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Home My WebLink About2018-07-24; City Council; ; Amendment No. 2 to the Agreement between the City of Carlsbad and the City of Vista for the Agua Hedionda Sewer Lift Station and Vista Carlsbad Interceptor Sewer, ReachesCA Review Jf<; ~ CITY COUNCIL V Staff Report Meeting Date: To: From: Staff Contact: Subject: July 24, 2018 Mayor and City Council Kevin Crawford, City Manager Babaq Taj, Engineering Manager Babaq.Taj@carlsbadca.gov or 760-637-0006 Terry Smith, Engineering Manager Terry.Smith@carlsbadca.gov or 760-603-7354 Amendment No. 2 to the Agreement between the City of Carlsbad and the City of Vista for the Agua Hedionda Sewer Lift Station and Vista Carlsbad Interceptor Sewer, Reaches VC11-VC15. Recommended Action Adopt a Resolution authorizing execution of Amendment No. 2 to the Agreement between the City of Carlsbad and the City of Vista for the construction of the Agua Hedionda Sewer Lift Station and Vista Carlsbad Interceptor Sewer, Reaches VC11-VC15, Project Nos. 3492, 3886 and 3949. Executive Summary The Agua Hedionda Sewer Lift Station and Vista Carlsbad Interceptor Sewer Project, Reaches VC11B-VC15, Project Nos. 3492, 3886, and 3949 (Project), is a joint sewer project with the City of Carlsbad and the City of Vista that is currently under construction. Pulice Construction, Inc., the contractor constructing the Project, submitted certified claims in the amount of approximately $3.9 million for extra work claiming changed conditions. The City of Carlsbad and City of Vista Project Agreement needs to be amended to include contracting and cost sharing for legal and expert services required to defend against the contractor's claims during non-binding mediation. This Agreement did not delegate authority to execute amendments, therefore City Council authorization is required. Discussion The Vista Carlsbad Interceptor Sewer was constructed in the early 1960s and extends approximately 8 miles northeast from the Encina Water Pollution Control Facility to the City of Vista. The Vista Carlsbad Interceptor Sewer is identified as pipeline Reaches VCl through VC15 and includes the Buena Vista and Agua Hedionda Lift Stations. The City of Vista and the City of Carlsbad have entered into an amended agreement for the ownership, operation, and maintenance of the Vista Carlsbad Interceptor Sewer that requires preparation of a project agreement each time a portion of the Vista Carlsbad Interceptor Sewer needs rehabilitation, replacement, or upsizing (Resolution No. 2013-082}. July 24, 2018 Item #9 Page 1 of 7 The Project is a joint sewer project with the City of Carlsbad and the City of Vista. The Project replaces existing facilities with larger pipes and pumps to increase sewer capacity and improve reliability within the lower portion of the Vista Carlsbad Interceptor Sewer System. The entire Project is located in the City of Carlsbad, beginning at the north shore of the Agua Hedionda Lagoon and extending south a distance of approximately 2.3 miles to the Encina Water Pollution Control Facility. On Feb. 10, 2015, the Carlsbad City Council adopted Resolution No. 2015-039, approving the Project Agreement between the City of Carlsbad and the City of Vista to define the estimated construction cost share of the Project. On Dec. 5, 2017, the Carlsbad City Council authorized execution of Amendment No. 1 to the Project Agreement to increase the budget to cover additional costs arising from several unforeseen and changed conditions (Resolution No. 2017- 223). Progress on construction of the Project has been slower than anticipated and the contractor, Pulice Construction, Inc., is not anticipated to complete construction by the current contract completion date. In addition to delays in completing the Project, Pulice Construction, Inc., submitted claims in the amount of approximately $3.9 million for several disputed work items. City staff and the contractor have exhausted the informal dispute resolution process required by the contract and the parties have agreed to proceed to non-binding mediation. The Carlsbad City Attorney has contracted with the law firm of Burke, Williams & Sorensen, LLP, for legal support services through mediation. The Project Agreement needs to be amended to include those legal and expert services necessary to prepare for the non-binding mediation. Amendment No. 2 allows for the cost sharing