TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: John Ristow
SUBJECT: See Below DATE: July 28, 2025
Approved
Date:
8/5/25
COUNCIL DISTRICT: Citywide
SUBJECT: Actions Related to the 10362 – 2024 Local Streets Remove & Replace Project
RECOMMENDATION
Approve a $35,000 increase to the construction contingency amount of $483,280 for a revised total contingency amount of $518,280 for the 10362 – 2024 Local Streets Remove & Replace Project.
SUMMARY AND OUTCOME
Approval of the increase in construction contingency will provide the funding necessary to compensate for additional work that was needed to complete the surface preparation on the project streets ahead of the 2024 Local Streets Sealing Project.
BACKGROUND
On June 20, 2024, the Director of Transportation awarded the contract for the 10362 – 2024 Local Streets Remove and Replace Project to O’Grady Paving, Inc. in the amount of $4,832,800 with a 10% contingency in the amount of $483,280. The project provided the preparation work for more than 61 miles of streets in the City of San Jose’s Local and Neighborhood Streets Network that were to be sealed through the 2024 Local Streets Sealing Project later in the year. Preparation work consisted of removing and replacing moderate to severe distressed pavement areas (also known as digouts) and filling cracks in the roadway.
COUNCIL AGENDA: 8/19/25
FILE: 25-829
ITEM: 2.14
HONORABLE MAYOR AND CITY COUNCIL
July 28, 2025
Subject: Actions Related to the 10362 – 2024 Local Streets Remove and Replace Project
The City issued a Notice to Proceed to O’Grady, Inc. on August 12, 2024. Construction was substantially completed by October 30, 2024.
ANALYSIS
The original scope included 74,000 square yards of digout areas. During construction, project inspectors identified an additional 10,900 square yards with moderate to severe distress along various streets that needed to be addressed to provide the necessary preparation work ahead of the 2024 Local Streets Sealing Project. The additional areas requiring repair resulted in an increase in several line items of the schedule of quantities and increased the total digout area to a total of 84,900 square yards by the end of the project, which resulted in an overage of $599,500 towards the project. All but $35,000 of the overage has been covered by the project and the already approved project contingency.
This proposed increase to the contingency will provide compensation to the contractor for work previously performed during the project’s construction.
EVALUATION AND FOLLOW-UP
No additional follow-up with City Council is expected at this time.
COST SUMMARY/IMPLICATIONS
1. COST OF PROJECT/AMOUNT OF RECOMMENDATION:
TOTAL FOR CONTRACT $5,316,080.00
Contract Amount $4,832,800.00
Contingency $483,280.00
TOTAL PROJECT COSTS $5,351,072.50
Total Payments Made $5,090,168.87
Retention to Be Paid Out $260,903.63
REMAINING PROJECT COSTS1 ($34,992.50)
1 Difference between “Total for Contract” and “Total Project Costs.”
2. SOURCE OF FUNDING: 486 – Pavement Maintenance – VTA Measure B 2016.
HONORABLE MAYOR AND CITY COUNCIL
July 28, 2025
Subject: Actions Related to the 10362 – 2024 Local Streets Remove and Replace Project
3. OPERATING COST: There is no expected annual operating and maintenance impact to the General Fund.
BUDGET REFERENCE
The table below identifies the fund and appropriation to increase the construction contingency recommended as part of this memorandum and remaining project costs resulting from project delivery and construction.
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Amount for
Contract
2025-2027
Proposed
Capital
Budget Page2
Last Budget
Action (Date,
Ord. No.)
486
403Q
Pavement
Maintenance –
VTA 2016
Measure B
$26,680,000
$35,000 827
6/17/2025,
Ord. No.
31230
2 The 2025-2027 Proposed Biennial Capital Budget was released on April 26, 2025, and was adopted on June 17, 2025 by City Council.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, the City Manager’s Budget Office, and the Planning, Building and Code Enforcement Department.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the August 19, 2025 City Council meeting.
The project construction is completed, and no additional notification will be provided.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
HONORABLE MAYOR AND CITY COUNCIL
July 28, 2025
Subject: Actions Related to the 10362 – 2024 Local Streets Remove and Replace Project
CEQA
Environmental status granted by the Planning, Building and Code Enforcement Department. Categorically Exempt, File No. ER24-313, CEQA Guidelines Section 15301(c), Existing Facilities.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
John Ristow
Director of Transportation
For questions, please contact Jennifer Seguin, Deputy Director, Department of Transportation, at [email protected].