Public Works City Manager Approval:
Council Agenda 8-19-2025 9.F-2
RESOLUTION NO. R-2025-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA AUTHORIZING THE CITY MANAGER TO EXECUTE CHANGE ORDER #1 IN THE AMOUNT OF $50,356.41 AND CHANGE ORDER #2 IN THE AMOUNT OF ($25,435.30) FOR A TOTAL NET INCREASE OF $24,921.11 WITH SOUZA ENGINEERING CONTRACTING, INC. DBA SOUZA CONSTRUCTION FOR THE OAK
PARK MEDICAL PLAZA PARKING LOT REPAIR PROJECT
WHEREAS, the privately-owned parking lot and driveway located at 901 N. Oak Park Boulevard was damaged when a valve that is part of City-owned water infrastructure that runs beneath the parking lot ruptured; and
WHEREAS, on April 1, 2025, the City Council awarded a contract to Souza Engineering Contracting, Inc. dba Souza Construction (Souza Construction) for the removal and replacement of damaged asphalt and sub-base in the parking lot; and WHEREAS, during the course of construction several unforeseen issues arose resulting in a change in the character of the work, and work was completed by Souza Construction on a time and material basis; and
WHEREAS, construction of the project is now complete, and the contractor has provided its documentation of the actual cost of the added work; and WHEREAS, underruns in actual quantities used of several bid items is documented in a balancing changer order; and
WHEREAS, there is sufficient budget in the Fiscal Year 2026 Water Construction Fund North Oak Park Repair project account to support this cost.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby authorizes the City Manager to execute Change Order #1 in the amount of $50,356.41 and Change Order #2 in the amount of ($25,435.30) for a total net increase of $24,921.11 with Souza Engineering Contracting, Inc. dba Souza Construction, in substantially the form attached to staff’s report dated August 19, 2025, for the Oak Park Medical Plaza Parking Lot Repair Project.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 19th day of August 2025, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Council Agenda 8-19-2025 9.F-3
Attachment 1
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and official seal of the City of Pismo Beach on _______________________.
________________________
Erica Inderlied, City Clerk
Council Agenda 8-19-2025 9.F-4
Attachment 1
No 1
Project:
Date of Issuance
Contractor:
You are directed to make the following changes in the Contract Documents.
Change in Contract Price
Original Contract Price:
$10 days
No. N/A to No. N/A to
No. N/A No. N/A
$0 Days
Contract Time Prior to this Change Order:
$10 days
Net change of this Change Order:
$0 days
$10 days
Recommended:Recommended:
by by
Approved:Approved:Approved:
Rosemarie Gaglione, PE Jorge Garcia Contractor
Director of Public Works City Manager
157,877.41
The amount and time provided in this contract change order are a full and final accord and satisfaction of all costs and time directly and indirectly related and all other claims related hereto are hereby waived. The Contractor has reviewed the plans and specifications related to this change order and all changes thereto are accounted for in the attachment labeled "Attachment A". 107,521.00
0.00 Net increase (decrease) of this Change Order
Contract Price with all approved Change Orders
Contract Price Prior to this Change Order
50,356.41
Contract Time with all approved Change Orders:
Previous Change Orders:
Purpose of Change Order:Discovered saturated soil during excavation. Replacement of two valves Attachments: (List documents supporting change)
Change in Contract Time:
Original Contract Time:
Previous Change Orders:
Souza Construction
Description:Replace two (2) water valves. Change of character of the work. Original scope
CHANGE ORDER
107,521.00
(Instructions Follow)
August 8, 2025
Oak Park Medical Plaza Parking Lot
requested the dig out and place/compact the same soil. Scope was revised to remove and haul off the saturated soil, install geofabric and replace with base material.
CouncilpAgendap8JF9J2"25 9.F-5
Attachment
No 2
Project:
Date of Issuance
Contractor:
Change in Contract Price
Original Contract Price:
$10 days
No. 0 to No. 0 to
No. 1 No. 1
$0 Days
Contract Time Prior to this Change Order:
$10 days
Net change of this Change Order:
$0 days
$10 days
Recommended: Recommended:
by by
Approved: Approved: Approved:
Rosemarie Gaglione, PE Jorge Garcia Contractor
Director of Public Works City Manager
Souza Construction
CHANGE ORDER
August 8, 2025
Oak Park Medical Plaza Parking Lot
107,521.00
(Instructions Follow)
You are directed to make the following changes in the Contract Documents.
Description:BALANCING CHANGE ORDER
Purpose of Change Order:Full or partial descope of line items 3, 5, 7, & 8 Change in Contract Time:
Original Contract Time:
Attachments: (List documents supporting change)
Contract Time with all approved Change Orders:
Previous Change Orders:
132,442.11
The amount and time provided in this contract change order are a full and final accord and satisfaction of all costs and time directly and indirectly related and all other claims related hereto are herby waived. The Contractor has reviewed the plans and specifications related to this change order and all changes thereto are accounted for in the attachment labeled "Attachment A". 157,877.41
50,356.41
Net increase (decrease) of this Change Order
Contract Price with all approved Change Orders
Contract Price Prior to this Change Order
(25,435.30)
Previous Change Orders:
CouncilRAgendaR8FL9F"Y"5 9wFF6
AttachmentR3
RECORDING REQUESTED BY:
WHEN RECORDED, RETURN TO:
CITY CLERK
CITY OF PISMO BEACH
760 MATTIE ROAD
PISMO BEACH, CA 93449
NO TRANSFERORS
This document is recorded for the benefit of the City of Pismo Beach, a Municipal Corporation, and is exempt from fee per Government Code Section 27383.
NOTICE OF COMPLETION AND ACCEPTANCE
FOR OAK PARK MEDICAL PLAZA PARKING LOT REPAIR PROJECT
NOTICE IS HEREBY GIVEN by the City of Pismo Beach in the County of San Luis Obispo, State of California, as follows:
1.That on the 19th of August 2025, the project hereunder described was considered completed and accepted by the City Council of the City of Pismo Beach.
2.That the description of said project is the construction of parking lot repairs, for the City of Pismo Beach.
3.That the name of the political subdivision controlling said project, and the owner of the land upon which the project was constructed, is the City of Pismo Beach, in the County of San Luis Obispo, State of California, whose address is 760 Mattie Road, Pismo Beach, CA 93449.
4.That the name of the owner/contractor on said project is Souza Engineering Contracting, Inc. dba Souza Construction, 4027 Santa Fe Road, San Luis Obispo, CA 93401.
5.The name of the Surety on the project is Everest National Insurance Company, 100 Everest Way, Warren, NJ 07059.
I certify (or declare) under penalty of perjury that the foregoing is true and correct.
Date:
Jorge E. Garcia, City Manager
Attest:
Erica Inderlied, City Clerk
Council Agenda 8-19-2025 9.F-7
Attachment 4