REPORT TO THE CITY COUNCIL
August 31, 2017
FROM: THOMAS C. ESQUEDA, Director
Department of Public Utilities
BY: MICHAEL CARBAJAL, Planning Manager
Department of Public Utilities - Utilities Planning & Engineering
GLENN A. KNAPP, PE, Professional Engineer
Department of Public Utilities - Utilities Planning & Engineering
SUBJECT
Title
Approve Change Order No. 10 to the construction contract with W.M. Lyles Company for the City of Fresno’s Southeast Surface Water Treatment Facility to increase the lump sum scope of work by $198,063 (Citywide)
Body
RECOMMENDATION
Staff recommends that City Council approve Change Order No. 10 to the construction contract for the City of Fresno’s (City) Southeast Surface Water Treatment Facility (Facility) to increase the lump sum scope of work by $198,063 for necessary onsite and offsite project modifications.
EXECUTIVE SUMMARY
On November 19, 2015, City Council awarded a contract to W.M. Lyles Company (Contractor) for construction of the Facility in the amount of $158,766,000. Notice to Proceed (NTP) with construction was issued on December 31, 2015. In order to maintain the project schedule, this change order incorporates minor credits and other necessary onsite and offsite construction modifications in the amount of $198,063, for a net total increase of $2,338,038 (1.5%), through ten (10) Contract Change Orders (CCO’s), resulting in a new total construction contract value of $161,104,038.
BACKGROUND
On February 26, 2015, the City Council adopted a five-year water utility rate plan to finance the construction of a five-year water capital plan totaling approximately $429 million. The five-year capital plan included the construction the Facility to allow the City to more effectively use its existing surface water allocations and entitlements from Millerton Lake and Pine Flat Reservoir. Consistent with Council-approved rate plan and capital plan, the Facility will be constructed with a permitted capacity of 54 Million Gallons per Day (MGD), and the City will petition the State to allow the Facility to be re-rated to 80 MGD through a one-year performance demonstration testing procedure.
On September 10, 2015, the City Council approved acceptance of a $195,489,000 State Revolving Fund (SRF) Low Interest Loan through the State Water Resources Control Board (SWRCB) for construction of the Facility. The construction contract is fully funded through this loan.
W.M. Lyles Company submitted the low bid price of $158,766,000 on October 13, 2015, a contract to construct the Facility was awarded on November 19, 2015, and NTP was issued on December 31, 2015. The Facility is currently scheduled complete construction in September 2018.
Subsequent to NTP, a total of nine (9) CCO’s have been executed to date, resulting in a net total increase to the contract value of $2,139,975 which includes the following:
• Value engineering cost reductions totaling $1,862,611;
• Addition of supervisory control and data acquisition (SCADA) work, which was included in the construction budget but planned to be performed through a separate contract, totaling $2,493,750;
• Miscellaneous other added and deleted work, totaling $965,451, and
• Additional design modifications and installation of a calcium hydroxide feed system $543,385
In brief summary, this CCO No. 10 identifies necessary modification of offsite pipeline backfill and roadway improvements adjacent to the project site along Olive Avenue due to significant rain events during early spring of 2017. Other Change Order items include minor credits for electrical substation modifications, and other onsite and offsite project components as further described in the attached Change Order. The intent was to make these changes without delaying or undoing any aspect of the construction process. Implementation of this Change Order will increase the lump sum cost by $198,063 with no increase to contract time related to Change Order items, while providing availability of three unused Adverse Weather Days. These increased costs will be covered by contingencies within the project budget, and funded through the above noted SRF Low Interest Loan.
This Change Order No. 10 incorporates the noted activities into the contract resulting in a new total construction contract value of $161,104,038.
ENVIRONMENTAL FINDINGS
Approval of a change order for an existing construction contract is not a “project” for the purposes of the California Environmental Quality Act (CEQA), and does not involve commitment to any specific project which may result in a potentially significant physical impact on the environment as contemplated by CEQA Guidelines section 15378.
LOCAL PREFERENCE
Local preference was not implemented because this action pertains to an existing construction contract.
FISCAL IMPACT
There is no impact to the General Fund. This work will be funded by the SRF Low Interest Loan through the SWRCB. The cost of debt service for this state low interest loan was incorporated into the water rate model used to create the five-year utility rate plan that was adopted by City Council on February 26, 2015.
Attachment: Change Order No. 10