January 20, 2026
Public Works
DATE: January 20, 2026
TO: Mayor Martinez and Members of the City Council
FROM:
Daniel Chavarria, PE, Director of Public Works
Robert Armijo, PE, Deputy Director of Public Works / City Engineer
Bradley Harms, Environmental Manager
Subject:
Contract Amendment for the Fiscal Year 2024–25 Grade
5 Sanitary Sewer Rehabilitation Project
FINANCIAL IMPACT: The proposed $4,030,385 expenditure for the amendment is included within the approved fiscal year
2025-2026 budget in the Wastewater Enterprise Capital
Improvement Fund (Account String: 40322931-400708-
22230).
PREVIOUS COUNCIL
ACTION:
July 2, 2024
STATEMENT OF THE
ISSUE:
City staff is recommending City Council adopt a
resolution authorizing an amendment to the subcontract
issued by Veolia to APB General Engineering for
additional sanitary sewer line replacement and
rehabilitation work necessary to meet the City’s annual compliance obligations under the Baykeeper Settlement
Agreement.
RECOMMENDED ACTION:
ADOPT a resolution and APPROVE the issuance of Task
Authorizations to Veolia Water, on behalf of the City, to manage subcontracts with APB General Engineering,
VW Housen, and Questa Engineers for additional
sanitary sewer line replacement and rehabilitation work, with a contract amendment amount of $4,030,385,
thereby increasing the total payment limit to $6,554,348, including applicable markups – Public Works Department
(Bradley Harms 307-8094/Robert Armijo 620-5477).
AGENDA
REPORT
January 20, 2026
DISCUSSION:
The Baykeeper Settlement Agreement (Section 31.c, 2018) requires the City of Richmond to annually replace or rehabilitate at least two (2) miles of Grade 5 gravity sewer, measured on a five-year rolling average (Attachment 1). To comply with this requirement, the City must allocate adequate annual capital funding for these mandated improvements. Failure to meet this requirement exposes the City to potential enforcement actions and penalties.
On July 2, 2024, the City Council adopted Resolution 84-14 which authorized Veolia to manage a subcontract with APB General Engineering in the amount of $2,523,963 to implement a portion of the City’s annual Grade 5 sewer rehabilitation obligation (Attachment 2). The project was required to be substantially completed by June 30, 2025, to count toward the applicable fiscal year’s two-mile compliance requirement.
During construction, unforeseen field conditions—including abandoned lines, access limitations, and easement conflicts—reduced the number of sewer segments that could be constructed within the originally authorized scope. As a result, the originally approved subcontract amount was insufficient to achieve the two-mile annual rehabilitation threshold required under the Baykeeper Settlement Agreement.
To address this shortfall and maintain compliance, staff identified and authorized additional Grade 5 sewer segments for evaluation and construction under the same competitively bid unit pricing.
Delays in material procurement further impacted the project schedule. However, APB’s proposed costs remained reasonable and aligned with the original competitively bid pricing. No changes were made to the contractor’s unit prices, and the additional work was executed consistent with the original procurement framework.
Given the fixed June 30 compliance deadline and the regulatory consequences of falling short of the mandated mileage, staff determined that increasing the subcontract authority was necessary to complete sufficient sewer segments within the required timeframe.
Construction subsequently progressed, allowing the City to meet the Baykeeper- mandated two-mile requirement for FY 2024–25. This action ensured continued compliance with the Settlement Agreement and avoided potential enforcement exposure.
The total cost of authorized Task Authorizations is $6,554,348. This includes mark-up from Veolia ranging from 9 percent to 16.5 percent. These mark-ups are consistent with the City’s existing operations and maintenance contract with Veolia. The previously approved amount by City Council is $2,523,963. Thus, staff is requesting additional funding to be approved in the amount of $4,030,385. This will be funded from the
January 20, 2026
Wastewater Enterprise Capital Improvement Fund and is included in the 2025-26 Fiscal Year budget.
A summary of the Change Orders is listed in the table below (Attachments 3-9):
Item Project Proposal Veolia
Markup Subtotal Contingency
Base Project 24 Lines $ 1,755,800 $ 289,707 $ 2,045,507 $ 478,456 Change Order No 1
XP Lines
(collapsed) $ 225,308 $ 37,176 $ 262,484 $ - Change Order No 2
XP Lines
(collapsed) $ 206,296 $ 34,039 $ 240,335 $ - Change Order No 3
Remove
abandoned lines
Added 13 lines
additional lines. $ 1,645,356 $ 269,550 $ 1,914,906 $ - Change Order No 4
Pipe conflict
Issues $ 673,858 $ 60,647 $ 734,505 $ - Change Order No 5
Addition of 9
lines $ 865,974 $ 142,886 $ 1,008,860 $ - Change Order No 6
Removal and
replace
Manhole.
Add three (3)
line segments $ 298,499 $ 49,252 $ 347,751 $ - Total Task
Authorizations
Issued $ 5,671,091 $ 883,257 $ 6,554,348 Total Amount Adopted $ 2,523,963
Amount of Amended Contract Requested $ 4,030,385
City staff requests that City Council adopt a resolution approving an increase to the subcontracts issued to APB General Engineering, managed by Veolia, in the amount of $4,030,385 for the FY 2024–25 Grade 5 Sanitary Sewer Line Replacement Project. This action is necessary to meet the City’s compliance obligations under the 2018 Baykeeper Settlement Agreement.
The total cost of the project will not exceed $6,554,348 without prior City Council approval.
SYNERGISTIC POLICIES:
Strategic Goal 3.2 – Create new infrastructure
This project will repair/replace sanitary sewer infrastructure.
January 20, 2026
DOCUMENTS ATTACHED:
Attachment 1 – Baykeeper Settlement Agreement
Attachment 2 – Resolution 84-24
Attachment 3 – Task Authorization – Original Project Scope Attachment 4 – Task Authorization – Change Order No. 1
Attachment 5 – Task Authorization – Change Order No. 2
Attachment 6 – Task Authorization – Change Order No. 3
Attachment 7 – Task Authorization – Change Order No. 4
Attachment 8 – Task Authorization – Change Order No. 5
Attachment 9 – Task Authorization – Change Oder No. 6
Attachment 10 – Resolution