HomeMy WebLinkAbout2020-10-20; City Council; ; Appropriation of Additional Funds in the Amount of $136,000 and Increase of the Construction Contingency by $60,000 for the Palomar Airport Road Widening Project Meeting Date: Oct. 20, 2020
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Valerie Airey, Municipal Projects Manager
valerie.airey@carlsbadca.gov, 760-602-2764
Subject Appropriation of Additional Funds in the Amount of $136,000 and
Increase of the Construction Contingency by $60,000 for the Palomar
Airport Road Widening Project
Recommended Action
Adopt a resolution authorizing the appropriation of an additional $136,000 from the Gas Tax
Fund and authorizing an increase of the construction contingency by $60,000 for the Palomar
Airport Road Widening Project, Capital Improvement Program project nos. 6043 and 6044.
Executive Summary
The project, which was awarded on July 23, 2019, has experienced construction delays that
require additional funding for construction costs, construction management, inspection,
materials testing, engineering and associated staff support. As noted in Carlsbad Municipal
Code Section 3.28.040.D.3, City Council authorization is required to appropriate additional
funds to Capital Improvement Program project budgets and authorize an increase in the city
manager’s authority to approve construction change orders. The recommended actions exceed
the city manager’s procurement authority and require City Council authorization.
Discussion
On July 23, 2019, the City Council adopted Resolution No. 2019-128 and awarded a $741,463.10
contract to Just Construction, Inc., for construction of the project, which consists of
improvements along eastbound Palomar Airport Road at Paseo Del Norte. The left-turn lane
modification, identified as Capital Improvement Program Project No. 6043, will extend the
existing left-turn pocket on eastbound Palomar Airport Road on the approach to northbound
Paseo Del Norte an additional 175 feet to the west by removing a portion of the raised concrete
median. The right-turn lane improvement, identified as CIP Project No. 6044, will create a new,
dedicated right-turn lane on eastbound Palomar Airport Road on the approach to southbound
Paseo Del Norte. To date, the contractor has completed the median improvements, and is
currently working on the traffic-signal modifications, right-turn lane and right-of-way
improvements.
The contractor was initially scheduled to mobilize and begin work on March 3, 2020. But before
then, the city directed the contractor to postpone its mobilization to mitigate anticipated
construction impacts to nearby businesses. The contractor then submitted a change order
Oct. 20, 2020 Item #3 Page 1 of 6
request in the amount of $132,121 for reimbursement of direct costs and indirect unabsorbed
home office overhead costs as a result of the delay.
Staff reviewed the claim and established it merits reimbursement of eligible direct and indirect
costs in the amount of $42,381.27 because it relates to the delay in start of the work. The
contractor has stated that it does not agree with the city’s determination of merit and valuation
of costs and has therefore refused to sign a contract change order for resolution of this impact.
To ensure that the contractor is reimbursed timely for verified work, the city has executed a
unilateral change order to the contract in the amount of $42,381.27 to reimburse the
contractor for verified costs. The city has issued payment for this verified work with the
project’s October 2020 progress payment.
Separately, work on the project has been impacted by the presence of unforeseen buried
utilities, as well as contractor delays. These unforeseen conditions have necessitated changes
to the original scope of work, as well as additional management and oversight of the project as
a result of a longer construction duration with a total estimated cost of $17,618.73.
With the unilateral change order of $42,381.27 for the delay in start of the work and
unforeseen condition costs of $17,618.73, for a total cost increase of approximately $60,000,
staff requests the City Council’s authorization to increase the project’s construction
contingency by $60,000, from $135,000 to $195,000. Staff also seeks City Council’s
authorization to appropriate an additional $80,000 for construction management, inspection,
materials testing, engineering and associated staff support required for management and
oversight of the project over a longer duration. Altogether, staff requests a total increase in
appropriation of $136,000, which is the remaining balance required since $4,941 is currently
still available. (To specify, $60,000 + $80,000 = $140,000 - $4,941 = $135,059, rounded up to
$136,000)
Staff estimates a total increase in the project budget in the amount of $136,000 based upon
known issues and the contractor’s current estimated completion date of November 2020.
However, the contractor has indicated there may be additional potential impacts and costs that
staff have not confirmed as meritorious at this point.
