CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
8/23/2022
AGENDA ITEM
TO:
HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM:
THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
CHANGE ORDER NO. 3 FOR THE SPRING STREET BICYCLE LANE GAP CLOSURE PROJECT (PROJECT NO. 90.18003)
Summary:
Staff is recommending approval of Change Order No. 3 to the Public Works Contract with Sequel Contractors, Inc. (SCI) for the construction of the Spring Street Bicycle Lane Gap Closure Project (Project). The Change Order revises the contract to accommodate additional contract costs due to material cost escalation for asphalt concrete, utility manhole/valve adjustments, and a time extension due to design revisions and other project delays.
Recommendation:
Approve Change Order No. 3 to the Public Works Contract with SCI for the Project and authorize the Public Works Director to execute and administer Change Order No. 3.
Fiscal Impact:
Change Order No. 3 will increase the contract price with SCI by $317,531.86 for a total not-to-exceed contract amount of $2,025,175.19. The total budget for construction and construction engineering/administration is $3,202,000. The project budget currently contains $548,367.01 of unencumbered funds. Therefore, with approval of Change Order No. 3, the project is expected to finish within budget. Table 1 below lists all the funding sources for the Project.
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Table 1 Project Funding Sources
Strategic Plan Objectives:
Goal No.2: Ensure public safety is high priority.
Goal No.4: Maintain the public infrastructure.
Goal No.5: Ensure an enhanced quality of life for the residents.
Goal No.6: Promote a transparent and open government.
Background and Analysis:
On June 22, 2021, the Project was included in the FY 2021-22 Capital Improvement Project Budget and was approved by Council as part of the Annual Operating and Capital Budget.
On December 14, 2021, City Council approved a Public Works Contract with SCI for the Project for a term of 120 working days and a not-to-exceed contract amount of $1,690,430, plus a contingency of $167,638 consistent with the City’s Purchasing and Contracting Guidelines. The original engineer’s estimate for this scope of work was $2,394,875.00.
The Project involves the construction of approximately two lane-miles of new on-street (Class II) bike lanes and re-pavement of the roadway from 500 feet east of California Avenue to the easterly city limit at Junipero Avenue. The Project also includes corridor-wide improvements including revised striping, signage, safety lighting, pedestrian walkways, infrastructure for future street lighting, and pedestrian signal countdown heads.
Change Orders No. 1 and 2
Change Orders No. 1 and 2 totaling $17,213.33, are within the original contingency limit of $167,638.
The total amount for Change Order No.1 and 2 is within the approval limit of Public Works Director pursuant to the City’s Purchasing Guideline. The remaining contingency for the project is $150,424.67. Change Orders No. 1 and 2 consist of additional land surveying services for required ADA improvements at the intersections of California Avenue/E. Spring Street and Cherry Avenue/E.
Spring Street, installation of colored concrete for the ADA ramp at the southwest corner of Walnut Avenue/E. Spring Street, and additional costs associated with changes to the design, alignment, and materials of utility substructures for future street lighting such as conduit and pull boxes.
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Change Order No. 3
The total cost increase due to Change Order No. 3 is $317,531.86 (Attachment A). The amount of this change order exceeds the original contingency authorized by Council on December 14, 2021.
Change Order No. 3 is a result of material cost escalation for asphalt concrete pavement due to industrywide rising prices, primarily driven by rising crude oil prices and high demand in the construction industry. SCI notified staff of this issue and proposed a 25.6% cost increase to their original material price for rubberized hot mix asphalt and a 22.6% increase for conventional hot mix asphalt concrete. To verify this information, material quotes from multiple suppliers were obtained. In addition, staff verified that the California Statewide Crude Oil Price Index has risen by 28% since the time of SCI’s bid, as shown in Figure 1 below. Due to project delays outside of the control of SCI and the erratic nature of the current market conditions for crude oil, staff recommends approval of the material cost adjustment.
Figure 1 Crude Oil Price Index Increase
Change Order No. 3 includes additional costs for adjustment of existing utility valves and manholes before and after the paving operation. Utility adjustment was not originally in the Contractor’s scope of work, as the Contractor was required to schedule each utility company to adjust their manholes and/or valves prior to the paving operation. Utility owners in the area were notified of the project in July 2020, and confirmed that they would adjust their utilities at their expense. The utility owners were notified at the start of the City’s paving project and were invited to the preconstruction meeting on January 13th, 2022. On July 7, 2022 the utility owners were notified of the upcoming paving and were requested to adjust their utilities prior to SCI’s paving activities. The utility owners either did not respond to staff’s and the Contractor’s requests for adjustment, or did respond but did not have the resources to perform the adjustments in a timely manner. Change Order No. 3 will compensate SCI for performing these utility adjustments under the City contract. City staff will back charge each respective utility owner for this work per their original commitment to adjust the utilities at their expense. Of the $159,073.81 worth of anticipated utility adjustments under Change Order No. 3, Staff CITY OF SIGNAL HILL Page 3 of 4 Printed on 8/18/2022
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expense. Of the $159,073.81 worth of anticipated utility adjustments under Change Order No. 3, Staff estimates that $116,982.57 will be charged to the following respective utility owners: City of Long Beach, Frontier Communications, and Los Angeles County Sanitation District and Flood Control. The final amount will depend on the field measured quantities of actual work performed. The remaining amount will be paid by the City for adjustment of Signal Hill Water valves and manholes.
Change Order No. 3 also includes a time extension to the contract for delays outside of the control of SCI. The original contract stipulated a completion date of August 11, 2022. In March 2022 and April 2022, Southern California Edison provided revisions to the approved construction plan for the conduit and vaults to be installed on the project. The City incorporated these revisions and issued them to SCI. Acquisition of an encroachment permit from Caltrans for the work south of the I-405 freeway also contributed to the delay on the project. This permit was acquired by the City on August 1, 2022.
Change Order No. 3 extends the contractual completion date to November 4, 2022 as these delays were beyond the control of the Contractor.
Change Orders have been included on the Contract Amendment Register (Agenda Item 13b) to reflect the total contract amount and completion date.
Reviewed:
_________________________
Sharon del Rosario
Approved:
_________________________
Joe Hoefgen
Attachment
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