BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Accept the Work as Complete and Direct the Clerk to File the Notice of Completion of Contract and Acceptance of Work for the Upper Llagas Creek Flood Protection Project, Flood Protection and Civil Work, Phase 2A, Completion of Milestones 1 and 2, Flatiron West, Inc., Contractor, Project No. 26174052, Contract No. C0665 (Morgan Hill, District 1).
End
RECOMMENDATION:
Recommendation
A. Accept the work on the Upper Llagas Creek Flood Protection Project, Flood Protection and Civil Work, Phase 2A, Completion of Milestones 1 and 2, Flatiron West, Inc., Project No. 26174052, Contract No. C0665 as complete; and
B. Direct the Clerk of the Board to sign the Notice of Completion of Contract and Acceptance of Work and submit for recording to the Santa Clara County Clerk-Recorder.
Body
SUMMARY:
The construction contractor, Flatiron West, Inc., has completed Milestones 1 and 2 of the Upper Llagas Creek Flood Protection Project, Civil Work, Phase 2A (Phase 2A Project).
Project Background
Santa Clara Valley Water District (Valley Water) is undertaking the Project in partnership with the U.S. Army Corps of Engineers (USACE) and the City of Morgan Hill (City) to provide 1% flood protection to approximately 1,100 homes and 500 businesses along West Little Llagas Creek, East Little Llagas Creek and Llagas Creek. The Project is part of the Safe, Clean Water and Natural Flood Protection Program (Safe, Clean Water Program) that voters approved in 2012 and renewed in 2020 as Project E6 under the flood protection priority. The approximately 13.9 miles-long project encompasses the City of Morgan Hill, City of Gilroy, and various unincorporated areas of Santa Clara County, including San Martin. The Project is being constructed in three phases (Phase 1, Phase 2A, and Phase 2B), and flood protection will only be realized after construction of all three phases is completed. Graniterock Company was awarded Phase 1 construction by the Valley Water Board of Directors on July 23, 2019, and the Notice of Completion was accepted by the Valley Water Board of Directors on May 24, 2022. Flatiron West, Inc. was awarded Phase 2A construction by the Valley Water Board of Directors on April 13, 2021. Phase 2B was awarded to Graniterock Company by the Valley Water Board of Directors on August 13, 2024, and is currently under construction.
Llagas Creek and its tributaries are part of the Pajaro Watershed, the area of land over which rain falls and then drains off on its journey to the ocean, or into reservoirs for storage. The Pajaro-Llagas Watershed is a 104-square-mile region that is distinguished by its agricultural lands and natural areas.
The entire Project consists of channel widening and deepening, instream improvements for wildlife and habitat, installation of maintenance roads along top of banks, installation of fencing and gates, instream improvements for wildlife and habitat, revegetation, and a three-year plant establishment maintenance period. The entire Project’s mitigation elements to offset environmental impacts associated with the construction work include the following environmental elements:
• Riparian mitigation consisting of approximately 105 acres of native vegetation plantings;
• Creation of the Lake Silveira wetlands, approximately 4 acres;
• Restoration of approximately 2000 linear feet of Llagas Creek
• Invasive plant removal (13.0± acres);
• In-stream complexities-woody debris (464 instream complexity features including divide logs, wing deflectors, rootwads, and boulder clusters);
• Turtle basking sites within the created wetlands (10 turtle basking sites);
• Tree girdling (27 invasive trees girdled for bat/owl habitat);
• Bat boxes (14);
• Upland log piles (148 locations);
• Removal of legacy trash & hardscape debris (2.3± acres of remediation)
Staff recommends the Board accept as complete Phase 2A, Milestones 1 and 2. In accordance with the Contract Documents, Special Provisions, Section 12.04. Time Allowance for Completion of Work, Paragraph G. Milestone Completion, the Milestones are defined as follows:
Milestone # 1 (Tunnel Completion): Completion of the Tunnel Construction from Station 592+27.12 to 613+1.98 work within 850 calendar days from the First Chargeable Day of the Contract.
