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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: August 5, 2026
To: Honorable Mayor and City Council Members
From: Eric Levitt, City Manager
Department: City Manager's Office
Subject: Reallocation of $200,000 in American Rescue Plan Act (ARPA) funds from the Façade Improvement Paintbrush
Program to the Navigation Center and Approval of
Amendment No. 2 to the Agreement with Mandeville
Modular Increasing the Not-To-Exceed Amount by
$717,620.64 (Ward 1)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California,
1. Adopt Resolution No. 2026-126 authorizing the reallocation of $200,000 in previously allocated American Rescue Plan Act (ARPA) funds from the Façade Improvement Paintbrush Program to the Navigation Center Project; and
2. Approve Amendment No. 2 to the Agreement for Design Services and Purchase and Delivery of Goods with Mandeville Modular increasing the not-to-exceed amount by $717,620.64 for a new total contract amount not to exceed $11,035,053.78; and
3. Approve Change Orders No. 12, 13, and 14 in the total amount of $717,620.64.
City Manager's Comments
The City Manager recommends approval of the $717,620.64 change order.
Executive Summary
The development of the City’s Navigation Center has incurred additional expenses totaling $717,620.64 in change orders from Mandeville Modular. These change orders resulted from design modifications made to the foundation, requiring additional waterproofing of the modular units at a cost of $272,240.64 (Change Order 12) and modifications to the mechanical cabinets at a cost of $137,130 (Change Order 13).
Additionally, due to protracted negotiations between the City and Mandeville Modular, where both parties worked towards an agreement on how to proceed with completing the project, a third change order in the amount of $308,250 is needed to remobilize the 3 4
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manufacturing of the modular units (Change Order 14).
Of the $717,620.64 in additional change orders, $214,420 is covered by an existing contingency that was specifically approved for the modular units. The remaining $503,200.64 will be funded by: (1) a transfer of $200,000 in ARPA funds from the Façade Improvement Program, which would go unspent if not reallocated to this project, and (2) authorizing $303,200.64 of the General Fund Loan for the Navigation Center to be used for these change orders.
Background
On December 4, 2024, the Mayor and City Council approved a hybrid Design Services and Goods Purchase Agreement with Mandeville Modular in the amount of $10,093,027 using American Rescue Plan Act (ARPA) funds. This agreement provides the City with both the design of the SB HOPE Campus, also known as the City’s Navigation Center, and the modular units that will make up the facility. Of the original contract amount, $8,776,545 was for design and modular manufacturing costs and $1,316,482 was for a 15% project contingency.
On November 5, 2025, the Mayor and City Council approved Amendment No. 1 to the agreement with Mandeville Modular, which increased the contract’s not-to-exceed amount by $224,406.14 using funds from the Inland Empire Health Plan (IEHP) grant for a new total contract cost of $10,317,433.14. The reason for this increase was due to two change orders that totaled $1,540,888.14, which exceeded the existing project contingency by $224,406.14. These change orders pertained to increases in steel prices as a result of inflation and other market forces, and increased design costs for adding additional facilities to the campus. As part of staff’s recommendation, Council also approved an additional project contingency outside of the contract in the amount of $214,420.00 using a grant from Molina Healthcare. This contingency would be used for any future unforeseen costs associated with the manufacturing of the modular units.
Current Design and Modular Unit Budget Amount
ARPA $10,093,027.00
Inland Empire Health Plan Grant $224,406.14
Molina Healthcare Grant $214,420.00
FUNDING
Total Funding $10,531,853.14
Site Design and Modular Unit Manufacturing Costs $8,776,545.00 Change Order 2 – Steel Price Increases $1,239,668.00
Change Order 3 – Additional Facilities $301,220.14
COSTS
Total Costs $10,317,433.14
Remaining Budget $214,420.00
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General Fund Loan
On January 21, 2026, the Mayor and City Council approved a loan from the City’s General Fund in the amount of $8,768,982 for the Navigation Center with the understanding that the City would work to secure additional outside funding for the project to help pay itself back. The loan was necessary to fully fund the construction agreement with the general contractor, Spec Construction Co Inc., who would be responsible for preparing the site for the modular units. The agreement with Spec Construction has a not-to-exceed amount of $15,037,000, and the City requested Council to approve $2,255,550 in additional project contingencies, for a total construction budget of $17,292,550. At the time, only $8,523,568 in federal, state, and local grant funding remained in the project’s available budget, which necessitated a loan of $8,768,982 from the City’s General Fund to cover the difference.
Since the approval of the General Fund loan, the City was able to secure $1,979,926.86 in additional funding for the project by reallocating unspent Community Development Block Grant (CDBG) and Community Development Block Grant CARES Act (CDBG- CV) funds to the project. These additional funds were approved by the Mayor and City Council on March 4, 2026, and reduced the amount of General Funds that would be used on the project (“General Fund Loan Savings”). It is important to note, however, that some of these reallocated funds were already accounted for in the original project budget, and additional project expenditures have since been approved by the Council utilizing these General Fund Loan Savings. As a result, $1,072,752.52 of the General Fund loan is currently available to be used.