of legal and expert services required to defend against the contractor's claims. The existing Agreement, including Amendment No. 1, is sufficiently funded to allow for the cost sharing of these additional services between the City of Carlsbad and the City of Vista at a rate of 43.9 percent and 56.1 percent, respectively. The City of Carlsbad has fully funded the entire Project, including contingency, through sewer replacement funds already appropriated to the Project through the Capital Improvement Program. No additional funds are being requested at this time. Fiscal Analysis The cost for legal and expert services to defend against the contractor's claim are estimated to be $250,000. The budget identified within the Agreement, and as subsequently modified through Amendment No. 1, is sufficient to cover the cost of legal and expert services and therefore no changes to the Agreement budget are required. A summary of the Project Agreement budget is shown in the table below: July 24, 2018 Item #9 Page 2 of 7 AGREEMENT BETWEEN THE CITY OF CARLSBAD AND THE CITY OF VISTA FOR THE CONSTRUCTION OF THE AGUA HEDIONDA SEWER LIFT STATION AND VISTA CARLSBAD INTERCEPTOR SEWER, REACHES VC11-VC15, PROJECT NOS. 3492, 3886, AND 3949 EXISTING BUDGET IN AGREEMENT $56,702,500 AMENDMENT NO. 1 $1,754,470 AMENDMENT NO. 2 $0 PROPOSED BUDGET IN AGREEMENT $58,456,970 A summary of the existing and proposed project budgets are shown in the table below: AGUA HEDIONDA SEWER LIFT STATION AND VISTA CARLSBAD INTERCEPTOR SEWER, REACHES VC11-VC15, PROJECT NOS. 3492, 3886, AND 3949 Total Appropriation $60,630,000 Total Expenditures/Encumbrances $60,102,479 TOTAL AVAILABLE $527,521 ADDITIONAL PROJECT COSTS ,., ' Estimate for legal and expert services $250,000 REMAINING BALANCE $277,521 ADDITIONAL APPROPRIATION NEEDED $0 Sufficient funds are currently available for the completion of the Project. All Project related costs will be shared between the City of Carlsbad and the City of Vista as described within the existing Project Agreement between the two cities approved by City Council {Resolution No. 2015-039}. Carlsbad's share of the Project is funded from the Sewer Connection Fee Fund. Next Steps Mediation is anticipated to occur in August 2018. Construction of the Project will continue and is expected to be complete by the end of calendar year 2018. Environmental Evaluation (CEQA) A Mitigated Negative Declaration {MND} and Mitigation Monitoring and Reporting Program {MMRP} were prepared for the Agua Hedionda Sewer Lift Station, Force Main and Gravity Sewer Replacement Project {PDP 00-02{C}/SP 144{L}/RP 10-26/CDP 10-17 /HDP 10-05/SUP 10- 02/HMP 10-03}. The MND was adopted by the City Council on Dec. 6, 2011, in compliance with the California Environmental Quality Act {CEQA} Guidelines Section 15074. Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the scheduled meeting date. Exhibits 1. City Council Resolution. July 24, 2018 Item #9 Page 3 of 7 RESOLUTION NO. 2018-142 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING EXECUTION OF AMENDMENT NO. 2 TO THE AGREEMENT BETWEEN THE CITY OF CARLSBAD AND THE CITY OF VISTA FOR THE CONSTRUCTION OF THE AGUA HEDIONDA SEWER LIFT STATION AND VISTA CARLSBAD INTERCEPTOR SEWER, REACHES VC11-VC15, PROJECT NOS. 3492, 3886 AND 3949. EXHIBIT 1 WHEREAS, the Agua Hedionda Sewer Lift Station and Vista Carlsbad Interceptor Sewer, Reaches VC11-VC15, Project Nos. 3492, 3886 and 3949 (Project) is jointly owned by the City of Carlsbad and the City of Vista; and WHEREAS, on Feb. 10, 2015, City Council approved an Agreement with the City of Vista (Project Agreement) for funding of construction phase services for the Project by adoption of Resolution No. 2015-039; and WHEREAS, on Dec. 5, 2017, City Council adopted Resolution No. 2017-223, approving Amendment No. 1 to the Project Agreement between the City of Carlsbad and the City of Vista; and WHEREAS, the Project is not anticipated to be completed prior to the current contract completion date and the contractor, Pulice Construction, Inc., has submitted claims in the amount of approximately $3.9 million for extra work by claiming changed conditions; and WHEREAS, the City of Carlsbad and Pulice Construction Inc. have been unable to resolve the claims using the the informal dispute resolution process required by the construction contract; and WHEREAS, the parties have agreed to participate in non-binding mediation and the Carlsbad City Attorney has contracted with the law firm of Burke, Williams & Sorensen, LLP, to provide legal services through mediation; and WHEREAS, the Project Agreement needs to be amended to include legal and expert services, estimated at $250,000, required to complete the mediation process with Pulice Construction, Inc.; and WHEREAS, the City Council of the City of Carlsbad, California has determined that it is in the best interest of the city to execute Amendment No. 2 to the Project Agreement between the City of Carlsbad and the City of Vista. