REPORT TO COUNCIL
SUBJECT
Title
Approve a $3,500,000 Increase in the Construction Contingency in the Construction Contract with Ranger Pipelines, Inc. for the Water Pollution Control Plant Site Preparation Project (PW21-35) to Mitigate HazardousMmaterials, and Approve Budget Modification No. 10
Report
EXISTING POLICY
Pursuant to Chapter 2.09 of the Sunnyvale Municipal Code, City Council approval is required for construction contracts exceeding $250,000.
ENVIRONMENTAL REVIEW
The project, which involves demolition, pipeline relocation and utility work to prepare the Water Pollution Control Plant for upcoming construction projects, has no additional impacts beyond those already described in the Master Plan Program Environmental Impact Report (PEIR). As the action being considered does not constitute any changes to the scope of the Project, no further environmental review is necessary.
BACKGROUND AND DISCUSSION
Capital Project 833210 (Secondary Treatment & Thickening/Dewatering - CAS Stage 1) is divided into three construction packages to group like-items together and sequence the work. This first construction package consists of grading, paving, routing utilities, demolishing existing structures and facilities, constructing a portion of secondary effluent pipeline, relocating process equipment, and providing temporary facilities to City staff. For this package, Council awarded a construction contract to Ranger Pipelines, Inc. in the amount of $6,091,315, and approved a 10% contingency in the amount of $609,132 on February 1, 2022 (RTC No. 22-0138).
Recently, the contractor has encountered a large volume of unanticipated hazardous materials. The old sedimentation tanks and the old primary control building contain lead, asbestos, and Polychlorinated Biphenyls (PCBs) in the coatings, building materials, and mechanical equipment. The hazardous materials at both of these locations must be abated before the existing facilities can be demolished to allow for construction of the Secondary Treatment and Thickening Dewatering facility to continue.
The original contract awarded to Ranger Pipelines allotted funds for encountering a certain amount of hazardous materials; however, with rapidly changing regulations with respect to disposal of PCBs and the inability to perform destructive testing activities during design, the allotment is not sufficient. Demolition of the sedimentation tanks and the primary control building is anticipated to complete the largest location of hazardous materials for this contract.
As a result, staff is requesting to increase the construction contingency to cover mitigation of unanticipated hazardous materials. With the additional construction contingency, staff will be able to negotiate the costs for hazardous material mitigation and off haul. This work is anticipated to cost an additional $3.5 million, including $500,000 for mitigation work from the original construction contingency to progress the project on schedule.
Separately, a future item will likely be brought forward for Council approval to amend the construction contract with Ranger Pipelines and increase the construction contract amount as a result of costs associated with the delay of completion of the Primary Treatment project caused by the hazardous materials. These likely delay costs are still be discussed with staff and the contractors associated with various phases of the project.
FISCAL IMPACT
Budget Modification No. 10 has been prepared to appropriate $3,500,000 from the Rate Stabilization Reserve in Fund 6080 - Wastewater Management Fund to Project 833210 - Secondary Treatment & Thickening/Dewatering - CAS Stage 1 to fund the construction change order. This action will not cause any reserve balances in the Wastewater Management Fund to be noncompliant with City policy.
Budget Modification No. 10
FY 2024/25
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|
Current |
Increase/ (Decrease) |
Revised |
|
Wastewater Management Fund |
|
|
|
|
Funding Use |
|
|
|
|
Project 833210 - Secondary Treatment & Thickening/Dewatering - CAS Stage 1 |
$74,797,954 |
$3,500,000 |
$78,297,954 |
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|
|
|
|
|
Funding Source |
|
|
|
|
Rate Stabilization Reserve |
$58,166,602 |
($3,500,000) |
$54,666,602 |
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
1. Approve an Increase in the Construction Contingency by the amount of $3,500,000 relating to the Construction Contract with Ranger Pipelines, Inc.; and
2. Approve Budget Modification No. 10 in the amount of $3,500,000.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Allison Boyer, Assistant City Engineer
Reviewed by: Dennis Jaw, Interim Director of Finance
Reviewed by: Ramana Chinnakotla, Director of Environmental Services
Reviewed by: Chip Taylor, Director of Public Works
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager