BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Approve a Budget Adjustment in the Amount of $121,000 for the Construction Contract Contingency Increase of $121,000 for the Lower Calera Creek Flood Protection Project, Project No. 40174005, Contract No. CO666-1 (Milpitas, District 3).
End
RECOMMENDATION:
Recommendation
A. Approve a budget adjustment in the amount of $121,000 from the Lower Berryessa Creek Phase 1 Flood Protection Project to the Fiscal Year 2025 Lower Berryessa Creek Phase 2 Flood Protection Project; and
B. Approve an increase of $121,000 to the construction contract contingency sum for the Lower Calera Creek Flood Protection Project for a new running contingency sum of $380,816.59 and overall contingency sum of $4,210,571.50.
Body
SUMMARY:
Staff seeks Board approval for a budget adjustment to provide additional contingency funds to compensate the contractor for additional costs and overhead incurred.
Lower Berryessa Creek Flood Protection Project was constructed in two phases, Phase 1 completed in December 2016 and Phase 2, currently still under construction. The Lower Calera Creek Flood Protection Project is part of the Lower Berryessa Creek Phase 2 Flood Protection Project (Phase 2 Project). The Phase 2 Project completed civil construction in July 2020, and the Lower Calera Creek Flood Protection Project completed civil construction in June 2023. These projects involved constructing new floodwalls, levees, maintenance roads, mitigation planting, and plant establishment. The remaining work for construction of LCC Project includes plant establishment and maintenance and closing out the Phase 2 Project.
The proposed budget adjustment would transfer $121,000 from the Phase 1 Project to the Phase 2 Project.
Approval of the budget adjustment and increase to the construction contract contingency sum will provide additional funds to compensate the contractor for additional costs due to water pipe repairs, and close out the Phase 2 Project.
Project Background
The Lower Berryessa Creek Flood Protection Project which extends approximately 1.6 miles from Berryessa Creek’s confluence with Lower Penitencia Creek upstream to Calaveras Boulevard, is part of a number of flood protection improvements within the City of Milpitas (City) (Attachment 1 Map). The LBC Project will help protect the surrounding area by removing approximately 1,800 parcels from the one (1) percent floodplain and provide improved maintenance access to the channel. Construction of the LBC Project is being undertaken in two (2) phases.
The Lower Berryessa Creek Phase 1 Flood Protection Project (Phase 1 Project) was completed in December 2016 and included improvements from the Lower Penitencia Creek confluence up to Abel Street. The Phase 2 Project includes the segment along Lower Berryessa Creek between Abel Street and Calaveras Boulevard and a segment of Calera Creek from the Union Pacific Railroad to about 880 feet upstream of Arizona Avenue (i.e., Lower Calera Creek). The civil construction work for the Phase 2 Project was completed in July 2020. The plant establishment work was completed in March 2023.
City Improvements Requested During Construction
The LCC Project included constructing an earthen channel, new floodwalls, and mitigation planting. In the spring of 2022, the City requested Santa Clara Valley Water District (Valley Water) replace a section of the City’s water and sewer pipes located under the u-frame floodwall. Valley Water prepared plans for the new water pipe with input and approval from the City engineering staff. The City agreed to reimburse Valley Water $245,862 for the costs of the water pipe replacement, included in Change Order No. 8 in Table 1 Summary of Construction Contract and Contingency Amounts, and Valley Water’s contractor completed the work in July 2022.
On December 9, 2022, Valley Water’s contractor observed water flowing up from beneath the new water pipe section. After further evaluation, a water leak was discovered at the connection points with the existing pipe due to movement of the coupling. Staff determined that the repair work would merit a change order to the contractor. This waterline leak was discussed in the January 20, 2023, Non-Agenda CEO Bulletin. The City agreed to cost share with Valley Water $404,138 for the costs of the water pipe repairs based on a projected repair costs proposal from the Contractor. However, the total repair costs were much higher than anticipated due to significant delays from inclement weather, conflicts with additional unknown utilities encountered that caused further escalation of the trenching and shoring costs. Staff intends to present an account of these additional costs to the City of Milpitas to seek further reimbursement from the city.
The LCC Project civil work and water pipe replacement was completed by March 2024. The mitigation plant establishment phase is underway and will be complete in January 2026.
