REPORT TO THE CITY COUNCIL
FROM: PAUL AMICO, PE, Director
Department of Public Utilities
BY: DEJAN PAVIC, PE, Licensed Engineer Manager
Department of Public Utilities - Utilities Planning & Engineering Division
DENISE SORIA, PE, MSCE, Licensed Professional Engineer
Department of Public Utilities - Utilities Planning & Engineering Division
SUBJECT
Title
RESOLUTION - Approving Reimbursement of Eligible Construction Costs in an Amount Which Exceeds the Engineer’s Estimate by More Than Ten Percent, for a Total Reimbursement Amount of $1,165,392.08 for the Construction of Improvements Related to the Fresno Unified School District Alternative Educational Campus and Administrative Building (Council District 5)
Body
RECOMMENDATIONS
Staff recommends that City Council adopt the Resolution approving reimbursement of eligible Construction Costs in an amount which exceeds the Engineer’s estimate by more than 10 (ten) percent, for a total reimbursement amount of $1,165,392.08 for the construction of improvements related to the Fresno Unified School District (FUSD) Alternative Education Campus and Administrative Building, now known as Farber Educational Campus.
EXECUTIVE SUMMARY
On May 13, 2022, the City of Fresno (City) and FUSD entered into an Infrastructure Reimbursement Agreement (Agreement) pertaining to the construction of off-site water infrastructure improvements and appurtenances at an Alternative Education Campus and Administrative Building (Farber Educational Campus) located at Assessor’s Parcel Number 470-021-01T (Project). The Project includes construction of a 16-inch replacement water main in the street formerly known as East Ventura Avenue from South Tenth Street westerly across the Project frontage, construction of a replacement 16-inch water main in the street formerly known as East Ventura Avenue between South Cedar Avenue and South Tenth Street, construction of an 8-inch replacement water main in South Tenth Street between the street formerly known as East Ventura Avenue and East Lane Avenue, and related appurtenances. The Engineer’s estimate of the eligible construction costs was $770,655.00.
FUSD constructed the required water mains, and they were accepted by the City on June 10, 2024. The actual construction costs total is $1,165,392.08, which exceeds the Engineer’s estimate by more than 10 (ten) percent. The Resolution authorizes payment of $1,165,392.08 to FUSD, as required by the Agreement.
BACKGROUND
On May 13, 2022, the City and FUSD entered into an Agreement for construction of off-site water infrastructure improvements and appurtenances at the Project. The Project includes construction of a 16-inch replacement water main in the street formerly known as East Ventura Avenue from South Tenth Street westerly across the Project frontage, construction of a replacement 16-inch water main in the street formerly known as East Ventura Avenue between South Cedar Avenue and South Tenth Street, construction of an 8-inch replacement water main in South Tenth Street between the street formerly known as East Ventura Avenue and East Lane Avenue, and related appurtenances.
The Agreement specifies that the City will reimburse FUSD for 100% of the cost of construction of the improvements. The Engineer’s estimate of the eligible construction costs was $770,655.00. Section 2.3 of the Agreement states that reimbursement of any eligible construction costs in excess of 10 (ten) percent of the Engineer’s estimate shall require Council approval. Further, FUSD must demonstrate, to the reasonable satisfaction of the Director of Public Utilities, that the amount incurred in excess of the Engineer’s estimate resulted from circumstances not caused by the Developer, its contractors or subcontractors, was beyond their control, and is justifiable.
Construction of the 16-inch public water main in the street formerly known as East Ventura Avenue and the 8-inch public water main in South Tenth Street is now complete and the Department of Public Utilities (DPU) needs to reimburse the FUSD for constructing the public water mains and appurtenances.
The proposed Resolution will authorize payment to FUSD for the actual construction costs of constructing approximately 1,297 linear feet of an 8-inch diameter and 1,587 linear feet of a 16-inch diameter public water mains, and related appurtenances, including traffic control and permanent trench resurfacing costs. The City has determined that the eligible reimbursement amount for construction of the Project is $1,165,392.08, which exceeds the Engineer’s estimate by more than 10 (ten) percent. The additional construction costs are itemized in Exhibit A to the Resolution and are attributed to change orders resulting from adjustments to resolve utility conflicts encountered in the field and the City erroneously charging connection fees to FUSD for relocating existing water meters. The field changes related to the utility conflicts were authorized by the City’s Construction Management Division. Consequently, the amount incurred in excess of the eligible construction costs per the Agreement resulted from circumstances not caused by FUSD, its contractors or subcontractors, was beyond their control, and is justifiable.
ENVIRONMENTAL FINDINGS
On May 12, 2022, Council adopted Resolution 2022-108 considering Mitigated Negative Declaration (MND) SCH No. 2018101040 and adopting findings pursuant to CEQA Guidelines section 15162. Council determined that no substantial changes have occurred with respect to the circumstances under which the prior MND was adopted; and, that no new information, which was not known and could not have been known at the time that the prior MND had become available. Accordingly, Council determined that a subsequent Environmental Impact Report (EIR) or MND was not required.
The present action is to authorize an increase in the reimbursement amount, as required by the terms of the Agreement. An analysis has been performed pursuant CEQA Guidelines §15162 to determine whether subsequent environmental review is required for this approval. Based upon this analysis the following findings are made to support the determination that no subsequent environmental review is required:
1. No substantial changes are proposed in the Project which will require major revisions of the previous MND due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. The Project was completed within the scope of work and the footprint of the approved MND. The additional construction costs, which are itemized in Exhibit A to the Resolution, are attributed to change orders resulting from adjustments to resolve utility conflicts encountered in the field and the City erroneously charging connection fees to FUSD for relocating existing water meters. The field changes related to the utility conflicts were authorized by the City’s Construction Management Division. They did not result in a change to the scope of work assessed in the MND.
2. No substantial changes have occurred with respect to the circumstances under which the Project was undertaken which will require major revisions of the previous MND or Addendum due to the involvement of new significant environmental effects or substantial increase in the severity of previously identified significant effects. As noted above, the Project was completed within the scope of work and the footprint of the approved MND. To the extent adjustments were necessary to respond to utility conflicts, this did not result in a change to the scope of work assessed under the MND.
3. There is no new information, which was not known and could not have been known at the time of the previous Mitigated Negative Declaration showing that:
a. The Project will have one or more significant effects not discussed in the previous MND;
b. Significant effects previously examined will be substantially more severe than shown in the previous MND;
c. Mitigation measures or alternatives previously found to be not feasible are now feasible and would substantially reduce one or more significant effects of the Project.
Based upon these findings, it has been determined that no further environmental documentation is required for this approval.
LOCAL PREFERENCE
Local preference was not implemented as this item does not involve the bid or award of a construction or services contract.
FISCAL IMPACT
There is no impact to the General Fund. Funding for this Project is included in the Fiscal Year 2026 Water Enterprise Fund (40101).
Attachments:
Infrastructure Reimbursement Agreement
Resolution
Location Map
Vicinity Map