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Home My WebLink About05 - Water Transmission Main Valve Replacement Phase 2 (Project No. 18W12 & 19W13) — Contract No. 7539-3 Contingency IncreaseQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report July 26, 2022 Agenda Item No. 5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David A. Webb, Public Works Director - 949-644-3311, dawebb@newportbeachca.gov PREPARED BY: Michael J. Sinacori, Assistant City Engineer msinacori@newportbeachca.gov PHONE: 949-644-3342 TITLE: Water Transmission Main Valve Replacement Phase 2 (Project No. 18W12 & 19W13) — Contract No. 7539-3 Contingency Increase ABSTRACT: On November 10, 2020, the City Council awarded a construction contract for the Water Transmission Main Valve Replacement (Phase 2) project to Paulus Engineering, Inc. for $2,797,771 and established a contingency of $280,000 (approximately 10 percent of the total bid). During the course of construction, the project incurred numerous change orders related to unforeseen conditions and the COVID-19 pandemic. Staff requests an increase to the contingency for the construction contract with Paulus Engineering for remaining valve replacement work. RECOMMENDATION: a) Find the requirement for environmental review under the California Environmental Quality Act (CEQA) is satisfied by the November 10, 2020 Council exemption from the California Environmental Quality Act (CEQA) pursuant to Class 2 Section 15302(c) (replacement of existing public facilities involving negligible or no expansion of capacity) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment; b) Increase the contingency from $280,000 (approximately 10 percent of the contract award of $2,797,771) to $700,000 (approximately 25 percent of the contract award) to cover the cost for the remaining valve replacements and unforeseen work; and c) Approve Budget Amendment No. 23-008 appropriating $420,000 in increased expenditures in Account No. 70201931-980000-18W12 and transferring funds from the Water Enterprise Fund unappropriated fund balance to the Water Capital Fund for the Water Transmission Main Valve Replacement (Phase 2) Project. DISCUSSION: On November 10, 2020, the City Council awarded a construction contract to Paulus Engineering, Inc. for the Water Transmission Main Valve Replacement (Phase 2) Project. This project replaces large diameter water valves as identified in the Water Master Plan. 5-1 Water Transmission Main Valve Replacement Phase 2 (Project No. 18W12 & 19W13) — Contract No. 7539-3 Contingency Increase July 26, 2022 Page 2 These are older, deteriorated valves located on large diameter transmission mains (12-inch, 16-inch, 18-inch, 24-inch, 36-inch and 48-inch) the oldest of which was installed in 1926. The valves are critical to isolating large sections of the water transmission system for maintenance and operations. All valves considered in this contract have outlived their design life, are not operating properly, and need to be replaced. The project includes replacement of 22 valves located at various locations throughout Newport Beach, but primarily along Jamboree Road, East Coast Highway and at the Big Canyon Reservoir and the 16t" Street Utilities Yard. Of the 22 planned valve replacements, 17 have now been completed. Eight change orders totaling $717,180 have been approved to cover increased costs resulting from material price increases related to the COVID-19 pandemic supply chain issues, additional work efforts needed due to extra thick pavement removals (up to five feet thick) and cement slurry located at the Jamboree Road and Coast Highway intersection, relocation of interfering utilities, and additional necessary dewatering. Additionally, at the Big Canyon Reservoir, the Zone III pump station valve replacement required additional excavation, shoring, concrete removals, removal and replacement of existing electrical wiring for pumps, and replacement of deteriorated 12-inch and 24-inch water mains that were found in poor condition during construction.. Also, during construction an 18-inch and 6-inch valve were recently found not functional at Coast Highway and Hazel Drive that needed to be replaced prior to the paving of highway. Planned completed project work and these change orders to date (including the unplanned work efforts at Hazel Drive and Coast Highway) have expended $2,547,295.87, or approximately 91 % of the awarded contract construction cost. Funding to complete the remaining five valve replacements planned within this project will require an increase of the project contingency from $280,000 to $700,000. Alternatively, the City Council could deny this request and staff would direct the contractor to delete valve work to stay within the original project contingency. Any deleted valves and work would then be re -bid in a future contract. Staff recommends proceeding with the planned valve replacement work now as the bid prices are from 2020 and the contractor has agreed to honor most of the bid pricing except for extreme COVID-19 supply chain cost increase issues. FISCAL IMPACT: Upon approval of the proposed Budget Amendment, sufficient funding will be available from the Capital Improvement Program (CIP) budget for the completion of this contract. The Budget Amendment appropriates $420,000 in additional funding from the Water Enterprise Fund unappropriated fund balance. It will be expensed to the Water Capital Distribution & Piping account in the Public Works Department, 70201931-980000-18W12 for the Water Transmission Main Valve Replacement (Phase 2) Project. The Water Enterprise Fund generates revenue primarily through water rates collected by service users. 5-2 Water Transmission Main Valve Replacement Phase 2 (Project No. 18W12 & 19W13) — Contract No. 7539-3 Contingency Increase July 26, 2022 Page 3 ENVIRONMENTAL REVIEW: Staff recommends the City Council find the requirement for environmental review under the California Environmental Quality Act (CEQA) is satisfied by the November 10, 2020, Council exemption from the California Environmental Quality Act (CEQA) pursuant to Class 2 Section 15302(c) (replacement of existing public facilities involving negligible or no expansion of capacity) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Location Map Attachment B — Budget Amendment 5-3 ��EWPpRT ATTACHMENT B City of Newport Beach ° M BUDGET AMENDMENT 100, 2022-23 BA#: 23-008 Department: Public Works ONETIME: D Yes ❑ No Requestor: David A Webb Approvals ❑ CITY MANAGER'S APPROVAL ONLY Finance Director: Date 21 COUNCIL APPROVAL REQUIRED City Clerk: Date EXPLANATION FOR REQUEST: To appropriate funds for the Water Transmission Main Valve Replacement (Phase 2) Project. ❑ from existing budget appropriations ❑ from additional estimated revenues ❑� from unappropriated fund balance REVENUES Fund # Org Object Project Description Increase or (Decrease) $ 702 70299 692701 INTERFUND TRANSFERS - INTRAFND XFR FRM WATER ENT FNC 420,000.00 Subtotal $ 420,000.00 EXPENDITURES Fund # Org Object Project Description Increase or (Decrease) $ 701 70199 992702 INTERFUND TRANSFERS - INTRAFUND XFER TO WATER CAPITA 420,000.00 702 70201931 980000 18W12 DISTRIBUTION & PIPING - CIP EXPENDITURES FOR GL 420,000.00 Subtotal $ 840,000.00 FUND BALANCE Fund # Object Description Increase or (Decrease) $ 701 300000 WATER ENTERPRISE FUND - FUND BALANCE CONTROL (420,000.00) 702 300000 WATER CAPITAL FUND - FUND BALANCE CONTROL Subtotal $ (420,000.00) Fund Balance Change Required 5-6