CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 10 Section Name: {{section.name}} Account Number: 72-4671 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: July 28, 2025
SUBJECT:
Wastewater Treatment Plant Upgrade Engineering Services During Construction – Amendment and Contingency Increase RECOMMENDATION:
Approve Amendment No. 13 to the agreement with HDR Engineering, Inc. for engineering services during construction for the Wastewater Treatment Plant Upgrade and Expansion Project extending the term of the Agreement from August 31, 2025 through May 31, 2026; increase the contingency reserve by $1,500,000; and authorize the Public Works Director to execute the amendment and issue change orders within the contingency amount.
BACKGROUND:
The City is currently under a Regional Water Quality Control Board Cease and Desist Order requiring improvements to its sewer collection system and Wastewater Treatment Plant (WWTP) to eliminate sanitary sewer overflows and unauthorized discharges of untreated or partially treated wastewater to San Francisco Bay. The Clean Water Program (CWP) includes several capital improvement projects that are currently under construction and intended to comply with the Cease and Desist Order. The WWTP Upgrade and Expansion Project (Project) is the largest of these projects, which will result in a new treatment plant for processing wastewater. The project designer is HDR Engineering Inc. (HDR). As the project designer, HDR has also been contracted by the City to provide engineering services during construction (ESDC).
Construction of the Project by Sundt Construction Inc. has been underway since May 2019. The Project is being delivered in three construction packages:
Package 1 - Site preparation: Work was substantially completed in July 2022. Package 2 - Foundation piles: Work was substantially completed in January 2022. Package 3 - WWTP process facilities, Administration Building, and Maintenance Warehouse: In progress.
Below is the history of the HDR ESDC agreement and the amendments to date:
June 2019, City Council approved an agreement with HDR to provide ESDC services for Package 1 of the Project in the amount of $450,221.
June 2020, City Council approved Amendment No. 1 to include ESDC for Package 2 in the amount of $419,830. November 2020, City Council approved Amendment No. 2 to include ESDC for Package 3 in the amount of $12,273,376 and authorized a contingency reserve of $2,244,000 to address future scope needs. Using the contingency budget from Amendment 2, the Public Works Director executed six additional amendments (Nos. 3 through 8) to HDR’s agreement.
July 2023, City Council approved an increase in the contingency reserve by $1,100,000 to address additional scope needs.
Using the increased contingency budget, the Public Works Director executed two additional amendments (Nos. 9 and 10) to HDR’s agreement.
CITY OF SAN MATEO
September 2024, City Council approved Amendment No. 11 to extend ESDC services for Package 3 in the amount of $1,607,808 and authorized an increase to the contingency reserve of $320,000 to address future scope needs. Using the increased contingency budget, the Public Works Director executed Amendment 12 to HDR’s agreement. The total contract value awarded to HDR for Packages 1, 2, and 3, including the additional amendments using contingency funds is $18,233,097.
Currently, the remaining contingency budget is $182,138.
On February 18, 2025, staff presented an update to Council for the WWTP Project including construction progress updates, causes for delays and budget increases, and updated schedules. Construction has been challenging while still progressing forward. The Project has required several significant changes, including changes related to the emergency generators fuel storage system, the fire suppression system in the new Administration Building, the chemical piping system, the aeration piping system, piping in the Biological Nutrient Removal Basin due to corrosion from dissimilar metals, timing issues related to the completion of leak testing of the concrete basins, and delays in remote monitoring system programming.
In the February 2025 Council meeting, staff also noted that due to risks, changes, delays, and unknowns identified over the past year, the WWTP Project’s estimate at completion has increased by approximately $25 million from $572.5 million to $597.5 million, which is still subject to change. To ensure there is sufficient funding to complete the WWTP Project, staff proposed a $25 million budget increase in the Fiscal Year 2025-26 Capital Improvement Program to fund the completion of the project. The proposed budget increase was approved by Council on June 16, 2025. This $25 million increase includes costs associated with the construction contract ($19.5 million) and extended soft costs ($5.5 million). Under the extended soft costs, $1.5 million is associated with additional ESDC services – mainly project management, resident engineer, startup and commissioning assistance, design modifications, cost estimating, and change order cost reviews. The $1.5 million budget increase is based on information known today and is subject to change as the project progresses closer to completion.
Overall, construction of Package 3 is approximately 96% complete and in its final stages. Construction of the new Administration Building and the Maintenance Warehouse is completed and occupied. Construction of the new treatment facilities is anticipated to be complete in mid-summer 2025. Clean water testing began in January 2025 and will be ongoing until the whole new plant is ready for process startup. Process seeding, startup, and performance testing is expected to occur in the July - August 2025 timeframe. The new WWTP is anticipated to be in full service by September 2025. Once liquids treatment operations are fully transitioned from the existing to the new WWTP, the remaining scope of work includes conversion of the existing aeration basins to wet weather flow equalization basins, and miscellaneous sitewide improvements including site lighting, landscaping, paving, signage, site security, etc. Currently, final completion and project closeout is forecasted to be at the end of May 2026.
The current term of HDR’s ESDC agreement is through August 31, 2025. As a result of the construction contract extension (approved and potential), extension of associated ESDC services is also necessary. Staff requests approval of Amendment No. 13 extending the term of HDR’s ESDC Agreement through May 31, 2026.
As noted above, the remaining contingency budget at this time is $182,138. Staff requests approval for increasing the contingency reserve by $1,500,000 for extension of HDR’s ESDC services to cover potential modifications to scope items that may be necessary to successfully complete the Project. Over the remaining project duration, staff will continue to be thorough in review and negotiations of potential amendments to manage the overall cost impact within the approved contingency budget.
BUDGET IMPACT:
Sufficient funds are available in the WWTP and Flow Management Upgrade and Expansion Project No. 46t003 to award Amendment No. 13 and increase the contingency reserve for HDR’s agreement for engineering services during construction.
ENVIRONMENTAL DETERMINATION:
CITY OF SAN MATEO
The City prepared a Final Programmatic Environmental Impact Report (Final PEIR) in accordance with the California Environmental Quality Act (CEQA) (SCH No. 2015032006). The PEIR was certified by City Council on June 6, 2016. In accordance with CEQA, the Final PEIR serves as the primary environmental compliance document for implementation of the Clean Water Program. The City prepared an Addendum to the Final PEIR that were approved on July 16, 2018 (Addendum 1) and April 15, 2019 (Addendum 2). This work is within the scope of the project evaluated in the PEIR and Addenda.
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att. 1 – Amendment
STAFF CONTACT
Thomas Ruark, Senior Project Manager
[email protected]
650-522-7280
Tom Williams, Engineering Manager
[email protected]
(650) 522-7307
Matt Fabry, Director of Public Works
[email protected]
(650) 522-7309