CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 8 Section Name: {{section.name}} Account Number: 72-4674 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: November 06, 2023
SUBJECT:
Dale Avenue Pumping Station Upgrade – Contingency Amendment RECOMMENDATION:
Approve an increase to the contingency reserve associated with the Anvil Builders, Inc. construction contract for the Dale Avenue Pumping Station Upgrade project in the amount of $2,000,000 for a total contingency of $7,500,000; and authorize the Public Works Director to issue change orders within the contingency amount.
BACKGROUND:
The Clean Water Program includes various projects to improve the City of San Mateo’s sanitary sewer system to improve flow management and increase capacity to prevent sanitary sewer overflows. Included in the Basins 2 and 3 project is the upgrade of the Dale Avenue Pump Station (DAPS or Project), which consists of the replacement of mechanical, electrical, and instrumentation equipment in the pump station, along with other upgrades and an increase in the pump station capacity.
On October 7, 2019, City Council awarded an agreement with Anvil Builders, Inc. (Anvil) for construction of the DAPS Upgrade project in the amount of $20,142,000; established a contingency reserve of $2,000,000; and authorized the Public Works Director to execute the agreement and issue change orders within the contingency amount. The contingency reserve was established to address and mitigate potential unknowns that may arise during construction and was approximately 10% of the agreement value.
On September 6, 2022, an increase to the contingency reserve in the amount of $3,500,000 was approved by City Council to bring the total contingency reserve to $5,500,000. To date, approximately $3.5 million of the approved contingency has been utilized to issue necessary negotiated change orders for the Project leaving $2.0 million in contingency funds to complete the Project. A summary of the executed contract change orders is included in Attachment 1.
The Project has encountered challenges during construction and additional work including, but not limited to, installing an emergency generator and associated electrical, mechanical, civil, and structural improvements are required to complete the work. Anvil has submitted a change order proposal for $2.73 million to address the required emergency generator changes on the Project. Staff is currently evaluating the emergency generator proposal and other changes to the Project, and continues to negotiate with Anvil.
Although the scope and fees associated with the project’s remaining work are still being negotiated between Anvil and staff, the remaining contingency balance of $2.0 million is insufficient to execute change orders required to complete the work and Project. In addition to the emergency generator installation proposal, described above, additional contract change orders are required and are in negotiation. For example, conditions of approval from the Planning Division in connection with Site Plan and Architectural Approval for the Project required screening of the generator from adjacent
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residential properties. This requires additional landscaping near the fence lines of the property. In addition, there are remaining safety and equipment protection improvements, and extended overhead costs that require contract cost increases as well. All change orders will be thoroughly reviewed by Public Works staff as well as the Construction Manager consultant prior to recommending approval to the “Clean Water Program Change Board.” The CWP Change Board is made up of the Director of Public Works, Deputy Director of Public Works, and Program Manager Advisor (Jacobs), and provides an additional vetting process to review proposed change orders and provide final approval to utilize contingency reserves.
To mitigate risks associated with potential delays, streamline procurements, and to provide flexibility for staff to negotiate and execute contract change orders in a timely manner, staff recommends increasing the contingency reserve by an additional $2,000,000 for a total contingency reserve of $7,500,000.
An alternative to approving the recommended contingency increase is directing staff to finalize negotiations of the potential contract change orders, then requesting City Council to approve the contract change orders at a later City Council meeting (likely in January 2024). This alternate approach will result in additional delays and extended overhead costs, since Anvil will not start work until a contract change order is executed. With the wet weather season approaching, there is urgency to have the contractor to begin work to install the foundation and underground conduits to avoid weather delays and have the foundation ready for arrival of the generator. Staff does not recommend this approach due to the added costs and risks associated with not having a permanent generator installed on a critical facility during the wet weather season.
BUDGET IMPACT:
The initial authorized agreement with Anvil for construction was in the amount of $20,142,000. The original contingency reserve established was $2,000,000 and a subsequent increase was approved for $3,500,000. This request increases the contingency further by $2,000,000 to a total of $7,500,000. This increase brings the potential total project cost to $27,642,000. Funding for this additional contingency amount is available within the Basins 2 & 3 Collection System Improvements (46s003) project.
ENVIRONMENTAL DETERMINATION:
The work addressed by this administrative report is being undertaken to support the Clean Water Program. This project is subject to the requirements of the California Environmental Quality Act (CEQA), the general components of which are included as part of the Final Programmatic Environmental Impact Report (Final PEIR) (SCH No. 201532006) that was prepared for the Clean Water Program. The Final PEIR was certified by City Council on June 6, 2016.
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Dale Ave Pump Station Improvements – Contract Change Order Summary
STAFF CONTACT
Tom Williams, Acting Engineering Manager
[email protected]
(650) 522-7307
Deryk Daquigan, Acting Public Works Deputy Director
[email protected]
(650) 522-7287