Milestone #2 (Project Completion): Completion of all remaining work, including installation of box culverts, transition structures, utility relocation including Hale Avenue Extension and related work, traffic detours/controls, street restoration, AC paving, soils testing as required for off-site disposal, permanent fencing, and miscellaneous concrete work within 1,050 calendar days from the First Chargeable Day of the Contract.
Previous Relevant Board Actions
On September 22, 2009, the Board approved a cost-sharing agreement with the City of Morgan Hill for preparing the environmental document and the design plans and specifications.
On June 10, 2014, the Board certified the Environmental Impact Report for the Upper Llagas Creek Flood Protection Project and adopted Resolution No. 14-67.
On May 14, 2019, the Board adopted the plans and specifications and authorized advertisement for bids for the construction of the Phase 1 Project.
On July 23, 2019, the Board awarded the Phase 1 Project contract to Graniterock Company, in the amount of $68,118,602.00 and approved a contingency fund of $10,217,790.00.
On January 12, 2021, the Board adopted the plans and specifications and authorized advertisement for bids for the construction of the Phase 2A Project.
On April 13, 2021, the Board awarded the Phase 2A Project contract to Flatiron West, Inc., in the amount of $43,989,600 and approved a contingency fund of $8,797,920 with a construction contract retention of ten percent (10%) because the Project was determined to be ‘substantially complex’ due to the precision needed to safely perform critical underground work, including tunneling, within the time allowance for completion of work.
On May 24, 2022, the Valley Water Board of Directors accepted the work as complete and authorized filing of a Notice of Completion for Phase 1, Milestones 1 & 2. Upon completion of the 3-year mitigation native plantings establishment period (Milestone 3) anticipated in spring 2025, the Valley Water Board of Directors shall consider a Notice of Completion for Phase 1, Milestone 3.
On May 16, 2023, because of the completion of Milestone 1 (Tunnel Completion), the Board authorized reducing the Phase 2A construction contract retention of ten percent (10%) to five percent (5%), for the Upper Llagas Creek Flood Protection Project Phase 2A, Project No. 26174052, Contract No. C0665 with Flatiron West, Inc., consistent with the minimum amount of retention required by the California Public Contract Code.
Contract Change Orders
A total of thirty-six (36) contract change orders totaling $7,456,351.87 were executed to date to address various issues, including unforeseen site conditions and utilities, Valley Water & City of Morgan Hill (City) requested changes, post-design clarifications, and credits back to the contract for adjustments to bid items based on final quantity measurements. This total of $7,456,351.87 for change orders was within the previously Board-approved Contract contingency amount of $8,797,920.
These changes included:
A. $885,453.00 cost increase due to the existing City of Morgan Hill’s (City) narrow Del Monte Avenue right of way, the potential construction equipment clearance issues with the existing PG&E overhead electrical facilities along both sides of the street, potential impacts to existing underground utilities, and ingress-egress concerns for adjacent residents during construction along Del Monte Avenue, north of the intersection with W. Dunne Avenue, the underground box culvert design for shored open trench excavation modification to extend the Nob Hill underground tunnel by 125 linear feet.
B. $1,976,061.00 for additional costs for work associated with significant storm events in winter/spring 2023 and unanticipated high levels of groundwater experienced throughout the 2023 regulatory work window for construction of the twin underground reinforced concrete box culverts (RCBs) along Hale Avenue within City of Morgan Hill downtown. Additional work was necessary to control, treat, and dispose of stormwater from the Project excavation area throughout the work season.
C. <$357,175.00> in credits back to the contract for adjustments to bid items based on final quantity measurements.
Table 1 presents a summary of the construction contract and contingency amounts associated with the completion of Milestones 1 and 2.
