Report Prepared by: Laura Ivancich, Management Analyst, Engineering
Title
SUBJECT: Approval of Additional Contingency in the Amount of $53,190.80 for Additional Work Which is Reflected in Change Orders 3 with Mid Cal Pipeline & Utilities, Inc. for the Craig Drive Sewer Main, Project No. CP250064
REPORT IN BRIEF
Considers approving an increase to the contingency in the amount of $53,190.80 for Project No. CP250064 - Craig Drive Sewer Main for the extra work reflected in Change Order 3.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the increase in contingency in the amount $53,190.80, for a total contingency amount of $112,223.30, which is approximately 28.51% of the original agreement amount for the extra work reflected in Contract Change Order 3; and,
B. Authorizing the City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve subject to conditions other than recommended by staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Refer to staff for reconsideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion)
AUTHORITY
Charter of the City of Merced, Article XI, section 1109 - Contract on Public Works
Merced Municipal Code Chapter 3.04, Article IV - Public Works Contract.
CITY COUNCIL PRIORITIES
As provided for in the 2025-26 Adopted Budget.
DISCUSSION
In Fall of 2024, the staff was notified of failing septic tanks on Craig Drive by the residents. Due to the developing situation, the Engineering Department designed the installation of a new sewer line and determined that the existing water main needed to be upgraded to current City Standard.
On April 7, 2025, Council approved the construction contract with Mid Cal Pipeline & Utilities, Inc. in the amount of $393,550.00 with a 15% contingency of $59,032.50. The work performed included installing a new 6” sewer main, sewer manholes, abandoning existing 4” and 6” water main, installing a new 8” water main, fire hydrants, 6” DIP, curb & gutter, sidewalk, cross gutter, water meter box, pipe location and new striping.
Change Order 1 in the amount of $31,320 was executed to install new sewer laterals from the sewer main to the property line of the homes.
Change Order 2 in the amount of $27,594.25 was executed to replace an additional fire hydrant and water service located on G St, as well as two water meter size changes.
The original contingency amount of $59,032.50 minus Change Orders 1 and 2 in the amount of $58,914.25, left a remaining contingency of $118.25. The total amount of Change Order 3 is $53,309.05, which is $53,190.80 above the remaining contingency amount for the project.
During the construction months, it was discovered that the road was failing due to weather and the poor structural sections of the road. Unfortunately, the road became unsafe and needed to be repaired. Staff secured a quote from Mid Cal Pipeline to patch the roadway to bring it to a drivable condition. Change Order 3 reflects this additional work associated with paving Craig Drive. Staff is currently seeking additional funds to properly repave Craig Drive and will address the road in its entirety as funding becomes available.
Additional Work for Change Order 3 includes ($53,309.05):
1. Labor, Materials, Equipment, Trucking, Profit & Overhead; and,
2. 3” grind and replace AC between trenching; and,
3. Credit for water & sewer trench; and,
3. 6” Asphalt on Craig Drive at G St.
Currently the project has an available budget of $19,277 in Water Enterprise Funds, leaving a shortfall of $34,033. The amount of Change Order 3 will be split between Water and Sewer funds. A budget transfer of $7,378 from CP260016 Projects to be Determined Water System Operation, and $26,655 from CP260025 - Projects to be Determined Wastewater System Operations was completed to cover the shortfall.
Staff is recommending approving the increase in contingency for Contract Change Orders 3 to close out this project.
IMPACT ON CITY RESOURCES
Project CP250064 is established as a Capital Improvement Project to be funded by Water and Sewer Enterprise funds. A budget transfer was completed in the amount of $7,378 from CP260016 - Projects to be Determined Water System Operation, and $26,655 from CP260025 - Projects to be Determined Wastewater System Operations. The project now has sufficient funding to complete this change order.
ATTACHMENTS
1. Executed Original Agreement
2. Executed Change Order 1
3. Executed Change Order 2
4. Proposed Change Order 3