Contract Change Orders
A total of thirteen (13) contract change orders and two (2) directed change orders totaling $3,829,754.94 have been executed to date for this contract to address various issues, including unforeseen site conditions, migratory birds, utility conflicts, City of Milpitas and Santa Clara Valley Transportation Agency requested changes including replacing and repairing a portion of the City of Milpitas’ sewer and water pipes, redesigning of floodwall foundations, existing pump station bypass, unsuitable soil excavation, Class 2 soil off-haul, and resequencing/acceleration of the schedule.
Table 1 presents a summary of the current construction contract and running contingency amount.
TABLE 1
SUMMARY OF CONSTRUCTION CONTRACT AND CONTINGENCY AMOUNTS
Budget Adjustment Recommendation
Staff are currently working on construction oversight of the mitigation plant establishment phase, development of the LCC Project as-built plans and operations and maintenance manual, and completing the close out process for the Phase 2 Project. In order to fund the pending waterline repair settlement payment, staff recommends a budget adjustment as detailed in the Financial Impact section below.
Increased Construction Contingency Recommendation
A future change order will be necessary to compensate the contractor for repairing the water pipe leak. The final settlement cost associated with the water pipe repair is estimated to be $380,000. There is currently $259,816.56 remaining in the contingency fund so an additional $121,000 is needed to settle the future change order with the contractor.
Staff is recommending the Board approve an increase to the contingency fund in the amount of $121,000, which will enable staff to execute a future contract change order for the waterline repair settlement costs. If approved by the Board, the additional contingency amount will result in a total contingency of $4,210,571.50.
Relevant Prior Board Actions
On December 13, 2011, the Board adopted a Resolution adopting the Final EIR for the Lower Berryessa Creek and Lower Calera Creek improvements, the Mitigation Monitoring and Reporting Program, and approved the Project.
On January 26, 2021, the Board adopted the plans and specifications and authorized staff to advertise the Project for bids and delegated authority to the Chief Executive Officer to negotiate and execute the Master Agreement with the City of Milpitas (City) for the construction of City improvements, modifications to City facilities, and work within City’s right of way for Valley Water to proceed with construction of the Lower Berryessa Creek Flood Protection, Lower Calera Creek Flood Protection, and Lower Penitencia Creek Improvements Projects.
On April 6, 2021, the Board rejected all bids for Contract C0666-1 and authorized re-advertisement for bids.
On May 25, 2021, the Board awarded the subject contract to Granite Construction Company, the amount of $17,899.365.00 and approved a contingency fund of $1,789,936.50, or 10% of the Contract award amount.
On April 12, 2022, the Board approved an increase of $1,299,635.00 to the construction contract contingency encumbrance. The increased construction contingencies were approved to compensate the Contractor for change order work to construct a redesigned floodwall foundation as required to avoid conflict with existing fences on the Valley Water property line.
On June 13, 2023, the Board approved a Budget Adjustment of $1,600,000 from Lower Berryessa Creek Phase 1 Project (Project No. 40174004) for the Lower Calera Creek Flood Protection Project (Project No. 40174005) and approve an increase of $1,000,000 to the Construction Contract Contingency Sum for the Lower Calera Creek Flood Protection Project (Project No. 40174005), Contract No. C0666-1 (Milpitas, District 3). This increase in contingency was needed to repair a waterline leak and for unforeseen conditions during the plant establishment period.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
The Phase 2 Project, Project No. 40174005, which includes the Lower Calera Project, is included in the Capital Improvement Program (CIP) FY 2025-29 Five-Year Plan and in the FY 2024-25 Adopted Budget. The Phase 1 Project, Project No. 40174004 is anticipated to close at the end of FY 2025.
The proposed budget adjustment would transfer $121,000 from the Phase 1 Project to the Phase 2 Project.
Because the Phase 1 Project has been completed and is processing closeout documentation, there is no impact on transferring $121,000 to the Phase 2 Project, Project No. 40174005. The Phase 1 and Phase 2 projects are funded by the Watershed and Stream Stewardship Fund (Fund 12).
CEQA:
On December 13, 2011, the Board adopted a Resolution adopting the Final EIR for the Lower Berryessa Creek and Lower Calera Creek improvements, the Mitigation Monitoring and Reporting Program, and approved the Project. The recommended action would not result in changes to the project that would require additional CEQA review.
ATTACHMENTS:
Attachment 1: Map
UNCLASSIFIED MANAGER:
Manager
Bhavani Yerrapotu, 408-630-2735