TABLE 1. SUMMARY OF CONSTRUCTION CONTRACT
AND CONTINGENCY AMOUNTS
|
|
Contract Amount |
Contingency Amount |
|
Original Contract |
$43,989,600 |
$8,797,920 |
|
Change Order No. 1 (Staff approved) Add/Delete |
$0.00 |
$0.00 |
|
Change Order No. 2 (Staff approved) |
$69,345.57 |
<$69,345.57> |
|
Change Order No. 3 (DOO approved) |
$162,116.00 |
<$162,116.00> |
|
Change Order No. 4 (DOO approved) |
$198,901.00 |
<$198,901.00> |
|
Change Order No. 5 (DOO approved) |
$187,797.00 |
<$187,797.00> |
|
Change Order No. 6 (DOO approved) |
$187,169.00 |
<$187,169.00> |
|
Change Order No. 7 (Staff Approved) |
$72,166.00 |
<$72,166.00> |
|
Change Order No. 8 (Staff Approved) |
$53,327.00 |
<$53,327.00> |
|
Change Order No. 9 (DOO Approved) |
$190,582.74 |
<$190,582.74> |
|
Change Order No. 10 (DOO Approved) |
$190,635.00 |
<$190,635.00> |
|
Change Order No. 11 (Staff Approved) |
$85,521.00 |
<$85,521.00> |
|
Change Order No. 12 (Staff Approved) |
$79,237.00 |
<$79,237.00> |
|
Change Order No. 13 (DOO Approved) |
$170,635.00 |
<$170,635.00> |
|
Change Order No. 14 (CEO Approved) |
$885,453.00 |
<$885,453.00> |
|
Change Order No. 15 (DOO Approved) |
$193,724.06 |
<$193,724.06> |
|
Change Order No. 16 (DOO Approved) |
$181,416.84 |
<$181,416.84> |
|
Change Order No. 17 (Staff Approved) |
$82,074.52 |
<$82,074.52> |
|
Change Order No. 18 (DOO Approved) |
$200,000.00 |
<$200,000.00> |
|
Change Order No. 19 (DOO Approved) |
$198,764.47 |
<$198,764.47> |
|
Change Order No. 20 (DOO Approved) |
$192,092.42 |
<$192,092.42> |
|
Change Order No. 21 (DOO Approved) |
$171,672.16 |
<$171,672.16> |
|
Change Order No. 22 (Staff Approved) |
$94,900.00 |
<$94,900.00> |
|
Change Order No. 23 (DOO Approved) |
$197,477.62 |
<$197,477.62> |
|
Change Order No. 24 (DOO Approved) |
$180,216.52 |
<$180,216.52> |
|
Change Order No. 25 (DOO Approved) |
$178,361.00 |
<$178,361.00> |
|
Change Order No. 26 (Staff Approved) |
$87,234.12 |
<$87,234.12> |
|
Change Order No. 27 (DOO Approved) |
$195,253.04 |
<$195,253.04> |
|
Change Order No. 28 (CEO Approved) |
$1,976,061.00 |
<$1,976,061.00> |
|
Change Order No. 29 (DOO Approved) |
$191,051.31 |
<$191,051.31> |
|
Change Order No. 30 (DOO Approved) |
$186,352.40 |
<$186,352.40> |
|
Change Order No. 31 (DOO Approved) |
$199,360.02 |
<$199,360.02> |
|
Change Order No. 32 (DOO Approved) |
$198,830.96 |
<$198,830.96> |
|
Change Order No. 33 (DOO Approved) |
$182,434.47 |
<$182,434.47> |
|
Change Order No. 34 (DOO Approved) |
$183,113.06 |
<$183,113.06> |
|
Change Order No. 35 (Staff Approved) |
$10,251.57 |
<$10,251.57> |
|
Change Order No. 36 (CEO Approved) |
<$357,175.00> |
$357,175.00 |
|
Current Contract Amount and Remaining Contingency |
$51,445,951.87 |
$1,341,568.13 |
Pending Contract Claim
On October 28, 2024, the Contractor submitted a claim to Valley Water in the amount of $866,291.00. The claim relates to work done to fix construction deficiencies in a sewer siphon for which the contractor seeks additional compensation. The claim included a request for an informal conference pursuant to Article 3.12(G) of the contract specifications. Valley Water staff have denied Contractor’s claim in full and have participated in an informal conference on December 3, 2024, and continue to work to resolve the claim.
