That the City Council:
A. Approve the Notice of Completion for the Alley Improvements Project, Alleys No. 1 and No. 83, City Project No. 3-R-21, and authorize staff to send the Notice of Completion for recordation;

B. Approve and authorize staff to execute Change Order No. 1 in the amount of $51,766.29 with F.S. Contractors, Inc., for extra work performed to Alleys No. 1 and No. 83, City Project No. 3-R-21; and,

C.  Authorize the City Manager to increase the City's Purchase Order with F.S. Contractors, Inc., by $35,835.29, from available Gas Tax funds to cover the extra work performed by F.S. Contractors, Inc.

On March 4, 2024, the City Council awarded a construction contract to F.S. Contractors, Inc. ("Contractor") of Sylmar, California, in the amount of $167,640, which included a 20% contingency, for the construction of the Alley Improvements Project, Alleys No. 1 and No. 83, City Project No. 3-R-21 ("Project").  The Project included asphalt pavement reconstruction, reconstruction of alleyway approaches, driveway approaches, longitudinal v-gutters, other concrete improvement as well as other incidental work.

During construction, the contractor encountered more than anticipated sub-grade deficiencies and excessive pumping issues that necessitated additional full depth pavement and sub-base reconstruction ("digouts"). The total amount associated with extra work was $51,766.29 (see Attachment 1 "Change Order No. 1" for extra work details). The total cost of the project, including the additional work, is $203,475.29 which is $35,835.29 more than the approved purchase order issued to the Contractor, but less than the total approved budget for this project. The work performed by the Contractor met the City's specifications and standards; therefore, staff recommends that the City Council Change Order No.1 as well as authorize staff to file a Notice of Completion for recordation. 

The Alleys Project had a total approved budget of $500,000 for services including design, construction, construction management, material testing and inspection. There is sufficient remaining gas tax funding appropriated for this project to cover the requested $35,835.29 increase to the purchase order. See table below for a breakdown of project costs. 
 

Construction Budget and Expenses	Amount
Construction Purchase Order Amount	$167,640.00
Completed Contract Work	$151,709.00
Completed Extra Work (Change Order No. 1)	$51,766.29
Total Construction Cost	$203,475.29
Requested increase to the purchase order	$35,835.29

Staff is requesting that the City Council approve Change Order No.1 and increase the Contractor's purchase order by $35,835.29 to cover the cost of the additional completed work. There is sufficient Gas Tax funding available in the approved project budget to cover the cost of the extra work that was necessary.