COUNCIL APPROVED DEVELOPMENT FUNDING
Source Allocation Utilized Available
ARPA $11,344,785.00 $11,344,785.00 $0.00
CDBG $3,682,700.80 $3,682,700.80 $0.00
CDBG-CV $1,272,805.06 $1,272,805.06 $0.00
DIGNITY HEALTH GRANT $250,000.00 $250,000.00 $0.00
GENERAL FUND LOAN $8,768,982.00 $7,696,229.48 $1,072,752.52 HHAP-3 $808,385.00 $808,385.00 $0.00
HOME-ARP $4,299,671.00 $4,299,671.00 $0.00
INLAND EMPIRE HEALTH GRANT $1,500,000.00 $1,500,000.00 $0.00 LOMA LINDA UNIVERSITY DONATION $70,000.00 $70,000.00 $0.00 MOLINA HEALTHCARE GRANT $300,000.00 $300,000.00 $0.00
Total $32,297,328.86 $31,063,966.34 $1,072,752.52
Discussion
Over the past several months, the City and Mandeville Modular engaged in negotiations regarding the design and delivery of the modular units for the Navigation Center. During this process, the manufacturing of the modular units was demobilized while both parties worked towards finalizing various design components. This includes 3 4
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completing the fire life safety plans for the modular units, making modifications to the foundation’s height for improved ADA access, and updating other components impacted by the design modifications. As a result, Mandeville Modular submitted three contract change orders totaling $717,620.64:
•Change Order 12 – Lower Chassis Waterproofing $272,240.64 •Change Order 13 – Mechanical Cabinet Modifications $137,130.00 •Change Order 14 – Demobilization & Remobilization $308,250.00 Amendment No. 2 to the Agreement with Mandeville Modular increases the agreement’s not-to-exceed amount by $717,620.64 to pay for these change orders and establishes a new total contract cost of $11,035,053.78. The additional funds will consist of the following:
1. $214,420.00 from the Molina Healthcare Grant, which will be formally incorporated into the contract.
2. $200,000 in reallocated ARPA funds from the Façade Improvement Program. The Façade Improvement Program will not be able to spend these funds by the ARPA expenditure deadline, requiring them to be transferred to another ARPA-eligible project or be returned to the Federal Government.
3. $303,200.64 from the General Fund Loan.
Mandeville Modular Contract With Amendment No. 2 Amount ARPA $10,293,027.00
General Fund Loan $303,200.64
Inland Empire Health Plan Grant $224,406.14
Molina Healthcare Grant $214,420.00
FUNDING
Total Funding $11,035,053.78
Site Design and Modular Unit Manufacturing Costs $8,776,545.00 Change Order 2 – Steel Price Increases $1,239,668.00
Change Order 3 – Additional Facilities $301,220.14
Change Order 12 - Lower Chassis Waterproofing $272,240.64 Change Order 13 - Mechanical Cabinet Modifications $137,130.00 Change Order 14 - Demobilization & Remobilization $308,250.00 COSTS
Total Costs $11,035,053.78
Remaining Mandeville Modular Budget $0.00
Strategic Targets and Goals
Approving Amendment No. 1 to the Agreement with Mandeville Modular aligns with Key Target No. 3: Improved Quality of Life. The successful completion of the SB HOPE Campus will provide the City’s unhoused population with interim housing, 3 4
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recuperative care, and an extensive range of onsite supportive services designed to promote stability and self-sufficiency.
Fiscal Impact
The fiscal impact associated with this item is $717,620.64, which will be funded by $214,420 in Molinda Healthcare Grant Funds, $200,000 in ARPA funds transferred from the Façade Improvement Program, and $303,200.64 in General Funds. There is sufficient budget available to fully cover the costs associated with this item’s actions.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California,
1. Adopt Resolution No. 2026-126 authorizing the reallocation of $200,000 in previously allocated American Rescue Plan Act (ARPA) funds from the Façade Improvement Paintbrush Program to the Navigation Center Project; and
2. Approve Amendment No. 2 to the Agreement for Design Services and Purchase and Delivery of Goods with Mandeville Modular increasing the not-to-exceed amount by $717,620.64 for a new total contract amount not to exceed $11,035,053.78; and
3. Approve Change Orders No. 12, 13, and 14 in the total amount of $717,620.64.
Attachments
Attachment 1 – Resolution No. 2026-126 ARPA Transfer to Navigation Center Attachment 2 – Amendment No. 2 to the Agreement with Mandeville Modular Attachment 3 – Amendment No. 1 to the Agreement with Mandeville Modular Attachment 4 – Original Agreement with Mandeville Modular Attachment 5 – Change Order No. 12 with Mandeville Modular Attachment 6 – Change Order No. 13 with Mandeville Modular Attachment 7 – Change Order No. 14 with Mandeville Modular Ward:
First Ward
Synopsis of Previous Council Actions:
December 4, 2024 Mayor and City Council approved an Agreement for Design Services and Purchase and Delivery of Goods with Mandeville Modular in the amount of $10,093,027.
November 5, 2025 Mayor and City Council approved Amendment No. 1 for Design Services and Purchase and Delivery of Goods with Mandeville Modular increasing the not-to-exceed amount by $224,406.14 using funds from the Inland Empire Health Plan (IEHP) grant for a new total contract cost of $10,317,433.14.
CC: Eric Levitt, City Manager