Flatiron has also requested additional compensation in the amount of approximately $1.9 million, claiming loss of productivity, additional costs for work acceleration, and costs related to Builder’s Risk Insurance. Valley Water staff continues to discuss this matter informally with Flatiron to determine if an amicable resolution can be reached and will follow the dispute resolution process as specified in the contract documents and bring forth any updates or actions for the Board’s consideration as necessary.
Acceptance of the work as complete, will not affect the status of this claim or Valley Water’s position in defense of the claim.
Acceptance of the Work and Recording Notice of Completion of Contract
The California Civil Code allows an owner or agent to execute a Notice of Completion of Contract after acceptance of the work by the Board. The Notice of Completion of Contract and Acceptance of Work is included in Attachment 1. The Designated Engineer has determined that the work has been completed, to the best of their knowledge, in accordance with the plans and specifications, and recommends acceptance. The Designated Engineer’s recommendation of construction acceptance is included in Attachment 2. The Project Completion Letter is included as Attachment 3. Photos of the completed Project are included in Attachment 4. The Project Delivery Process Chart is included in Attachment 5.
Construction Contract Retention
California law requires Valley Water to release contract retention in accordance with certain time frames, which will commence once the Notice of Completion is recorded with the Santa Clara County Clerk-Recorder. Interest payment on retention due to the contractor may be avoided by meeting the requisite deadlines.
The Phase 2A Project Contract with Flatiron West, Inc., imposed a construction contract retention of ten percent (10%) because the Project was determined to be ‘substantially complex’ due to the precision needed to safely perform critical underground work, including tunneling (Milestone 1), within the time allowance for completion of work. On May 16, 2023, the Board authorized reducing the Phase 2A construction contract retention of ten percent (10%) to five percent (5%), for the Upper Llagas Creek Flood Protection Project Phase 2A due to the completion of Milestone 1 (Tunnel Completion). The retention above the current Valley Water withholding of five percent (5%) retention funds was released to Flatiron West, Inc.
Valley Water is currently withholding retention funds totaling (5%) of the contract items associated with Phase 2A, Milestones 1 & 2 in the amount of $2,573,174.95 in accordance with the Public Contract Code. Per the Construction Contract Documents, Valley Water is required to release retention funds associated with the contract 35 days after recording the Notice of Completion of Contract and Acceptance of Work, subject to any withholds required by law or the contract.
Total Project Expenditures
As indicated in the Summary of Construction Contract and Contingency Amounts (Table 1), the original contract amount of $43,989,600.00 has been increased by $7,456,351.87 in approved change orders to $51,445,951.87, an increase of approximately 14.5 percent (14.5%) and under the Board approved contingency.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
Upper Llagas Creek Flood Protection Project Phase 2A, completion of Milestones 1 and 2, Project No. 26174052 is included in the Capital Improvement Program (CIP) Fiscal Years (FY) 2025-29 Five-Year Plan and in the FY 2024-25 Adopted Budget. Total financial costs were detailed in previous sections of the agenda memorandum. The Project is funded through the Safe, Clean Water and Natural Flood Protection Fund (Fund 26).
The City of Morgan Hill has reimbursed Valley Water $2,525,000 to date for their base Bid Items for City Improvements for Phase 2A in accordance with City-Valley Water cost-sharing agreement #A4448S executed on April 21, 2021. Valley Water will send an invoice to the City after Project Notice of Completion is issued for reimbursement of costs regarding any modifications, revisions, change orders and/or extra work approved by the City. The current estimated reimbursement from the City of Morgan Hill is $994,813.61 for its requested additional contract change order work in accordance the cost-sharing agreement #A4448S.
At the conclusion of the outstanding claims and dispute resolution, Staff will present to the Board the final financial summary of the project.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Notice of Completion and Acceptance of Work
Attachment 2: Construction Contract Acceptance
Attachment 3: Project Completion Letter
Attachment 4: Construction Photos
Attachment 5: Project Delivery Process Chart
UNCLASSIFIED MANAGER:
Manager
Bhavani Yerrapotu, 408-630-2735