That the City Council:
A. Approve the Notice of Completion for the Harbor Boulevard at Arbolita Drive Intersection Safety Improvements, City Project No. 3-R-23, and authorize staff to send the Notice of Completion for recordation; and, 

B. Approve an appropriation of $13,336.06 from available, unencumbered Measure M2 Fair Share fund balance to fully fund the Harbor Boulevard at Arbolita Drive Intersection Safety Improvements, City Project No. 3-R-23; and,

C. Authorize the City Manager to increase the City's Purchase Order with Palp, Inc. dba Excel Paving Company by $11,213.21 for extra work performed by Palp, Inc. dba Excel Paving Company.

On July 15, 2024, City Council awarded a construction contract to Palp Inc. dba Excel Paving Company ("Contractor") of Long Beach, California, in the amount of $559,185, which included a 10% contingency, for the construction of the Harbor Boulevard at Arbolita Drive Intersection Safety Improvements, City Project No. 3-R-23 ("Project"). The Project included safety features such as a curb extension at the southwest corner of Harbor Blvd. and Arbolita Drive, the installation of a permanent concrete barrier, a new guardrail system, tree planting, landscaping, irrigation, new traffic striping and signage, and other incidental work. 

During construction, the Contractor encountered unforeseen site conditions, including 17" thick AC pavement and an underlying pavement filter fabric (commonly known as "Petromat"). These conditions required additional crushed miscellaneous base (CMB) installation and topsoil to fill the voids beneath the new improvements, including the concrete barriers, landscaping, curb, gutter and the street areas caused by the unexpected pavement thickness. The disposal of the contaminated AC pavement containing Petromat  resulted in increased costs due to higher dump fees and extended travel time, as only select dump facilities accept Petromat materials. As a result, the total project cost is increased to $608,521.06, or $13,336.06 more than the approved project budget of $595,185.00. The Contractor's purchase order was exceeded by $11,213.21, and the $36,000 budget allotted for construction management, design support, material testing, and inspection was exceeded by $2,122.85. The work performed by the Contractor met the City's specifications and standards; therefore, staff recommends that the City Council accept the Project, approve a new appropriation to cover the costs overruns, and authorize the recordation of the Notice of Completion.

The Harbor Boulevard at Arbolita Drive Intersection Safety Improvements Project, City Project NO. 3-R-23 had a total approved budget of $595,185.00. The Project is funded by a combination of Measure M2 Fair Share funds and Traffic Impact Fee funds for services including design, construction, construction management, material testing and inspection. Project expenditures total $608,521.06, exceeding the approved budget by $13,336.06. The overage is primarily attributed to unanticipated costs related to unforeseen site conditions. See table below for a breakdown of project costs.

Staff is requesting that the City Council authorize an appropriation of $13,336.06 from available, unencumbered Measure M2 Fair Share funds to fully fund the Project, and authorize staff to release retention.