The contract provides an informal dispute resolution process whereby the contractor may
submit an appeal for additional compensation for claimed impacts and costs. To date, the
contractor has not validated many of the potential claims and has not submitted change order
requests for other potential claims. The city is aware of four potential claims the contractor has
submitted through the informal dispute resolution process. These claims total approximately
$650,000 in additional claimed compensation. Resolution of these disputes could result in
additional requests for appropriation in the future.
Fiscal Analysis
There is $4,941 currently available for the project. Two funding sources have appropriated
funds for the project: $164,084 from the Gas Tax Fund and $1,175,916 from city’s share of
TransNet, the sales tax that funds transportation projects in the county. Based on the increase
in construction contingency and the additional cost required to service the project over a longer
duration, an additional funding appropriation in an amount of $136,000 from gas tax funds is
required. The additional requested gas tax funds will be distributed to CIP project nos. 6043 and
Oct. 20, 2020 Item #3 Page 2 of 6
6044 in the amounts of $40,000 and $96,000, respectively. The available funds and distribution
of funds for each project are shown in the following table:
Palomar Airport Road Widening Project,
Capital Improvement Program project nos. 6043 and 6044
Total appropriation to date (Gas Tax Fund and TransNet) $1,340,000
Total expenditures and encumbrances to date $1,335,059
Current project account balance –
Capital Improvement Program project nos. 6043 and 6044
$4,941
Construction contingency (estimated) $60,000
Construction management services (estimated) $80,000
Total estimated project costs $140,000
Remaining balance after Capital Improvement Program
project nos. 6043 and 6044
$(135,059)
Additional appropriation needed $136,000
Distribution of additional appropriated funds
Additional appropriation – Palomar Airport Road and Paseo Del Norte left-turn
lane, Capital Improvement Program Project No. 6043
$40,000
Additional Appropriation – Palomar Airport Road and Paseo Del Norte Right-
Turn Lane, Capital Improvement Program Project No. 6044
$96,000
Next Steps
Upon City Council approval and authorization of additional appropriation, staff will execute a
new task order with Kleinfelder Construction Services, Inc., the city’s construction management
consultant, for additional construction management, inspection and testing services.
Staff will continue to pay the contractor for non-disputed work in a timely manner, while
ensuring the remainder of the project is completed in conformance with the contract. Staff will
continue to monitor progress and notify the City Council if known impacts could result in
additional delays beyond November 2020 or additional increases to the project budget. Staff
will return to the City Council for authorization if additional appropriation is needed.
Environmental Evaluation (CEQA)
The project is exempt from the California Environmental Quality Act under CEQA Guidelines
Section 15301(c) - minor alteration of existing facilities including streets, sidewalks, gutters and
similar facilities involving negligible or no expansion. A notice of exemption was filed in the
office of the San Diego county clerk on Feb. 20, 2018, for a 30-day public review.
Public Notification
Public notice of this item was posted in keeping with the Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1. Resolution
2. Location map
Oct. 20, 2020 Item #3 Page 3 of 6
RESOLUTION NO. 2020-207
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING APPROPRIATION OF ADDITIONAL FUNDS IN AN
AMOUNT OF $136,000 FROM THE GAS TAX FUND FOR THE PALOMAR
AIRPORT ROAD WIDENING PROJECT, CAPITAL IMPROVEMENT PROGRAM
(CIP) PROJECT NOS. 6043 AND 6044 (PROJECT) AND INCREASING THE
CONSTRUCTION CONTINGENCY FOR THE PROJECT BY $60,000
WHEREAS, on July 23, 2019, the City Council of the City of Carlsbad, California adopted
Resolution No. 2019-128, awarding a $741,463.10 contract to Just Construction, Inc. (Contractor), for
construction of the Palomar Airport Road Widening Improvements at Paseo Del Norte, CIP Project Nos.
