.jpg)
Consent
Item No. 6.
| MEETING DATE: 05/19/2025 |
|
| TO: | HONORABLE MAYOR AND COUNCILMEMBERS |
| FROM: | JIM SADRO, CITY MANAGER By: Elias Saykali, Public Works Director |
| SUBJECT: | APPROVE NOTICE OF COMPLETION FOR THE EAST BISHOP DRIVE STORM DRAIN IMPROVEMENT PROJECT, CITY PROJECT NO. 1-D-16
|
RECOMMENDATION:
That the City Council:
A. Approve the Notice of Completion for the East Bishop Drive Storm Drain Improvement Project, City Project No. 1-D-16;
B. Authorize staff to file a Notice of Completion with the Orange County Recorder's Office; and,
C. Approve an additional appropriation of $206,569.77 to the East Bishop Drive Storm Drain Improvement Project, City Project No. 1-D-16.
DISCUSSION:
On November 21, 2022, the City awarded a construction contract in the amount of $1,778,657 to AID Builders, Inc. (“AID”) for the East Bishop Drive Storm Drain Improvement Project (“Project”), City Project No. 1-D-16. The scope of work included the replacement of a deficient open channel with a 72-inch reinforced concrete pipe (RCP), realignment of water lines, reconstruction of the Bishop Street asphalt pavement section, and installation of new curbs, gutters, sidewalks, and drive approaches, along with associated restoration work on adjacent properties. A Notice to Proceed was issued on May 17, 2023, with work scheduled to begin on May 22, 2023.
During the course of construction, City staff identified significant issues with AID’s performance, including delays and substandard work quality. AID was given multiple opportunities to cure the deficiencies but failed to make necessary progress. Consequently, on October 10, 2023, the City issued a formal request to Gray Casualty & Surety Company (“Surety”), AID’s bonding company, to intervene — either by completing the Project through an alternate contractor or by compensating the City so that work could be completed.
On November 20, 2023, the City Council approved the termination of the Public Works Agreement with AID. Following discussions with the Surety provider, and with significant assistance from the City Attorney's office, it was agreed that the City would select a new contractor, and the Surety would reimburse the City pursuant to a Settlement Agreement.
In November 2023, the City issued a Request for Proposals (RFP) to four (4) qualified contractors. After joint evaluation by City staff and the Surety, Mike Bubalo Construction Company, Inc. (“Mike Bubalo”) was selected as the lowest responsible and most qualified bidder.
On December 4, 2023, the City awarded a construction contract to Mike Bubalo in the amount of $1,819,989 to correct previously identified deficiencies from the prior contractor and complete the project. The contractor successfully completed the Project in accordance with the approved plans, specifications, and City standards; therefore, staff recommends that the City Council formally accept the Project and authorize the recordation of the Notice of Completion.
During the course of construction, City staff identified significant issues with AID’s performance, including delays and substandard work quality. AID was given multiple opportunities to cure the deficiencies but failed to make necessary progress. Consequently, on October 10, 2023, the City issued a formal request to Gray Casualty & Surety Company (“Surety”), AID’s bonding company, to intervene — either by completing the Project through an alternate contractor or by compensating the City so that work could be completed.
On November 20, 2023, the City Council approved the termination of the Public Works Agreement with AID. Following discussions with the Surety provider, and with significant assistance from the City Attorney's office, it was agreed that the City would select a new contractor, and the Surety would reimburse the City pursuant to a Settlement Agreement.
In November 2023, the City issued a Request for Proposals (RFP) to four (4) qualified contractors. After joint evaluation by City staff and the Surety, Mike Bubalo Construction Company, Inc. (“Mike Bubalo”) was selected as the lowest responsible and most qualified bidder.
On December 4, 2023, the City awarded a construction contract to Mike Bubalo in the amount of $1,819,989 to correct previously identified deficiencies from the prior contractor and complete the project. The contractor successfully completed the Project in accordance with the approved plans, specifications, and City standards; therefore, staff recommends that the City Council formally accept the Project and authorize the recordation of the Notice of Completion.
FISCAL IMPACT/SOURCE OF FUNDING:
On December 4, 2023, City Council approved the Project budget for the East Bishop Storm Drain Improvements in the amount of $4,086,221.75, funded by a combination of American Rescue Plan Act Funds and General Capital Funds. Project expenditures total $4,641,716.40, exceeding the approved budget of by $555,494.65. The overage is primarily attributed to unanticipated costs related to repairing damage and restoring landscaping, irrigation systems, hardscape, driveways, fencing, walkways, drainage, and other related improvements to seven adjacent private properties impacted by the Project.
On September 20, 2024, the City entered into a Settlement Agreement with Gray Casualty & Surety Company (“Surety”) regarding damage caused by their defaulting Contractor, AID Builders. Under the Agreement, the Surety reimbursed the City $1,605,000 to offset costs related to emergency work, contract work and incidental damages. These funds were allocated to the General Capital Funds for eligible project expenses. The City agreed to pay Thompson Pipe Group $206,569.77 for pipe materials previously supplied under the terminated contract with AID Builders. This invoice remains outstanding.
In addition to the proposed revised $4,641,716.40 project budget, staff recommends that the City Council authorize an appropriation of $206,569.77 from available unencumbered General Capital Projects fund balance to pay for the outstanding invoice to Thompson Pipe Group. This will bring the final project cost to $4,848,286.17. All other contractual obligations have been reconciled and accounted for.
If approved, the final project funding breakdown will be as follows:
On September 20, 2024, the City entered into a Settlement Agreement with Gray Casualty & Surety Company (“Surety”) regarding damage caused by their defaulting Contractor, AID Builders. Under the Agreement, the Surety reimbursed the City $1,605,000 to offset costs related to emergency work, contract work and incidental damages. These funds were allocated to the General Capital Funds for eligible project expenses. The City agreed to pay Thompson Pipe Group $206,569.77 for pipe materials previously supplied under the terminated contract with AID Builders. This invoice remains outstanding.
In addition to the proposed revised $4,641,716.40 project budget, staff recommends that the City Council authorize an appropriation of $206,569.77 from available unencumbered General Capital Projects fund balance to pay for the outstanding invoice to Thompson Pipe Group. This will bring the final project cost to $4,848,286.17. All other contractual obligations have been reconciled and accounted for.
If approved, the final project funding breakdown will be as follows:
- ARPA Funds: $3,025,591.40
- Surety Reimbursement Funds: $1,605,000
- General Capital Funds: $217,694.77
Approval of this action will allow staff to pay Thomposon Pipe Group, release retention to Mike Bubalo, and file the Notice of Completion for the Project.
GENERAL PLAN RELEVANCE/CITY COUNCIL GOALS & OBJECTIVES:
General Plan Goals:
SD 1.3 Adequate Storm Drainage Infrastructure
SD 1.7 Drainage Channels
SD 1.8 Deficient Areas
City Council Goals and Objectives:
Goal 3 - Maintenance and Improvement of City Infrastructure
Objective D - Maintain storm drain pipelines
SD 1.3 Adequate Storm Drainage Infrastructure
SD 1.7 Drainage Channels
SD 1.8 Deficient Areas
City Council Goals and Objectives:
Goal 3 - Maintenance and Improvement of City Infrastructure
Objective D - Maintain storm drain pipelines