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: July 24, 2018 Item #9 Page 4 of 7 EXHIBIT 1 1. That the above recitations are true and correct. 2. That the mayor of the City of Carlsbad is authorized and directed to execute Amendment No. 2 to the Project Agreement between the City of Carlsbad and the City of Vista for construction of the Agua Hedionda Sewer Lift Station and Vista Carlsbad Interceptor Sewer, Reaches VCll-VClS, Project Nos. 3492, 3886 and 3949, which is attached hereto as Attachment A. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 24th day of J.!!!y, 2018, by the following vote, to wit: AYES: NOES: ABSENT: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. None. None. July 24, 2018 Item #9 Page 5 of 7 Attachment A SECOND AMENDMENT TO THE PROJECT AGREEMENT BETWEEN THE CITY OF VISTA AND THE CITY OF CARLSBAD FOR CONSTRUCTION OF THE AGUA HEDIONDA SEWER LIFT STATION AND VISTA/CARLSBAD INTERCEPTOR SEWER, REACHES VC11-VC15 THIS SECOND AMENDMENT ("Second Amendment") to the Project Agreement between the City of Vista and the City of Carlsbad, dated February 10, 2015 ("Project Agreement"), is made and entered into as of the k day of _ _02b: : , 2018 ("Second Amendment Date"), by and between the City of Vista, a chartered municipal corporation ("Vista"), and the City of Carlsbad, a chartered municipal corporation ("Carlsbad"). RECITALS A. Carlsbad and Vista first entered into a Project Agreement for the construction of the Agua Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches VC11- VC15 on February 10, 2015. B. A First Amendment to the Project Agreement was executed December 8, 2017 increasing the project budget for additional construction costs associated with unforeseen issues and delays to the project as well as additional construction management and inspection services required to complete the project. C. Pulice Construction, Inc., the contractor constructing the Agua Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches VC11-VC15 project, has submitted certified claims in the amount of approximately $3.9 million for extra work claiming changed conditions. D. Carlsbad and Pulice Construction, Inc., have exhausted the informal dispute resolution process required by the contract and both parties have agreed to proceed to non- binding mediation. E. Carlsbad has contracted with the law firm of Burke, Williams & Sorensen, LLP, to assist with resolving the claims through the non-binding mediation process. F. Vista and Carlsbad desire to enter into a Second Amendment to the Project Agreement by modifying the terms of the Project Agreement to include legal services necessary to achieve completion of the non-binding mediation. G. Funds are available within the existing contingency and no increase to the project budget is required at the time of the agreement. H. The claim pertains to VC14-VC15 where the City of Vista has 56.1% ownership and the City of Carlsbad has 43.9% ownership, and the cost of the legal services shall be shared in those proportions. July 24, 2018 Item #9 Page 6 of 7 NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, Vista and Carlsbad agree as follows: 1. The Project Agreement is amended to account for legal services required to complete non-binding mediation with the contractor. 2. All other provisions of the Project Agreement, as may have been amended from time to time, will remain in full force and effect. CITY OF VISTA, a chartered municipal corporation BY: Judy i ter,V-a;q 1 "1— ATTEST: 62,Lt i ., ]a K. A Kathy Idez, City Clerk 6 APPRO AS TO M: Darold Pieper, City torney RISK MANAGEMENT REVIEW: Dolores Gasco, is anager CITY OF CARLSBAD, a chartered municipal corporation BY: Matt Hak, Mayor ATTEST: Barbara Englespn, City Cle AMSAS TO FORM: Celia A. Brewer, City Attorney City Attorney Approved Version 1/30/13 July 24, 2018 Item #9 Page 7 of 7