6043 and 6044 (Project); with an additional construction contingency of $135,000; and
WHEREAS, in March 2020, the City of Carlsbad postponed start of construction; and
WHEREAS, the Contractor submitted a change order request in the amount of $132,121, of
which staff has determined merit for reimbursement of costs in the amount of $42,381.27 regarding
delay in start of the work; and
WHEREAS, the Project has been further impacted by unforeseen conditions resulting in changes
to the scope of work and project schedule delays in the amount of $17,618.73; and
WHEREAS, staff requests that the Project's construction contingency be increased by $60,000
to cover the cost of delaying the start of work and changes in the scope of work; and
WHEREAS, staff has determined an additional $80,000 in funding is required to provide the
necessary services for construction management, inspection, material testing, engineering and staff
support through an extended construction duration; and
WHEREAS, sufficient Gas Tax funds in the amount of $136,000 are available to complete the
Project; and
WHEREAS, the city planner has determined that the Project is exempt from the California
Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15301(c) - minor alteration of
existing facilities including streets, sidewalks, gutters, and similar facilities involving negligible or no
expansion, and none of the exceptions described in CEQA Section 15300.2 are applicable to this project.
A Notice of Exemption was filed in the office of the San Diego County Clerk on Feb. 20, 2018 for a 30-
day public review.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
Oct. 20, 2020 Item #3 Page 4 of 6
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1. That the above recitations are true and correct.
2. That the deputy city manager, administrative services is authorized and directed to
appropriate funds from the Gas Tax Fund in the amount of $40,000 and $96,000 to the Palomar Airport
Road and Paseo Del Norte Left-Turn Lane Project (CIP Project No. 6043) and the Palomar Airport Road
and Paseo Del Norte Right-Turn Lane Project (CIP Project No. 6044), respectively, for a total
appropriation of $136,000 in support of construction of the Project.
3. That the city manager or designee is hereby authorized to approve construction change
orders for an additional amount of $60,000 for a total not-to-exceed amount of $195,000.
4. That the city planner has determined that the Project is exempt from the California
Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15301(c) - minor alteration of
existing facilities including streets, sidewalks, gutters, and similar facilities involving negligible or no
expansion, and none of the exceptions described in CEQA Section 15300.2 are applicable to this project.
A Notice of Exemption was filed in the office of the San Diego County Clerk on Feb. 20, 2018 for a 30-
day public review.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 20th day of October, 2020, by the following vote, to wit:
AYES: Hall, Blackburn, Bhat-Patel, Schumacher.
NAYS: None.
ABSENT: None.
MATT HALL, Mayor
AMat IV (OP(
BARBARA ENGLESON, City Clerk
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Oct. 20, 2020 Item #3 Page 5 of 6
Exhibit 2
Oct. 20, 2020 Item #3 Page 6 of 6
Babaq Taj, Engineering Manager
Oct. 20, 2020
Appropriation of Additional Funds
for the Palomar Airport Widening
Project
Recommendation
•Adopt a resolution for the appropriation of additional funds in an amount of $136,000 from the Gas Tax Fund and authorizing an
increase of the construction contingency by
$60,000 for the Palomar Airport Road Widening Project, Capital Improvement Program Project Nos. 6043 and 6044
Background
•Project consists of improvements along Palomar Airport Road at the intersection with Paseo Del Norte
•Extends the existing left-turn pocket on eastbound Palomar Airport Road on the approach to northbound Paseo Del Norte, and creates a new dedicated right-turn lane on eastbound Palomar Airport Road on the approach to southbound Paseo Del Norte
•Has experienced construction delays and requires additional funding for construction costs, construction management, inspection, materials testing, engineering and associated staff support.
Background
•Contractor was directed to postpone its March 3, 2020 mobilization to
mitigate anticipated construction impacts to local businesses in the vicinity
of the Project
•Contractor submitted a change order request in the amount of $132,121
for reimbursement of direct and indirect costs as a result of the delay; staff
has reviewed the claim and established merit for direct and indirect costs
in the amount of $42,381.27
•Project has also been impacted by unforeseen buried utilities costs in the
amount of $17,618.73
Next Steps
•Upon City Council approval and authorization of additional appropriation, staff will execute a new task order for additional construction management, inspection and testing services.
•Staff will continue to pay the Contractor for non-disputed work in a timely manner while ensuring the remainder of the Project is completed in conformance with the contract
Recommendation
•Adopt a resolution for the appropriation of additional funds in an amount of $136,000 from the Gas Tax Fund and authorizing an
increase of the construction contingency by
$60,000 for the Palomar Airport Road Widening Project, Capital Improvement Program Project Nos. 6043 and 6044.
Thank you